They see London, They see France --- but they're going for austerity anyway
by digby
Odds are that even if Obama wins, Republicans will hold the House and potentially win back the Senate. But after losing the presidency — after failing to achieve what Senate Minority Leader Mitch McConnell (Ky.) called their “top political priority” — would they be more or less willing to work with a man they couldn’t persuade the American people to fire?
“After you lose, there’s a circular firing squad that occurs,” says a former senior aide to the Senate Republican leadership. “You’ll have a wing of the party standing up and saying we did not adhere to our values strictly enough. And you’ll have a wing saying we did not appeal to independents.”
In a scenario where Republicans are willing to work with Obama — where they would accept $1 trillion or more in new revenue in return for cuts to entitlement programs — the president’s team can imagine getting quite a lot done, in part because there’s a lot that both sides want to do.
Both sides are aching to do tax reform, for instance. Both sides want an intelligent set of spending cuts. And both sides are seeking changes to entitlement programs such as Social Security and Medicare.
But agreeing on goals isn’t the same as agreeing on the policies needed to achieve those goals. Sure, both sides want tax reform, but they disagree on whether it should raise new revenue. And both sides want to replace the supercommittee’s automatic spending cuts, but Republicans want to substitute deeper reductions to domestic programs, and Democrats don’t. If these issues could be successfully navigated, however, that could build the necessary trust to take a run at entitlement reform.
It’s easier to see Democrats and Republicans coming together on a deal around Social Security than on Medicare and Medicaid. Bipartisan changes to the two health-care programs are complicated by the Affordable Care Act and GOP Rep. Paul Ryan’s budget, which have committed the parties to opposing visions for the health-care system.
But the two parties have largely left Social Security out of their arguments. Ryan’s budget leaves it alone. Obama’s plans do, too. The two sides haven’t polarized around irreconcilable ideas. It’s possible to imagine them going into a room and coming out with a deal. It could even be coupled with tax reform, since much of what needs to be done for Social Security relates to changing what and how it taxes.
Of course, if the post-election Republican Party pulls further to the right, then big deals are probably impossible. In that scenario, our fiscal problems might be solved when Congress fails to come to an agreement, and the Bush tax cuts expire and the spending cuts kick in. That would be devastating to the economy — I consulted some forecasters who thought we’d be in double-dip-recession territory — but it would cut the deficit in a hurry.
Great. The tax hike of doom boogeyman. I don't know why they can't let the Bush tax cuts expire and then have the President call for huge tax cuts for the middle class. The 1% tax hike will not cause a recession. (They've proven that they have more than enough money to afford it with their insane election spending to avoid paying it.) Will the Republicans block it? Maybe. But it's very hard to see how they can ever hope to win elections going forward if they do.
I'm not in the mood to completely game this out today. Maybe I'll take a whack at it tomorrow. But at first glance, this sounds like a recipe for disaster. They shouldn't even be talking about cuts. We've see the result of this "strategy" in Britain, where the nation went back into recession before the cuts even took place. You want dynamic growth? Well, one good way not to get it is to slash the hell out of programs real people are going to need and use in the future. It tends to make a whole lot of them just a little bit risk averse. Slash the safety net and you create a financially cautious, circumspect middle class hunkering down for the coming apocalypse, not a nation of swashbuckling entrepreneurs.
So, it appears that Washington is determined to continue to obsess over dicey fiscal projections for a quarter century from now while ignoring the problems that are staring us right in the face. Indeed, the only long term problem that requires our immediate attention is climate change and they not only couldn't care less, they are actively creating an industry devoted to denying it even exists.
Oy vey. This is headache inducing. But I hope somebody's thinking about it because we are going to face this right after the election whether in the lame duck or the beginning of the new congress when they can push it through before new members get their sea legs. They seem not to even have noticed what's happening in Europe --- or here. The DC bubble has never been so insular. And from the sound of Ezra's piece, the election itself matters not a whit.
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