GOP Senator: Tax Increases Must Be a Part of Deficit Reduction

More

A Republican finally said it. There will be no budget deal without enough Democrats. And there will not be enough Democrats without tax increases. Former Gang-of-Sixer Sen. Tom Coburn in Bloomberg:

The solution is obvious. Democrats have to accept the reality that structural entitlement reform is necessary. Republicans have to accept the reality that in order to get Democrats to make those changes we will have to agree to tax reform that will increase revenue but not rates.

Kudos to Coburn for saying what his party won't. This is as brave and honest a paragraph as I've read from a senator on the deficit, Democrat or Republican. And yet...


Back up and recall that it only makes sense to think of the deficit crisis as three deficit crises. The short term deficit, the medium term deficit, and the long term deficit. The short term deficit is not a problem. Interest rates are low, the private sector is weak, and the public sector should be spending more than it taxes. The medium term deficit is a problem that requires raising taxes and cutting domestic spending. Entitlement reform is a long term fix that doesn't do much for you in the next five years. The long term crisis is an entitlement crisis -- more than anything, it's a Medicare crisis. 

Coburn's right: Structural entitlement reform is necessary. But structural entitlement reform in 2011 won't bring down the deficit very much in 2015. Only higher taxes and lower spending will do that. If Republicans want structural entitlement reform as a quid pro quo for higher taxes, then fine, that's how negotiations work. So my "Yes, but..." response to this op-ed is that if we're talking about how to close the deficit in the next ten years, we need to talk taxes first, and entitlements second.

Read the full story in Bloomberg.
Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

The Ghost Trains of America

Can a band of locomotive experts save vintage railcars from ruin?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Video

What If Emoji Lived Among Us?

A whimsical ad imagines what life would be like if emoji were real.

Video

Living Alone on a Sailboat

"If you think I'm a dirtbag, then you don't understand the lifestyle."

Video

How Is Social Media Changing Journalism?

How new platforms are transforming radio, TV, print, and digital

Video

The Place Where Silent Movies Sing

How an antique, wind-powered pipe organ brings films to life

Feature

The Future of Iced Coffee

Are artisan businesses like Blue Bottle doomed to fail when they go mainstream?

Writers

Up
Down

More in Business

Just In