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Sunday, April 10, 2011

Protection Racket

by digby

Winning the future:

"The Senate majority called what the Speaker was asking for, just in February," Amanpour said, "he called it 'draconian.'" She pointed out the cuts were now being called historic. "I mean, which is it? Is it draconian yesterday and historic today?" Amanpour pressed.

"Well," Plouffe replied, "some of the cuts were draconian. Because it's not just the number, it's what composes the number."

"So in this budget deal, the President, Senator Reid, you know we protected medical research, community health centers, kids in Head Start. We were not going to sign off on a deal that cut those things," Plouffe said. "The President was comfortable with the composition of this deal that, again, there were some tough cuts in there…but in these fiscal times, everyone is going to have to make tough decisions. So it was a historic deal for the American people."

The President of the United States and the Democratic Senate are taking credit for "protecting" some line items in the budget against what --- the all-powerful Satan? I don't know if anyone's noticed, but the Republicans don't have the majority --- tey have one House of congress. The Democrats control half the congressional branch and the Executive. They aren't scrappy little underdogs here. This was an administration that originally proposed to add a 40 billion dollars in much needed stimulus in a time of nearly 9% unemployment. Today they're taking credit for puny rear guard actions "protecting" Head Start and Planned Parenthood. It's literally the least they could do.

It was one thing last December to say that they extended tax cuts for the middle class and unemployment insurance in exchange for the Bush tax cuts for the rich. It was a shitty deal they could have avoided if they hadn't been so determined to also "protect" their House members from having to stand for anything, but at least it advanced something tangible that wouldn't have existed if they didn't act and could theoretically be called an economic stimulus. "Protecting" some social programs that the Republicans put on the agenda for the purpose of feeding their base red meat is not an accomplishment. It's a very weak cover for their capitulation and one which the Republicans are glad to give them. After all, the culture warriors will get a few more bites of this apple in the coming months and this keeps them engaged and busy while the bipartisan budget cutters take a meat cleaver to everything else.

The roundtable with Amanpour, Brazile, Will, Brownstein and Freeland was interesting this morning. I think it's fairly clear that the Villagers know that the Dems were the big political losers in this deal.

Amanpour: How is President Obama playing now? Is this a victory as they are saying now?

George Will: If this is a victory, I wish him many more...

He went on to point out that this establishes the new baseline for all these programs and will actually result in hundreds of billions in cuts over the long haul. He ended with this: " The entire conversation in the capitol is in the conservative vocabulary." Yes indeed. Amanpour then repeated Plouffe's earlier statement that "cuts have to happen."

Meanwhile, here's Ron Brownstein, who seemed somewhat surprised at how much ground the Democrats had given:

Substantively this is a win for the Republicans. The entire debate, as George suggested, was on their terms. The president essentially accepted an argument that austerity is acceptable at a time when unemployment is at 8.8%. That is a big win.

He then pointed out that the congressional Republicans come out of this more united and the Democrats are more divided, which I'm not sure anyone expected. On the other hand, the polls may very well show that the vast majority of Democrats and independents admire the president for compromising and they don't really know or care about the substance since they trust him to do what's right, in which case he's got a good short term political win that may even buy him a temporary couple of points, just as the lame duck compromises did. The problem lies in the policy substance. We aren't even talking about jobs or the economy except to the extent that slashing government spending as far into the future as possible will somehow result in Morning In America. If the economy is hurt by an immediate withdrawal of a large sum of money, it may be a Pyrrhic victory after all. Independent voters may not care about the details of these "deals" but they do care about results like this:

In an update that dents the Chancellor's goal of driving Britain back to competitive prosperity, the leading think-tank predicted growth of just 1pc for the three months to the end of June, compared with an average for the G7 leading economies excluding crisis-hit Japan of 2.9pc.

Critics of the Government said the forecast demonstrated that the scale of its £110bn austerity programme is jeopardising the recovery.

I suppose that the governing elites are counting on American Exceptionalism to get a different outcome here. And maybe it will. After all, here in America the entire conversation among all elites in the media and government is leading people to believe that the cause of the current economic malaise and income inequality is government spending and high taxes for the wealthy and corporations. It will take years to unravel that belief at this point and until it is, there will probably be round after round of cuts to "fix" the ailing economy as average people incrementally lose their dreams and their futures. At some point, they'll catch on. But it may be too late.

While the Democratic Party very well "win" from time to time and the party will play its role in the kabuki dance -- that of "protector" of an ever dwindling handful of ever smaller signature programs to keep the desperate progressive faction on board --- liberalism itself has suffered a terrible and perhaps mortal blow. To have a Democratic president of the United States adopt austerity and extol it as an historic victory the midst of ongoing high unemployment and a moribund economy means that the argument is basically over. This is not Franklin Roosevelt's puny GOP opposition and the Democratic Party does not have the middle class loyalty it had in 1937 to withstand making this kind of monumental error. Neither are we likely to be rescued by a war machine --- it's already cranked. No, the Democratic Party is formally relinquishing its historic claim to represent the economic interests of working families. The best we can hope for is that they "protect" us from a full blown Theocracy or a return to Jim Crow. (After all, they need to get elected somehow or they won't get a share of the spoils.)

The next step is to join the clamor to turn the safety net into an individual "investment" instrument and elder insurance scam and make the transition complete. The consensus on that is already there. Here's Fareed Zakaria this morning:

The good news is that Congressman Paul Ryan, the Republican chair of the House Budget Committee, has put out a budget plan for the next year and beyond that tries to tackle America's biggest long-term problem, entitlement spending that is careening out of control.

The bad news is, his plan wouldn't work. But I still applaud him for his courage in taking on the toughest topic and for proposing painful remedies. Any solution to Medicare will involve cuts and they will be unpopular.

So, what's wrong with Ryan's plan? Well, it's an odd proposal from a man who seems genuinely committed to a solution to the U.S. fiscal crisis. The plan does not touch social security. It actually increases defense spending over the next 10 years, then it never actually explains what it will cut from discretionary spending. It simply asserts spending will go down massively...

So why do I applaud the Ryan plan? Because it is the first serious effort to begin talking about restructuring entitlements, which is a necessity. Democrats can attack the plan but they, too, must face up to the fiscal reality and come up with their own plans.

The Government Accountability Office concludes that America faces a fiscal gap of $99.4 trillion over the next 75 years. Now, that would mean we would have to increase taxes on average by 50 percent or reduce spending by 35 percent simply to stop accumulating more debt than we already have.

Medicare, Medicaid and social security will together make up 50 percent of the federal budget by 2021, in 10 years. For liberals, this long-term fiscal crisis should seem devastating. If entitlement programs continue to grow, they will soon crowd out almost all other government spending. This means there will be little money left for programs to address poverty, income inequality, education, infrastructure, science and technology, research and all the other purposes of active energetic government.

"The Washington Post" blogger Ezra Klein has pointed out that the federal government is turning into an insurance company with an army, and if that insurance company doesn't shrink, soon there wouldn't be much money even to pay for an army.

Oh, I have a feeling we'll always have the money for the army. After all, that's what protects the economic interests of the owners of America from confiscation. (And is there any big plan on the table that has "entitlement" spending being diverted to "address poverty, income inequality, education, infrastructure, science and technology and research?" The last I heard we needed to eliminate the debt because "markets" are upset and the yellow peril and/or the terrorists are going to kill us all in our beds because we are going broke.)

That's the argument, folks, in a nutshell. The Democrats will save Planned Parenthood spending (although it might have to turn it into a block grant ... ooops)and will fight for "Race to the Top" and all you have to do is give up the social safety net. Do you feel protected?


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