Thursday, July 7, 2011

Here We Go Again!

Three weeks to go before Armageddon and, just like last December, President Obama has gathered the troops from both political camps into the White House to iron out the deal every reasonably sane person knows has to happen, and only a fool would pass up.

Everything is on the table, yes everything. That’s what you do when you compromise: you put everything on the table. Once more the adult in the room – old Captain Pragmatic – is poised to author an agreement that will certainly draw the ire of both political flanks. On the Right, additional tax revenue and defense cuts must be a part of any deal; on the Left painful cuts to some social programs, even, dare I say it, entitlement reform must also be included. What has yet to be decided is how much and where to cut, as well as how much additional tax revenue gets thrown into the pot. As always the devil will be in the details.

But know this, barring a rather desperate and obviously controversial evoking of section 4 of the Fourteenth Amendment – a tact that even Constitutional scholars can’t agree is even legal – time runs out for nation’s debt ceiling on August 2nd. A deal involving compromise is the only way to avert a catastrophe.

Also know this, any deal struck by the President is going to be painful for both sides. There is no way to get around this elephant anymore. At the risk of pissing off the few progressives left who actually read my blog – and I know who you are – spending in Washington has gotten ridiculous over the last decade or so. And yes, it is absurd to blame all this on Obama when he walked into the worst economic mess since FDR was sworn into office. But progressives have to come to a painful reality: there comes a time when you have to show some fiscal discipline, and now is as good a time as any.

And speaking of fiscal discipline, it is more than just a little disingenuous to claim you are for balancing the budget when you continue to defend tax cuts that, over the last decade, have cost the treasury $4 trillion. It is the height of hypocrisy for Republicans to demand that Democrats give up some of their sacred cows, while holding onto the mother of all fairytales: that tax cuts pay for themselves. Any deal that does not begin to shatter this colossal nightmare of a myth is no deal at all. Even if it costs him three dollars in spending cuts to get one dollar in additional tax revenue, Obama must do it. The alternative is too ghastly to contemplate.

As far as entitlement reform is concerned, I have warned that Democratic promises that Medicare would never be touched would eventually backfire. Well the day of reckoning may finally be here. While it was fun watching Republicans run for cover after Paul Ryan stepped on the third rail with his “courageous” budget proposal, I cautioned progressives against over optimism. While polls show most of the electorate opposed to any changes in Medicare, those same polls also reveal a growing concern that many have that the program, as it is now, will not be around when they retire. That spells trouble in Dem land down the road. If enough voters figure out that Democrats really have no plan to fix the systemic problems besetting both Medicare and Medicaid, you can kiss 2012 goodbye. If they are smart – and remember we are talking about Democrats here – they will work with the President to ensure that any cuts to both entitlement programs not adversely effect recipients. The Republican sin of commission – which is what Ryan’s Medicare solution is – cannot be countered by the Democratic sin of omission – doing nothing.

And what of the Tea Party? What about them? A bunch of spoiled brats who actually believe they can point a loaded gun at the head of the nation and bring about the first ever U.S. debt default in its history just by holding their breath and counting to a zillion. Screw them. If John Boehner really wants to be the leader of his party then he is going to have to start acting like one sooner or later. And that means risking the political fallout a compromise with Emperor Obama would entail. So far, he has not been up to the task. He has been, for all intents and purposes, a puppet of this fanatical faction. And the Republican Party as a whole has been unable or unwilling to compromise even a little. It seems hell-bent in allowing the unthinkable to happen rather than risk angering its’ ideologically rigid base. They have an enormous opportunity here to forge a deal, which will help propel the country forward toward a more secure economic footing, yet are stuck in their own worn out narrative.

In an op-ed piece in The New York Times called “The Mother of No-Brainers,” conservative columnist David Brooks wrote the following:

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.

The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.

But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.

While I don’t agree with a lot of Brooks’ op-ed pieces, and some of his conclusions in this particular piece stretch the bounds of reality somewhat, in this regard we are in complete accord. At a time when both political bases need to show a little give and take, it seems one side is out to win it all, no matter the costs, even if one of those costs is the destruction of the very country they purport to love above all else.

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