If the debate around the fiscal cliff and, particularly, the still-impending sequester demonstrates anything, it’s that Richard Nixon’s one plunge into economic theory—“We’re all Keynesians now,” the former president once said—still holds. Everyone acknowledges that laying off hundreds of thousands of government employees, including 800,000 civilian Defense Department workers, and stopping payment to government contractors will, by definition, destroy jobs, at least until the payments resume. It’s still Republican orthodoxy, to be sure, to deny that government spending actually creates jobs, but even they acknowledge that the cessation of government spending destroys them. Which illustrates that the problem with contemporary Republicanism isn’t confined to their indifference to empiricism but also their indifference to logic. Reasoning—either deductive or inductive—is either beyond them, beneath them or above them.
When President Lincoln suspended habeas corpus in 1862 (a couple of times, actually), he conceded the possible unconstitutionality of what he had done but concluded that since the move was necessary in a time when half the country was at war with the other half, he would take his chances with Congress, the courts, and history. The country’s current chief executive finds Lincoln comparisons disconcerting, but this is a case where he might pay attention, because his legal grounds for unilaterally raising the ceiling on the national debt in a time of congressionally inflicted crisis are no weaker than Lincoln’s and probably stronger.
Now that the future revenue path is pretty clear for the next decade, I took another look at President Obama's 2013 budget, which projects spending and revenue through 2022 on the assumption—a correct one, it turns out—that taxes will only rise on the affluent.
Beyond yesterday’s narrow escape from the dreaded fiscal cliff are … more cliffs. President Obama and Congress averted one fiscal calamity of tax-hikes-for-all only to face even steeper cliffs—the sequester, the debt ceiling, the Social Security shortfall, ad infinitum. It is a fiscal Wizard of Oz, an extended odyssey with perils on every side.
“It’s not all I would have liked,” says Republican Senator Lindsey Graham of South Carolina, speaking of the deal on the fiscal cliff, “so on to the debt ceiling.”
The battle over the fiscal cliff was only a prelude to the coming battle over raising the debt ceiling—a battle that will likely continue through early March, when the Treasury runs out of tricks to avoid a default on the nation’s debt.
The White House’s and Democrats’ single biggest failure in the cliff negotiations was not getting Republicans’ agreement to raise the debt ceiling.
The last time the debt ceiling had to be raised, in 2011, Republicans demanded major cuts in programs for the poor as well as Medicare and Social Security.
The Senate vote just before dawn in favor of a permanent tax hike on the top one percent defers virtually all of the other budget battles. Assuming the House follows suit today, it is up to President Obama and the Democrats to radically change the conversation.
The deal emerging from the Senate on the fiscal cliff is a lousy one. Let me count the ways:
1. Republicans haven’t conceded anything on the debt ceiling, so over the next two months—as the Treasury runs out of tricks to avoid a default—Republicans are likely to do exactly what they did before, which is to hold their votes on raising the debt ceiling hostage to major cuts in programs for the poor and in Medicare and Social Security.
The side of John Boehner we understand most is the one that offers that distant sense of comfort—the one who'll pander to the conservative movement during these fiscal cliff talks but understands a compromise must come through at the end. This is the John Boehner we dub the "dealmaker," the leader who must "stand up” to the Tea Party—and Majority Leader Eric Cantor, the rival who would do him in. His “dealmaker” persona stems from the assumption he isn’t a true believer or an aggressively ideological Republican, which is correct.
Sure, lame-duck legislatures are bound to be a bit mad. But the session that just closed in Michigan was one for the ages. Aflush with the flurry of bills sent to the desk of Governor Rick Snyder—not so much speaking to his opinion on their quality—a politics-loving friend of mine in Detroit exclaimed, “It’s like Christmas in … well, in December.”
Yesterday, I posted a piece that questioned the political and policy wisdom of President Obama’s latest offer for a budget deal. My qualms were vindicated when Speaker Boehner, rather than taking the widely leaked “progress” as a new common ground, went back to his starting point and offered his own “Plan B”. This left President Obama in just the position that he vowed that he’d be in again—“negotiating against himself.”
The Michigan legislature’s lame duck session is only three weeks long, but the state house didn't need more than 18 hours to move the state sharply to the right. During a marathon session Thursday and Friday, the state house passed a variety of very conservative bills on issues from abortion to gun control to taxes. You can’t say they’re not efficient. The state, which favored Obama by 9 points and has long been home to a moderate-progressive movement, may now have a set of laws that puts it on America’s more conservative end.
There's been an odd change in Republican rhetoric in the last few weeks about taxes. As we all know, for a couple of decades now, particularly since George H.W. Bush went back on his "Read my lips" promise and agreed to a tax increase to bring down the deficit, Republicans have been uncompromising and dogmatic that taxes must never be raised in any form, ever. That's part of the pledge Grover Norquist has made nearly all of them sign—not just that rates should only ratchet down, but also that they will "oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates." With the bitter taste of defeat still lingering in their mouths, many have realized that there is going to be some increase in the wealthy's taxes. But to hear them talk now, you'd think that they don't much care how much people pay in taxes, so long as the top marginal income rate doesn't go up. Here's Karl Rove writing in the Wall Street Journal, explaining President Obama's nefarious plan to divide them:
But the president is now less interested in raising revenues than in raising marginal tax rates on top earners. He apparently believes that Republicans, in a weakened state and defending an unpopular position, might buckle on a central GOP tenet, opposition to any increase in marginal rates. That might kick off a Republican civil war, resulting in divisive party primaries in 2014 that leave the president's opposition even more weakened and produce more subpar candidates like this year's Republican Senate candidates in Indiana and Missouri.
So the "central GOP tenet" isn't opposition to tax increases, it's "opposition to any increase in marginal rates." That's like a baseball manager saying the point isn't whether his defense keeps the other team from scoring runs, it's just that they won't stand for homers.
This squirrel sees right through you, McConnell. (Flickr/Californian Em)
A few years ago, somebody (forgive me for forgetting who it was) suggested that newspapers should have a daily feature called "Things That Are Still True," which would remind readers of important facts that are still important even if they haven't generated news in the sense of being new. In that spirit, during the current budgetary debate it's a good time to remember what I think is one of the three or four most enduring and important facts about American politics and public opinion. Almost half a century ago, Lloyd Free and Hadley Cantril argued that Americans as a whole were ideologically conservative but operationally liberal, meaning that in broad terms they like "small government," but when one gets specific it turns out they like almost everything government does, and want it to do even more of it.
This fact explains practically everything about how the Republican and Democratic parties set about appealing to voters. Republicans talk in broad, ideological terms about small government and free enterprise, while Democrats talk in much more specific terms about programs, whether it's Medicare or Social security or education or what have you. The problem Republicans have is that if you're going to govern, eventually you have to get specific.
Washington is in a fiscal panic, yet surprisingly few people are asking an obvious question: Why in the world is the Obama administration proposing to spend $8 trillion on security over the next decade? Included in that giant sum is not just Pentagon spending, but also outlays for intelligence, homeland security, foreign aid, and diplomacy abroad.
If the administration gets its way, security spending would account for a fifth of all government outlays over the next decade. Such spending would be roughly twice as great as all non-mandatory spending through 2022—a category that includes everything from NASA to Pell Grants and national parks.
Now that Republicans have pretty much resigned themselves to the idea that there is going to be some kind of tax increase for the wealthy, they're comforting themselves with the idea that come early next year, they'll still be able to reenact the lovely conflict we had over the debt ceiling in 2011 and hold the American economy hostage to their demands. President Obama has quite sensibly said that we ought to just get rid of the debt ceiling itself, since it serves no purpose and allows a party to engage in just this kind of economic blackmail if it's desperate and cynical enough. So Republicans are pushing back, none more so than Senate Minority Leader Mitch McConnell. But in the process, McConnell has revealed that he has no idea how the debt ceiling actually works.