The New Republic

The only things that Judis somehow forgets to mention are that the Bush tax cuts that weren't permitted to expire were made permanent and the payroll tax holiday expired. Thus, for a large percentage of households, particularly those who spend their income, household income has been reduced in favor of continued tax reductions for those least likely spend it. That is contractionary, making it a little too soon to start cheering the recession avoided. This is particularly so because, as Judis himself points out here as he has in the past, taxing those who don't spend their income and spending it is the fastest way out of recession. Not taxing them and raising taxes on those at the bottom who are compelled to spend their income has, to no surprise, the opposite effect. As well, income tax increases are now off the table for the indefinite future, which means there will be no revenue increases to balance impending spending cuts -- Obama's purported approach -- unless we are talking about regressive tax increases or benefit cuts that will reduce spending dollar for dollar. How much will government spending now be reduced in the next round because of Obama's foregone revenues? And why is that not likely to induce recession when combined with the regressive effects of the deal just negotiated? I have an uncle who always wins in the market because he doesn't count unrealized losses and never realizes them so that he doesn't have to count them. Judis seems to engage in the same sort of accounting as my uncle. If you somehow omit discussion of the negatives of what Obama just did, well then, I suppose it is a stunning victory. Taxes went up on only the very richest and those who work for a living leaving a large swath of the upper middle class untouched, and most of the Bush tax cuts were made permanent, an outcome undreamt of two days ago. Some victory.

- roidubouloi

January 3, 2013 at 12:54am

"The fiscal cliff deal took tax rates out of the discussion. What’s left are spending cuts." Yup.

- roidubouloi

January 3, 2013 at 12:56am

See Timothy Noah's piece. He has by far the better argument about the real consequences of this deal.

- roidubouloi

January 3, 2013 at 1:37am

Which are very likely to hit the poor. Hell why not, poor people take no responsibility for their lives and have no lobby.

- Sophia

January 3, 2013 at 1:38am

Help me out roid. First, I don’t understand this statement: “Taxes went up on only the very richest and those who work for a living leaving a large swath of the upper middle class untouched, and most of the Bush tax cuts were made permanent, an outcome undreamt of two days ago.” Are you saying that taxes went up on “those who work for living” (whom you are apparently distinguishing from the upper middle class) because the payroll tax relief was ended? Wasn’t that relief ended also for the “upper middle class”? Are you saying that the upper middle class can more readily absorb the end of the payroll tax relief? More fundamentally, what precisely is your issue with the extension of the Bush tax cuts? That it is “permanent” rather than temporary? That the threshhold is 400k rather than 250k? (I understand that much of that difference was made up for with caps on certain deductions.) Even more fundamentally, perhaps you have outlined it somewhere else, but could you explain what the package is that you think Obama could have and should have negotiated? It seems to me that there is a major tension between two objectives here: (1) addressing unemployment and a sluggish recovery, on the one hand; and (2) addressing the size of the debt and deficit, on the other hand. My view is that Obama’s major failing is allowing the discussion to be diverted from the former to the latter. Dhurtado

- NR143296

January 3, 2013 at 8:02am

Cloud. Silver lining. Did Judis volunteer for this assignment, or did he draw the short straw? I must say that counting on Republicans to self-destruct is an odd strategy for Obama and the Democrats. It's comparable to counting on winning the lottery for retirement. Good luck with that.

- rayward

January 3, 2013 at 8:47am

Roid, what is a "permanent" tax rate anyway? Remember the 1980's and 1990's, tax rates on income, cap gains and payroll taxes changed approximately every 5 years or so. But all of those rates were "permanent", and did not have a sunset provision. The only reason the Bush ones did was because the GOP utilized a procedural gimmick to get them passed in 2001 and 2003 when it didn't have 60 votes to overcome a filibuster. I can't predict the future any better than the average Mayan calendar-maker, but I can reasonably foresee a time in the near future when some of the current income or capital gains or other tax rates may go up (or down) as part of some budget deal or other. Past is prologue, after all.

- wildboy

January 3, 2013 at 9:06am

Increasing income tax rates requires special dispensation from God, something unlikely to happen anytime soon; indeed, the "deal" didn't increase income tax rates - it cut them for those earning less than $400,000 ($450,000). The last increase in the payroll tax rates (and the concomitant increase in the "wage base") occurred in the 1980s when Reagan was president and the really dumb Democrats fell for Senator Dole's plan to "save" social security, it's just that the increases were phased-in over a long period ("clandestine" tax increases for working Americans only, turning many of them into tax protesters and Republicans). Republicans love the regressive payroll tax: it's the "flat tax" of their dreams. What this "deal" means is another whopping increase in the regressive payroll tax to "save" social security and grandma's Medicare. Noah wants to scrap payroll taxes; Republicans want to increase them. It's simple.

- rayward

January 3, 2013 at 9:53am

Greetings, dhurtado, I am being a bit general, but by "those who work for a living" I intend those whose only source of income is their labor. As you go up the income scale, people start to have assets, even if they are not tangible assets -- say the value of the practice of a surgeon, something that can eventually be sold. Of course, this description does not absolutely conform to the income hierarchy, but it does pretty well for a summary description and also says something about the nature of the economic interests. The poor and working class don't have capital gains and hence don't enjoy that preference, a big piece of what keeps our tax system from being progressive. In this deal, payroll taxes, which are most of the taxes paid by "those who work for a living," that is those who have exclusively labor income, went up. Taxes went up for those with income above $400,000 (and somewhat for those with income above $250,000 due to loss of exclusions, etc.). But income between #113,000, where FICA ends, and $400,000, was largely untouched. Overall, this is surely contractionary, and it means that the system is overall less progressive today than it was on December 31. Do see Timothy Noah's piece. Of course, tax rates are not the laws of physics, and therefore not "permanent." But what that term has always meant in this context is the elimination of the automatic expiration of the Bush tax cuts, something the Republicans have long sought but not been able to achieve. Now they have it. Why? How did that get into the deal? It was not even on the table at the end of the year. This has the disastrous impact of locking in a structural deficit in the operating budget. What we should have is a deficit in entitlements, for demographic reasons, and balance or preferably surplus in the operating budget. Rayward is exactly right about the consequences. With income tax rates off the table until we have a strong economy plus firm Democratic control of both houses of Congress and the presidency all at the same time, and a structural operating deficit, the pressure will now be on entitlements to reduce deficits. This means either increases in regressive taxes, the payroll tax, or cuts in benefits, or both, all of which are regressive, unless you think that means-testing, a progressive approach, is likely. I don't. This is the Holy Grail for the right, and they are much closer to achieving it today than they were before Obama made this deal. I find it hard to believe that if Obama had been willing to stick to his $250,000 line and go over the non-existent cliff, he could not have sweated a better deal from the Republicans. How long were they going to resist a temporary extension of the cuts for under $250,000, a temporary extension of the payroll tax holiday (why should only the upper middle class continue to get a tax cut?), plus middle and lower class tax credits and UI relief? Every single element of that package is politically popular while increasing taxes above $250,000 is unpopular. The Republicans, who claim only to want to cut taxes, would have been resisting popular tax cuts for most everyone merely to hold out for tax cuts for the rich. If nothing else, the Republicans would have been clearly on the record with their indifference to all but the wealthiest and, in the end, surely Obama could have had a deal at least this good. There was no downside to letting the Republics live openly in public with their own policy choices, at least for a while. And, surely, making the Bush cuts permanent was would not then have been part of the deal. It is indeed just about as simply as rayward says. Republicans want regressive taxes. They don't mind benefits as long as the full burden of them has zero redistributive effect, because they know that those who work for a living cannot possibly afford them if there is no redistributive effect. They have hated social security and Medicare from inception, they still do, and they are looking to dismantle them. They are not in reality at all unaffordable, unless you believe that we have to put the elderly out on ice floes because we do not have enough GDP, but the Republicans aim to dismantle them by crippling them financially. As I said, they are much closer today than a week ago, and Obama has already indicated a willingness to cut benefits. The Republicans campaign rhetorically on protecting benefits and then use their hostage-taking tactics to get Democrats (like the dumb ones rayward refers to) to do the dirty work of cutting them in the name of fiscal responsibility (see the stupidity call Simpson Bowles for example). That is up next as the Republicans use the debt ceiling to start extracting just those concessions, constantly drumming the lie that we cannot afford so-called entitlements. Bloodying their noses good by stoking public ire at their tax demands would, if nothing else, been a vastly better way to enter the next round of negotiations, even with the same lousy deal that Obama just made. Had Obama demonstrated that he knows exactly how to punish them, and had the will to do it, we would be way better off. That required going over the cliff. Obama wouldn't.

- roidubouloi

January 3, 2013 at 11:08am

Put another way, it was much safer to play chicken with the Republicans over the sunset of the Bush tax cuts than it will be over the debt ceiling, and crippling them now in the eyes of the public would have set up that negotiation for success. Obama let them dodge the easy bullet and actually emerge with the heretofore goal of making the Bush cuts permanent. He shot himself and us in the foot. My mind gropes for an explanation of Obama's fecklessness. I know he is not stupid. Hence, the only explanation I can come up with is that his image of himself as above partisanship -- an absurdity in our system -- makes him always desperate to make a deal. That weakness is clear to thugs like the Republicans and they don't fail to take advantage of that. I think he also does not have the ruthlessness to punish them for their excesses. He feels better letting them walk away than polishing them off. They see that weakness too and take advantage of it. I do not otherwise know how to explain Obama's behavior.

- roidubouloi

January 3, 2013 at 11:15am

heretofore unachievable goal of making the Bush cuts permanent.

- roidubouloi

January 3, 2013 at 11:15am

Roid, I agree. But, for once, I think Brooks is right: "The core thing [the fiscal deal] says about [the Republicans] is that they want to reform entitlements and cut spending, but they can’t actually propose any plans to do these things because it would be politically unpopular. This is a terrible problem for them." Here is the political landscape, as I see it. Tea Party activists are already threatening to go after House Republicans who dared vote for the deal. There are 85 of them. Let's say 60 get challenged, and 40 challenges succeed. What we have, then, is the Mourdock/Akin scenario: perfectly safe seats handed over to the opposition because of batshit crazy candidates. Yes, there is the odd Cruz, but by and large, politically speaking, you have two sets of dynamics at work. First, the Republicans will fracture even more and will put even more seats at play; and second, the Republicans will have to go after their own constituency by proposing cuts, instead of sitting on their asses hoping for the Democrats to do the dirty deed for them. I go back to the point I made before and that, amidst several snarky posts, you ignored: the feckless community organiser negotiated the fiscal cliff you love so much when he had no negotiating room at all: gun to head and elections coming up. How that he is a politically stronger position, why do you think he will not be able to get as good a deal as what he got when he was weak? The fiscal cliff was also his deal, and back then, you and Aaron thought he was weak and ineffectual and whatnot. Now you think it is the best thing since a Tip O'Neil House, and Obama is weak and feckless for giving it up. It does not make sense. Ray: "What this "deal" means is another whopping increase in the regressive payroll tax to "save" social security and grandma's Medicare." For a median income of $50 K, $20 per paycheque. Not "whopping". What I don't understand is why removing the sunset from the payroll taxes is considered a payroll tax increase, but doing the same thing to income levels above $450 K is simply "going back to previous rates"?

- icarus-r

January 3, 2013 at 11:16am

I so wish that public intellectuals, particularly those who presumably do in fact understand this distinction, would try and make it in their utterances: "raises tax rates back to 39.6 percent for those making over $400,000" This is just wrong and it confuses an extraordinarily high percentage of people, thus distorting the debate. Why not say "for income over" which is fewer keystrokes and far more lucid too? Tax rates do not distinguish between people making over and under a certain amount, only between income under and over that amount. Please!

- boyski

January 3, 2013 at 11:19am

ARGH! Obama didn't win AND he wasn't "rolled." The Clinton tax scheme which produced budget surpluses and the most robust economy of my lifetime have had at least half and arguably more of their increased revenues obliterated. Anyone who cares about concentration of wealth has to feel a little sick about an estate tax that doesn't kick in until $5,000,000. And anyone who follows political history knows that Dem leverage is currently about as high as it's likely to get in this gerrymanderred nation. Obama made a very defendable choice. He avoided a lot of short-term pain for most Americans by risking a lot of long term pain but believing, with reason, that he can address that in the upcomming months. The shades are very grey.

- Lymon1

January 3, 2013 at 11:52am

icarus, you take me to task for agreeing with something seattle said and then publicly express agreement with David Brooks? Even if your political analysis were right, the timeline is wrong. The next hostage-taking is in a matter of weeks. All the Republican political fracturing and losses you describe, even were they to occur, will not affect that. You are confusing the deal over the fiscal cliff, that emerged from the debt-ceiling hostage crisis, and the last extension of the Bush tax cuts where both aaron and I, and a lot of other people, were stunned that Obama walked away from the increase in taxes on income above $250,000. But at least he got a payroll tax holiday out of that deal. He just made an even worse deal after winning re-election having campaigned on raising taxes on income above $250,000. He moved to $400,000, abandoned the payroll tax holiday, and made the Bush cuts permanent. How on earth did he not get rolled? Or is it indeed the reality of being politically accountable that led to a better deal the last time and allowed him to play at statesman at the country's expense this time? The fiscal cliff deal wasn't really a deal at all so much as an agreement to defer the negotiation until after the election. I was a harsh critic at first but came around once I understood it (not always easy to do in the first reports). It was merely an adjournment with a face-saving way out for the Republicans. With this tax deal, the clarifications as they emerge have only made the deal worse. The very least that Obama could have demanded for making the Bush tax cuts permanent, a hitherto undreamt of concession, was to move the debt ceiling forward until it matches the budget cycle, so that the negotiation is over spending levels, with government stoppage as the threat, rather than government default. A debt ceiling sufficient to finance any adopted budget should be something the president insists on, always, now that we understand the potential for the debt ceiling to be used as a weapon. So, Obama did a lousy job on the first tax cut negotiation, a worse job on the second, when he had more leverage and the political capital of having won his re-election, successfully kicked the can down the road on the first debt-ceiling hostage taking, but failed to use his maximum leverage on taxes to set up the second debt-ceiling hostage taking, either by bloodying the Republicans for their intransigence or taking away their debt-ceiling weapon. This is in your mind successful negotiating? What would failure look like? Switching parties?

- roidubouloi

January 3, 2013 at 11:57am

No tax rates are permanent, as are no other results of legislation. Any incoming Congress and president can completely reverse what previous lawmakers have done. That's the beauty (or the ugliness) of elections. As our Ayn Randian business community continues to leave more and more Americans dying in the dust, we may come to the day when a wildman Left president and a Left Congress install socialist medical care in our nation. It's coming--and it may just be the start. There are only so many years when banking titans can laugh madly at us peasants from on high. Everything that goes up must come down. 2008 was proof of that.

- magboy47.

January 3, 2013 at 11:59am

Just compare this tax cut deal to the one a year ago, lymon, when, by all accounts, Obama had less leverage and had to face re-election. That deal was a helluva a lot better than this one. Maybe it was the prospect of facing re-election that stiffened his spine a bit a year ago. With the election behind him, when he could have been tougher, he collapsed. Must be fun to be a statesman and not have to be a politician any longer.

- roidubouloi

January 3, 2013 at 11:59am

"Just compare this tax cut deal to the one a year ago, lymon, when, by all accounts, Obama had less leverage and had to face re-election." This is the point I keep making Roid. You keep saying that the feckless Obama does not know how to negotiate, etc.; and I keep reminding you that back then, with less leverage, he got the cliff of which you are now so enamored. I don't agree that he somehow stiffened back then and got statesmanlike now; he is who he is. I agree with Lymon - he took the deal he could get, and we will have to see about the next one. In 2011, he offered three to one in cuts and taxes, and got rebuffed. Now, he got $600 billion in taxes and no cuts, and is offering one to one for the next round. Clearly, his position has improved since then.

- icarus-r

January 3, 2013 at 12:05pm

"A debt ceiling sufficient to finance any adopted budget should be something the president insists on, always, now that we understand the potential for the debt ceiling to be used as a weapon." That is precisely what the next two months will be about. Republicans will have to spell out spending cuts. Obama will put forward tax loophole closings for incomes above $250 to equal the proposed spending cuts. Not a bad negotiating position to be in.

- icarus-r

January 3, 2013 at 12:08pm

"The fiscal cliff deal took tax rates out of the discussion." There is still the capital gains (and dividends) preference to be gotten rid of, which has not been helping the economy.

- Nusholtz

January 3, 2013 at 12:19pm

Wow. All these negative comments about the Obama deal and the Judis article. Maybe I missed something, but none of the negative commenters said they and their children are relying on unemployment benefits-- not to mention all the other real benefits for real people that the Congressional Republcans would like to kill, but have been prevented from doing so. Obama got "for the people" real help. In the process, he laid down markers for the next round and, I suspect, increased his stature - and poll numbers - among the American people. As to the tax side, Obama got 75% of what he was after (tax obligations will, in fact, go up on everyone with $250,000 of adjusted gross income). As to the Social Security tax holiday, most Americans never knew they got one, and polls consistently found that they disagreed with the whole idea of one. If Obama follows Judis's advice and treats the next round as a political campaign, I think the result will be OK. My only suggestion to Obama is that he ought to insist that Immigration Reform legislation be part of the next legislative round, and campaign like Hell on the issue. It will broaden his argument and deepen the support of the base. If the Republicans refuse, everyone will know where to lay the blame-- and Obama will have set the stage for Act 3.

- CABChi

January 3, 2013 at 12:53pm

I think JBJ has it right: by decoupling taxes from spending the GOP will no longer be able to hide its true intentions (cutting government down to 18% of GDP) behind populist tax-cutting rhetoric, but instead is forced out into the open - it will have to make some hard choices and likely alienate large portions of its shrinking constituency.

- Hamburger

January 3, 2013 at 1:52pm

The real point of dispute here is about the consequences of going over the cliff. Roid and others assume that there wouldn't have been any real consequences, and that going over the cliff would have increased Obama's leverage. I'm not sure, though. With markets tanking on day one as they realize that it's real, talk of recession, constant tut-tutting and hysteria from the media, immediate cessation of unemployment benefits, general uncertainty about tax rates and the alternative minimum tax and the need for messy retroactive fixes as the filing deadline approaches, government preparations for major cuts, etc., it's hard to know whether the current pro-Obama narrative would have shifted against him and whether he could have possibly gotten anything better -- and quickly -- in the ensuing chaos. Seems doubtful to me. With a "big deal" clearly not going to happen, and with Dems basically getting what they want and could realistically achieve on taxes, the issues are clean now for the public, and Obama is already hammering away on the debt ceiling, positioning Republicans as holding the country hostage on the non-negotiable point of paying the bills we've already run up, all so that they can eviscerate well-liked programs. Meanwhile, the deficit does need attention, so long as any significant belt-tightening is postponed. Obama will have moments of high visibility to frame the debate for the public -- the inauguration, the State of the Union -- and continue to enjoy popular support and approval, which I think stems in no small part from the fact that he is seen as the reasonable sort willing to come to reasonable compromises, a reputation enhanced by the tax deal. Liberal militancy may play well in the pages of TNR, where the theme of Democratic and Obama "weakness" is a running complaint among some, but not I think among the media generally or among the public.

- JakeH

January 3, 2013 at 3:33pm

Let's see -- it's been two entire years of financial hostage crises, leading to a "fiscal cliff", which the Republicans first created, then wailed about. And the most recent month's attempts by both McConnell and Boehner to make pseudo-compromises which they then had to filibuster or withdraw themselves. After all of that, and the "lines in the sand" of $100K, $250K, "No debt-Ceiling Debate" -- after all of that, all we get is 39% on over $400K and a two-month delay in the spending cuts? You can only conclude that Obama didn't get rolled, IF you accept the Republican's idiotic position that no tax increases are ever allowed. Instead, Obama has now given the Republicans yet another opportunity to excuse their irresponsible behavior as "being Obama's Fault". Sure, perhaps Obama folded because he "feared" that Republicans would be even more intransigent in January if there were no deal. But that intransigence could easily, obviously, be laid at the Republican's feet. And at that point any action taken would be a "tax-cut". Instead Obama has taken all the leverage generated over two years of pointless negotiation, and wasted it on a mere 4% tax increase on those over $400K. So yes, if he wasn't "rolled" now, he (and America) certainly will be in two months, when both the spending cuts AND the debt-ceiling AND the spending bills all get negotiated at the same time. It's 2011 all over again, and Obama's yet again given the Republicans the tools needed to roll him.

- AllanL5

January 3, 2013 at 3:33pm

There are two separate issues we're debating. In terms of the deal itself, it's a small deal--it's neither great nor terrible. It raises taxes somewhat significantly on most people earning more than $250k (first via capping deductions, then, at the $400k mark, raising the marginal rate). It also preserves key tax credits for poor people (EITC, Pease) and unemployment benefits. It doesn't extend the payroll tax holiday, but neither does it cut entitlements. In terms of future negotiating leverage, I don't think Obama is out of the woods by a long shot. The next battle isn't about specific spending cuts or taxes, but the debt ceiling. The GOP will simply threaten to go through the debt roof (first the fiscal cliff, now the debt roof), and I think Obama might back down in fear of it. I think this because Obama consistently said that a debt ceiling deal must be a part of the fiscal cliff resolution--but then he caved at the last minute. My assumption is that Obama decided to cave on that issue because he felt he could deal with the debt ceiling on its own--that, indeed, he learned from last time and will simply demand, over and over, to raise the debt ceiling to pay for things already legislated. Indeed, his willingness to publicly bully the GOP was encouraging this round. Or maybe he's willing to rely on a more extreme, perhaps Constitutional, end-around. I hope he has a clear strategy. But my hope doesn't eliminate my worry--and there's support for both hope and worry in Obama's most recent negotiation.

- polcereal

January 3, 2013 at 3:51pm

Jake: In all the economic analysis and speculation as to bargaining and negotiating and so on, no one really raised the point that you have just made. The standard media narrative over the past umpteen years of Republican idiocy has been "pox on both their houses." The Economist, commenting on the election, said, "Now, hug a Republican" and repeatedly refers to the President's having driven too unreasonable a bargain on entitlements. Given what we know of this tendency, to expect the media to react to the fiscal cliff by assigning blame to the Republicans would be foolish. More to the point, as the crisis deepened, we could have expected "media hysteria" to actually start working against Obama - right before his inaugurationand State of the Union. This is where I come from: Boehner devised Plan B to humiliate Obama; his own caucus refused to support tax "increases" to incomes above $1 million. Right there, you have the crazies signalling exactly how open they would be to an Obama grand bargain. I ask myself this: if they can't agree with their own leader to vote even symbollically for a tax measure intended to humiliate Obama, how likely is it that they would have agreed to anything Obama was going to offer? Would they have voted for the "Obama Tax Cut Act"? The threat of the Defense sequester? They are prepared to push the US into default; you think they care about government shutdowns, defense cuts or deep Medicare cuts? Let us concede the point that Obama's deal is not great. By their own reckoning, the defenders of the fiscal cliff jump have yet to provide a counterfactual that accurately captures the points you have raised in your post.

- icarus-r

January 3, 2013 at 4:12pm

"The real point of dispute here is about the consequences of going over the cliff. Roid and others assume that there wouldn't have been any real consequences, and that going over the cliff would have increased Obama's leverage. I'm not sure" I agree, Jake H.

- arnon1

January 3, 2013 at 5:03pm

How can any sane person claim to be so concerned about the debt they got themselves into that they decide the best response is to stop paying their bills? The lunacy and duplicity of the hollow vapid GOPer claims versus their tactical response leads to the definitive diagnosis of severe hypocritical schizophrenia in tea party drag. What a bunch of morally bankrupt phonies.

- smabry03

January 3, 2013 at 5:46pm

icarus, You keep confusing the first negotiation over the Bush tax cuts, when Obama backed away from his pledge to see rates rise for income over $250K in exchange for the payroll tax holiday, with the creation of the fiscal cliff. The latter emerged from the debt ceiling hostage crisis. The fiscal cliff was a draw or better in that entitlements were excluded from the deal, the sequestration was at least as noxious to the Republicans and the Democrats, and the debt ceiling fight was kicked down the road past the election -- something both sides actually, quite clearly wanted to do. In the first tax cut deal, Obama at least got a quid pro quo -- the payroll tax holiday -- for backing away from letting the high end tax cuts expire. Nothing was made permanent. This deal is strictly worse. He got nothing for backing up from $250K to $400K and, worse, made the rest of the Bush cuts, the cuts that Democrats have been railing at for years, permanent, once again legitimizing Republican positions and abandoning Democratic positions to do it. He didn't make the Republicans pay for their extremism, he legitimized it and stuck it to most households in the course of doing so. He let regressive taxes go up and very high-end taxes go up. The system is more regressive today than on December 31 which is contractionary in terms of its macroeconomic impact. There is nothing significant to cut in the budget at this point other than defense -- not going to happen -- and entitlements. The rest of the government has already shrunk 5% as a share of GDP since 2000. So, now Obama goes into another hostage-taking crisis having left a lot of revenue increases on the table -- because the Bush cuts are now scored as permanent among other things. The only other sources of deficit reduction, realistically, are defense -- not going to happen -- regressive taxes, reduced entitlement benefits, or means-testing of entitlement benefits. Entitlement cuts and regressive taxes require Democratic concurrence. The operating budget (so-called discretionary spending) requires Republican concurrence as would means-testing entitlements. Is Obama actually willing to face down the next debt-ceiling hostage-taking in order to protect entitlements and avoid regressive taxes? I would, making sure to stop paying exactly those items that hurt Republican districts the most, especially any form of revenue-sharing with states that generally flows from blue to red. But if Obama wouldn't sweat them over the tax cuts, the chances that he will do so with much more at stake appears to me to be nil. As for the adverse consequences of letting the Bush tax cuts expire, we are going to get most of them because of the expiration of the payroll tax holiday. So, we get the worst of the macro-economic effects with little to show for it and a worse hand in the next round. Bad deal. Kicking the sequestration down the road was no victory. The Republicans were happy to do it because, as I pointed out, the sequestration, without the debt-ceiling gun to the head, is at least as anathema to them as to the Democrats.

- roidubouloi

January 3, 2013 at 6:27pm

The worst of the continuous Democratic legitimation of Republican extremism is that JakeH can say with a straight face that Obama sticking to his pledge not to renew Bush tax cuts for incomes above $250,000 would be "liberal militancy," and then have icarus concur. That is how cowed the left has become in the face of Republican terrorism. To object to insanity is now considered militancy. Allan responded quite well to every point made or implied by Jake, icarus. Perhaps you missed it. But you, like Obama, appear terrified at what the Republicans will do to the country if Obama doesn't keep rolling over to appease them. I am not terrified. I think there would be a lot of pain, felt quickly, and the Republicans would not be able to endure the pressure of public opinion resulting from their doing what they threaten. Either way, I don't think the country can afford to live with Republicans perpetually holding a gun to our heads. I would rather let them fire it and demonstrate that, ultimately, they are both indifferent to the fate of millions of Americans and impotent to do anything other than wreck. THEN we have a route back to political sanity. Continuing to appease them is not the answer. Even if we went through the pain and Obama had to back off and make huge concessions in order to bring it to a halt, we would still be better off with the public seeing what the Republicans are actually willing to do to us. Then, at the next election, Americans can either decide that this is what they want, or not. If they do, they do. Obama keeps covering up for the Republicans by legitimizing them with his deals, making it impossible for most Americans to understand what is going on.

- roidubouloi

January 3, 2013 at 6:42pm

Obama should have bloodied their noses when he could do so with relatively low risk. He couldn't. He will then roll over the next time when the stakes are much higher, and they will be stimulated by the fact that he rolled over this time to take it to the edge or over. Let's see who blinks first, icarus. Then you can explain to me again what a brilliant statesman Obama is.

- roidubouloi

January 3, 2013 at 6:45pm

so roid, what are you going to do about it? Join drofnats and vote Republican to sweep in some glorious progressive revolution after Republicans destroy America? You do understand, don't you, that your argument is pointless. you said on anther thread I am screwed though I don't know it yet (sounding awfully like drofnats who has been predicting an imminent depression for 2 years now), but there is nothing I can do about it. without Seniors Republicans are well and truly boned, they absolutely need Democratic cover to pass anything on entitlements, but if they play hostage Democrats can backload it and run on restoring everything that is cut. Now to be fair I think a lot can be done to shore up both Medicare and Social Security, raise the retirement age to early retirement at 65 and full retirement at 70 for people born 1980 and later, raise and index the cap while raising payroll, negotiating for drugs in Medicare, a chained cola with provisions for the poor, some means testing and co pays for medicare (while still retaining its universiality) You think this is all Obama, without Reid and Pelosi signing off whatever he does there is nothing he can do. I simply can't see Republicans axing entitlements and getting zero Democratic support in the house with it passing the Senate no matter what Obama does. Obama broke the Republicans Hastert rule, do you really imagine Boehner will want to go down in history as the man who brought ruin to the world's economy because he won't let a bi-partisan set of entitlement reform to pass Congress? It will only take, at most, 20 republicans to vote for whatever is done. And as to payroll taxes reverting to their normal rate. Give it a rest. Erick Ericcson over at Redstate pushed for a permanent reduction in payroll tax rates because he knew underfunding it would lead to its death. My family can survive with the $20 a week less. You keep pretending that Obama could have gotten the eitc, ui extension, child tax credit, etc. if he played brinkmanship. You said before you can afford whatever happens so for you it is nothing more than an exercise. For millions of Americans we simply couldn't risk it. So yes, I am happy enough with this (is it perfect, no. I would have preferred there be a sunset, but I wasn't there and it wasn't my call so for now I am happy to take what I can get so if you will pardon me I won't be killing myself in utter despair as you seem to think I should be doing)

- blackton

January 3, 2013 at 6:47pm

Roid-I don't understand how your brinksmanship is different from Republicans'.

- icarus-r

January 3, 2013 at 7:53pm

No, blackton. Be happy. You think you have yours. Good luck. icarus, does this mean that you don't understand the difference between making threats and being threatened, the difference between doing bad things, and telling a bully that you will not be bullied? Yes, it is brinksmanship because the other guy is threatening to take you over the brink. If you don't know how to deal with such threats, you get screwed. If you think the way to deal with a serial hostage-taker is continually to appease and wait for the next round -- rather than refuse to be held hostage -- then be happy along with blackton. Good luck. There is no such thing as a bipartisan set of entitlement reforms, blackton, or we would long since have had them. Since no one can ever prove a counter-factual, you can both be content that everything is for the best in this the best of all possible worlds. No need to think further about anything. You won't be at the table, I won't be at the table, nothing of what we say here can affect any outcome. In the next round too, Obama will achieve the best possible outcome, because it will be the only outcome that will in fact have occurred in the actual world. He will be a great statesman. The country will, by definition, achieve the best possible outcome. Obama will be Obama, and we can have no other president for four years. It is all foolproof.

- roidubouloi

January 3, 2013 at 8:23pm

"Either way, I don't think the country can afford to live with Republicans perpetually holding a gun to our heads." Broadly I agree with the spirt of your comment roid, but a few things are worth mentioning: 1) Where the hell does this implication of permanency come from? There are House elections every two years and in 2006 they rolled over to the Dems and in 2010 they rolled over again to the GOP. Historically, they are not bad odds for 2014. 2) That said, I think it's a valid point to emphasize that the gerrymandering of districts helps incumbents and that at the moment it's helping a lot of Republicans especially in states where their party was able to supervise the redrawing of the lines -- and that's a lot of states potentially, as the GOP has been strikingly successful recently on the statehouse level including in places that were traditionally pro-labor. 3) Therefore, although it's not unreasonable to look at the House reverting to Dem control in two years time, it's not necessarily anything you (or the administration) would want to bet on. 4) Taking the foregoing into account, while it might be psychologically possible to win the stand-off in the way that you suggest, purely practically the GOP House majority is there for the next two years and might be there for longer. And more importantly: it is not a given -- as I've tried to point out to drofnats with actual evidence that he has consistently ignored -- that confrontation with the Republicans allied with more left-wing Democratic positions will cause public opinion to break our way at election time.

- ironyroad

January 3, 2013 at 9:44pm

Nothing is a given, irony. But what it will now take for an income tax increase is a Democratic House, Democratic Senate, and a Democratic president. I don't think that will never happen again, but part of the job of the Democratic president is to help it happen. And part of the way in which it happens is by helping the Republicans take politically unpopular positions while making it absolutely clear that these are Republican positions. Every time Obama cuts a deal, it muddies the waters. If it is a good deal, fine. I don't, like the Republicans, advocate making things worse in order to defeat political opponents. Just the reverse. But if the Republicans are trying to force a bad deal, or are making hostage-taking threats, it is better to say no and stick them with the consequences of their politically unpopular, even overwhelmingly hated, positions. This accomplishes two things: (1) it disciplines them so that they are less inclined to obstruct things that are good for the country, allowing Democrats to govern more effectively and politically successfully, and (2) it renders Republicans unpopular when they are obstructionist, forcing them to take the blame for their behavior. It's a two-fer, Dems achieve more and Republicans look worse. I continue to believe that it would have been very healthy to have Republicans barring the door against middle class tax cuts, middle and lower class credits, and UI relief, AND a renewed payroll tax holiday, even if only for a couple of weeks, even if Obama then had to concede all the same things. He could have gone on TV after making the deal and explained that, while he deeply regretted extending the (unpopular) upper income tax cuts in light of our fiscal deficits, he was compelled to accept them by Republican intransigence that was damaging millions of working families, millions of the still unemployed, and the very prospects of economic recovery. Even if had caved, he would have won. The public is not going to parse what happened here, and a lot of people are going to see their take-home pay drop. The Democrats will be blamed for that. The genius of Republican obstructionism is not merely to throw sand in the gears, but then to get the Democrats, who are desperate not to have sand in the gears, take the blame for adopting what are unpopular Republican fiscal policies. We need to let people see the gears, the sand in the gears, and the Republicans standing there next to the gears holding the bucket of sand. Otherwise, we will not see that Democratic control of the House, Senate, and presidency for a very long time.

- roidubouloi

January 3, 2013 at 11:12pm

Just look how far and how fast Obama moved from his opening offer. What kind of negotiating is that? Everyone now knows that any offer Obama makes is pure bluff, quickly abandoned. He moved from $1.6 million of revenue to $600 billion in a blink of an eye.

- roidubouloi

January 3, 2013 at 11:14pm

Roid- I’m not sure I agree with the premise that because I have non-liquid assets (e.g., the house I live in), or have paper gains (or losses) on a retirement account, I therefore have sources of “income” other than my labor. But even if I stipulate that equity in my home or gains on a 401k constitute sources of income, I cannot agree that I do not work for a living (unless I am just imagining the 60+ hours I spend each week working for my employer). So I think it may be preferable for you to find some other nomenclature to make your point. Perhaps you mean to say those whose income is insufficient to require them to pay income tax but is nevertheless subject to payroll taxes. But that excludes probably at least a 100 million people who work for a living by any meaningful definition of that phrase. You say, “In this deal, payroll taxes, which are most of the taxes paid by "those who work for a living, ...." I don’t see how this can be true, unless you mean to limit “those who work for a living” to those who are not required to pay federal income taxes. Most if not all income tax rates are higher than the payroll tax rate. You further say, “Taxes went up for those with income above $400,000 (and somewhat for those with income above $250,000 due to loss of exclusions, etc.). But income between #113,000, where FICA ends, and $400,000, was largely untouched. Overall, this is surely contractionary, and it means that the system is overall less progressive today than it was on December 31. Do see Timothy Noah's piece.” Perhaps this is beyond my “pay grade,” but that is not obvious to me. It’s “contractionary” because ___? Because it represents less revenue than a broader tax increase would represent? I don’t see how it will affect consumption, other than to perhaps increase it. And the extension of unemployment insurance is also at least mildly stimulative. I appreciate your further analysis, but I still am confused about what deal you think Obama should have struck. A temporary (as opposed to “permanent”) extension of the Bush tax cuts with the threshold at 250k, and an extension of the payroll tax holiday? Dhurtado

- NR143296

January 4, 2013 at 8:26am

dhurtado, roid above said he would have been satisfied with this package only after a few weeks of high drama so he could have had the satisfaction of shouting "see, see, look at how bad Republicans are" and somehow teabaggers would have seen the light and Republicans would have lost in 2014. I checked the numbers roid, in Pa. Democratic congressmen won nearly 600,000 more votes statewide then Republicans but Republicans won 13 seats to Democrats 5. Romney won 12 or the 13 districts that Republicans won with the last being tied. Your capacity to believe that now, only now, would people have been woken up to what Republicans are about. And you think I am "happy"?? I am not happy with this situation. Pa. has a Republican governor, house, and senate, a large Republican delegation in the house and one Senator all because of 2010. There are two possible outcomes, if Republicans push it too far with this next round of talks and pushes the US into recession Republicans in Pa. will face a bloodbath, if Republicans don't and a deal is struck (one I think will be mostly smoke and mirrors with a lot of cuts down the line) then the simple passage of time will kill these old teabaggers in Pa. and I can get my state back. "There is no such thing as a bipartisan set of entitlement reforms, blackton, or we would long since have had them." There was previously under Reagan. Personally at this point I don't care if we never have them. If in the future we don't have the money to cover social security we can raise taxes then or cut benefits then or do both. The great thing is by then all of these teabaggers will be dead and America will be a near minority majority nation. Rich republicans ain't seen nothing yet.

- blackton

January 4, 2013 at 9:35am

I will take your point about the nomenclature, dhurtado, but for most Americans, they pay more in payroll taxes than in income taxes. This is why the range of average Federal tax rates is only from about 15% at the bottom to about 23% at the top. Of course, there is a large group of people who have both earned and unearned income. Raising taxes at the upper end, where the surpluses exist (income in excess of consumption and real investment) has de minimis effect on private expenditure and hence is not contractionary. Indeed, if what is taxed is spent, it is expansionary. Lower down, people spend virtually every dollar they earn, and more. They have little assets (inventory of money or things that can be converted to money) to cushion changes in their income. Hence, every dollar reduction in their take-home pay reduces their private expenditure, contracting the economy. Therefore, the tax structure is now less progressive, taxes at the bottom having gone up 2%, in the high-end middle but much less than that, and, given exclusions and such, but less than 4% at the top. Also, the changes were contractionary on balance principally due to the reduction of the take-home pay of those who depend almost entirely on their earned income. If you are going to start raising taxes in a weak economy, you do it first at the high end and last at the low end, rolling down the scale. It makes no economic sense to do so first at the high and simultaneously at the low end, leaving the high-end of the middle untouched. Certainly, not extending UI would have been contractionary for the same reasons. But it was in place. The net change from Dec 2012 to Jan 2013 is a reduction in the spending of the earning class. Just compare this deal to the last one on the Bush tax cuts. There, nothing was made permanent and Obama cut a payroll tax holiday as a quid pro quo for abandoning his insistence on a tax increase above $250K. This time, after louder and longer insistence on his immovability, he accepted both a higher threshold, $400K and, astonishingly, making the rest of the cuts permanent. What was the quid pro quo? Nothing. There is no payroll tax holiday. ____________________ I never said any such thing, blackton. You exaggerate for effect. I said that the fastest way to defeat the Republicans is to give the public a taste of what happens when the Republicans actually get to do what they want. If we are going to be pushed into recession, it needs to be absolutely, unequivocally clear that the Republicans are the cause of it. Else you don't get the bloodbath. You appear content to allow demographics to defeat the Republicans and to play prevent defense until then, conceding as much ground as necessary to prevent them from pulling the trigger on whatever threat. I am not. I would rather bring on their apocalypse, if they don't in fact cave in, and believe that the country has the capacity to heal itself once their perfidy is completely exposed and we no longer have packs of wild dogs attacking us. Hence, you insist that Obama should cave in as necessary to prevent them pulling the trigger. I think he should let them do it, if that is what they are really going to do, or expose their threats as empty. In any case, it would have been far safer to do this over the non-existent fiscal cliff than it will be to do it over the debt ceiling. Let the public get an aching belly full of Republican savagery now, rather than at the limit of the debt. You, however, think that anyone concerned about working people would share your desire to concede. I don't see it that way, as the disruption for everyone will be vastly worse if they pull they debt ceiling trigger and it is hard to tell what Obama will concede to stop them doing it. I would concede not a single thing because I don't think the country can survive with this terrorist threat as a constant of political life. I doubt Obama has that much nerve.

- roidubouloi

January 4, 2013 at 10:46am

Roid: I was typing on a playbook, so was cryptic. The results of your brinksmanship are much the same as the results of Republican hostage-taking, with the added problem that we know the Republicans are batshit crazy, but you would propose that we jump into the abyss with them on rational grounds. "Since no one can ever prove a counter-factual, you can both be content that everything is for the best in this the best of all possible worlds. No need to think further about anything." Nonsense. I just think that governance are politicking, while connected, are clear different things. I'm a middle easterner, for Heaven's sake - verbal brawling (at the very least) is in my blood. If you ask me, am I afraid of what these crazies are capable of doing? The answer is yes. Should they be resisted? Of course. Could Obama be more political and less apparently conciliatory? Perhaps. Should he worry about generations of Democratic and Black politicians coming after him about the consequences of letting Republican nihilists destroy the US economy? Not sure. You and Aaron have primal responses that I fully understand and, at a deep level even agree with. (And you know that in argument I don't take prisoners.) Aside from the fact that I don't agree with you guys that Obama does not know how to play the game, though, I think that the responsibilities of governing rightly shape Obama's politics post-election that neither of you is willing to accept or acknowledge. This, to me, is the critical point of departure between our respective positions.

- icarus-r

January 4, 2013 at 10:57am

"governance AND politicking"

- icarus-r

January 4, 2013 at 10:58am

"That Republicans suffered a rout, as the British did with the fall of France and evacuation at Dunkirk in 1940, is undeniable." This from Patrick Buchanan - not that I agree with him in any way - but that it's funny how we can't get away from WWII imagery- the mark of a truly impoverished discourse.

- icarus-r

January 4, 2013 at 11:10am

It was an epic scene, ick. Those who were there will never forget it. The parking lot under the US House of Representatives was the beach at Dunkirk, and brave Tea Party activists were the pilots of the fleet of little boats that rescued the broken GOP expeditionary force from certain annihilation. And that makes the Democrats . . . what? The Waffen SS?

- ironyroad

January 4, 2013 at 4:30pm

Democrats are, and always have been, the Vichy French.

- icarus-r

January 4, 2013 at 4:52pm

"I think that the responsibilities of governing rightly shape Obama's politics post-election that neither of you is willing to accept or acknowledge. This, to me, is the critical point of departure between our respective positions." I disagree, icarus. I think aaron and I share the view that there cannot be successful governance, despite having been elected to office, without successful politics -- ongoing politics, not just at election time -- being the foundation thereof. I don't think Obama understands that. I really don't. In this respect, he could not be more different from FDR, who surely understood that he had the crushing responsibility to govern through the Depression, the run-up to the war, and the war itself. But FDR knew his key task was to cultivate public support, and was not shy about knee-capping opponents if that is what he thought was required on an given day. The whole notion of statesmanlike governance in a democracy such as ours is actually preposterous, a fourth-grade civics fantasy. The Republicans, realizing that, have proved the point by demonstrating that consistent obstruction can functionally cripple the elected majority -- unless that is the elected majority is willing to give political battle. I see Obama failing to govern successfully because he will not shoulder the essential task of political leadership. One can argue about the best tactics in a given situation, but I seem him fundamentally failing to do his job, as I have since he botched the politics of the ACA.

- roidubouloi

January 4, 2013 at 11:30pm

Not that icarus needs me to answer for him, roid, but he did not oppose the notion that successful politics is necessary for successful governance. He said that the responsibility of governing should shape post-election politics. Do you disagree with that proposition? If you said that you did, I would suspect you of being dishonest. The more profound question is whether the responsibility of governing required Obama to make some concessions to avoid the risk that the following would come to pass for an indefinite period of time: an immediate increase in income taxes across the board; cessation of unemployment insurance benefits; immediate termination of the payroll tax holiday; and about $1 trillion in cuts to discretionary spending. I take your position to be: (1) had Obama stood his ground, the Republicans would have caved and would have voted for a package that included extension of the tax cuts on income below $250k, extension of the payroll tax holiday, extension of unemployment insurance, and deferral of sequestration (presumably because they wouldn’t want to be tagged with allowing taxes to increase across the board); and (2) even if the Republicans would not have caved prior to the sequestration deadline, had Obama continued to stand his ground, the Republicans would have caved in short order because they would not want to be in the position of failing to vote for a tax cut for 99 percent of taxpayers. But how can you be sure of that, particularly where there is a substantial portion of the Republican caucus that appears unwilling to support anything that does not involve deep spending cuts and reduction of the size of government, and appears willing to plunge us into the abyss rather than compromise their “principles”? I take your response to be that you can’t be sure of it, but you don’t care. Let the Republicans plunge us into the abyss, and let the public see who they are, and the public eventually will turn on the them and put progressives in power. It is just not clear to me that that is a risk we can expect the President of the United States to take, particularly because it would certainly involve a lot of short-term (or maybe long-term) pain for the very group of Americans that you now think is getting the shaft. Dhurtado

- NR143296

January 5, 2013 at 9:39am

I think Dhurtado has put the argument very effectively -- more effectively than I have, in any case. There is some legitimate doubt as to whether the Republicans would cave in precisely the manner roid predicts, but the thing that one should bear in mind is that the entire GOP approach -- and this was obvious in the election -- was to strongly suggest that where cuts would be made, they would be aimed at people who are in the eyes of their voters freeloaders and outsiders. The entire campaign against the ACA is clearly fueled by a deep resentment at people getting access to services that people who already enjoy such access regard as not entitled to those services. It's true that the achilles heel of the conservative fiscal warrior posture is the fact that they have to somehow convince their supporters that they will protect their entitlements and benefits while cutting or nixing other people's -- which is difficult in a system where the disbursement structure is generally universal and bureaucratic, but they seem to achieve it (at least to the extent they require). Add to that, that the recent elections have shown that a considerable number of mainly Republican voters live in a somewhat fact-free bubble in which they are basically convinced that Obama is stealing something that's legitimately theirs, and I think it's taking a chance to assume that these voters will suddenly wake up to world and pressure their congressional representatives to get real and act responsibly.

- ironyroad

January 5, 2013 at 2:25pm

Dhurtado, The entire point of politics, particularly in a democratic system, is governance. There is no dichotomy. That is the logical fallacy that I object to. You have to succeed politically, and that necessarily includes overcoming political opposition, in order to govern. The point of making the Republicans take responsibility for their insanity is that, until the public sees and holds them accountable, they will continue to be able to obstruct successful governance by the majority party -- and the Democratic party is the majority party. Accordingly, the very idea that Obama, once in office, can somehow abjure politics in favor of statesmanlike governance is objectively preposterous. And the only thing he has accomplished by trying is to land us in successively deeper shit -- the 2010 election, the debt-ceiling hostage crisis, and on and on. You do not defeat the terrorists by appeasing them, you beat them by making them anathema to the public. Until they are defeated, we will remain mired in the economic mess of their making. As to the fiscal cliff, there was not abyss, there is no abyss. That is absurd, hyperbolic rhetoric. Had we "gone over the cliff," we could at any time un-go over the cliff, unlike an actual cliff where, once you are over the edge, you are gone. You essentially advocate that Obama do whatever is necessary to prevent the terrorists from pulling the trigger because you think the risk is too great. I see it the other way. The risk of allowing them to frustrate governance with incessant extortionate demands is, to my mind, far and away the greater risk. You can disagrees, but spare me your crap about how you think I am dissembling and your condescension that i don't understand the economic risks. I understand them a whole lot better than you do. That means I also understand better than you do when they are being exaggerated for political or narrative effect.

- roidubouloi

January 5, 2013 at 11:18pm

Icarus said, "I think that the responsibilities of governing rightly shape Obama's politics post-election that neither [you nor aaron] is willing to accept or acknowledge.” You said, “I disagree, icarus. I think aaron and I share the view that there cannot be successful governance, despite having been elected to office, without successful politics -- ongoing politics, not just at election time -- being the foundation thereof.” One could reasonably infer from your response that you recognize a conceptual distinction between governance and politics. That is not to say that governance and politics are mutually exclusive, or that they are necessarily or even usually opposed to one another, i.e., that is not to say that there is a “dichotomy” between governance and politics. No one here has made that argument. All of that said, I tried in my prior post to get away from semantic jousting and pose what I think the question is: whether responsible governance (or responsible politics, if you will) required Obama to make concessions in order to avoid unacceptable risks. It has been quite clear that your answer is that it did not. So I then articulated what I understood to be your argument in that regard. If I mischaracterized your argument, you were quite free (and I was sure would not be reticent) to correct me. You did not take issue with my characterization other than to object to my use of the word “abyss,” which I will concede is hyperbole. But would it be fair to say that you believe it would be preferable to go into another recession, and/or to default on our debts, along with whatever the consequences of that would be, rather than make concessions to Republicans regarding the budget? Dhurtado

- NR143296

January 6, 2013 at 10:15am

No, what one can reasonably infer from my response is that I disagree with icarus's mischaracterization of what I think. You and he want to draw a distinction between governance and politics that I find utterly specious. There are risks on both sides. What I consider unacceptable risks, you don't. And what you consider unacceptable risks, I don't. That is a disagreement to be sure, but when you start out by saying that I don't think Obama should avoid unacceptable risks, you have rather loaded the question. What I think (as opposed to the manner in which you an icarus attempt to characterize what I think) is that entitlements are not a short or even medium-term problem. To the extent that we need to address those programs, I do not think that should be done as part of the regular budget process. Indeed, it is not part of that process as the entitlements and their financing are already enacted into law and do not require annual appropriation. That is why the Republicans cannot themselves do anything about entitlements, as they can about the discretionary budget simply by refusing to authorize new spending they do not want to permit. They are taking us hostage to force changes to laws that the minority does not have the authority to change. What other laws that the minority has no constitutional authority to change on its own could the Republicans then demand be altered under the threat of wrecking the economy? I do not want to live in a United States where a rabid minority governs by virtue of terrorist threat. I am certainly willing to live with the choices of the majority, even when I disapprove of them. That is democracy. What the Republicans are attempting is a hijacking of democracy. There are unfortunate precedents in history, but I don't care to re-enter the discussion about what are and are not acceptable historical precedents to cite. The Republicans are attempting to force modifications to entitlements under the objectively false claim that they are the major cause of our deficits, and they are doing it with the threat to wreck the economy. I think the response to that should therefore be an absolute refusal to deal. No modifications to entitlements, or any other laws, under the threat that, if they are not satisfied, the Republicans will wreck the country! If they are then going to cause a recession and the pain of billions of dollars of government services not being provided and billions of dollars of people's expectations of income not being realized, let them. We would soon find out whether the country will tolerate governance by terror. Even if the Democrats then had to yield out of necessity, it would be straightforward, finally, to make clear exactly what the Republicans, and not the Democrats, were doing to popular Federal programs and to our government generally. Then the voters would have a clear choice to make about what government they want. This IS a democracy. If a majority of the voters want what the Republicans are selling, then that is what we should have. What ought to be unacceptable to Democrats is minority government by terror or continuing to enable the Republicans to conceal what they are selling and saddle Democrats with the political responsibility for Republican policy. That only perpetuates the crisis. There are long-term consequences to continuing to foul our economy and for our political life that are, in my opinion, much, much, much worse then the consequences of a few weeks on the far side of one of the Republicans' artificially created fiscal cliffs. To be absolutely clear, I think that the risks of appeasing Republican attempts to allow the minority govern by terror are much worse than the alternative. You can disagree, but don't mis-characterize what I think as indifference to consequences or ignorance of them or some false dichotomy between politics and governance, as if the president has a choice to engage in one but not the other. As for the annual budget, there is no question but that the president has to negotiate about it as it requires annual Congressional approval. If they cannot agree, then the Republicans can refuse to pass a continuing resolution and shut down the government. But that is still not the same thing as using the threat to destroy the economy and government as a means of extracting concessions that the Republicans do not themselves have the power to enact. The Constitution requires spending to be approved by Congress. So be it. The absurdity of the House Republican threats is made plain by the objective fact that the budget that the Republicans are now threatening not to finance was in fact adopted by them. This farce resembles the scene in Blazing Saddles where the sheriff holds a gun to his own head and takes himself hostage. Given the now revealed willingness of the Republicans to make these threats, any president would be foolish ever again to sign a budget bill that does not include sufficient authorization of financing for the spending then being approved.

- roidubouloi

January 6, 2013 at 11:26am

"We would soon find out whether the country will tolerate governance by terror." Yes, roid, we would find out. And I think there is some evidence (observable not only by me by by everyone else including Obama) that a substantial part of the country will tolerate it. And they'll tolerate it because those voters are not making political decisions on the concerns as we have been discussing them but rather according to tribal loyalty, racial paranoia, and ideological fixity -- and that within a suboptimal (in may places) congressional redistricting map that locks down one-party majorities and regional bias. Add to that that the next opportunity for the "country" to show its toleration or lack of it is fall 2014 and there is at least some basis for thinking that a deal on the model of Jan 1 2013 has a better chance of containing destructive consequences. I don't claim to support that position entirely -- and there's a lot about the negative potential down the line that is worrying -- but I do see its logic and therefore I'm disinclined to paint it in dark and ominous colors.

- ironyroad

January 6, 2013 at 3:38pm

Maybe. But I still think it is better to have the government that the public actually wants -- if indeed it will tolerate this behavior -- than a minority dominating the majority by threats of destruction. That is fundamentally undemocratic. I want to live in a democracy, and I am not willing to have it hijacked by thugs. Bad precedents. You figure out what they are as you are a student of history. There is nothing in the laws of physics or even in the Bible that says the United States of America must endure in its present form forever, and we can be confident that it won't. If indeed we have a substantial number of Americans who are not willing to observe democratic norms, I think it is better to know it and go our separate ways. There is no reason for those of us who want to live in a democracy to remain politically bound to those who don't. Political systems change, borders change, countries merge, countries break up. The Soviet Union cam apart and the world did not end. It is not unthinkable for the US to do so if the alternative is to be trapped with thugs who will not let us get on about the business of life, liberty, and pursuit of happiness. They should be permitted to live out their own libertarian, dystopian, apocalyptic vision without bothering the sane. Plus, since they are concentrated in the Confederacy, the sub-tropical South, they will all soon fry anyway. Do we need a bunch of Southern refugees headed north when their ecosystem collapses? None-the-less, for all that tribal loyalty, racial paranoia, and ideological fixity, if the result of their own nonsense is that the lot of them are not getting paid, I somehow suspect that they will manage to discover, in the nick of time, that tribalism, racism, and ideological fixity need the Federal government to keep going and keep paying the bills. We should not forget that blue states are overwhelmingly net donors and red states are the net takers -- the "moochers" in their own parlance. We won the Civil War and now are going to let the rubes, a minority, run the country without even getting elected to do so? You don't find their threats dark and ominous?

- roidubouloi

January 6, 2013 at 6:13pm

I do find their threats dark and ominous, but what I openly admit is that I'm just not sure of the best way to combat them.

- ironyroad

January 6, 2013 at 7:07pm

No one is sure of the best way to combat them. But we have to make choices none-the-less, even if it is to do nothing. That too is a choice. There are demons and hazards to the left, demons and hazards to the right, demons and hazards ahead of us. We have to make judgments about the best thing to do. I look at history, and the consequences of both appeasing bullies and standing up to bullies, and I pick the latter. The appeasement seems only to induce more and more extreme behavior as it betrays weakness, something bullies seek out, gets them results, and, worse in some ways, it slowly legitimizes the bullies' behavior so that people stop thinking that it is outrageous and not to be tolerated. Then they, the bullies, up the ante. This very pernicious effect on people's thinking is already evident with respect to the debt-ceiling hostage taking.

- roidubouloi

January 6, 2013 at 8:46pm

Roid- I do not believe I have been mischaracterizing your arguments. I have been telling you what I understand your arguments to be, and asking you to confirm or clarify. Nor have I advocated any position of my own. I have merely been trying to frame the issues so that I can then determine where I stand. That said, I do think that appeasement and refusal to negotiate is a false dichotomy, to use your terminology. I also do not share your view that the recent deal that was struck in order to postpone sequestration was a complete capitulation. It involved increased revenue, mostly from the well-off (though continuation of the payroll tax holiday would have been desirable) and left entitlements untouched. And it preserved unemployment benefits for those who need them. In my view, there was no reason to play chicken this time around. The entire point of sequestration (or “fiscal cliff”) was to induce negotiation regarding how to address the debt and deficit. But I agree that the debt ceiling is a different matter. Obama should not negotiate at all with regard to raising the debt limit. It is Congress’ obligation to do so. Dhurtado

- NR143296

January 7, 2013 at 1:20am

I never claimed that the deal was a complete capitulation, only that I believed it was a lot less than Obama could have gotten if he were willing to go over the cliff that was not a cliff except rhetorically. If, as you now suggest, he should not capitulate faced with demands that he . . . what exactly? . . . then he will have to be prepared to go over a much steeper cliff. Would I mischaracterize your argument by saying you think he should not have risked the little hill of the first negotiation in order to wait to play hardball when faced with the riskier second negotiation? When you say I am dissembling, is that a characterization or a request for clarification?

- roidubouloi

January 7, 2013 at 4:45am

You are far too thin-skinned Roid. I have not said that you are dissembling. I said the following: “The responsibility of governing should shape post-election politics. Do you disagree with that proposition? If you said that you did, I would suspect you of being dishonest.” That is not a characterization, but a direct question about what you believe, and a statement that I would be incredulous if you said you did not think the responsibility of governing should shape post-election politics. I then said, “I TAKE your position to be: (1) had Obama stood his ground, the Republicans would have caved and would have voted for a package that included extension of the tax cuts on income below $250k, extension of the payroll tax holiday, extension of unemployment insurance, and deferral of sequestration (presumably because they wouldn’t want to be tagged with allowing taxes to increase across the board); and (2) even if the Republicans would not have caved prior to the sequestration deadline, had Obama continued to stand his ground, the Republicans would have caved in short order because they would not want to be in the position of failing to vote for a tax cut for 99 percent of taxpayers.” (Emphasis added.) I also said, “I TAKE your response to be that you can’t be sure of it, but you don’t care. Let the Republicans plunge us into the abyss, and let the public see who they are, and the public eventually will turn on the them and put progressives in power.” (Emphasis added.) You have had full opportunity to say that what I take to be your position is not correct. But back to substance, The difference between the “cliff” and the debt ceiling is that the former was a piece of legislation that was put in place for the express purpose of inducing the parties to negotiate a budget. It was not “terrorism” for the Republicans to use sequestration to try to negotiate a deal that they deem desirable. On the other hand, it is not the purpose of debt ceiling to induce negotiation of a budget. Raising the debt ceiling is necessary in order to pay debt that Congress has already incurred. I think “terrorism” would be a fair epithet to apply to a threat to permit the US to default on its debt. But I think the risk is lower than it was or is with sequestration. I think the US will not default on its debt, regardless of what Congress does. Dhurtado

- NR143296

January 8, 2013 at 12:49am

The sequestration was he outcome of the first debt-ceiling hostage taking. Since I had already made quite clear that that post-election politics and post-election governance are inseparable, I TAKE it that I was indeed being accused by you of being dishonest. But your coy conceit that you are merely asking for clarification is amusing. I TAKE it to be coy, and dishonest. I TAKE it that your position is, whether or not Obama could have negotiated a better deal and more successfully placed responsibility for ongoing crises on the Republicans, you don't care, so long as we did not go over the so-called cliff. No, I don't think that we should go over the cliff for the long-term hope that progressives will be in power. I think that making the Republicans bear the political consequences of their fecklessness, at no great cost in my opinion, would significantly decrease their present ability to obstruct governance by the majority and might also lead eventually to an electoral defeat. The latter, however, is very much a secondary consideration. You can TAKE that to be my position. You are the equivalent of a push-poll. I have no great interest in continually having to correct your mischaracterizations of what I say in the guise of asking for clarification. I TAKE it that you have stopped molesting your children, no?

- roidubouloi

January 10, 2013 at 7:53am