The Wet Bandits and Tax Pledgers: Lost in Debt

The Wet Bandits and Tax Pledgers: Lost in Debt

Posted by Bryan Berky on 04/21/2017

Marv and Harry“All the great ones leave their mark.”

-Marv Merchants

In the classic Christmas movie Home Alone, Marv - the injury-prone dunce - leaves the water running in the basements of each house he would rob with Harry - his disgruntled but equally injury-prone partner.  The flooding trademark inspired Marv to give them the nickname the Wet Bandits.  Marv matter-of-factly explains to his unamused partner that the reasoning behind their “calling card” flooding of basements is that “all the great ones leave their mark.”

Another less-comedic but still well known drowning is the desire of Grover Norquist, President of Americans for Tax Reform (ATR), “to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."  This goal is connected to ATR’s Taxpayer Protection Pledge that many Members of Congress have taken. The pledge indicates that a lawmaker will not raise taxes under any circumstances (though this so-called tax purity test often serves as a protector of special interest loopholes in the tax code).  Currently, 45 Senators and 208 members of the House have signed the pledge.   

The idea of the tax pledge is associated with the “starve the beast” theory, that in order to limit the amount of government spending you must limit government revenues.  As explained by President Bush when passing a tax cut package in 2001, "so we have the tax relief plan [...] that now provides a new kind—a fiscal straightjacket [sic] for Congress. And that's good for the taxpayers, and it's incredibly positive news if you're worried about a federal government that has been growing at a dramatic pace over the past eight years and it has been."  

The desire to limit the size of the federal government is a fine one.  The problem, however, is that you have to actually limit the amount of government spending to make it happen.  Instead, members that took the pledge only kept up with the revenue half of the bargain. Spending IncreaseThen they joined hands with non-pledge signers and exploded government spending.  So while revenue has remained relatively flat since 2001 ($2.4 trillion to $2.9 trillion or 20 percent increase), government spending has dramatically risen ($2.2 trillion to $3.5 trillion or 60 percent increase).  

Failing to build on the emerging budgetary progress of the late 1990’s, President Bush and Congress increased the services that government provided without a commensurate rise in taxes or cuts to lower priority spending.  President Obama and Congress doubled Debt/GDPdown on this strategy.  Disconnecting spending from revenues allowed politicians to have the best of both worlds – avoiding tough budgetary choices at what appeared to be no cost to the taxpayer. This trick was made possible by increasing taxes through another form – the tremendous debt burdens that are being hoisted onto the next generation.  

Since 2001, our debt has nearly quadrupled from $5.7 trillion to $20 trillion.  While historically low interest rates have masked the true costs of this build up, interest payments on the debt are projected to dramatically climb from $241 billion to $768 billion over the next Grover's Wishdecade.   We will be spending more on interest payments for our debt pile than all of the non-defense discretionary accounts combined!  Instead of the tax pledge achieving Grover’s wish to “drown government in the bathtub,” it turns out it contributed to the drowning of future generations in debt.  

When Kevin McCallister outwits Marv and Harry and executes a completely realistic plan to get them arrested, Marv proudly lets the police officer know that they are the Wet Bandits.  This provides the police incriminating evidence that every robbed house with a flooded basement can be pinned on them.  Just the same, politicians signing a pledge to never raise taxes without a plan to control government spending is the calling card that millennials can look to when they find out they are inheriting a bankrupt country.  Flooded basements and a deluge of debt are marks alright, though the legacies of the Wet Bandits and Tax Pledgers will not be so great.

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Bryan BerkyBryan Berky
Executive Director
Bryan joined Restore Accountability in 2017 and provides expertise and commentary on today's important issues. Previously, he spent seven years on Capitol Hill working as a policy advisor for Senator Tom Coburn and Senator James Lankford...FULL BIO