Reports from Saturday night indicate Speaker John Boehner has told the White House that his Tea-GOP party will not accept President Obama’s framework for a “grand bargain.” Apparently his people aren’t willing to vote for up to $1 trillion in additional tax revenues, and there may be other objections.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Boehner said in a statement. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”
The Obama White House’s rhetoric remains tied to Tea-GOP talking points, which if used as a basis for policy, would only harm the economy and increase unemployment. His senior advisers continue to claim, illogically, that it would be okay to make massive cuts in spending if only the rich paid more taxes. Here’s Dan Pfeiffer (via Ryan Grim):
“The President believes that solving our fiscal problems is an economic imperative. But in order to do that, we cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree.
Two points. Spending cuts now, with or without tax increases, would harm the economy, yet the White House can’t seem to say this clearly. And even if the cuts were scheduled for a post-recovery period when they would be less harmful, cutting valuable programs like Social Security would not be acceptable and would not become justified by having hedge fund managers pay more taxes.
When used here, the “balanced approach” argument is gibberish. Spending should be cut when it doesn’t serve a worthwhile public purpose; taxes should be raised and allocated fairly from those able to pay to accomplish those public purposes. Only someone indifferent to public policy consequences is taken in by this “balance” argument.
Where Boehner’s rejection leaves the discussions planned for Sunday is hard to sort out, because none of the parties has a coherent, logically consistent position or one consistent with the public interest. The American people do not have a reliable representative to protect their interests in these discussions. The realities appear to be this:
– The nation’s economy desperately needs more federal spending, because the economy has not sufficiently recovered to sustain sufficient growth to reduce employment in any reasonable timeframe. Friday’s terrible jobs report confirmed this. The human suffering and vast economic waste from this situation are the real crises facing the economy, not deficits, and Washington is not addressing these real crises.
– Despite the consenus on the need for more spending to rescue the states, reduce and relieve unemployment and rebuild the country, none of the parties is recommending these measures as necessary conditions for agreement on raising the debt ceiling, even though they would affect the debt.
– There are no leaders in either party recommending economically sound policies. So it’s very unlikely anything useful will come out of the debt limit discussions that will help the economy, and very likely the economy will be harmed.
– The debt limit has to be raised. Only the most extreme, least reality-based members of the Tea-GOP deny this. However, the Tea-GOP base may prevent sufficient Republican votes to raise the debt limit without spending reductions that could cripple the economy.
– The country is in the middle of a fiscal/financial crisis, but not the one Boehner describes. We face the Hobson’s choice of either hurting the economy and increasing unemployment by slashing spending at a time when more spending is needed, or creating a further financial crisis by failing to raise the debt limit. The Tea-GOP has deliberatly created this terrible choice.
– With Tea-GOP votes now questionable, Democrats are now realizing their votes could become the deciding factor in choosing between crippling the economy further and betraying their base on the most important social programs of the Democratic era, or refusing to do so and being blamed for the consequence of not raising the debt limit. Obama has recklessly put Democrats in this untenable position.
With a few exceptions, much of the Beltway reporting can’t seem to rise above “he said/she said” narratives or deficit hysteria framing (e.g., see NYT versus this NYT editorial), and so it is not reporting how destructive Washington’s leaders have become or how much Obama’s reckless judgment has crippled his own party. We are staring into an abyss, none of the leaders are grownups, and those who lead us are not listening to anyone with an ounce of sense.