Deficit reduction is always crucially important to members of Congress -- except when it requires making difficult choices. Then, well -- not so much. The latest DHINOs (Deficit Hawks In Name Only): Sen. Scott Brown, R-Mass., and Maine Republican Sens. Susan Collins and Olympia Snowe.
Brown, Snowe and Collins are crucial votes for the financial regulatory reform bill. But they objected to the last-minute addition of a tax on banks and hedge funds to raise money to pay the costs of the reform effort. The senators were ready to oppose the bill -- until conferees reopened negotiations, killed the tax and replaced a big chunk of the money the tax would have raised by terminating the Troubled Asset Relief Program (TARP) early and grabbing $11 billion in leftover funds from that bank bailout fund. The wrinkle: Leftover TARP money is supposed to go back to the Treasury to reduce the deficit. And it was all borrowed in the first place. Apparently, though, that's OK with the senators.
To be fair, it was also OK with the conference committee Democrats who voted along party lines to approve the change. The Dems might argue (weakly) that they don't deserve as much criticism because they were being blackmailed -- fix the tax or lose a worthwhile bill. So they looked around in desperation for dough, and there was TARP, fenced off by that pesky requirement not to use leftover money for anything but deficit reduction. That wasn't hard to fix -- who do you suppose wrote the rule in the first place? The Democrats should take a hit, but in assessing hypocrisy points, I'll merely ask which party has done more chest-thumping lately about the importance of deficit reduction and the recklessness of its opponents. And who got elected to the Senate from Massachusetts promising (among other things) to help mend Washington's profligate ways?
Washington Post blogger Ezra Klein has partially defended Brown by noting that the senator called for "spending cuts" to replace the bank tax. Not quite. Brown's letter demanding the tax be killed called for "spending cuts" -- but then suggested targeting "hundreds of billions in unspent federal funds sitting around." That's exactly what the leftover TARP money is, but think what this means. The funds are "sitting around" wherever Treasury keeps the money it borrows. This is like saying I'm going to pay for my new boat by using some of the unspent money I have "sitting around" in my line of credit. And then I'm really, really going to get serious about reducing my debt.
Maybe this is OK because once President Obama's deficit commission produces its report this winter, everyone will come together to fix the problem, and this will be an asterisk. But if the parties can't manage to reduce the debt by a mere $11 billion, how are they ever going to come up with trillions?
George Hager is a member of the USA Today editorial board.
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