Digby's Hullabaloo
2801 Ocean Park Blvd.
Box 157
Santa Monica, Ca 90405

Facebook: Digby Parton

@BloggersRUs (Tom Sullivan)

thedigbyblog at gmail
satniteflix at gmail
publius.gaius at gmail
tpostsully at gmail
Spockosbrain at gmail
Richardein at me.com


Mother Jones
Raw Story
Huffington Post
Crooks and Liars
American Prospect
New Republic

Denofcinema.com: Saturday Night at the Movies by Dennis Hartley review archive

January 2003 February 2003 March 2003 April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 December 2005 January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 April 2013 May 2013 June 2013 July 2013 August 2013 September 2013 October 2013 November 2013 December 2013 January 2014 February 2014 March 2014 April 2014 May 2014 June 2014 July 2014 August 2014 September 2014 October 2014 November 2014 December 2014 January 2015 February 2015 March 2015 April 2015 May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 November 2015 December 2015 January 2016 February 2016 March 2016 April 2016 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 July 2018 August 2018


This page is powered by Blogger. Isn't yours?


Thursday, February 17, 2011

State of play

by digby

It appears that the Obama supporters in the political establishment have awakened to the fact that he really does want to enact a Grand Bargain and that it's highly likely that it will end up being a bad deal for Democrats. Dday has the scoop today on this much-discussed article by Johnathan Chait in The New Republic (an article that made me laugh because I recalled being jeered and dismissed for my Cassandra warnings for the past two years on this.)

Dday writes:
Chait goes on to say that this deal calls for ten times as much spending cuts as revenue increases, and that this would be a horrible deal for Democrats (to say nothing of the country).

It would. But where has Chait been? This isn’t a surprise at all. The Obama budget has a mix of 2/3 spending cuts and 1/3 revenue. The Republican budget has all spending cuts and is almost impossibly cruel. Bowles-Simpson’s ratio, I believe, was 3/4 spending, 1/4 revenue. Split the difference and you’re up to 5/6 or 7/8 spending cuts. That’s not appreciably different than what’s coming out here. Democrats have always created severe imbalances in these “grand bargain” deals in favor of spending cuts, maybe because they think that’s what can pass or something, maybe because they (or more to the point, their wealthy donors) prefer spending cuts.

I’d love to see just one Democrat come out and say, “You know, just letting the Bush tax cuts expire completely would solve the entire medium-term deficit issue. And we wouldn’t even have to pass anything. Were the Clinton-era tax rates so burdensome?” But to date, that hasn’t happened. So you get these monstrously bad spending-heavy “grand bargains.”

I think that's definitional in this political environment. Even the vaunted 1983 social security deal --- which really was anticipating a short term funding crisis --- ended up being 65% cuts to 35% revenue. (That's why I don't get to retire until I'm almost 67 and neither does anyone else who's younger than I.)

The Republicans have staked out the very fringe of the anti-tax argument as their final position while the Democrats come charging in with anti-spending rhetoric and proposing cuts to poor people to establish that they are acting in good faith --- as if there's any political advantage to that. Even the Villagers applaud such gestures and then promptly forget them. (What they truly desire is for the president to capitulate to the conventional wisdom that says Americans deserve to be punished for their bad, bad behavior with "tough love" which always stimulates aristocrats in interesting primal ways.) The "bargain" almost has to contain far more spending cuts than revenue hikes just from the starting positions alone. And I'm fairly sure the White House knows this --- what they want is political credit for getting a "win" on the board. But I think that in the era of Citizen's United what constitues a "win" is a much more fluid concept than it has been in the past.

As Ezra writes today, the Grand Bargain is basically about cuts to "entitlements" and "tax reform" both of which are essentially GOP issues, depending on how you define "reform" and I think the GOP probably has the upper hand in that. (The right will never agree to cut defense --- unlike the administration they don't seem to believe that the public is impressed when they give up their principles on the alter of making "tough choices.") Cuts to Medicare and Medicaid are probably off the table for the time being after the bruising health care battle. So, Social Security is the best terrain for the Grand Bargain: it's effects won't be felt until the people making the deal are probably long dead (or comfortably ensconced in the taxpayer funded retirement), it will impress the only people who matter --- the confidence fairies and bond vigilantes, and it allows the president to be Very Seriously Presidential in Winning The Future.

The problem is that the Republicans want to lay this off on the president so they can have it both ways by saying he didn't do enough while their shadowy corporate supporters under Citizens United demagogue the cuts to senior citizens, thus insuring they will come out to vote against Obama in huge numbers. The president, on the other hand, needs the GOP to jump off the cliff with him so they can share the blame. What do you suppose the odds of the latter happening are?

Here's an example of the state of play, via Andrea Mitchell today. Deficit scold David Walker, lately of the Pete Peterson Foundation and now head of his own catfood institution said this:

Mitchell: Did he punt on the budget as he's accused of by the Republicans, or is it at least a first draft?

Walker: He punted on the structural deficit challenges. You know, he had a commission, the national fiscal responsibility and reform commission. They really tried to deal with the tough issues of the structural deficit. And frankly, their recommendations didn't seem to get much consideration by the administration and its budget. You know, the president is the chief executive officer of the united states government.The entity that he leads has a deteriorating financial condition and it could have its own debt crisis within three to five years if it doesn't change course. He needs to lead.

Mitchell: What about the argument that if he puts something out there, Savannah Guthrie was on the program earlier, and he said that their strategy is to play his cards close to the vest, my words, not theirs, and wait to see what the other side proposes, see if there's anything that come to senate negotiation, bipartisan negotiation, and then come in, rather than having everyone taking pot shots at what he puts out there.

Walker: The chief executive officer has a responsibility to lead, no matter what type of enterprise it is.

Now, we'll see what the Republicans come up with.They've now said recently that they might come up with some specific proposals as part of the house budget. We'll see whether that's the case. Realistically, we need to do the following.
There needs to be an agreement between the president and congress on short-term spending as part of the continuing resolution.

They're arguing over the bar tab on a ship that's headed towards an iceberg that could sink it. So they need to get perspective. Secondly, they need to end up focusing on the debt ceiling limit. We need to bring back tough budget controls with automatic enforcement mechanisms starting in 2013.

Mitchell: You know, there are some people, including fiscal hawks like my colleague, Lawrence O'donnell, who's been making the case that you're making. But he says we have to be very careful about not cutting too much during this weak economic period. That we can agree to cuts. I think my sense is that many people believe you should agree to something now that triggers in later. Would that do the trick?

Walker: We clearly need to recognize the difference between the short-term and the structural. Look, the real threat is not today's deficits and debt. We can have more tolerance for spending and targeted investments in the short-term if we have a plan to deal with the real threat.What's going on right now is a moral tragedy.We're mortgaging the future of our kids and grandkids at record rates. But how we solve the problem involves moral issues as well.

Walker is explicitly helping the Republicans there, taunting Obama, saying he has a responsibility to "lead" on the destruction of the safety net. And Mitchell (and O'Donnell, apparently) are pushing the idea that "future" cuts are a-ok, which I think is probably the White House position as well. I suppose if they can convince Republicans not to run their usual slash and burn political campaign against them in 2012, it might even work. What do you suppose the chances of that are?