It’s Hard to Negotiate with Ideologues…

December 14th, 2012 at 6:02 pm

…and not just because they’re ideological and lack flexibility or the will to compromise, but because they tend not to have specific ideas.  And there’s a reason for that.

I promised myself I wasn’t going to waste our time with fiscal cliff updates unless I have some concrete information, so this will be short.  It will also echo Paul K from this AM.

As I see it, the Republicans have been running their broad anti-government talking points for so long that when they actually have a chance to bring specific, actionable ideas to the table, they’ve actually got very few.  (To say they have none is inaccurate: see appendix.)

Actual deficit reduction deals, as opposed to ones that mug for the camera (“we must not become Greece!”), require a willingness and knowhow to get into details.  If you really want to raise billions by closing tax loopholes, you need to specify which loopholes you want to close.  If you think, as Rep Boehner does, that there’s another $300 billion to be cut from Medicare and Medicaid, beyond the $300 billion the President has outlined in detail in his 2013 budget, then you need to identify the source of those savings.

Same with the R’s $300 billion more in cuts to discretionary spending.  We’ve already cut that part of the budget by $1.5 trillion over 10 years, cuts that already invoke risks to the future—in fact, to blithely spout big numbers without specifics is no different—and by that I mean: no smarter—than the automatic cuts (sequester) that everyone detests.

In sum, you can’t do what my CBPP colleague Bob Greenstein labeled “look Ma, no hands” budgeting.

The problem is, of course, larger than this negotiation.  When you live in a world where all the polls must be wrong because they favor your opponent, where the BLS must be cooking the jobs numbers because they don’t go your way, where “right-to-work” rules are “pro-worker” and “pro-collective bargaining,” where our budget problems are all on the spending side, none on the revenue side, where supply-side, trickle down fairy dust is the still the only way to grow the economy despite decades of counter-evidence, where tax increases on the top 2% of households and top 3% of small businesses will devastate the economy, again despite evidence to the contrary…

When you live in that world, what need could you possibly have for getting into the actual substance of budgeting and economic policy?  It’s all a dark game, lavishly financed by those to whom this status quo delivers unheard of riches, leading to a concentration of income, wealth, and power that we haven’t seen in America since the latter 1920s.

In that world, you don’t go into the non-defense discretionary lines in the budget and bring a coherent proposal to the table.  You’ve sacrificed those and any other useful, pragmatic skills on the altar of your anti-government ideology.

The only good thing I can say about all that is this: it does feel a bit, as Krugman also notes, as if the real world is closing in on their fake world.  But we’ll have to see.  When they are backed by billionaires, don’t expect even corrupt and fact-starved visions to go gently into that good night.

 

Appendix:

The R’s have brought a few concrete asks to the cliff debate: the switch to the chained CPI, raising the Medicare eligibility age from 65 to 67, and means-testing entitlements.  Those are serious proposals, worthy of consideration.

My views on the first two are here: the Medicare age idea is just really bad; applying a different price index is worth considering but it’s too complicated to be jammed into the next two weeks—it’s a phase two topic.  Re means testing, Medicare already has an income test on parts B and D—that could be expanded; the Social Security benefit formula could be tilted to provide fewer benefits to the wealthy.

The thing is, together these ideas lower spending by maybe $300-400 billion over the next decade and some of them—the chained CPI, for example—would have to be offset so as not to hurt low-income seniors.  They will decidedly not reduce the most prominent factor driving the long-term debt: budget pressures from the health care programs.  The only fair and politically plausible way to do that is to reduce systemic inefficiencies in health care delivery, in the bias for quantity over quality care, in wasteful procedures and in lack of cost controls.

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5 comments in reply to "It’s Hard to Negotiate with Ideologues…"

  1. Rima Regas says:

    Jared,

    I think both you and Paul K give them entirely too much credit. Their ideology is establishing an oligarchy. Based on that, one cannot expect any useful proposals within the context of a negotiation for a government budget. Look at what just happened in Michigan with the emergency manager law they just passed after the voters rescinded it last month! These people are not interested in the best interest of the nation or the rule of law. That is why it’s been so difficult to govern. They need to be voted out of office.


  2. wkj says:

    Are the proposals for a 2 year increase in the Medicare eligibility age specific enough to know whether (i) it would be phased in over decades (like the analogous increase in the Social Security normal retirement age) or (ii) it would take place at once or over only a few years?

    I assume a lengthy phase-in is most likely approach. e.g., 1 month per year increase over 24 years. If that is the case, wouldn’t there be some logic to the President reluctantly conceding that issue if he got something really worthwhile in exchange and the Democrats could then make the restoration of age 65 eligibility a campaign issue in in 2014? I remember the enactment and almost immediate repeal of the Medicare catastrophic coverage during the Bush I administration.


    • Jared Bernstein says:

      As I understand it, it would start right away.


      • wkj says:

        Wow! If that is the case, then there will be a huge constituency for repeal or deferral of the change. Most of thos who reach age 65 after the effective date (about 10,000/day) will believe (correctly) that they were cheated. (Remember all of the fuss created by the 4 million so-called “notch babies” when the SS benefit indexation rules changed–and there was no internet then.)

        If this rule is enacted, I predict we will end up with an strong push for annual one-year deferrals of the implementation of the change similar to the annual AMT and Doc fixes. The demand for these deferrals will be stoked by the SSA’s letters advising individuals near to retirement that THEIR Medicare benefits will not kick in until 2 years after the date they expected. In addition, every one-year deferral will create a new, slightly younger, group who will be affected and thus angry.


  3. dl says:

    It’s my understanding that Social Security benefits, in conjunction with other earnings, are subject to Federal Income tax. To me, that is an effecient means test of SS benefits which scales with need and ability to pay.


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