An election-year struggle for the fiscal high ground
Hartford — Democrat Chris Murphy tried to be the voice of fiscal reason in the U.S. Senate race Thursday, accusing Republican Linda McMahon of proposing $4 trillion in tax cuts over the next decade without offsetting spending reductions.
But Murphy quickly encountered the challenges of fiscal restraint in an election year: Asked about the popular, soon-to-expire Social Security payroll tax cut, he supported its continuation beyond 2012 without explaining how Congress should pay for it.
“I support extending it and finding a way to make sure that Social Security remains solvent,” Murphy told reporters after a roundtable talk on taxes at a kitchen remodeling center in the city’s North End.
After talking to reporters for about 9 minutes, Murphy left without saying how long the cut, which saves a family earning $50,000 about $1,000, should be continued. The 2 percent reduction costs about $120 billion a year.
So, how does he differ from McMahon?
That was a question left for another day. Like McMahon, Murphy said there must be a bipartisan discussion on Social Security reform next year — after one of them is safely sworn in for a six-year term as Connecticut’s new senator.
McMahon and Murphy are hardly alone in dodging questions about how they would bring fiscal responsibility to Washington. That is why the report of the President’s National Commission on Fiscal Responsibility landed with a thud in December 2010.
The bipartisan panel, otherwise known as the Simpson-Bowles Commission for its two co-chairmen, Alan Simpson and Erskine Bowles, issued a sobering call for action on addressing the nation’s deficit spending.
Since the last balanced budget in 2001, the federal debt has risen from 33 percent of gross domestic product to 62 percent of GDP in 2010.
“The escalation was driven in large part by two wars and a slew of fiscally irresponsible policies, along with a deep economic downturn,” the commission said. “We have arrived at the moment of truth, and neither political party is without blame.”
McMahon’s campaign endorses some of the commission’s less painful recommendations, such as reducing the federal corporate income tax rate from 35 percent to 25 percent, a staple of GOP jobs plans.
She also says she would accept the commission’s proposal to end corporate tax credits that cost about $660 billion over five years and $90 billion in annual payments such as farm subsidies and loans, research and marketing support for businesses.
She also would cut the middle-class tax rate from 25 percent to 15 percent and cut the capital gains tax. McMahon says her plan would save $6,000 a year for a family of four with an income of $125,000.
Murphy said Thursday that McMahon’s plan would add to the debt and be a drag on the economy.
“Her tax cuts would add $4 trillion to the deficit” over 10 years, Murphy said. “And her spending cuts would, over a decade, be about one-tenth that amount. Her numbers just don’t add up. True, there is not a lot of flesh on the bones, but what we can glean from her slickly produced tax plan is that it would increase the deficit by almost $4 trillion, further crippling our economy.”
“This isn’t theory. We have data. President [George W.] Bush’s tax cuts contributed to the economy falling apart and deficits exploding. We don’t have to do guess work when it comes to Linda McMahon’s plan,” Murphy said. “We saw it in action during the last decade. Bush’s tax cuts, unaccompanied by spending discipline, exploded the deficit and killed jobs.”
McMahon’s spokesman, Todd Abrajano, said Murphy misrepresented the costs of McMahon’s tax proposals, because he ignored the economic growth her plan would stimulate. He noted that President Obama offered a similar justification for a middle-class tax cut during Wednesday night’s debate.
“When President Obama was talking about middle-class tax cuts and why it’s important to cut taxes for the middle class, he was exactly right,” Abrajano said. “He is talking about putting money in the hands of the middle class. You get this positive cycle going.”
McMahon had no public campaign events Thursday. On Friday, she is scheduled to attend Archbishop Henry J. Mansell’s Columbus Day breakfast in New Haven, then prepare for her first debate Sunday with Murphy.
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