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“Reaching Out, Finding Nothing”: Remind Me Again Of How All The President Has To Do Is “Lead” & Offer Good-Faith Compromises

It’s hard to blame President Obama for at least making an effort. For four years, he took a variety of steps — some social, some formal, some professional — to establish relationships with congressional Republicans. The outreach didn’t amount to much.

But it appears the president, either out of necessity or stubbornness, will continue his newly revamped charm offensive, including a trip to Capitol Hill for another round of budget talks. It’s clearly intended as a major gesture on Obama’s part — presidents usually summon lawmakers to the White House, not head to Capitol Hill for meetings on lawmakers’ turf.

Time will tell, obviously, whether the efforts pay dividends, but the New York Times has an interesting report today on the ineffectiveness of recent outreach, including a great anecdote I hadn’t heard before.

For all the attention to President Obama’s new campaign of outreach to Republicans, it was four months ago — on the eve of bipartisan budget talks — that he secretly invited five of them to the White House for a movie screening with the stars of “Lincoln,” the film about that president’s courtship of Congress to pass a significant measure.

None accepted.

For all the pundits who complain bitterly that Obama hasn’t done enough to schmooze with lawmakers, doesn’t an anecdote like this suggest the problem is not entirely the president’s fault? Are we to believe that all five — invited in secret so they wouldn’t have to take heat from Fox or the GOP base — were all washing their hair that night?

On a more substantive note, the piece also included this key piece of information:

What spurred Mr. Obama to reach out to rank-and-file Republicans with a flurry of phone calls, meals and now Capitol visits were the recent announcements by their leaders — Speaker John A. Boehner and Senator Mitch McConnell of Kentucky — that they will no longer negotiate with Mr. Obama on budget policy as long as he keeps demanding more tax revenues as the condition for Democrats’ support of reduced spending on Medicare and other entitlement programs.

This is important. Congressional Republican leaders are now saying they won’t even talk to the president unless Obama agrees — before any meetings even take place — to give them what they want. In other words, when the White House announces that all efforts at deficit reduction in the coming years will include literally nothing but 100% spending cuts, then GOP leaders will be prepared to negotiate with the president.

Please, Beltway pundits, remind me again how all the president has to do to resolve political paralysis is “lead” and offer good-faith compromises.

 

By: Steve Benen, The Maddow Blog, March 12, 2013

March 13, 2013 Posted by | Politics | , , , , , , , , | Leave a comment

“The Message Was Crystal Clear”: On The Sequester, The American People “Moved The Goalposts”

I don’t agree with my colleague Bob Woodward, who says the Obama administration is “moving the goalposts” when they insist on a sequester replacement that includes revenues. I remember talking to both members of the Obama administration and the Republican leadership in 2011, and everyone was perfectly clear that Democrats were going to pursue tax increases in any sequester replacement, and Republicans were going to oppose tax increases in any sequester replacement. What no one knew was who would win.

“Moving the goal posts” isn’t a concept that actually makes any sense in the context of replacing the sequester. The whole point of the policy was to buy time until someone, somehow, moved the goalposts such that the sequester could be replaced.

Think back to July 2011. The problem was simple. Republicans wouldn’t agree to raise the debt ceiling without trillions of dollars in deficit reduction. Democrats wouldn’t agree to trillions of dollars in deficit reduction if it didn’t include significant tax increases. Republicans wouldn’t agree to significant tax increases. The political system was at an impasse, and in a few short days, that impasse would create a global financial crisis.

The sequester was a punt. The point was to give both sides a face-saving way to raise the debt ceiling even though the tax issue was stopping them from agreeing to a deficit deal. The hope was that sometime between the day the sequester was signed into law (Aug. 2, 2011) and the day it was set to go into effect (Jan. 1, 2013), something would change.

There were two candidates to drive that change. The first and least likely was the supercommittee. If they came to a deal that both sides accepted, they could replace the sequester. They failed.

The second was the 2012 election. If Republicans won, then that would pretty much settle it: No tax increases. If President Obama won, then that, too, would pretty much settle it: The American people would’ve voted for the guy who wants to cut the deficit by increasing taxes.

The American people voted for the guy who wants to cut the deficit by increasing taxes.

In fact, they went even further than that. They also voted for a Senate that would cut the deficit by increasing taxes. And then they voted for a House that would cut the deficit by increasing taxes, though due to the quirks of congressional districts, they didn’t get one.

Here in DC, we can get a bit buried in Beltway minutia. The ongoing blame game over who concocted the sequester is an excellent example. But it’s worth remembering that the goalposts in American politics aren’t set in backroom deals between politicians. They’re set in elections. And in the 2012 election, the American people were very clear on where they wanted the goalposts moved to.

 

By: Ezra Klein, The Washington Post, February 23, 2013

February 25, 2013 Posted by | Sequester | , , , , , , , , | 1 Comment

“Simpson-Bowles Rebaked”: Playing To The Peanut Gallery

Simpson and Bowles have returned to the stage with a far worse plan than the one they had before. Their old formula sought $2.9 trillion in cuts and $2.6 trillion in revenues, while this new one that they touted at a Politico breakfast this morning seeks just $1.3 trillion in revenues and jacks the cuts up to $3.9 trillion.

The change is driven not so much by any kind of ideological shift or decision that we need more pain as it is driven, or so says Ezra Klein, by their apparent decision this time not to create their own new thing wholly from scratch irrespective of what the pols are saying, but to use Obama’s and Boehner’s latest offers as sort of starting points and guides:

This isn’t meant to be an update to Simpson-Bowles 1.0. Rather, it’s meant to be an outline for a new grand bargain. To that end, Simpson and Bowles began with Obama and Boehner’s final offers from the fiscal cliff deal. That helps explain why their tax ask has fallen so far: Obama’s final tax ask was far lower than what was in the original Simpson-Bowles plan, while Boehner’s tilt towards spending cuts was far greater than what was in the original Simpson-Bowles.

That said, while this plan doesn’t include more tax increases than Obama asked for, it does include significantly more than the $1 trillion in spending cuts than Boehner asked for — about $500 to $700 billion more, if I’m reading it right. In increasing the total deficit reduction, Simpson and Bowles have put the weight on the spending side of the budget.

But why would they shift so dramatically in the Republicans’ direction? Derek Thompson of The Atlantic sees two reasons:

First, there aren’t enough people in Washington who want to raise taxes on anybody making less than $250,000 to make the original $2.6 billion figure work. Second, Congress has demonstrated a fairly strong appetite for scheduling budget cuts.

Well, alas, he’s undoubtedly right about that. But really, this is not to be taken seriously. I’m not usually part of the Entitlement Chicken Little Caucus, because I concede that something needs to be done, provided that “something” is first and foremost to change the way Medicare reimbursements are made, which would save many trillions over the years, and then see what else needs to be done. But to be “responsible” people inside the Beltway you must thirst for seniors and future seniors and poor people and future poor people to sacrifice more. Simpson and Bowles are just playing to that peanut gallery, for which a Politico breakfast is the perfect audience.

One might generously say that Simpson and Bowles are just bowing to the extant political reality. But I thought their job was to suggest the most responsible way forward. They of all people should be standing up to GOP intransigence, not accepting it.

 

By: Michael Tomasky, The Daily Beast, February 19, 2013

February 21, 2013 Posted by | Budget | , , , , , , , | Leave a comment

“A Straightforward Factual Description”: Only One Party Is Willing To Compromise And It Isn’t The GOP

The difference between the Republican and Democratic positions on the sequester is simple: Democrats believe reaching a compromise is preferable to letting the sequester happen, since it could devastate the military and scuttle the recovery. Republicans believe letting the sequester happen is preferable to reaching a compromise, even though it could devastate the military and scuttle the recovery.

This is not a partisan observation. It is a straightforward factual description of the two sides’ positions and public statements. The Democratic position is that we must avert the sequester with a mix of new revenues and spending cuts — which is to say, a mix of what both sides want. The Republican position is that we must avert the deal only with spending cuts — which is to say, only with what Republicans want. Some Republicans are openly declaring that they will sooner allow the sequester to kick in than accept a compromise that includes revenue hikes. In other words, the sequester is preferable to any compromise that includes a mix of concessions by both sides. That’s their explicit position.

Indeed, Politico details this morning that many Republicans are holding to this position because they believe that they can blame Obama for the sequester. Roll Call adds that Mitch McConnell is urging Republicans to draw a hard line on the issue.

But given that polls show the public is already convinced Republicans are not doing enough to compromise with Obama, this position is not without risk to their side. So Republicans have tried to obscure the true nature of their stance in two ways.

One is to pretend they are the party that has made all the concessions to deficit reduction thus far. For instance, Charles Krauthammer argues today that Republicans should not give an inch on new revenues, because they already agreed to tax hikes as part of the fiscal cliff deal. Krauthammer doesn’t mention that Democrats agreed to $1.5 trillion in spending cuts — significantly more than the $700 billion in revenues Republicans agreed to — in 2011. Indeed, even if the parties agreed to a roughly one-to-one split between revenues and cuts to avert the sequester, the overall ledger would still be tilted towards Republicans.

The second way Republicans try to obscure the true nature of their position is by pretending Democrats aren’t willing to cut spending. But there’s that aforementioned $1.5 trillion that must not ever be discussed. What’s more, there is simply no question that if Republicans agreed to new revenues, Democrats would give Republicans at least as much, and likely more, in spending cuts. Yes, some liberals want Dems to refuse to offer any cuts. But the position of Democratic leaders, and even the President himself, is that spending cuts must be part of any deal. By contrast, the position held by the Tea Party wing of the GOP — no new revenues no matter what — is the position held by GOP leaders.

The problem for Republicans remains that they are on record saying that the sequester would devastate our military and are even on record saying it would scuttle the recovery. And so the current political situation is this: One side is willing to reach a compromise to avert disaster for the country; the other is not only unwilling to reach a compromise to avert disaster, it views the impending disaster as an opportunity to get what it wants and even sees it as preferable to compromise. This is an objectively true description of the two sides’ positions. If Republicans believe this is a political winner for them, then hey, go for it.

 

By: Greg Sargent, The Washington Post The Plum Line, February 8, 2013

February 11, 2013 Posted by | Politics | , , , , , , , , | Leave a comment

“Kick That Can”: Fiscal Austerity Should Wait Until The Economy Has Recovered

John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”

Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.

But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.

Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.

This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.

Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.

Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.

One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.

Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.

The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.

But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.

Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?

Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.

So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.

By: Paul Krugman, Op-Ed Columnist, The New York Times, February 7, 2013

February 11, 2013 Posted by | Deficits | , , , , , , , , | 1 Comment

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