Later today President Obama will meet with Congressional leaders to take another run at getting Congress to raise the debt ceiling before August 2. While there appears to have been some movement towards what has been described as a “large deal”, with both sides ceding difficult political ground, that effort has apparently collapsed with Republicans rebelling against the inclusion of new revenues in the $4 trillion dollar deficit reduction package. Reports indicate that House Majority Leader Eric Cantor had said he and many other rank and file House Republicans would vote against any deal that includes revenues. The Washington Post summed it up neatly:
The emerging deal, however, quickly appeared to be collapsing under its own ideological weight. Liberals were outraged by Obama’s offer to rein in entitlement spending, particularly Social Security, which congressional Democrats believed would not be a part of the debt-reduction effort. The White House had offered to change the measure of inflation used to calculate Social Security payouts, a shift that could save more than $100 billion over the next decade, according to congressional budget analysts.
Conservatives, meanwhile, were uniformly opposed to raising taxes. That resistance has proved to be the biggest obstacle to a compromise of any size.
A liberal backlash had been taking place publicly, with Minority Leader Pelosi publicly opposing cuts to the entitlement programs. With Boehner being undercut from the right, including the roster of Republican Presidential candidates, and with Obama taking heat from the left, a deal was going to be a high wire act in any case. The President, I am sure, had an inkling that the Speaker was going to have a hard time delivering the Republican caucus on any grand compromise. The Speaker, to his credit, appears to recognize that a debt default would be a disaster for the United States, and was working towards a deal that would have been heavily weighted towards the Republicans. But he was undercut by his own Majority Leader and much of his caucus. Despite the gamesmanship on both sides the Republicans are truly missing a unique opportunity here, and in my opinion are largely responsible for the failure, so far, of the talks. David Brooks had it exactly right when he called acceptance of the proposed “large deal” by Republicans a no-brainer.
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
But the Republicans are no longer a force for responsibility in government, and Brooks is right about that as well.
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.
Just about says it all when you have a so-called major Republican candidate for President (Tim Pawlenty) on Meet the Press bragging about taking actions that shut down state government while he was Governor. A core group of leaders in the Party appear to be dismissive of the consequences of failure to raise the debt ceiling, with the smarter Republican members imprisoned by their earlier rhetoric and by the imbecility of those in the Party pushing the country towards default. The Secretary of the Treasury explains some of the real world consequences of having juveniles in charge in the attached clip. It is time for adults to step up and get this done for the sake of the country.
Visit msnbc.com for breaking news, world news, and news about the economy
Your Argument is strictly partisan. We are right, and you are wrong.
The President and some Democrats need to raise taxes as part of their DNA.
Three shifts of economists have been fired (resigned) I have seen their work. It didn’t.
So what makes Manzi and Obama economic gurus? Nothing.
Read my lips, NO NEW TAXES>
My argument, contrary to your assertion, is non-partisan. The Democrats would have howled in protest at the $4 trillion deal because of cuts in entitlements. The right would have howled because of increased revenues. But, we would have taken a $4 trillion dollar bite out of the deficit. Lets face facts: the Republicans are not at all for deficit reduction. They wish to use the deficit to promote further tax cutting under the guise of deficit reduction. If you question that premise then why don’t you examine the “deficit impact” of the Ryan plan. Still leaves us with a huge deficit. Read the Wall Street Journal editorial page, where they are openly dismissive of the benefits of deficit reduction. Why? Because they know that REAL deficit reduction will entail additional revenues. Same reason Krugman is dismissive of deficits, because he knows that REAL deficit reduction will entail some modification of entitlement programs. Actually Jules I am in the non-partisan middle of the road. (With Bowles -Simpson)
Let me make a few points;
1. The deficit action is part of the Obama re-election campaign.
2. Ever since Obamacare, where he spent an entire year ramming the legislation through No transparency-NO, closed door deals, ignored any Republican input., he has been insulting people, everything Republican, the Supreme Court all the while raising taxes and watch the country sink into debt.
3. The Republican do not want to reduce deficit. Your right based on raising taxes.
Reminder: unemployment remaining above 9% and job growth near zero. Ongoing since his election.
5. Actually, you honor, you are so far to the left, you are over the horizon and can’t see anything to right.
6. Simpson-Bowles who?
7. Your friend has to begin managing the country and get off the campaign trails.
8. NO NEW TAXES.
OFF SUBJECT ENTRY
Is it true that the Governor is modifying the MA Budget to give unions more of a say in the cost savings from MUNI legislation?
Reps give the cities and towns a break, Senate takes some of it away and now our fine governor of the people (as long as they are union members) is taking the savings effect one more notch down by giving the unions a say in the matter.
So how much are you going to raise taxes next year.
Your friends did it again.
Point by point.
1) Politics on both sides, not just with Obama.
2)Health care is a major reason we are in this mess. Without cost containment we are going to fade as an economic power. No Republican plan that I have seen deals with the uninsured, or with costs. What is their plan?
3)You confirm what I have been saying for a long time on this blog. Republicans care not a bit about the deficit. It is not possible to get rid of the deficit without steep cuts and additional revenues. NOT POSSIBLE! Period!You need both. Paul Ryan’s plan keeps a large deficit, but attacks entitlement spending. Why couldn’t he totally close the gap??? Because he does not want to advocate for cuts that will be rejected politically by the American people beyond his Medicare scheme, which appears to be dead in the water.
4) Krugman speaks for the left on entitlements and deficits. On deficits he is pretty close to the Wall Street Journal editorial page. Simpson-Bowles is a bipartisan attempt to solve the deficit problem that drew support from both parties, including Tom Coburn. It also drew heavy fire from both parties, including Krugman and Ryan.
5) If no new taxes then have the courage to propose the cuts that would be required to balance without new revenues, including cuts to Social Security, Medicare, Medicaid, and Defense spending. I get the political campaign mantra of “no new taxes”. The part I don’t get is what cuts the Republicans advocate to bring us into balance under that scenario. They always seem to leave that part out.