Earlier today House Majority Leader Eric Cantor (R-VA) stated that any aid for the victims of the Joplin tornado would need to be “offset” by spending cuts in other places. Some have criticized Cantor’s comments, saying that no offsets were required for other disasters like Hurricane Katrina. Others have simply claimed that now is the wrong time to quibble over spending cuts.
According to early estimates the Joplin tornado caused approximately $3 billion in damage. Below one can find 10 ways that Cantor could “offset” the Joplin aid through the budget.
#1 – Oil company subsidies
Currently the United States tax code gives favorable tax treatment to major oil companies even though these companies are bringing in billions in record profits. Last week Democrats tried to cut the $2.5 billion that goes these companies every year, but their efforts were blocked by a Republican filibuster in the Senate. If Cantor appealed to his colleagues to cut the oil subsidies he could pay for the Joplin aid many times over the next ten years.
#2 – Allow the Bush tax cuts for the wealthiest 2% of Americans to expire
Last December President Obama and the Democrats proposed that the tax cuts for the Bush tax cuts for the wealthiest Americans be allowed to expire. Cantor and his Republican colleagues demanded that all of the Bush tax cuts be extended or none of them at all. If Cantor allowed the Bush tax cuts for the wealthiest 2% of Americans to expire it would generate $700 billion in revenue over the next ten years, paying for the Joplin aid 233 times over.
#3 – Accept the Pentagon’s own recommended cuts for defense spending
Earlier this year Secretary of Defense proposed spending cuts worth about $78 billion (26x what is needed to fund the Joplin aid) over the next five years. Under Gates proposal defense spending would still grow, but simply at a slower rate than what was already planned. Cantor and the Republicans have thus far refused to accept Gates proposal, instead increasing defense spending in the most recent budget compromise. The United States already spends more on defense than most of the rest of the world combined.
#4 – Allow Americans to purchase a “public option” health insurance plan
Allowing Americans to purchase a “public option” for health care insurance would help reduce overall health care costs by providing competition to the private market. According to the non-partisan Congressional Budget Office, a public option would save $110 billion over ten years, more than 37 times what is needed to fund the Joplin aid.
#5 – Cut ethanol subsidies
Increasingly there is bipartisan support for no longer subsidizing the production of ethanol. The high energy cost in producing ethanol means it has little, if any, environmental advantage. The program also may be increasing food prices by sending more corn into the fuel sector as opposed to the food sector. Cutting ethanol subsidies would create about $5 billion in revenue, but whoever does it will admittedly pay a political price in the swing state of Iowa.