Rightward Drift

April 8th, 2013 at 5:29 pm

My CBPP colleague Bob Greenstein provides an important warning here about how the President’s entry in the current budget negotiations risks rightward drift.   The key point: the compromise position must NOT be taken as a new pole staking out one side in the debate.  It must be taken as what it is…a compromise between existing poles.

…if one sets up a playing field where the new Obama budget is one pole and the current Republican no-tax, deep-spending-cut position the other — and presents the halfway point between them as a logical compromise — the result is to ask President Obama and the Democrats to accept an outcome well to the right of Speaker Boehner’s offer in December. That won’t happen, and it shouldn’t happen if policymakers are to produce a fair and balanced package.

Operationally, a lot of what happens next—or more likely, doesn’t happen—depends on the White House sticking to their position that what they’re offering on Wednesday is not a menu of options.  It’s a package.  You want entitlement cuts, you give on revenues.  And I believe they will stick.

I fully understand and genuninely share some of my fellow political travelers’ negative reactions to what’s been leaked of the admin’s budget.  As one friend said this weekend, “we don’t need Democrats to cut entitlements; we’ve got Republicans for that.”  But the fact is that team Obama wants a) a “grand bargain” where D’s get new revs and R’s get cuts to social insurance, and b) to move the debate out of the fiscal crisis mode that’s been the norm for years now.

I’m not sure you can get there—to “b,” i.e., out of crisis mode—from here with this budget and these players, but that’s the right destination.  And to avoid being too much of a wuss, I should say that I don’t necessarily agree with my friend.  There are cuts that could be made in such a way as to protect vulnerable beneficiaries.  That said, a) I wouldn’t lead with them, b) I probably wouldn’t try to go there with this Congress (I just don’t trust them a whit to protect social insurance), and c) re Social Security, I’d raise the earnings cap before I put benefit cuts on the table.

 

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11 comments in reply to "Rightward Drift"

  1. Tom in MN says:

    Why are we discussing cuts at all? We are the richest country on the planet and can afford anything we want. But “want” is the key word. At this point it appears we “want” the unfortunates in our country to be sick, hungry and homeless.

    See

    http://thinkprogress.org/economy/2013/04/08/1834981/the-us-collects-less-in-taxes-than-all-but-two-industrialized-countries/

    if you think we are over taxed.


    • D. C. Sessions says:

      What we all to often get is Zeno’s Bargain:

      * I set out an offer
      * You set out your demands
      * I split the difference and offer a compromise
      * You set out your demands
      * Split the difference again
      * You set out your demands
      * …

      When do we reach a conclusion?


  2. Fred Donaldson says:

    In this case you prove you can be wrong some of the time, which is not the end of your intellectual influence, considering you are very correct most of the time.

    Cutting retirement benefits is like cutting the minimum wage – it saves some folks from paying fair taxes, but makes most of us more miserable trying to survive in an economy already geared against us.

    Just because Republicans want the middle class to feel guilty because they can afford five days at the beach a year, while their rich contributors buy entire islands, doesn’t excuse the once party of the people when it takes a “reluctant” part in this sadistic tragedy.


  3. Procopius says:

    “… team Obama wants a) a “grand bargain” where D’s get new revs and R’s get cuts to social insurance, …”

    “… that’s the right destination.”

    No, that’s not “the right destination.” That’s terrible policy. No matter how much we get in new revenues we should not be considering, much less offering, cuts to Social Security benefits, which people have paid for, owrked for, and are entitled to. I don’t even agree we should be considering reducing benefits for people who earned more than $250,000 a year, or $10,000,000 a year. Raise the cap, raise all benefits as well. Can;t do it with this Congress? OK, be patient, wait, leave it for the next Democratic (or Republican) administration, but don’t cut benefits, don’t offer to cut benefits, don’t even consider cutting benefits. Doesn’t Obama remeber 2010? I never understood why the Dems weren’t out there every day explaining what was in ACA that was good for people. I do remember the Republicans out there every day screaming about how ACA would screw people. I can already hear the ads in 2014, “The Democrats want to cut your Social Security.” This is stupid, stupid, stupid.


    • Jared Bernstein says:

      I meant b) there, not a). The WH is right to be trying to shift fiscal policy out of crisis mode.


      • Procopius says:

        Oh, OK, I can agree with that, but I still think the strategy is foolish. I don’t believe anyone remains who does not already know who is at fault and going through a dangerous charade to point it out again is fruitless.


      • Bearpaw says:

        I can’t imagine why anyone who’s been paying attention would think that Repubs would willingly leave crisis mode, given how well that strategy continues to work for them. I mean, they’ve gotten a Democratic president to publicly suggest cutting Social Security — that’s a major win for them. Why should they free the hostages as long as their ever-increasing demands keep getting them more bags of money?


        • Jared Bernstein says:

          True, but it’s a matter of tradeoffs, which even they face. EG, many of their funders do not want them to screw around with the debt ceiling.


  4. Allan Lane says:

    The R’s want the entitlement cuts, but they won’t ever name them in public. This is because entitlements sound like they are going to “those” people, the undeserving. But they really mean Social Security and Medicare, as we know.

    They won’t name cuts so they can force the President to offer cuts as a compromise to them. Then they can say the Democrats want to cut your Social Security and Medicare.

    The President should only consider publicly named cuts offered by the R’s. He should never provide them himself, which he keeps on doing. I have ever so many arguments with people over how the R’s are trying to save Medicare or Social Security by reform, while the President and the D’s are trying to cut them. They are furious at the D’s for the cuts, while supporting the R’s for trying to stop the President. It’s backwards, but it’s President’s own doing.

    This has to stop. It’s terrible politics, besides being utterly cruel to those who need help most: our parents, our kids, our out of work neighbors.


  5. Sidney R. says:

    A President’s budget is a political statement, not a realistic attempt at setting out the fiscal parameters for the coming fiscal year, and so it is unlike a real budget. A President’s budget is never adopted, and in fact is usually ignored by both parties.

    So the issue here is what are the politics with respect to ultimate fiscal policy.

    1. As long as the President holds to his commitment to require higher revenues in return for changing the CPI index he will never be called to deliver. Republicans in the House will not approve such a deal. So no one should get terribly upset at what Mr. Obama is proposing.

    2. Assuming the President and his team are politically astute (ok a big assumption but surely they have learned something in 4 years), they know this. So one must conclude that they propose these changes with the idea or removing the deficit issue from the 2014 election.

    So everyone should chill out, see what happens. There will be plenty of time for outrage in the future, and plenty of issue to be outraged about. The critical item in 2014 will be whether or not the Dems can hold the Senate. If not, look for the last two years of the Obama Administration to be a nightmare.


  6. Pinkybum says:

    I must say I am with your friend 100 percent. There is no way Democrats should be cutting any social insurance programs. Social Security should be off the table – it clearly is self-sustaining there is a well defined revenue stream and the people are more than willing to fund it at the current 12.4 percent payroll tax level.

    Medicare – sure you could nickel and dime the more affluent beneficiaries but for what reason? Medical costs are rising but this just enriches the already wealthy. The focus should be on restricting the rise of medical costs and the ACA seems to have provisions which help that process along. You could cut Medicaid but this is by definition a benefit to the very poor.

    I think the talk of cutting earned benefits is very dangerous we have got this far as an advanced society because of the explicit social contract the government has with its people and if this trust gets really broken (like it has been threatened in the past) then serious social unrest is will be the outcome. Ultimately I think taxes will be raised on the rich because the government will be forced into accepting that there is a price to pay for social stability. It rather depresses me to see that the president doesn’t have the moral conviction to stand by progressive principles – ones with which the vast majority of the American people agree.


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