Nate Silver’s analysis of the debt deal is broadly similar to mine, actually. He acknowledges that fiscal policy will be anti-expansionary in the near term, but that the cuts are not that deep in fiscal year 2012, and that defense will bear at least some of the pain. It’s a backloaded deal, and future Congresses can simply obviate it.
That’s true. Future Congresses are not bound by the actions of previous Congresses. The more important question is whether you believe that THIS generation of Congressional leadership will work outside the lines of this agreement. Will these Democrats muster the gumption to break the spending caps, to allow all the Bush tax cuts to expire, etc., etc. I just don’t see it. I don’t see these Democrats, who have been parroting the language of austerity so much they have to believe at least some of it, will ever go beyond this agreement. They have made a virtue of paygo and Clinton’s balanced budgets for close to 20 years now. They are fiscal conservatives, the only ones in Washington to be precise. The Progressive Caucus budget reaches a surplus in 2021, albeit in a smarter way. They will live within the constraints of this paralyzing discretionary budget, which puts public investment at an appallingly low level.
The way out of this box is to find different people than the ones currently in office. I don’t see any other way around that. This can start at the state level, actually. One of the worst aspects of this deal is the timing – in just a week, there are elections in Wisconsin that represents a true mass popular movement aligned with the Democratic Party, that happens to be fighting for workers’ rights. But everyone is overwhelmed with anger over this debt deal.
As an additional note, Jay Newton-Small’s piece today adds that the 2012 fiscal year budget will be “deemed” passed inside this deal. While that’s true, that doesn’t mean the appropriations will be completed in here. The caps will have been set but the specifics would need to be passed by September 30. And that’s another hostage-taking even for Republicans. One that they can use to their advantage to extract more concessions, whether on near-term cuts (the spending cap is not a floor) or policy riders.
I also think the trigger will wind up being more binding on Democrats than anyone thinks, particularly the White House, for the reasons I said before.