Are the Dems considering dropping the millionaire chump change demand?
by digby
If I’m reading this story headlined “Democrats should surrender on taxes” right, Ezra Klein is saying that Dems should give up on “revenue” and ask for something else, like immigration reform and infrastructure spending — in exchange for tax reform, lifting sequestration and/or entitlement cuts in upcoming negotiations.
He explains that revenue is no longer necessary (as if it ever was) now that deficits are coming down so democrats should shift their demand to something more meaningful. Here’s how he puts it:
…[Democrats] should see their leverage clearly: Republicans badly want entitlement cuts, but they don’t want them enough to trade for taxes. They badly want to replace sequestration, but not enough to trade for taxes. And they badly want tax reform — but, again, not enough to trade for higher taxes.
One answer to that is to keep sequestration in place until something changes. That’s basically the answer Democrats have come up with. But it’s a terrible answer. It’s bad for growth, bad for government, and bad for the people who depend on government programs.
Democrats should use their leverage to get something they actually want. Immigration reform and infrastructure investment are obvious places to start. They mean vastly more to the economy and to people’s lives than slightly higher taxes on rich people. And they’re things that many in the Republican Party want, too.
The reason I ask if I’m reading it correctly is because he doesn’t mention entitlement cuts explicitly as something to which the Democrats should concede. He talks instead about the opportunity to get defense cuts, immigration reform and infrastructure spending. But the implication is that Republicans might go for those to get what they “badly want” — which he defines there as entitlement cuts, replacement of sequestration and tax reform.
So, how would that deal look in the end? Well: It would replace the sequester with defense cuts (not many — both parties are subject to tremendous pressure on the defense budget) entitlement cuts, tax reform and immigration reform and/or infrastructure spending.
I have always believed that “tax reform” as currently defined by the so-called Very Serious People was something of a joke and the president calling Chained-CPI for the regular Americans in exchange for “asking the rich to pay a little bit more” a “balanced approach” is kind of a bait and switch. Certainly, immigration reform and infrastructure spending are worthier goals than temporary chump change for millionaires. But let’s be clear here — Chained-CPI is a terrible, terrible idea that needs to be tossed on the same rubbish pile as as SS privatization. Cutting Social Security as far as the eye can see at a time of dislocation and economic insecurity is not a “win” regardless of what the Democrats get in exchange.
This proposal would change the dynamic in one very important way. By pitting Immigration Reform against protecting Social Security, the left will be divided. Right now it’s easy for everyone to be on the same page — nobody is harmed if tax hikes for millionaires don’t go through. But this is a matter of millions of people being able to come out of the shadows and be treated like human beings in the here and now against vulnerable seniors of the future. Not nice.
Let’s hope I’m reading Ezra wrong on this — and if not, that he doesn’t reflect the broader thinking among the Democratic establishment. Tax hikes have long been the one thing the wingnuts will not agree to do even in exchange for cuts to entitlements. It’s possible that some kind of immigration reform or defense cuts would be equally unacceptable — but we don’t know that and I’m not anxious to find out.
It would be best to take all the earned benefits programs out of the budget negotiations altogether and then see where we are. The fact that Democrats continue to refuse to do so, despite the fact that the deficit is no longer a major issue (and SS was never part of those numbers in the first place) is very worrying.
Update: Apropos of nothing, there is this:
President Barack Obama said on Tuesday that stalled immigration reform would be a top priority once the fiscal crisis has been resolved.
“Once that’s done, you know, the day after, I’m going to be pushing to say, call a vote on immigration reform,” he told the Los Angeles affiliate of Spanish-language television network Univision.
We have no reason to believe this is in any way tied to the new budget negotiations in the next couple months. But you never know.
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