The Time Has Come To Do Nothing (With Update)

As I was watching coverage of the budget talks the other day, I realized that there is simply no way the Republicans and Democrats are ever going to come to an agreement on anything related to the budget. The problem is that too many Republican congressmen signed the Grover Norquist Pledge to never raise taxes under any circumstances, and any congressmen who violates this pledge and votes to raise taxes would have a very hard time winning a GOP primary let alone a general election.

Although I think signing such a pledge was tantamount to treason and demonstrated a genuine hatred for America, the whole thing made me wonder what would happen if Congress and Obama simply did nothing. After all, the Bush tax cuts are set to expire in 2012.

Well, the Congressional Budget Office crunched the numbers -- not only for a scenario where the Bush tax cuts are extended (which, of course, would lead to economic disaster) -- but also figured out what would happen if Congress and Obama did nothing:

[T]he [CBO] forecast also presents another opportunity to remind people that the medium-term budget outlook is perfectly fine if Congress adheres to the law as it's currently written. That means no repealing the health care law, for one, but more significantly it means allowing the Bush tax cuts to expire, and (unfathomably) allowing Medicare reimbursement rates for doctors to fall to the levels prescribed by the formula Congress wrote almost 15 years ago. In other words, no more "doc fixes."

Helpfully, CBO juxtaposed these two alternative futures in a pair of graphs and, just as last time, it projects that deficits will disappear entirely by the end of President Obama's second term (if he gets a second term) if Congress were to just sit on its hands and do nothing.

Sounds good to me. The lack of "doc fixes" will, of course, be a big problem, but there is no way the Democrats or Republicans are ever going to come to a budget agreement anyway, so there it is.

UPDATE: Here is more on this from Steve Benen:

*** The tax deal worked out in December, much to the left’s chagrin, extended all of the Bush-era rates. Obama has said he won’t allow this again — come hell or high water, the president won’t let the wealthy keep the tax breaks they don’t need and the country can’t afford.

This matters a great deal, of course, in the context of the current talks. Dems want more revenue, Republicans won’t even consider tax increases. But the president can generate all kinds of revenue later, and there’s nothing the GOP can do about it.

The White House will probably offer Congress a familiar deal: current rates up to $250,000, Clinton-era top rates for those over $250,000. If Republicans agree, taxes on the wealthy go up and the deficit shrinks. If Republicans refuse, demand Bush-era rates for everyone, and reject a deal that shelters the middle class, taxes go up across the board and the deficit shrinks a lot.

It’s something to keep in mind as the debt talks continue.