Unless you’ve been in a cave deep beneath the earth for the past two weeks, you know we very nearly had a federal government shutdown. Media attention to that problem focused mainly on the political fight involved. How much would the Democrats agree to? Does the Tea Party run the GOP? Does Harry Reid actually exist? Will John Boehner cry all the way to political nirvana?
What generally got ignored was what a government shutdown would have meant to folks who didn’t suck at the public teat on capitol hill. That list would include, but not be limited to, the following: Social Security checks would not have gone out; Medicare claims would not have been processed; the federal component of Medicaid (roughly 70% of it) would have shut down; the incomes of at least 800,000 federal employees would have been put on hold—with, incidentally, no guarantee they would have been made up once the shutdown ended; military personnel would (depending on which source you believe) either receive no pay, or receive pay for the first week of a shutdown and then no pay (this would include those members of the military currently being shot at in Iraq and Afghanistan); all the federal regulatory agencies would stop regulating (though with some, like the Securities and Exchange Commission, you might not have been able to tell the difference); air traffic controllers and most postal workers would have stayed on the job, but without pay and without a guarantee that their pay would be made up—I’d work hard under those circumstances, wouldn’t you?; the federal court system would have closed up shop (my God, Barry Bonds might go free); some FBI agents would remain on the job, but their labs and administrative offices would have closed . . .
You get the picture. Our politicians in Washington were playing chicken with the very fabric of American society, or, maybe a better metaphor, with the ligaments, tendons and other connective tissue that hold the American skeleton together. And why? In the case of the Democrats, it was because they had no choice. By even the most conservative estimates, the cuts the House Tea Partiers wanted would have cost the economy a million jobs and absolutely short-circuited the fitful recovery we seem to be making from the Great Recession.
In the case of the Republicans, it appears to have involved a combination of hubris, cynicism and opportunism. The hubris was evident in the chest-thumping the Tea Partiers were doing about the fact that they COULD shut the government down. The cynicism was manifest in comment like Boehner’s “So be it” response to a reporter who pointed out that House budget cuts would eliminate 650,000 federal jobs. The opportunism was clear in the House insistence on including social policy “riders” that had nothing to do with money in a budget bill.
That the Republicans are easily identified as the bad guys in this struggle does not absolve the Democrats. What the budget debate showed clearly (if it wasn’t clear enough already) is that the Democratic Party leadership, including the President, has a very difficult time finding a principle it can’t run away from. How else to explain two weeks of debate over a budget proposal that contained 30-odd billion dollars in cuts but not one penny in tax increases for the wealthy or for corporations, during which the unfairness and unacceptability of that formula was never even brought up?
How else to explain a fight over whether the cuts should be 32 billion, 33 billion, 38 billion or 40 billion, but no fight over the fact that 2/3 of those cuts (whatever the dollar amount) were going to come from programs that affected almost exclusively the middle and lower classes?
Here is the problem as I see it. On every important issue since Obama became President, the Democrats have stuck their collective heads in the sand and allowed the Republicans to define the parameters within which debate would occur, then cautiously pulled their heads out of the sand and attempted to debate within those parameters.
And the Republicans have gotten progressively better at defining parameters in their favor. During the TARP debate, they tried to define the debate as being a budget deficit issue, but the country (and world) was in obvious enough economic peril that even red state mouth breathers couldn’t get too much behind that one.
The GOP stepped up its game considerably on health care reform, tossing out death panels, socialism and government intrusion into the precious doctor/patient relationship as the brackets within which the debate would be held. The result was no public option, no single payer plan, and most important to Republicans, no machinery to control pharmaceutical costs.
When financial sector reform came to the front, the Republicans immediately stipulated that any rule limiting Wall Street’s ability to reward its denizens with obscene bonuses would cause its most talented players to leave the street, that reimposing Glass-Steagall would cost Wall Street billions, as would any sort of meaningful regulation of the derivatives markets. And, what do you know, none of those issues were really part of the ensuing debate.
In the present instance, the Republicans started thumping the deficit reduction drum last November when the Democratic congress was trying to pass a 2011 budget that would have spared us the recent showdown, and once again, the Democrats responded by in effect saying, “oh yeah, the deficit’s a problem”—thereby acquiescing to the notion that the debate should be about how deeply to cut the deficit, not whether now was the best time to do that.
I’m occasionally given to flights of fancy, so indulge me please in this one. I would love to see Obama commandeer prime time television and give a speech that went something like this:
Good Evening.
As all of you know, we recently engaged with the other party over a bill to provide 201l funding for the federal government. An agreement was eventually reached and what would have been a catastrophic event—the shutting down of government—was avoided.
If you will recall, the budget I proposed for 2011 last year contained about 10 billion dollars in cuts. The Republicans immediately castigated me for being too cautious, even though caution about reducing government spending in the midst of a very fragile recovery was the advice of just about literally every economist in the world who was not employed by the Republican party. Speaker Boehner subsequently proposed an additional 23 billion in cuts—a total of 33 billion. Reluctantly, I agreed to that figure.
Under considerable pressure from the Tea Party backed members of his caucus, Speaker Boehner, a couple weeks ago, upped the cuts to 40 billion. In addition, again acceding to his Tea Party wing, he folded a variety of social policy riders that had nothing to do with money into the negotiation. That launched the two week scurry to reach some sort of agreement. In the end, the Republicans got nearly all the money cuts they sought, but were forced to exclude the riders.
Even before that agreement was reached, Speaker Boehner was making public pronouncements about the debate over this year’s budget being simply the first of three opportunities his party would have to assert its will over the direction of this country. It is perhaps a little incongruous that the self-described leader of “one half of one third” of the government would see that minority as sufficient to dictate what the economic and social future of the nation should be, but let that go for now.
So our friends in the Republican party and the people of the United States can be clear that they will not dictate the terms of either debate--as they have so successfully done in the past, here are the parameters my administration will set.
First, we have already agreed to what I described earlier as the “largest single year spending deduction” in our nation’s history. In a couple weeks, as required by law, Congress will need to vote on raising the debt limit so the nation’s financial obligations can be met. Let us be clear about one thing. Raising the limit on the amount of debt the country can carry has nothing intrinsically to do with budget deficits. So, we will brook no debate over further mandated spending cuts in the 201l budget. Congress will pass a clean bill raising the debt limit, or it will not. If the Republicans want to ruin the country’s international credit standing by forcing default on our debts because we will not cut anything further from a budget that has already been reduced 38 billion dollars, let it be on their heads.
Nor will we agree to any policy revisions of the sort proposed in the recent debate. Regulatory agencies will continue regulating and social service organizations will continue their social services. There will be no negotiation in that area.
Formulating the 2012 budget will commence in earnest in the Fall, and the positions I will advocate relative to it will be, to some degree, determined by the state of the economy at that point. Assuming that the economy then will be much like it is now, in a slow and somewhat fragile recovery mode, the budgetary model I will be following will be closely aligned with the advice of the world’s best economists.
Specifically, the focus will be on economic stimulus generally and job creation specifically. Budget deficit reduction will be a secondary priority and one that, for the most part, will be delayed until economic recovery is capable of tolerating it. We have tangible evidence of what happens when cutting a budget deficit becomes the paramount objective by observing what has happened in England. Prime Minister Cameron and his Conservative Party bought entirely into the “austerity is the answer” formula and made draconian cuts in education, social welfare programs, medical care—all the same targets as the Republicans have aimed at here. Just as importantly, the British government ignored the negative impact all those cuts would have on employment.
The result has been that England’s economy has plunged deeper into recession than it was in 2009. Significantly, the results of the Conservative Party’s policies in England are precisely what the world’s economists predicted they would be—and what they are predicting they would be here were we to follow Republican policies.
Let it then be understood that the budget debate this fall will not be over how much we will cut. It will be over how much we will spend to keep the economy moving, and how much we will increase revenues to make that possible. The word “tax,” at least when it comes from a Democrat’s mouth, will not be a dirty word. And our attention will be trained primarily on the segments of our population that presently aren’t contributing a fair share to tax revenue. Those would include individuals in the wealthiest 5% and the larger corporations.
I do not mean to suggest that spending cuts are entirely off the table. What is off the table is any further cuts in infrastructure funding, education, scientific research, and social welfare programs. We will be open to cuts in corporate subsidies and the defense budget. We will also be open to beginning a dialogue on how Medicare can be restructured to begin reining in escalating medical costs, as well as a dialogue on how the fiscal independence of Social Security can be guaranteed. Our interest in Medicaid will be restricted mostly to how the federal government can better assist the states in funding it.
It would be appropriate to characterize what I’ve just described as our lines in the sand. If it wasn’t before, it became clear during the recent showdown that preserving ideology is more important to at least a significant element of the Republican party than effectively governing the country. There are important fiscal issues to be dealt with over the next 8 months. Republican ideology will not be what sets the parameters of the debates over those issues.
We’ll never hear that speech, nor, I fear, anything remotely like it. That’s a shame because absent that speech, or something very like it, political discourse in this country, and our political direction, will continue to be driven by a party whose leadership would turn us into a plutocracy and whose base would return us to the Wild West.
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