It's All Politics
6:04 pm
Thu September 15, 2011

Boehner Lobs Supply Side Shell In Fiscal Trench War With Obama

The latest rhetorical artillery shell to be launched in the trench warfare between Washington Keynesians and supply-siders landed Thursday in the form of House Speaker John Boehner's speech to the Economic Club of Washington.

Something of a rebuttal to President Obama announcement of his jobs plan last week, a John Maynard Keynes-inspired stimulus in everything but name, Boehner didn't have nearly as catchy a hook as the president's "pass this bill."

But what Boehner's speech lacked in terms of obvious flourishes he made up for in his dogged faithfulness to the Laffer Curve. The setting for the speech, the Ronald Reagan Building in downtown Washington, was chosen to underscore his proposal's links to the 40th president's economic ideas.

There weren't really any new ideas in the speech. Boehner said tax increases were out of the question for the congressional joint select committee, the so-called super committee, given the task of finding at least $1.5 trillion and 10-years' worth of spending cuts.

Because tax increases were off the table as far as he was concerned, that left spending cuts and entitlement reform as the only levers to be used to lower the nation's deficits and debt.

But tax reform was a different matter. Cutting tax rates, a supply side idea dating back to the Reagan era was fine by him so long as it was accompanied by the end of deductions, credits and loopholes that make the tax code as complicated as a computer operating system.

Getting rid of all those ways that limit the government's tax receipts would be necessary to avoid the double whammy to federal revenues from lowering rates while still allowing taxpayers to reduce their tax bills with deductions etc.

His call for tax reform allowed Boehner to take a shot at Obama's plan with its proposed new tax credits for employers who hire new employees.

BOEHNER: It strikes me as odd that at a time when it's clear that the tax code needs to be fundamentally reformed, the first instinct out of Washington is to come up with a host of new tax credits that make the tax code more complex.

Boehner spent a large portion of his speech devoted to that other touchstone of supply side economics, fewer regulations.

BOEHNER: At this moment, the Executive Branch has 219 new rules in the works that will cost our economy at least $100 million.

"That means under the current Washington agenda, our economy is poised to take a hit from the government of at least $100 million — 219 times.

"I think it's reasonable to ask: is it wise to be doing all of this right now?

"The current regulatory burden coming out of Washington far exceeds the federal government's constitutional mandate. And it's hurting job creation in our country at a time when we can't afford it.

But he had a message which seemed aimed for the Tea Party and other diehards. He counseled patience. Not all the spending cuts could be gotten in a year. They would need need to trust him that they would get done.

"There is a myth that spending reforms aren't 'real' unless they happen this year.

"That myth is built on a healthy skepticism that spending cuts made today are going to be implemented tomorrow.

"But it is a myth nonetheless, and we need to make sure it doesn't stop us from doing what needs to be done.

"Most of the entitlement reforms in the House GOP budget are phased in over time. And that's the way the Joint Committee should do them as well.

One of the most striking things about the current economic crisis is the completely different worlds Democrats and Republicans appear to be living in.

It's as if a gravely ill patient went to two different doctors and got two entirely different diagnoses and two completely different treatment regimens, with one doctor prescribing surgery, the other a homeopathic treatment.

An excerpt from NPR's Andrea Seabrook report for All Things Considered makes the point:

BOEHNER SOUNDBITE: Job creators in America basically are on strike. And it's not confusion about the policies. It's the policies themselves.

ANDREA: His answer? Reform the tax code, making it fairer and to lower rates. Cancel or change all government regulation of business, that could cost money to the economy. And make deep cuts in federal spending, including reforms to Social Security, Medicare and Medicaid.

Not everyone believes in Boehner's view of the problem. Independent economists blame the banking meltdown, the European debt crisis and other factors for the current slump.

Boehner did say he and his Republican colleagues in the House will consider the president's jobs plan. And at times during his speech, Boehner even seemed to strike a conciliatory tone.

BOEHNER: The responsiblity for fixing this toxic environment for job creation is a bipartisan one.

ANDREA: But listen closer and the speech starts to sound more partisan. It's decidedly Republican view of the problem leads Boehner to a decidedly Republican solution.

The situation was created by Washington's inability to let the economy work. It was created by government intrusion and micromanagement. And I think we have a responsibility to work together in the coming months to remove these barriers and liberate our economy.

ANDREA: Liberate the economy, said Boehner, from the shackles of government.

It's a slogan that delivers on two fronts — it lays out the work Speaker Boehner believes the Congress must do in the coming months. And it lays out the groundwork for a bid by Republicans to gain more control of the government come November 2012.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.