Because if you do, all they do is nearly wreck their presidencies seeking a grand bargain, only to get rewarded with this:
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.
Tom Friedman makes his usual contribution (i.e. none) to the national debate:
I voted for Barack Obama, and I don’t want my money back. He’s never gotten the credit he deserves for bringing the economy he inherited back from the brink of a depression. He’s fought the war on terrorism in a smart and effective way. He’s making health care possible for millions of Americans with pre-existing conditions, and he saved the auto industry. This is big stuff. But, as important as all of these achievements are, they pale in comparison to the defining challenge of Obama’s presidency: Can he put the country on a sustainable economic recovery path at a time when, if we fail, it could be the end of the American dream?
I believe the best way for Obama to do that is by declaring today that he made a mistake in spurning his own deficit reduction commission, chaired by Erskine Bowles and Alan Simpson, and is now adopting Simpson-Bowles — which already has Republican and Democratic support — as his long-term fiscal plan to be phased in after a near-term stimulus. If he did that, he would win politically and create a national consensus that would trump his opponents, right and left. […]
Obama aides argue that so many G.O.P. lawmakers are committed to making his presidency fail, or have signed pledges to an antitax cult, that they would never buy into any grand bargain. I think that is true for a lot of Republicans in Congress. But I have some questions: Why are the Republicans getting away with this?
[Perhaps because you don’t call them out on it, and insist it’s Obama’s fault that they don’t accept the ludicrously-tilted deals in their favor that he keeps offering? No?]
I think America’s broad center understands very clearly that the country is in trouble and that the Republican Party has gone nuts. But when they look at Obama on the deficit, they feel something is missing. People know leadership when they see it — when they see someone taking a political risk, not just talking about doing so, not just saying, “I’ll jump if the other guy jumps.” In times of crisis, leaders jump first, lay out what truly needs to be done to fix the problem, not just to win re-election, and by doing so earn the right to demand that others do the same.
What would it look like if the president was offering such leadership? First, he’d be proposing a deficit-cutting plan that matches the scale of our problem — one with substantial tax reform and revenue increases, a gasoline tax, deep defense cuts and cutbacks to both Social Security and Medicare. That is the Simpson-Bowles plan, and it should be Obama’s new starting point for negotiations. The deficit plan Obama put out last September is nowhere near as serious. “It is watered-down Simpson-Bowles,” said MacGuineas. “Most people don’t even know it exists.”
I found this column irritating, so I decided to contact Tom Friedman* and we enjoyed a nice, leisurely chat:
Tom: Hey, what’s up?
Lev: I read your article.
Tom: Yeah? Good one, I think.
Lev: Not one of your best efforts, I think. I’m a little confused.
Tom: Really? I thought it was right up there with The World Is Flat.
Lev: I don’t know about that. I thought it reflected a pretty poor grasp of the political situation, actually.
Tom: How so?
Lev: Well, you outright assert that you want to see President Obama take a public stand in favor of the Simpson-Bowles plan, and you also insist that you want to see Simpson-Bowles passed into law.
Lev: Well, hasn’t the attitude of the Republican Party been to basically just reject anything proposed by Obama out of hand?
Tom: Now, that’s just ridiculous. Republicans truly do care about the deficit, and they like Simpson-Bowles. Didn’t you read Ezra Klein’s piece on this last week?
Lev: Indeed I did, Tom. Indeed I did. Surely this sentence didn’t escape your notice: “For one thing, compromising with Obama is compromising with a Democratic president who’s at 44 percent in the polls and at 9 percent among Republicans. No Republican politician can survive that.”
Lev: And your colleague Ruth Marcus over at the Post makes a convincing point that Obama isn’t the problem, and basically that people trying to work on these things have continually asked him not to get involved, so as to avoid turning these things into partisan struggles.
Tom: But doesn’t a president have to lead the country? To use the bully pulpit to advance important causes?
Lev: Yeah, you said that in your piece. It’s sort of ironic that you’re using one of the pervasive critiques of Obama from the left to hit him from the right.
Tom: I’m quite a contortionist, eh?
Lev: You’re also pretty confusing about this. Who is Obama supposed to lead? He has some influence among some Democrats (though not all, as the first two years of his presidency abundantly proved). Perhaps he can use that to make Simpson-Bowles more popular on the Democratic side, sure. But this doesn’t negate the fact that every move Obama makes in support of this thing becomes one move that Republicans make away from it. This dynamic has played out again and again. The Tea Party sees Obama in starkly negative terms, and they simply will not brook any agreement with him. If he likes something, they’re bound to hate it.
Tom: But they are obsessed with cutting the deficit!
Lev: Cutting spending, Tom. These are different things.
Tom: They’re close!
Lev: Related, yes. But there’s more to it than that.
Tom: That’s why I support Simpson-Bowles. It cuts domestic spending, it cuts defense spending, it raises taxes by a bit, and clears some stimulus for now. It does it all!
Lev: Yes, it does those things. I don’t like everything it does, like raising the retirement age to 67. Such a dumb idea could only originate in a legislative body where a person’s mid-60s are considered the prime of their career. But it does some smart things too. You’re right, it might be a decent place to start negotiating.
Tom: And yet I sense some reticence on your part.
Lev: I feel this is all a waste of time. Republicans deliberately tanked the supercommittee’s negotiations on antitax grounds. They have signaled an intention to try to cut back on the cuts they agreed to in the debt ceiling deal. This indicates a complete lack of seriousness on the issue.
Tom: If that’s true, they’ll pay a political price for it.
Lev: Not so long as you and your ilk blame both sides every time this stuff fails.
Tom: But they are both responsible! They didn’t agree!
Lev: Calling half the pitches balls and half strikes might seem fair on the surface. At least until pitchers realize that they can throw wild pitches every time and earn about as many walks as strikeouts. That’s not fair. That’s a system that’s too obsessed with norms.
Tom: Americans want debt-reduction!
Lev: But, ultimately, they value jobs more. How else to interpret Obama’s popularity hitting a nose dive during the debt ceiling negotiations, and modestly rebounding after months of focus on jobs? Put simply, I don’t see a point to Obama spending months of his time beating the drum for some plan the public is dimly aware of with no visible hope of success, instead of beating the drum for an issue the public cares deeply about.
Tom: You got me there, guy! Wanna go clubbing with me and Brooks this weekend?
Lev: I’d rather reenact the head-in-a-vice scene from Casino.
Mutual laughter, the conversation ends.
* Not really. But I now find Friedman more annoying than David Brooks. Brooks is conservative, so it’s not quite fair to get angry at him for that. Friedman just criticizes Obama for doing things he didn’t do, or not doing things he did, or not doing unwise things. Wanker.
But the interesting legacy of Daley’s tenure is not his mechanical performance. It’s that he conducted an experiment based on the Washington elite view of the Obama presidency. That view, shared by business leaders, centrist pundits, and other elites, holds that Obama’s main problem has been excessive partisanship, liberalism in general, and hostility to business in particular. In December, 2009, Bill Daley wrote a Washington Post op-ed endorsing precisely this analysis. After the midterm elections, Obama – pelted by Daley-esque complaints – appointed Daley chief of staff. “His moderate views and Wall Street credentials make him an unexpected choice for a president who has railed against corporate irresponsibility,” reported the Post. Republicans like Mitch McConnell, Karl Rove, and FedEx CEO Fred Smith raved.
Daley tended to exacerbate some of the Obama Administration’s worst tendencies–namely establishment-bounded thinking, corporatism, “big things” vagueness–and underplay its best ones. His effective departure comes as a welcome, if long overdue, relief. Giving in to deficit hysteria was such a colossally dumb move, worse than FDR’s retrenchment in 1937 due to the simple fact that FDR had actually presided over a pretty remarkable economic turnaround and taking the foot off the gas made some sense at the time, though not in retrospect. Daley and Obama figured high, static unemployment was the perfect time for this. When I think of how the past year would have turned out in an alternate universe, with Obama fighting hard for jobs all year against a GOP fighting for spending cuts and the usual obnoxious culture war junk, it’s maddening to think how much better this year could have turned out, and I can’t help but think that dynamic would have played so much better with the voters. At the very least, a less obsessive desire for a debt deal could have averted the disaster of July. Daley’s tenure ranks down there with Andy Card and Mack McLarty in terms of modern-day Chiefs of Staff, I think. But that’s in the past, and increasingly I’m thinking that it might not be too late for some sort of turnaround. Don’t worry, I’ll be watching closely.Daley, pursuing his theory, heavily courted business leaders. He made long-term deficit reduction a top priority, and spent hours with Republican leaders, meeting them three-quarters of the way in hopes of securing a deal that would demonstrate his centrism and bipartisanship. The effort failed completely.The effort failed because Daley’s analysis — which is also the analysis of David Brooks and K Street’s Michael Bloomberg — was fatally incorrect. Americans were not itching for Obama to make peace with corporate America.
I respect the Times’s attempt to avoid printing just another straight “Dems In Disarray” story by tying in some other points of disarray on the other side of the aisle. This is when the “both sides” mentality should be more often employed, and in my opinion Republicans have had quite a bit more disarray this cycle than Dems have. But, naturally, the juiciest stuff in the article is basically the usual Dems In Disarray material, because come on, we do it so well:
Within Mr. Obama’s circle, recriminations include complaints that Mr. Daley and the White House political strategist David Plouffe invested too much faith for too long in their ability to strike a debt-ceiling “grand bargain” with the House speaker, John A. Boehner. Some Obama advisers look back at the springtime standoff over government spending as a missed opportunity to confront Republicans, risking a government shutdown then that might have averted debt-ceiling paralysis later.
Mr. Daley has reason to be mad. He thought he was returning to Washington after a decade’s absence to soothe business leaders and strike confidence-building deals with Republicans.
So does Mr. Obama, who does not hide his frustration over the turn toward full-throated combat he now considers unavoidable. Nor do his aides hide theirs, over news accounts that they believe don’t adequately fault Republicans.
I do really wonder what Daley was thinking. Can a political professional operating in this day and age be anywhere near that naive? Did he really think pestering Boehner and Cantor about how much he hates regulations was going to turn things around? That continues to be such a strange staffing call to me, to pick a naive neolib banker as CoS.
Anyway, I was thinking the other day about why I think it’s silly for Democrats to think they can win the deficit game politically. The facts, so far as I can tell, are pretty simple:
- Most of the people who really care about the deficit–really care about it, not just say they do–are Republicans, or Republican-leaning voters.
- The Republican Party as an institution doesn’t really care about the deficit.
- Given 1 and 2, “winning” in this case has to mean splitting staunch Republicans off from their party over the deficit.
- There is no precedent for 3 ever happening.
This all seems like a very tall order to me. To be fair, for a moment there it looked like Obama was going to pull it off over the debt ceiling. But it didn’t happen, and the mood flipped back from “Republicans suck!” to “Everyone sucks!” I think the reason why I can’t quite get over the debt ceiling fight is that it was sort of the sum of all possible blind spots on the part of the White House. To the extent that Obama has the “disease of being a policy wonk“, it’s manifested in that what he saw in the hostage crisis was not primarily an unprecedented usurpation of his authority so much as an opportunity to pass a totally awesome deficit deal with everything on the table. That’s the way he treated it, anyway. I don’t let Republicans off the hook for being unbelievably irresponsible on that issue, but when the bully goes after your lunch money, and you can fight back, it’s so odd to try to use the opportunity to negotiate a debt management plan for the bully.
This is worth sharing:
It’s from Kevin Drum, who asks: “Did WWII rescue the American economy or not? And if it did, what’s the argument for not trying it again, but without the war?” If I had to give what I consider to be a knee-jerk answer from a right-wing perspective, it would be that WWII created a sense of national purpose in standing together against evil and eliminating all those National Socialists, clearing the way for new business opportunities in Italy and Germany. New Deal programs, however, just made people lazy by taking away the incentive to give them “real” jobs, sapped the peoples independence and made the government’s books being unbalanced set a bad example for the public on debt. Am I right? It’s a shame that economists don’t take narratives of good and evil into account in making their predictions. Then again, no prominent conservatives believed any of this when a Republican president had a crappy economy, and they won’t when another Republican president has a crappy economy in the future.
It’s always nice to see a bright beam of fiscal reason in a room darkened by media-enabled thoughtgarbage:
Bill Gross is the manager director of PIMCO, which makes him one of the most important bond traders in the world, if not the most important. And so his exit from the Treasury market a few months ago, plus his intense and very public concern over the deficit, has attracted a lot of concern. […]
[I]n an unusual mid-month note to his investors, Gross hammered the “anti-Keynesians” in both parties who believe “that fiscal conservatism equates to job growth.” The truth, he says, is just the opposite. “Fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth.” […]
So what should we do? “Government must temporarily assume a bigger, not a smaller, role in this economy, if only because other countries are dominating job creation with kick-start policies that eventually dominate global markets.” But what about the deficit? “Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.”…
Gross’s credentials as a deficit hawk are unimpeachable, but he’s arguing here that, to be a deficit hawk over the long term, you need to be jobs-focused now, as no economy with 9 percent unemployment is going to achieve the growth necessary to get its deficit under control. And he’s right.
Will his words be heard in the media cavalcade driving every policymaker to be “serious” about the deficit right now?
h/t Anne Laurie
The new Times/CBS News poll highlights the problem, by asking more specific questions about taxes and spending than many previous polls have. (See questions 33 through 45 here.) Not surprisingly, when given a straight-up choice between broad spending cuts and tax increases, Americans say they would prefer to reduce the deficit mostly through less spending. It’s not even close: 62 percent for spending cuts, 29 percent for tax increases. A few questions later, though, our pollsters offered a different choice. Would people rather eliminate Medicare’s shortfall through reduced Medicare benefits or higher taxes? The percentages then switch, becoming nearly a mirror image of what they had been. Some 64 percent of respondents preferred tax increases, while 24 percent chose Medicare cuts. The same is true of Social Security: 63 percent for higher taxes, 25 percent for reduced benefits.Yeah, yeah, I get it. Nobody likes paying taxes… Blah blah blah. But when you really get down to it, most folks really don’t seem to know their ass from a hole in the ground when it comes to expending even a teensy bit of mental energy on the question of whether we should cut spending or raise taxes in order to deal with our long-term deficit situation. Have Republicans successfully brainwashed 65% of the country into believing that we can slash our $12+ trillion national debt by doing away with funny-sounding things like funds for volcano monitoring and tax breaks for bull semen? If so, a big shout out to Fox News. Update: In the same vein, a recent poll on Security Security found that even 65% of teabaggers would rather raise taxes than cut benefits and/or raise the retirement age:
Currently, workers pay social security payroll taxes on up to $106,800 of their salary. To ensure the long-term viability of Social Security, would you rather have people pay social security taxes on salaries above $106,800, or would you rather see benefits cut and the retirement age increased to age 69? Raise payroll cap Cut benefits All 77 10 Dem 84 4 GOP 69 17 Ind 77 11 Tea Party 67 20
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