Lori Montgomery reports that the White House is “speeding up” debt limit talks, with an outline of spending cuts and deficit triggers in exchange for a debt limit increase. Montgomery breaks some news about one potential trigger, which would, according to Delaware Senator Chris Coons (D), lead to tax increases and specifically entitlement cuts, if annual targets for the deficit are not met. Coons thinks this would motivate both sides to get to the savings goals by other means, rather than whacking the safety net or raise taxes, but it sounds like a dangerous game.
But that seems unlikely, as Republicans, contrary to this Richard E. Cohen story, “have so far declined to consider eliminating even certain temporary tax breaks, such as those for Puerto Rican rum and NASCAR tracks, that have been repeatedly lampooned by watchdog groups.” In other words, while Republicans are willing to talk in the abstract about special-interest tax breaks, in the specific they don’t want to add really any of them to this deal. Maybe the ethanol tax subsidy gets eliminated or restructured, but that’s about it. Republicans want to hold all those tax expenditures back for a larger tax reform, where they would insist on lower tax rates.
In the end, we could see a short-term debt limit vote to go with all that gets agreed to. And I agree with the Fitch ratings agency that something will be done before the Treasury-imposed deadline of August 2. But this is something to fear, not celebrate. Because after a brief flurry when bad economic forecasts came out, it doesn’t appear that any kind of job creation measures will be included in this bill, much to the dismay of US mayors, who let the White House have it yesterday.
But a bipartisan group of U.S. mayors on Monday accused Washington politicians of being out of touch with the dire economic realities facing states and municipalities as the nation struggles to lift itself out of the recession and the country faces a 9.1 percent unemployment rate.
“The fact is we have a Congress that’s dithering” on job creation, L.A. Mayor Antonio Villaraigosa (D) told reporters gathered at the White House after a meeting with Obama and Biden. “We cannot in these times allow some to debate on the head of a pin everything that makes us different and not find the common ground … for resolving [the deficit reduction and debt limit hike] in a way that’s smart.” […]
Philadelphia Mayor Michael Nutter (D) slammed “the lack of reality” that comes out of Washington when lawmakers push for massive cuts, which he argued actually hurt their districts.
“We recognize deficit reduction is important … but when I go back home, no one is going to walk up tome on the streets of Philadelphia and start having a conversation about the debt limit and deficit reduction,” he said. “What they want to know is, mayor, I need a job.”
Villaraigosa and Nutter aren’t always right, but here they are a breath of fresh air. Because they don’t live with the preoccupations of Washington, they can see pretty clearly that reducing investment will lead to major hardship for them and their communities. Often, the reduction of federal budgets just shifts the needs – and the funding – to the states, as it has with the EPA budget. This forces the tough choices to the local level, at great risk to the recovery.
As Matt Stoller writes, Anthony Weiner may have been a distraction, but he was a distraction from the fact that there’s no jobs agenda in Washington.
The simple fact is: There’s no governing agenda being debated. So Weiner wasn’t a distraction — more like an in-flight soft-core movie in between election jockeying by a bored political class.
For confirmation, let’s look at the economist Rebecca Blank, a candidate to replace Austan Goolsbee as the White House’s chief economic adviser. Blank is a “pragmatic progressive” economist, which apparently means someone who feels bad about the damage caused by the problems they aren’t trying to fix.
“Could this economy take off again?” Blank said recently in the National Journal, “The answer is absolutely yes. If you look at corporate profits, if you look at consumer balance sheets [improving] … gas prices are falling. I guess I understand the reason to say, ‘Let’s see if this economy can do it on its own.’”
On its own? Really? Tell this to the more than 9 percent currently unemployed.
The Progressive Caucus is on that multi-city tour to talk directly about job creation. It’s a message that Washington all needs to hear.