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Mike Lux

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The Case for Letting Things Play Out

Posted: 12/19/2012 4:30 pm

Having been in the shoes of the team at the White House, I feel for them right now. Every group, business, and constituency in America that cares about tax and budget policy (i.e. most of them) is banging on them to do this or that or, more importantly, not do this or that. The media is hyping the so-called "fiscal cliff" deadline. They've just been through a tough reelection campaign and have to be just exhausted. It's Christmas time and they want to see their families.

They just want the big showdown to be over so that they can catch a well-deserved nap (and maybe even see their kids at Christmas), and get on to the next exciting thing. Having been in the Clinton White House when issues were sometimes maddeningly unresolved for months at a time, I definitely remember the feeling of being so tired of an issue fight that I just wanted it to be over, regardless of the outcome, so I am very sympathetic. I can also relate to the feeling of being squeezed by multiple trade-offs in policy, knowing that whatever deal you end up striking with right wing Republicans is inevitably going to have some bad things in it -- been there, done that too.

Just to prove I'm capable of being nuanced (something most of my friends and my wife doubt very much), I also want to say this about the White House proposal: there are certainly a lot of things to like in it from a progressive point of view. They are, for example working very hard to preserve Medicaid, extend Unemployment Insurance and hold other key programs that help the poor. I appreciate how hard they are working to preserve many of the things we progressives hold dear. The president and his team have a lot to be praised for in this confusing mess of budget negotiations, and I have a lot of understanding re what they are going through. However, not everything we hold dear is being preserved, and I think the Obama team is going down the wrong path, specifically on Social Security benefit cuts. There are two major things that I think are moving them in the wrong direction.

The first is that they just don't get how fundamental Social Security is. The people who live entirely or primarily on their Social Security checks really are living right on the edge, and every dollar matters. If you know people in this situation you understand how tough their lives can be, how any spike in utilities or gasoline prices or groceries or out-of-pocket health care costs, or any drop in income, can put them in an untenable situation. It can drive a person in poverty to starvation or hypothermia; it can drive someone in the middle class straight into poverty. And just let me pause here to say, as someone who firmly believes that a prosperous middle class is the engine of our economy, that cutting Social Security benefits is going in exactly the wrong direction because all of those middle class seniors who will become poorer as a result don't just have tougher lives, they have less money to spend in their community. That is bad for all of us.

The second thing I think the White House folks are wrong on is their sense of what happens next if this thing drags on. Driven, I think, by their understandable exhaustion and personal feelings, and the uncertainty of what happens next, they have convinced themselves that if this fiscal showdown drags on past the Jan. 1, the politics -- and therefore the final deal -- gets worse for them. No one knows for sure, but based on the current polling and our experience in the Clinton White House, I think they are likely very wrong.

The polling is very clear: Obama's approval rating is going up, and the Republicans in Congress are at a low ebb; people say they would blame the Republicans more than Obama if things fall apart; on the specifics of the deal, people strongly favor the historic Democratic positions on all the major issues in the fiscal debate. It is hard to imagine all of that changing if a deal doesn't come together before the end of the year. In fact, based on the Clinton experience, it is likely to get better rather than worse as people focus on the big issues at stake in the crisis.

So let's talk about the Clinton experience for a minute. The first point worth making is that in 1993, in a weak economy with a big deficit, a budget was passed with big tax increases as well as some significant spending cuts. We didn't fall off a cliff, the economy didn't crash overnight -- or at all. In fact, it got steadily better. Given that, I am more than a little skeptical of the urgency of cutting a deal to save the economy.

More directly to the showdown point, in the great Clinton-Gingrich showdown of 1995, the polling did not initially favor us the way it does for Obama now. It was by no means a sure bet that a government shutdown would be to our benefit politically. In fact, the president's pollster Mark Penn, among several other advisers, strongly urged Clinton to just split the difference with Gingrich and avoid the showdown. But when Clinton played things out and refused to go along with Republican blackmail, the reaction from the public was dramatically in our favor. When the crisis focused the public's attention on the issues in the showdown, they overwhelmingly sided with Clinton. The Republicans had to cave, and cave they did. This was no meeting in the middle, as Obama has offered. We got pretty much everything we wanted in that budget fight and did not have to give on anything President Clinton really cared about -- not Medicare or Medicaid, not Social Security, not education or environmental spending. And once we kicked their butt in that showdown, they never seriously challenged us in a budget battle again.

Look, I won't pretend that there aren't risks and trade-offs in every political dynamic. I'm sympathetic to all the pressures the president and White House team are under. But cutting Social Security benefits is a very big deal, it will hurt millions of people in the decades to come if this deal is done and, mark my words, some people will die because of it, too. It is morally wrong, it is politically wrong and it hollows out our middle class-driven economy. Given how big the stakes are on such a cut, and that history and all the polling show that we are likely to get a far better deal if we wait, the president's proposal should be withdrawn and we should wait them out. If the deal the president offered is accepted by the Republicans, Democrats should vote against it because, morality aside for a moment, think about the politics: if you members of Congress think that cutting Social Security is going to be popular back home, please check the polling. (If you end up with a primary race, it's even a bigger problem.)

No Democratic president has ever cut Social Security. We shouldn't start now. Mr. President, I hope you change your mind, toughen up your bargaining position, and wait the Republicans out. And Democrats in Congress, if the president makes a mistake and hands you these terrible cuts in Social Security, I hope you remain true to your promises, your legacy, and your professed values, and vote them down.

 

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