I think one of the reasons the White House is so miffed "the left" for not wholeheartedly supporting the Great And Wise Tax Compromise of 2010 is that they quite sincerely don't see the dangers of the "compromise" that many of us see. Obama truly sees the "payroll tax holiday" as having a stimulus effect, for example, and truly does not see the danger of stuffing a few more gigantic IOU's in the Social Security trust fund, because it's only... temporary. And I think the primary reason "the left" is so angry with the White House is because they find that a remarkable position to have.
We're in the middle of a two-party battle to end a huge, budget-busting, deficit-engorging "temporary" tax cut that was a bad idea ten years ago and a worse idea now. That's not surprising, nor is it surprising that a few hundred of the nation's top supposed deficit hawks are holding everything that's not nailed to the floor as ransom for getting that "temporary" tax cut for the rich extended. (For the five hundredth time, it's never about deficits, it's about defunding government -- only idiots and political reporters could possibly fail to tell the difference.)
But what is surprising is that the White House "compromise" to an impasse over letting supposedly temporary tax cuts to expire is to not just renew them, but introduce a whole passel of new "temporary" budget-busting, deficit-ballooning tax cuts, and claim that those new tax cuts will definitely expire when they're supposed to. No, seriously, trust us next time.
That seems implausible. (Note my tact, here, as I use the politically tasteful word "implausible", as opposed to its non-political, everyday translation of "possibly lying, possibly batshit stupid.") The answer to deficit fever caused by temporary tax cuts is to introduce more, equally dangerous temporary tax cuts? And promise that no really -- next time, two years from now, we'll really go to the mat to raise them back up, in order to not crush Social Security and other programs under implausible levels of debt? In 2012? During an election year?
To put it mildly, it's a dangerous wager. We've not just refused to defuse the deficit bomb, we've surrounded that original deficit bomb with... more deficit bombs. And more ominously, we haven't raised the debt ceiling or included it in the negotiations, so the Primary Hostage -- namely, everybody, you and me -- is still in play, and we can expect severe "austerity measures" to kick in as soon as the new GOP House members finally have their government healthcare kick in and, coincidentally, get down to some good ol' fashioned Tea-Party-inspired legislatin'.
The countercharge, of course, is "if not this compromise, then what?" It's fair to say you go to Congress with the Democrats you have, not the Democrats you wish you have, and if the Democrats had been serious or competent about addressing any of this in the last two years you'd have thought they'd have gotten around to it by now. But like every other situation in which they've been badly outplayed, they haven't. So we're stuck in a situation where we need stimulus, and we especially need relief for Americans at the short end of the Big Recession stick. Afterall, don't you care about unemployed people? Don't you care about them enough to acquiesce to literally anything the Republicans might demand?
Well, we're certainly living in a period of time when every speck of economic pain is expected to be absorbed by the poor and middle class, not by the rich or the incorporated. Whether this deal goes through or not, the poorer classes are going to continue to be bled dry. Taxes for the poorest will actually go up under this "compromise", not down. We've already seen a federal pay freeze, and the muttering over cutting federal jobs in large numbers is only going to get louder under the new GOP House. Ditto on the reduction of aid to states, and on the reduction of aid from states: if there's one consistent thing both parties can "compromise" on in this recession, it's Screw the Poor. Hey, that bank bailout money needs to come from somewhere. And these tax cuts aren't going to pay for themselves.
So the question boils down to whether or not you think this particular deal is an actual good deal or, in the immortal words of Admiral Ackbar... something else. Is it really a stimulus? How many people will it help, and is giving in to multiple deficit bombs the only way to get that help? I think this is worth echoing, from DDay:
Therefore, I think you have to look at the totality of this. There’s not going to be the kind of impact from this bill sufficient to call it a second stimulus. The stimulus itself is poor to begin with – little bang-for-the-buck outside of the unemployment insurance extension, and mostly just extending current law (anti-contractionary, not stimulative). When you offset that with big spending cuts, which Senate Budget Committee Chair Kent Conrad voted for in Bowles-Simpson, and which House Budget Committee Chair Paul Ryan didn’t vote for because he didn’t think they were savage ENOUGH, the stimulative impact is zero.
So the choices are: a deal that extends Bush tax cuts and a lower estate tax than even Bush envisioned, basically forever, with a canceled-out stimulus in the exchange; or no Bush tax cuts, and no stimulus. In the alternative scenario, do Republicans still call for spending cuts? Probably. But the public finances look better in that scenario, and their energy would probably be dedicated to getting those tax cuts back instead. Republicans have signaled enough weakness on unemployment benefits that a short-term extension can probably get wriggled out. And crucially, you’d have a future tax base which can actually sustain a robust functioning government.
So you have to ask yourself is this the best possible deal for the future? Because there’s no question this is a deal for 2012. But endless low tax rates, on income and estates, basically ends progressive governance in America. As Kevin Drum said yesterday:
Looking at American politics from a 100,000-foot level, conservatives have won. Programmatic liberalism is essentially dead for a good long time, and small bore stuff is probably the best we can hope for over the next 10-20 years — though social liberalism will continue to make steady advances. I reserve judgment on whose fault that is.
It’s certainly dead in a situation where tax rates are permanently at 2001 levels. To me, that’s the choice. If the debt ceiling rise was included in this deal, ensuring that one bargaining chip for spending cuts came off the table, I’d have a much easier time agreeing to this, mindful of the near-term need for stimulus. As it isn’t, I have problems with mortgaging the future for a short-term gain I find ephemeral.
And there's the rub; trading a short-term gain for a much longer-term structural disadvantage. The help for the unemployed -- something that is only controversial now because, let's face it, our government has devolved into staggering levels of corruption and incompetence, too busy sodomizing the rich for every last scrap of goodwill and campaign funds -- that meager acquiescence to continue to help the unemployed in a small, banal, utterly non-controversial way during a major worldwide economic crisis is good. But the tax bombs that the White House is so eager to accept -- ironically agreeing to them so that they don't have to deal with the current tax bomb, of all things -- are things that fit perfectly into the Republican agenda of defunding government up to and past the crisis point, then using the crisis to in turn defund all of the various middle-class achievements of post-Depression America that they so despise.
With each year and each Congress, the "conservative" position moves dramatically rightward. An intentional corollary is that "the left" gets redefined by both parties, Republicans and Democrats, to mean any common-sense non-conservative position that's just too damn hard to get votes for in the current climate. So now we've got the White House sincerely wounded that we don't believe Obama when he says these "temporary" tax cuts will really expire in 2012, after they themselves haven't been able to end a damn one of them this time around.
How does that make sense? Does the White House really believe that they and their remaining Democratic legislators will stand firm on letting tax cuts expire next time, not this time? Based on what evidence? What part of this current debate makes that sound like a likely scenario?
Forgive us, for we be but poor citizens and yokels, but you've got to be kidding. I want a sound and intelligent government, but if I can't get that, I at least want a government that doesn't consider its citizenry to be made up of goddamn morons.
At some point it's going to be necessary to draw a line in the sand, if things like Social Security and Medicare are really going to continue to exist: surely, that much is obvious, and we can all agree on it. But the farther rightward the "bipartisan" position shifts, and the more financially endangered those programs become, the harder it's going to be to claw it back. The decade-plus premise now of Democrats continually acquiescing to those moves rightward last saw fruition in healthcare reform, which saw a "compromise" taken in very large part from the Republican side of the aisle in the Clinton-GOP healthcare debates of the 1990's, but which to today's modern, Beck-wielding Republicans is still indistinguishable from Marxism. Now we're in a position where all Serious People are suddenly very worried about the deficit -- a deficit caused entirely by the Bush tax cuts -- and are simultaneously demanding that deficit be made worse. And the Democrats continue to go along with it, not entirely because they're suckers, but because the desire to achieve something "bipartisan" is always much more tantalizing than dealing with very hard problems right now, at this particular moment.
So I think "the left", that sordid block of characters that never quite seems happy with anything, in this time of two-party cooperation on shoveling money into the hands of the rich and "compromising" on everything else, needs to be forgiven for displaying more than a little healthy skepticism about the premises of borrowing money from Social Security to pay for tax cuts now, and calling it a fine momentary solution. We did that. It didn't work. It never works, and it never goes away.
The final point: we haven't heard from the White House how they plan to defuse this new bomb they've created two years from now. We've heard from his economic advisors that this temporary defunding of Social Security simply isn't a problem because we'll be writing IOUs from the general fund to pay for it -- but no acknowledgement that that's what we say every single time we "borrow" money from Social Security, and somehow never manage to pay it back, and that that, precisely, is exactly why there's currently a problem. On the part of ostensible experts like Summers, Geithner and the others, it fairly reeks of insincerity. Obama is willing to call Republicans "hostage takers" and irritated liberals "sanctimonious", but his people haven't yet addressed how they're magically going to stand firm on something two years from now that they're willingly giving away today.
If America is expected to subject themselves to yet another Republican tax-cut experiment, and set itself up for not one, but two more rounds of hostage taking when these "temporary" measures run down their own clocks, the White House needs to be a lot clearer on why this newest one won't result in the same disaster all the last ones have caused. "Trust us next time around" is not a plan.