Getting what they wanted
by digby
Ezra’s well connected to this debate so I’m assuming he knows what he’s talking about:
Michael Gerson describes what top Republicans are saying will be in the final budget deal
A package of immediate and specific budget cuts; budget caps reaching out five years to reassure conservatives that tough budget decisions will be made in the future; Medicare reforms short of the House approach; no tax increases — a Republican red line — but perhaps additional revenue from the elimination of tax expenditures.
I’m hearing mostly the same thing. The debt-ceiling deal looks like it’ll be almost entirely composed of cuts and caps. Whatever revenues are in it will be token contributions, at best. There won’t be structural reforms to Medicare, Medicaid and Social Security, and there won’t be a pass at tax reform. The budget caps will make automatic cuts to spending if we’re not on a path to primary balance by 2014. The big question with the cap is whether it just makes automatic cuts to spending or it also raises taxes. It’s not obvious to me why the Democrats would fold on that last point, but they might.
What this means is that Democrats and Republicans have agreed that the “grand bargain” isn’t spending cuts for tax revenues, but entitlement reforms for tax revenues.
Excellent. Except we have no idea what those tax revenues are except for some symbolic cuts of a few easy corporate subsidies. But I guess the idea is that if the Democrats put “entitlements” on the menu then surely the GOP will meet them halfway. What could go wrong?
Knowing as we do that the outcome of the debt limit “fight” was pre-ordained (they were always going to raise it) what this really means is that the Democrats wanted to make the parameters of the 2012 budget fight around entitlement cuts and allowing the Bush tax cuts to expire as scheduled. And apparently they want to be forced to cut spending radically in the second term. In other words, a big win for the austerity fetishists. I hope the confidence fairy is duly impressed.
As for the politics, I’d guess the Democrats think this will “take deficit reduction off the table” so they can start talking about #winningthefuture, but I think that may be just a little bit delusional. After all, the Republican electoral argument is that deficit reduction is the key to growth and jobs. They aren’t going to let it go, especially since they now know how to play it.
Obama will say that he’s shown great leadership by being willing to rein in spending and will run on allowing the Bush tax cuts to expire as the Democratic “win” in the Grand Bargain — but only if he’s re-elected. The Republicans will say that Obama’s profligate spending has exacerbated the unemployment crisis and that raising taxes when the economy is sputtering will make things even worse. Who knows what people will believe? I suspect they’ll see Obama as the better bet. That’s the beauty of having the opposing party be batshit insane.
So, whichever jersey you wear, and whatever problems you have with the policies, you’ll be told to clap louder — to drown out the sound of the plutocrats’ laughter.
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