Strengthening Constitutional Self-Government

No Left Turns

Politics

Debt Ceiling Thoughts

  • They say that those who successfully fake authenticity can get away with anything. The corresponding danger is that when you try but fail to fake it you can't get anyone to believe you, even if you are being sincere. Barack Obama, graduate of Columbia and Harvard Law, sometimes - as in yesterday's news conference - drops his g's and refers repeatedly to what "folks" want and believe. The falsity of this rhetorical persona renders everything he tries to convey less plausible. 
  • The product President Obama was trying to sell yesterday was as dubious as the salesman. As Clive Crook pointed out, Obama's passivity often extends to speaking as though someone else has been president since January 2009: "Asked at the press conference to make one specific proposal on entitlement reform, he dodged yet again, merely laying out criteria for what he might be willing to accept if somebody else happened to come up with a plan." 
  • This leading-from-behind approach to the national debt not only clouds the future but distorts the past. In the press conference Obama yet again blamed the federal deficits on everyone but himself: "It turns out that our problem is we cut taxes without paying for them over the last decade; we ended up instituting new programs like a prescription drug program for seniors that was not paid for; we fought two wars, we didn't pay for them; we had a bad recession that required a Recovery Act and stimulus spending and helping states -- and all that accumulated and there's interest on top of that." You would never know that the Obama administration proposed a 2012 budget that told the American people that a national debt rising to nearly 100% of GDP over the coming decade was the best we could hope for and, really, nothing to worry about. Or that Obama treated the Bowles-Simpson Commission report as an interesting analysis that had no bearing on his administration's fiscal policy.
  • Other things don't add up. Even The New Republic, willing for four years to give Obama the benefit of every doubt, found his assertion that "some modest modifications" in Social Security and Medicare "can save you trillions of dollars" mystifying. The entitlement changes laid out so far by the budget negotiators reduce outlays by no more than $350 billion over the coming decade. The "trillions" claim could make sense only if Obama were prepared to raise the Medicare eligibility age from 65 to 67, as envisioned in the proposal put forward by Senators Lieberman and Coburn. If Obama is receptive to such an idea he is, again, waiting for someone else to do the heavy lifting.
  • "We have a chance to stabilize America's finances for a decade, for 15 years, or 20 years, if we're willing to seize the moment," Obama said, but this "unique opportunity to do something big" would require "some shared sacrifice and a balanced approach" - a mix of spending cuts and tax increases. Strangely, when Obama speaks of the tax changes he has in mind, the revenue they would generate for the government always sounds incidental. The real purpose is to give people facing a reduction in their government benefits tangible reasons to believe we're all in this together, that they are not being singled out for sacrifices. Thus, says Obama, the balanced approach would "require revenues" because "even as we're asking the person who needs a student loan or the senior citizen or people -- veterans who are trying to get by on a disability check -- even as we're trying to make sure that all those programs are affordable, we're also saying to folks like myself that can afford it that we are able and willing to do a little bit more; that millionaires and billionaires can afford to do a little bit more; that we can close corporate loopholes so that oil companies aren't getting unnecessary tax breaks or that corporate jet owners aren't getting unnecessary tax breaks."
  • Cutting $4 trillion from the projected national debt sounds surprisingly easy in Obama's telling: a modest modification of a social insurance program here, and asking a few gazillionaires to do a little bit more there, and before you know it we're running surpluses as far as the eye can see.  When you look at the numbers, though, you keep coming back to the fact that the Obama commitment that has put the country on the wrong path was his determination to significantly and permanently expand federal domestic programs while keeping his campaign promise to limit any and all tax increases to families making more than $250,000 per year.  As Derek Thompson points out, this pledge renders it very difficult to increase federal revenues by more than $1 trillion over the coming decade. That upper boundary, in turn, means that the progressive hope - a 50-50 split between revenue increases and spending cuts - could accommodate no more than $2 trillion in deficit reduction over ten years, not the $4 trillion that would be the lowest amount compatible with Obama's professed desire to "do something big."  
  • This failure to be clear and candid is not simply Obama's but a liberal failure of which Obama's $250,000 promise is a recent and clear instance. European social democrats not only want a government big enough to guarantee the economic well-being of every citizen, but are willing to acknowledge that the revenue base such an enterprise requires can be provided only through broad-based taxes, such as a value-added tax, which significantly reduce everyone's disposable income. American liberals want the former but shrink from the latter, thus committing themselves, stupidly or cynically, to the proposition that America can progress toward a social democracy with a tax system that curtails the lifestyles of the rich and famous, but no one else's.
  • Given all this, Republicans could be forgiven for echoing an old SNL parody: "I can't believe we're losing to this guy." But they are. Obama has "dramatically transformed the debate over the debt limit to his advantage," according to Rich Lowry, editor of National Review, using "the threat of post-August 2 turmoil to paint the Republicans as reckless and unreasonable." The source of this emerging political defeat is that "no [debt ceiling] increase can currently get 218 votes in the House. If House Republicans were voting to cut spending by $10 trillion and raise the debt ceiling by $10, they still might not be able to get a majority." This intransigence, meant to cow and constrain Obama, has wound up enhancing his leverage and flexibility. In Lowry's account, the "paralysis in the House" means Obama can suggest he's amenable to "phantom spending cuts that he's never compelled to reveal but that he takes credit for proposing in negotiations."
  • The no-retreat, no-surrender Republicans on Capitol Hill regard opposition to any and all debt ceiling and tax increases as a matter of principle. Believing that government has already taxed and borrowed enough, they refuse to be complicit in any plan to tax and borrow more. Principles are necessary for governing ably, but not sufficient. Statesmanship requires the application of timeless principles to transient realities, which are usually complex and difficult to perceive with clarity. In a democracy, where public sentiment is the ultimate arbiter of all questions, statesmanship requires an understanding of what the people will insist on, cannot abide, and might tolerate, which must be far more subtle and discerning than the insight such crude measures as public opinion surveys can provide. On the fundamental question about the size, scope and financing of American government, public sentiment is inchoate, not clear and resolute. As Crook argues, when Democratic politicians vow to "defend Medicare and Social Security" and Republican ones promise to "roll back wasteful government and [oppose] job-killing tax increases," the public "agrees with both sides."
  • In politics it's better to be right than wrong, but it's imperative to be right shrewdly, in ways that attract allies and divide adversaries by presenting them with difficult choices. Within the public's contradictory feelings about the welfare state, it's possible to discern the raw material for an enduring center-right consensus. The fact that Democrats refuse to advocate wide-spread tax increases, and that the welfare state can't begin to approach European dimensions until they not only produce but sell such arguments, suggests that our distinctive don't-tread-on-me spirit continues to make an American social democracy impossible. For that consensus to dominate American politics, causing the welfare state to ingest a decline proportion of a growing economy, will require the smartest and not merely the most unyielding efforts of conservative politicians. One idea Republicans should consider is Kevin Williamson's: "a very narrowly tailored bill that would permit the issuance of new debt -- but only for the purpose of financing current debt service." Under such a law, "The national debt no doubt will rise, but only by as much as it costs to refinance current obligations." In the unlikely event Obama and the Democrats want to do something about our deficits, as opposed to doing nothing about them while getting credit for wishing to address the problem, that plan would permit and ultimately require them to put some cards on the table. Such a course compares favorably to the Republicans' current negotiating path, which will lead them to "take much of the blame [for any default] without having achieved any tactical or strategic aim," in Lowry's assessment. "The last thing Republicans should want," he correctly points out, "is to make President Obama fortunate in his adversaries."
Categories > Politics

Discussions - No Comments Yet

Leave a Comment

* denotes a required field
 

No TrackBacks
TrackBack URL: http://nlt.ashbrook.org/movabletype/mt-tb.cgi/16845