I got into a little Twitter spat today with Michael Grunwald over this story about short-term austerity measures at the federal level. One point I want to emphasize; when the Obama Administration touts that spending and the deficit are smaller, they are taking it from a timeline that begins when they enter office, i.e. before passage of the stimulus. So it’s not correct to say, as Grunwald did at one point, that 2010 spending went down just because 2009 spending went up from the stimulus. At the end of the day, spending has gone down from a pre-stimulus baseline. And fiscal policy at the federal level has dragged on growth since mid-2010. These are inescapable realities.
That’s about all I want to get into with that discussion until I actually read the book. But before that point, we can mutually agree that the pro-austerity rhetoric emanating from the Obama Administration has been corrosive. And despite signs that, after the unpopular debt limit deal, the President put such rhetoric in his hip pocket, sadly that’s not at all true. Witness him today in his impromptu press conference:
Still, the biggest thing Congress could do for the economy is to reach a deal on “a sensible approach” to reducing the deficit, he said. Obama specifically urged congressional leaders to revisit the revenues and spending cuts that were on the table during last year’s negotiations on the debt.
“I continue to be open to seeing Congress approach this with a balanced plan that has tough spending cuts, building on the $1 trillion worth of spending cuts we’ve already made, but also asks for additional revenue from folks like me, folks in the top 1 or 2 percent.”
That would give more “certainty” to families and small businesses.
Welcome back, confidence fairy!
“The $1 trillion in spending cuts we’ve already made,” also typically ignored by those who want to say that Obama out-foxed Boehner in the debt limit deal, refers to the spending cap, which will starve federal investment for the next ten years. But the clear point made here is that $1 trillion is not enough for this President. He still seeks that grand bargain where token revenue increases are exchanged for “tough spending cuts.” This is still part of the agenda even in an election year. That it comes after Joe Biden made a guarantee about holding harmless Social Security is all the more disconcerting.
Digby references a recent campaign spot – from before Paul Ryan joined the ticket – to emphasize this point.
I don’t have a clue how to stop this train. Having the zombie eyed granny starver on the ticket hasn’t changed their view that the Grand Bargain to slash 4 trillion in government programs in the middle of an epic slump is still great policy and even better politics. But don’t worry. They’ll ask millionaires to “pay a little more” so it’s all good. I’m feeling more “confident” already.
Basically we have a choice between the Republican dystopian hellscape or the Democrats’ long slow jobless recovery with even more insecurity for the poor and middle class. Or actually, it’s more likely to be a “compromise” between the two. After all, these are the opening bids.
I don’t think this is totally inevitable; I think there are opportunities to wiggle out of this relatively unscathed. But one overlooked part of all this is that oftentimes, budget cuts and grand bargains like this don’t happen because a very vocal minority makes it toxic for them to happen. Then they get told “see, there was never anything to worry about, you didn’t have to shout,” when the shouting helped stop the plan from taking effect. It’s a thankless job, alas, but someone has to do it.