Why Simpson/Bowles Should Be DOA.

To follow up on Mark's post, I think it's worth explaining a central problem with Jon Chait's defense of Simpson/Bowles. Chait concedes that the report is heavily tilted in favor of conservatives. So why on earth would it be "supportable" for non-conservatives? The key point is expressed in the first paragraph:

In any relationship, the party that's willing to walk away has the most power. Republicans care far, far less about the deficit than do Democrats, and this power gave them enormous sway over the deficit commission's proposal, released today.

The dynamic that Chait describes is real, and there are cases in which the strategic advantage enjoyed by legislators who just don't care about whether an important social problem is addressed leads to otherwise unpalatable compromises. In the case of the Affordable Care Act, there was no tactical way of getting around Joe Lieberman's insistence on removing the public option or the Stupak amendment because you can't win a game of chicken with people who can live with the health-care status quo continuing indefinitely. The compromises are worth it because once an important program is in place, it becomes very difficult to repeal and will generally be strengthened over time. The modern welfare state was largely built on the foundation of skeletal New Deal programs that represented half or thirds of loaves and contained compromises with venal interests (most notably, systematic discrimination against African Americans in the provisions of benefits) that make the compromises in the ACA trivial by comparison.

The problem is that the deficit is nothing like health care. There's no political dynamic that locks deficit reduction programs into place. Chait is implicitly referring to the bait-and-switch pulled by the Republicans after the Greenspan commission on Social Security and the 1993 Clinton budget deal, in which deficit reductions were used to finance hugely expansive Republican boondoggles like unnecessary, trillion-dollar wars and upper-class tax cuts.   Nothing in a deal would stop the same thing from happening again.  The best proposals in the report -- cutting defense spending and agricultural studies, getting rid of the mortgage deduction, ending the special treatment of capital-gains income -- would be the hardest to sustain over time. Legislation that provides direct benefits to concentrated, powerful interests while imposing indirect costs on more diffuse, less powerful interests is the easiest kind of legislation to pass. Moreover, this fact is another reason why S/B isn't a good starting point for a deal, because the best provisions are the least likely to survive the legislative process. We all know that any bill that phases out the mortgage deduction is DOA.

To put it another way, when Chait concedes that Republicans don't care about the deficit, we can stop right there, because a deficit-reduction deal requires ongoing cooperation between the parties; legislation that is passed today can be changed next year. This cooperation currently doesn't exist. Therefore, there's no reason for Democrats to support a deficit-reduction program that isn't otherwise worth passing on the merits.

-- Scott Lemieux

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