Bandits, Blowhards And Showhorses: The GOP’s Road Not Taken
Over the past months, Republicans enjoyed enormous advantages. Opinion polls showed that voters are eager to reduce the federal debt, and they want to do it mostly but not entirely through spending cuts.
There was a Democratic president eager to move to the center. He floated certain ideas that would be normally unheard of from a Democrat. According to widespread reports, White House officials talked about raising the Medicare eligibility age, cutting Social Security by changing the inflation index, freezing domestic discretionary spending and offering to pre-empt the end of the Bush tax cuts in exchange for a broad tax-reform process.
The Democratic offers were slippery, and President Barack Obama didn’t put them in writing. But John Boehner, the House speaker, thought they were serious. The liberal activists thought they were alarmingly serious. I can tell you from my reporting that White House officials took them seriously.
The combined effect would have been to reduce the size of government by $3 trillion over a decade. That’s a number roughly three times larger than the cost of the Obama health care law. It also would have brutally fractured the Democratic Party.
But the Republican Party decided not to pursue this deal or even seriously consider it. Instead, what happened was this: Conservatives told themselves how steadfast they were being for a few weeks. Then morale crumbled.
This week, Republicans probably will pass a balanced budget constitutional amendment that has zero chance of becoming law. Then they may end up clinging to a no mas Senate compromise. This proposal would pocket cuts that have already been agreed on, and it would eliminate leverage for future cuts and make them less likely.
It could be that this has been a glorious moment in Republican history. It could be that having convinced independents that they are a prudent party, Republicans will sweep the next election. Controlling the White House and Congress, perhaps they will have the guts to cut Medicare unilaterally, reform the welfare state and herald in an era of conservative greatness.
But it’s much more likely that Republicans will come to regret this missed opportunity. So let us pause to identify the people who decided not to seize the chance to usher in the largest cut in the size of government in U.S. history. They fall into a few categories:
The Beltway Bandits
American conservatism now has a rich network of Washington interest groups adept at arousing elderly donors and attracting rich lobbying contracts. For example, Grover Norquist of Americans for Tax Reform has been instrumental in every recent GOP setback. He was a Newt Gingrich strategist in the 1990s, a major Jack Abramoff companion in the 2000s and he enforced the no-compromise orthodoxy that binds the party today.
Norquist is the Zelig of Republican catastrophe. His method is always the same. He enforces rigid ultimatums that make governance, or even thinking, impossible.
The Big Government Blowhards
The talk-radio jocks are not in the business of promoting conservative governance. They are in the business of building an audience by stroking the pleasure centers of their listeners.
They mostly give pseudo Crispin’s Day speeches to battalions of the like-minded from the safety of the conservative ghetto. To keep audience share, they need to portray politics as a cataclysmic, Manichaean struggle. A series of compromises that steadily advance conservative aims would muddy their story lines and be death to their ratings.
The Show Horses
Republicans now have a group of political celebrities who are marvelously uninterested in actually producing results. Sarah Palin and Michele Bachmann produce tweets, not laws. They have created a climate in which purity is prized over practicality.
The Permanent Campaigners
For many legislators, the purpose of being in Congress is not to pass laws. It’s to create clear contrasts you can take into the next election campaign. It’s not to take responsibility for the state of the country and make it better. It’s to pass responsibility onto the other party and force them to take as many difficult votes as possible.
All of these groups share the same mentality. They do not see politics as the art of the possible. They do not believe in seizing opportunities to make steady, messy progress toward conservative goals. They believe that politics is a cataclysmic struggle. They believe that if they can remain pure in their faith then someday their party will win a total and permanent victory over its foes. They believe they are Gods of the New Dawn.
Fortunately, there are still practical conservatives in the GOP, who believe in results, who believe in intelligent compromise. If people someday decide the events of the past weeks have been a debacle, then practical conservatives may regain control.
By: David Brooks, Columnist, The New York Times, July 19, 2011
A Conspicuous Pattern: The GOP Is Really Not Interested In Governing
At his press conference the other day, President Obama noted the recommendations of the bipartisan deficit-reduction commission (which, by the way, failed to reach an agreement). He mentioned in passing that his White House set up the structure for the commission: “As you will recall, this was originally bipartisan legislation that some of the Republican supporters of decided to vote against when I said I supported it — that seems to be a pattern that I’m still puzzled by.”
It is, to be sure, quite a pattern. For two-and-a-half years, Obama has run into congressional Republicans who not only refuse to take “yes” for an answer, but routinely oppose their own ideas when the president is willing to accept them.
This seems especially relevant in the context of the current debt-reduction talks. At a certain level, it’s almost comical — here we have a Democratic president agreeing with a conservative Republican House Speaker on a massive deal that would lower the debt by over $4 trillion over the next decade. It would tilt heavily in the GOP’s direction, and address the problem Republicans pretend to care about most. Obama is even willing to consider significant entitlement “reforms,” which should be music to the ears of the right.
And yet, in the latest example that “puzzles” the president, Republicans aren’t interested.
Now, part of this is obviously the result of Republicans adopting a faith-based approach to revenue, which happens to be wildly disconnected to reality. But that’s not the only angle that matters. Matt Yglesias had a good item the other day that raised a point that’s often lost in the shuffle.
[H]ere we get to the problem that’s recurred throughout Obama’s time in office. If members of Congress think like partisans who want to capture the White House, then the smart strategy for them is to refuse to do whatever it is the president wants. The content of the president’s desire is irrelevant. But the more ambitious his desire is, the more important it is to turn him down.
After all, if the President wants a big bipartisan deal on the deficit, then a big bipartisan deal on the deficit is “a win for President Obama,” which means a loss for the anti-Obama side. When Obama didn’t want to embrace Bowles-Simpson, then failure to embrace Bowles-Simpson was a valid critique of him. But had Obama embraced Bowles-Simpson, then it would have been necessary for his opponents to reject it.
For weeks, many have marveled at the priorities of the Republican policy wish-list — given a choice between the larger debt-reduction plan in American history and preserving some tax breaks for the wealthy, GOP officials at nearly every level strongly prefer the latter. Indeed, for nearly all Republicans, it’s such a no-brainer, this question is almost silly.
But there’s a separate challenge — Republicans have a choice between advancing policies they ostensibly agree with and Obama scoring a legislative victory. And as it turns out, that’s a no-brainer, too, since GOP lawmakers don’t really care about governing so much as they care about denying the president political victories. It might make them appear ridiculous — why would anyone reject their own ideas? — but looking foolish isn’t a major concern for congressional Republicans.
Obviously, this makes compromise literally impossible, and all but guarantees the least productive legislative session in many years. But it also suggests the president needs to adapt to an awkward set of circumstances: given Republican beliefs, Obama must realize his support for a legislative idea necessarily means it’s less likely to happen.
By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, July 17, 2011
On Debt Impasse, GOP Full Of Contradictions
Sen. Mitch McConnell has a clever plan to resolve the federal debt impasse. Congressional Republicans would invite President Barack Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.
Hmm. Just a bit contradictory?
Meanwhile, the impasse arose because congressional Republicans thunder against government red ink, yet refuse to raise revenue by ending tax breaks that help Warren Buffett pay a lower tax rate than his receptionist (which he agrees is preposterous). Another contradiction? Of course.
McConnell’s plan – a pragmatic way to avert a catastrophic default – may be torpedoed by more extremist House Republicans, such as Michele Bachmann. They seem to fear that ending tax loopholes for billionaire fund managers would damage a fragile economy. Yet they seem to think that this invalid of an economy would be unperturbed by the risk of a default on our debts.
A contra- . . . yes, you got it!
What about this one? Republicans have historically been more focused on national security threats than Democrats. Yet what would do more damage to America’s national security than a default that might halt paychecks for American military families?
This game of “spot the contradiction” is just too easy with extremist Republicans; it’s like spotting snowflakes in a blizzard. Congressional Republicans have taken a sensible and important concern – alarm about long-term debt levels, a genuine problem – and turned it into a brittle and urgent ideology.
Politicians in both parties have historically been irresponsible with money, but President Bill Clinton changed that. He imposed a stunning fiscal discipline and set the United States on a course of budget surpluses, job growth and diminishing federal debt – until the Republicans took over in 2001.
In the Bush years, Republicans proved themselves reckless both on the spending side (unfunded wars and a prescription drug benefit) and on the revenue side (the Bush tax cuts). Their view then was, as former Treasury Secretary Paul O’Neill quoted Vice President Dick Cheney as saying, “Reagan proved deficits don’t matter.”
It may seem odd that Republicans were so blithe about debt in the Bush years, yet now insist on addressing the problem in the middle of a downturn – even though basic economics dictates that a downturn is the one time when red ink is advisable. Well, just another of those contradictions.
Then there’s the rise of health care costs, a huge burden on our economy. It’s pretty clear what doesn’t work: the existing, dysfunctional system. A forthcoming book on health care by Paul Starr, “Remedy and Reaction,” notes that in 1970 the United States spent a smaller fraction of income on health care than Denmark and the same share as Canada.
Today, in dollar terms, we spend 21/2 times the average per capita of other rich countries.
When congressional Republicans do talk about health care, they have one useful suggestion – tort reform – and it was foolish for Democrats (in bed with trial lawyers) to stiff them on it. But research suggests that curbing malpractice suits, while helpful, would reduce health costs only modestly.
Beyond that, the serious Republican idea is to dismantle Medicare in its present form. That would indeed reduce government spending but would increase private spending by even more, according to the CBO.
The Obama health care plan could have done better on cost control, but it does promote evidence-based medicine, so that less money is squandered on expensive procedures that don’t work. And the Independent Payment Advisory Board will recommend steps to curb excess spending in Medicare.
Yet congressional Republicans are trying to kill the Obama health plan. Yes, of course: another contradiction.
A final puzzle concerns not just the Republican Party but us as a nation. For all their flaws, congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts – and most voters say in polls that they’re against raising the debt ceiling. I fear that instead of banishing contradictions, we as a nation may be embracing them.
By: Nicholas Kristof, Columnist, The New York Times, Published in the Milwaukee Journal Sentinel, July 14, 2011
Eric Cantor Loves Government Spending…On The Drug Industry
Republicans would like you to believe that our deficit problem is primarily a spending problem and that responsibility for that problematic spending is primarily a Democratic responsibility. But the second claim is as misleading as the first. Republicans have also been known to promote wasteful government spending, particularly when it goes towards an industry with which they happen to be cozy. For a vivid illustration of this, look no further than a new Politico article about House Majority Leader Eric Cantor and his position on a key deficit reduction proposal.
The proposal in question would lower the cost of what the federal government currently pays to provide low-income seniors with prescription drugs. For years, the government purchased drugs for these seniors directly through Medicaid, taking advantage of the low prices drug companies must, by law, provide when selling drugs for the people in that program. But that changed in 2006, with the creation of Medicare drug benefit. At that point, the government delegated the purchasing of drugs for low-income seniors to private firms. And the firms haven’t been able to negotiate equally deep discounts, partly because of restrictions on their ability to limit drug availability.
According to the Congressional Budget Office, restoring the “Medicaid discount” for low-income seniors could save more than $100 billion over the course of a decade, depending on the structure of the proposal. And, at one point, many health care reformers had hoped to include that proposal as part of what became the Affordable Care Act. The administration and leaders of the Senate Finance Committee agreed not to include the proposal in the final legislation, as part of their infamous deal with the drug industry lobby. But that was a one-time deal, at least in theory, and congressional negotiators are looking seriously at enacting the proposal now.
The problem is lawmakers like Cantor, who oppose the idea. According to the Politico story, written by Matt Dobias, Cantor is making the same argument that the drug industry lobby does: That the proposal would amount to a form of government price controls, retarding economic growth and discouraging innovation.
The latter point is highly dubious: The reduction would bring reimbursement levels for these drugs very close to what they were a few years ago. Many experts, including the CBO, think the likely impact on research and development would be negligible. (Harvard economists Richard Frank and Joseph Newhouse addressed this issue at some length in Health Affairs a few years ago.)
As for the former suggestion, it’s true that any net reduction in government spending could reduce economic growth, at least at this particular moment. That’s why it’s not a good idea to be madly slashing government spending right now — and why, perhaps, congressional negotiators should delay implementation of this cut, like the others, so that it would take effect after the economy has more fully recovered.
But Cantor’s anxiety over the economic ramifications of spending cuts seems strangely selective. He hasn’t raised similar concerns about cuts to food stamps, Medicaid, and similar programs that would likely have a more devastating impact, both on the economy as a whole and the people who depend upon them for support.
Then again, food stamp recipients didn’t donate $168,000 to Cantor’s reelection campaign in the last cycle. The drug industry did.
By: Jonathan Cohn, The New Republic, July 15, 2011
Why The Debt Ceiling Debate Matters Now
If Congress doesn’t act soon, interest rates could spike–maybe for a long time. Then you’ll care.
The White House and Republican congressional leaders insist the debt ceiling will be raised well before the United States has to default, which would cause massive economic disruption. But a resolution seems less than assured. In the last few days, Republican presidential candidates Michele Bachmann and Tim Pawlentyhave joined a growing conservative chorus loudly denouncing a deal, and antagonism among the various parties appears to be growing, not diminishing.
Still, nobody in Washington or on Wall Street seems very alarmed. The Treasury says it can hold out until Aug. 2. But a look at the current politics and the recent history of debt-ceiling showdowns suggests that alarm might soon become warranted.
There are two reasons why. The first has to do with how difficult it will be to settle on something that can get through Congress in time to stave off any damage. This struggle has been largely misportrayed and crudely simplified as a tug-of-war between Republicans set on spending cuts and Democrats who want tax increases to accompany them. It’s actually a three-way struggle, because Republicans themselves don’t agree on their ransom demands to permit a larger debt.
House Republicans want to cut $2 trillion without raising any taxes or closing any loopholes. They’re focused strictly on spending. But Mitch McConnell, the Republican Senate leader, wants any deal to include Medicare reform. He’s focused on politics. McConnell worries that the House Republican budget passed in April, which takes the deeply unpopular step of privatizing Medicare, presents a mortal threat to Republican candidates in next fall’s elections. A debt-limit deal on Medicare that drew the support of President Obama and Democrats would inoculate the GOP against this danger.
The trouble is, House Republicans don’t share McConnell’s concern, so an agreement among Republicans seems nearly as remote as one between Republicans and Democrats.
That gets to the second reason for alarm: the United States need not default on its debt in order to incur costly and potentially lasting damage. A February report by the Government Accountability Officeexamining the recent history of “debt-ceiling events” — none nearly so serious as the current one — showed that government borrowing costs began to rise well in advance of default. Call it a taxpayer premium for congressional squabbling: the disruption of Treasury auctions and the threatened loss of liquidity among Treasury notes and bills caused billions in additional borrowing costs in the form of higher interest rates.
One reason why the debt showdown isn’t causing more alarm is that interest rates have been falling. But that’s due mostly to declining economic forecasts in the United States and fear of a Greek default — currently more powerful influences, but also ones that would mask worries about a US default.
At some point, perhaps as soon as in a few weeks, the fight in Congress could eclipse those factors and drive interest rates higher. That’s been the historical pattern, and it is already causing worry about what might trigger such a rise. “The nervousness on our end is that the markets will misperceive what’s going on,” an aide to a conservative House Republican told me. “If something fails on the House floor, people might react as if all life is about to end — just like they did when the TARP vote failed.”
That could cost taxpayers dearly, even if a default is ultimately avoided. One reason why US borrowing costs are so low is the universal belief that the government will always make good on its debts in a timely manner. But if that faith is shaken — and a good scare could do the trick — investors might decide that government debt is a riskier investment than they had imagined and demand a better return.
That will hurt. The Office of Management and Budget determined that a mere 1 percent rise in interest rates would cost taxpayers $973 billion over the next decade [pdf, pg. 23]. So a fight purportedly about cutting the deficit could actually cause it to grow much larger. That’s worth worrying about now — especially as Republicans threaten a default and claim there’s no cause for alarm.
By: Joshua Green, Senior Editor, The Atlantic, June 30, 2011
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