FOR ANYONE NAIVE ENOUGH TO THINK WE'LL REALLY CLOSE FAT-CAT LOOPHOLES IN A DEBT-REDUCTION PLAN...
President Obama is going to make a speech today outlining his plan for cutting the debt. It's not clear how much his plan is going to look like the plan put forth by the Simpson/Bowles commission, but, like that one and the one put forward by Paul Ryan, the Obama plan will probably call for lowering tax rates but closing loopholes.
And I'm sure the government will, in fact, close tax loopholes -- for ordinary Americans. The mortgage interest deduction will go, for instance.
But if you really think big corporations and the wealthy will have to give up their loopholes -- ever -- even as a quid pro quo for lower rates, well, I have a bridge to sell you. Needless to say, this is how things are done in D.C.:
Lobbyists Won Key Concessions in Budget Deal
At a quarter till midnight last Friday, with a deal to avert a government shutdown barely an hour old, Senator Harry Reid phoned a fellow Democratic senator, Ron Wyden, at home and startled him with some bad news. "You lost free-choice vouchers," Mr. Wyden recalls Mr. Reid telling him.
... a health care plan he had succeeded in getting passed months earlier despite furious lobbying by big business and labor had been pulled out of the blue and killed as part of the broader budget deal struck between the White House and Congress.
... in the end, a handful of relatively small-bore line items affecting particular industries attracted some of the most aggressive lobbying behind the scenes, as business interests, health care providers and others fought to hold on to, or kill, proposals that affected their bottom line.
... there was also intense but ultimately unsuccessful lobbying by General Electric and other military contractors to revive financing for an alternate engine for a costly jet fighter project. Proponents of tougher regulations for the politically influential and beleaguered commercial college industry succeeded, for now, in beating back an effort to block restrictions on how the schools get federal aid....
Needless to say, there's nothing remarkable about this story. There are stories like this after every big, impenetrable bill is finalized in Washington. Which is the point.
I'm not telling regular readers of this blog anything they don't already know. But well-respected pundits across the political spectrum are going to discuss the merits of various deficit plans as if there's even the slightest possibility that the rich and big corporations will give up any pet tax breaks. They absolutely will not. If we're being realistic, we have to assume that the fat-cat-loophole-closing contribution to deficit reduction will be zero.
You can dismiss out of hand any analysis of deficit and debt reduction that doesn't acknowledge this. Any such analysis is worthless.