JONATHAN CHAIT AUGUST 2, 2011
The next step of the deficit fight moves to the super committee, in which each party appoints members. Since the committee can't recommend any deficit reduction without a majority, each party has the incentive to appoint members unamenable to compromise. I would like to see the committee come up with a sensible bipartisan compromise. But since Republicans are already vowing to insist that any appointee disavow any increase in tax revenue, it makes sense for Democrats to reciprocate.
One idea making the rounds, which was first floated by Think Progress, is to demand that Nancy Pelosi and Harry Reid — who each appoint three members to the committee — pledge to only appoint people who will vow to hold the line on core liberal priorities.
At her presser today, Nancy Pelosi was asked by a reporter if she would do that, and she came close to endorsing the idea. Asked if she would “require” that her appointees to the committee draw a bright line protecting Medicare, Pelosi replied that protecting Social Security, Medicare and Medicaid benefits is a “priority” for Democrats.
Wait. Think Progress says the red line is revenue. Sargent is defining the red line as no entitlement cuts -- or, at least, quoting Pelosi sort-of defining it that way. These are completely different things!
You could agree to entitlement cuts on the condition that they come attached to more revenue. Think Progress's criteria would allow that, while Sargent's wouldn't. Meanwhile, Sargent's criteria would allow huge cuts to discretionary programs with no entitlement cuts or revenue, while Think Progress's would not. [Update: upon closer reading, Sargent is defining the criteria in terms of both revenue and entitlements.]
Personally, I like the Think Progress idea a lot more. I'd add my own twist to it. I'd insist on revenue as part of the deal, and I'd also insist that the revenue come outside of the framework of the Bush tax cuts. They can't agree to lock in large segments of the Bush tax cuts, sunset others, and define that as a revenue increase. Just leave that to 2012.
On the other hand, there is room to play with things like the Alternative Minimum Tax. That, as I've explained before, offers a path to raise revenue while not technically increasing taxes. I'm not going to go through my explanation again -- read my explanation if you're curious -- but it offers a way to increase revenue over the likely baseline if Republicans are inclined to cut a deal rather than sock it to the defense and medical industries.
The one commonality between all the liberal positions is the common belief that another all-cuts deal should not be acceptable. The default is a better option, even though it stinks.