“Crying About The Deficit Is A GOP Tool”: Can We Stop Pretending That Republicans Care About The Deficit Now?
Congress is about to pass a package that will keep the government operating through next September. And in order to sweeten the deal for conservative Republicans who would rather not spend money to have the government operate, they’ll also be voting on a $680 billion package of tax cuts. These bills contain both things Republicans want (like allowing oil exports, extending a research and development tax break for businesses, and delaying the “Cadillac Tax” in the Affordable Care Act) and things Democrats want (like extending the child tax credit and the Earned Income Tax Credit).
But whether you’re happy with the overall balance of line items in the bill, one thing’s for sure: it will increase the deficit rather substantially.
While there are some Republicans complaining about that, what they’re really mad about is the things they didn’t get, like banning Planned Parenthood from getting Medicaid reimbursements. In short, what mattered for both sides was the substantive details, and to some degree the politics (i.e. Republicans not wanting to suffer the fallout from another shutdown crisis).
Let’s be honest: despite all their talk about what we’re handing to the next generation and how government should balance its books just like a family does, when it comes down to actually making choices, Republicans are no more concerned about deficits than Democrats are. Crying about the deficit is a tool they use to constrain policies they don’t like. When it comes to the policies they do like, how much the government will have to borrow to fund them is barely an afterthought. So can we stop pretending they actually care about deficits?
There’s no denying that Republicans have wielded the fear of deficits and debt with extraordinary effect. They often convince the public that deficits are a serious problem that needs addressing, because most voters have only the vaguest understanding of how the government operates, and words like “debt” become a stand-in for “the economy.” And they have allies among those sometimes referred to as the Very Serious People in Washington, who gravely intone that government can’t do things like mitigate the effects of a recession if doing so will add to the debt. But when Republicans actually have to make choices, there’s a simple calculus at work: the programs they don’t support anyway, like food stamps or Medicaid, should be cut because we just can’t afford them. But the programs they do support, like military spending, not to mention tax cuts that will increase the deficit? Well, we just have to do those things, because they’re necessary.
Consider that the biggest Democratic policy initiative in recent years was the Affordable Care Act, which was completely paid for through taxes and budget cuts within Medicare. The ACA not only didn’t increase the deficit, it decreased it. The biggest Republican policy initiatives in recent years, on the other hand, were the Bush tax cuts and the Iraq War. The former cost somewhere between $2 trillion and $3 trillion (see here and here), while the latter cost around $2 trillion. There was no attempt to pay for either one, meaning the cost was just added to the deficit.
And why wasn’t there an attempt to pay for them? The simple answer is that when Republicans have something they want to do, they do it. Trying to pay for what you want to do just complicates things (as the authors of the ACA could testify). When George W. Bush took office, they wanted to cut taxes, particularly on the wealthy, so they did. They wanted to invade Iraq, so they did. If any Republican said, “It would be nice to do this, but it’s going to increase the deficit, so we shouldn’t,” they would have been laughed out of the room. And all those Republicans who today say that they don’t think Bush was a real conservative because he didn’t curtail spending? If you don’t remember them loudly objecting at the time, that’s because they didn’t.
The main reason Republicans are free to set aside concerns about the deficit right now is that it has dropped so dramatically over Barack Obama’s presidency, so it’s much harder to argue that it’s an urgent problem. The deficit peaked at $1.4 trillion in 2009, Obama’s first year in office, when the country was still in the depths of the Great Recession. By 2014 it had fallen to $484 billion, a decline of two-thirds. It went from 9.8 percent of GDP in 2009 down to 2.8 percent of GDP in 2014.
There are multiple reasons why, including sequestration, the improving economy, and the tax increases Obama negotiated. But if you want to grant presidents credit or blame for what happens with the deficit on their watch, in the last forty years, Presidents Obama and Clinton reduced the deficit as a proportion of GDP, President Carter kept it almost exactly where it was, and Presidents Bush the Younger, Bush the Elder, and Reagan increased the deficit. Notice a pattern?
And all the Republicans running for president have tax plans that would send the deficit into the stratosphere. They wave away the consequences by saying that they’ll come up with some package of (yet unspecified) budget cuts, or even better, that despite all historical evidence, this time cutting taxes will lead to such an explosion of economic growth that the deficit will actually fall (this is known as a belief in the “Tax Fairy”). But the truth is that they just want to cut taxes, and if one of them becomes president, that’s what he’ll do. And nobody on the Republican side will care what it does to the deficit.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, December 17, 2015
“Poisonous Intra-Party Politics”: John Boehner’s Resignation Won’t Save Republicans From Themselves
For all his flaws, House Speaker John Boehner, who announced on Friday that he will resign from Congress at the end of October, was badly served by a lot of people.
Boehner’s decision is due not to any ostensible scandal or illness but to cruel political mathematics: His conference has become so dysfunctional that when a Republican speaker resigns, the House becomes less, not more, chaotic and reckless. The circumstances that prefigured his resignation are thus a fitting metaphor for his entire speakership and for the state of the Republican Party as a whole. It would be to Boehner’s credit to do everything in his power in the next month to protect his successor from the same fate.
What makes Boehner’s decision surprising is that the forces that drove him to it are familiar enough that they’ve become mundane. Up against a deadline to complete a basic function of government—in this case, to fund it—Boehner found himself beset by conservative demands that he condition Congress’ obligation to help run the country on President Barack Obama’s capitulating to partisan demands. This time the demand was to defund Planned Parenthood. In the past it’s been to change immigration policy, slash social spending, and defund the Affordable Care Act. In each instance, Boehner was confronted with a terrible choice: provoke a crisis, like the 2013 government shutdown, or capitulate to Obama, and face repercussions from unruly conservative members, who were constantly threatening to depose him.
These episodes of brinkmanship always resolved themselves, sometimes in damaging ways. In addition to the shutdown, Boehner’s 2011 decision to ransom the statutory debt limit brought the country within hours of an economically devastating credit default, and precipitated an agreement to impose automatic, indiscriminate spending cuts that harm the government and the economy to this day. More recently, he placated his members by embroiling the House in a lawsuit against the president, which, if successful, would precipitate a constitutional crisis. But he always maintained his brittle grip on power. Either he no longer believes he can, or doesn’t want the hassle anymore.
By stepping down, but not for a month, Boehner has freed himself from the poisonous intraparty politics that made it all but impossible for him to govern, and left himself a brief opening in which to settle some accounts, before the next speaker is elected.
If the succession of power goes as it has in recent years, his deputy—Majority Leader Kevin McCarthy of California—will become speaker. A conservative dark horse, like Representative Jeb Hensarling of Texas, could mount a challenge. But any insurgent candidate will have to overcome the fact that the speakership, unlike the majority leadership and other high-ranking posts, is determined by the entire House. Democrats, who can not elect a speaker on their own, are ultimately likelier to assure a victory for McCarthy over the devil they don’t know.
But no matter who comes next, the question is whether they’ll immediately confront the same tawdry dynamic that ultimately felled Boehner, or whether Boehner takes it upon himself to bring some stability to the chamber.
If he takes the path of least resistance, the next speaker will have all the same problems Boehner had, minus his years of experience. That path would end with a brief continuation of government funding—just enough to hand the same political mess over to a new leadership team. It would leave the government no less vulnerable to a shutdown, or another debt limit crisis, or a lapse in highway funding, and the party no less vulnerable to bearing responsibility for a crisis in the middle of election season. Call it Boehner’s curse.
Boehner probably can’t end the vicious cycle that hobbled his speakership. But he could plausibly clear the deck for his successor for long enough that the big issues Republicans want to fight over can play out in the election, rather than in the throes of governance. He could place legislation on the floor that funds the government for a year, extends the debt limit through 2016, and replenishes the highway trust fund, and allow Democrats to supply most of the votes required to restore calm. If Boehner were determined to make the next speakership less volatile than his own, and to end his own speakership on a note of responsible stewardship, he almost certainly could. What remains to be seen is whether he has one last fight left in him.
By: Brian Beutler, Senior Editor, The New Republic; September 26, 2015
“Why Liberals Have To Be Radicals”: Going After The Grotesquely Concentrated Wealth And Power At The Top
Just about nothing being proposed in mainstream politics is radical enough to fix what ails the economy. Consider everything that is destroying the life chances of ordinary people:
- Young adults are staggered by $1.3 trillion in student debt. Yet even those with college degrees are losing ground in terms of incomes.
- The economy of regular payroll jobs and career paths has given way to a gig economy of short-term employment that will soon hit four workers in 10.
- The income distribution has become so extreme, with the one percent capturing such a large share of the pie, that even a $15/hour national minimum wage would not be sufficient to restore anything like the more equal economy of three decades ago. Even the mainstream press acknowledges these gaps.
The New York Times’s Noam Scheiber, using Bureau of Labor Statistics data, calculated that raising the minimum wage to $15 for the period 2009 to 2014 would have increased the total income for the 44 million Americans who earn less than $15 an hour by a total of $300 billion to $400 billion. But during the same period, Scheiber reported, the top 10 percent increased its income by almost twice that amount.
Scheiber concludes:
So even if we’d raised the minimum wage to $15 an hour, the top 10 percent would still have emerged from the 2009-2014 period with a substantially larger share of the increase in the nation’s income than the bottom 90 percent. Inequality would still have increased, just not by as much.
Restoring a more equal economy simply can’t be done by raising incomes at the bottom, even with a minimum wage high that seemed inconceivable just months ago. It requires going after the grotesquely concentrated wealth and power at the top.
Last week, another writer in the Times, Eduardo Porter, assessed Hillary Clinton’s eagerly anticipated speech on how to rescue the middle class.
Porter’s conclusion? Far from sufficient. He writes:
Mrs. Clinton’s collection of proposals is mostly sensible. The older ones — raising the minimum wage, guaranteeing child care to encourage women into the labor force, paying for early childhood education — have a solid track record of research on their side. The newer propositions, like encouraging profit-sharing, also push in the right direction.
But here’s the rub: This isn’t enough.
Nothing in mainstream politics takes seriously the catastrophe of global climate change. Few mainstream politicians have the nerve to call for a carbon tax.
The budget deadlock and the sequester mechanism, in which both major parties have conspired, makes it impossible to invest the kind of money needed both to modernize outmoded public infrastructure (with a shortfall now estimated at $3.4 trillion) or to finance a green transition.
The economy is so captive to financial engineers that even interest rates close to zero do not help mainstream businesses recover. There is still a vicious circle of inadequate purchasing power and insufficient domestic investment.
The rules of globalization and tax favoritism make it more attractive for companies to assemble products, export jobs and book profits overseas.
To remedy the problem of income inequality would require radical reform both of the rules of finance and of our tax code, as well as drastic changes in labor market regulation so that employees of hybrids such as Uber and TaskRabbit would have both decent earnings and the protections of regular payroll employees.
Congress would have to blow up the sequester deal that makes it impossible to invest money on the scale necessary to repair broken infrastructure and deal with the challenge of climate change.
Politicians would have to reform the debt-for-diploma system, not only going forward, as leaders like Bernie Sanders and Elizabeth Warren have proposed, but also to give a great deal of debt relief to those saddled with existing loans.
Unions would need to regain the effective right to organize and bargain collectively.
This is all as radical as, well, … Dwight Eisenhower. Somehow, in the postwar era, ordinary people enjoyed economic security and opportunity; and despite the economy of broad prosperity, there were plenty of incentives for business to make decent profits. There just weren’t today’s chasms of inequality.
But the reforms needed to restore that degree of shared prosperity are somewhere to the left of Bernie Sanders.
This is one of those moments when there is broad popular frustration, a moment when liberal goals require measures that seem radical by today’s standards. If progressives don’t articulate those frustrations and propose real solutions, rightwing populists will propose crackpot ones. Muddle-through and token gestures won’t fool anybody.
By: Robert Kuttner, Co-Founder and Co- Editor, The American Prospect, July 22, 2015
“How The GOP Made Fiscal Responsibility Look Irresponsible”: It’s A Matter Of When, Not If, Republicans Will Cave
It’s a minor miracle: Both houses of the Republican-controlled Congress have passed a budget.
Now, that’s the easy part compared to getting appropriations bills to Obama’s desk that he will actually sign. And notwithstanding the bipartisan lovefest that surrounded the House bill fixing Medicare physician reimbursements (held up for the moment in the Senate over abortion), deep philosophical differences between the parties remain.
So a standoff between congressional Republicans and the White House is inevitable. (Unless you think Obama is going to suddenly want to repeal ObamaCare.) And under both Obama and President Bill Clinton, these stalemates have seldom ended well for the Republicans.
Why? Because even though the Constitution vests the most important taxing and spending powers in Congress, the president has some huge advantages. If the president doesn’t want to sign a given spending bill and Congress doesn’t have the votes to override the veto, lawmakers only have blunt instruments with which to force his hand. And since congressional Republicans tend to end up getting the blame in the media and in the polls, even those tools are of limited utility. The president knows it is a matter of when, not if, Republicans will cave.
Republicans are trying to rein in the spending driving both the long-term debt and the unfunded liabilities of the major entitlement programs the Democrats built. They are trying to be fiscally responsible.
You may not agree with all the cuts Republicans make in their budgets. You may not be convinced their numbers add up. But Paul Ryan and Tom Price have been more transparent about their fiscal vision than most of their detractors.
The president has a different vision, and he isn’t budging. To try and force his hand (if not change his mind), Republicans have relied on a series of high-profile manufactured crises: the fiscal cliff, various debt ceiling standoffs, government shutdowns, near-shutdowns of major Cabinet departments, the threat of across-the-board tax increases, you name it.
And that’s the problem. In the process, they have made fiscal responsibility look downright irresponsible.
As the national debt was careening toward $18 trillion, Republicans insisted there be some limit to the federal government’s borrowing power. But because of the means they used to try to compel the president, it was the Republicans who stood accused of refusing to pay Washington’s bills and letting the government default on its obligations.
In the fiscal cliff debate, Obama likened congressional Republicans to hostage takers when they tried to hold the line on spending and taxes. Fiscally-minded conservatives probably fancy themselves more green eyeshade accountants than hostage takers. But it’s true that the GOP’s weaponized approach made them look like irresponsible bad guys, at least in the mainstream media.
These battles haven’t been a total loss for Republicans. Far more of the Bush tax cuts have survived than once seemed likely. Sequestration has contained spending growth. But because sequestration hits defense spending as well as social programs, a lot of Republicans are as anxious for relief as the Democrats. This in turn annoys the party’s strongest fiscal conservatives. Why trust promises of future spending cuts when the leadership seems willing to roll back the ones already in effect?
Conservative activists are irritated by the fact they have little to show for the last time Republicans held the White House and Congress simultaneously — and probably feel a little guilty they didn’t do more to pressure Republicans at the time. So they have made up for it by pressuring Republicans to do things they don’t have enough power to do. And because the Republican leadership frequently says it will fight next time and then next time doesn’t come, their pleas for patience fall on deaf ears.
That’s true even among members of the House. A key group of fiscal conservatives clearly lacks confidence in the leadership but doesn’t have the votes or a plan to replace them.
While there has been substantial short-term deficit reduction, the fiscal picture over the longer term keeps getting bleaker. All conservative lawmakers can do is vote for bills they correctly see as entirely inadequate to fix the challenges facing the country — or deny leadership the votes to pass anything, except by working with the Democrats.
Thus the party of fiscal discipline often doesn’t seem disciplined at all.
By: W. James Antle, lll, The Week, March 30, 2015
“The 35-Year GOP Budget Dilemma”: Deficits Take Care Of Themselves, As Long As They Are The Ones Running Them Up
One of the more important consequences of the Republican takeover of both chambers of Congress has been the GOP’s inability to paper over internal differences of opinion–or more to the point, to blame the inability to get stuff done on Harry Reid. We may be about to see this dynamic playing out in spectacular fashion when Congress takes up a FY 2016 budget resolution, which Republicans pretty much have to attempt after years of attacking Reid for Democratic Senate refusals to pass budget resolutions (a largely symbolic exercise absent enforcement mechanisms, and unnecessary for a while given the Obama-GOP spending agreements adopted outside “regular order”). As the New York Times‘ Jonathan Weisman describes the state of play right now, there’s a “chasm” between Republicans whose prime objective is to eliminate the sequestration system that has capped defense spending, and Republicans who are still spouting 2009-10 rhetoric about debt and deficits.
“This is a war within the Republican Party,” said Senator Lindsey Graham, Republican of South Carolina, who has vowed to oppose a final budget that does not ensure more military spending. “You can shade it any way you want, but this is war.”
The divisions will be laid bare Tuesday when congressional leaders unveil blueprints that hew to spending limits imposed by the budget battles of 2011.
Unlike legislation, the spending plan Republicans will be creating this week requires only a majority vote in both the House and Senate, cannot be blocked by a filibuster and is not subject to presidential approval or veto.
The intra-party tension this year has been ratcheted up by three external factors, of course: the general war-lust of Republicans, which is currently reaching early-2000s levels; shrinking short-term federal budget deficits; and an impending presidential election that makes the most likely way out of the GOP’s budget dilemma–Social Security, Medicare and Medicaid cuts–rather perilous.
But it’s important not to think of this problem too narrowly as a current phenomenon. In reality, Republicans have been struggling with this same dynamic for 35 years, since the first Reagan Budget. Given four ideological goals in budgeting–lowering top-end tax rates; boosting defense spending; going after New Deal/Great Society spending; and reducing budget deficits–the one that always gets the short end of the straw is deficit reduction, even if supply-side magic asterisks allow GOPers to pretend, temporarily, that deficits will take care of themselves, as long as they are the ones running them up. And speaking of magic asterisks:
Senator Kelly Ayotte, Republican of New Hampshire, and Mr. Enzi are pressing for a place holder in the budget — a “deficit-neutral reserve fund” — that they say would allow Congress to come back in the coming months with legislation to lift the spending caps.
The idea is to pass a budget this month that sticks to the spending caps, but then negotiate a budget law this summer that ends sequestration. The $540 billion in cuts still to come under the Budget Control Act would be replaced by savings from entitlement programs like Medicare and Social Security as well as new revenue from closing some tax loopholes.
To translate, this means an unenforceable promise to come back later and pay for a defense spending boost via “entitlement reform,” which Democrats and the White House have no intention of allowing. By summer, I guess, Republicans will come up with some way to delay the inevitable, and/or to disguise an implicit deal with Democrats to suspend sequestration long enough to give both the Pentagon and domestic programs a fresh drink of water.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, March 16, 2015
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