Monday, September 19, 2011

About that veto promise...

It seems that the Times preview of Obama's deficit reduction plan was inaccurate in an important particular:

In laying out his proposal, aides said, Mr. Obama will expressly promise to veto any legislation that seeks to cut the deficit through spending cuts alone and does not include revenue increases in the form of tax increases on the wealthy.

Not so. What Obama actually promised was to veto any bill that changes Medicare benefits without raising new tax revenue.  He has not promised to veto any Supercommittee bill that cuts the mandated $1.2--1.5 trillion in spending without raising taxes if it leave Medicare benefits untouched. So the debt ceiling deal could result in $2.5 trillion in spending cuts and no new revenue.

Because of the "triggers" in the debt ceiling deal, which mandate $1.5 trillion in spending cuts if the Supercommittee deadlocks or Congress does not pass its legislation, Obama cannot veto his way to tax increases yet. He can only keep crying out for revenue increases -- until the next round, when the Bush tax cut expiration looms.  That's when he'll have to draw a real line in the sand.

UPDATE: here's the relevant bit from the speech transcript:
I will not support -- I will not support -- any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable.
"I will not support" does not equal "I will veto."  And a deal that cut a further $1.5 trillion in spending arguably would not put "all the burden for closing our deficit on ordinary Americans" -- just 5/8 of it, if the goal is $ trillion in deficit reduction, and you add the Supercommittee's cuts to the initial $1 trillion.  So Obama has some wiggle room to sign a Supercommittee bill that leaves Medicare untouched but is still all-cuts -- or perhaps more likely, one that adds some token amount of tax hikes to a trillion-plus in cuts.


  1. yes, but I don't see that as a real danger. the weakest link on the supercommittee, max baucus, isn't *that* weak. For months he's been saying this:

    "Any sustainable solution to getting the deficit reduced has to contain both balanced spending cuts as well as revenue.

    "It's pretty simple. There is no way of getting around it, frankly."

    Read more:

    The lowest acceptable *amount* of tax revenue in any deal has always been the key question, and it's something the WH and the Supercommittee Dems have to completely agree on, keep secret, and never waver from.

  2. Thanks, Andrew. I've read similar encouraging vows from Dem Supercommittee members, but I think the question remains, which side is more afraid of the triggers? Dems could still agree to an all-cuts package that doesn't touch Medicare/SS, particularly if Obama is spooked by the defense cuts in the triggers.

  3. well yes, and I thought he would be when the triggers were first announced. remember Panetta's statements, and Obama's backing him up?

    but now with the veto threat, I don't know.

    if the veto threat is real, then he's not worried about the trigger.

    if the veto threat is just lip-service, then he doesn't believe a bill that cuts medicare benefits but does not raise revenue will get out of the supercommitee in the first place.

    am I missing some contingencies?