The debt ceiling deal negotiated today relies heavily on triggers for future action. The finger on the final trigger is the president's. Hence, from a progressive's point of view, the deal is only terrible if you mistrust the president. Unfortunately, the way the deal went down makes it very hard to trust the president.
As Jonathan Chait has been pointing out for weeks, progressives are better off with a cuts-only deal, end-stopped by the expiration of the Bush tax cuts on Dec. 31, 2012, than with the revenue-light grand bargain Obama was negotiating with Boehner. That deal would have raised only $800 billion in new revenue over ten years, roughly the amount that would be gained by letting the Bush cuts for the wealthiest 2% expire while leaving the bulk of the cuts in place. Expiration of all the Bush cuts, in contrast, would raise an estimate $3.6 trillion in new revenue of ten years.
The deal negotiated today calls for $900 billion agreed-on cuts in discretionary spending over 10 years and establishes a bipartisan committee of senators and MCs to propose a long-term plan that reduces the deficit by at least another $1.2 trillion. Congress must give that plan an up-or-down vote without amendments. If the plan is voted down, or (I think) if the committee fails to agree on a proposal, that failure triggers $1.5 trillion in automatic spending cuts, split evenly (as of now) between domestic and defense spending. Ditto if the president vetoes the plan. The Democrats failed to get tax increases included in the trigger, despite Harry Reid's announcement yesterday that they would not agree with a plan that failed to do so.
The trigger behind the trigger is the Bush tax cuts. Obama, if he were a different person, could threaten to veto any any plan put forward by the committee that did not include tax reform yielding, say, $2 trillion in new revenue over ten years -- the amount proposed by Bowles-Simpson. If no such plan materialized, and automatic cuts were triggered, he could also promise to veto any subsequent tax legislation that did not raise said $2 trillion (or whatever benchmark he chose). If no such legislation emerged, the Bush cuts would all expire, and the additional revenue, coupled with the triggered spending cuts, would put the budget in effective balance.
Obama is in fact indicating rather weakly he will use this this leverage:
Day's End and Night Watch
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