Category: Bipartisan Wet Dream

The deal

~ susie ~ 3 Comments

When Obama made his announcement, you’ll notice he says he would have preferred a bigger deal with entitlement “reform” (i.e. Social Security and Medicare cuts). It’s a shitty deal – even the NY Times noticed.

By the way, I’m not calling them “entitlement” programs anymore, that’s right-wing phrasing. They’re national retirement programs. We paid for them, they’re ours:

President Obama said tonight that he and congressional leaders have agreed to a debt ceiling deal just two days before a possible government default that would inflict major damage on the economy.

The full Senate and House must still vote on the agreement, Obama said at a surprise appearance Sunday night in the White House.

“We’re not done yet,” Obama said. “I want to urge members of both parties to do the right thing with your votes.”

As word of the agreement filtered out, some Democratic liberals are already protesting that the plan lacks new tax revenues, while some Republican conservatives said it creates the possibility of too many defense cuts down the line.

Obama said there are some parts he doesn’t like, particularly the lack of new tax revenue, but that is the nature of compromise.

“This process has been messy,” Obama added. “It has taken far too long.”

The proposal calls for a two-tiered $2.1 trillion increase in the debt ceiling while cutting federal spending by more than $2 trillion over the next ten years. Most of the reduced spending will be developed by a special congressional “super committee.”

The plan also calls for automatic spending cuts if the committee cannot agree on a plan, or if Congress rejects its recommendations.

“Everything will be on the table to hold us all accountable,” Obama said.

Cult Following

~ susie ~ 3 Comments

Krugthulu on the Cult that’s Destroying America:

[T]he cult that I see as reflecting a true moral failure is the cult of balance, of centrism.

Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.

So what do most news reports say? They portray it as a situation in which both sides are equally partisan, equally intransigent — because news reports always do that. And we have influential pundits calling out for a new centrist party, a new centrist president, to get us away from the evils of partisanship.

The reality, of course, is that we already have a centrist president — actually a moderate conservative president. Once again, health reform — his only major change to government — was modeled on Republican plans, indeed plans coming from the Heritage Foundation. And everything else — including the wrongheaded emphasis on austerity in the face of high unemployment — is according to the conservative playbook.

What all this means is that there is no penalty for extremism…

Days of swine and roses, indeed.

Forest for the trees

~ susie ~ 3 Comments

Robert Greenstein from the Center on Budget and Policy Priorities says the Gang of Six plan is not all that bad, and explains it in great detail. Read it, your blood pressure might go down at least a bit.

However, as I’ve pointed out before, policy wonks get so immersed in the details of a proposal (Ezra Klein comes to mind) that they simply miss the larger issues — like why a Democratic president even put us in the position of making a deal that includes Social Security, simply to get a routine raise in the debt ceiling – something on which he could assert 14th Amendment privilege and just do.

‘Why don’t I know about this deal?’

~ susie ~ 4 Comments

Harry Reid:

Senate Majority Leader Harry Reid (D-Nev.) confronted White House budget director Jack Lew during a Thursday afternoon meeting about secret talks on a deficit-reduction deal between the president and Speaker John Boehner (R-Ohio).

“I’m the Senate majority leader — why don’t I know about this deal?” Reid demanded as soon as the budget director walked into the historic Mansfield Room for a meeting with Senate Democrats, according to a lawmaker who witnessed the exchange.

Lew shot back: “If there’s a deal, then the president doesn’t know about it, the vice president doesn’t know about it and I don’t know about it.”

A Senate Democratic aide confirmed the exchange took place.
Democrats were outraged about reports that Obama was willing to accept major spending cuts in exchange for reforming the tax code at some point in the future as part of a deal to raise the $14.3 trillion debt ceiling.

Reid and other Democrats warned the administration officials in the meeting that they might not support a deal between Obama and Boehner if kept out of the loop.

“It was a heated session,” said a senior Democratic senator who attended the lunch. “There’s a basic lack of trust with the president.”

The gospel according to Ezra

~ susie ~ 2 Comments

Here’s an update from Ezra Klein this morning:

What set off yesterday’s debt-deal panic among congressional Democrats wasn’t so much information about a new deal as a better understanding of the old deal. What Boehner and Obama appear to be discussing is the $4 trillion deal they were discussing a few weeks ago. In that deal, $1.5 trillion in immediate cuts would be followed by processes for making a further $1.5 trillion in deeper cuts — many of them to entitlement programs — and reforming the tax code to raise a trillion more dollars than it does now. The plan would also include some sort of enforcement mechanism that would make sure the future spending cuts and tax increases manifested.

Congressional Democrats spent much of yesterday complaining that this plan doesn’t really have revenues while the White House spent much of yesterday swearing that it did. On this, congressional Democrats are mostly right. The revenue in this plan is approximately equal to the revenue from letting the Bush tax cuts on the rich expire — which is something Democrats could do with zero Republican votes in 2012, when the Bush tax cuts are set to expire automatically. In other words, Democrats are demanding, as part of this deal, that Republicans agree to let them do…something they could do even if Republicans refused to agree to it.

The best way to understand the revenue in this plan, in fact, is that it’s a concession to Republicans, not Democrats. It effectively takes the 2012 expiration of the Bush tax cuts and all of the leverage that gives Democrats off the table, but doesn’t ask for more revenue in return. Rather, there’s about 25 percent as much revenue in this plan as there is in simply doing nothing and letting the Bush tax cuts expire, and half as much revenue in this plan as in the Simpson-Bowles/Gang of Six plans recommended, and this plan also gives up Democrats ability to go for more revenue in 2012 when the Bush tax cuts expire. See this graph/post for a clearer comparison.

Continue reading “The gospel according to Ezra” →

Bipartisan deal

~ susie ~ 5 Comments

I think Obama just wet himself, he’s so excited. Even when you know it’s coming, it’s still maddening when it does:

President Obama on Tuesday hailed an ambitious new deficit-reduction plan that is gaining momentum in the Senate, saying it could provide the vehicle to break an impasse over raising the federal borrowing limit while cutting the nation’s debt.

Appearing at the regular White House news briefing, Obama said the bipartisan proposal is “broadly consistent” with the approach he has advocated in that it reduces discretionary spending and tackles health-care spending and entitlements while also raising additional revenue.

But in the event that an agreement capable of passing Congress is not reached before a looming deadline to raise the federal debt ceiling, Obama said, lawmakers should finishing hammering out a backup plan now being negotiated by the Senate’s Democratic and Republican leaders.

Closer

~ susie ~ 2 Comments

Ezra Klein:

We seem to be coming closer to a deal on the debt ceiling. It begins with the McConnell plan, in which the debt ceiling is raised three times between now and November, and each time, Republicans are able to offer a resolution of disapproval. Then it adds in $1.5 trillion in spending cuts harvested from the Biden talks. Then it creates a committee of 12 lawmakers charged with sending a deficit-reduction plan to Congress by the end of the year. Whatever they decide on would be protected from the filibuster and immune to amendments.

For Republicans, this plan is something close to the best of all possible worlds (sorry, but I do not consider a world in which “Cut, Cap, and Balance” passes to be a possible one): It’s all spending cuts and no revenues. It’s a little plan that denies the Obama administration the political and substantive benefits of a big plan. It’s a multi-part plan — which is more important than people realize — that forces Democrats to take three hard votes between now and the election, and almost ensures that deficit reduction will be an issue in 2013 and beyond. It’s a plan that smartly pockets more than a trillion dollars in spending cuts Democrats can sort-of accept and only then begins a grand bargain process, ensuring that if there’s a grand bargain later, it will cut far deeper into the bone of Democratic priorities. If it passes, Republicans will have escaped these negotiations without making any significant political or policy concessions.

As for the Democrats? Well, it’s a deal. No particular part of it is so objectionably that Harry Reid couldn’t pass it if he tried. And it raises the debt ceiling. That’s not a particularly rousing argument, but perhaps it will be enough.

I suppose it never even occurred to anyone to simply give us what we want — which is stimulus spending and jobs. Oh well!

UPDATE: Jed Lewison has more:

Not only would they get significant cuts without tax increases, they also get a process that will place the entire political burden for raising the debt limit on President Obama. Moreover, they force him to request three separate debt limit extensions, and would require Democrats to sustain vetoes of Republican rejections of each of those extensions. Because the commission could theoretically suggest revenue increases, Republicans could claim to the chattering classes that they aren’t totally in Grover Norquist’s grip. And to top things off, they would get all this for something that they have already publicly said they want: a higher debt limit.

The only potentially attractive thing* about this is that it would avoid the catastrophe of failing to raise the debt limit, at least for now. But it’s not like they weren’t other ways to achieve that goal. Using the debt limit as a hostage to force sharp spending cuts without raising revenue is exactly what Republicans have been fighting for. And if this is the plan, they may well be close to getting it.

*It should be noted that by this same logic, serving time in prison is a “potentially attractive thing” because you get free food.

Taibbi: Obama doesn’t want a progressive deal on the deficit

~ susie ~ 2 Comments


Like Matt Taibbi, David Swanson also thinks the debt ceiling debate is a fraud.

Matt Taibbi describes the debt ceiling charade in his own inimitable way:

But what is becoming equally obvious, to both sides, is that the Obama White House is using this same artificial calamity to pitch its own increasingly rightward tilt to voters in advance of the 2012 elections.

It has been extremely interesting in the last weeks to see observers on both sides of the aisle make this point. Just yesterday, the inimitable New York Times conservative Ross Douthat listed Obama’s not-so-secret rightward push as a the first in a list of reasons why the Republicans should dig in even more, instead of making a sensible deal: Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.

The not-so-secret secret is that the White House has given ground on purpose. Just as Republicans want to use the debt ceiling to make the president live with bigger spending cuts than he would otherwise support, Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.

Douthat makes this observation, then argues that the Republicans should recognize Obama’s hidden motive and hold out for an even better deal. It will then be a race to see which party can abandon employment in favor of deficit reduction faster. He writes:

Why? Because the more conservative-seeming the final deal, the better for the president’s re-election effort. In that environment, Republicans have every incentive to push and keep pushing. Since any deal they cut will be used as an election-year prop in 2012, they need to make sure the president actually earns his budget-cutting bona fides.

This is interesting because just last week, the liberal opposite of Douthat at the Times, Paul Krugman, came to the same conclusion:

It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

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Plan B

~ susie ~ 3 Comments

Reid and McConnell put together a backup plan.

What is emerging as the most likely outcome is a plan based on Messrs. McConnell and Reid’s work, a Democratic official familiar with negotiations said. It would include roughly $1 trillion in deficit reduction, but would not come with tax increases or Medicare savings, the official said. It could include an extension of unemployment insurance, the official said, which costs $40 billion and would be offset by spending cuts.

Mr. Obama suggested in Thursday’s meeting that leaders end tax breaks for ethanol producers, oil and gas companies and corporate jet owners, and offset those tax increases with an extension of the payroll tax credit for employees, a Democratic official familiar with the meeting said, but Republicans said they would not support it.

Mr. Obama said he still prefers a larger plan, but the only way to get even to a $2 trillion deal is to include tax increases, which Republicans flatly oppose, or Medicare cuts, which Democrats oppose without concessions from Republicans on taxes. Mr. Obama will hold a news conference Friday morning.

In other words, if Boehner can browbeat the House Republicans in to budging on tax increases, the Dems are going to cut Medicare. Oh, yay!