Republican Paradox: The Party That Can’t Say Yes
For days, the White House has infuriated its Democratic allies in Congress by offering House Republicans more and more in exchange for a deal to raise the debt ceiling and prevent default. But it was never enough, and, on Friday evening, it became clear that it may never be enough. Speaker John Boehner again walked away from the “grand bargain” he had been negotiating with President Obama, leaving the country teetering on the brink of another economic collapse.
At the White House podium a few minutes later, the president radiated a righteous fury he rarely displays in public, finally placing the blame for this wholly unnecessary crisis squarely where it belongs: on Republicans who will do anything to upend his presidency and dismantle every social program they can find. “Can they say yes to anything?” he asked, noting the paradox of Republicans, who claim that financial responsibility and debt reduction are their biggest priorities, rejecting yet another deal that would have cut that debt by at least $3 trillion.
Mr. Obama, in fact, had already gone much too far in trying to make his deal palatable to House Republicans, offering to cut spending even further than the deficit plan proposed this week by the bipartisan “Gang of Six,” which includes some of the Senate’s most conservative members. The White House was willing to cut $1 trillion in domestic and defense spending and another $650 billion from Medicare, Medicaid and even Social Security.
Much of that savings would have come from raising the eligibility age for Medicare benefits and reducing the cost-of-living increases that elderly people depend on when receiving their health and pension benefits. It could have caused significant damage to some of the nation’s most vulnerable people.
The “bargain” would require that alongside these cuts, tax revenues would go up by $1.2 trillion, largely through a rewrite of the tax code to eliminate many deductions and loopholes. That’s substantially less in revenue than the $2 trillion in the “Gang of Six” plan. The problem is that while much of the cutting would start right away, most of the revenue increases would be put off, in part because a tax-code revision would take months, and in part to allow House Republicans to say they did not agree to any specific tax revenue increases.
Democratic lawmakers were rightly furious when they heard about these details this week, calling the plan wholly unbalanced. But, in the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of the revenue increases (the equivalent of letting the upper-income Bush tax cuts expire as scheduled next year — not much of a heavy lift) but could not stomach another $400 billion the White House wanted to raise through ending tax loopholes and deductions.
So, on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base. As the president forcefully said, there is no evidence that House Republicans are capable of making those tough decisions. If last-ditch talks beginning Saturday fail, they will have to take responsibility if the unimaginable — a government default — happens in 10 days and the checks stop going out.
By: The New York Times, Editorial, July 22, 2011
Debt Ceiling: What Killed The Deal And What Might Make One Happen This Week
There are a lot of good articles running through what happened between Thursday night, when a deal seemed likely, and Friday evening, when the talks fell apart. New reports suggest that Boehner is trying to prepare a deal by tomorrow evening, to prevent the markets from dropping Monday. So here’s the short version of what just happened, and where we’re likely to be going:
On Tuesday, the Gang of Six proposed a deal that would raise tax revenues by $2 trillion — which showed there was support among Senate Republicans for a deal that raised taxes by about $2 trillion. On Thursday, congressional Democrats rebelled over reports that the deal Boehner and Obama were negotiating had only $800 billion in new revenue, and it wasn’t even clear how those would be achieved. That night, Obama called Boehner looking for about $400 billion more in revenue to have something he could sell to Democrats. That would have brought the deal from $800 billion in revenue to $1.2 trillion in revenue. He didn’t get a call back until the next day at 5:30 p.m. — by which point the call was unnecessary. Boehner had already told the media that he was leaving the talks.
Republicans are emphasizing that the White House went from asking for $800 billion in revenue to $1.2 trillion. The word you’re hearing from them is “reneged,” but the White House emphasizes that negotiations were ongoing, and both sides were asking for more as they tried to figure out what they could both agree on and pass through Congress. Boehner, for instance, wanted further cuts to Medicaid, a trigger that would repeal the individual mandate and the Independent Payment Advisory Board if the entitlement cuts didn’t come through, and a tighter cap on discretionary spending. “They make it seem like the president made some ultimatum on $1.2 trillion in revenue,” says a senior administration official. “He didn’t. He said, ‘If you can’t do this, let’s figure out what we can do.’ ”
The “what we can do” would probably have been to ratchet back the entitlement cuts. Or maybe another solution would have been found. It’s hard to say because Boehner didn’t come back with a counteroffer. He simply left the negotiations.
But let’s zoom out on where the negotiations left off. Spending cuts would have totaled about $3 trillion, with a bit less than a trillion dollars of that coming from entitlements and other forms of mandatory spending. Revenue increases — none of which would have come from raising marginal tax rates — would have been between $800 billion and $1.2 trillion. The package would have extended the unemployment insurance and payroll tax cut provisions passed in the 2010 tax deal. All in all, that’s about a trillion dollars less in revenues than the Simpson-Bowles/Gang of Six deals advocated, and about $2.6 trillion less in revenue than simply letting the Bush tax cuts expire in 2012.
There’s a question as to whether this was the very best deal Republicans could get or simply close to it. But it’s hard to believe that it was so bad that it ended the talks. What seems likelier is that Boehner spent some time between Thursday and Friday talking to his members and found that his party simply didn’t support a deal with the White House. For one thing, a deal would include some amount of revenue, and that was a hard sell under any circumstances. For another, letting the president look like a dealmaker would potentially dim the GOP’s chances of retaking the White House in 2012. As my colleague George Will put it Thursday, a deal “would enable President Obama to run away from his record and run as a debt-reducing centrist.”
And so Boehner walked. Fundamentally, this looks like the same calculation that ended the last round of talks over a 4 trillion deal. What’s different this time is Boehner’s plan B: The Speaker of the House appears to believe that a deal struck between congressional leadership would perhaps be easier to sell to his members. Since it’s hard to see Nancy Pelosi and Harry Reid making deeper concessions than Obama did, it’s hard to see why that would be true, save that the deal might not look like such a victory for the White House.
Perhaps taking the benefit for Obama off the table will be enough. I’m doubtful. It’s more likely that what we’re really doing now is wasting time until the markets plummet and Boehner’s members decide that a deal is better than no deal. And there’s a very good chance that the first major show of market concern could come tomorrow night, when the Asian markets open. Boehner is hoping to present a plan by then, but a plan is very different from a deal. A plan is something politicians can come up with. A deal, we’re increasingly finding, is something that we need the markets to force.
By: Ezra Klein, Columnist, The Washington Post, July 23, 2011
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Grover Norquist’s Pledge Is A Colossal Failure
In 1986, Grover Norquist and his organization, Americans for Tax Reform, created the “Taxpayer Protection Pledge,” which he describes as “a simple, written commitment by a candidate or elected official that he or she will oppose, and vote against, tax increases.” It has recently come under repeated fire: it became a tool for ethanol subsidy apologists, for example, and most recently, it emerged as a needless obstacle in negotiations over raising the debt ceiling.
Responding to his critics, Norquist has taken to the op-ed page of the New York Timesthis morning to defend his legacy:
Contrary to the hopes of some that I am somehow softening the pledge, it is stronger and more important than ever: it has made it easier for members of Congress to credibly commit to voters that they will refuse to increase taxes and instead focus on reducing the cost of government.
In fact, it is more important than ever to be rid of The Pledge, because it has been a colossal failure. Does anyone think that fiscal conservatives should be happier with the state of our nation’s finances now than they were when the pledge began 25 years ago? Does anyone still harbor the illusion that “starve the beast” is an effective method of shrinking the federal government?
Here is why The Pledge has failed. Time and again, it has contributed to the GOP tendency to make taxes their top priority, deficits be damned. As Kevin Williamson puts it at National Review, “Republicans led by naïve supply-siders are preparing, for the third time in my life, to sell their souls on spending cuts in exchange for tax-rate reductions that are small, ineffective, and sure to be temporary. Ronald Reagan got his tax cuts, but he went to his grave waiting for those spending cuts. George W. Bush got his tax cuts, and ended his presidency with spending soaring and his entitlement-reform program in the garbage. And now certain Republicans are starting to slobber over the Gang of Six plan.”
What Norquist doesn’t understand or won’t admit is that deficit spending is worse than a tax increase, because you’ve got to pay for it eventually anyway, with interest. Meanwhile, you’ve created in the public mind the illusion that the level of government services they’re consuming is cheaper and less burdensome than is in fact the case. If you hold the line on taxes but not the deficit, you’re making big government more palatable.
Back in 1986, if taxes had been raised every time federal spending had increased, and voters knew that taxes would go up again every time new federal programs or spending was passed, the backlash against big government that we’re seeing now would’ve started a lot sooner, and been much more broad-based. Had that been the policy, it’s doubtful that George W. Bush would’ve passed Medicare Part D. Instead, the Baby Boomers have borrowed a bunch of money that my generation and my children’s generation is going to have to pay back. But their taxes didn’t go up. Thanks for that, Mr. Norquist. I’m not sure what to call it, but fiscal conservatism isn’t it.
As the conservative movement laments our fiscal straits, and the dire situation the nation finds itself in, perhaps it is too much to ask that they assign Norquist a little bit of the blame. But surely they can at least recognize that the solution he’s been pushing since the Reagan Administration hasn’t worked.
By: Conor Friedersdorf, Associate Editor, The Atlantic, July 22, 2011
A Fear Of Breaking “The Pledge”: Are Republicans And The Tea Party Serious?
This is not the Congress where I worked in the ’70s and ’80s. This is not the same caliber of leader, especially on the Republican side, that our country has been accustomed to over decades. In the past, people like Eric Cantor and Michele Bachmann were marginalized. They were not respected by their own party, let alone rewarded; they were relegated to the back bench.
It would have been a joke if someone predicted that a cable queen like Bachmann could raise $14 million for a House race or that South Carolina Rep. Joe Wilson could raise over $2 million in a matter of weeks as an obscure member, after screaming at the president, “You lie!” at a State of the Union address. The notion that someone such as Bachmann would be so popular in polls and be in a position to win Iowa would have been unthinkable a few short years ago.
But more important than these personalities and their extreme positions is what they have done to the Republican party.
We have a unique opportunity to truly turn this nation around. President Obama, and it appears Speaker of the House John Boehner, were ready to truly change the direction of the country. In the past, I believe we could have made it work—with a Reagan, an O’Neill, a Mansfield, a Baker, a Dirksen. It is a long list.
But, sadly, the absolutism of no revenues—every tax cut, even temporary—is now permanent. Taxes can only go down… sort of like housing prices can only go up! Pledges to Grover Norquist are absurd, shortsighted, and counterproductive.
I truly wonder whether the extreme wing of the Republican Party wants to solve our problem or just play politics with it; is this just beat Obama and the democrats at all costs, the country be damned? Or is it an adherence to an ideology that is inflexible, a fear of breaking some “pledge?”
Regardless, the over $4 trillion budget fix is achievable—not popular—but achievable. It takes both parties to accept political responsibility. I wonder, though, if you asked a Tea Party member or a liberal democrat, “Would you sacrifice your seat in Congress to achieve real fiscal responsibility, to turn the nation around?” would they say “yes?” After all, why did they run for office in the first place? To be serious, to accomplish big things, I would hope.
A number of years ago a group of us were with Sen. Paul Sarbanes. He was retiring after a long and distinguished career in the House and Senate. One person asked him what was the biggest change he had seen in his 40 years. Sarbanes said that people come into office now with their minds made up; they are afraid to change or to listen to the other side. He pointed out that when he first came to the Senate, there used to be real debate on the issues of our time and that minds would be changed. There was a different spirit of cooperation and compromise and true listening. Relationships across the aisle were forged. There was give and take. There was an opportunity to come to an agreement without a total win-lose mentality.
If there ever was a time in our nation’s history to return to that spirit, it is now.
By: Peter Fenn, U. S. News and World Report, July 13, 2011
How Can Anyone Take The GOP Seriously: The Dismal Republican Record On Taxes
“In the present weak economic climate,” a group of conservatives, including Newt Gingrich, wrote in an open statement, “we believe that to restore the health of the economy and put Americans back to work, America should follow a course against high taxes and federal spending.”
The White House was unmoved. “Republicans may feel they can’t go to voters after supporting a tax increase,” one administration official told the New York Times. “We’ve got to convince them that the situation won’t be as devastating as it would be if the tax bill is sabotaged.”
The latest moves in the debt ceiling debate? Not quite: The administration was Ronald Reagan’s, and the year was 1982. With his previous year’s landmark tax cuts having exploded the budget deficit, Reagan had reluctantly backed a tax increase to bring it back under control, prompting a minor conservative uprising led by then Rep. Jack Kemp and which included then backbench House member Gingrich. “You can’t have the largest tax cut in history and then turn around and have the largest tax increase in history,” one conservative rebel groused.
Right-wing economists issued dire forecasts. Arthur Laffer, widely described as the father of supply-side economics, warned that the bill would “stifle economic recovery” and “lengthen and deepen the recession.” The president of the U.S. Chamber of Commerce wrote that the tax hike would “curb the economic recovery everyone wants,” adding: “It will mean a lower cash flow as more businesses pay more taxes, with a depressing effect on stock prices. It will reduce incentives for the increased savings and investment so badly needed to improve productivity and create more jobs.” As Bruce Bartlett, an early supply-sider and Reagan aide who has since recanted the faith, noted last month, “It would be hard to find an economic forecast that was more wrong in every respect.” Real gross domestic product grew at 4.5 percent in 1983 and 7.2 percent in 1984, while unemployment fell from 10.6 percent in December 1982 to 7.1 percent in 1984.
Just about the only thing the conservative rebels got right back in 1982 was Gingrich’s comment to the New York Times that the skirmish was the “opening round of a fight over the soul and future of the Republican Party.” Looking back, the extent to which the conservatives won the fight within the party while losing the war with economic reality is fairly astounding. In the nearly three decades since, the Republican feeling toward tax increases has moved from Reaganesque dislike but acceptance (he signed tax increases into law in seven of his eight years in office) to their current, blindly absolutist position flatly opposing any tax increases at all, even in the face of spiraling deficits and possible economic default.
Witness comments like House Speaker John Boehner’s that “raising taxes is going to destroy jobs.” The rhetoric hasn’t changed much since 1982, but the accumulated evidence against this GOP dogma is overwhelming.
Gingrich was again at the forefront of the fight against taxes in 1993 when he warned that the Clinton budget plan “will in fact kill the current recovery and put us back in a recession.” Rep. Dick Armey, who would go on to be House majority leader and now is a Tea Party godfather, warned that “the impact on job creation is going to be devastating.” Texas GOP Sen. Phil Gramm warned that the budget deal was a “one-way ticket to a recession,” adding that Clinton’s would be one of the jobs killed by the bill. (Gramm would seek Clinton’s job, but couldn’t best Bob Dole; he was last seen being muzzled by John McCain’s presidential campaign in 2008 after calling the country a “nation of whiners.”) Laffer warned that “Clinton’s tax bill will do about as much damage to the U.S. economy as could be feasibly done in the current political environment.” Boehner himself dismissed the Clinton plan as “Christmas in August for liberal Democrats: more taxes, more spending, and bigger government.”
He got the Christmas part right. Unemployment, which had been 7.1 percent in January 1993, fell to 5.4 percent by the end of 1994. Real GDP grew from 2.9 percent in 1993 to 4.1 percent in 1994. The final tally of the Clinton years was 23 million new jobs and a budget surplus.
Clinton and his villainous tax hikes were followed by George W. Bush and his cure-all tax cuts. “Tax relief will create new jobs,” Bush argued in April 2001. “Tax relief will generate new wealth.” When the bill was enacted that June, GOP Rep. Mike Pence (now running for governor of Indiana) gushed that they would “stimulate our economy” and “put the ax to the root of the Internal Revenue Code as it wages war on the American dream.”
How’d that turn out? From 2001 to 2007, jobs grew at one fifth the pace of the 1990s, the slowest rate in the post-World War II era. GDP in those years grew at half the rate of the 1990s. Oh yeah, and the deficit exploded. Fully 10 years after the largest tax cuts in history, the economy had shed 1.1 million jobs. It seems Pence’s ax was put to the root of the American dream itself.
Given the historical and economic record, one has to ask: How can anyone take the GOP seriously, especially when they are playing fast and loose with economic disaster in service to a political philosophy that not even their main icon—Reagan—followed with such monomania?
Decrying the Clinton tax plan in 1993, Boehner recalled the quote: “Those who do not learn from history are doomed to repeat it.” He went on, “It very appropriately applies to Congress today.” That’s one piece of rhetoric Boehner really should recycle. And learn from.
By: Robert Schlesinger, U. S. News and World Report, July 13, 2011
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