Didn’t the politicians just do deficit reduction? Yeah, but now comes Round II. To refresh your
memories, in July of this year, the Congressional GOP graciously agreed not to destroy the economy; i.e., they reached a deal with President Obama to raise the federal government’s debt ceiling through 2013 so the U.S. government could pay its past bills. (Most of which had
been run up by the Bush administration’s tax cuts and unpaid-for spending; and the recession. But, never mind that).
This agreement set up a special deficit-reducing “supercommittee” that is supposed to recommend by November 23 at least $1.2 trillion in deficit reduction measures. If the 12-member panel (made up of six Democratic and six Republican members of the House and Senate) fail to reach agreement and the Congress fails to pass it into law, then enormous spending cuts would automatically kick in in January 2013, after the election. One-half of these cuts would be to defense spending and the other half to other federal programs, excluding Social Security, Medicaid and some other poverty programs. The idea was that the looming defense cuts (and, separately, the looming expiration of Bush’s tax cuts – all of them) would incentivize Republicans members of the supercommittee to compromise on taxes, and the catastrophic cuts to non-defense discretionary programs would incentive Democrats to compromise on spending. The supercommittee has been quietly plugging along and it’s hard to tell where they are at.
So, what’s to talk about? Well, I promised you something novel. It occurred to me that I could explain in plain English what’s in the many different deficit-reduction proposals that have been floating around: The House’s Paul Ryan plan, the Simpson-Bowles plan, and Obama’s own ambitious deficit reduction proposal of September. Since this could get a little dry, I’ll keep it very big-picture, and add a little background.
I’ll focus my intro on:
- How we got here: What’s causing the deficit, and what has already been done by Obama and two previous agreements Obama has made with the GOP.
- The Supercommittee: What its mandate is and what will happen if no agreement gets passed.
- The op. cit. competing plans that supercommittee might use as a template.
Just so you know, most observers think the supercommittee will fail to reach agreement. All six GOP members of the panel have signed Grover Norquist’s “no new taxes” for any reason pledge and show no public sign of budging. In addition, every single GOP presidential contender has publicly stated that a ratio of 10:1 spending cuts to tax increases would be an unacceptable supercommittee “compromise.” So, we’re realty beyond the looking glass here. Still, you never know.
- Is the supercommittee for real, or is it just for show and doomed to failure?
- What kinds of compromises would be acceptable to you? Why?
- What does the public really want? Could reasonable people (as opposed to our politicians) reach any compromise on this stuff?
- Would Obama and the Democrats be better off politically accepting another lousy compromise, or should they reject one that is bad?
- What caused the huge deficits we’re facing? What does government do and who pays for it? These one and two old posts of mine explain it pretty well, I thought, with cool charts!
- Why focus on austerity now, with 9% unemployment? Good question, although it’s not as simple as this article maintains, IMO.
- Background on the supercommittee.
- Gee, the supercommittee reportedly is deadlocked already and the “automatic” spending reductions may not be all that automatic.
- Still, sooner or later deficit reduction will get done. Here are the options on the table (I will briefly go over each):
.– The “Simpson-Bowles”commission plan.
.– President Obama’s Sept. 2011 plan.
. — The House Republicans’ “[Paul] Ryan”budget. It’s crazy, but the House passed it.
Finally, having bashed the Right, I feel the need to make one more point: We need to keep in mind not just what we (mostly liberals) would want in deficit reduction, but also what the public will accept and what our leaders might actually compromise on.
See you all there…