Senate Republicans Repeat False Claim That "There Is No Revenue Problem"

July 07, 2011 9:18 am ET — Walid Zafar

Senate Republicans are on message ahead of Thursday's planned debt-reduction meeting at the White House. Speaking on the Senate floor yesterday, several senators, including Orrin Hatch (R-UT) and Tom Coburn (R-OK), made the oft-repeated claim that the deficit and debt situation is solely the consequence of overspending and has nothing do with federal tax revenue.

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The refrain is common orthodoxy among conservatives who think that repeating it will somehow make it true and stave off any action to increase tax revenues, such as the closing of loopholes for corporate jet owners. As a practical matter, however, the phrase is as nonsensical as the belief that tax cuts pay for themselves, another deeply held maxim among conservatives. 

The fact is that we do have a revenue problem: Revenue has decreased during the previous decade, even well before the start of the current recession. This TPM chart, based on data provided by Democrats on the Senate Appropriations Committee, highlights what has happened in the last ten years:

The federal government currently spends almost the same amount — adjusted for inflation — for each individual American as it did in 2001. The only difference is that the population has increased by 9.1 percent.

In the same period, the annual spending for defense and mandatory programs such as Medicare and Medicaid has increased by 174 percent and 132 percent, respectively. But annual revenue has not kept up. In fact, it's decreased such that in 2011, the federal government is taking in almost half a trillion dollars less in revenue than it did in 2001. Back then, the federal government was collecting 19.5 percent of GDP in revenue. That figure has now dropped to 14.8 percent.

Republicans point out that the current shortfall in revenue is largely due to the recession, but that's not the whole story. The recession has decreased the number of workers who pay federal income taxes, which has decreased revenues. But the shortfall is also due to massive tax cuts the Bush administration gave to the wealthiest Americans, which "drove revenue down sharply." Yet Republicans not only defend the Bush tax cuts, which reduced revenue and increased the deficit and debt, but also seek to enact even more tax cuts for the wealthy.

The data clearly show that there is a tremendous shortfall in revenue, which needs to be addressed in the effort to solve the budget impasse. The refusal to admit this basic reality is yet more proof that the party, as David Brooks dejectedly writes, is "infected by a faction that is more of a psychological protest than a practical, governing alternative."

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