This is crap. The trigger is
easily overcome: The reason the panel was to succeed where other bipartisan negotiations have failed was the “trigger.” The inability of the two sides to reach a deal would trigger $1 trillion in automatic cuts over the next 10 years. Half of that would come from domestic spending, although Social Security, Medicaid and a few other programs for low-income Americans would be protected. The other half would come from the Pentagon.
But increasingly, no one fears the trigger. If it is activated, Republicans have spoken openly about undoing the defense cuts — and the White House and congressional Democrats would happily sign on. But the White House won’t allow the defense cuts to be lifted if the other side of the trigger — domestic cuts — isn’t also defused. So it’s simple to imagine the coalition that will disarm the trigger.
I suppose it's always a risk that the Dems would allow the domestic cuts to go through anyway, but the greater likelihood is that the whole deal would fall apart. (Certainly, a few Democratic obstructionists could make that happen if they wanted to.)
Joan McCarter had a piece at DKos addressing this emerging idea that
we are headed for another "downgrade" by their Royal Highnesses, Moody Analytics. It's also crap:
In fact, as the Center on Budget and Policy Priorities Paul Van de Water blogs, a new analysis from economists at Goldman Sachs Research says that a debt downgrade "seems unlikely," and that medium-term deficit out look would change "only modestly, if at all."
In the final analysis, Goldman says, "the super committee process is important to market participants because it provides a signal as to how successful future fiscal consolidation efforts might be." But a badbudget deal could augur worse for the future than no deal at all.
For example, as Bob Greenstein and Jim Horney have explained, the most recent Republican offer would make further fiscal consolidation more difficult to achieve by essentially taking revenues off the table for future rounds of deficit reduction. Adopting the new Republican proposal—or any other proposal that is unbalanced or makes it more difficult to raise additional revenues in the future—would be worse than no agreement at all.
That was written before the latest brilliant plan to punt on the revenue side of this until next year was floated. That was about the Republican plan to "raise revenue" by dramatically increasing the burden on low and middle income taxpayers in order to make the Bush tax cuts permanent.
Any thought that Republicans are going to offer up something better than that next year, if this cockamamie put-taxes-off-until-later idea flies, is delusional at best. They will never give up on making the Bush tax cuts permanent and they will never agree to revenue increases that would actually make a trade for the Social Security, Medicare and Medicaid cuts they demand worth it, in terms of politics or policy.
I don't think there's any trade that's "worth it" frankly. Whatever budgetary challenges there are to the health care programs must be solved on a deeper systemic basis, which is what the health care reform was supposed to do. The problem is escalating
costs and cutting the program isn't going to solve that. Social security isn't contributing to the deficit and has no business even being in the mix. If they are determined to build up another trust fund they can raise the cap and fix the projections for an additional quarter century.
No, these problems all have solutions that do not require cutting the programs and they shouldn't be part of these negotiations.
We do have a big problem with the wealthy in this country being undertaxed. Plus we have a bunch of military operations around the world that aren't buying us anything but an imperial headache. If people really are concerned about deficits, maybe we should have a real conversation about spending priorities and what we're all willing to pay for instead of empowering secret panels to run spread sheets and come up with a bunch of abstract cuts. It's even possible that Americans would be willing to pay more in taxes. Of course, nobody's even asking them that because it's now a political taboo. (Not that it's the greatest idea in a recession, mind you, but if it's ok for the government to pull money out of the economy by cutting programs it should be ok for the government to pull money out of the economy by raising taxes.)
I keep coming back to this:
If the deficit really is a crisis, it's not difficult at all to see how to fix it. That this isn't even on the table proves that the entire exercise is about something else.
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