The President has just the thing to focus the federal government’s attention on the jobs crisis: a bus tour of the Midwest. And his Treasury Secretary kicked off the campaign (shall we call it The Next Recovery Summer?) in the Washington Post. How does that go? Well, he spends 14 paragraphs defending the debt limit deal and then busts out with this:
And by locking in long-term savings, Congress will have more room in the fall to pass additional short-term measures to strengthen the economy — such as extending the payroll tax cut, which provides an average of a thousand dollars to the after-tax incomes of working Americans; extending unemployment benefits; and financing infrastructure investments. After all, strengthening growth and putting more Americans back to work are among the most important things we can do to improve our fiscal situation today and over the long term […]
It is not enough for Congress to have prevented a disaster it brought on itself. Lawmakers should return in September prepared to act to strengthen the economy and get more Americans back to work. Doing so will help repair the damage this fractious debate inflicted on an economy that was already slowing, not just here but around the world.
This is that famous pivot we’ve been hearing so much about, the one that has been attempted at least seven other times by the Administration. Remember that the end of the health care bill was supposed to precipitate a pivot to jobs. Then the end of Dodd-Frank would do the same. And so on. [cont’d.]
But this underestimates the malign forces who don’t want to pivot, who want to remain right in the muck of austerity for as long as possible. Deficit scolds consider the debt limit deal to be a lowest common denominator, and they want the Catfood Commission II to improve it. Erskine Bowles and Alan Simpson, the Statler and Waldorf of Washington, have an op-ed in today’s New York Times essentially saying, “There will be no pivot!” They write that the debt crisis has been merely postponed, and that none of the essential work has yet been accomplished. In what amounts to a companion news piece, Binyamin Applebaum writes that the debt will be higher in 10 years from the debt deal (in real dollars; debt-to-GDP is a far more important figure), and that health spending remains out of control.
The simple solution to all of this is to do nothing (allowing all of the Bush tax cuts to expire in 17 months) and to create jobs (you simply can’t cut the deficit at 9% unemployment). But the malign actors just don’t want to hear that. They want to break the promises the country has made to the poor and the elderly. And they’re not going to stop yapping until they get there. So this “pivot” is just fanciful.
Especially when the Democrats are perpetually trying to one-up the fiscal scolds:
One of the big victories by tea-party Republicans in the debt-ceiling measure signed into law Tuesday was securing a requirement that Congress vote later this year on a balanced budget amendment to the Constitution.
The measure would need a two-thirds vote in each chamber, and then ratification by 38 states, to succeed. And most observers believe passage in the Democratic-controlled Senate is all but impossible.
Enter Sen. Mark Udall, the centrist Democrat from Colorado, who has introduced an amendment proposal and said Tuesday that Democratic leaders have chosen his legislation to be considered in the fall.
President Obama and other senior Democrats have opposed any balanced-budget amendment, but the idea is popular with many voters – particularly independents, who are growing more fiscally conservative.
Udall is up for reelection in 2014. Many of his Democratic co-sponsors – including Sens. Claire McCaskill (Mo.), Joe Manchin (W. Va.), Bill Nelson (Fla.) and Ben Nelson (Neb.) – are running this year and need support from centrists.
This is really a competing measure to the Republican version of a balanced budget amendment, which includes a spending cap. But just the fact that this vote has to be taken by October will maintain the focus on the deficit.
The point is that, based on the structure of the debt deal and the necessities of passing budgets and other legislation, the deficit will never be fully vanquished in such a way that this pivot can be accomplished.