The politics of the spending cuts

I think Obama is making a big mistake if he signs onto to things like raising the Medicare eligibility age. This Kthug piece may be a little emo for some of you, but I think he gets this right:

A further point: even if Obama really does cut spending, will anyone notice? Even people who are supposedly well informed believe that there was a vast expansion of government under Obama, when in fact there wasn’t. So we’re supposed to believe that independent voters will actually be able to cut through the fog — the deliberate fog of Fox, the he-said-she-said of most other media organizations — and give him credit for spending cuts? Remember, whatever he does Republicans will claim that the government is getting bigger — and news organization will report only that “Democrats say” that this isn’t true.

I don’t think a president can completely ignore the Village — they still have some sway — but on this one, the flyover country reaction has to trump everything else. People don’t want their Medicare taken away, or even delayed. It’s that simple.

Update. Jon Cohn says the deal Obama was offering did include some form of stimulus, which would change my estimation of it.

96 replies
  1. 1
    cat48 says:

    Obama is out of the negotiations. It’s Boehner, Pelosi, Reid, & McConnell; so you & Krugman can whine to them!!!

    The Teapublicans don’t trust Obummer so the talks are at the Capitol, not the WH; so you’ll get what the Teapublicans give you. They want cut everything!

    Also2, Krugman & his “Don’t worry about the Deficit”, have him tell S&P who’s threatening to downgrade the AAA rating within 90 days without a $4T deficit plan.

  2. 2
    Quiddity says:

    If your read Johathan Cohn at TNR, and he’s citing administration officials, Obama is hell-bent on a deal because the economy sucks. So he’s willing to cut Medicare, Medicaid, Social Security, and (out-year) discretionary spending, in order to get: UI extension, a further FICA payroll tax holiday, a vague and too-late-to-matter highway program.

    The economy is in the doldrums largely due to the inadequate 2009 stimulus package that had – at the White House’s instance – inefficient tax cuts in a misguided attempt to bring Republicans on board.

    Obama is sacrificing long-term programs for short-term gain in order to fix a problem that was largely his doing (outreach to Republicans).

  3. 3
    Nemo_N says:

    Another good point:

    As I recall, two things happened last year: voters were angry about the weak economy, and older voters believed that Obama was going to take away their Medicare and send them to the death panels. And so the way to win those voters back is to cut Medicare and weaken the economy?

  4. 4
    Trollenschlongen says:

    But Kthug is shrill.

  5. 5
    PsiFighter37 says:

    A great comment from Nate Silver:

    Don’t know why we treat S&P and Moody’s like a 4th branch of government when they’re the Wall Street equivalent of the LA Clippers.

    A great (and true) statement. No one has any respect for these jokers. And yet everyone freaks out whenever any of them so much as drops a silent fart.

  6. 6
    Skippy-san says:

    Amen and amen! This is about the fact t hat the douchebaggers want a one party government- along the lines of Singapore’s PAP. And if someone has the temerity to point out the flaws in that-they get smacked down.

  7. 7
    Davis X. Machina says:

    @PsiFighter37: A lot of their clout is hard-wired into existing contracts and legislation. Prospectuses are full of requirements and stipulations that holding debt of a specified rating is the same as holding cash; money on hold in local and state government agencies before expenditure must be held until then in the form of cash, or debt above a certain rating.

    It’d be a legal nightmare to unravel all of that on an ad-hoc, on-the-fly basis.

    They’re a bunch of corrupt and incompetent hacks, but path dependence is a bitch.

  8. 8
    Trollenschlongen says:

    what the fuck?

  9. 9
    The Raven says:

    “Jon Chait says the deal Obama was offering did include some form of stimulus, which would change my estimation of it.”

    Would the speculative stimulus outweigh the depressive effects of the cuts, do you think?

    Going to be an interesting election in 2012.

    Croak!

  10. 10
    Quiddity says:

    Krugman quoting Elizabeth Drew on White House thinking:

    It all goes back to the “shellacking” Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less.

    2010 had a 30% lower turnout than 2008 (that’s why right-wing maniacs like Allen West of Florida got into office). It is a mistake to conclude that 2012 will have the same dynamics, especially in light of the current poor approval numbers of prominent austerity-driving Republican governors (Scott, Walker, Kasich, Snyder, LePage).

  11. 11
    lol says:

    The economy is in the doldrums largely due to the inadequate 2009 stimulus package that had – at the White House’s instance – inefficient tax cuts in a misguided attempt to bring Republicans on board.

    You mean the three Republicans who voted for the stimulus after the tax cuts they insisted on were included and without whose votes the stimulus wouldn’t have passed?

  12. 12
    quannlace says:

    \Wish Boehner would knock it off with the ‘The White House doesn’t have a plan/hasn’t shown us any plan” bullshit. So what the hell did you walk out on on Friday?

  13. 13
    RalfW says:

    I’m not asking this question to be an Obot or a moran, but if ACA doesn’t get shredded by the GOP before full implementation, what – beyond cost-shifting 2 years of premiums onto 65+ people – is the horror of lifting the Medicare age, assuming it’s phased in slowly.

    Adult Americans really are living longer. They increasingly work in jobs other than heavy mining and manufacturing. Is it absurd to expect that, as with SS, they’ll stay in the workforce longer?

    I agree with (I think it was) Ezra Klein who says there would need to be a way to deal with people who do still work in physically demanding obs that wear people out early, but that’s a policy problem, not a catastrophe.

    I’m probably asking this in the wrong blogosphere, but I hang out at BJ more than anywhere else, so I’m game to see how it goes.

  14. 14
    cat48 says:

    @quannlace:

    He lost the messaging war & he’s desperate to change that. It’s a nonsensical statement.

  15. 15
    Sapient says:

    “And yet everyone freaks out whenever any of them so much as drops a silent fart.”

    That’s because whenever they drop a silent fart, people’s retirement portfolios drop to a point that they have to go on Medicaid (what Medicaid?).

    Unfortunately, it’s the world we live in.

  16. 16
    aisce says:

    @ cat48

    Obama is out of the negotiations. It’s Boehner, Pelosi, Reid, & McConnell; so you & Krugman can whine to them

    so, if we take this to its logical conclusion, any deal ultimately made is not to the president’s credit? he receives no credit, no praise for his epic chessmaster strategeries, no admiration for his nimble politicking and image burnishing with independent voters? is that where you’re going with this? that he no longer matters?

    uh huh, right. up until a deal is made, and then it becomes 100% obama again. predictable to the last. the blogosphere would be such a nicer place if 99% of everybody who used a computer wasn’t perpetually butthurt over every little thing.

    also, too, we don’t know what the deal is/isn’t/could be/will be/won’t be. but fuck if that hasn’t stopped the outrage machine. and the counter-outrage machine. and the counter to the counter-outrage machine. you guys all deserve each other.

  17. 17
    moonbat says:

    I think we are just wanking at this point since the House will accept no plan with Obama’s fingerprints on it. Benen discussed this this morning: if Obama is able to stand up and say, “I approve this plan,” even if it is 100% wingnut wishlist, they will scuttle it. Because we as a nation can all go to perdition, but this MUST NOT LOOK LIKE A WIN FOR OBAMA.
    Got it?

  18. 18
    aisce says:

    also, dougj, you got your tnr jons wrong. it’s cohn not chait. just fyi.

  19. 19
    Comrade Luke says:

    Isn’t this really all about the bond vigilantes?

    I think the real issue is that “we’re not the customer”. I take that from many articles written about Google and Facebook (actually typed Fecebook first. heh), and how it’s really the ad companies that are the customers, and not the users of their products themselves.

    In the same way, isn’t it basically true that these negotiations – really, every decision Congress & the White House seems to make – is targeted making the markets happy?

    Seems like the entire M.O. to me.

  20. 20
    cat48 says:

    Well, if anything gets done, he’ll have to sign it. I’m giving him credit for the messaging/bully pulpit. He moved public opinion on raising the DC by about 20 pts in the WSJ poll. I don’t think he cares what’s in the deal as long as the Bond rating doesn’t go down.

  21. 21
    Davis X. Machina says:

    @RalfW: Klein’s got an underlying point, that how a social provision is done isn’t near as important as that it is done — look at all the different health-care finance and delivery schemes out there in the real word — but it’s not generally considered sound to jump unless you’re sure where you’re going to land.

    Medicare is a known and working entity, and while maybe some future iteration of PPACA, and some future iteration of Medicare — and it will change, its future costs pose real problems — would be close enough in what a patient gets and pays that you could elide one into the other, but there’s many a a slip, etc. etc…

    Klein’ll be better at this when he’s older and more cynical.

  22. 22
    Comrade Luke says:

    @moonbat:

    I think we are just wanking at this point since the House will accept no plan with Obama’s fingerprints on it.

    Yup, pretty much.

  23. 23
    PurpleGirl says:

    RalfW — there are a lot of people in their 50s and 60s who lost their jobs and have been UNABLE to find another one. (Me, for instance, out of work since Dec. 2008.) So you expect that people who can’t get a job now are going to be able to work just a few more years for SS amd Medicare?

    Don’t talk to me about raising the age at which I can get Social Security or Medicare… I’m living on money borrowed from relatives because of the way state law and unemployment interact my benefits ended after 60 weeks total. And if forced to apply for early SS benefits (I would still have to wait for Medicare), my SS will be 25% less than otherwise. Every year, a few months before your birthday, the Social Security Administration sends you a statement of projected benefits. Look at it and see what you’re slated to get under different situations.

  24. 24
    Shawn in ShowMe says:

    Oh, I get it. This is one of these hypothetical arguments like who would win in a fight between Thor and the Hulk. But in real life there is no Thor and the Hulk just like there is no deal that the Republican caucus would agree to that has increased tax revenues.

    P.S. Hulk wins in a hand to hand matchup. Thor wins if uses his hammer to whip up a portal that sucks the Hulk into another dimension.

  25. 25
    Earl Butz says:

    what – beyond cost-shifting 2 years of premiums onto 65+ people – is the horror of lifting the Medicare age, assuming it’s phased in slowly.

    The problem is that health insurance when you’re over 65 costs a couple of thousand a month for even the shittiest of policies.

  26. 26
    moonbat says:

    Besides, I am not opposed to see Pelosi as Boehner’s opposite on this negotiating team. She can eat his lunch just as easily as Obama can. And unlike Boehner, she has control of her caucus. She can guarantee enough votes needed to get something passed the crazy 88s. He can’t.

  27. 27
    joel hanes, sp4 says:

    @RalfW
    Adult Americans really are living longer.

    Not so much.

    Most of the statistical increase in average lifespan comes from decreased infant mortality.
    Much of the remaining increase in the average is because the aged-but-affluent are living five to seven years longer than an earlier generation.

    If I recall correctly, working-class males now in their late fifties can be expected to live only a year or two longer than their fathers.

    So the solution proposed is to delay and reduce benefits to the common man, who will need to depend on those benefits, in order to preserve tax cuts for the affluent, who do not rely heavily on the benefits being cut.

  28. 28

    So far, I’m hearing a lot of reports about what Obama offers that come from anonymous officials, and a lot of rage about Obama putting the social safety net on the chopping block. In fact, I’ve been hearing these reports way back into 2009. I guess it’s possible it could happen, given the insanity of these negotiations, but it ain’t happened yet.

  29. 29
    FlipYrWhig says:

    @ RalfW : The argument is largely that it’s bad politics (because it opens up an avenue of attack for being a decision that hurts seniors) rather than that it’s bad policy. I wouldn’t be surprised if, in the context of a fully-running ACA, it _did_ create some savings without harming people’s livelihoods. But I think Krugman is right that the advantages of making such a change, whatever they were, would be hard to claim anytime soon.

    My sense is that Obama likes, even relishes, being able to step up to the podium and tell a story about how he chose to deal with Big Problems regardless of the naysayers who told him it would be politically disadvantageous. He may be betting that that meta-story — “I do what needs doing, even if it’s not what everyone would like” — is even more key to his reelection prospects than any details or any outcome of any particular negotiation.

    That way he can say to people who don’t pay that much attention to the particulars, “I’m working hard for you and I’m willing to step on some toes to do it,” and if they vote more based on “What kind of a person do I want in charge?” rather than “What have you done for me lately?”, it could work.

  30. 30
    JGabriel says:

    John Boehner via TPM:

    I would prefer to have a bipartisan approach to solve this problem. If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own. Today.

    Does Boehner even understand that Republicans do not control the Presidency or the Senate, that Republicans do not have the power to move on their own?

    Unbelievable.

    .

  31. 31
    boss bitch says:

    Oh great! Another post about what Obama might maybe could be doing but hasn’t followed by comments from people acting as if he made the deal (the worse one they can image) already. Facts be damned lets just make shit up.

    Oh and the economy and Republican cult like behavior – all Obama’s fault.

  32. 32
    FlipYrWhig says:

    @ Earl Butz:

    The problem is that health insurance when you’re over 65 costs a couple of thousand a month for even the shittiest of policies.

    Will that still be true in the context of a fully-phased-in “ObamaCare”?

  33. 33
    Davis X. Machina says:

    @FlipYrWhig: No. But to what extent ‘no’ no one can tell. And that’s the problem

    Hippocratic politics — first do no harm — generally is smart politics.

  34. 34
    Sapient says:

    “beyond cost-shifting 2 years of premiums onto 65+ people – is the horror of lifting the Medicare age, assuming it’s phased in slowly.”

    If ACA stays in effect (or, preferably, is improved – which is another thing that Obama and Democrats would be working to achieve) I don’t have a problem with the Medicare eligibility age being increased. (And I am approaching “the age”.) But, if the SS eligibility age is increased, I have a huge problem with that! People get tired and old – that’s just a fact. Not all professions accommodate tired and old people. And, if tired and old people lose their jobs, nobody will hire them. Just look around.

    So yeah, Medicare, maybe, with the above caveats. SS? No way.

  35. 35
    RalfW says:

    @Earl Which is why I said raising the Medicare age after ACA is fully implemented, so that the subsidies kick in at 9.5% of income. I’m 45, self-insured, get low pay for a tiny faith-based justice org and pay over 13% of my income in premiums. No picnic whatsoever, so I don’t toss off 9.5% as some easy thing for people to do.

    I eagerly (and with serious worry about the GOP jihad) await ACA subsidies or shopping for a cheaper plan via the exchanges.

    As for PurpleGirl and many, many people in a similar bind, I point to this PPACA point: persons at or below 150% of the poverty level would be subsidized such that their premium cost would be of 2% of income or $50 a month for a family of 4.

  36. 36
    Thymezone says:

    I’m not sure what you are saying, Doug. “People want” this and “people want” that. So what? “People” are constituencies with opposing interests and agendas.

    “People want” their country back. Okay, those are rednecks and skinheads, mostly, who use that language. But in any case … there they are. “People want” their entitlements. Hey, sing to me. My medicare kicks in a week from tomorrow. I am quite tuned in to the idea. But I also want fiscal balance and progressive taxation. And I want a government that bends, and does not break.

    And that latter, it seems to me, is the most important thing that “people want.” It’s what Lincoln wanted us to understand when he spoke at Gettysburg and made the most remembered speech in American history. Look, he said, at this field of death and destruction. This is what you get when a country that wants different things can’t bend before it breaks. We have to do better than this.

    One hundred or so years later, Barry Goldwater enlisted Lincoln’s old party into a sham philosophy that says “Extremism is no vice.” In other words, anything goes in politics when you are sure you are right. And that is the operating principle of the Republican party. So what is it that “people want?” A government that works, and bends, and goes forward? Or one that stands tall on principle and never gives in, and honors Goldwater and the so-called “conservative movement,” which is surely the most inaptly named creature in our history. What do “people” really want?

    They appear to want guns, and butter, and ponies, and all of it for free. What do you think they want?

  37. 37
    RalfW says:

    Sapient, the SS age is already rising for ppl like me who are now 45. Per SS, my full retirement age already is 67. So to me, linking Medicare with SS – assuming full PPACA implementation, which is not given – then they seem to be part of a not-insane reform.

    I have few illusions about not-insane reforms this Congress.

  38. 38
    RalfW says:

    Does Boehner even understand that Republicans do not control the Presidency or the Senate, that Republicans do not have the power to move on their own?

    The Unitary executive theory shits to whatever office (or body of Congress; Supreme Court if necessary) obtains.

    The repups ARE America. All else is irrelevant.

  39. 39
    patrick II says:

    @joel hanes, sp4:
    Well said, and right on.
    It is amazing to me that every policy the repubs support rob the poor and middle class to pay the rich. If you are not sure why the republicans are doing something, just ask yourself, “how does this help the rich”, and you will figure it out.

  40. 40
    NR says:

    It’s pretty clear that Obama views cuts to the “big three” social programs as his duty to be a Very Serious Person in Washington.

    And you have to admire his chutzpah, at least, in citing the plight of poor elderly people after offering to slash their retirement benefits.

  41. 41
    PurpleGirl says:

    RalfW — please respond to the major point I was making about people having jobs, or not as the case may be. How do people make it if they don’t have jobs?

    I really hope that you are able to keep working, even as a self-employed person. Cause when they cut you lose and you run out of money, it ain’t fun. (Oh, and I was working for a nonprofit myself.)

  42. 42
    efgoldman says:

    I am 66, but still working (in an office). I got into a 401(k) program too late in life (age 50) to retire last year, plus like everyone else I took a huge hit in 2008 – which has all been made back, and then some, but still, a huge hit.
    The other reason I’m still working is company medical. Its a good, but not gold-plated, program (my son-in-law, who works for the US branch of a British company, gets gold-plated). But mrs efgoldman is nine years younger than I, and therefore won’t be eligible for medicare for another eight years. ACA will kick in before that, but meanwhile I dasn’t lose my insurance.

  43. 43
    Rome Again says:

    RalfW—please respond to the major point I was making about people having jobs, or not as the case may be. How do people make it if they don’t have jobs?

    The Tea Party doesn’t care if anyone “makes it”. They think they are doing God’s work – that if someone is poor, it’s because God hates them and made them that way on purpose, so they are targeted for termination.

    I’m NOT snarking, this is really how they think.

  44. 44
    Anya says:

    @Nemo_N ~ I think the President gets the voters’ frustration. He stated it succinctly, at the press conference.

    Now, what you’re going to hear, I suspect, is, well, if you — if the Senate is prepared to pass the cap, cut and balance bill, the Republican plan, then somehow we can solve this problem — that’s serious debt reduction. It turns out, actually, that the plan that Speaker Boehner and I were talking about was comparable in terms of deficit reduction. The difference was that we didn’t put all the burden on the people who are least able to protect themselves, who don’t have lobbyists in this town, who don’t have lawyers working on the tax code for them — working stiffs out there, ordinary folks who are struggling every day. And they know they’re getting a raw deal, and they’re mad at everybody about it. They’re mad at Democrats and they’re mad at Republicans, because they know somehow, no matter how hard they work, they don’t seem to be able to keep up. And what they’re looking for is somebody who’s willing to look out for them. That’s all they’re looking for.

  45. 45
    FlipYrWhig says:

    @ Frankensteinbeck:

    In fact, I’ve been hearing these reports way back into 2009.

    What’s funny, but not funny ha-ha, is that there was a time when it was pretty much the consensus view that Social Security needed some kind of small adjustment (which could come in the form of raising the income cap) and that Medicare needed some kind of big adjustment (which could come in the form of incentivizing medical cost savings). Even as recently as the privatizing SocSec effort, it was common to see a rebuttal that stated that SocSec wasn’t the problem, Medicare was. And everyone in the blogosphere used to know that the prescription drug benefit was a boondoggle and a giveaway to pharmaceutical companies.

    But somehow we’ve gotten to this place where every suggestion of a “cut,” an “adjustment,” a “tweak,” or “strengthening” is _prima facie_ a slow-motion version of Death Panels. Preceded by the eating of tin after tin of cat food.

    I have a lot of sympathy for the claim that there’s no good reason to be discussing “entitlement reform” in the middle of a moribund job market. I don’t have a lot of sympathy for the overcompensation that finds _any_ discussion of _ever_ doing something about this anathema. But that’s what the blogospheric discussion has been like for months.

    As with climate change, the big problems happen in the future, so it feels like we should do them in the future, because there will be a certain amount of pain in the short term. So to avoid that pain, we delay, which means that the amount of pain we eventually experience will be greater. Politically, it’s never the right time to tackle any long term problems.

    (Maybe the grand bargain should be that reforming the structure of medical spending gets tied to reforming the structure of energy policy. One big Future Crisis package.)

  46. 46
    efgoldman says:

    @ 41 Rome Again – July 24, 2011 | 3:05 pm

    I’m NOT snarking, this is really how they think.

    Snark and the truth are not mutually exclusive.

  47. 47
    moonbat says:

    I know it’s really hard to focus with all this rumor running around, but if you listen to the words coming out of the President’s mouth in his press conference Friday (you know, the guy that all these positions are being ascribed to) you would have heard this phrase “without cutting benefits” when he was referring to SS and Medicare.

  48. 48
    kay says:

    Does the timing of any of this matter to people? Because it should. The cuts to discretionary spending, for example, are over ten years. That’s (allegedly) what Obama offered. But the piece Krugman linked (and relied on, I assume) says only “some of them in 2012”. We have a guess at amount, but we don’t have when.
    If the (substantive, policy) worry or complaint is Obama is willing to pull money out of the economy in a depression, doesn’t it matter, a lot, whether that cut goes into effect in 2012 or 2014 or 2021?
    That’s not even considering the fact no one has any idea if cuts scheduled, say, 8 years out EVER go into effect?
    Boehner needs the appearance of cuts. Obama needs stimulative spending to at least stay the same or increase. Couldn’t the timeline allow (depending on who gets what, when) both things to happen? The appearance of cuts for Boehner, but the substantive absence of cuts for Obama while the economy sucks?

  49. 49

    NR:
    Given that he hasn’t done it, has had some great chances to do it, and speaks eloquently and at length against it, I’m not sure why this is clear.

  50. 50
    WereBear says:

    It’s all so easy now… reading some of the comments online about what Obama should be doing is transforming my life!

    I won’t need to cooperate with my life partner any more. Yes, we share paychecks to keep the rent going out and groceries coming in, but I won’t let that get in the way of my Galtian Greatness any more.

    I’ll save so much time not feeding the cats any more. They might not like it, but they can just go Libertarian; they’ll be happier that way.

    I can make more money just by using the Bully Pulpit on my boss. Never mind that how much I get paid isn’t my decision; I’ll just declare it is.

    Gosh, this unbounded by reality existence sure sounds good! I can’t wait to implement it Monday morning.

  51. 51
    RalfW says:

    RalfW—please respond to the major point I was making about people having jobs, or not as the case may be. How do people make it if they don’t have jobs?

    I would if I could. This being a healthcare thread, I was addressing that.

    Seriously, I am sorry you’re out of work. My partner has risked getting in debt to go back to school and we’re stressed out about what happens in 18 months when he graduates.

    But I can’t address the massive downturn in the economy & jobs in any meaningful way that will take care of that for you.

  52. 52
    Thymezone says:

    #35 … so what? I don’t get it. 6x is just a number, and that number has always been driven mainly by actuarial tables. Social Security is not a magical system that the Baby Jesus decided should kick in at 62, or 63, or 65, or 80. It’s a pension scheme that floats on assumptions and numbers that are not fixed.

    The first imperative in the scheme is that it be solvent … that is has the ability, at least over a reasonable term, to adjust so that it doesn’t keep paying out more than it takes in, lest it become a drain on the general fund or else break and collapse.

    Where does the idea come from that the government owes anyone a retirement age? Right now, people like me can retire on a sliding scale of age vs benefit, so that the longer you work, the larger your benefit … a very sensible arrangement since people at the approach to retirement are making more money than they did years ago, and paying in the most. It’s smart policy. I retired at 63 because my benefit was going to go up if I stayed in the unretired pool … but the job I was in was literally killing me. So the calculation was, do I stay in for a higher benefit and die before I can enjoy it, or get out while I still have some health and take a smaller benefit? I took the latter path. It wasn’t the best financial path but time will tell whether it was the best life path. I am very glad that the choice was available.

    And of course, the people who talk about the current debate and talk about “slashing Social Security” are just baldfaced fucking liars. Social Security has rested on flexibility and change, number one. And number two, there is no major hit to benefits being proposed that takes effect in near years … and the out years are not bound to what we do now because the whole idea of having a government is to provide the means to adjust as we go along. So the assertion is just bullshit. It’s stupidass rhetoric not worth the pixels it wastes on your screen.

  53. 53
    OzoneR says:

    Even people who are supposedly well informed believe that there was a vast expansion of government under Obama, when in fact there wasn’t. So we’re supposed to believe that independent voters will actually be able to cut through the fog — the deliberate fog of Fox, the he-said-she-said of most other media organizations — and give him credit for spending cuts?

    Yet somehow we seem to think they’ll let him try to turn around 40 years of conventional wisdom and convince the country that we need to spend more.

  54. 54
    FlipYrWhig says:

    Does the timing of any of this matter to people? Because it should.

    Thanks, kay! Yes, it should, and yet for some reason chatter in the blogosphere has been envisioning that all cuts happen immediately, and immediately inflict “austerity.”

  55. 55
    OzoneR says:

    older voters believed that Obama was going to take away their Medicare and send them to the death panels. black.

    FIFY.

  56. 56
    kay says:

    And then to take it further, if the (second) Cohn piece is correct, does timing matter there? If Obama gets (an increase) stimulative spending short-term in return for a promise of cuts long-term, well, there’s the old saw about money in your hand versus a promise to pay (or in this case, a promise to cut). But Boehner can claim victory, as long as no looks at when.

    Don’t we need to know when along with what to evaluate an eventual deal?

  57. 57
    OzoneR says:

    2010 had a 30% lower turnout than 2008

    Decisions are made by those who show up and policy is crafted around those who show up. You can’t say they should care about the other 70 percent when they can’t guarantee they’ll be there on election day to back them up (they won’t be)

  58. 58
    Andrew says:

    The Elizabeth Drew piece Krugman links to is an interesting piece. A lot of it is inside baseball, quotes from anonymous insiders, etc. So I take it with a grain of salt and keep some perspective, but it is still an interesting read. It essentially suggests that Obama wants a big deficit reduction deal because it will help his “brand” and improve his image with independent voters. But it also suggests that to some extent he does believe in that. It quotes one anonymous WH aide saying Obama “isn’t as Keynesian” as in 2009, as if the continued drag of the economy has made Obama more skeptical of Keynesian remedies.

    The most charitable interpretation I can make is that he basically feels large-scale Keynesian solutions are hard to make work in practice absent a war setting (i.e. the relative slow pace of the stimulus’ “shovel-ready” projects). Better then to keep in place some basic supports (lower payroll tax, unemployment benefits) and push for longer-term spending and investment, something which he thinks will be easier to sell if is also accompanied by a broader deficit-reduction plan. I don’t totally buy it; I can understand the sentiments, but the argument seems self-rationalizing and a little circuitous. I don’t see why an argument that “jobs are important now – deficit reduction can wait for later” isn’t a more viable one.

    Anyway, there is much to criticize here. But I do find Krugman’s blog posts – in contrast to his columns – to be annoyingly personal. It’s clear there’s a strong personal edge to Krugman’s criticisms of Obama, one that tends to automatically view his actions in the most negative light. The irony is that despite his continued claims that we should’ve voted for Hillary (a blog post last week said, offhand “remember the primary? (On second thought, maybe better not to”)), there’s little reason to think Hillary would be doing very differently right now, given that most of Obama’s current advisers, Plouffe excepted, were Clinton people. Gene Sperling was her top economic adviser. Bill Daley was a longtime Clintonite. Roger Altman was her likely Treasury Secretary. Maybe things would have turned out differently, but all the evidence was that her policies would have been very similar to Obama’s.

  59. 59
    gwangung says:

    Does the timing of any of this matter to people? Because it should.

    Details matter. Except to idealogues (on both right and left).

  60. 60
    PurpleGirl says:

    RalfW — let’s make this simple… If a person cannot get a job now at age 59 or 60, how does anyone expect that they can work just a few years more to a higher Social Security age? Is that reasonable? Yes or no?

  61. 61
    OzoneR says:

    If a person cannot get a job now at age 59 or 60, how does anyone expect that they can work just a few years more to a higher Social Security age? Is that reasonable?

    In a perfect world, none of this is reasonable, but again, in part because you’re demographic voted overwhelmingly for them, the GOP House gets to call at least some, if not all, of the shote.

  62. 62
    kay says:

    FlipYrWhig

    If the argument is stimulative spending, timing is everything. With a ten year window, we’re out into an imaginary congress, an imaginary president, and an imaginary economy.

    The same goes for tax cuts/increases, by the way. If the spending increase and/or revenue increase is front-loaded, and the discretionary cuts/tax cuts are in some distant future, that’s a substantively better deal for Obama/America in a recession.

  63. 63
    FlipYrWhig says:

    @ kay : I think the rhetoric around the original stimulus bill was badly mishandled when it didn’t incorporate the notion that, over the long term, the Treasury would bounce back. The lost opportunity was for Keynesian Democrats to strike an arrangement with the Deficit Peacocks to frame the whole effort as short-term spending followed by long-term savings. I think that would have negated some amount of the traction Republicans gained on the idea that Obama was so spendthrift he had to be thwarted by any means necessary. That wouldn’t have swayed everyone, I realize, but IMHO it would have helped.

    And any further discussion of stimulus should include corresponding rhetoric about repayment. We spend, we pay back, just like an honest hardworking taxpayer. Even use the dreaded nation-household analogy… for OUR purposes. Win win.

  64. 64
    Rome Again says:

    @efgoldman:

    Point taken, I just didn’t want it get lost in the “you’re just joking around” basket.

  65. 65
    Rome Again says:

    @Andrew:

    Things would have never gotten to the point they are now, because, you know, that question of color.

    I didn’t support Hillary (I found her Croatia warzone statement utter fantasy) and I have been an Obama supporter since several months before the election and while he’s not perfect, I admire what he’s trying to do. That said, a lot of what is happening now is happening simply because the man in the white house is not white. We would not be living under the same circumstances now if Hillary won. Comparing the similarity of the two situations is impossible.

  66. 66
    The Tragically Flip says:

    @Thymezone:

    Where does the idea come from that the government owes anyone a retirement age?

    Oh I don’t know, basic human decency and compassion for those too old to work?

    Seriously, what is the alternative? Leaving them on ice floes?

  67. 67
    Canuckistani Tom says:

    48 @WereBear

    I’ll save so much time not feeding the cats any more. They might not like it, but they can just go Libertarian; they’ll be happier that way.

    Careful. If the cats go libertarian, you’d better sleep with one eye open

  68. 68
    kay says:

    Details matter.

    I refer you to the cuts to Medicare providers that were written into law in 1997. And have yet to come into being. Ever. The Doc Fix “fixes” them. Every time.

    In 1997, the Republican Congress created a payment formula meant to govern Medicare called the Sustainable Growth Rate. The formula was supposed to be a little tweak that saved a couple billion dollars. But the formula was wrong, and it quickly proved a wrenching readjustment that would’ve driven physicians out of the program by sharply slashing their payments. But rather than undo it, Republicans in Congress, and then Democrats when they took over Congress, passed temporary fixes, because no one wanted to come up with the money to fix the thing permanently

    The ACA has a whole section devoted to finally admitting that Congress won’t cut payments to providers. Ever. They formed a panel, to get Congress off the hook. Lobbyists, (along with each and every Republican and ten or so Democrats) are working furiously to destroy that ACA cost-saving measure, as we speak.

  69. 69
    joel hanes, sp4 says:

    Thymezone @ 50 :

    When the Republican Party was sane, SS was a flexible system.

    I fear the ratchet, because I’ve seen it here in California.
    When, a decade or more back, we had a temporary surplus, the “taxation is theft” Republicans immediately and “temporarily” halved the vehicle registration tax to “return the money to the people”, eliminating the surplus in short order. The surplus evaporated, but when it came time to return the vehicle registration tax to its former value, the Republicans successfully demogogued “raising taxes”, and that tax is still at the “temporary” value.

    So when the Democrats work deals that include “temporary” payroll tax holidays, I fully expect Republicans to fecklessly renege on the “temporary” part, and to insist that the payroll tax remain at the reduced value indefinitely. When the Democrats work deals that include benefit reductions in “the out years”, I fully expect that when those years arrive, Republicans will insist that the reductions must be made, regardless of the nation’s economic health at that moment, just as they have insisted that the “temporary” Bush tax cuts must be retained.

    The ratchet only turns one way. Little defeats are impossible to reverse, and eventually add up.

  70. 70

    I’d like to make a point about whether Obama believes the deficit is a problem.

    I listened to his speech on that very subject. The entire speech, paying attention to more than a few words. I have no reason not to take it at face value. Yes, he thinks the deficit is a problem, and the sooner we reign it in, the better. He believes, and has been explicit about this, that it’s caused not by the safety net but by Republican tax cuts, spiking medical costs, and a bloated military budget. He believes that it should be fixed by raising taxes *on the wealthy*, fixing the medical costs problem (as opposed to just cutting Medicare), and cutting military spending. He thinks that cutting the safety net or investments in infrastructure would be immoral and bad policy. In fact, he thinks we could use some more stimulus spending, because it has very little to do with the long-term deficit problem.

    In what way is this a position we disagree with? The man flat out told you what he wanted. It’s the stuff that’s been in every bill he’s proposed or supported so far. There’s no need to look for code words or his secret plan.

  71. 71
    Citizen_X says:

    a lot of what is happening now is happening simply because the man in the white house is not white

    Very true, but Wingnut World would be spawning a different–probably roughly equal–set of horrors if the man in the white house were not a man.

  72. 72
    Thymezone says:

    @tragically dense —

    Uh, I meant “a particular retirement age.” But I see the point was lost on you.

    Let me make it easier: The government does not owe you a retirement at age 65, or 67. It owes you a pension system that works and the age has to be adjustable for that to be true. Otherwise you could never adjust the age. When the retirement age was “raised” what actually happened was that a sliding scale was put in place that permits retirement at 62 or higher, with “full” benefits available to those who wait until a trigger point. But even then, people can continue to work past that age if they want to. It’s the flexibility that is essential, not the particular age limits.

    The full history of the adjustments is here.

    correction — these are adjustments through 2000. More recent changes are available elsewhere on that same website.

  73. 73
    efgoldman says:

    @ 63 Rome Again – July 24, 2011 | 3:29 pm

    We would not be living under the same circumstances now if Hillary won. Comparing the similarity of the two situations is impossible.

    Oh, I don’t think so. The attacks might have taken a different tone, so to speak, but they would have been just as vicious, and the GOBP TeaHad would have been justa s intransigent.
    That woman just doesn’t know her place, after all, and besides, the wingnuts just hates them some Clintons.

  74. 74
    kay says:

    kay : I think the rhetoric around the original stimulus bill was badly mishandled when it didn’t incorporate the notion that, over the long term, the Treasury would bounce back.

    If I had been in charge of “messaging” I would have hammered, over and over, that the stimulus propped up the safety net that millions of Americans fell into when private markets collapsed. Because that’s what happened.

    The safety net was funded, and it worked. Food stamps were distributed, Medicaid was there, housing subsidies and (meager) cash welfare was available. Unemployment checks went out. We needed it, obviously. Libertarians and conservatives were and are wrong. Markets fail.

    It wasn’t like the Great Depression, with bread lines, not because of some magic or because people were watching American Idol. They weren’t on bread lines or storming the capitol because they had food, because we had a safety net. Liberals should be celebrating that. It works! We need it. It was there.

    People here know it. They know it because they went on food stamps and collected an unemployment check and put their kids on Medicaid. But no one knows who funded it and whose idea that is.

    Rant concluded. I would have gone the other way. I would have said “it’s bad but what did you rely on when libertarianism and conservatism FAILED?

    The safety net. And who invented and funds the safety net? Liberals.

  75. 75
    Thymezone says:

    #67 — that’s an interesting point. It was pointed out recently that Democrats have taken a rigid message posture because they can no longer count on reasonableness from the other side. That’s why they are doing the rather ridiculous looking “don’t slash Social Security” schtick when they know full well that that is not what is being debated at all. They are so unsure of their message in a poisoned atmosphere that they have chosen a dumbed-down message that is idiot proof. It’s a tactic that I deplore for reasons already explained, but there it is.

    #68 — White House insiders have been quoted as saying that Obama is plenty worried about the deficit for the very reason that it threatens progressive policy. Unless the political atmosphere is calmed, the argument goes, all progressive policy is impaled on overheated deficit talk. So the rationale is to make the balance sheet healthier so that the advance of progressive policy is free to operate politically.

  76. 76
    Thymezone says:

    #67 — further … I think that the big mistake you are inadvertently signing on to is calling any formula, table or number that reduces a supposed future benefit is a “defeat.” That’s the left’s big lie, the Bernie Sanders lie.

    Adjustments that keep the system solvent and better aligned with actuarial and fiscal reality are essential to the health of the system, which is why such adjustments have been being made for decades. It’s only in a poisoned atmosphere that these adjustments are seen as “defeats.” The more out of whack the system gets WRT real economic reality, the more vulnerable it is to real defeat and real attack from its enemies who have wanted it destroyed since the day it was signed into effect in 1935.

  77. 77
    FlipYrWhig says:

    White House insiders have been quoted as saying that Obama is plenty worried about the deficit for the very reason that it threatens progressive policy. Unless the political atmosphere is calmed, the argument goes, all progressive policy is impaled on overheated deficit talk.

    Obama more or less said that openly during the Friday press conference that most everyone liked: if you’re a progressive, you should favor deficit reduction because the existence of deficits and debts is being used to stifle progressive initiatives.

  78. 78
    Thymezone says:

    One last thing about the legislative history of SS I posted, and I can’t believe I have to do this again on this board, but anyway ….

    Only the most significant changes are shown in that doc. Minor ones are filtered out. The doc is not comprehensive.

    Further, not all mods to inputs and payouts are legislative in origin. Real time effects are mostly programmatic in nature. That’s why SSA doesn’t start sending you a benefits estimate until you are well along in your work history. I started getting mine sometime around age 50-ish. Or a little after.

  79. 79
    cat48 says:

    @Andrew:

    Keynesian is hard to sell for a politician b/c the projects done might not help every area in the country & he started out every townhall he did that yr. explaining what the Recovery Act had in it which takes about 10 min. The GOP comes along & convinces everyone it didn’t work or it was union payoffs, etc., etc. I think Obama probably hates that about huge packages. I do. It was fully accounted for, but no one bothers to look at all the tedious records they kept.

  80. 80
    Rome Again says:

    @Citizen_X:

    Only if she weren’t Sarah Palin. :P

  81. 81
    cat48 says:

    4:00pm Asian Market Time; yikes!

  82. 82
    Rome Again says:

    @efgoldman:

    Just as vicious does not equal the same. It would be different. It would still be contentious, mean-spirited, nasty and full of lying, but it wouldn’t be what we have now.

  83. 83
    Rome Again says:

    @The Tragically Flip:

    you saw the word Retirement and stopped, right?

  84. 84
    joel hanes, sp4 says:

    Thymezone skrev :
    Adjustments that keep the system solvent and better aligned with actuarial and fiscal reality are essential to the health of the system

    Oh, I fully agree. That’s why I have no problem with the Reagan-era bargain in which benefits were adjusted slightly, and payroll taxes on the Boomer generation were raised significantly to create the “trust fund” needed to cover the demographic bubble. I’ve been paying those rates for over a quarter of a century, without a quibble. That’s flexibility, and that’s how our political system used to work.

    But under the ratchet, the only “adjustments” allowed by the Republicans will be reductions in benefits, followed by reductions in taxation, followed by reductions in benefits “required” by the reductions in taxation, followed by further reductions in taxation, followed by …

    I expect the Republicans to fight hard to retain the “temporary” payroll tax holiday, and maybe to succeed.

    There is a qualitative difference between give-and-take between rational political actors and the current Republican “death by a thousand cuts” tactic, which is deliberately employed to ultimately destroy the programs in question. The ideologues riding the Tea Party tiger oppose Social Security and Medicare and Medicade and food stamps and WIC in principle, and will do all in their power to end these programs completely. They will never be satisfied by any “flexible” compromise solution.

    And at present, they appear to be winning.

  85. 85
    The Tragically Flip says:

    @Thymezone:

    @tragically dense—

    I apologize profusely for reading what you wrote in plain english and responding to it. Clearly I’m too stupid to be in the same thread as you. Apparently as long as something called “social security” exists that gives some number of Americans at some age some amount of money, you will be satisfied that social security has been saved. Others don’t agree, so clearly insults are the best way to resolve this.

  86. 86

    FlipYrWhig:

    I didn’t see a transcript or recording of that one, more’s the pity. But if he thinks addressing the deficit helps sell progressive initiatives… that still means his focus is on increasing taxes and generally paying for crap rather than cutting benefits, because the benefits ARE the progressive initiatives we’d be trying to help.

    ‘Thinks we should address the deficit’ still doesn’t equal ‘thinks cutting the safety net is a good idea’. And the guy’s been completely up front about that.

  87. 87
    Rome Again says:

    @joel hanes, sp4:

    But under the ratchet, the only “adjustments” allowed by the Republicans will be reductions in benefits

    Obama said he’s not willing to do that. He is talking about making other adjustments that don’t effect benefits.

  88. 88
    joel hanes, sp4 says:

    @Rome :

    Obama said he’s not willing to do that.

    He’s saying that now.

    I expect him to fold.

    I guess we’ll see Real Soon Now.

  89. 89
    General Stuck says:

    Somebody lend a nipple for Krugman to suck on, before he shits his diaper, again.

  90. 90
    Martin says:

    Adjustments that keep the system solvent and better aligned with actuarial and fiscal reality are essential to the health of the system, which is why such adjustments have been being made for decades. It’s only in a poisoned atmosphere that these adjustments are seen as “defeats.” The more out of whack the system gets WRT real economic reality, the more vulnerable it is to real defeat and real attack from its enemies who have wanted it destroyed since the day it was signed into effect in 1935.

    I agree. My ideal solution is one that ties as many outcomes to measured economic outcomes. If SS payments stay fixed relative to poverty, I don’t see that as a defeat at all – that’s what the system was supposed to do from day one – keep seniors out of poverty. If you want more than that, we’ve got a whole raft of good solutions – from tax-free to tax-deferred retirement plans. We can’t expect SS to cover the ideal retirement scenario because it was never set up to do that.

    If healthcare costs are pushing seniors back into that poverty category by overburdening them with costs, then that’s a solution on the healthcare side. Dumping more money into SS checks simply results in seniors laundering payroll taxes back to the healthcare system. That’s the opposite outcome that Dems want, so why focus so much on SS rather than on Medicare payment reform? Dems would be wise to embrace C-CPI (government wide) in exchange for expanded Medicare regulation over nursing and assisted living payments. That’d do vastly more good for seniors than the CPI would, it’s save the government money both ways (rather than wasting it both ways), and there would be other benefits to C-CPI outside SS that would pay dividends down the road.

    But I’d be okay with a cap on spending proportionate to GDP, provided that everything was part of the cap, and not exclude defense, as the GOP has done, and that there was a comparable floor on revenues proportionate to GDP that was at least equal to the spending cap. These would be 4 year moving averages – so any spikes one way or another could have time to smooth out. 2/3 vote needed to overcome cap, and it’d apply to both caps simultaneously.

    19%/20% would be my preference. If the GOP wants to cut spending below the 19%, they can do that, but the 20% revenue stays. The cap/floor would apply for any budget cycle where debt/GDP is above a certain ratio – say 33% – after which time old rules go back into place.

  91. 91
    Ella in New Mexico says:

    …thus we settled the question of whether some shadowy oligarchs still pull the strings of the Republican party. They do not.

    I wholeheartedly disagree. The Overlords, for all their power, still need the mindless hoard of ignoramouses to vote for and support the Eric Cantors and the rest of this crazy crew of Republican Teahadists. Because without them and their stupid Nordquist promise, we might actually come to a common sense agreement, recover economically and thus they will watch last chance at a coup d’etat slip through their fingers.

    The Overlords don’t give a hoot about abortion, gay sex, prayer in schools, or the browns coming over the border. They don’t believe for a moment Obama is a Kenyan Socialist Illegal Alien. None of these issues and the battles that have ensued over the past two years are more than a slight, annoying noise in their ears, like the buzzing of a random mosquito. But one thing they DO know: the voters they need DO care. And so they will do everything they can do to encourage them to keep up the stupid.

    If the US Government defaults, it must pay it’s debts first, so they won’t lose. They’ll also get a nice little interest rate increase to boot. Add to that the HUGE opportunities that will be created to exploit and pillage when Executive Branch agencies which regulate these Bastards start to shut down for non-funding.

    Look at what happened when the FAA shut down non-essential tax collection activities this weekend due to failure to fund it’s organization: the airlines got to still fly, safely thanks to airtraffic controllers, but it no longer had to collect and hand over Federal taxes on airtravel—so they collected the same amount by raising airline ticket costs, keeping the difference!

    Can anyone imagine the blissful rape and pillaging of this country that will take place by our Corporate Kings as each and every government impediment is removed?

    These guys LOVE Eric Cantor. They LOVE him.

  92. 92
    Thymezone says:

    #83 — there are a lot of ways to do this, but putting words into my mouth that I didn’t speak is probably the worst. My general habit is to shove them up your ass.

    Don’t try to build strawmen out of my pearls of wisdom, son. It’s a loser’s game. I said exactly what I meant, no more and no less. Disagree if you can make an argument, otherwise you would be better off to just use the So’s Your Old Man strategy. Or the Oh Yeah? tactic. Those work well for the underequipped.

  93. 93
    Bruce S says:

    My advice, because my political priorities are contempt for Jane Hamsher and Adam Green – and of course the “Big Liar” Bernie Sanders – is “Don’t organize! Read tea leaves!” And, oh yeah, escalate both the tone and frequency of your blog commentaries.

  94. 94
    Bruce S says:

    “the rather ridiculous looking ‘don’t slash Social Security’ schtick”

    Ridiculous, of course, because it’s winning politics. And sensible, sober “Democrats” are more concerned about the details of how best to cut Social Security benefits without anyone noticing, except of course GOP campaign operatives.

    Also, why aren’t people okay with raising the Social Security or Medicare eligibility age when the SS age increases from the Reagan era are still being implemented and all raising the Medicare eligibility age would do is cost the country large amounts of money in health care spending as % of GDP, because Medicare is a more cost-effective insurer than private carriers.

    I don’t understand people who don’t render these stupid, callous and/or politically idiotic propositions pure genius.

  95. 95
    stinkdaddy says:

    Whatever else happens, that clip of Obama at his “finally pissed” presser saying something to the effect of

    We offered $650 billion in cuts Medicare, Medicaid, and Social Security.

    is going to come up again. Nothing like a nice pre-packaged attack ad. Political amateur hour.

    The Dems are going to get fucking creamed, and the vast majority of people are going to suffer because of it. The degree to which the Admin has bungled the politics of this one is really mindblowing.

  96. 96
    OzoneR says:

    is going to come up again. Nothing like a nice pre-packaged attack ad.

    No, it isn’t, seeing as they proposed eliminating Medicare altogether.

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