I can’t remember an issue on which I have been as conflicted as on the pending debt ceiling deal.
No sugar coating. It’s not a good deal. It does very little to solve the problem of our budget deficits and growing debt. The law also leaves us at the mercy of the appointees to the super committee; if I knew who would be on the committee I might have more confidence because Republicans can reject anything Democrats on the committee want to do (and vice versa). The other negatives include the automatic cuts to defense if the committee cannot reach agreement or if the agreed proposal is rejected (although the defense cuts would not be as bad as some assume).
But there are positives which cannot be ignored. The debate leading to the deal, and the deal itself, has changed the entire dynamic of the political debate going into the presidential election year, with the sole issue being deficit reduction. While there is a possibility that the committee could suggest revenue increases, it is not obligated to do so and such measures are subject to being blocked both on the committee and in the House. Additionally, entitlements are part of the discussion and will be for the coming year. Politically, the deal has fractured the already fractured Obama base.
Fears that this deal is a prelude to a massive tax increase are overblown. As to the Bush tax cuts expiring, I’m not concerned. First the use of the current baseline year was done to make it more difficult (but not impossible) for the committee to recommend revenue increases:
The super-committee must use the “current law” baseline, which assumes that the 2001 and 2003 tax cuts expire at the end of 2012. But why are GOPers happy about this, considering they want those tax cuts extended? For the simple reason that Democrats on the super-committee therefore can’t use repeal of the “Bush tax cuts for the rich” as a revenue raiser.
Additionally, since the vast majority of the Bush tax cuts benefit the “not rich,” Obama and Democrats would be committing political suicide by arguing for allowing the Bush cuts to expire in an election year. (Added, isn’t the fight we want to have?) This is the reason Obama backed away last December. (Btw, Rush is making an argument today that the extension of the Bush tax cuts requires a tax increase by the committee, but I’m not seeing it.)
Putting aside some of these conflicting possibilities, if one views this deal as the end of the road, the last and only chance to make changes, then the deal should be rejected because it does not come close to meeting the challenge.
My perspective, as I’ve stated before, is that we need to keep the ultimate goal in mind, which is defending the House, taking back the Senate with a margin which does not leave us dependent upon 2-3 Republican “moderates,” and defeating Obama. Then, and only then, can we achieve the types of structual changes needed to stave off fiscal disaster. Everything we do now is just around the fringes.
The debt ceiling provided us with an early and somewhat unexpected oppotortunity to address some of the issues and frame the debate. And we have done that.
This is not, however, the end of the effort. In addition to the coming fight over the Bush tax cuts, we will have to deal with a likely debt downgrade. The issue of the trajectory of spending will be revisited in the coming year and most importantly in the presidential election.
But the debt ceiling was an imperfect device on which to mount the effort to change the direction of government. Unlike a “mere” budget impasse resulting in a partial shutdown of government, the debt ceiling holds more risk. I never bought into the August 2 drop-dead date, but I do accept that with $100 billion per month deficits we could not last long after August 2 before collateral effects were felt. Those collateral effects go beyond a debt downgrade (which probably will happen anyway), and include economic dislocation would be hard to predict politically.
So we are, to some extent, like the proverbial dog chasing the car which doesn’t know what to do with it once it catches the car. The car being a failure to raise the debt ceiling for a significant period of time. What would be do with it once we got it?
We have played the debt ceiling hand and achieved some results. We have framed the debate, put Obama on defensive, and have an opportunity to do the only thing that can make a difference, winning the elections in 2012. Overplaying our hand carries risks I would not take.
As bad as it is, I would take this small victory and move on to the battle of 2012, which will decide the fate of the nation for generations.
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Comments
The existing continuing resolution expires on September 30.
S&P gave Congress 90 days from July 14 to implement a plan resulting in a minimum of deficit reduction of 4 trillion.
With this deal, we are 1.9 trillion short. However, I would not focus on specific spending cuts, but rather revisit Cut, Cap and Balance.
Get the House to pass it again, send it to the Senate and then stop.
Want a C/r extension, pass Cut, Cap and Balance (repealing the relevant provisions of the Budget Control Act).
The Democrats and Obama will moan, piss, scream, yell, holler, blah, blah, blah.
The response? What is your counter? Put it in writing. Then we can talk.
More moaning, pissing, screaming, yelling and hollering from the Democrats and Obama.
The response? What is your counter? Put it in writing. Then we can talk.
Repeat, rinse, lather.
If the counter comes at the last minute do not be time pressured. Continue in the ordinary course. If that means a government shut down, so be it. But pass a law to ensure no b.s. from the Obama administration viz payments.
Act and think like winners.
Just some thoughts.
No matter what other mechanisms are in place, real spending cuts require program changes in entitlements and reduced appropriations for other programs. This is hard, detailed, nitty-gritty work in the trenches. But that is were spending reductions really have to take place, not in grandiose plans.
Astute observations, professor. Recognizing ‘the devil is in the details’ I propose we take this “Satan Sandwich” and use it as sustenance to prepare for the battle to come.
Agree completely. The devil is always in the details and the Democrats have become experts at hiding important stuff in those details.
Professor, you are conflicted. I am not.
So long as the Tea Party remains focused on reducing government spending they cannot lose.
Government default? GOOD, the feds can’t spend money nobody will lend them.
Bond rating downgraded? GOOD. If it’s harder to get money, there will be less borrowed.
Government collapses? Good. If there is no government they can’t spend money. This is a win-win for most of Americans. Percenters (anybody that derives income from a percentage of another’s labor) will get screwed but they have been screwing everybody for ages it’s only fair that they get a turn over the barrel.
Sampson took down the Temple to kill the Philistines. The establishment needs to know that it’s over. They either stop with the deficit spending or the Temple comes down.
Since deficit spending will destroy everything eventually, Destroying it now allows the rebuilding to start sooner and puts the hurt on the Bastards that did this to us.
Waiter: Can I take your order, sir?
Customer: Why yes, I’d like a T-bone. Medium rare.
Waiter: I’m sorry sir, we have no more T-bones.
Customer: Fine. Please bring me a prime rib.
Waiter: So sorry. Fresh outta prime rib, too. Can I interest you in a crap sandwich?
Customer: I’m starving. I guess so. Just dress it up with lots of condiments so it doesn’t look and taste like a crap sandwich. By the way, say good-bye to your tip.
Waiter: Very good, sir. I understand. I hope you found the service acceptable.
Customer: Neither of us are getting anything close to what we expected when I sat down. Why should we be happy?
Waiter: When both of us compromise, we both get to pretend it’s a victory.
Customer: I don’t feel like a winner.
Waiter: Actually, I don’t either.
Customer: What kind of a joint is this?
Waiter: Washington.
Customer: Sounds more like Fantasyland.
Waiter: Exactly.
I have a process problem — with the order of voting.
Why is the House voting first?
Why didn’t the House instead demand that the Senate amend the Boehner bill, the one which they already sent to the Senate at the end of last week?
The Senate should have had to amend Boehner’s bill in a way a way that would conform to the terms of this agreement, and then pass it, thereby returning it to the House for final consideration.
That way, the proper constitutional process would have been followed.
What guarantee does the House have that the Senate will concur if the House goes first with a brand new bill?
So far, the House has done all the heavy lifting. The Senate should have to actually participate in the process in a manner that was intended in the United States Constitution, not just get away with refusing to commit themselves to changes they want and becoming a mere rubber stamp ratifier of final agreements.
That is a dangerous precedent, one that Boehner should not have agreed to. He could have gone public with that case and won in a heartbeat.
Otherwise, I think that on the substance Boehner did a very good job in getting as much as could possibly be expected under the circumstances.
Congressman Louis Gohmert (R-Tx) said he stayed up most of the night reading the proposal that they are expected to vote on today. He said it was a horrible deal, and he is a solid “Nay”. He said it basically continues to kick the can down the road and the problem is you really can’t lock in the actions of future Congresses.
Congressman Gohmert is an honest guy who stands by the TEA Party ideals of lower debt/lower taxes/reduced budget. And I don’t think he would stand in the way of progress since he is really not all that partisan (he is a conservative first, not Republican first).
http://www.spiegel.de/international/world/0,1518,777705,00.html
I think you’re right that the long game, taking the Senate and Presidency, is the only way to effect real change.
But, haven’t the Tea Party and the 2010 elections already framed the economic issue? If 3/4ths of Americans already favor a balanced budget amendment, which has not been a major talking point so that people even understand how it would work, it seems that the issue has been well framed–or maybe well intuited.
http://www.bloomberg.com/news/2011-07-29/balanced-budget-amendment-may-create-more-problems-than-it-fixes.html
I’m just hearing Speaker Boehner stress the balanced budget amendment. If Republicans can hold that as their message despite whatever is in the bill to be passed, this (or any bill) could be a win. It’s not so much what’s in the bill as what message goes forth.
Not that a balanced budget amendment is necessary. But, the overwhelming desire for one is the key to effective economic policy.
I’m usually ambivalent about many things, however, I see this deal as a total disaster. The road to fiscal responsibility and a sound economy is by way of substantial cuts in spending. This deal doesn’t even come close to that.
The only good that I see coming out of this is that we can now very clearly see that the current Republican leadership isn’t up to the job. Lets all get together and sent them another message of dissatisfaction in the next elections.
Bipartisan legislation is a bunch of baloney as long as the Democrats are hell bent on spending and taxing. We need to get rid of them as much as possible and get in more good Tea Party candidates. That means more people like Rubio and West and NOT more like O’Donnell and Angle.
Your comments assume that the whole thing had to be done in this one bill. This is going to be a long war with many battles. This was just the first major battle. I’d say the forces of reduced spending won a victory here, albeit a narrow one. It is not possible for the Republicans to force their agenda on the Democrats. Until the Senate and White House are under the control of real conservatives, progress will be painfully slow and difficult and victories will be small.
nah, this is the dominant viewpoint of the Democrats and leftwingers.
Check it out: http://www.the-pork.com/Topic936332-48-1.aspx?Highlight=bush+tax+cuts+expiring
Lefty’s believe that Bush tax cuts only benefit the wealthiest families in American, not the poor
This is why you see them consistently bring up allowing the bush tax cuts to expire. harry reid is only a recent occurance in his debt bill. this is a battle that will be played in 2012 (and if 0bama is in power he will veto
when it’s brought up again.)
the president is only allowed to serve 2 terms anyways, right? So what would voters do? vote him out?
he’d be leaving anyway by his second term.
and he wouldn’t fear the reprecussions of being voted out;
he has consistently said he isn’t happy with the wealthy getting tax cuts and wants them to pay more. He would of let them expire back in 2010… if it weren’t for the choice
of 1) that or higher taxes.
If he had been responsible for higher taxes in his first term. it would of been bad for his re-election …as the economy would play a huge part. Less jobs will be created and it hurts him.
A second term, he won’t care whether the high taxes hurt him. He wouldn’t be allowed to run for a third term anyways. So, I bet he’ll veto it next time it comes up.
but making bush tax cuts permanent now prevents that. And this is a good opportunity to do that. because… The gop will surely vote yes to pass a debt bill with it inside. And the choice would be forced into the Democrats hands or 0bama they could accept. which saves the conservatives a future battle in 2012 and damages the morale of the democrats in their faith in 0bama or… refuse and cause a default. which don’t look good for 0bama in a re-election wise in 2012.
They don’t want a default under their Democrat president
If any of you had or wondered if the rumors that the media had taken sides against Republican then this should put those questions to rest once and for all …. I THINK THIS DESERVES A BLOG POST OF ITS OWN
CBS Norah O’Donnell..””WE” gave “THEM” everything , “WE” got nothing”
http://www.youtube.com/watch?v=q19aWffJgf4&feature=player_embedded
here’s another
http://www.the-pork.com/Topic941117-48-1.aspx?Highlight=bush+tax+cuts
THE POOR ARE NOT POOR BECAUSE THE RICH ARE RICH …..don’t remember where I read that but it pretty much sums it up
If we give obama 2.4 trillion dollars to again spend on his vote-buying and his supporters who in turn donate to his campaign and the yearly deficit is 1.5 trillion dollars, where will it all end? We are clearly adding 1.5 trillion dollars to the 14.5 trillion we have now. The only ay out doing this is to continue to borrow. With a deficit like this we will never pay it off without stringent downsizing of all government departments, quit subsidizing all the countries in the world, giving grants for ridiculous research nobody cares about, subsidizing chosen tax exempt organizations and not repealing obamacare. There is no way we can do this otherwise. Anyone who has a charge card could tell you this is a loser. This is truly kicking the can down the road again until we have no resources and will have to sell our assets to foreign powers in return for more loans. This path will never end until this country is totally destroyed. IMHO, that is the real goal of the obama administration.
here’s a third article from a known progressive about how much they blame the wealthy and the rich and are adamant believers that the Bush tax cuts are harmful to poor and middle class.
http://www.the-pork.com/Topic931328-48-1.aspx?Highlight=bush+tax+cuts
I really think the republicans may want to consider added a permanent bush tax cuts code into the debt talks….
it really forces the other players hand
to either pass it. or reject it.
(rejecting it would have devastating consquences for the economy, 0bama or democrats.
The only part of this deal that is important to actually resolving the federal government’s massive spending addiction is a Balanced Budget Amendment.
If such a bill is ever introduced in the House, John Boehner will maneuver any BBA to failure in the House.
He has no intention of reducing federal spending. And he has no intention of allowing a meaningful BBA to pass the House because it would result in reduced federal spending.
Agree completely. As I’ve said before, it’s Pyongyang on the Potomac-something now for a promise to consider something later. But now the other side is just across the hall and everyone’s watching, it’s not just some deal in a back room at Foggy Bottom. Take the deal, win EVERYTHING, win UGLY, in 2012. Then hold ALL their feet to the fire; the new president’s, the house’s, the senate’s. Bush tax cuts? Who cares. A new tax code. Cut spending? Piddly. Cut government.
You left the states out of the political equation. Getting the hat trick in 2012 (house, senate, president) is by no means certain. But refusing to raise the debt ceiling without a balanced budget amendment would be a long term game changer, one that is available now. That pulls power out of DC and puts it back in the hands of the states.
The Obama administration will not spend the next 18 months with the 40 percent spending cut that happens if the debt ceiling is not raised. They will pass the balanced budget amendment. Once that passes, gridlock is our friend again … no hat trick required.
If National Review, a GOP cheerleader, is saying that: “The bill became substantially worse in this latest version” (http://www.nationalreview.com/corner/273373/one-cheer-deal-yuval-levin)
and Rich Lowry is saying that the defense cuts are “hair-raising” (http://www.nationalreview.com/corner/273340/defense-obama-cut-plus-more-rich-lowry)
I can say without equivocation that the bill must stink to high heaven.
And why is the House voting on it first? Shouldn’t the Senate have amended it, voted on it and returned it to the House?
I don’t like any of this.
I can’t agree that this is even a small victory. I’m not some fanatic TEA-partier who insists on fixing everything right now. I understand that while Democrats control the Senate and the White House, real spending cuts are not achievable. We didn’t get into this mess in one step, and we won’t get out of it in one step; that would be true even if we controlled Congress and the White House and could pass anything we wanted. Given that we only have one house, compromise is inevitable and necessary.
But the minimum compromise that I’d consider barely acceptable would be a deal that held the coming year’s spending to $1 less than what was spent in the past year. That’s all I want; a measly one dollar cut in spending. It would represent the Democrats’ acknowledgment that spending is a problem, and it must eventually be seriously cut, but let’s not do it right now. That would be acceptable to me. But this deal doesn’t even do that. Spending continues to go up. The first rule of holes is supposed to be to stop digging; not only don’t we do that (and I agree it would be impossible), not only aren’t we even slowing down our digging, we’re speeding it up! That without the deal we would be speeding up our digging at an even greater rate doesn’t interest me; I’d rather have no deal than this one.