Finally, doing nothing might actually be a good idea

As has probably been made far more obvious lately, it’s far easier for the Senate to do nothing than anything. They haven’t even been able to pass an unemployment benefits extension for the past three weeks, depriving long-time victims of the shitty economy of at least a modicum of support. Ezra Klein points out that with President Bush’s hallmark tax cuts set to expire this year, it might be better, at least in the long-term, for the Senate to do nothing and let them expire:

For the deficit hawks in Congress, the next few months are going to offer a rare and valuable opportunity: They can do nothing and bring the federal budget much closer to balance. At issue is the expiration of the Bush tax cuts. If allowed to lapse, they’d improve the deficit outlook by about $4 trillion over the next 10 years — and more after that. As Joshua Gordon writes, “the difference in the publicly held debt resulting from [extending the tax cuts] represents an amount of money larger than the country’s total economic output in 2035. Debt held by the public would be 187 percent of GDP instead of the 79 percent it would be under current law.”

Further, imagine if Congress is able to extend the deficit-busting Bush tax cuts but not unemployment benefits. But that, of course, is what most people think they’re going to do. This will be a test for any politician who claims to care about the deficit. If they’re willing to let the tax cuts expire — a tough decision, given the politics of taxes — it’s good evidence that they’re serious about cutting the debt. If they’re not willing to let the cuts expire, it’s irrefutable evidence that they’re not.

It should be pointed out the shrewd tactics that allowed this to happen in the first place. It was a budget-busting enormous tax cut that lowered the bottom tax rate, cut the top tax rate, and, to a less extent, lowered the rates in the middle. To make its effect on the budget seem smaller, it was set to eclipse, so it would seem to have less of a cost over 20 years, yet knowing full well that allowing it to lapse would be akin to political suicide.


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