Political Economy Today: Will Overreach Lead to Balance?

May 26th, 2011 at 8:35 am

In this biz (if playing digital chin music can be called a biz), you don’t want to get too hung up interpreting one moment in time.  These things change quickly.  But in the heat of budget deals, debt ceiling, proposed Medicare changes, the NY special election, the nascent economic recovery, a few themes seem worth observing.

–The R’s have overreached.  By getting behind a budget plan that seriously whacks the poor and the elderly, ends the guaranteed health security of Medicare, and spends much of those “savings” on tax cuts for wealthy people, they’ve simply gone too far for most people’s sense of fairness.  I’m not talking about the left here.  I’m talking about the independent, median voter who tends to decide elections in this country.

–It’s all about balance. Raising the debt ceiling is an obscure concept to most people, an unattractive task for any politician, and a clear imperative for our economy (actually, when you think about the far-flung holders of our sovereign debt, for the global economy).  While a clean bill to raise the ceiling would be the best way to go about this, it ain’t gonna happen.  The price of admission to raise the debt ceiling is negotiating a path to fiscal sustainability.

So, the question is, how do we set out that path most quickly and effectively?  And the answer is: a balanced plan that a) doesn’t whack away at the current economy, still trying to get off the ground, b) includes both revenue raisers and spending cuts, and c) doesn’t undermine the Federal government’s ability to continue providing retirement and economic security to the vulnerable.  I’d also add you don’t want to exacerbate two major economic challenges we face: poverty and income inequality.

How likely is it that such a plan emerges?  See the above re overreaching.  To insist on the measures in the R’s plan is to insist on imbalance, and that’s not only bad policy…it’s bad politics.  At this point, it’s really not clear to me who, including the Tea Party, wants to see measures like those in the Ryan budget.

I know—that’s all very rational and sensible.  So why did 42 out of 47 Senate R’s vote for this plan yesterday?  Is it a loyalty test, as the WaPo suggested this AM?

Again, the daily papers give you a snapshot of a landscape that can change quickly, but it’s not at all hard to imagine the R’s digging in deeper, defending a bad plan that deservedly unpopular, even at great political expense.  I’m not sure why that happens in this town—some kind of self-destructive group think.  But it happens.  So stay tuned.

Update: Ezra speaks to the “why” posed above re the Senate R’s support, suggesting that the base loves the Ryan budget.  If that’s so (any polling on this?), greater familiarity might breed more contempt.

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10 comments in reply to "Political Economy Today: Will Overreach Lead to Balance?"

  1. readerOfTeaLeaves says:

    The GOP is capable of describing the part of the economy that is controlled by private interests.

    They are almost incapable of having a reasonable discussion about the importance, distribution, and protection of public goods (including pension funds).

    I take the rather odd view that the GOP, like everything else, is a creature bound to a certain time in history. As long as resources were fairly easy to grab and control, as long as corporate structures were the path to power, the GOP could remain dominant.

    It will fight to remain in power in DC, but it is increasingly irrelevant to the lives of millions.


  2. foosion says:

    There’s a theory which says the Republicans ultimately answer to corporate interests and the rich and powerful. Those groups would find a default (even a “technical” default) unacceptable. I just read that they’re calling “Wall St” to reassure that there won’t be a default.

    Cuts to Medicare, Medicaid and Social Security are unacceptable to every group I’ve seen polled, including the Tea Party.

    People are against government spending in the abstract and in favor of it in specific cases. The debate over the debt ceiling is an abstract. Tell people it would mean cutting X, Y or Z and they’ll have another view.

    The problem is that the Democrats, and especially Obama, have developed a reputation as very weak negotiators, which just encourages the Republicans to push the envelope.

    Short term stimulus, long term deficit reduction. Ending the Bush tax cuts and our various wars would likely be enough. Add the reductions in healthcare costs envisioned by the ACA and we’re in great shape, so long as we don’t do anything stupid.


    • chris says:

      The Republicans have every reason in the world to play their radical right endgame because they’ve already won where it counts… the SPINELESS DEMOCRATS – led by the COWARD/FRAUD Barack Obama – have been consistently passing GOP legislation and will continue to do the GOP dirty work, especially when it comes to Wall Street and its well established kleptocracy,

      The GOP doesn’t need to win the presidency. It only needs to make Obama and the WORTHLESS DEMOCRATS act like Republicans.

      Your idea of “balance” is warped.

      Your “their-better-than-the-GOP shilling for the gutless Democrats is weak.

      And you know it.

      Balance?

      Meh…


  3. David Welker says:

    “While a clean bill to raise the ceiling would be the best way to go about this, it ain’t gonna happen.”

    This statement, coming from a former key employee of an administration that seems to value preemptive surrender above all else, does not surprise me.

    Okay. I am being a little rhetorical there. But only a little.

    The first thing Rahm Emmanuel said when it was pointed out to him that the stimulus was too small, was that it was politically impossible to pass a bigger stimulus. So, lets not even try.

    Then, to add insult to injury, lets make one-third of the stimulus tax cuts and lets not get any Republican votes in exchange. Great. Lets make concessions to Republican approaches without getting any Republican votes. That sounds like a great way to get them to the negotiating table.

    Oh, and after that, lets not even TRY to do push for more stimulus, because we already know it is not possible. No need to push for stimulus and then if it is blocked point out to the general public who is preventing the administration from addressing the unemployment problem. No, instead, lets just not address the jobs problem because we already know that stimulus is not politically possible, so lets not even try. Lets not even try to make the case to the American people that Republicans should not block stimulus that would put people back to work! Sounds like a great plan!

    Oh, and you know what, lets also do something that is symbolic and fiscally meaningless. Let’s arbitrary freeze pay for federal workers so that Obama can be a pose as someone who is responsible. Never mind that this just feeds and validates Republican narratives that are false.

    Oh, and lets have President Obama go out there and take credit for the tax cuts. Because reinforcing the Republican narrative that tax cuts are always good is exactly what we want to be doing. Let us validate the Republican narrative all the while never speaking forcefully for the need for stimulus!

    As someone that attended Harvard Law School and participated in the Program on Negotiation, whenever I hear Obama, he sounds like someone who is looking for underlying interests and trying to move beyond rigid positions. That is what we, more than anything else, were taught about negotiation at Harvard Law School. I don’t know if he took negotiation there or not, but he sort of seems like he picked up those ideas. If so, I wish he would knock it off sometimes! Looking for underlying interests and moving beyond rigid positions is fine. But there is also a place to draw lines in the sand. There is also a place for advocating for what you think is right, even if you are not absolutely certain to “win” a legislative accomplishment at the end of the day. One thing is definitely true. If you don’t push for stimulus, you definitely won’t get it. But if you push for it and point out to the public that the other side is stopping you from addressing unemployment, you might actually get it. And at the very least, you can make it clear to the public who to blame for lack of action. Drawing lines in the sand and pushing for good policy even if it isn’t 100% certain to pass is part of leadership too!

    So, here we go again. Same administration, same weak approach with minimal leadership. A clean bill isn’t possible you say? But imagine that President Obama had it in him to make a very clear and simply statement as follows: “I absolutely promise to veto any bill that attempts to attach any condition whatsoever to a debt limit increase because we shouldn’t play games with the full faith and credit of the United States” and he stuck with that statement. Then we definitely could get a clean raising of the debt limit. What alternative would Republicans have? They are clearly bluffing, even as some of them make what sounds like ever more irresponsible noises to get you to think otherwise. If the President put his credibility on the line in saying that he just will not play this insane game of chicken, then the Republicans would have to fold. The fact that this is going to drag out to the 11th hour is partly Obama’s fault. He has failed to communicate.

    If, and this is speculative, Obama imagines that the debt limit will provide him cover for making concessions that are unacceptable to his base, he is under a delusion. I don’t think that is what is going on, but it is hard to understand exactly why the President is taking such a weak approach.

    The lack of leadership from the Obama administration has simply been appalling, both in style and in substance. I say this as someone who very much wants to see the administration succeed. You see the administration, repeatedly, negotiating with itself and offering concessions in exchange for nothing. You see, repeatedly, the administration making excuses for not using the bully pulpit in a powerful way. If a legislative victory will not be the immediate result, then there is no reason to advocate for a policy?!? Right. Why can’t the President at least advocate for stimulus when millions and millions of people are unemployed?!? Is that too much to expect??

    I am very frustrated with this administration, which I want to see succeed. There apparently is a culture of preemptive surrender in negotiation and holding your cards way to close to your chest at the expense of good communication. The administration is lucky that the Republicans overplayed their hand so far on Medicare, because otherwise Obama’s re-election prospects would not be so hot with such weak leadership.


    • chris says:

      BINGO!


    • readerOfTeaLeaves says:

      Terrific comment. And this:

      There apparently is a culture of preemptive surrender in negotiation and holding your cards way to close to your chest at the expense of good communication. The administration is lucky that the Republicans overplayed their hand so far on Medicare…

      had me nodding, “Yes!”


    • Sagacity says:

      Very well said. Many, many people agree with you. It’s been both frustrating and outright painful to see the American people keep getting the shaft.


  4. Sid F says:

    “At this point, it’s really not clear to me who, including the Tea Party, wants to see measures like those in the Ryan budget”

    As long as the base believes what Karl Rove wrote Thursday in the WSJ about the NY 26th District Race and how Republicans have the right plan, they just need to go out there and sell it, the base will support it. Here is a good critique of the Rove piece,

    http://dismalpoliticaleconomist.blogspot.com/2011/05/karl-rove-on-ny-26th-congressional-race.html

    but it is not likely to sway any of the true believers. When perception conflicts with reality, perception wins.


  5. Virgil Bierschwale says:

    You are right.
    It is all about balance as I describe at http://www.BuriedWhere.com

    Balance between the Business communities need for Profit and the People’s right to a life that should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement regardless of social class or circumstances of birth.

    Balance with the Government being the facilitator to take us into the next century utilizing our tax revenue and the mediator to resolve conflict between the Business community and the People.

    Balance with an independent mainstream media exposing any corruption between Government, Business & People.

    Balance that cannot happen when the media is owned by the very business community that it should be exposing.


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