New post up at Blue Jersey regarding a different approach to budgeting in difficult circumstances. Yes, revenues can be on the table!
Read it here.
Ezra Klein has a provocative post up this morning where he argues that while Democrats may emerge from budget negotiations with a more stable political position, the policy outcome is going to stink:
But if you just keep your eye on the policy, Republicans are moving towards a win far beyond anything the House leadership had initially imagined. Getting there required learning they had less control over their conservative wing that they’d hoped, but it also taught them that their inability to control their conservative wing gave them credibility in negotiations with Democrats and can lead to pretty remarkable policy wins, as no one doubts that House Republicans really will shut down the government or allow for a default.
One way to read this is that Democrats have a basically impossible task; since they care about a functioning government, they will never be able to out-crazy the GOP hard-liners who have seemingly convinced themselves that a government shutdown or even U.S. default would somehow spur positive reforms, or at the very least force Americans to take their medicine for their profligate spending demands. How to negotiate with these types?
Another way to read it is that the Democrats, particularly President Obama, are just really horrible negotiators. Krugman advances this line here, piling on the President for his inapt and harmful “belt-tightening” metaphor and general abandonment of Keynesian rhetoric. I think he’s onto something and that in general, progressives didn’t push back hard enough on this type of thing coming from the White House.
But it’s important to note that these extremely suspect negotiating tactics have infected the entire party, both on the federal and state levels. Here, for example, is Sen. Chuck Schumer who tweeted this gem way back on February 15th, linking to a Facebook post titled “We All Agree On Need to Cut Spending, Now Let’s Have a Debate On What Exactly To Cut.” Remember — this is the progressive representative in budget negotiations. Can you imagine, say, in the context of entitlement reform, Rep. Paul Ryan blaring out a Facebook post “We All Agree On Need to Raise Revenues, Now Let’s Have a Debate On How Exactly To Raise Them”? I think you’ll see the fundamental asymmetry there.
The most frustrating thing is that the Democrats actually have the economics on their side. It’s simply untrue, as Schumer alleges, that “we all agree on need to cut spending.” In fact, most center-to-left economists — while they disagree on the relative severity of our medium-term fiscal problems — believe that immediate spending cuts are the exact opposite solution to promoting growth. This isn’t a crank view, it’s mainstream economics, and Schumer has basically written them out of the conversation completely.
This is a problem on the state level as well, as Sen. Schumer’s fellow New Yorker Gov. Cuomo has presented an all-cuts budget to close a $10 billion deficit. Like his hard-line conservative neighbors PA Gov. Corbett and NJ Gov. Christie, Cuomo ruled out any and all revenue solutions to the budget crisis. The Times had an excellent editorial on what this means about Cuomo’s priorities:
Governor Cuomo has vowed to make the tough decisions and not to be swayed by special-interest pleadings. But he is refusing to impose any new taxes or even continue a current surcharge on New York’s wealthiest and least vulnerable citizens.
That makes no fiscal sense. So we have to assume that for Mr. Cuomo, some special interests are more special than others. Just extending the surcharge on New York’s highest earners through 2012 would add an estimated $1.2 billion in revenue to the upcoming budget and $4 billion the following fiscal year.
Without that surcharge and other targeted tax increases, Mr. Cuomo’s proposed cuts in education and other vital services will inevitably be deeper and more painful than necessary, harming both individuals and the foundation for the state’s future economic growth.
What’s awful about this (in addition to the pain imposed by the cuts) is that it’s being done in the name of pragmatic, hard-nosed budgeting — a “new day for New York.” But it’s the opposite of pragmatism to flatly rule out tackling one side of the ledger from the start. It also happens to define modern conservative ideology. No wonder progressives seem to be losing in budget negotiations.
This type of rhetoric gives the impression that Gov. Christie and other rising-star Republicans are right: that there’s no other way to fix our budget problems. But Gov. Brown in California is offering a much more balanced solution, with both revenue and spending on the table — which is as is should be. You won’t see him getting the type of east coast/beltway media attention, though, that is afforded to Gov. Cuomo’s stalwart defense of the wealthiest New Yorkers.
New York is a huge progressive state with a disproportionate impact on the media narrative and elite thinking. It often serves as the bulwark for the left side of the national conversation. To have the Democratic governor of the state demand that revenues be off the table in any budget negotiation, and to have the senior Democratic Senator imply that anyone who doesn’t believe in immediate federal spending cuts doesn’t even deserve a seat at the table, is a ticket to a Tea Party budget in all levels of government. Schumer and Cuomo would probably argue that their rhetoric is politically necessary, and is a bow to “reality” after the 2010 elections. But their negotiating tactics are so bad that one has to wonder if they actually believe these things on the merits — and that would truly be scary.
He does realize, then, that since he is saying this publicly, if there is any movement towards more cuts, the Tea Party will rightfully take credit, have their “negotiating” strategy vindicated, and repeat it in every subsequent negotiation? Essentially Sen. Schumer is implicitly saying that the Tea Party has a veto over the budget — they are the “only obstacle.” In the name of making the Tea Party seem extreme and the Democrats “reasonable” by comparison (which I don’t think anyone cares about), he is simply telling the public that they have a willingness to stick to their guns. Not really the best way to marginalize them.