American Sauce: what the deficit debate is really about
April 18th, 2011
12:00 PM ET
3 years ago

American Sauce: what the deficit debate is really about


Capitol Hill (CNN) - What do you think the deficit debate is about? How to cut the $1.5 trillion deficit? The dream of, some far off day, bringing down the $14.2 trillion national debt?

Try: It's about what Americans want their country to be. What society and government will become.

In this week's American Sauce, we look at the congressional deficit battle big picture. How this money fight could shape American society and government for years. We focus on three larger issues in this fight and compare how the plans from Team Obama and the GOP's Team Ryan would steer the broader future.

Listen here. Comment below. Or keep reading.

The Profound Deficit

Consider three of the ways this hefty deficit debate is a battle over national philosophy.

1. Rich vs. Poor

The prominent example of this old-as-man debate in the deficit battle will be the Bush tax cuts. It may also be an issue threatening another, future government shutdown.

President Obama, does not want to extend those tax cuts for the wealthiest 2 percent of Americans. Those making over $250,000 a year. And he's making it a vow. "I refuse to renew them again," he said in his deficit speech last week.

Republicans are just as adamant that the tax cuts must be extended for everyone. To do otherwise, they say, is a tax increase. And here's the Republican double-dare: GOP Senate Leader Mitch McConnell's response to the president's deficit plan? "We will not be discussing raising taxes."

The debate may focus a lot on the relative costs or benefits of the Bush tax cuts. But it is also about how society works. Should the rich, who have more, be required to give more in the name of lifting society as a whole. Or should the rich be allowed to spend their wealth as they see best, with the idea that those individual decisions by the rich would be the best for the economy and society?

2. What We Want to Encourage

In other words, the tax code. Both Team Ryan and Team Obama promote a simpler tax code with lower tax rates and fewer deductions. (Note: Team Ryan has given more specifics thus far but we don't have the full details from either deficit plan.)

Changing the tax code is like changing the financial ecosystem, altering where the sun shines and where it doesn't. Which parts of the economy get extra rainfall and which ones dry up.

Examples: The mortgage deduction absolutely boost home ownership in America. Corporate deductions clearly affect large charitable giving and large, business-expensed luncheons alike.

As Congress debates a major overhaul of the tax code, it is debating one of the largest motivating forces in society. It helps decide what grows in America and what shrinks.

3. What Government Should Be

Dust off the Friedrich Hayak versus Milton Friedman chapters. (Philosopher name-drop there, thanks to a mention from our government philosopher guest Josh Cohen of Stanford, who you can hear in the podcast.)

Or just look around.

The debate over what to spend and what to cut is a debate over the shape of government for the long-term debt-soaked future.

-President Obama's version: government continues to run Medicare, launch a new health care system (where government has tighter regulation of insurers), provide safety-net guarantees and keep society protected. Washington must cut spending, but should do it as evenly as possible, including cuts to the Pentagon.

-Republican/Paul Ryan's version: government's hand is too heavy and must be pulled out of several sectors, including health care. Ryan's budget would privatize Medicare, dismantle the Obama health care law and limit some federal safety net programs, like food stamps or SNAP.

It's debate over not just the size of government, but the power of government. What role government should have in society? Where do we need government and where should we instead trust or force individuals to make decisions and survive for themselves?

Again, listen to the podcast here. [AUDIO LINK} And please leave a comment below when the window is open.

Also, tell your friends about our show. We are trying to infuse congressional reporting with some home-baked substance. And we're just tired of the silly fingerpointing soundbites, so we ignore them.

Listen to the podcast here

Follow on Twitter: @lisadCNN

You can also listen to American Sauce on iTunes, Stitcher or subscribe to the podcast via RSS.


Filed under: American Sauce • Deficit
soundoff (17 Responses)
  1. JMR49

    The debate about the debt has nothing to do with the debt or the best interestes of the Country. GOP is using it to gain votes and nothing more, had the debt been a problem they'd have dealt with it when they were in charge. Media is using it to sell erectile disfunction perscriptions, mispreports the facts now and with the GOP, ignored the issue during the Bush admin.

    April 18, 2011 12:15 pm at 12:15 pm |
  2. james Miller

    We`ve hammered the middle class to death with spending cuts and basically given the rich an easy ride.

    April 18, 2011 12:21 pm at 12:21 pm |
  3. Kelby

    "what the deficit debate is really about"

    The deficit debate is really about trying to make the president look bad. The economy is slowly improving and we needed deficit spending to do that. However, this deficit didn't show up over night. Hell, the previous administration ran deficits and nobody complained about deficits then. Cheney even said deficits were good.
    If they were honest about cutting the deficit they would cut the defense budget, raise taxes on the rich and make sure these multi-billion dollar corporations actually pay their taxes.

    April 18, 2011 12:27 pm at 12:27 pm |
  4. Wilt

    Who wrote this the White House Press office?? Obama just wants more $$ for spending – if you think it would be for deficit reduction your dreaming. Obama will eventually trickle down to middle class tax hikes because even if he raised taxes to 70% for the top 5% it would not cover his budget. Its all smoke and mirriors.

    April 18, 2011 12:38 pm at 12:38 pm |
  5. Lynne

    The GOP has stated clearly what their goal is...make sure President Obama is a one term president....that's one of the reasons for this deficit debate. Number two is to help the GOP corporate sponsors make more money...the rich get richer and the poor get poorer.

    Everyone acts like Paul Ryan is soooo "brave" for doing that super hard workout every morning! Get real people! The truly brave people are those in our military and our police and our fire departments...that run in when the rest of us run out. Not some vain workout junkie.

    April 18, 2011 12:40 pm at 12:40 pm |
  6. Marko

    We take the best parts of socialism and the best parts of capitalism and form a new system. Either one in their pure state alone will always be corrupt. Both have a lot to offer and both have a lot to be wary of.

    April 18, 2011 12:43 pm at 12:43 pm |
  7. Don Johnson

    Here's what it amounts too, in any kind of debate. Each "side" presents their plan. They call the opposing plan destructive for america that will bring the end of the world, eat babies and make ice cream spoil.

    All they are trying to do is score political points for the next election, and keep your hard earned tax dollars funding their never ending struggle to argue all day. Almost like lawyers. Neither plan is going to destroy the country, and both will cost jobs in the govt sector. Now the GOP has the tea party mindset that they won't compromise is suddenly a fascist term, so now nothing will get accomplished. Their way or the highway, so I expect a government shutdown next year.

    Wake me when they stop acting like children.

    April 18, 2011 12:46 pm at 12:46 pm |
  8. Fair is Fair

    "The deficit debate is really about trying to make the president look bad."

    He's doing that perfectly well all by himself, thank you.

    April 18, 2011 12:51 pm at 12:51 pm |
  9. Rebecca

    Republicans think government is a business. It isn't. A business sells goods and services for profit in our system. Government provides for the "welfare of the people" according to the Constitution. To run government as a business is akin to coaching a basketball team like racing horses; it doesn't make sense. Deep down, Republicans really want a corporate autocracy which is nothing more than a veiled form of fascism.

    April 18, 2011 12:51 pm at 12:51 pm |
  10. diridi

    Do not talk about Deficit...it is caused by GOP idiots, and thugs...not Clinton, nor Obama....o.k....on the pretext of this deficit, they, GOP idiots are cutting basics....ex., Rail, education, infrastructure, Medicare....etc., stupid, and idiots....enough of this Deficit...to hear with....

    April 18, 2011 01:18 pm at 1:18 pm |
  11. rob

    Its a simple as this: If its a question of raising taxes and tinkering around with entitlements, the "Rich" don't have enough to get us out of debt. The real money is in the middle class: the middle class will suffer with more taxes to pay for the spending and the poor will inevedably suffer with the forced reductions in entitlements because we can't afford them. Second: If its a matter of spending cuts and really transforming entitlements; the middle class and the poor will suffer in the short term but will be better off in the long term because we will continue to support a growing economy with a thriving privat sector and entitlements will survive in the future for those who really need them.

    So far, in my opinion, the Republican plan shows a real framework for getting us to where we need to be. President Obama will not give any real specifics about reductions in entitlements other than an admission that they need to be reduced. Instead, he rails against the Republicans plan and calls for "The rich to pay their fair share" with the Media cheerleading for him.

    Who is being "Political" here? We will have to endure this idiocy for another 19 months untill hopefully the American people will finish the job started in Nov. 2010.

    April 18, 2011 01:34 pm at 1:34 pm |
  12. The reality is...

    On one side those who believe the country would be better off as Capitalist and the other side those who believe Socialism is better. The country thrived under Capitalism until it veered away from true Chri st ian ity, and that folks, whether you like it or not, is the problem because that was where greed and immorality entered in. Socialism = government control and that is NOT something hard working people generally want to submit to. If Capitalists don't want to lose more/all their freedom they need to face this reality. Money will only buy you so much for so long.

    April 18, 2011 01:39 pm at 1:39 pm |
  13. Henry Miller, Libertarian

    "Should the rich, who have more, be required to give more in the name of lifting society as a whole."

    The theory is that, in the US, we're all equal under the law, that the law should not discriminate for or against any group or individual. It is utterly antithetical to that philosophy to discriminate against those who happen to have more money simply because they have more money.

    "As Congress debates a major overhaul of the tax code, it is debating one of the largest motivating forces in society. It helps decide what grows in America and what shrinks."

    In a free economy, it is not the proper business of Congress to "decide what grows in America and what shrinks." There are many reasons for this, but the most important is that every command economy ever tried has failed, hurting millions of people in the process.

    "What role government should have in society?"

    As close to zero as is possible and still defend the country from the rest of the world–that's the only way to defend the people of this country from the government of this country. As George Washington once said, "Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master." Government, like the fire in a furnace, is fine as long as it is kept contained and under control. As things stand right now in the US, government has become an all-consuming fire, destroying the society it was intended to serve.

    April 18, 2011 01:44 pm at 1:44 pm |
  14. Henry Miller, Libertarian

    "Government provides for the "welfare of the people" according to the Constitution."

    No, government, according to the Constitution, was established to "form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity. "Promote the general welfare" is only fifth on the list.

    "Deep down, Republicans really want a corporate autocracy which is nothing more than a veiled form of fascism."

    Deep down, Democrats really want a political autocracy which is nothing more than an unveiled form of tyranny, a good example of which was the passage of Obamacare over the objections of a majority of Americans.

    April 18, 2011 01:53 pm at 1:53 pm |
  15. The reality is...

    Rebecca, the constitution says "promote" the general welfare not "provide" for the general welfare. BIG difference ; please take notice.

    April 18, 2011 01:56 pm at 1:56 pm |
  16. Penny

    First priority is get rid of the deficit and quickly. The very wealthy have the ability to do this now and should do this for their country. Afterall, they use the same water, electricity, gas, food, etc that the rest of us do. It would be the same in a household. Get rid of the debt, then decide how to prevent it. Perhaps a straight 10% tax would even the playing field. Sure there are those who don't want to work but we can find them eventually. Then there are those who made tons of money at other's expense and those who simply inherited wealth. Paul Ryan did not address the question about the rich – he stalled and changed the subject. We all know there are far more poor people, or people making less than $250,000 per year. If you continue to make them more poor or push them against the wall people will retaliate any way they can. The rich should be willing to help their country unless they have taken classes in chinese language. I can't believe this is even in issue. If I was that wealthy I would want to help my country. Millions of service men and women put their lives on the line for our safety. Can the rich not put their money on the line to keep America out of the hands of the chinese?

    April 18, 2011 02:09 pm at 2:09 pm |
  17. Marie MD

    The deficit debate is about making the rich and filthy rich richer and the vanishing middle class and poor carry the load!

    April 18, 2011 02:31 pm at 2:31 pm |