Miscalculations
Posted on Sat Jul 30, 2011 at 12:14:28 PM EST
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Jed Lewison links to Ezra Klein describing the latest in a pattern of miscalculations by the Obama Administration in its negotiations with the Republicans. Ezra writes:
The White House proposed a balanced trigger in April: It would have automatically [increase] taxes and [cut] spending if America wasn’t on a path to balanced budgets by 2014. [. . . ] But privately, they’re less concerned about a spending-only trigger, which was seriously considered during their negotiations with Boehner. They point out that Republicans might want to cut spending, but they don’t want the blame for automatic, untargeted spending cuts that slash away at Social Security, Medicare and defense during an election year.
This is a monumental miscalculation. I'll explain why on the flip.
First, it seems to me that the likely iteration of such a trigger would require immediate spending cuts, not cuts after 2014. That is by far the worst result possible in the debt ceiling negotiations.
But it also reveals a fundamental miscalculation of what motivates Republican bargaining - which is taxes. As Jim Orney of CBPP explains to Ezra:
Jim Horney, a budget expert at the Center on Budget and Policy Priorities, thinks that a spending-only trigger misses the point of these devices. Horney, who worked on the budget deals in the 1980s and 1990s, argues that the point of these mechanisms is “to force both sides to negotiate sensibly.”
Take the Gramm-Rudman-Hollings Balanced Budget Act, he says. “They figured that Democrats cared about spending programs. So half the cuts would come from domestic programs. and they realized that what Ronald Reagan cared about wasn’t taxes so much as defense. So half the cuts came from defense. But what gets the attention of Republicans today is not defense. It’s taxes. So if you’re going to use the basic idea sequestration had in its original incarnation, it has to include revenues to bring them to the table.”
(Emphasis supplied.) It is preferable to go through another debt ceiling negotiation than agree to automatically triggered spending cuts. Indeed, it is bizarre that the White House thinks the GOP would get the blame for automatic spending cuts. The only way to pin the blame for such cuts on Republicans is to make them argue for low taxes for the rich financed by cuts in Social Security and Medicare.i The only way to do that is to make them negotiate for spending cuts, not have them occur automatically.
In 1998, when involved in a similar political battle with Republicans, who as always wanted to cuts taxes for the rich, President Bill Clinton argued for Social Security first:
Now if we balance the budget for next year, it is projected that we'll then have a sizable surplus in the years that immediately follow. What should we do with this projected surplus? I have a simple, four-word answer: Save Social Security first.
Tonight I propose that we reserve 100 percent of the surplus, that's every penny of any surplus, until we have taken all the necessary measures to strengthen the Social Security system for the 21st century. Let us say -- let us say to all Americans watching tonight -- whether you're 70 or 50 or whether you just started paying into the system -- Social Security will be there when you need it.
Let us make this commitment Social Security first. Let's do that -- together.
If you read the entire speech, you will see many nods to fiscal restraint, deficit cutting and smaller government. But it retained a firm commitment to Social Security, echoing President Clinton's earlier resolve in his battle against Republican attempts to slash Medicare and Medicaid (these battles led to the government shutdowns of 1995.)
Automatic spending cuts destroy any attempts at contrast (as the attempted Grand Bargain would have.)
The potency of this issue is not to be underestimated. Today I received from a senior hard line conservative Republican the following e-mail that is being passed around in his circle:
This has nothing to do with Republicans or Democrats, it is about most Senators and Congressmen. In Washington. The idea is to keep us dope partisans, occupied fighting and blaming each other while they empty the US Gov. Treasury in their personal pockets.
! Wise Up Americans !
Alan Simpson, Senator from Wyoming, Co-Chair of Obama's deficit commission, calls senior citizens the Greediest Generation as he compared "Social Security" to a Milk Cow with 310 million tits. August, 2010.
Here's a response in a letter from a unknown farmer in Montana.... I think he is a little ticked off! He also tells it as it is.!
"Hey Alan, let's get a few things straight..
1. As a career politician, you have been on the public tit for FIFTY YEARS.
2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).
3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you political pukes decided to raid the account and give OUR money to a bunch of zero ambition losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would have made Bernie Madoff proud.
4. Recently, just like Lucy & Charlie Brown, you and your ilk pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age 67. NOW, you and your shit commission are proposing to move the goalposts YET AGAIN.
5 I, and millions of other Americans, have been paying into Medicare from Day One, and now you morons propose to change the rules of the game.. Why? Because you idiots mismanaged other parts of the economy to such an extent that you need to steal money from Medicare to pay the bills.
6. I, and millions of other Americans, have been paying income taxes our entire lives, and now you propose to increase our taxes yet again. Why? Because you incompetent bastards spent our money so profligately that you just kept on spending even after you ran out of money. Now, you come to the American taxpayers and say you need more to pay off YOUR debt.
To add insult to injury, you label us "greedy" for calling "bullshit" on your incompetence. Well, Captain Bullshit, I have a few questions for YOU.
1. How much money have you earned from the American taxpayers during your pathetic 50-year political career?
2. At what age did you retire from your pathetic political career, and how much are you receiving in annual retirement benefits from the American taxpayers?
3. How much do you pay for YOUR government provided health insurance?
4. What cuts in YOUR retirement and healthcare benefits are you proposing in your disgusting deficit reduction proposal, or, as usual, have you exempted yourself and your political cronies?
It is you, Captain Bullshit, and your political co-conspirators called Congress who are the "greedy" ones. It is you, and your fellow nutcases, who have bankrupted America and stolen the American dream from millions of loyal, patriotic taxpayers. And for what? Votes. That's right, sir. You and yours have bankrupted America for the sole purpose of advancing your pathetic political careers. You know it, we know it, and you know that we know it.
And you can take that to the bank, you miserable ASSHOLE...!!!If you like the way things are in America, delete this. If you agree with what a fellow citizen says, PASS IT ON!!!!
This populist message resonates across party lines, including among those vaunted "Independents" David Plouffe so furiously covets.
The actions of the Obama Team on this issue are approaching political criminal incompetence.
They must do better. They must understand who the Republicans are and what they want . Otherwise, a one term Presidency threatens ever more ominously.
Speaking for me only
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