Defining Down Reasonable

Rich Wilkins wants to give Charlie Dent and the 85 House Republicans some credit for voting for the Senate’s fiscal cliff compromise. I don’t, for two reasons.

The fiscal cliff was a political crisis, not an economic crisis. The issue was whether the US political system could pull together and stop a crisis of its own making, or if the Republican commitment to anti-tax politics would push us back into recession. The markets are not forcing us to reduce our debt or deficits. Quite the opposite. The issue was that a few different austerity measures were going to take effect that would reduce the deficit too much, too quickly. Charlie Dent and the Republicans have spent the past 4 years whining about the deficit, but when it finally came time for them to do something that would shrink the deficit by a lot, it turned out they didn’t really believe any of that stuff. They don’t really believe that a big deficit is hurting the economic recovery. That says a lot about how Charlie Dent’s been voting for 4 years.

The other reason Dent and the 85 House Republican cross-overs don’t deserve credit is because they helped create this political crisis in the first place.

The fiscal cliff was four main things – the expiration of the Bush tax cuts, the expiration of the payroll tax cut, the expiration of unemployment insurance, and the sequester cuts.

Extending unemployment insurance and especially the payroll tax cut were no brainers. There was never any reason not to do both of those things, but we didn’t extend the payroll tax cut, and unemployment insurance only barely made it in.

The Bush tax cuts were the subject of the 2012 election, and President Obama won that big. Obviously he should get his way on that, but he ended up compromising anyway.

But the last reason this happened – the sequester – is entirely the Republicans’ fault. They held the debt ceiling hostage for spending cuts (the “Boehner rule”) and how that ended was the Budget Control Act. The BCA established the supercommittee, and if the supercommittee failed, then the sequester would take effect and cut a bunch of spending arbitrarily. Republicans, including Paul Ryan, scuttled the supercommittee negotiations, so we ended up with the sequester.

Charlie Dent was right there with the rightwingers in the House on holding the debt ceiling hostage, and that’s what kicked all of this off. We should’t pat him on the head for diffusing a crisis of his own making. If you don’t want your Congressman to help create fake crises and then diffuse them later, then you need to replace your Republican Congressman with a Democrat.

Comments

  1. John says:

    Go figure, a far left partisan hack doesn’t want to give credit.

  2. John says:

    Because it’s the adult thing to do, and if you were truly honest you’d recognize that this was another bipartisan fiasco.

    But you’re a hack, so you have to do this. It’s ok, all 5 people who read this blog know that.

    • Jon Geeting says:

      It’s adult to give cover to politicians who don’t act like adults and create fake crises? When one party creates a problem, and you try to say it was both parties, you let the problem party off the hook. There was nothing bipartisan about the making of this political crisis and you know it. Ending fake crises isn’t praiseworthy, it’s expected.

    • Rich says:

      There was nothing bipartisan about this crisis. The only reason we were having this discussion was the GOP’s decision to turn the debt ceiling into a political issue, something we never had before. Then, the only reason we had an issue on the tax issue is that the GOP refused to accept the election results. This wasn’t a “both sides made this” issue.

      With that said, Jon’s under valuing the split within the GOP. There’s a serious and substantive difference within the House GOP, all of Congress GOP, and GOP as a national party at this very moment. There are about 150 to 160 Republicans in the House that essentially voted to “starve the beast” last night in the face of a certain market melt down today, who were willing to reject a deal that was cut by the GOP’s Senate leader, and who are now rumored to have discussions going on within them about whether or not to re-elect Boehner tomorrow. That is not a minor issue at all. You can view the last 96 hours two different ways- either you can say that there was a blueprint developed for how to pass laws in Obama’s second term with the Senate and House, or you can say that we’re about to watch a political party go into actual revolt over substance.

      Jon’s also missing the value of the Sandy Bill fight that we’re now going to see play out between now and the inauguration. The nation’s largest city and it’s metro area were whacked by a huge storm, and a political party has a lot of members who don’t want to do anything to help them. They’re referring to pork as parts of the bill that for instance help hotels re-open. That’s crazy talk.

      The bottom line about the votes is that which side a Republican was on last night actually mattered, both in those votes and in the future. There are 201 Democrats on Thursday, narrowly less than needed to elect a Speaker or pass a bill. In a narrowly divided House, it appears the new dividing line will be super hard-line versus old school conservative. There won’t be a “Rockefeller wing” of the GOP. Charlie’s apparently politically comfortable with not being on the hard-line side, which is notable given his new district.

  3. John says:

    Rich we’ve never had a President spending money like this, so the debt ceiling had to become an issue. And last I checked, the Democrats didn’t take every seat in the House and every seat in the Senate. Our form of government allows dissent and is designed to slow things down so the best decisions are made.

    All that being said, I think this was a good first step, but the other 1/2 of the problem, spending, has yet to be addressed. That’s where both parties have screwed things up. We have entitlements we can’t afford and that has to be dealt with by adults.

    As to NYC, I am all for helping. I am not for covering 100% of the costs. People make choices and have responsibility for those choices. There’s no way I’d give NY all the money they ask for up front either. The city and the state have long track records of fraud, waste, mismanagement, etc. Give them what they ask and you’re guaranteed it’ll cost at least twice that.

    • Jon Geeting says:

      The only reason last night’s vote went the way it did was because Boehner suspended the Hastert rule and allowed an open vote. How often do you think that’s going to happen again?

      • John says:

        Hopefully often, because it was an adult decision. We have too few of them in Washington.

        Think maybe Harry Reid will pass a budget this decade, as the Senate is required to? He won’t allow a vote there because it’ll look bad for him.

        Works both ways Junior.

        • Jon Geeting says:

          The adult decision would have been not to create a fake crisis in the first place. Diffusing the fake crisis is the bare minimum that should be expected.

    • Jon Geeting says:

      Actually the current deficit isn’t about “spending money” it’s about the downturn. The structural deficit – the difference between spending and revenue – is only 2.1% of GDP. The deficit is causing none of our current economic problems, so no, none of this “had to become an issue.”

      • John says:

        That’s nice, neat math that only explains a small portion of the problem. The unfunded liabilities of entitlement program adds up to trillions more in debt that is not accounted for.

        So yes, it has to become an issue unless your generation wants to get bent over.

        Your choice.

        • Jon Geeting says:

          It’s not “entitlements” it’s just health care prices. We need to reduce Medicare reimbursements to doctors and hospitals.

    • Rich says:

      This President’s spending money in ways we haven’t seen? Really? On the day he took office, the 2009 deficit was $1.2 trillion. The 2013 deficit is $900 billion, pre-tax changes. He didn’t halve the deficit as he said, but it’s down by 25%. You do realize they compute these numbers based on a baseline of existing conditions, meaning the number you inherit is based on the spending decisions of past Presidents.

    • Rich says:

      Secondly, the debt ceiling should never, ever even exist, let alone be an issue. Civilized countries sell bonds to finance debt, and the bond-buying market determines market price on interest for the bonds. In the case of Greece, bond holders decided their debt was at a level they could not pay back structurally, so they jacked rates way, way up. In our case, they buy our debt at zero interest even today. There is long-term concern, but not short-term concern about deficits.

      Democrats got one million more votes for the House and didn’t win it purely on gerrymandering. We won more Senate seats, and 332 electoral votes to go with the 4% popular vote win. No, it’s not a dictatorship, which is why I’m fine with the deal that was struck, but we did win, and the President’s tax policy did win. It should have been passed. Elections should at least have consequences on the issues that we debated.

  4. Jack Contado says:

    There must not be a spending crisis; the president spent $4,000,000 of our money to go on his Hawaii holiday and another $3,000,000 to fly round trip for the cliff vote.

    Jon can no doubt find a way to justfy this

  5. Jack Contado says:

    funny indeed

  6. GDub says:

    I think this event is worthy of congratulations–but only very briefly. It is good that, by whatever Roberts rules utilized, a political compromise was reached. We need to get past the idea that every time a revenue bill is passed that it is somehow “historic” and worthy of such description in the press. This is a routine legislative function–one that is actually required by law!

    It would seem that the main problem in the debates is the mismatch between short- and long-term issues. The Republicans seem to be more confused on how this works, but some Democrats seem rather in the ignorance is bliss mode.

    I think taking the “structural deficit” or long term interest rate stats at face value masks the real issue. While there is a consensus that in the short term, the deficits don’t hurt the recovery, there is far more disagreement and concern about the impact and opportunity cost of debt in medium to long term–and worrying about the long term is certainly in the interests of every working generation.

    Having long term benefit legislation packages that frontload revenues and back load costs distorts the “structural deficit” picture and potentially leaves a lot of costs down the road unaccounted for.

    Its easy to look like the richest guy on the block by eating your seed corn, but the real challenge is figuring out how to get the corn growing. Not sure the Congress is going to solve that.

    • Jon Geeting says:

      There may be consensus among economists that short term deficits aren’t hurting the recovery, but the opposite view is the consensus within the Republican political party. Or at least it was until the fiscal cliff exposed that as a fake talking point.

      • Gdub says:

        I agree. Many of these legislators are using legitimate long term concerns in a short term debate.

        However, it doesn’t mean there is no economist concern about the fiscal position of the US, so to say this is fake is untrue. Valuing the short term at the near total exclusion of the long term has put many developed economies in a very bad position, particularly since these economies (like ours) have difficulty generating real growth out of the problem.

        There are choices to be made still…

        • Jon Geeting says:

          I don’t really see the point of worrying about a hypothetical budget problem in 2040 when current fundamentals are high unemployment, low inflation and low interest rates. Nobody knows what’s actually going to happen.

          • GDub says:

            What in the world is the national congressional popular vote? U.S. Constitution covers elections fairly thoroughly.

            The reason you worry about 2040 is because–well, that’s what responsible governance does. Whether you are borrowing at 0% or 5%, the principle does get paid back, and eating your seed corn today means that nothing gets grown in 2040.

            Societies should borrow to invest in the classical definition of investment. Borrowing to pay salaries and social benefits is not “investment” and needs to be avoided.

            We do have sectors of our economy that need some time and attention, particularly second-tier urban centers, but what would be wrong if our government and population decided to do some things with tax and business policy that bore better fruit in 15 years? I lived in Korea during an economic meltdown far worse than what America is experiencing–many of the choices they made have made the country a dynamo.

            My issue with current economic policy in general is that it is focused on re-creating some dreamy world that existed in 1998 or 2006. Those days weren’t as good as we thought, had some unique circumstances that aren’t to be replicated, and those days aren’t going to be coming back ever. So what do we do to set ourselves up for future success? I don’t see that conversation at any level of government in the US.

          • Jon Geeting says:

            The popular vote for Congress – how many Americans voted for a Democrat for Congress vs. a Republican. Because of gerrymandering, more people voted for a Ds, but Rs won a majority of the seats. We need proportional representation for House elections.

        • Jon Geeting says:

          There’s also the issue that any deficit reduction achieved by Democrats just creates a pot of money for movement conservatives to give away as tax cuts. Somebody on the Republican side should finally actually propose a deficit reduction plan if that’s what they really care about.

Speak Your Mind

*

* Copy this password:

* Type or paste password here:

82,952 Spam Comments Blocked so far by Spam Free Wordpress