Super, Just Super — 21 November 2011

So the Super Committee “failed” to reach agreement.  I, for one, am not surprised at all, and I am not particularly dismayed.

This effort to short-circuit Congress’s responsibilities was ill-conceived from the start.  It was unlikely that a group of twelve lawmakers would be able to craft an agreement that would pass muster without amendment with the larger Congress.  The numbers they were talking about – $1.2 trillion or more over ten years – were large: about 10% of current discretionary spending, and about 3% of the total government spending on the current plan.  That sure seems like a tall order.

Well, it is, and it isn’t.  The fire hose of federal money jumped by six hundred billion between 2008 and last year.  The super committee was asked to cut that back merely by a quarter.  Is that unrealistic?

Moreover, we’re not talking about actually spending less money at the federal level.  All these Draconian “spending cuts” are all about increasing by a smaller amount than current budgeting forecasts.  I don’t get it.  When businesses find their backs to the wall, they do the necessary albeit painful thing – they pink-slip the people who aren’t absolutely vital.  Why can’t the government do that?  The federal work force has grown by several hundred thousand in the last few years.

The sad thing about the inability to come to agreement is that this target was really just the beginning of the reforms that are needed to bring our $14 trillion national debt (not including unfunded liabilities) under control.  To properly achieve the sort of reform necessary meant major changes – to tax policy, to entitlement eligibility, to the pattern of budgeting and spending.   We’ve only just begun to have that fight.

But here’s why I’m not particularly horrified by the failure to come to agreement on this.  First of all, the invocation of sequestering means the reductions will all come in the form of spending cuts – tax increases are not in the mix, so the Republicans have a victory in that regard.  Secondly, I am not one of those who thinks the sequestering is a sham, and that Congress will spend all of next year undoing it.  Both the Executive and the House will need to address the sequesters – which are a matter of law at this point – in the budgets that they put forward in February.  (The Senate should put forward a budget too, but the fact that they haven’t bothered in the last three years suggests that Harry Reid & Co are not too bothered about shirking their legally-mandated responsibilities, and I expect nothing different in 2012).  At any rate, these budgets need to address the sequestering issue head-on, and it strikes me as unlikely that either side will go on record – in an election year – saying they intend to subvert the law they agreed upon just last summer.

So the odds are that we will get real spending reductions (ok, growth slowdowns), albeit in areas that would not have been the cuts of choice – for either side – had the negotiations taken a more sympatico direction.  Actually, the Budget Control Act that established the Super Committee also revived certain provisions of the Gramm-Rudman Act of 1985, which give the President or the Congressional leaders limited opportunities to redirect the reductions so they are not blunt axe across-the-board cuts.

Throughout this series of legislative battles, Republicans have been steadfast in refusing to countenance what the Democrats euphemistically call “shared sacrifice” – tax increases to help close the budget gap.  This is because these deals have all followed a consistent pattern.  The tax increases go into effect right away, and the promised spending cuts – intended from the outset to stretch out over several years (mostly coming way out in the future because the present need for funding is – always – so acute) – never actually occur.  It’s like Lucy and Charlie Brown’s football, and the Republicans used to fall for it every time.  They’ve gotten wise.

Besides, we do not have a funding problem; we have a spending problem.  And the growth of spending, absent major reform, is demographically destined to increase rapidly over the next few decades, even beyond its current mind-numbing pace.  No amount of tax increases on the “wealthy” will make much of a dent in that.  What tax increases will almost assuredly do is return the economy to recession.  I don’t understand how Democrats can be so cavalier about that.  It’s almost as if their compulsion toward redistribution of wealth is stronger than their desire to help regular folks by fostering a strong economy.  Is it possible they truly think that the country can absorb a major tax increase and not stumble?

Regardless, it is clearly their plan to paint the budgetary impasse in starkly class-warfare terms.  The talking points have already begun flooding the talk shows and op-eds: We could have had a deal, except the Republicans cared more about protecting their wealthy friends than about solving the country’s problems.  This is the theme that President Obama started honing way back last summer, and it has echoes in the frustrations expressed by the Occupy Wall Street crowds.  It’s the plutocrats versus the 99%.

It’s patently false, of course.  As I indicated above, tax increases at a time like this – even if they are levied against “millionaires” making more than $250,000 – will succeed only in choking off whatever nascent economic recovery is taking place.  Moreover, the charge requires a staggering act of imagination:  can anyone seriously entertain the idea that Republican legislators as a group are so venal they’d sell the country down the river to help somebody else get rich?  Nevertheless, it is classic  Alinskian tactics to dehumanize the opposition as the Democrats do with this message: Pick the target, freeze it, personalize it, polarize it.

And it may succeed, simply because it fits a “narrative” that has been cultivated for years: that Republicans are the party of money and corporations (this despite the fact that the Democratic Party does at least as well among large corporate donors as the GOP).

The Tea Party has been highly beneficial to conservatives in helping to redefine their purpose as one in defense of small business and taxpayers in general.  It has also been helpful to see the end-point of the progressive impulse to spend playing out in Greece.  But it would be a mistake for Republicans to think that the wreckage of Barack Obama’s economic and regulatory policies makes him an easy target in 2012.  He is amassing a billion-dollar campaign chest, and he clearly intends to spend it painting his opponent as an enemy of the 99%.

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