Neither candidate for Minnesota’s U.S. Senate seat has realistic stands on taxes, spending, annual federal budget deficits, the national debt or Social Security.
If these issues are important to you, hold your nose and vote for the least bad alternative. But then don’t expect great economic statesmanship from your senator once he or she gets to Washington.
Let’s start with U.S. Rep. Mark Kennedy since he is in his sixth year in Congress. The Republican’s Web site lays out much of his economic-policy views under the heading “Growing the Economy and Creating Jobs.”
The first two items are “Make the Tax Cuts Permanent that Have Generated More than 5.5 Million Jobs” and “Hold the Line on Spending by Passing the Line-Item Veto, a Balanced Budget Amendment and Earmark Reform.” Tellingly, he does not mention deficit reduction or ongoing growth in the national debt.
His first assertion hinges on the questionable assumption that all recent growth in employment resulted from Bush administration tax cuts and that employment won’t grow if tax cuts are not extended.
A favorable tax climate is just one of many elements in employment growth. In 1994, the Clinton administration and a Democrat-controlled Congress passed a modest tax increase. Many Republicans argued that even slightly higher taxes would kill job growth. Instead, total employment grew by 11.8 million over the next five years.
The “taxes are the only factor in job growth” school also assumes that persistent budget deficits and the growing public debt are benign and don’t inhibit business investment and job growth. This is not a safe assumption.
The second plank advocating line-item vetoes, a balanced budget amendment and earmark reform is election year gimmickry unless the candidate is willing to indicate what spending cuts he would support to balance the budget. Right now, we borrow one dollar out of every five we spend, excluding Social Security.
Cutting earmarks, or politicians’ pet projects, is a good idea. But a balanced budget amendment and line-item veto are meaningless unless officeholders are willing to make tough choices that disappoint some voters. Kennedy shows no willingness to do this, nor has the House in which he has worked for three terms. Non-defense spending is growing at the fastest rate in decades.
Amy Klobuchar, the DFL candidate, has never served in Congress and has less of a track record. The Hennepin County attorney’s campaign materials make a big deal out of federal deficits and the national debt, but her concern is not matched by realistic proposals for their reduction.
She calls for maintaining the Bush administration’s tax cuts for all households earning under $336,000. She also proposes new tax credits for first-time homebuyers, elder care and higher education. The math simply does not work. Revoking tax cuts for the 1 percent of Americans with high incomes just does not produce enough revenue to close the gap. It is dishonest to imply that it does.
Klobuchar also emphasizes Social Security in her platform. She rightly criticizes the private-account plans proposed by the Bush administration, which would finance the transition by adding hundreds of billions of dollars, perhaps trillions, to the national debt.
But she says nothing about how she would deal with the benefits we have promised to future retirees that we cannot finance with current FICA rates. She sidesteps the problem with a promise to “to make sure our nation plans ahead and works toward a bipartisan solution to make Social Security more secure for the long term.” She is not willing to say the solution inherently involves increases in withholding taxes, benefit cuts or large transfers from the general Treasury.
We are not going to “make Social Security more secure for the long term” until political leaders are willing to level with voters.
© 2006 Edward Lotterman
Chanarambie Consulting, Inc.