Groundhogs love Grand Bargains
by digby
Here's a shocker. The Super Committee Dems are negotiating like morons:
The key dilemma facing President Obama and Congressional Democrats is that Republicans are wholly unwilling to support any new job-creating spending projects -- even projects with bipartisan support -- unless they're offset with spending cuts or savings elsewhere in the budget.
Thus, Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they've been tasked with finding, in order to help offset some of those costs.
"All of us would like to set as a target for ourselves even more than $1.5 trillion," Rep. Chris Van Hollen (D-MD), who's also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference.
He and other Democrats point out that economic growth will reduce deficits simply by reducing unemployment rolls and increasing tax revenues. But when taken on their own, Democrats' favored jobs proposals (infrastructure spending, or temporary tax cuts) add to the deficit, and will thus make it harder, mathematically for Democrats to reach the Committee's goal of $1.5 trillion in budget savings.
Committee member Rep. Xavier Becerra (D-CA) agrees with Van Hollen, and says he'd be willing to put key progressive programs on the table if it gives Congress more running room to shore up the economy now.
"It's incumbent upon the Congress and the government not to make things worse," Becerra said. "I'm looking at the last six months and I'm not seeing how job growth has come from some of this cutting of services, but again I'll be open to it so long as...there's proof that the proposal will lead to job growth and deficit reduction."
This is obviously coordinated with the White House which has been leaking this silly idea for the last week. I wrote about it here back on the 4th, based on this Politico report:
The drama surrounding Obama’s new jobs plan has eclipsed the other major item on the White House’s September agenda: to offer his most specific proposal yet for reshaping Medicare, Medicaid and the tax code.
In the speech Thursday, Obama will challenge the 12-member congressional supercommittee to exceed its $1.5 trillion goal for budget savings — setting a higher target that would allow the additional money to fund tax breaks and other stimulus spending. But the “very specific” deficit recommendations that Obama promised last month won’t come until after the speech, although the exact timing is unclear, White House officials said.
But then there's nothing new about it at all, is there?
January 2009:
To listen to Obama and his budget director Peter Orszag is to hear a tale of long-term fiscal woe. The government may have to spend and cut taxes in a big way now, but in the long run, the federal budget is unsustainable.
That's where sacrifice kicks in. There will be signs of it in Obama's first budget, in his efforts to contain health-care costs and, down the road, in his call for entitlement reform and limits on carbon emissions. His camp is selling the idea that if he wants authority for new initiatives and new spending, Obama will have to prove his willingness to cut some programs and reform others.
The "grand bargain" they are talking about is a mix and match of boldness and prudence. It involves expansive government where necessary, balanced by tough management, unpopular cuts -- and, yes, eventually some tax increases. Everyone, they say, will have to give up something.
Only such a balance, they argue, will win broad support for what Obama wants to do, and thus make his reforms "sustainable," the other magic word -- meaning that even Republicans, when they eventually get back to power, will choose not to reverse them.
It's Groundhog Day.
Aside from the absurdity of the idea that this "balance" will win broad support and thus make his proposals "sustainable", the politics at this point are literally insane.
The president and his Democratic robots are going to propose to cut Medicare by raising the eligibility age and cut Social security by making the oldest and most vulnerable (mostly women) lose benefits just when they need them the most. They are going to do this in order to get the Republicans to agree to extend the payroll tax cuts for another year or two (which only counts as stimulus if you define it as something that would be contractionary to take away.) And the really good news is --- huzzah --- that will weaken Social Security even more. It's a twofer. if we're lucky maybe they can get the Democrats to agree to slash the corporate tax rates to zero and completely eliminate the FAA and call it stimulus too.
Politically it's even better. Here's the Mittster just a couple of days ago:
ROMNEY: We didn’t raise taxes, Mr. President. You raised taxed $500 billion dollars. We didn’t cut Medicare — one President in modern history cut Medicare, this President.
David Atkins wrote a whole post recently about the latest "independent expenditure" attacks on Democrats for cutting Medicare. Maybe the president thinks he might as well propose to cut it for real since they're already blaming him for doing it. The difference, of course, is that Democrats who don't usually believe GOP propaganda like that will be forced to admit that it's true. Why do that?
I am given to understand that the DCCC is telling all their candidates to run on the Pelosi slogan "we have a plan, it's called Medicare." I like that slogan very much. But I have a sneaking suspicion it isn't going to play very well if the Democratic president is cutting the hell out of the program. And raising the eligibility age is a very, very big cut, one that people will immediately grasp, especially those that are in the program or close to it. The politicians can assure these elders all they want that they will be ok, but polls repeatedly show that it doesn't help sell the cuts to say "don't worry, you're safe --- only your kids and grandkids will be screwed." For some reason, older people who like these programs often care about their families and want them to have them too. Who knew?
I'm sure they'll make the case that the Affordable Care Act will pick up the slack, which will sound to the average American as if they're speaking in tongues. Nobody understands or trusts that the ACA is even real at this point --- that argument will get them nowhere in 2012.
I don't believe any of these Democrats are stupid enough at this point to think they will get a "deal." The Republicans have shown their cards on that one too many times for even these guys to believe otherwise. But the Republicans are thrilled for the Dems to tee up Medicare and Social Security for them again.
Here's a little reminder of the 2010 campaign:
This is becoming surreal. It's almost impossible to sort out what these people really want anymore or what they think they will accomplish. It's clear to everyone except Mark Halperin that there will be no bipartisan agreement, even if Barack Obama were to simply take Rick Perry's agenda and adopt it as his own. So it's all a bizarre suicidal kabuki dance.
Wasting the last year on this deficit nonsense has been very, very costly for the American people. The congress is hunkered down, the Fed and the executive branch are still wedded to austerity. All that's left of politics is the election campaign. This isn't going to help.
Update:
Dday writes on the same subject:
The President has all the tools he needs right now to force deficit reduction far beyond what he will probably even announce. It’s called the veto pen. Doing nothing and allowing the Bush tax cuts to expire, along with other expiring tax breaks, will more than achieve primary balance in the medium term. That’s the consensus of the Congressional Budget Office from a couple weeks back. The President could simply say he will not sign any extension of these plans without offsets, leave it to Congress to figure out the details, and be done with deficit reduction, while demanding his jobs plan get enacted. He could say the same thing on jobs, saying he will veto Catfood Commission recommendations unless they contain his jobs plan, with the trigger on defense and discretionary cuts backing him up.
But that’s not this President’s agenda. He thinks the Clinton tax rates were too high. He things that raising the Medicare eligibility age, one of the worst policy ideas imaginable, is a “modest adjustment” to “strengthen” the program. So all these ideas for how to deal with an age of political hostage-taking is a wish and a hope.
By putting Medicare eligibility on the table, and I’m sure Medicaid blended rate and chained CPI aren’t too far behind, the focus becomes about cuts rather than jobs, against the explicit wishes of the public. In the end, Republicans can pick and choose, taking tax cuts and entitlement cuts and tossing out the public investment and overall tax hikes. This didn’t work out during the debt limit deal, but with the trigger supposedly forcing action in the Catfood Commission, the urgency for a Democratic capitulation will be great, especially if the party leader puts out a plan of this stripe.
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