Sen. Gregg Calls Americans For Tax Reform Estimate "Absurd"
In a post last week, Ryan Ellis, tax policy director over at Grover Norquist's Americans For Tax Reform, claimed that two members of President Obama's debt commission — Erskine Bowles and Sen. Judd Gregg (R-NH) — were calling "for a massive, $26.7 trillion tax increase on the American people." He based that conclusion on Bowles' suggestion that the debt be reduced via a 75-25 split between decreased spending and increased revenue. So Ellis concluded:
Bowles and Gregg can only be talking about cutting $3 in promised Social Security and Medicare benefits in exchange for $1 in tax increases. In other words, 1/4 of the unfunded liabilities of Social Security and Medicare would be paid for with tax hikes. So how big is that?
According to the 2009 Social Security and Medicare Actuaries' Report, the long-run insolvency of the Social Security and Medicare systems is $106.8 trillion (with a "t") over the infinite horizon. To close this gap with one-quarter tax hikes is, therefore, to raise taxes by $26.7 trillion. Of course, this number is undoubtedly higher since the Obama Administration is sitting on (read: hiding) the 2010 version of the report (it's nearly six months overdue).
Gregg was asked about the proposed $26.7 trillion tax increase this morning by Fox News host Eric Bolling:
Bolling: Here's what's on the table, a 26 trillion with a T dollar tax hike that, according to our next guest who is on that debt commission, New Hampshire Senator Judd Gregg joins us now. So 26 trillion, that's a big number. What are you talking about when you say $26 trillion?
Gregg: I've never used that number. I don't know where it comes from. It's an absurd number.
Of course, it came from Ellis at ATR — and it is deeply dishonest.
Ellis falsely assumes that Medicare is the biggest driver of the federal deficit and the federal debt. In the short-term, that is not the case. It is true that the Commission is focused on improving "fiscal sustainability over the long-term," but their most pressing concern is fixing the short- and medium-term fiscal situation. The $106.8 trillion, as Ellis himself admits, is for "the infinite horizon."
The debt commission, though concerned about long-run viability, was created as a response to the present crisis. For instance, you never hear politicians say that that our fiscal irresponsibility will damage people who live at the infinite horizon. Instead, they talk about the next several decades or even, their grandchildren's generation. It's absurd to discuss a $26.7 trillion tax increase when the underlying figure used for that estimate is no more than a theoretical assumption based on infinity and beyond.