Portman’s call for tax cuts ignores simple arithmetic

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By Jack Torry, Columbus Bureau Updated 11:42 PM Sunday, June 13, 2010

It didn’t take long for Ohio Republicans to roll out one of their favorite hits — cutting taxes.

In his first major TV commercial, Senate Republican candidate Rob Portman talks about suspending the payroll tax.

He holds a copy of his jobs plan, which includes reducing the corporate income tax rate, and extending the 2003 tax reductions on capital gains and dividends.

And though he doesn’t mention it in the commercial, Portman has in the past favored extending the 2001 tax cuts, which included reductions on income taxes for all Americans.

At the end of this year, virtually all the tax cuts Congress approved in 2001 and 2003 and signed into law by President George W. Bush will expire unless Congress votes to extend them. It means the tax issue will be even more powerful than usual.

From the time Republican James A. Rhodes ran against Democratic Gov. Michael DiSalle in 1962 with the charge of “Tax Hike Mike,’’ Ohio Republicans have used the tax issue to bludgeon a series of Democratic candidates. It’s clear Portman wants to try it one more time.

There is only one problem with Portman’s call for tax reductions: the laws of mathematics.

At a time when federal deficits exceed $1 trillion, extending the tax cuts “makes getting back to fiscal sustainability a lot more difficult,’’ said Robert Bixby, executive director of the Concord Coalition, a Washington organization that champions balanced budgets.

Here is how deep a fiscal hole the nation is in. Assume that Congress does nothing and the tax cuts expire at the end of the year. According to the nonpartisan Congressional Budget Office, the government would still run a $1 trillion deficit in the 2011 federal spending year, as well as huge deficits through 2020.

So far, few politicians are even suggesting all the tax cuts should expire.

President Barack Obama has proposed extending all the tax cuts for families earning less than $250,000 annually. The Republicans have seen him and raised him: Extend them all, they say.

Both approaches would take a nightmarish debt problem and make it far worse. The Pew Charitable Trust last month concluded that it would cost the government $2.28 trillion over the next decade if Congress approved Obama’s plan, while the GOP plan would add $3.14 trillion to the national debt during the same span.

In his jobs plan, Portman, a former director of the Office of Management and Budget, makes a nod toward reducing the deficit.

He assails “Washington’s unprecedented fiscal irresponsibility,’’ and says the government must “get its fiscal house in order by controlling spending and reducing the debt.’’

But many budget analysts insist it is nearly impossible to balance the budget through spending reductions.

To give you an idea, if the government did away with the Pentagon tomorrow, we would still have a deficit in 2011.

“Whatever we do with spending, we’re not going to bring it down so sharply and so fast that we won’t have to look at (more) revenue,’’ Bixby said. “Think about the magnitude of the cuts. It becomes implausible. It may be theoretically possible. But it’s implausible.”

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