Have we finally managed to slow the deficit cutting momentum?
by digby
I was reading Krugman’s column on the minimum wage this morning and it struck me that maybe this piece by Zachary Goldfarb over the week-end just might be tracking something real:
For more than two years, President Obama has endorsed reducing Social Security payments as part of an ambitious deal to tame the national debt. But then Sen. Elizabeth Warren (D-Mass.) — viewed by supporters on the left as a potential 2016 presidential candidate — embraced a far different proposal: increasing benefits for seniors.
As Obama struggles to achieve his second-term domestic agenda, a more liberal and populist voice is emerging within a Democratic Party already looking ahead to the next presidential election. The push from the left represents both a critique of Obama’s tenure and a clear challenge to Hillary Rodham Clinton, the party’s presumptive presidential front-runner, who carries a more centrist banner.
The left’s influence will be on display in coming weeks when a high-profile congressional committee formed after the government shutdown faces a deadline to forge a budget agreement. Under strong pressure from liberals, the panel has effectively abandoned discussion of a “grand bargain” agreement partly because it probably would involve cuts to Social Security.
“The absolute last thing we should do in 2013 — at the very moment that Social Security has become the principal lifeline for millions of our seniors — is allow the program to begin to be dismantled inch by inch,” Warren said recently on the Senate floor, announcing her support for a bill that would expand the program.
Liberals say Social Security is one example of how Democrats are likely to face sustained pressure in coming months to move in a more populist direction on a host of issues.
“The first Obama administration was focused too much on saving the banks and Wall Street,” said Sen. Tom Harkin (D-Iowa), a liberal who is retiring after four decades in Congress. “There’s going to be a big populist push on whoever’s running for office to espouse these kinds of progressive policies.”
There’s some real policy energy (as opposed to simple GOP opposition) emanating from the left right now, more than I’ve seen in a very long time. Certainly the sustained pressure that activist groups and outside the beltway chatterers have brought to bear on the Social Security issue seems to have had an effect. And even aside from the individual merits of the various proposals Goldfarb outlines in his piece, you can also see that the Party itself is seeing the strategic merits of not acting like a bunch of fools and pretending that the “grown-up in the room” gambit is getting them anywhere. It seems that some of them, at least, have joined the fight.
Meanwhile, the deficit scolds ain’t done yet. In fact, they’re just blathering on:
[B]udget experts, labor unions and business groups are saying enough’s enough, and questioning why lawmakers can’t live within their means the way ordinary Americans do and instead lurch from one budget standoff to the next.
“It’s a stupid way to run a country,” said Maya MacGuineas, head of the Campaign to Fix the Debt, a non-partisan advocacy group whose members include business leaders and former lawmakers. “Change comes from two possible things: a crisis or leadership.”
One of the co-chairmen of the campaign is Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP and the New York City mayor.
Unlike with previous budget panels, including the failed 2011 supercommittee, there are no immediate consequences if the budget conference misses its Dec. 13 deadline — the U.S. won’t default on its debt and the federal government won’t shut down for lack of funding.
The committee’s lack of progress is frustrating outside groups, especially business executives, who say congressional lawmakers’ habit of governing by crisis and temporary spending bills is hurting the economy and costing jobs.
“The uncertainty has a chilling effect on job creators, households and anybody who’s trying to see around a corner,” said MacGuineas, who is also president of the Committee for a Responsible Federal Budget, a fiscal advocacy group.
Congress in 2009 last passed a budget resolution, the equivalent of a household budget that sets spending parameters for the federal government.
In 2010, disagreement over how to handle the scheduled expiration of tax cuts enacted under former President George W. Bush prevented agreement on a budget resolution and Republicans won the House majority, creating a divided Congress.
The current panel is the fifth bipartisan attempt in three years to address the nation’s debt and deficit. The others, starting with the 2010 debt-reduction commission appointed by President Barack Obama, ended in failure.
This one may, too, said Maryland Representative Chris Van Hollen, a panel member and the top Democrat on the House Budget Committee. “Negotiations have to accelerate significantly if we’re going to get something done,” he said.
The conference committee was supposed to mark a return to so-called regular order, where the chairmen and members instead of ad hoc negotiating groups work to craft a budget for the coming fiscal year and figure out a way to replace some of the automatic cuts known as sequestration.
Instead, they’re stumbling over the same obstacles that have prevented past agreements. Democrats want to end some corporate tax breaks while Republicans say they oppose any changes to the tax code outside a broader deal. Republicans want to cut spending on entitlement programs, which Democrats oppose without considerable revenue concessions.
I think we know that sometimes gridlock is our friend. But we still need to just note that last paragraph. Democrats want to end some corporate tax breaks while the Republicans want to cut spending on entitlements programs. Unfortunately, this isn’t exactly correct, is it? Most Democrats already conceded on the cuts to entitlements, they just want a little pocket change to go with it. In fact, both sides have agreed to the cuts. The only thing stopping that from happening is GOP intransigence on any form of revenue. All it would take for this to happen would be for Paul Ryan and friends to come up with something that could get past Grover Norquist and a deal would be done. Vigilance is called for.
This is why it remains vitally important to get these Democrats to take that offer off the table once and for all, never to return. The Chained-CPI must be killed.
The good news is that we at least now have some ballast on the other side of this argument calling for increased benefits. That makes it a lot harder to cut and opens the door to a rethinking of this whole “entitlements are going to make us go broke” scam. Fingers crossed that we may have halted the momentum on that noxious idea and are slowly turning the ship in other direction.
*Note: the wealthy con men hoping to get their hands on this SS money won’t give up, of course. They have been angling for it for it for over half a century. But the safety net programs are extremely popular and they’ve been thwarted all the way along. They will be again if the Democratic Party has finally come back to its sense and realized that its greatest strength is as a protector of the American safety net. Sheesh. You wouldn’t think you’d have to remind them of something so elementary, but all that money they get from the 1% makes them forgetful.
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