Sarah Babbage wonders if the budget debate in Washington has moved to the left.
So far this week, Sens. Pat Toomey and Kent Conrad have both released budgets, although Conrad’s has yet to go public. What they both show is a response to the backlash to Paul Ryan’s budget and the GOP’s current budget strategy.
Toomey, taking a hint from the town halls, public opinion polls, and a special election in New York state, not only spares Medicare in his budget proposal – he increases spending on it relative to Obama’s budget proposal. That’s great news, but it may signal that the debate is getting so focused on Medicare that we’re forgetting all the other programs Republicans want to cut [...]
Meanwhile, Conrad introduced a budget to Senate Democrats yesterday that reduces the deficit through a 50-50 combination of tax increases and spending cuts, a fairer formula than even what Obama is proposing. He too is probably responding to public opinion, which now acknowledges that balancing the budget will require tax increases.
If you think that this is a good time, with the initial jobless rate rising and the economy fragile, to suck hundreds of billions of dollars annually out of the economy, then sure, this may be good news. Tax increases are favorable to spending cuts from the standpoint of economic multipliers, and a balanced solution favorable to one weighted entirely on cuts. I hear that Conrad’s budget includes a millionaire’s surtax, which of all these ideas is the least obtrusive, because you’re dealing with money that is otherwise lying fallow in a trust fund.
But that’s not to say that everyone’s breaking out the Birkenstocks and tie-dye on Capitol Hill. First of all, I don’t think the statement about Toomey funding Medicare more than the Obama budget is actually true. And Toomey still block-grants Medicaid, a drastic policy that would kick 31-44 million Americans off their health insurance and probably remove millions of elderly people out of nursing homes. He also reduces overall spending to 2006 levels and keeps it there.
On the other side of the Capitol it’s the same old story. Hal Rogers, the Appropriations Committee chair, is prepping an appropriations bill that slashes discretionary spending by another $30 billion even while increasing military spending by $17 billion. House Republicans may admit that they’re not being intellectually honest with their rejection of tax increases, but that hasn’t stopped them from making that ultimatum. And at the same time that Republicans feel free to take revenues off the table, you have a President pleading with his own party not to do the same:
President Obama urged members of his party Wednesday to avoid declaring absolute positions in the debate on increasing the federal debt ceiling, a day after House Speaker John A. Boehner (R-Ohio) said that tax increases were “off the table” as part of any agreement.
In an hour-long session with Senate Democrats at the White House, Obama told his former colleagues not to “draw a line in the sand” in negotiations, said Senate Majority Leader Harry M. Reid (Nev.). Showing an unwillingness to compromise, Obama said, would not only limit the ability to reach a deal with Republicans but could also have a negative impact on financial markets.
When only one side can make an ultimatum, you end up with an asymmetry in negotiations.
So is the debate “moving to the left”? I don’t think the left is even on the playing field here. The debate is moving away from Medicare but headlong toward $2 trillion in spending cuts, no tax increases and a savage change in Medicaid. I’d be happy to be wrong about that.