By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen
The Beltway wonkosphere spent most of yesterday shooting the fish in the barrel that is the Paul Ryan “Path to Prosperity” budget. Here’s a representative sample. From the looks of it, the Ryan budget for fiscal year 2014 looks mostly like the Ryan budget for FY2012 and FY2011, with the added extra of banking the tax hikes he didn’t vote for in the fiscal cliff deal. It includes the same vague goal of marginal tax brackets at just 10% and 25%, the same voucherization of Medicare, the same “repeal of Obamacare” while keeping all the revenue-raisers from Obamacare intact, the same block-granting of mandatory spending like Medicaid and food stamps (Ryan calling welfare reform a “success” because child poverty rates initially came down is completely disingenuous, ignoring the economic boom that happened at the same time), etc., etc. This year’s model balances the budget by 2023, but that’s largely a factor of the austerity already put into place over the last couple years.
It’s not all that illuminating to see the same cast of characters make the same pronouncements on Ryan’s plans. At least the mask did slip for a moment today: in a press conference, Ryan insisted, “We are not going to give up on destroying the healthcare system.”
The more noteworthy story in the budget wars was the sneak preview of the Senate Democrats’ contribution to the debate. No full package, but some topline numbers, which includes $1.95 trillion in deficit reduction over the next ten years, split between tax hikes and spending cuts, with a token $100 billion in new spending in the first year on a “jobs program.” So sequestration would get replaced with larger deficit reduction by almost a factor of two.
This is smaller than Ryan’s $5 trillion in cuts, which all come from the spending side. It’s also both unnecessary and unpopular. The deficit is already shrinking too rapidly for the economy to accommodate. And you cannot find more than a couple small regions of the budget where voters would endorse the cutting.
Here’s where the Senate Democrats, led by Patty Murray, lay down the axe:
The spending cuts are divided up this way: $493 billion in domestic savings, including $275 billion in health care cuts that the Democratic source said would not harm seniors or families. Defense spending would be cut by $240 billion in accordance with troop drawdowns from overseas operations. An additional $242 billion in savings come from reduced interest payments.
It’s perhaps possible to come up with $275 billion in health care cuts that “would not harm seniors or families,” but that would have to include reducing payments to stakeholders, something our captured Congress has found nigh impossible, especially when they’ve already handed over the forced market that insurers and hospitals and drug companies accepted as payment for their token give-backs in the Affordable Care Act. At any rate, with discretionary spending already on a trajectory lower than what we spent as a percentage of GDP in the Eisenhower Administration, there’s no need to go lower there even while cutting health care. The usual argument here is that cuts to social insurance help “protect” the discretionary budget, but they both come up for cuts here. And of course, this is the perceived leftward pole in the debate (The Progressive Caucus will release a budget tomorrow, which will promptly get unfairly ignored by everyone in Washington).
In the middle of all of this is the White House. And they appear to be engaged in the tactic of saying different things to different audiences. To the public, the President sat down with George Stephanopoulos and claimed that “My goal is not to chase a balanced budget just for the sake of balance,” and that he’s focused on growing the economy. He also took a few swipes at the big fat target that is the Ryan budget.
Behind closed doors, the tone was, shall we say, different:
President Barack Obama told Senate Democrats on Tuesday that his budget to be released in April would align closely with their priorities.
He also warned that Democrats need to embrace at least some changes to unsustainable entitlement programs in order to achieve their long-term priorities.
The president made the case, senators attending the luncheon said, to protect entitlements for future generations — a key Democratic priority in negotiations with Republicans over a deficit reduction deal known as a grand bargain.
But Obama acknowledged that Social Security and Medicare — big drivers of federal spending — wouldn’t survive without some changes to save money. Obama added that Republicans must first agree to more revenue hikes before the White House would concede on changes to entitlement programs, senators attending the luncheon said.
Still out grand bargaineering, I see.
I don’t really feel it necessary to refute the fearmongering over threats to Medicare and Social Security’s “survival.” The real worry as far as survival goes consists of the survival of senior citizens, who have next to no retirement savings and require expanded Social Security benefits. Unless you want senior poverty rates to explode and catfood prices to surge, that’s going to be the important next step. Yet the White House is on board with a switch to chained CPI that would represent up to a $1,000 annual cut for older seniors.
Ultimately the budget wars represent the same old story: Obama wants his grand bargain, Republicans want low tax rates. Most of the rest is just theater, about who can stick the other with the worst aspects of any compromise politically. It’s always worth understanding where people line up, but after enough of this go-round, you can’t possibly not have divined it.
As to whether this will ever resolve itself, I think Republicans see what’s occurred so far as pretty decent to their eyes. Tax rates remain manageable for the rich, government has been shrunk, and their reticence to come to a deal just means that every politician in America keeps talking about the deficit and austerity in a time of high unemployment. What’s more, they have a steady stream of more roadblocks to ensure the conversation stays right there. We’ve been on this track ever since the famous Obama “pivot” to the deficit in 2010, and little else of consequence has since been accomplished. As long as we’re on budget/austerity/catfood watch, forget progress. Republicans understand this at some level.