[img_assist|nid=44798|title=The trend|desc=|link=none|align=left|width=240|height=282]Okay, let's for the moment stipulate that if President Obama and the Democrats are to have any chance of avoiding a major fiscal crisis, they must compromise in some manner with Republicans who threaten to reject an increase in the national debt ceiling unless everyone agrees to massive spending cuts.
[I say "stipulate" because it's not at all clear to me that, once again for Democrats, refusing a bad deal is worse than accepting a bad deal. For one thing, the whole "debate" about the deficit problem is pretty much one-sided and totally skewed, since as most economists agree, cutting spending in the midst of a severe recession is only likely to make it worse. Cut later? Sure thing, Right now? Spend more to boost consumer demand, thus getting big business to start investing its trillion-dollar cash pile into new jobs and other things useful.]
But yeah, if making a deal is paramount, if this is how you see things, then the Democrats need to offer significant spending cuts while demanding sigbnificant tax increases. A big problem, though: The president has just signaled he's willing to make entitlement program cuts as part of that deal. Also, instead of insisting on at least a dollar to dollar match between spending cuts, and tax increases on the wealthy and corporations, things have devolved as usual toward the GOP position so that now the ratio being debated appears to be more like four to one or even six to one in favor of spending cuts.
Maybe Obama knows what he is doing and can work with House Speaker John Boehner to come up with enough symbolic entitlement cuts -- i.e., cuts that won't affect eligibility for Medicare, Medicaid or Social Security or reduce actual benefit pay-outs in any significant way, while still sounding tough. But even if that's the White House plan, it's a terrible idea.
And it's terrible for exactly one reason: Rep. Paul Ryan (R-WI), the House budget committee chair who's proposed draconian cuts to entitlements and tax cuts for the wealthy. His plan is utterly foolish and non-mathematical, but that's not the problem, because his plan was dead on arrival. No way Obama and the Democrats would support it, and even a plurality of Republicans are walking away from it fast.
No, the problem is entirely symbolic. If Obama gets Demiocrats in Congress to go along with even marginal changes to entitlements -- except perhaps to reforms that target payments to health care providers, aimed at reducing waste -- then Ryan wins.
While his party will have won, Ryan won't really have attained this victory. But he'll claim it anyway. He'll claim, as he already is claiming, that his draconian deficit reduction plan got the two sides talking. There's a grain of truth in that. But only a grain. It's would be as if al Qaeda threatened to blow up all US oil refineries, and then claimed victory when one oil rig exploded and sank, not because of any terrorist act, but because it was badly designed. The US economy and our political process are now functioning badly, and Ryan if anything is part of the problem, not the solution.
Because Ryan's plan is very badly designed, lawmakers do need to take some other kind of budget action (a second stimulus package would make a lot more sense than spending cuts, of course). Maybe it doesn't even matter what Congress ends up agreeing to do. Maybe Ryan will claim credit, regardless.
Surely, however, we don't need Barack Obama and blue dog Democrats adding the slightest tinge of credibility to that claim by moving rightward in order to achieve a bad deal.
As other commentators have noted, the main dynamic in the talks so far seems to be this: Obama wants to go into the 2012 elections with a win; Boehner wants to neutralize Tea Party fanatics. So they're working together to diss elements in their respective parties by coming up with middle-ground mush that will hurt average Americans and won't really solve the debt crisis or help speed the economic recovery. This is, in short, not very much about money and jobs and economics, but rather mostly about politics. And politics of recent decades have been the cause of most of our economic woes.
Now, therefore, would be a good time to write or phone your elected reps and the White House, telling them how you feel about all this. Elsewise, that Social Security benefit you're hoping to get in a year or three might not be yours for additional years. Or it might be a smaller benefit. Or you may not automatically qualify for Medicare.
Removing Bush tax cuts for the wealthy would go a long way toward covering our projected deficit. Make 'em pay their faire share. Make Republicans openly choose their favored constituents.
Because if Democrats formally agree that federal entitlements are too generous, and once they make the slightest negative alteration in those benefits, the Republican game is not over, it's on. This is one huge Pandora's Box, and it must not be opened, lest the Democratic Party be ruined forevermore, while the GOP's minority hegemony is fortified and prolonged, and while the American middle class is further damaged. And Paul Ryan will keep right on drinking $350 bottles of wine with his elitest cronies.
A bit of good news from the morning headlines, maybe:
WASHINGTON -(Dow Jones)- Minority Leader Nancy Pelosi (D., Calif.) reassured angry House Democrats that a proposal to change a key measure of inflation linked to Social Security was not likely to be part of a debt ceiling deal, lawmakers said Friday.
Pelosi calmed Democrats upset over a proposal to change how the Consumer Price Index is calculated that would curb Social Security benefits, dimming the prospects of an idea once floated as an area of bipartisan support.
"She basically reassured the group that there's no way it's going to happen," said Rep. Barney Frank (D., Mass.), following a Friday afternoon meeting of House Democrats in the basement of the Capitol building. "After this, I do not think reducing the CPI in any way is a viable option." ...