Lies, damned lies, and presidential reduction plans
Obama drops his facade of bipartisanship
During the debt ceiling negotiations, President Obama made an offer to Speaker of the House John Boehner that was the epitome of reasonable:: in return for lifting the debt ceiling, Obama proposed a $4 trillion reduction in federal deficits over ten years, split roughly 2-to-1 between spending cuts and revenue increases, with little to none of the cuts occurring in the next two years. Boehner, having waited for this sort of middle-of-the-road compromise for weeks, quickly accepted. And for a moment, I thought it was all going to work out.
Then, things fell apart. Obama changed his mind and said he needed $400 billion in additional tax increases, possibly more, to make the deal work. Boehner decided he could no longer negotiate with someone displaying such bad faith. Both sides retreated to their barricades and the moment of bipartisanship was gone.
Ever since then, I’ve wondered — was Obama’s bait-and-switch merely high stakes negotiating gone awry, or was it something more insidious — a strategy to find the most generous offer that Republicans would reject so that he could hold it up and claim the mantle of bipartisanship?
Today, I have my answer. One has to look no further than Obama’s recently promulgated debt reduction plan to see his full partisan duplicity on display.
The president is offering a plan that, on paper, looks just like the offer seen during the debt negotiations: $4 trillion, split two-to-one between budget cuts and tax increases, with the first couple years of budgeting left untouched. If only it were so.
This debt plan is — to borrow Rick Perry’s turn of phrase — a monstrous lie. In the spending cuts that Obama proposes, he includes nearly $2 trillion of spending that simply doesn’t exist. Roughly $1 trillion of “cuts” are drawn from the wars in Iraq and Afghanistan, even though this spending doesn’t exist in the baseline budget projection, nor is there any plan circulating the Beltway to extend those wars by the decade or two it would take to rack up $1 trillion worth of spending. The president might as well have offered to save us money by not fighting a war with Italy in 2016. A second trillion comes from the debt ceiling agreement already struck — never mind that the president already traded these cuts for an increase in the debt ceiling; now he hopes the nation will buy them again in exchange for more of his agenda.
As a kicker, the president has proposed these deficit reductions as a means to pay for his new spending plan. So, in the final tally, Obama is only offering only $245 billion in spending cuts over the next ten years. And what does he want in exchange? A small, temporary tax cut for the middle class, and a permanent $1.7 trillion tax hike on the upper class and other politically convenient targets.
The punditocracy have spent most of their time debating two questions. The first is whether or not the debt plan amounts to “class warfare.” It’s an accusation that the president deserves — you can’t tell interviewers that you would raise tax rates on the rich even if it meant no additional income for the U.S. government, and then act surprised when opponents accuse you of using tax policy punitively.
The second is whether or not tax hikes on high-earners are good economics. I’ve already written on this subject, and those looking for a refresher course can read Gruber and Saez’s paper, “The Elasticity of Taxable Income, Evidence and Implications.” Instead of rehashing that debate, I’ll leave it at this: I don’t think raising taxes on the well-to-do above and beyond their Clinton-era levels is wise, and neither did Clinton.
But both these points are missing the forest for the trees. The president has just stood up and proposed a debt reduction plan which is one half lies and one half liberal wet dream. This is the grand reveal, the tip of the hand that shows us Obama’s true nature.
In 2007, I remember watching a C-SPAN forum on the ascension of Dmitry Medvedev to the Russian presidency. Most of the participants remarked that Medvedev was Putin’s most loyal and least independent lieutenant, and concluded that Putin elevating Medvedev was simply a convenient way for the wily Russian to circumvent the two consecutive term limit on the Russian presidency. But one of the commentators had an idea so elegant that it seemed to me that it must be true.
It went like this: Putin, with all of his popularity and power, would have no problem passing a constitutional amendment to allow him to serve a third, fourth, or fifth consecutive term. So why depart the presidency and govern by proxy if he had no real intention of handing over the reins of government? As the theory went, Putin’s aim was not to do a mere end-run of an easily changeable law but instead to create a system of checks and balances in the Russian system of government. By taking the typically weak prime minister spot and leaving the presidency to a loyal lieutenant, Putin would have the opportunity to strengthen the prime minister’s role in government and make it a real counterbalance to the presidency. So Putin wasn’t merely some unscrupulous autocrat; he was a man working in a broken system, using the flawed tools available to him to make it better.
It was a cute theory, and if you looked hard enough, you could find evidence to support it right up to last week, when Putin decided that he, not Medvedev, was going to be the next president of Russia. From then on, there could be no doubt: Putin is, and always has been, a plain and simple dictator.
In 2008, Obama stood up and told me that he was a different kind of politician — that he was going to do away with politics as usual and unite the country. Like the “Good Guy Putin” theory, the “Good Guy Obama” claim was one that, on a gut level, you wanted to be true. And so I ignored the truth that, in three years of governing, Obama has made just one serious attempt at bipartisanship: the Bush Tax Cuts plus Don’t Ask, Don’t Tell plus START II plus unemployment benefit bargain struck with 2010’s lame-duck congress. Right up through the debt ceiling fight, I held out hope that the president was the man he said he was, doing his best with what he had.
Some lies can only stretch so far.