“My aim is not to pass laws, but to repeal them”
by digby
There are many post-mortems of the budget deal today and this one by Peter Coy at Business Week gets it (mostly) right: The Democrats won the battle but the Tea Party is winning the war:
Obamacare aside, events have actually gone the movement’s way ever since Republicans wrested control of the House of Representatives in the 2010 midterm elections. Discretionary spending has been falling. Federal-employee head count is down. And since 2010, deficit reduction has been more rapid than in any three-year period since the demobilization following World War II.
Discretionary spending (i.e., spending excluding transfer payments and interest) will fall even more in the decades ahead if the laws that the Tea Party helped get on the books stay there. The nonpartisan Congressional Budget Office projects that, under current law, by 2038 total spending on everything other than the major health-care programs, Social Security, and interest will decline to the smallest share of the economy since the 1930s.
Ronald Reagan had nothing on today’s Tea Party when it comes to shrinking the parts of government that require annual appropriations by Congress. “That part of the budget has been cut very significantly, I think more than anyone would have expected or would have thought even was possible before the 2010 elections,” says Ed Lorenzen, executive director of the Moment of Truth Project, which was launched by would-be budget cutters Alan Simpson and Erskine Bowles. Tea Partiers like to see themselves as underdogs in a war against profligate spending. But the truth is they’ve already won.
Here’s the thing. It’s not just the Tea Party. Democrats have been patting themselves on the back for reducing the deficit just as energetically as the Republicans. They may not agree on the details but there has been consensus on the need for austerity within entire political establishment for some time. Both parties ran on it in 2012, so they can both take credit for the results:
That victory, however, has come at a high price. The Tea Party pushed for heavy spending cuts when the economy was weak, needlessly depressing output and keeping the unemployment rate high. The International Monetary Fund, which supports long-run deficit reduction, declared in June that the U.S. program was “excessively rapid and ill-designed.” It nearly tipped the economy into recession, says Mark Zandi, chief economist of Moody’s Analytics (MCO). The Congressional Budget Office estimated in September that waiving spending caps now would create about 800,000 jobs by the end of 2014.
What’s worse, the cuts the Tea Party achieved have come almost entirely on the discretionary side of the budget, choking everything from medical research to antipoverty programs to food inspection. Discretionary spending is the most vulnerable because it must be appropriated annually. The Tea Party, and Washington in general, have scarcely touched the real problem: entitlements such as Social Security, Medicare, and Medicaid, which are on track to soak up huge portions of the national income in coming decades. “Most economists, I dare say all economists, recognize that we have a long-run fiscal problem that needs to be addressed. But you can’t address it by cutting discretionary spending alone,” says Joel Prakken, co-founder of Macroeconomic Advisers, a St. Louis-based forecasting firm.
In political terms, the Tea Party’s scorched earth strategy has produced some impressive legislative wins but damaged the movement’s popularity. Now its blunt tactics threaten to make deficit reduction seem like a fringe issue, one of concern only to extremists. The Greek king Pyrrhus, after whom Pyrrhic victories are named, once said, “If we are victorious in one more battle with the Romans, we shall be utterly ruined.”
If this devastation could be solely blamed on the Tea Party — and the Democrats could ostentatiously distance themselves from it by rejecting austerity (and stopping their incessant chatter about deficits) — the right political lessons, at least, might be learned from all this on both sides. I don’t see it now, but analyses like this could certainly be helpful. As for the policy, well I don’t think anyone really needed to have this demonstrated with a real-life passion play, but they did it anyway. One can only assume they really thought it was a good idea on the merits.
Naturally, this writer has the standard cure that’s just as bad as the disease:
Fiscal policy would not look like this if the key players in Washington trusted one another more. (No smirking.) Tea Partiers insist on “front-loading” cuts in discretionary spending despite the harm to a still-recovering economy—and to the fabric of government—because they don’t trust others’ commitments to cut entitlement spending at some point in the future. The breakdown in trust is tragic because pivoting toward long-run entitlement reform really would be better for all concerned. “We’ve drifted into this environment where we have these calendar-created crises,” says Prakken of Macroeconomic Advisers. “It’s nobody’s idea of the best way to do things.”
Prakken, a hawk on long-term deficits, backs the idea of a gradual, long-term deal. “It would be wonderful, would it not, if our elected officials announced some grand bargain that seemed credible, realistic, with enforcement mechanisms that make it very difficult for future regimes to overturn,” he muses. “Maybe coupled with fundamental tax reform and higher revenues. Implemented over 30 years with very little fiscal drag created—that would be a wonderful outcome.”
I love the fantasy of “enforcement mechanisms that make it very difficult for future regimes to overturn.” That’s not how these things are supposed to work, nor should they. We will be dead and “future regimes” will be living in a different world. It’s outrageous to say that we should be able to “force” Americans decades from now to do things based upon our dysfunctional understanding of how the government should work and our total lack of ability to see into the future. Not to mention that it’s impossible. Any budget deal made today can be broken the day after the next election. This long term budget obsession is just hocus pocus designed solely to benefit bond holders to the exclusion of regular people.
Moreover, the idea seems to be that we absolutely must have some kind of “deal” because once we do the Tea Party types just calm right down and we can go back to the glory years of Ike or Ronnie or Poppy Bush, which they seem to believe is the natural state of things. That ain’t America folks. Or rather, it’s not America most of the time. We are a big country with only two parties and most of the time they are fighting over fundamental differences about the very definition of who we are. Get used to it.
That argument gets very intense at times and now is one of those times. Why in the world would you want to make any long term agreements with a group that even this reporter characterizes as a radical, irrational, rump faction of one Party? How can it possibly make sense to institutionalize any product of this dysfunction for decades to come? This is the absolute worst moment for Democrats to be making any agreement with Republicans that lasts longer than is absolutely necessary. They are, as this writer aptly illustrates, extremists.
Unless, of course, this really is a Shock Doctrine moment. Which is entirely possible. Indeed, one can’t help but note that it’s the crazy Tea Party that’s been unwilling to play ball on long term “reform” that benefits the wealthiest class. They oppose it for the most absurd of reasons, but we can be grateful to them for (inadvertently) using their crazy for good.
And meanwhile it’s important to recognize just how effective they’ve been at getting their short term agenda passed. Their irrational radicalism may have saved us (so far) from institutionalizing their spending cut fetish over the long haul, but they’ve successfully taken a meat cleaver to vital government programs in the short run. Sure, we can make fun of them — their behavior is flamboyant and foolish. But consider what they’ve accomplished, by the standards of the conservative movement’s first great leader:
I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. It is not to inaugurate new programs, but to cancel old ones that do violence to the Constitution, or that have failed their purpose, or that impose on the people an unwarranted financial burden. I will not attempt to discover whether legislation is “needed” before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can. — Barry Goldwater, The Conscience of a Conservative (1960)
Smells like …. victory.
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