“Weather Vane Man”: Tracking Paul Ryan’s 5 Different Positions On The Sequester
House Republicans are attempting to blame Democrats and President Obama for “sequestration,” the automatic budget cuts that will begin taking effect on March 1 if Congress fails to avert them. But even as they cast that blame and ignore their own role in creation of the sequester, which wouldn’t exist had Republicans not refused to raise the debt ceiling in August 2011, Budget Committee Chairman Paul Ryan (R-WI) is expected to count the sequester’s automatic cuts in the next version of his budget, BuzzFeed reports:
According to two senior GOP aides familiar with Ryan’s thinking on the budget, the Wisconsin Republican and former vice presidential candidate will use the so-called sequester as part of the baseline level of spending for his budget.
Ryan’s position on the sequester has changed multiple times:
1. Helped make the sequester happen. Ryan was among the Republicans leading demands for spending cuts to offset a debt ceiling increase in the summer of 2011, and was among the leaders who refused to consider new revenues in those negotiations. Had Republicans not refused to raise the debt ceiling in the first place, the sequester wouldn’t exist.
2. Voted for plan to create the sequester, then bragged about it. Ryan took credit for the sequester in August 2011, bragging to Fox News that it guaranteed the massive budget cuts Republicans were seeking. “We got that in law,” he boasted. On the House floor, he said the Budget Control Act’s spending cuts were “a victory for those committed to controlling government spending.”
3. Called the sequester “devastating” during the presidential election. Ryan blasted Obama for wanting the sequester’s “devastating defense cuts” to take place during the presidential election, when he was the GOP’s vice presidential candidate.
4. Blamed the likelihood of the sequester occurring on Obama. The sequester “will probably occur” because “the president has not a proposal yet on the table,” Ryan told CBS News last week. “Don’t forget it’s the president who first proposed the sequester. It’s the president who designed the sequester as it is now designed,” he added.
5. Will include sequester cuts in his latest budget.
This is hardly a new strategy for Ryan, who crisscrossed the country blasting Obama for cutting Medicare spending even as he included the cuts in his last budget proposal and made even bigger changes to the program.
By: Travis Waldron, Think Progress, February 15, 2013
“Joe Scarborough Is A Total Hack”: But Don’t Take My Word For It
In his latest salvo in his back-and-forth with Paul Krugman over the significance of the national debt, Joe Scarborough, writing in POLITICO today, displayed such a foul misunderstanding about economics, Krugman must have choked on his oatmeal laughing as he read it.
In “Paul Krugman is wrong – but don’t take my word for it,” the MSNBC host made the following point:
Investors may be growing skittish about U.S. government debt levels and the disordered state of U.S. fiscal policymaking.
From the beginning of 2002, when U.S. government debt was at its most recent minimum as a share of GDP, to the end of 2012, the dollar lost 25 percent of its value, in price-adjusted terms, against a basket of the currencies of major trading partners. This may have been because investors fear that the only way out of the current debt problems will be future inflation.
It also may have been because space aliens raided the Treasury in the dead of night because Nicholas Cage and Chuck Norris were off duty, having been contracted by the Navy to fight a flotilla of krakens in the Caribbean the week before. Scarborough may as well have argued that, because it would have displayed a better understanding of how foreign exchange markets actually work. The value of the dollar is determined by foreign countries’ demand for it and our supply of foreign exchange. And while foreign investors in 2002 may have begun to fear widening debt that was eventually caused by a recession in 2008 — despite the fact that the housing bubble was far from inflated in 2002 and that these investors eventually failed to foresee the crash itself — it’s more likely that the value of the dollar fell because our current account deficit essentially doubled between 2002 and 2006 (but don’t take my word for it).
Scarborough continued to make arguments that could be debunked by a remedial high school economics teacher shortly after:
More troubling for the future is that private domestic investment—the fuel for future economic growth—shows a strong negative correlation with government debt levels over several business cycles dating back to the late 1950s. Continuing high debt does not bode well in this regard.
While it’s true that government borrowing can “crowd out” private investment by bidding up interest rates, it isn’t currently happening — interest rates remain low. Furthermore, investors seem to have more confidence in U.S. Treasuries than they do in the market (but don’t take my word for it, “investors continue to buy U.S. government debt as a refuge against a renewal of turmoil in global financial markets and concern the U.S. recovery may falter”). The real reason that private investment and government debt appear to have an inverse relationship, both now and during any recession, is that economic contraction causes both tax revenue and private investment to fall.
So whose word should we take?
If you believe that I am wrong and Paul Krugman is right…then take it up with the RAND Corporation whose senior economist wrote everything you have read here other than this concluding paragraph. The debt crisis is real and waiting another decade to fix it is not an option. Anyone who suggests it is operates well outside the mainstream of where serious economists reside.
If the recent financial crash has taught us anything, it’s that “the mainstream of where serious economists reside” is less credible than a bootleg DVD salesman convention. But what’s even more troubling about Scarborough’s column — and POLITICO’s decision to publish it — is that he doesn’t even say whose words we should take or what those words actually are. Scarborough names neither the “senior economist” nor the study or studies that he is citing. Nor does the RAND Corporation even have a single “senior economist” — a search for “senior economist” on RAND’s website indicates that the think tank has at least a dozen “senior economists” on staff. So we can’t even debunk the man inspiring Scarborough to spew such noxious filth. At least we can debunk him.
By: Samuel Knight, Washington Monthly Political Animal, February 16, 2013
“Willfull Ignorance”: Short-term Memory Loss Grips Republicans In Washington
ABC News’ George Stephanopoulos devoted a good chuck of “This Week” to discussed automatic sequestration cuts yesterday, and asked Rep. Tom Cole (R-Okla.) for his prediction. The Republican congressman said President Obama came up with the sequester — a claim that simply isn’t true — before saying his caucus is “prepared to negotiate on redistributing the cuts.”
It led to this exchange:
STEPHANOPOULOS: And you’re saying all cuts. Republicans are accepting absolutely no revenues?
COLE: No. Look, absolutely none. The president’s accepted no spending cuts back in the fiscal cliff deal 45 days ago, so you get all — no spending cuts back then. Then you’re going to get no revenue now.
Around the same time, Sen. John McCain (R-Ariz.), who appears to spend more time on Sunday shows than in the Senate, said he’s open to some revenues as a way to replace the sequester, but added, “[W]e have raised taxes. Why do we have to raise taxes again?”
Of course, by that logic, there’s no reason not to ask, “We have cut spending. Why do we have to cut spending again?”
It’s troubling that Republican policymakers have such short memories, and seem to have no idea what policies they voted for as recently as 2011. It’s one of the more breathtaking examples of willful ignorance in recent memory.
But if we assume that lawmakers like Cole and McCain are sincere, and they literally can’t remember the basics of recent budget policy, then it’s probably worthwhile to set the record straight.
In 2011, Democrats and Republicans agreed to between $1.2 trillion and $1.5 trillion in spending cuts, depending on how one tallies the numbers. The cuts included no new revenue.
In 2012, Democrats and Republicans agreed to a deal that raised revenue by about $650 billion. The new revenue included no new cuts.
In 2013, Republicans are saying they remember what happened in 2012, but the 2011 policy has been blocked from memory.
This is crazy. Folks like Cole and McCain keep saying the 2012 deal didn’t include spending cuts, so the sequester has to be 100% in the GOP’s favor now, without exception. Why? Because Republicans haven’t gotten spending cuts.
Except they already did get spending cuts. Indeed, the cuts from 2011 were twice as big as the revenue from 2012.
Even if the parties agreed to an entirely balanced agreement this month to replace the sequester — roughly $600 billion in revenue and $600 billion in cuts — Republicans would still be getting the much better end of the deal. The total for the entire package, negotiated in parts over the course of two years, would be over $4 trillion in debt reduction — with a cuts-to-revenue ration of about six to one.
For that matter, Obama isn’t calling for “tax increases”; he’s calling for new revenue through closed tax loopholes and ending certain tax deductions. As recently as last month, Republican leaders said such a policy doesn’t count as a “tax increase,” though it’s suddenly become outrageous now that the president agrees.
This really isn’t that complicated. Either Republicans have a child’s understanding of fiscal policy, the memory capacity of a goldfish, or they think Americans are fools. At this point, I’m no longer sure which, though I’m open to suggestion.
By: Steve Benen, The Maddow Blog, February 11, 2013
“Let’s Destroy The Village”: Four Years Later, Paul Ryan Wants More Of The Same
Just when I thought that the National Review Institute demonstrated that Republicans are ready to compromise, Paul Ryan outlined a somewhat apocalyptic vision of budget negotiations there on Saturday.
According to POLITICO, Ryan said “that the nation will face ‘tepid growth and deficits’ under President Barack Obama and Republicans must prudently ‘buy time’ and ‘keep the bond markets at bay — for the sake of our people.'” Like a third-rate objectivist action hero, he is.
Ryan continued:
“Unfortunately, the Democrats are unlikely to accept our proposals. They refuse to consider real reform. But we will lay the groundwork for future endeavors. So when reform is possible, we will be ready.
“The president will bait us. He’ll portray us as cruel and unyielding,” Ryan said. “Look, it’s the same trick he plays every time: Fight a straw man. Avoid honest debate. Win the argument by default.
But neither the President nor any other Democrats need to portray Ryan as “cruel and unyielding” because his policies do a fantastic job of that on their own.
Ryan has time and time again demonstrated that he isn’t interested in paying down the national debt or in “reforms to protect and strengthen Medicare and Medicaid,” as he claimed on Saturday. He’s interested in turning Medicare into a voucher program and in slashing Medicaid’s budget by over a trillion dollars — his logic reminiscent of that infamous Vietnam era talking point “destroying the village in order to save it.” And speaking of bombs, Ryan has repeatedly refused to consider cutting one of the most draining and unnecessarily large parts of the budget: defense spending. He also refuses to consider forcing those with mountains of idle or otherwise unproductive cash to pay for these programs, and isn’t content with Democratic compromises thus far, refusing to appreciate the $2.2 trillion in cuts agreed to during the 112th Congress, because he’s cranky about the $620 billion in tax increases.
Moreover, he isn’t even right about the one thing that libertarian types are supposed to be intimately familiar with — the bond market. As I pointed out a few weeks ago, interest rates are about as low as they can be and aren’t expect to rise, and demand for U.S. Treasury bonds is robust. This suggests that the market has confidence in the U.S. government’s ability to honor its debts, and that federal borrowing isn’t “crowding out” private sector investment.
Who’s avoiding honest debate, Congressman Ryan?
POLITICO also reported that Ryan’s outlook contrasts sharply with Speaker Boehner’s. The latter is attempting to compromise with Democrats by forcing the Senate to pass a budget so that the two houses can find some middle ground. But if Ryan uses his budget committee chair to turn this into another fiscal knock-down drag-out fight — something that makes virtually no sense in light of his party’s November drubbing, and Congress’ low approval rating — the ensuing conference committee might make the super committee look like serious adults.
So much for learning from the past four years.
By: Samuel Knight, Washington Monthly Political Animal, January 26, 2013
“Crisis To Crisis Management”: Congress’s Continual Game of Political Chicken
The proposal from the House of Representatives to push off the debt ceiling crisis for three months came with an ironic rhetorical frame: If the Senate will, in that time frame, pass a budget, we can start facing our long-term fiscal challenges instead of managing crisis to crisis. Oh, and if they don’t pass a budget all lawmakers will stop drawing salaries.
The basic idea that crisis to crisis management is the worst form of governance for our country is right on the money: Short-term continuing resolutions and other stop-gap measures ensure inefficiency because government agencies are hamstrung by their inability to plan beyond a few months. And absolutely the Senate should present a budget that lays out a vision for how to put our country on a path towards a healthy fiscal future. But, the politics over the debt ceiling in the last three years have been a leading contributor to the culture of avoiding hard decisions in favor of incendiary rhetoric we see in Congress today.
The debt ceiling debate in the summer of 2011 spawned the so-called “super committee” and so-called “fiscal cliff.” So, in the past two years we’ve seen the creation and failure of the super committee, an underwhelming fiscal cliff deal that paired special interest tax breaks with an increase to the rates for higher income individuals, and a short delay of the looming threat of sequestration, the across the board spending cuts that were supposed to motivate the super committee—and Congress—to come together to act. In the next two months we have another opportunity to avoid the sequester and the expiration of the current continuing resolution, the bill that funded government for six months at fiscal year 2012 levels in lieu of passing actual appropriations bills. And of course a debt ceiling vote is on the horizon.
All of these crises are manufactured. Those willing to put off raising the debt ceiling to make a political point are willing to hurt our economy and our standing in the world to make that same point.
At the root of these manufactured crises are a winner-take-all approach to the disagreements between and even within the political parties. At each crisis, Democrats and Republicans demand a total victory and a grand bargain only to end up placating one another with crumbs of a bad deal and promise to revisit the issues at the next manufactured crisis. Our nation cannot afford this continual game of political chicken. We cannot afford the impact of defaulting on our debts. Policymakers need to work together and come up with reforms to spending, taxes, and entitlements. No more political theater, no more back room discussions on grand bargains. It’s time for the hard work of legislating solutions to the nation’s fiscal challenges.
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