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.
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