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Paul Tullis Headshot

What Obama Forgot About Change In Washington

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So after all that, what did we get, really?

  • $91 billion a year in promised cuts for 10 years. That's about 6% of last year's federal budget, and it is subject to approval by future Congresses. This is evocative of what happened in 1981, when Reagan's director of OMB, David Stockman, recommended a package of tax cuts, which Congress approved, with the assumption that corresponding spending cuts would come later to pay for the reduction in revenue. (Interesting how this shows that not even Reagan believed what is now an article of faith among Republicans -- the idea that tax cuts pay for themselves by increasing job growth.) Well -- big surprise -- nobody in Congress wanted to actually make the cuts, and the deficit and debt exploded.
  • $21 billion in cuts in 2012, when most economists agree that what we need is more than 10 times that amount in spending to stave off back-to-back recessions. (Here is some high-school economics that the Tea Party is either too stupid to understand or too full of crap to admit is true: Spending by the government in times of economic stagnation creates jobs, which results in greater tax payments to the government, and creates demand, which drives two-thirds of the economic activity.)
  • Another bipartisan committee to find another 1.2T-1.5T in savings. This is the 18th such committee, though supposedly this time it's different because its recommendations will be subject to a single yea or nay vote with no amendments or delays.

This is what amounts to a victory for Democrats these days: The committee is allowed to consider raising revenue.

Here are a few of the ideas for raising revenue that died along the way of Pres. Obama's and the Democrats' capitulation on the debt deal:

  • eliminating tax breaks for corporate jets.
  • eliminating subsidies for oil companies, three of which are among the four largest companies in the world.
  • changing the tax code so that hedge fund managers, some of whom make billions a year in income, pay a higher percentage of their income than dishwashers do.
  • changing the tax code so that corporations like GE actually pay their taxes.

These all died at the hands of Republicans. And we're supposed to believe they care about average Americans?

Here's one idea that was never considered:

  • taxing the bonuses of executives at companies that received taxpayer bailout money at 95%.

Republicans, of course, are completely disingenuous in their opposition to taxes, because a great deal of the federal budget is comprised of payments to states. When the federal budget is cut, state budgets must therefore be cut.

What will states do to avoid running a deficit, which they are prohibited from doing by law? I don't know, but what they've done in the past is raise sales taxes.

These of course fall disproportionately on the poor.

That aside, the GOP showed again -- as they have in the past with abortion, gay marriage, and a host of other issues -- that they're willing to risk everything to get what they want.

They lost the presidency in '92 because GHW Bush was believed to be insufficiently anti-choice.

There's never been a national GOP candidate since with even a shadow of a pro-choice record lingering behind.

This time they raised the stakes for their signature issue, taxes, on which they know that if they were to cave once -- like the NRA with gun control -- it would open the door to more of the same.

The prospect of default presented an opportunity to reduce the size of government by reducing spending.

Which is fine with Republicans because it doesn't affect their backers and they're not really interested in governing, only in winning so they can reduce the size of government.

The problem with that logic is that much spending is actually designed to save money, or to compensate for things that economists call "inelastic" in the market. (An example of that is endangered species, because once there are no more grey wolves or blue whales you can't go out and buy a new one for any amount of money. Another is health care, because unlike your car, which you can drive around with a dent in the fender, when you break your arm you can't wait till you have more money to get it fixed.)

In the debate last December about Planned Parenthood, it was largely forgotten that most of its budget goes to birth control for women who can't afford it, which prevents the birth of poor children -- who cost the government a lot more money than the price of some rubbers.

Or take the FAA; Republicans cut $16 million from its budget, but that action has caused the FAA to be unable to collect $25 million in airline fees per day.

So as a result of this cost-cutting measure we're losing ten times as much money as we're saving.

The list goes on ad on; clean air rules prevent asthma in children, which the government spends millions each year to treat.

So this anti-tax fervor doesn't even do what it's supposed to do, number one, and number two, it fails a very basic test of conservatism, which is to save money.

The hue and cry from Republicans over spending, meanwhile, is bullshit -- there's really no other word for it.

As I-forget-who said first, Republicans only care about the debt or deficit when there's a Democrat to beat over the head with it. They spent $1.5 trillion on wars (one against the wrong guy), another $1.8 trillion on tax cuts for their political supporters (who didn't need it), and $180 billion on the biggest unfunded entitlement in history (the Medicare drug program).

So they're willing to spend when it suits them. GW Bush even passed a $168 billion stimulus. (Don't be fooled by the fact that it came mostly in the form of tax cuts; they were of the form that economists call tax expenditures, because they amount to the same thing.)

At the moment, though, it suits Republicans to portray Pres. Obama as a "tax-and-spend Democrat" and keep the economy in the toilet by preventing additional (and necessary) stimulus, so they can regain the presidency in 2012.

So here's where the headline comes in:

This battle over the debt deal was not a matter of who believes in Keynes.

It was a matter of Republicans caring more about power than about governing, and Democrats being unable to wrest that power from Republicans so that they can govern.

The reason Democrats lost (and their constituents will suffer) is the problem with the entire Obama presidency:

He forgot that the corollary to "Change comes to Washington" is that all the people who brought change to Washington -- Lincoln, FDR, MLK, whoever -- were willing to do what the Republicans just did: risk everything (and in some cases lay down their lives) for what they care about.

What's pathetic is not that Pres. Obama did what he said he would do, and lost.

He didn't even try.

He's the most forceful American orator in two generations, who's proven capable of killing a wedge issue and shifting the terms of the debate just by standing behind a podium and opening his mouth.

But his version of getting people behind him on the debt deal was a couple of press conferences -- where by definition you don't control the agenda -- and a primetime speech from the Oval Office, which was immediately overshadowed by its response.

Compare this to what GW Bush did during 2002-2003 in the buildup to Iraq:

He wanted to go to war, and he did whatever he had to to get people behind him.

He went around the country at beautifully stage-managed appearances.

He got the whole cabinet behind him, with Tom Ridge changing the threat level every 15 minutes.

Ashcroft entrapping people to gin up phony terrorists he could parade before the press.

Signature phrases like "the smoking gun could be a mushroom cloud" repeated ad nauseum.

A speech or two before a joint session of Congress.

Unlike Bush with WMD, Pres. Obama didn't even have to lie about the debt.

He just needed to explain some high-school level economics. (Remember Perot with those ridiculous anti-Nafta charts on Larry King we all made fun of? Well who now doesn't remember the phrase "giant sucking sound"?)

Why didn't Pres. Obama go on a national tour, months in advance of the default deadline, and set the terms of the debate the way he was able to set the terms of the campaign?

Not the same crap at a solar panel factory -- "Bush eff'd everything up; it would have been worse if not for me; green energy blah blah blah" -- which the press has seen 1000x before and basically stopped covering, but some new backdrops:

A defense contractor making Hummer armor we'd no longer be able to pay for.

The trailers at Nellis AFB where they control the drones over Afghanistan. No more hunting terrorists?

East Hampton, NY, standing in front of some 20,000-square-foot summer house belonging to a Wall St. banker who's building an addition with his bonus.

A senior center in Delray, FL, the next day, with some old lady in a wheelchair and tubes up her nose, the implication being: You want to cut her health care because you won't raise taxes on yesterday's guy?

Bush trotted out Condi, Rummy, Dick... Where was Pres. Obama's Labor Secretary, HUD secretary, HHS secretary?

By the way, who is Pres. Obama's Labor Secretary, the HUD Secretary, HHS Secretary?

Here's NY Times's Nate Silver:

32-to-28, members of the Tea Party Caucus voted for the bill, despite earlier claims -- which now look like a bluff -- that they wouldn't vote to raise the debt ceiling under any circumstances.

These results seem to suggest that Mr. Obama could have shifted the deal tangibly toward the left and still gotten a bill through without too much of a problem. For instance, even if all members of the Tea Party Caucus had voted against the bill, it would still have passed 237-to-193, and that's with 95 Democrats voting against it.

Specifically, it seems likely that Mr. Obama could have gotten an extension of the payroll tax cut included in the bill, or unemployment benefits, either of which would have had a stimulative effect.

Nothing ventured, nothing gained.

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