Currently viewing the tag: "Debt Ceiling"

LBJ Comparisons Miss The Point

by Lev on 6 May 2013

There appears to be a new rash of arguments out there about how we’d all be better off if Barack Obama had just read his Robert Caro a little more closely. The broader arguments have already been made elsewhere. I’m sure I’ve probably made such arguments myself in moments of high emotion too. But the more I think about it, I just see this particular theory–that with some combination of cajoling, bullying, and pleading, Obama could pass his agenda over a stone-crazy GOP House and a filibuster-prone Senate–as not that compelling. So I’d advise proponents of it to make a more sophisticated argument: that Obama has already failed to be LBJ. Specifically, that the decisions he made in 2009-2010 ensured that Democrats would lose Congress and that he’d thus lose the ability to pass big, important legislation. I think this is actually a plausible argument, though I don’t fully believe it. Johnson had been a Washington legislator for over two decades when he became president, while Obama had really only done the job of a day-to-day U.S. Senator for two years upon getting into the White House. It’s been exhaustively documented that Obama cared much more about policy than politics and was insistent about bipartisan outreach, leading to a situation where he led the banks out of crisis by taking extensive political damage, and taking over a year to pass health care while the economy was pushed to the back-burner. The public got fatigued by the debate, the Tea Party made a stronger narrative about the ACA than the White House did, and so on, which led to Scott Brown and the rest of it. This is a plausible argument and I could go either way on it depending on the weather and so forth, but it’s not exactly ironclad when one remembers just how hapless those large Democratic majorities were, and even a second stimulus wouldn’t probably have staved off significant losses in 2010. But you could make more of an argument there.

For my money, the only moment where Obama needed to show that mythical LBJ/FDR spine of steel and didn’t was the first time the debt ceiling was threatened. Sequestration is turning out to be a policy disaster for the liberal project and a political disaster for Obama, the original sin from which (nearly) all others entered our world. He damned himself by not putting himself and his presidency on the line to shut down this disaster, and given that the Republicans folded like a 2-7 hand in Texas Hold ‘Em in March when it came up again, there’s even less reason to assume that Obama made the right call back then. Frankly, it almost doesn’t matter what he does now since that decision set the environment perfectly for austerian Republicans to turn the tables on him. It was one of those defining moments you hear about, and Obama flat-out flunked the test. Since then there’s been little opportunity to reverse that catastrophic decision, so complaining that Obama isn’t being tough enough now is beside the point.

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Sequestration Forever

by Lev on 25 March 2013

I don’t know that I really have too much more to say about this, but it deserves some notice:

Obama has repeatedly championed a set of government investments that he argues would expand the economy and strengthen the middle class, including bolstering early-childhood education, spending more on research and development, and upgrading the nation’s roads and railways. He has said his comfortable reelection victory in November shows the country is with him.

But none of those policies have come close to being enacted. Instead, after returning this weekend from a trip to the Middle East, Obama is set to sign a government funding measure that leaves in place the across-the-board cuts known as sequestration — a policy that undermines many of the goals he laid out during the 2012 campaign.

Obama thinks the cuts are, in his words, “dumb,” and he says they will slow the economy and harm priorities by cutting spending on education, research and development, and many other programs. Yet Obama now finds himself enacting a broad domestic policy that he doesn’t support and that he believes will harm the country.

The article contains some Obama-ites saying that the sequester is eventually going to go, but at this point they’ve not exactly proven very shrewd when talking about what Republicans will do. Seems clear that we’re stuck with the dumb cuts that everybody was sure wouldn’t happen, except for me, sort of. I thought they’d roll much of it back later this month, and they rolled some of it back, which puts me closer to what happened than most people.

Barack Obama is not a bad president, and has improved palpably in many ways since his early days in office. There have been many positive accomplishments over the past four-plus years. But deficits and budget politics continue to be the Administration’s Achilles heel. The fiscal cliff/sequestration battle smacked of self-assuredness in this area that wasn’t warranted, since ultimately the Republicans did the most predictable thing imaginable–obstruct and do nothing–which apparently came as a complete shock to them, an incredible admission of out-of-touchiness. Anyway, for whatever reason, the president would rather have the sequestration cuts than nothing, so the most likely scenarios are either a indefinitely-starved public sector or a permanently-shrunk welfare state. That 2012 victory was sure worth it.

You might imagine I’m sympathetic to this perspective:

“I think they brought it on themselves to the extent that they validated the deficit issue,” Mishel said. “It was always the case that the actual budget policy being pursued contradicted the rhetoric in the campaign. Now it’s even worse.”

I highly doubt Obama’s support was what legitimized deficits as an issue, you can’t put the myopia of D.C. entirely on him. And it’s not like all that pressure isn’t part of the context in which he has to operate. But, yeah, while it’s hardly incoherent to support both stimulus and long-term deficit reduction, or increased discretionary spending and entitlement cuts, it’s also unsurprising that this nuanced, complicated position has failed to jam up the STOP THE SPENDING!!! buzzsaw. I’d really hoped Obama had learned this after the debt ceiling crisis, but it’s now clear to me that he can’t learn and won’t learn when it comes to this issue.

(h/t Political Wire)

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“Losing” on the Sequester

by Lev on 6 March 2013

Ed Kilgore is sarcastic about the new CW:

So in effect Republicans are “winning” only because they have eschewed other do-nothing fiscal strategies—fights over the debt limit and the omnibus appropriations bill—that would create greater and clearer damage, and perhaps even sacrifice victory altogether. But it’s not easy to see how they get from here to what they actually want, unless it’s just a matter of getting to 2014 and 2016 and a fresh chance to change the balance of power.

There’s little doubt at this point that Republicans have masterfully avoided political damage from the sequester, which was (lest we forget) designed to inflict significant damage on their own interests. That might well change over the next few weeks or months–I would bet on it, in fact–but the reason for why this has occurred doesn’t seem complicated to me. The GOP just wants to have some spending cuts to show to its base, especially spending cuts that President Obama doesn’t like. They have accomplished this, and got Obama to spend a lot of time on the issue without any power to influence it, thus embarrassing him somewhat. On the other hand, the Administration has called the cuts “devastating” (as per today’s OFA email subject line from my inbox), but rather than just calling for outright repeal, they also want to replace the plan. There are a number of possible  reasons for this: fear of bond vigilantes (which would be crazy), fear of centrist pundits (which would be pointless), and genuine commitment to deficit reduction politics among them. But it’s hard to dispute that the public palpably doesn’t care about yet another budget standoff with exactly the same dynamic as the last dozen or so, including one just two months ago: Republicans proposing big cuts to safety net programs, Obama insisting on taxes while also providing “bona fides” in the form of offering to take more of a hacksaw to the same safety net programs, liberals getting angry about that hacksaw, Republicans refusing to deal on taxes and the media busting out industrial-strength equivalence generators. The public is fucking bored with all this, and I have to admit that I am too.

I don’t really blame liberals for just throwing up their hands at this pattern, and it’s long past time Obama altered his approach toward this subject. But Obama has proven utterly incapable of moderating either tone or substance on the matter of deficit reduction, and his ambition and principles (among which deficit reduction ranks strongly) simply will not permit any meaningful departure. What’s more, the most obvious thing for Obama to push–a full-on sequester repeal–seems to not be in the mix at all, despite being very easy to understand and a much easier sell to military-district Republicans. The Administration desires not to “own the cuts” as Ezra Klein reports, and breaking the anti-tax front in the GOP has long been their strategic priority. But frankly the White House has shown little common sense on the subject of deficit politics, often making off-base assumptions and not demonstrating much understanding of internal GOP politics, and it keeps running the same ineffective playbook on these issues, one that doesn’t seem to have a natural audience at this time. What’s more, rallying the base doesn’t really work if you can’t get across that you share their point of view and basic values, and at this point “more deficit reduction” doesn’t seem to be an overwhelming desire among activist liberals. So, sure, Republicans are passing up significant cuts to safety-net program benefits, but they’ve done that many times before. Humiliating Obama and continuing to hold power, those things matter much more to them, and so far, so good, I guess.

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Democrats, Don’t Let Your Babies Grow Up To Be Deficit Hawks

by Lev on 20 February 2013

Because if you do, all they do is nearly wreck their presidencies seeking a grand bargain, only to get rewarded with this:

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Again–and this is worth repeating–Democrats are fools to play this “game.” The facts of life are simple. First, grand bargains are unenforceable. Second, it’s impossible to pass large-scale deficit reduction in a unipartisan way, or really in a bipartisan way. The historical record is quite clear. The unipartisan way lost control of at least one chamber of Congress in 2010 and 1994, and the bipartisan way lost the White House in 1992. In the latter, Republicans simply revolted against higher taxes and disowned the deal (and the principle of raising taxes ever again), in the former two, unified Democratic control came to an end after the passage of bills designed in large part to deal with the deficit. Sure, health care reform did include money for poor people to get insurance, but the sales job and structure were much more about bending the cost curve–which is a worthy goal, but in any event this process creates losers that will strike back electorally. Third, very few people actually care about deficit reduction, and most of those who do are Republicans whose party pays sufficient lip service to the goal to keep them from considering any sort of switch. Fourth, there is little point to sacrificing political capital to lowering deficits that Republicans will just explode with more tax cuts and military spending as soon as they regain power. And fifth, the press will never, ever stop thinking of Democrats as tax-and-spenders (which ironically is supposed to be a badge of fiscal irresponsibility but implies spending that is paid for–it’s not much of an insult, since it’s basically saying “not a Republican” but nonetheless), and Republicans will always be so tortured by debt that they have little choice to keep exploding it until catastrophe forces us to accept a 19th century structure of government, thus eliminating it somehow. But Republicans had pundits at “tortured by debt.”

I do think that Democrats should actually pay for programs they create, rather than just put major new entitlements on our tab a la Dubya. But Obama has played by the Beltway rules on the deficit issue from day one. He’s assumed bipartisan goodwill that hasn’t existed since at least 1990, been comically overeager and optimistic over the possibility of a deal, and proposed many of his own that were frankly horrible and would have torn up his own party if he’d moved forward with them. Above all, he’s seriously misread the attitude and intent of pundits and media opinionators throughout, and the fact that he’s given absolutely zero credit for this by the press is entirely predictable and entirely damning. Regardless of my views, it’s insane for media outlets to act as though Obama has done little more than bicker with Republicans, and yet that’s what they’ve done. I would hope this is a cautionary lesson to future Democratic presidents: don’t bother with grand deficit ideas, because (1) almost nobody cares, (2) the powerful people who do care will never be satisfied and will never give credit, and (3) the people who actually care will never be convinced due to tribal psychology and information flow from ideological networks. Of course, given the imminence of the sequester, it would appear that the rotten fruit borne of this tree has not yet even begun.

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Something Must Be Giving

by Lev on 18 January 2013
I am forced to agree with this:
I thought that by ruling out any way to bypass the debt limit, the White House was setting itself up, at least potentially, for an ignominious cave-in. But it appears that the strategy has worked, and it’s the Republicans giving up. I’m happy to concede that the president and team called this one right. And it’s a big deal. Yes, the GOP could come back on the debt ceiling, but that seems unlikely. It could try to make a big deal of the sequester, but that’s a lot more like the fiscal cliff than it is like the debt ceiling: not good, but not potentially catastrophic, and therefore poor terrain for the “we’re crazier than you are” strategy. And while Republicans could shut down the government, my guess is that Democrats would actually be gleeful at that prospect: the PR would be overwhelmingly favorable for Obama, and again, not much risk of blowing up the world.
Good news for sure. Is it just me, or is something giving way a bit in the GOP? The debt ceiling, the Hastert Rule. Seems like some core of Republicans must be realizing the toll taken by obstructionism and insanity, and is acting on it just a little bit. We’ll see if it lasts, but it’s encouraging.

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Semantics

by Lev on 14 January 2013

Tim Noah raises a good question about Obama insisting he won’t negotiate on the debt ceiling: what does this statement actually mean?

Let’s think about this for one second, in conjunction with upcoming negotiations for resolving the “sequester,” i.e. the trillion-dollar blunt instrument of a spending cut that starts in a month and a half. Both sides want to change parts of the sequester. Does Obama’s stance on the debt ceiling mean that he will conduct negotiations over modifying the sequester purposefully excluding the debt ceiling, under the assumption that a hike ought to be done separately and cleanly? Will he insist on a debt ceiling hike as a precondition to any deal? Either of these could be construed as Obama “not negotiating” over it, but these are very different fundamental circumstances. I’d rather prefer the former since it acts as though the debt ceiling isn’t a valid demand, but the latter was one of Obama’s conceits for the “fiscal cliff” that didn’t quite pan out, and could well be reborn. And, of course, if the statement is construed as “I won’t talk about lifting defense cuts until the GOP raises the debt ceiling,” then it’s yet another thing (though this is a difficult interpretation to imagine Obama meaning).

Of course, the notion that Obama will refuse to negotiate on the debt ceiling is difficult to actually believe. Not impossible, but I’ll believe it when I see it. It was not a shock to me that the Administration rejected the platinum coin route, not because of some squirrely-sounding rationale about the Fed not accepting the coin so much as that using it would represent a failure of reason winning out and of people working together and coming to an agreement, even if they don’t like it. This is, essentially, at the core of Obama’s political persona and also of his own personality. However, allowing a default would arguably be just as untenable to that same sensibility (it is a flawed sensibility, at least in as strong a form as it manifests in him). So he’ll talk tough for a few more weeks, and then buckle when we start getting down to it. The only question is, what’s the ultimate deal that comes out of it? I’m guessing it will be a one-year debt ceiling hike, cancellation of most of the defense cuts, and something like chained CPI that will introduce a long-term Social Security benefit cut will be the top bullet points. No concessions from the GOP more than nominal/symbolic. After all, he didn’t get much more than nominal concessions with a ton of leverage this time, with little leverage I fully expect libs to take it in the teeth. I hope I’m wrong and that he’s got another brilliant Hagel-esque bunny rabbit up his sleeve. I hope so.

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Scenes From A Weekend

by Lev on 7 January 2013
  • I was in a place where CNN’s “Your Money” was playing, and Stephen Moore of the WSJ was blabbing about how using the debt ceiling as leverage was no big deal because one time it was used to force a vote on a balanced budget amendment. Obviously, tying a must-pass increase in the debt ceiling to a symbolic vote that would never pass is roughly the same to taking the economy hostage, with the ransom price being hideously unpopular and pointlessly cruel cuts in public spending. Moore (who seems to be an omnipresence in bolstering the ongoing debt ceiling extortion, even though he’s supposedly a reporter) was not challenged on any point he made. This does not make me feel bad that CNN is faltering.
  • Got a visitor at the home base the next day by a representative of a telecom company. Let’s just say it’s a company well-known for poor customer service. The guy asked if “Danny” is home, which is neither my nor my spouse’s name, nor the name of the people who lived in the apartment before us, presumably for at least a year. After hearing that “Danny” wasn’t there, the guy didn’t just move on to try to find him, but went straight into a hard sell on their premier TV service. It was not successful. Then, as if to underscore the shamelessness, he knocked right on the door next door. Has to find “Danny” somehow.As I said, this particular company isn’t particularly known for handling people well. But this is something else–a gimmick that even the least-cynical among us could see through. I hadn’t realized just how much I didn’t miss door-to-door salesmen until then. And here is my tip for people wanting to escape irritating salesmen: whatever they’re selling, say you get it for free. For example, if someone wants to sell you a newspaper subscription? Say you get it for free at work. There’s no place to go after that. It’s always shown success for me.

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