Showing posts with label supercommittee. Show all posts
Showing posts with label supercommittee. Show all posts

Saturday, February 23, 2013

No, Bob Woodward, the White House did not move the goalposts on the supercommittee's charge

Bob Woodward claims to have proof, in the form of statements by the principals, that the idea of using sequestration as an enforcement mechanism in the Budget Control Act of 2011 originated with the White House. That may be.*

Woodward also asserts that "the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester." He provides no quotes in this article to back that statement up. If there was any such agreement, it was never put in writing and it is not reflected in the legislative language or in official descriptions of the deal immediately following its announcement.

A CBO statement put out on August 1, 2011, described the supercommittee's task as follows:
Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reductions, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years
The BCA itself describes the supercommittee task as follows:

GOAL.—The goal of the joint committee  shall be to reduce the deficit by at least $1,500,000,000,000 over the period of fiscal years (Sect 401b, p. 52).
"Reduce the deficit" does not mean "by spending cuts only."

Publicly, from the moment the deal was announced, Republicans insisted that the supercommittee was tasked with considering cuts only, and Democrats insisted that new revenues would be part of the mix.  Announcing the deal on July 31, 2011, Obama said this of the supercommittee (my emphasis):

Tuesday, November 22, 2011

Obama pulls a trigger -- and takes two hostages

After the deal that become the Budget Control Act was announced on July 31, I repeatedly voiced the fear that Obama would go wobbly on the $600 billion in defense cuts that would allegedly be triggered if the supercommittee failed:
My fear is that Obama will once again turn the trigger on himself -- in this case, the large (if back-loaded and ultimately unenforceable) defense cuts that go into effect automatically if the supercommittee can't agree on a package. Would any president really suffer the defense budget to be cut by fiat, even notionally?  Not this president, I fear.  Look again at his rationale for not squeezing another trigger last December -- the scheduled expiration of the Bush tax cuts:
And the reason is because this is a very unique circumstance. This is a situation in which tens of millions of people would be directly damaged and immediately damaged, and at a time when the economy is just about to recover.
A mandated $750 billion reduction in projected defense spending over ten years is also "a unique circumstance." I can just hear it: "I cannot allow the security of the United States to be compromised..."
Wrong!  While Panetta forms a contrapuntal-but-harmonious* chorus warning that the "sequestered" cuts would "tear a seam in the nation's defense," Obama has declared that he's perfectly ready to let those cuts go forward if Congress does not replace the automatic cuts with a "balanced" plan for equivalent or greater reduction. That's a two-fer: he is trying to make Republicans feel the brunt of the pressure to avoid a) the sequestered defense cuts and b) the expiration of all the Bush tax cuts. Now his own counterproposal comes into play: $1.5 trillion in new revenue combined with a very different package of cuts, including to Medicare. That, incidentally, should put paid to the "lack of leadership" charges: he has set the parameters, and can afford to wait until the GOP begins to approach them.  He has exposed the Nov. 23 deadline as an illusion; the only deadlines that matter are November 6, 2012, and December 31, 2012.

Monday, November 21, 2011

Was the Budget Control Act a 60-yard punt for Obama?

Like Paul Krugman, Jonathan Chait is pleased with the supercommittee failure:
[The Budget Control Act] forced Congress to agree to $1.2 trillion in deficit reduction, or else automatic budget cuts would go into effect. But the key detail was that the budget cuts would not happen until 2013. Meanwhile, the debt ceiling would be lifted through the 2012 election. Between now and then, the two parties can fight over what to do about the automatic budget cuts scheduled to take effect. That’s not really the important thing. The important thing is that the debt ceiling is no longer on the table.

The whole plan was to start talking about something other than the debt ceiling, in hopes that the tea party would find some different shiny object to pick up and try to smash with a rock. And it worked!
Progressives have pretty much given up their multidimensional chess fantasies about Obama in this bruising year, and Chait does not explicitly credit Obama for this not-bad outcome.  But basically he's crediting Obama with a 60-yard punt.  If you accept the premise that no budget mandates past 2012 in this year's legislation matter, then in the summer negotiations Obama achieved his chief goal -- raising the debt ceiling to carry him past the 2012 elections -- at a net cost of $21 billion cut out of the 2012 budget, or about 2/3 of 1% of outlays. 

Saturday, November 19, 2011

A core problem for Democrats?

James Clyburn, third-ranking House Democrat and Supercommittee member, indirectly points up what may be Obama's greatest failing:
Clyburn, in a separate “Political Capital” interview airing on the same program, said a large deal approaching $4 trillion isn’t likely. He said he sees a chance of a smaller package as long as Republicans agree to revenue increases.

“I’ve kind of given up on big and bold, but I’m never going to give up on balance,” said Clyburn, of South Carolina.

If Republicans insist on extending Bush tax cuts for the wealthy “then we probably won’t get a deal,” he said.

Clyburn, the third-ranking House Democrat, said he hopes President Barack Obama won’t relent as he did last year and allow the tax cuts of his predecessor to continue again.

“I have no idea whether he will or not,” Clyburn said. “I hold out hope that the president will hold fast.”
That is a pretty staggering lack of faith in the team leader, and you can't call it unjustified.  Putting lipstick on the Aug. 1 debt deal pig, the White House did voice a rather weak Obama promise -- not even really a promise, more like a statement of capability -- to veto any legislation that extends the Bush tax cuts for the wealthiest:

Sunday, September 25, 2011

Please, Obama: stop talking like a hostage

A worrying signal in The President's Plan for Economic Growth and Deficit reduction, regarding the triggers in the deficit reduction deal, aka the Budget Control Act (BCA):
With approximately $1trillion in deficit reduction achieved over the next decade through the use of discretionary spending caps, it took a substantial step toward bringing down our deficit.Yet, with discretionary spending projected to reach historically low levels, we need to look at other parts of the budget for savings so that we pursue deficit reduction in a balanced way.This is not only critical to future economic growth, but if the Committee fails to achieve at least $1.2 trillion in deficit reduction, then a sequester would be triggered that could have devastating consequences for both defense and non-defense programs (pg. 2, pdf pg. 12).
Here we are with Obama once again warning about "devastating consequences" if a deal is not struck, this time by the Supercommittee. That worked out great the last time, didn't it? When faced with economic disaster if they don't back off a maximalist position, Republicans always back off, right?

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.

The battle lines are drawn

From the New York Times' preview of Obama's deficit reduction plan:
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. 
 Glory hallelujah. That has been the missing piece all along.

But does that mean Obama is willing to pull the trigger (or see it pulled) if the supercommittee deadlocks?  He'd better be.

Friday, September 16, 2011

Boehner supports Merkeley's call to score Supercommittee proposals for jobs impact

...only implicitly, of course.

Senator Jeff Merkley, as Greg Sargent has repeatedly broadcast with such enthusiasm, has a modest proposal for the Supercommittee charged with striking a deficit reduction deal:
He is calling on both parties to agree to submit every proposal offered by the supercommittee to the nonpartisan Congressional Budget Office, to be evaluated for the impact it will have — on jobs.

He doesn’t want the CBO to evaluate the proposals just for their budgetary impact. Rather, he wants the CBO to reach a conclusion on the impact the proposals will have on unemployment, whether positive, negative, or neutral.

“We need to have every proposal that the super-committee brings out to have it scored by its jobs impact,” Merkley told me in an interview this morning. He plans to urge Democratic and GOP leaders to agree to this standard, and hopes to build a campaign to make it happen...

Monday, September 12, 2011

Risk-free Republican rebranding

Hey, Republicans, I've got a winning strategy for you. Why not give Obama rope to hang himself?

This evening, the President will send up his jobs bill, with $440 billion in tax cuts and infrastructure spending. Next Monday, he'll send the White House proposal for the debt supercommittee, which will presumably add at least $440 billion to the $1.5 trillion in deficit reduction the committee is charged with putting together. In his speech on Sept. 8, that's how Obama proposed to pay for his jobs plan.

Republicans, why not carve out your favorite $440 billion in spending cuts from Obama's deficit reduction proposal, tack them to his jobs bill and pass the whole shebang -- leaving the remainder of the supercommittee's charge unchanged?

In one fell swoop you can lock in another near-half trillion in spending cuts with no tax increases, wipe out your reputation for intransigence, and get a chance to prove that a) the party is always in favor of tax cuts, b) the party recognizes the country's acute infrastructure needs, and c) Keynesian stimulus doesn't work.  If you really believe the last, what harm can the package do?  At the same time, you'll give yourself added space to stonewall in the supercommittee negotiations -- yielding on a little bit of stimulus spending can offset your implacability on tax hikes.

Wednesday, August 10, 2011

GOP will damn the polls and maintain tax intransigence

Andrew Sullivan, who wanted Obama to come out strong for Bowles-Simpson and make a crusade of deficit reduction in his State of the Union address, now suggests that Obama do the same with tax reform, a linchpin of any viable deficit reduction plan. (That is, a revamping of the tax code that shrinks loopholes, lowers rates, and nets substantial new revenue.) In support, Sullivan cites a compendium of polls from Bruce Bartlett:
They all show heavy majorities (most in the mid-60s) in favor of raising taxes on the wealthy as part of a deficit reduction plan. Yet this is the one issue on which Republicans seem determined to take a stand. If the Democrats cannot marshall 2 - 1 support for their policies into actual legislation, they really need to pack it in as a viable party (although one could argue they packed it in years ago).
This would be true if we lived in a sane political environment, especially since Republicans will not be able to prevent the Bush tax cuts from expiring if Obama and the Democrats are willing to let them all expire.  Reversion to Clinton-era rates would raise an estimated $3.6 trillion over current rates in ten years -- as opposed to the $1-2 trillion Democrats would be able to extract through tax reform, would Republicans agree to any increase at all.

We do not, however, inhabit in a sane political political environment.  Consider:

Monday, August 08, 2011

That sick "Obama's sliding" feeling

Bitterly disappointed as I was in Obama for letting himself be hijacked in the debt ceiling deal, I have been willing to reserve judgment through the next round -- the supercommittee negotiations -- and possibly through the endgame of the Bush tax cut expirations.  But this from Obama today triggered that "there he goes again" reflex:
Last week, we reached an agreement that will make historic cuts to defense and domestic spending.  But there’s not much further we can cut in either of those categories.  What we need to do now is combine those spending cuts with two additional steps:  tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare (my emphasis).

Couple that with this warning from Panetta:

Friday, August 05, 2011

Taxes or trigger!

Nancy Pelosi was not entirely clear when she said that Democrats negotiating (if such a thing is possible) with the GOP on the bipartisan supercommittee charged with putting forward a deficit reduction plan should be "as forceful as possible and as unified as possible," but that they should not rule out reforms to entitlement programs. She raised a lot of Democratic eyebrows by declaring "you won't see me drawing lines in the sand."  But if I understand her right, she's right. 

There is confusion about the kind of line in the sand Democrats on the supercommittee must draw. They will have to resist Republican intransigence, not mirror it. That is, they have to hold the line on taxes, not entitlements.