America didn’t vote for a “grand bargain” (2 articles)

Just a few short days after the election, and Obama is already going against the wishes of 60% of the elctorate who in exit polls want him to raise taxes on the wealthy and corporations. 60% of voters all over the country. And what is he going to do? Forget about raising taxes, he's going to lower taxes for corporations, against the views of 60% of the people who voted in 2012. Enter the bane of us all: the Grand Bargain.--jef

Thursday, Nov 8, 2012
Listen up, Democrats: Obama didn't win by promising a compromise on entitlement reform. He won despite it
By Rick Perlstein



By 10 p.m. on Tuesday, it was all over but the shouting — the shouting of Karl Rove, incredulous that Fox News’ “decision desk” would dare deploy the best statistical evidence at its disposal to call Ohio for the president; the shouting of wingnuts everywhere that — no fair! — Obama only won because of superstorm Sandy (because demonstrated competence in running the government is no reason to choose someone to … run your government); the shouting of the joyous throngs at McCormick Place waiting to receive their new second-term president. In my Hyde Park apartment just five blocks from the president’s home, soon all around me was jubilation. A second Barack Obama term! I alone seemed to feel the disquiet.

This reelection troubles me. It troubles me because of the signal it may send to some of the people running the Democratic Party, and to Barack Obama, a signal that may threaten the long-term health of the Democratic Party itself.

I heard Dick Durbin, the Illinois senator who is close to Obama, on the radio the next morning boasting that he was one of the Democrats on the Simpson-Bowles Commission to vote for its recommendations — recommendations that included, in addition to changes in the tax code meant to increase revenue (while also cutting tax rates), diminishing eligibility and benefits for Medicare and Social Security. Though the commission failed to reach consensus, making its proposals moot, it was aiming at just the sort of “grand bargain” that Obama has consistently and quietly spoken about as his sort of beau ideal for what a successful presidency would look like. Durbin went on to say he hoped a grand bargain might be wrapped up in the next calendar year, before congressmen and senators became preoccupied with reelection. And maybe it will. As the blogger Lambert Strether impishly put it on Election Day: “I’m betting the Ds, who wouldn’t abolish the filibuster for health care or the stimulus, will abolish it if that’s what it takes to kick the hippies and gut Social Security.”

Fellow Democrats, let’s hope not. Please, please, please, let’s hope not.

The goal, with or without a filibuster reform, would be to “correct” a supposed structural budget crisis that liberal economists like Paul Krugman and Dean Baker convincingly point out doesn’t actually exist. In fact, the increase in the deficit was caused directly by the financial crisis and the housing bubble, and had nothing to do with the middle-class entitlement programs a grand bargain would cut. What’s more, the deficit is perfectly sustainable in any event. As for the record national debt, in fact the rest of the world’s eagerness to lend to America at next to no cost is in fact a glorious opportunity to increase American well-being, something not to be feared but welcomed. (America’s debt to GDP ratio is about 70 percent. Japan’s is over 225 percent — and that island, with the world’s third-largest economy, has not sunk into the sea. In fact, from 2001 to 2010 its economic growth has generally surpassed ours.)

America’s government is not too big. It is not “out of control.” Measured by the number of public sector employees compared to the overall population, in fact, it is at its smallest size since 1968. The Democratic compulsion to take the lead in making it smaller, to “control” it, is in itself a serious historic problem —and a perverse one at that. For it doesn’t work. Bill Clinton tried it in the 1990s, working with Republicans in Congress both to obliterate the deficit caused by Republican budgetary mismanagement, and “end welfare as we know it.”

What happened to the resulting budgetary surplus they created? Republican mismanagement and ideological extremism obliterated it, and the public acted like no miracle save for drastic cuts in middle-class entitlements could ever bring it back; media gatekeepers immediately forgot that Democrats had been “responsible” fiscal stewards, just like much of the populace simply forgot what Clinton did with welfare. After Hurricane Katrina, the story was that black residents of New Orleans had become so enervated by their reliance on welfare checks they were too dumb to get out of the rain. It was as if America’s newly stripped-bare welfare system’s time limits, work requirements and block grants had been thrown down a memory hole — even as, seven years later in our current unemployment crisis, according to the nonpartisan Center for Budget and Policy Priorities, welfare reform now greatly contributes to increased rates of poverty.

A simple historical fact: There is no political payoff for Democrats in presiding over governmental austerity. The evidence goes far back to long before Bill Clinton. In the mid-1970s, the first superstar of the Democratic austerity movement, William Proxmire, a budgetary obsessive whose campaign bumper stickers read “Waste Will Bury Us,” began awarding a monthly “Golden Fleece Award” to the government expenditure he judged the most wasteful — a clown show that frequently had no more effect than making things difficult for scientists doing basic research that frequently led to revolutionary breakthroughs. Austerity was the ideology of Gov. Jerry Brown in California, too — and also the man who beat Brown for the Democratic presidential nominee in 1976, Jimmy Carter, who announced, in his 1978 State of the Union address that “Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or provide energy.”

What Carter said wasn’t even true; for instance, he did deploy the power of government to reduce inflation, by appointing a Federal Reserve chairman, Paul Volcker, with a mandate to squeeze the money supply, an act of deliberate austerity that induced the recession that defeated him. Like I said, there was no political payoff: Ronald Reagan, depicting Carter on the campaign trail as just another Democratic spendthrift, defeated him, reappointed Volcker, then harvested the political credit when Volcker’s governmental policies did slay inflation. And then came the amnesia: When, 18 years later, Bill Clinton gave much the same State of the Union address — “The era of big government is over” — people acted like no Democrat had ever said anything like that before.

Now Barack Obama, oblivious, may be barreling into a yet more dangerous austerity dare, perhaps squeezing the two most effective and popular government programs in existence — Social Security and Medicare. Credibly pledging not just to preserve them but to extend them has been how generations of Democratic politicians have turned millions into habitual Democratic voters.

Barack Obama didn’t win by promising a grand bargain to rein them in. He won despite it. Democrats won’t win in the future by “reforming” entitlements. If they do it, they will lose, precisely because of it, and possibly for generations. If he believes things to be otherwise, God help the party of Jefferson and Jackson.

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Thursday, November 8, 2012 by Campaign for America's Future
Voters Didn't Ask for Bi-Partisanship,
They Demanded Good Policies
After the Election, a New Mandate -- and New 'Fiscal Cliff' Math

by Richard Eskow

 

 

President Obama was reportedly planning to reach out to House Majority Leader John Boehner today to begin negotiating a deal to avoid the so-called "fiscal cliff," a series of spending cuts and tax hikes scheduled take effect unless Congress rescinds the law that created it.

That overture is both appropriate and statesmanlike. The public expects its leaders to work together on important issues.

The question is, what kind of deal? Boehner's been acting as intransigent as ever, telling Reuters that Congressional Republicans will have "a mandate to not raise taxes."

Now Boehner's saying he's willing to raise "tax revenue," as long as tax rates are lowered even more. That's a coded way of saying he wants even more tax breaks for millionaires and billionaires, and that Democrats should expect to get that "revenue" by eliminating tax deductions for struggling middle-class Americans. That's likely to mean losing deductions for dependent children and mortgages, and tax changes that will lead to even less health coverage for working Americans. He says he'll also demand cuts to Social Security and Medicare as part of any deal.

But Boehner isn't holding the cards in this situation. The president is. All the numbers say so -- in the election results, the polling data, and even in the stock market, if you read it correctly.

The New Math
As the Democrats were fond of saying this year: It's not politics, it's math. Here's some math that Congressional Republicans -- and austerity-minded Democrats -- are going to have to deal with:

A headline in the New York Times read, "Question for the Victor: How Far Do You Push?" The answer: As far as the voters have asked you to push.

2 to 1: Voters have given Democrats two of three branches of elected government. Two out of three aint' bad. In fact, it's a mandate to govern. Memo to John Boehner from the voters: When you've only got one out of three branches, you may be a partner in the political process -- but you're the junior partner.

12,744,844: Democratic Senatorial candidates got 12,744,844 more votes than Republicans this year. According to my rough calculations, Democratic candidates got 57.44 percent of the popular vote. Republicans only got 41.57 percent.

Harry Reid's been saying all along that he doesn't want to cut Social Security. The voters agree with him. Deal with it, Republicans.

Zero: That's the approximate number of candidates whose embrace for the "Simpson Bowles" austerity plan was a pathway to victory. That plan would cut Social Security and Medicare benefits, and sharply cut into all forms of government spending, while lowering taxes even more for millionaires and corporations. It would almost certainly raise taxes sharply, however, for the middle class.

As Zaid Jilani notes, three highly-visible candidates who openly endorsed the Simpson Bowles plan -- or who were endorsed by one or both gentlemen themselves -- unanimously went down to defeat this week.

On the other hand, Virginia Senate candidate Tim Kaine of Virginia openly rejected the Simpson Bowles plan. He pulled off an upset victory.

303: That's the number of electoral votes President Obama received. He won a decisive victory around the country -- and he won the popular vote, too. You lost, Republicans, fair and square.

And about that whole "fair and square" thing: As the New York Times noted today, the reelection of House Republicans had a lot more to do with gerrymandering, incumbency and big-money corporate campaign financing than it did with any mandate not to cut taxes.
A headline in the New York Times read, "Question for the Victor: How Far Do You Push?" The answer: As far as the voters have asked you to push.

Inside Job
But that process seems to disturb a lot of pundits, press and political insiders. They'd rather things worked out behind closed doors -- "just send your man around to see my man," as J. P. Morgan suggested to Teddy Roosevelt. The president's going to be under a lot of pressure to preemptively surrender on his stated principles.The voters have asked President Obama and his fellow Democrats not to "shirk a fight" over economic issues. 

Americans for Tax Fairness compiled polling data which showed that 60 percent of voters wanted the Bush tax cuts ended for incomes of $250,000 and above. Voters said they wanted to see their Social Security and Medicare benefits protected, and the deficit addressed by increasing the rich instead, and they did so by the overwhelming margin of 64 percent to 17 percent. And 62 percent of those polled said that "the message [they] were trying to send to the next president and Congress with [their] votes this year" was: "We should make sure the wealthy start paying their fair share of taxes."

And yet election-night commentary was filled with talk about the president's need to find "common ground," something we never heard about George W. Bush's two victories -- one of which came without either a popular-vote majority or an unequivocal electoral college win. Expect a lot more of this talk from insiders in the days and weeks to come.

These insiders don't seem to know or care that voters elected the president and his fellow Democrats because of those principles.

Rated X
The morally-compromised "ratings agencies" -- actually for-profit corporations that abused their obligations for years, directly contributing to the financial crisis of 2008 -- wasted no time getting into the act once the votes were counted. Fitch Ratings immediately warned the president that there would be "no fiscal honeymoon," saying that a failure to avoid the "fiscal cliff" would cost the U.S. government its "AAA" rating.

But international investors still love our government. They're essentially paying our Treasury to borrow money. And despite what the fearmongers are saying, the stock market didn't plunge because they're afraid we won't cut spending. While it's true that markets dislike uncertainty, what they really hate are austerity measures that shrink the economy.

Despite the mythology, the stock market didn't fall the last time credit agencies frowned on the the government's credit. It was the deal itself that dealt it a blow:

 You can see that the market began to fall in anticipation of a deficit deal, and fell even further when the deal was done. But it shrugged off a downgrade by S&P, another ratings agency and even climbed slightly. Why? Because investors know that spending cuts in this economic climate are recipe for disaster.

And after all those "agencies" gave all worthless mortgage securities a "AAA" rating -- apparently investors don't rate them very highly.

Stepping Up
At times during his first term, the president appeared to show disdain for ideology, for advocacy for the conflicts that are part of the political process. He sometimes spoke of emulating the compromises reached between Ronald Reagan and House Majority Leader Tip O'Neill, but without offering the fierce advocacy each of those leaders first gave for his own viewpoint.

But it was a newly energized president who addressed supporters on election night, saying "We will disagree, sometimes fiercely, about how to get there."

"I'm not talking about blind optimism," President Obama told the cheering Chicago crowd. "I'm not talking about the wishful idealism that allows us to just sit on the sidelines or shirk from a fight."

That's the process the public needs to see -- the disagreement, the debate, and the conflict, as well as the compromise and the forging of consensus. Voters need to know why they're getting the policies that affect them, and which politicians are pulling for (or against) them.

That's a promising sign. The absence of disagreement and ferocity has sometimes robbed the public of the opportunity to make informed choices in the voting booth. Would voters have given the reins of power back to Boehner and Congressional Republicans if they'd been able to see just how extreme their positions have been for the last two years?

The voters have asked President Obama and his fellow Democrats not to "shirk a fight" over economic issues. We look forward to seeing the democratic process unfold over the coming weeks, months and years, as a much-needed fight against economic injustice is played out in the public arena.

That's not partisanship. It's math.