“GOP Deficit Scolds”: By All Means, Cut Social Security, But Don’t Tax The Rich
If the White House’s political goal in calling for Social Security cuts in its budget was to reveal the GOP as the intransigent, uncompromising party in Washington, it’s having the desired effect.
The statements from Republican leaders today in response to the budget are noteworthy, though not surprising: They say we should proceed with Obama’s proposed entitlement cuts but not raise any new revenues by closing any millionaire loopholes. Oh, they don’t put it in those terms. But here’s John Boehner:
While the president has backtracked on some of his entitlement reforms that were in conversations that we had a year and a half ago, he does deserve some credit for some incremental entitlement reforms that he has outlined in his budget. But I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes. Listen, why don’t we do what we can agree to do? Why don’t we find the common ground that we do have and move on that?
And here’s Eric Cantor:
If the President believes, as we do, that programs like Medicare, Medicaid and Social Security are on the path to bankruptcy, and that we actually can do some things to put them back on the right course and save them to protect the beneficiaries of these programs, we ought to do so. And we ought to do so without holding them hostage for more tax hikes.
In other words, let’s only do the thing where there’s common ground (entitlement cuts) and not do the thing where there is disagreement (tax hikes).
Now in one sense, this can be seen to validate some of the left’s worst fears about what would happen if Obama offered entitlement cuts. Now that he’s formally proposed cutting Social Security benefits, Republicans can describe that proposal as the one area of agreement between the two parties. And it’s true Obama will probably take a political hit for the proposal.
At the same time, though, it’s worth noting that this doesn’t put Republicans in the greatest political position, either. The GOP position — revealed with fresh clarity today — is that we should only cut entitlements but not raise a penny in new revenues by getting rid of any loophole enjoyed by millionaires. GOP leaders try to compensate for this by robotically repeating the phrase “tax hikes” as a negative, but polls show that majorities already understand that Republican policies are skewed towards the rich. The use of the phrase “tax hikes” to obscure what Dems are really calling for — new revenues from the wealthy — didn’t fare too well in the 2012 elections.
And so, if the White House budget was partly intended as a trap, Republicans walked into it, revealing themselves as the only real obstacle to compromise. Indeed, as Steve Benen points out, Paul Ryan helped underscore the point when he struggled to name anything Republicans could support that their base wouldn’t like.
Now, maybe you don’t believe that there’s much political value in staking out the compromising high ground in this debate, because the Very Serious Deficit Scolds in Washington won’t ever award Obama any real credit for doing this. And maybe you believe that offering Chained CPI will do nothing more than make it easier for Republicans to attack Dems for cutting Social Security in 2014 and 2016.
All I can say to that is that the White House views things differently. Obama advisers believe Republicans could just as easily attack him this cycle for cutting Social Security based on his previous support for Chained CPI. They think the lesson of 2012 (remember the failed “he raided Medicare to pay for Obamacare” talking point?) is that Dems can fend off this attack with relative ease. And from what I have been told, they are looking beyond just getting the approval of the Very Serious People. They want to establish a Beltway narrative that GOP devotion to protecting the wealth of the rich is what’s preventing a deal to replace the sequester, in hopes that it will seep into local news coverage of the cuts around the country as the pain of those cuts sinks in, weakening Republicans further.
Chained CPI is awful policy, and I oppose it. On the raw politics of all this, however, only time will tell who is right.
By: Greg Sargent, The Plum Line, The Washington Post, April 10, 2013
“Republicans Are Out Of Excuses”: President Obama’s Budget And The Put-Up-Or-Shut-Up Challenge
As promised, President Obama sent Congress his budget for the 2014 fiscal year this morning, and there’s just enough in it to make everyone unhappy from a variety of directions.
Republicans won’t like everything about this plan that makes it progressive: it expands Medicaid, undoes sequestration cuts while ignoring Paul Ryan’s demands to slash public investments, pursues a universal-preschool initiative though new tobacco taxes, expands the Earned Income Tax Credit, invests another $50 billion in job-creating infrastructure, gives a big boost to federal R&D, and takes away breaks for Big Oil.
Democrats won’t like everything about this plan that makes it conservative: it includes additional Medicare reforms, it adopts chained-CPI to lower Social Security benefits, and it focuses more on the spending side of the ledger than the revenue side. On a fundamental level, Obama’s budget starts in the middle, rather than the left, making negotiations that much more difficult.
But whichever side you fall on, there’s an underlying strategy here. Ezra Klein’s summary sounds right to me:
Today’s budget is the White House’s effort to reach the bedrock of the fiscal debate. Half of its purpose is showing what they’re willing to do. They want a budget compromise, and this budget proves it. There are now liberals protesting on the White House lawn. But the other half is revealing what the GOP is — or, more to the point, isn’t — willing to do. Republicans don’t want a budget compromise, and this budget is likely to prove that, too.
As the White House sees it, there are two possible outcomes to this budget. One is that it actually leads to a grand bargain, either now or in a couple of months. Another is that it proves to the press and the public that Republican intransigence is what’s standing in the way of a grand bargain.
So, which of these two outcomes is more likely?
I think the smart money is on the latter. The president has called every GOP bluff and put his cards on the table — Republicans said Obama wouldn’t have the guts to go after entitlements and isn’t tough enough to risk the ire of his base. And now we know these assumptions were wrong — the president has presented a White House budget that includes the very entitlement “reforms” GOP leaders asked for, and liberals are furious.
It is, in other words, “put up or shut up” time. Republicans, out of excuses, can either meet Obama half-way or they’ll be exposed as craven. And if the last several years are any indication, GOP lawmakers will chose the latter without a moment’s thought.
Indeed, as Greg Sargent noted, congressional Republican leaders have already spent the afternoon arguing that Obama should simply give the GOP what it wants, and abandon the Democratic priorities, reinforcing the perception that Republicans still do not yet understand the difference between an offer and a gift.
In fact, I should mention that I received an email the other day from a long-time reader asking why I don’t seem more worked up about chained-CPI. The reader asked whether I support it (I don’t) and whether I’ve been relatively quiet about it out of some ideological or partisan predisposition.
I’ll tell you what I told him: I’m not worked up about it because I don’t see the scenario in which Republicans get chained-CPI by giving Obama hundreds of billions of new revenue. It’s easy to remain detached about a bad idea that seems highly unlikely to go anywhere. As Kevin Drum added today, “I don’t doubt that Obama’s offer is sincere, but it doesn’t matter. Republicans aren’t going to take it. Obama will get his proof that Republicans simply aren’t willing to negotiate seriously, and who knows? Maybe it will do him some good. But that’s all he’ll get.”
For me, the more interesting question is how the political world will process these developments when they occur. The Beltway said Obama needed to reach out to Republicans, so he reached out to Republicans. The Beltway said Obama needed to schmooze Republicans in a more personal way, so he did that, too. The Beltway said Obama needed to be willing to alienate his own supporters, and the president’s base has been duly outraged. The Beltway said Obama needed to put Medicare and Social Security on the table, and they’re on the table.
Will pundits who continue to blame “both sides” for partisan gridlock look ridiculous in the coming months? I sure as hell hope so.
By: Steve Benen, The Maddow Blog, April 10, 2013
“Two Steps Forward, Two Steps Back”: Today’s GOP Is Not A Small-Government Party, It’s An Anti-Tax Party
When it comes to striking a bipartisan fiscal deal, House Speaker John Boehner (R-Ohio) argued yesterday that the only compromise he’ll consider is one in which Republicans accept no concessions whatsoever. Around the same time, House Majority Whip Kevin McCarthy (R-Calif.) said the same thing.
Given this, it’s fair to say the prospects for a so-called “Grand Bargain” are finished, right? Almost, but not quite.
Sen. Bob Corker (R-Tenn.) said Sunday that he believes Republicans would consider adding new tax revenues by closing loopholes if Democrats show a willingness to embrace “true” entitlement reform.
“I think Republicans, if they saw true entitlement reform, would be glad to look at tax reform that generates additional revenues,” Corker said on “Fox News Sunday.” “And that doesn’t mean increasing rates, that means closing loopholes. It also means arranging our tax system so that we have economic growth.”
Corker is clearly part of a very small minority in his party, but it’s worth noting he’s not completely alone — Sen. Lindsey Graham (R-S.C.) made similar remarks shortly before the sequestration deadline about Republicans trading tax-reform revenue for unspecified entitlement “reforms.”
It’s admittedly difficult to read the available tea leaves — for every report that says Republicans will simply never even consider a compromise, there’s another that says the window is not yet closed and a deal is still possible.
But if we’re keeping score, put me down in the “deeply skeptical” category. Putting aside the merits of a “Grand Bargain” — I’m skeptical about the need for such a deal, too — I just don’t see a scenario in which enough congressional Republicans accept concessions to pass an agreement.
In fairness, the optimists have a compelling talking point: Republicans want changes to social-insurance programs like Medicare and Social Security; President Obama is tempting them by putting the “reforms” on the table; and GOP leaders know the only way Democrats would even consider these cuts is if Republicans make concessions on new revenue.
So why is failure probably inevitable anyway? In large part because when weighing the Republican support for entitlement cuts against the Republican opposition to new tax revenue, it’s no contest — today’s GOP is not a small-government party; it’s an anti-tax party. On the list of Republican priorities, there’s a #1 issue, followed by a steep drop-off to every other consideration.
For proof, look no further than Boehner’s and McCarthy’s comments yesterday. Yes, Corker sounded a more constructive note, but I strongly suspect he’s part of an intra-party minority that would be quickly crushed if a deal started to materialize.
But isn’t Obama making them a generous offer intended to garner GOP support? Yes, but let’s also not forget two things. First, the president has already put very conservative measures on the table, but they’re far short of what Republicans generally consider acceptable (the elimination and privatization of entitlement programs). Second, as we’ve seen before, the m.o. for Republicans is to simply pocket Obama’s offers while demanding more, constantly moving the goal posts to new extremes, before the president eventually gives up and the media blames “both sides.”
Indeed, look again at Corker’s specific use of words: he’ll consider revenue if Democrats accept “true” reforms. Who gets to decide what’s “true”? Apparently, Corker and his party do, and chances are, their definition won’t line up well with the Democrats’ definition.
I realize that on a conceptual level, this seems like the sort of agreement that could be reached in an afternoon. Both sides are looking for similar amounts of debt reduction, and have already made significant progress towards their goal. Democrats are open to spending cuts and entitlement changes, and if Republicans met them half-way on tax-reform revenue, they could shake hands and move on to some other issue.
But if I were a betting man, I’d say the smart money is on “never going to happen.” All of the GOP leadership and most of their rank-and-file members not only refuse to consider a compromise, but consider the very idea of meeting the White House half-way to be ridiculous.
By: Steve Benen, The Maddow Blog, Marh 18, 2013
“After The Flimflam”: Little By little, Washington’s Fog Of Fiscal Austerity Seems To Be Lifting
It has been a big week for budget documents. In fact, members of Congress have presented not one but two full-fledged, serious proposals for spending and taxes over the next decade.
Before I get to that, however, let me talk briefly about the third proposal presented this week — the one that isn’t serious, that’s essentially a cruel joke.
Way back in 2010, when everybody in Washington seemed determined to anoint Representative Paul Ryan as the ultimate Serious, Honest Conservative, I pronounced him a flimflam man. Even then, his proposals were obviously fraudulent: huge cuts in aid to the poor, but even bigger tax cuts for the rich, with all the assertions of fiscal responsibility resting on claims that he would raise trillions of dollars by closing tax loopholes (which he refused to specify) and cutting discretionary spending (in ways he refused to specify).
Since then, his budgets have gotten even flimflammier. For example, at this point, Mr. Ryan is claiming that he can slash the top tax rate from 39.6 percent to 25 percent, yet somehow raise 19.1 percent of G.D.P. in revenues — a number we haven’t come close to seeing since the dot-com bubble burst a dozen years ago.
The good news is that Mr. Ryan’s thoroughly unconvincing policy-wonk act seems, finally, to have worn out its welcome. In 2011, his budget was initially treated with worshipful respect, which faded only slightly as critics pointed out the document’s many absurdities. This time around, quite a few pundits and reporters have greeted his release with the derision it deserves.
And, with that, let’s turn to the serious proposals.
Unless you’re a very careful news reader, you’ve probably heard about only one of these proposals, the one released by Senate Democrats. And let’s be clear: By comparison with the Ryan plan, and for that matter with a lot of what passes for wisdom in our nation’s capital, this is a very reasonable plan indeed.
As many observers have pointed out, the Senate Democratic plan is conservative with a small “c”: It avoids any drastic policy changes. In particular, it steers away from draconian austerity, which is simply not needed given ultralow U.S. borrowing costs and relatively benign medium-term fiscal projections.
True, the Senate plan calls for further deficit reduction, through a mix of modest tax increases and spending cuts. (Incidentally, the tax increases still fall well short of those called for in the Bowles-Simpson plan, which Washington, for some reason, treats as something close to holy scripture.) But it avoids large short-run spending cuts, which would hobble our recovery at a time when unemployment is still disastrously high, and it even includes a modest amount of stimulus spending.
So we could definitely do worse than the Senate Democratic plan, and we probably will. It is, however, an extremely cautious proposal, one that doesn’t follow through on its own analysis. After all, if sharp spending cuts are a bad thing in a depressed economy — which they are — then the plan really should be calling for substantial though temporary spending increases. It doesn’t.
But there’s a plan that does: the proposal from the Congressional Progressive Caucus, titled “Back to Work,” which calls for substantial new spending now, temporarily widening the deficit, offset by major deficit reduction later in the next decade, largely though not entirely through higher taxes on the wealthy, corporations and pollution.
I’ve seen some people describe the caucus proposal as a “Ryan plan of the left,” but that’s unfair. There are no Ryan-style magic asterisks, trillion-dollar savings that are assumed to come from unspecified sources; this is an honest proposal. And “Back to Work” rests on solid macroeconomic analysis, not the fantasy “expansionary austerity” economics — the claim that slashing spending in a depressed economy somehow promotes job growth rather than deepening the depression — that Mr. Ryan continues to espouse despite the doctrine’s total failure in Europe.
No, the only thing the progressive caucus and Mr. Ryan share is audacity. And it’s refreshing to see someone break with the usual Washington notion that political “courage” means proposing that we hurt the poor while sparing the rich. No doubt the caucus plan is too audacious to have any chance of becoming law; but the same can be said of the Ryan plan.
So where is this all going? Realistically, we aren’t likely to get a Grand Bargain any time soon. Nonetheless, my sense is that there is some real movement here, and it’s in a direction conservatives won’t like.
As I said, Mr. Ryan’s efforts are finally starting to get the derision they deserve, while progressives seem, at long last, to be finding their voice. Little by little, Washington’s fog of fiscal flimflam seems to be lifting.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 14, 2013
“Can You Hear Me Now?”: A Moment Of Real GOP Clarity In The Fiscal Debate
As you regulars know, I’ve been hoping and hoping that reporters will press top Republicans on a simple question: Is there any ratio of entitlement cuts of your choosing to new revenues you’d accept? Three to one? Four to one? Five to one?
Well, John Boehner was asked something very close to that question on ABC News today:
MARTHA RADDATZ: Is there any ratio of entitlement cuts to new revenues that you would –
SPEAKER JOHN BOEHNER: The president got his –
MARTHA RADDATZ: — say that the is three to one, four to one –
SPEAKER JOHN BOEHNER: — tax hikes. The president –
MARTHA RADDATZ: — nothing?
SPEAKER JOHN BOEHNER: — got his tax hikes on January the 1st.
MARTHA RADDATZ: So, the answer to –
SPEAKER JOHN BOEHNER: He–
MARTHA RADDATZ: — that is no?
SPEAKER JOHN BOEHNER: — he ran his election on taxing the wealthy. He got his tax hikes. But he won’t talk about the spending problem and that’s the problem here in Washington.
We’ll take that as a No. House GOP majority whip Kevin McCarthy was also asked that question on NBC today:
DAVID GREGORY: Is there any ratio that you could accept?
REP. KEVIN MCCARTHY: There are no new tax increases because you don’t need it. If you look at this report –
DAVID GREGORY: But you’re never going to get entitlement reform –
REP. KEVIN MCCARTHY: You’re going to get nothing.
DAVID GREGORY: — without tax increases. Is that political reality?
Again, until we hear otherwise, we’ll take that as a No.
And so it’s now sinking in that: 1) Republicans are not getting the entitlement cuts they want without agreeing to new revenues; and 2) Republicans are explicitly confirming that there is no compromise that is acceptable to them to get the cuts they themselves say they want. The GOP position, with no exaggeration, is that the only way Republican leaders will ever agree to paying down the deficit they say is a threat to American civilization is 100 percent their way; they are not willing to concede anything at all to reach any deal involving new revenues to reduce the deficit, or to get the entitlement reform they want, or to avert sequestration they themselves said will gut the military and tank the economy.
But … but … but … Obama needs to lead and prove he’s Serious by offering still more entitlement cuts than he already has!
Come on. Is the situation clear enough now?
By: Greg Sargent, The Washington Post, The Plum Line, March 17, 2013
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