JONATHAN CHAIT MAY 31, 2011
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Mitch McConnell keeps saying that cutting Medicare must be part of any deal to lift the debt ceiling. McConnell also says he won't agree to raise taxes one cent:
SEN. McCONNELL: Yeah, look, you know, we just have a fundamental difference of opinion. If there's any issue which clearly divides Republicans and Democrats, it's taxes. We think we have this problem because we spend too much, not because we tax too little. And you've heard us have this debate over the years, we're going to have it again next year in the course of the election because the president wants the rates to go up again next year. We've got a two-year extension of current tax rates right now. I think we can stipulate this is an issue upon which there is deep-seated difference of opinion.
MR. GREGORY: But--so here's, here's the issue that I, that I keep coming back to, which is aren't you Republican leaders guilty of the same thing that you accuse the president of on health care, which is not doing enough to build actual political consensus around these issues? If you're not going to give anything up on taxes but you want to bring the deficit down, you say, no, these are iron-clad principles. I mean, that's where the--you said the president was on health care. How do we, how do we tackle real problems?
SEN. McCONNELL: But that's not where they are on, on the issue we were talking about earlier in the program. You've got the president, the vice president, President Clinton, Steny Hoyer all saying that Medicare has to change. So they're--that's not something we don't agree on. We're going to, we're going to discuss...
MR. GREGORY: That's a long way from changing the Medicare program the way Paul Ryan wants to.
SEN. McCONNELL: Well, we're going to discuss how to do it. But what we're saying on taxes is it isn't necessary. I mean, we don't have this problem because we tax too little.
The idea that tax rates have absolutely nothing to do with the the medium-term deficit is obviously absurd, and it highlights the difficulty of negotiating a fiscal solution with a party in the thrall of an ideology that refuses to acknowledge basic accounting identities.
But even if that difference could be bridged, you have the second issue. McConnell wants to use the threat of the debt ceiling vote as a hostage to force Democrats to accept policies they otherwise wouldn't. He also wants to strike a bipartisan Grand Bargain on the debt. You can't do both these things at once.
A bipartisan deal is an agreement where both parties move toward each other and make a policy change that both believe would constitute an improvement over the status quo. They can then defend the unpopular parts because they believe the agreement overall improves policy. The 1990 budget deal is an example of this. That's what McConnell has in mind when he says "none of it will be usable" in the next election. He believes both parties will endorse the unpopular elements in the deal and thus insulate each side from political damage.
A hostage-taking agreement is different. Here, one party threatens to damage something that the other party cares about, and uses this threat to extract concessions. If you pull that off, you can't also expect the other party to stand up and endorse it.
The operative example here is the deal to extend tax cuts struck last December. As a condition for extending tax cuts on income under $250,000, Republicans insisted on extending the portion of the Bush tax cuts that only apply to income over $250,000. Obama paid that ransom. But he didn't go around praising those tax cuts. He continues to call them unaffordable and promises to repeal them in the next election.
If McConnell wants to force Obama to accept his budget terms, on threat of harming the economy, then he can't also expect Obama to protect him. If he extracts Medicare cuts that Obama does not think constitute an improvement over the status quo, then Obama can take his case to the public. Democrats can say that Republicans threatened to blow up the economy if they wouldn't sign Medicare cuts, but if the public restores Democrats to power in 2012, they'll reverse those cuts. Alternatively, McConnell can negotiate a deal that Obama actually supports, which would neutralize the issue. If McConnell thinks he can do both at once, then Obama is doing a terrible job of negotiating.
13 comments
Interestingly, although al Qaeda talks a good game about the 99 virgins, even it--as a terrorist syndicate!--knows how to balance a budget. The Republican approach there would be: "We don't have a recruitment [revenue] problem, we have an attrition [spending] problem!" If they followed it, they would have thankfully been extinguished long ago. Of course, Republican ideology also dicates that since professional hostage-takers make payroll and have business experience, they are sainted job creators who should be tapped to run government. For the Republican Party, it's turtles all the way down.
- chaitless
May 31, 2011 at 8:56am
Yes, Obama is doing a terrible job of negotiating. He wants to build consensus, but the Republicans don't CARE about consensus, they want their way or the highway. They've demonstrated this multiple times since 2008, and McConnell's latest hostage-taking is just more of the same. Obama MUST stand firm. Otherwise, the resulting crash becomes partly HIS fault for agreeing to lunatic demands in the name of "consensus".
- AllanL5
May 31, 2011 at 8:56am
Obama standing firm is a win-win situation. If McConnell continues his hostage demands, and makes the US default on its debts, then the American Voter can vote to tell him the error of his ways. If McConnell folds, so as NOT to make the US default on its debt, then America gets better policies. Either way, America wins. The only way to LOSE is to have Obama "compromise" and agree to some lunatic cut in Medicare -- the ACA is already SUPPOSED to control Medicare costs, cutting it in some "compromise" is just stupid. And makes the resulting chaos OBAMA'S fault, and don't think the Republicans won't make hay on THAT.
- AllanL5
May 31, 2011 at 9:02am
Awesome, Chaitless. Moniker and commentary, that is.
- Tristan
May 31, 2011 at 9:03am
It's 72 virgins, c. But I might be interested in your disquisition on the other 27. As for the commentary, maybe not so much, T.
- liberalref
May 31, 2011 at 9:34am
McConnell's position on taxes is like a leak in the plumbing that floods the basement. Fixing the leak isn't going to dry up the basement, but you won't get it dry without fixing it. I think President Obama failed on the tax rate issue when he came out and called for higher taxes because it's patriotic. Then it was the "fair share" argument. None of these arguments are compelling. The argument I would have rather seen is: "We need '$X" in revenue and this is the way to get it with the least damage to the economy." If President Obama does not articulate a compelling need to raise tax rates, then we will go on getting what we have been getting from McConnell.
- Nusholtz
May 31, 2011 at 9:39am
Why the exclusionary narratives, n? Of course we need the revenue because we have a huge shortfall but the fairness issue plays well with the American public. So why not use it?
- liberalref
May 31, 2011 at 9:59am
I'd say the extra 27 are a structural problem. As long as you're over 55, no need to worry.
- chaitless
May 31, 2011 at 10:13am
yeah, seriously--what the hell's wrong with the fairness argument on taxes?
- Curran1
May 31, 2011 at 12:19pm
I know it's supposed to be a "trap" somehow, but why shouldn't we urge Democrats to vote for the "clean" debt-ceiling bill today? It probably wouldn't pass anyway, but it seems it could only strengthen their "responsibility" argument -- if they all vote "present" and don't take a stand now, it will be harder to sell the idea that the Republicans are risking something dangerous when it comes time to resist a "not so clean" bill.
- frippo
May 31, 2011 at 12:46pm
From the article,“To get my vote on the debt ceiling..Medicare will be a part of it,” Mr. McConnell said on NBC’s “Meet the Press,” in response to questions from host David Gregory. “The details have to be negotiated.”
So basically, McConnell is open to negotiation on the ratio between then elderly, crippled and poor people thrown under the bus. I supposed this is in addition to those being thrown out to afford to dig survivors out of the wreckage in Joplin.
- GSpinks
May 31, 2011 at 2:57pm
Well, doesn't this put an exclamation mark on futility ANY attempt to reach a grand deficit-reduction bargain in a bi-partisan fashion. I don't care if you call it gang of six, five, or whatever...There will never be deal when Grover Norquist is calling the shots.
- MikeB.
May 31, 2011 at 6:02pm
SEN. McCONNELL: Well, we're going to discuss how to do it. But what we're saying on taxes is it isn't necessary. I mean, we don't have this problem because we tax too little.
So then we spend too much...on what? Healthcare for the sick and elderly? Foreign humanitarian assistance efforts? Disaster recovery? All of the above? And programs like WIC and SCHIP just go without saying, because only lazy parasites use those programs...right?
- GSpinks
May 31, 2011 at 7:14pm