Mad Wombat

A moderately liberal Democraticly-themed blog

August 2011 Politifact Truthfulness Scale

I’m going to start posting my Politifact Truthfulness Scale scores on Mad Wombat from now on. For those unfamiliar with it on twitter, I gather the politifact scores for active, and some potential candidates for President. I then assign each rating a score. “True” gets 2 points, “Mostly True” gets 1 point, “Half True” gets 1/2 point. “Mostly False” gets -1/2 point, “False” gets -1 point, and “Pants on Fire” gets -2 points.  I then average the total number of points by the total number of ratings to get the score.  The higher the score, the better. A negative score basically means a candidate wouldn’t know the truth if it punched them in the face.

So here are the ratings as of August 26th, with the change from the scores on July 27th in parentheses. Minimum 10 ratings.

  1. Ron Paul (R): 0.71 (-0.20)
  2. Barack Obama (D): 0.59 (NC)
  3. Mitt Romney (R): 0.46 (-0.02)
  4. Newt Gingrich (R): 0.11 (-0.03)
  5. Sarah Palin (R): 0.02 (NC)
  6. Rick Perry (R): -0.01 (-0.05)
  7. Herman Cain (R): -0.50 (-0.05)
  8. Michelle Bachmann (R): -0.82 (-0.01)
Huntsman (6), Santorum (6), and Johnson (2) are candidates I’m tracking but who do not have enough ratings to be ranked.

Note: I removed Tim Pawlenty from the ratings as he has dropped out of the Presidential race.

This month’s conclusions:

Being a GOP candidate for President is very bad for the truth, as every active GOP candidate for President who has enough ratings to calculate a score saw their rating drop in the past month.  Other than Ron Paul, the biggest drop was seen from Rick Perry, who went from a score of 0.04 (which wasn’t that great to begin with) to -0.01, which is telling as he has the most ratings of any GOP candidate in the field.  Indeed 7 of Perry’s last 10 rated statements have been given a score of Mostly False or worse, and two of the other three were rated only “Half True.” That doesn’t do a lot of good for one’s average.

Just to give some perspective: Obama has the most “Mostly False” and “False” statements, but he also has about 4.5 times as many ratings as any other candidate. If one extrapolated the GOP candidate’s ratings so that they had as many ratings as Obama has, this is what we would see:

“False” and “Pants on Fire”:

  1. Bachmann: 212
  2. Cain: 173
  3. Palin: 118
  4. Perry: 112
  5. Gingrich: 100
  6. Romney: 75
  7. Paul: 67
  8. Obama: 53

Indeed, despite having several times as many statements as they do, Romney, Palin, Perry, and Bachmann still have more “pants on fire” ratings than President Obama.

The fact that half of the active GOP field that has a rating AVERAGES telling something untrue, that poses serious credibility problems on not only the candidates, but on the entire Republican Party as well. How can one trust a party to govern when they are seemingly incapable of telling the truth on simple, verifiable factual matters?

No, GPA Distribution is not the same as Wealth Distribution

So Fox News published this article about a recent college graduate trying to make a point about wealth distribution by comparing it to “GPA Distribution.”

The jist of if is this: He goes around asking college students if they’d be willing to give their higher grade points to students with lower grade points, and then tries to paint the vast opposition to such an idea as analogous to “wealth distribution.”  The problem is: the situations are anything but analogous, and I’ll explain why.

1. The range of GPAs is much smaller than the range in wealth, and the necessary level needed for GPA is much higher than with wealth

GPAs range from 0.0 to 4.0 and, generally, most students probably need a 2.0 GPA – sometimes more like a 2.5 – to really get by.  That means the range of GPAs is small – only 4 points, and there are a total of 40 levels – divided down to a tenth of a grade point, so the total number of “points” that can be shared is very limited anyway.  On top of this, even someone who has a 4.0 could only share half, or less, before they would effectively be in failing territory. (if you consider a sub-C average as effectively failing).  So one has a situation where the number of tradable grade poins is limited, even if you have a perfect GPA, and the number of grade points that can be traded before your lower GPA starts significantly degrading future possibilities is even smaller.

Compare that to wealth where we’re talking about asking people of over $250,000 to pay more in taxes, while the poverty level for a family of four is $22,350.  That means, if the poverty level were the goal as a minimum income, it is still only 9% of the lowest level of income that we’re even willing to raise taxes on.  In GPA comparisons, this means a “passing” GPA would be a measly 0.4. And if one were doing a one-to-one-exchange, a person with a 4.0 would only have to go down to a 3.6 to give someone with a 0.0 a passing grade.  That would make a “GPA distribution” sound not so bad.

But the comparison is even worse than that. That’s just going on the minimum level we’re asking to pay taxes.  In reality, what were talking about is millionaires and billionaires.  If we were asking someone who made $5 million to share, compared to GPA terms, that means we’d be asking someone who has a 4.0 to give up 0.02 grade point to someone with a 0.0 to give them a passing GPA, which in this comparison amounts to a GPA of 0.018. So the $5 million person’s GPA drops to a whopping 3.98. For someone making $50 million it’d be 3.998. for someone making $1 billion it would be 3.9999. You can see when you use income, and try to make the comparison to GPA, the scales we’d be working on are so small as to be effectively non-existant in the GPA comparison.  In fact, for someone making $1 billion, for their GPA to even drop a single tenth of a point, even considering rounding (meaning we’d only have to go halfway), they could help 5,000 separate students go from 0 to the mighty passing GPA of .0001. That’s some GPA Distribution.

2. GPA explicitly rates results. Reality doesn’t work that way

When one is looking at a GPA, that GPA is pretty much given based on the assumption that you were taking equal classes to everyone else. The same classes, with the same professors, in the same college, with the same books, etc.  In short, everyone had an equal opportunity.  In reality, it’s not quite that simple. People taking calculus are clearly taking a harder class than someone taking underwater basket weaving, and there may be issues in a particular student’s life that may make them more or less able to focus on school, but the assumption is effectively that opportunity is equal among all students. Everyone starts with a 0.0.

As a result, a person’s GPA is derived solely from each person’s intelligence and hard work. Two people with equal intelligence and and equal work ethic should, in theory, end up having the same GPA.  However, anyone who knows anything about life would clearly see that this just isn’t the case when it comes to actually living.  There are many people who are intelligent and work hard, but due to circumstances beyond their control, are mired in poverty or unable to climb up the economic ladder.

Becoming wealthy has as much to do with starting opportunity and luck than it does intelligence and hard work. Paris Hilton is probably a prime example of someone rich who many people would consider embodies neither of those attributes. And people who “make money with money,” as Warren Buffet put it, might be intelligent, but many may question whether how they make money could really be considered hard work, especially compared to the waitress making $30,000 a year by scrounging up tips. Start give some people a starting GPA of 3.5 and others a starting GPA of 0.0 and then see how people’s attitude about sharing grade points change.

3. GPA is used to promote oneself for future possibilities. Wealth IS the future possibility

This one is kind of easy: GPA is earned mainly in the hopes that it puts one in the situation for a good job and in good position to work your way up to earn a high salary. Those earning a high salary are ALREADY there. So it’s a difference between sacrificing opportunity to earn a result vs. sharing a portion of the result itself. It’s the difference between sacrificing the potential and sharing the actual.

Consider this situation: There is a contest you want to enter. It’s on a topic or skill you are good at so you believe you have a very good chance of winning the contest. The grand prize for winning the contest is $5000. The fee for entering the contest is $100. You currently have $150.

Now let’s go through two scenarios:

Scenario 1: It’s the day before the contest, and a friend in need really needs $100 to get through the weekend.  You can give him the money and help him out but lose out on going to the contest, or you can refuse to help and go onto the contest.

Scenario 2: The contest is over and you have your $5000 in hand. Your friend then comes to you and asks for $100 to get through the weekend.

In which scenario do you think that 1) the person is more likely to give up the $100 and 2) that society would have the higher expectation that the person give up the $100? In both cases, the answer is scenario 2, because it is the difference between sacrificing the potential for earning money and the sharing of money one has already earned, especially since it’s only a small percentage of the whole. This is somewhat analogous to the comparison between sharing GPA points and asking the rich to pay more to aid the poor.

In short, this is just yet another attempt by someone to use two things which perhaps on the surface appear analogous, but when one starts digging deeper are almost nothing alike, in an attempt to persuade the layman that their economic point of view makes sense. But in the end, it’s still comparing apples and oranges. The idea is that people have a visceral reaction to not wanting to give away what they earned, especially when one is rewarding potentially “lazy” people who do no work and get a 0.0 GPA in hopes that someone with a better GPA will help them out. But the circumstances between the two are so different that the comparison just doesn’t make sense.

Evidence: You Haz It. Use It.

If one read this article without any knowledge of actual facts, it might actually make sense:

Yet a number of political analysts and social scientists say the intransigence has as much to do with Americans outside the capital as lawmakers within it. If Americans want to know why their elected officials can’t compromise, these scholars and pundits say, perhaps they ought to look in the mirror.

Marketers, though, offer another explanation. Americans, they say, may profess an interest in compromise, as an abstract goal or principle. But they don’t want to make the trade-offs necessary to cut a deal.

Too bad this just isn’t true.

Example 1:

Almost 70 percent of Americans in a new Washington Post/ABC survey say that they back the agreement, which would temporarily extend tax cuts for all income levels, tax large inheritances at 35 percent, extend benefits for the unemployed, and impose a payroll tax holiday.

Example 2:

Nearly six in ten Americans approve of the eleventh hour budget deal struck between Congress and the White House to avert a government shutdown, according to a CNN poll released on Monday.

I’m sure they’ll point to polls regarding the debt ceiling deal as evidence in their favor, but consider the following:

  • Only 44% supported the debt ceiling deal, while 52% oppose it. Perhaps not surprisingly, this mirrors the amount of support raising the debt ceiling received in the first place, with 48% approving and 51% opposing. It’s less likely people will support a compromise if they don’t agree with the premise of the compromise to being with.  Indeed, when one looks at the breakdowns, support for the deal follows closely with base support for raising the debt ceiling to begin with. 74% of Democrats supported raising the debt ceiling and 63% supported the deal. Meanwhile, Only 37% of Independents and 35% of Republicans actually supported raising the debt ceiling to begin with, and consequently, only 35% of each group supported the deal. Perhaps the only real group that saw a significant difference in the opinions was among liberals, 66% of whom supported raising the debt ceiling generally, but of which only 51% supported the deal.
  • Second, support for the compromise was soured by the fact that Americans basically felt like everyone acted like a bunch of children. Obama came off looking the best afterward, and even he had 53% saying they disapproved of how he handled the negotiations. Congressional Republicans had 68% disapprove. Even if people might have otherwise liked the deal, the squabbling in Washington likely turned people off from any resolution that the parties might have agreed to by that point.
  • Even though only 44% say they support the debt ceiling deal, large majorities actually believe neither side gave up too much. 70% think the GOP didn’t give up too much and 61% say Dems didn’t give up too much. I should note that I don’t particularly like how this question is worded, since it didn’t give the option of whether they should have given up more, but in this case we’re talking about a claim that the general population is unwilling to give in anything. If that were true, these numbers would be a lot lower.

So support (or lack thereof) for the debt ceiling deal looks like it has more to do with support of raising the debt ceiling in the first place than it does any general opposition to compromise. I should also note that the group most supportive of a compromise solution – Democrats – was the group most supportive of the deal as well.

The Last Word on “EmoProgs”

I hope this will be my last post on this blog about so-called “EmoProgs,” though I’m sure they’ll do something overly ridiculous in the future to cause me to react to them. However, I think the time for infighting is over. We have to start focusing on defeating Republicans, and we can’t do that as long as we’re preoccupied with debating the what ifs, shoulda, wouldas, and whatever else. So I’ll try to make this my final statement on the matter and then hopefully move on.

EmoProgs. Also known as “frustrati.” Perhaps a more descriptive name might be Purist Progressives (as opposed to Pragmatic Progressives). These people often share several traits:

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The Rick Perry Speech: The Abridged Version

Some people may not have had a chance to watch or read Rick Perry’s announcement speech this afternoon. If you haven’t, I thought I would save you some time and present to you, the Rick Perry Announcement Speech: Abridged Version:

Hello, I’m folksy.

I’m glad to be in conservative states who love the military, unlike those liberal elitist states.

My parents are great and I’m from the middle of nowhere and I’m an Eagle Scout. I met my wife at age 8 and I love her, and that’s great. We also have two kids.

I learned growing up to rely on hard work, faith, and thrift. But I didn’t appreciate freedom until I got to fly air force jets around. Lincoln. Reagan. America is just about the only nation worth anything in the world.

In America,anyone can do anything. Government is there to ensure freedom. No money is earned without sweat and toil. Central government = bad! Spreading the wealth = bad! Stimulus = bad! Liberal economic theories = bad!

Obama prolonged the recession. Congress is gutless. They wouldn’t even gut entitlements. Obama downgraded our debt, along with everything else!

We’ll stand with those who stand with us, and we’ll just bomb everyone else.

In Texas, we had budget shortfalls, but we were able to balance the budget by screwing everyone in our state instead of raising taxes.

Balanced budgets! Lower taxes! Stop generational theft! I’ll now sound like Obama by talking about change a lot.

It’s an injustice that poor people don’t pay more taxes. I’ll now use dog whistles to call Obama a communist without actually saying it. Obamacare = bad!

To conclude, those Articles of Confederation weren’t so bad after all.

How Peter Daou Shunned Reality

Peter Daou, not shockingly, had decided to write a piece blaming all of the world’s problems at the feet of Obama and the Democratic Party at large.  And while the Democratic Party isn’t blameless for the current situation – their general messaging often does suck, though the media filter doesn’t help with that – Daou seems to ignore certain facts, or even worse, just makes them up.

He first asks the following set of questions:

How can the Tea Party exert such outsized influence?
Is President Obama an awful negotiator incapable of getting progressive results or a good negotiator getting exactly the anti-progressive results he wants?
Do Democrats stand for anything? If so, what?
Are Republicans reckless enough to destabilize the US economy for political ends? If so, how do they get away with it?

The answer to the first question (and the last question too) is easy: they control one House of Congress and thus can effectively block anything they damn well please unless they get their way. If one is just talking about some random bill, it’s not really a problem, because no action just means the status quo happens.  But when it comes to something like the debt ceiling, taking no action is about the worst possible action that can be taken.  That is why they exert an enormous amount of influence: because they have the will and ability to cause devastating damage to our economy, simply by saying “no.”

The fact that this isn’t obvious to Daou explains quite a lot as to his attitude in his post.  The GOP always held the cards in the debt ceiling fight because they knew Obama had to extend it, at virtually any cost.  Is it any wonder that, under these circumstances, any deal would be more in the GOP’s favor than ours? It’s rather surprising to me, given what leverage they had, that they agreed to the deal that they did (see my post on why the debt ceiling deal isn’t all that bad, considering).  Indeed, many in the Tea Party felt that Obama would agree to pretty much any demand they made, not because Obama wasn’t principled, but because he had no other choice.  That’s one reason why the Tea Party think they lost this battle. They feel the GOP gave in too soon to Obama’s resistance to go any further.  Meanwhile, on the other side, many liberals seem to be engaged in the fantasy that the GOP would have either folded under public pressure, actually passed a clean bill, or, even worse, that default wasn’t all that bad of an option after all.

Daou then decides to completely go into fantasyland later in his piece:

Imagine an Obama presidency where the health care debate started with a fierce fight for single-payer; where Gitmo had been closed; where gay rights were unequivocally supported; where Bush and Cheney were investigated for sanctioning torture; where climate change was a top priority; where Bush’s civil liberties violations were prosecuted rather than reinforced; where the Bush tax cuts expired; where the stimulus was much bigger; where programs for the poor, for research, jobs, infrastructure, science, education, were enhanced at the expense of war and profits for the wealthy; where the Republican assault on women’s rights was met with furious resistance. I could go on and on.

When it comes to many of these issues, Obama did try to get them passed.  It was Democrats in Congress themselves, many of them progressives, who blocked closing Gitmo.  Cap and Trade passed the House and died in the Senate, like so many other bills did. The same with the public option.  As far as gay rights, last time I checked, Don’t Ask Don’t Tell is over and they are arguing against the parts of DOMA that apply to the federal government.  Of course, many on the left have long since demonstrated that there is nothing Obama can do on gay rights that would satisfy them.  And then we have the old complaint about the Bush tax cuts. Nevermind that Daou’s preferred result would have resulted in taxes being raised on everyone, likely dooming any chance Democrats and Obama had in 2012, not to mention blocked unemployment insurance, DADT repeal, and START.

One uncomfortable truth that Daou is going to eventually be forced to accept is this: The Democratic party, while having a significant progressive element to it, is not a majority progressive party.  Indeed, Daou laments “many progressive thought leaders believe…the Democratic establishment has little in common with progressivism.”

While I might not go as far as saying that there is “little in common” – I think most moderate democrats and progressives share the same general goals – the methods to reach those goals, or exactly how encompassing the ends should be differ.  Bush’s tax cuts are a great example.  Both moderates and liberals wish to end them. I take great offense at the suggestion that my support for the tax cut deal somehow proves that I never wanted to end them. However, liberals seem to take an “end them at any and all costs” approach to Bush’s tax cuts for the rich while moderates (and many pragmatic liberals) generally tend to see things more holistically.  Ending the Bush tax cuts are important, and we still want to see that happen. But are they worth not extending unemployment, not ending DADT, not ratifying START, and oh by the way raising the taxes on the middle class right as a recession ends as well?  Moderates, I believe correctly, decided to give the GOP their Bush tax cuts for two more years in exchange for all of those other items.

In the end, should it really surprise Daou that the leader of a party which is moderate and pro-compromise when necessary is, himself, moderate and pro-compromise when necessary? Progressives surely gnash their teeth greatly over this, but, with all due respect, they are not representative of the majority of the party.

(As an aside, I never really got how cutting spending is bad bad bad right after a recession, but it’s A-OK to raise taxes on the middle class. Both policies have the same general effect: taking money out of the economy. And the general attitude that middle class tax cuts were so small that no one would be hurt by them being repealed is both wrong and shortsighted. Part of it probably has to do with the fact that many of them wouldn’t have to face the consequences of their own policy preferences.)

Daou then tops it all of by completely going bananas:

But it’s precisely the Democratic establishment’s decrepitude that enabled the rise of the Tea Party and the 2010 defeat.

This shouldn’t come as a news flash but, the Tea Party has been around since before Obama even became president. They may not have called themselves the Tea party yet at that point, but they existed.  To claim that anything Obama did “enabled the rise” of the Tea Party is flat out wrong. Obama’s very existence led to their rise, enabled by a press who is intrigued by any shiny object the right decides to put in front of them.

About the only point Daou makes that I can agree with is that Democrat’s messaging in 2010 was abysmal. But bad messaging is different than having a lack of principles.  Obama has argued since the very start, and continues to today, that revenues are essential to solving our problem.  He has given numerous press conferences stating this fact. The American people agree with him on this point. But the fact that he ultimately agreed to a deal that didn’t include revenue doesn’t mean he was lying or he’s not principled, nor does it mean he’s necessarily a bad negotiator.  It means he concluded, almost certainly correctly, that getting revenues just wasn’t possible under the current circumstances. Additionally, one gains nothing by leading the charge of the light brigade, where everyone heralds you as heroes, but you still end up dead.

Meanwhile, if one gets past the hair on fire analysis and actually take a lot at the bill, there are several aspects to it which are actually not so bad for Democrats, including:

  1. Delays almost all cuts until after the election, allowing whoever gets elected in 2012 to alter the deal in whatever way they see fit.  The chances of this deal actually remaining as it is through the next 10 years is essentially zero, which is one of the main reasons why the Tea Party voted against it.  If you want to change the deal, then vote for people who would be willing to make it better for you. The Tea Party is certainly going to be doing that.
  2. It still keeps expiring the Bush tax cuts on the table. In fact, Boehner made a great concession by basing the entire deficit reduction framework on the assumption that Bush’s tax cuts would expire.  That’s going to be a hard position to come back from, as any attempt to extend them would be considered a deficit busting move by the very framework the GOP agreed to.
  3. It shifts the leverage from the GOP, who was using the debt ceiling, to Democrats in the committee, who will have a good chance of forcing the GOP into the difficult position of choosing between eating large cuts to defense or accepting new revenue
  4. Obama and Democrats can now shift to jobs, which they have already started doing, instead of dealing with the mayhem that default would have caused.

Was it an ideal deal? No. Does it have everything either I or Obama wanted in it? No, but that is usually the nature of compromises.  What it did do is give Democrats the chance to fight on these issues another day, under far more favorable circumstances than we were fighting under during the debt ceiling battle.  Rarely does anything good happen when the person you are negotiating with is holding a gun to your head.  Obama was successful in punting the vast majority of the budget cuts to a time when Democrats will be on far more even ground – if the base actually decides to turn out and support them.

My Response to Paul Krugman

I posted this as a comment to his latest blog post about what he would have done in the debt limit fight (short of it: just declare the debt ceiling raised or abolished and not even bothered talking to Congress to begin with), but I thought I would post it here so it would be easier for people to read.  My response to Paul Krugman:

So, in short…you wanted Obama to act like a dictator and decree from the start that the debt limit was increased or didn’t exist.

You, as a liberal, of all people, should realize the dangers of a President deciding to do things by decree because, gosh darn it, it’s too inconvenient or too hard to have to negotiate with the other side, or that you realize that the other side is holding the better cards. That’s how democracies turn into dictatorships, by leaders who decide that it’s easier to not even bother dealing with the other side.

News flash: we live in a democracy. People voted in the tea party. While what they did was disgusting, there is nothing written anywhere that says they can’t use the debt ceiling as leverage, or a hostage, or whatever. The fact that you or I don’t like it is irrelevant. They were elected by the people and have an equal right to be a part of governing (or not governing as the case may be). Just declaring that you aren’t going to work with these people starts taking you down roads which are much worse than the bill you are complaining about today.

Why the debt ceiling bill isn’t all that bad

Before I get into the body of this post, I want to say this: I wouldn’t characterize this as a “win,” either for Democrats or the nation.  Any time a political party is willing to bring us within 48 hours of default – and perhaps closer pending the actual votes in Congress – is a very bad, and sad, say for America.  There is really no practice reason why the debt ceiling couldn’t have been raised cleanly like every other time.  This increase pays for the FY 2011 continuing budget that the Tea Party House itself approved back in the Spring, and they would have gotten another chance to affect spending – when it’s actually appropriate to do so – when dealing with the FY 2012 budget this fall.  But they knew the default was about the biggest hostage they could take and so they took it, welfare of the nation and the economy be damned.

It’s also not a “win” in that Obama didn’t get revenues, though in hindsight, I don’t think there was ever any hope of that, even if Obama and Boehner had hammered out some grand bargain. The GOP House would never have stood for it, and I suspect Boehner largely knew this, which is why he pulled out when it actually seemed like an agreement was imminent. Nothing would end his Speakership sooner than presenting a bill with tax increases to his House and having it get obliterated.  In essence, how the Tea Party treated this situation, Obama didn’t win and there was really no way he could “win.”  Most of the blathering I hear about Obama caving or how Obama should have stood his ground never really address how he gets a debt ceiling increase past the House, except by either claiming the Tea Party would have eventually caved (do you really believe that?) or he should have used the 14th Amendment from the start (screw that whole governing business!).  The fact of the matter is that, when one side takes a hostage and you have literally no choice but to deal with them, all the likely outcomes are likely not going to be to your liking.

Now that I have that out of the way, I think, given the circumstances and assumptions that Obama was forced to work under, he came off pretty well in the end.  Let’s take a look at the debt ceiling deal piece by piece to find out why:

1) Obama got his full debt ceiling increase without a threat of default until 2013.

This is a win for Obama and really a needless loss for the GOP.  They had also agreed to have a long term extension until a week or two ago when they decided, once again, to move the goalposts and ask for a short term extension, with the 2nd half held hostage again in the winter.  This changing of the goalposts turned this from just something everyone agreed on to an Obama win in the end.

2) The First tranche of cuts is largely non-controversial

The first tranche of cuts amounts to $917 billion, which was largely centered around the framework agreed to in the Biden-Cantor talks from two months ago.  Unless you’re saying that Obama had already “caved” then (and I’m sure you can find people who would say that), then this isn’t really that much of a cave. Half of those cuts, after taking out savings from debt interest, are from defense, something which it was reported that Boehner was trying to get lowered but was unsuccessful in doing so.  The other $350 billion or so are from spending caps on discretionary spending, which don’t even go into effect until FY 2013 (pending the upcoming FY 2012 budget battle, of course).

It also fully funds Pell Grants, one of the things that helped doom Boehner’s original bill but which Obama has been fighting for.

Frankly, unless you’re against cutting the budget at all (and I know there are many people out there that do), there isn’t much here one can complain about.

3) The trigger

The bill also sets up a joint committee (the so called “SuperCongress”) of 12 members of Congress, 6 from each House and 6 from each party, to recommend by Congress’ Thanksgiving break around $1.5 trillion in further deficit reduction. Despite Boehner’s slides to his caucus, anything and everything is on the table in this committee.  To try to ensure that this committee makes recommendations and that it’s recommendations are taken seriously, the bill comes with a trigger that goes off if either the committee can’t agree on a plan, if Congress votes down the plan, or if Obama vetoes the plan (and Congress doesn’t override).

The would include $500 billion in additional defense cuts – bringing the total to a whopping $850 billion over 10 years, as well as another $500 billion in across the board cuts, mostly to discretionary programs, but Medicare would also get cuts on providers, but not beneficiaries. Pretty much all other mandatory programs – Social Security, Medicaid, veterans benefits, unemployment insurance, etc. – would be spared from the cuts, as well as reportedly DOD salaries (I’m not sure if civilian salaries are protected or not, but my impression is that they would not be).

The point of this is to give each side incentive to deal in the committee and agree to the committee findings.  However, I find it hard to see how Democrats didn’t get the better of this deal.

First, in any committee deal that were to cut $1.5 trillion entirely by cutting programs, it’s hard to see how discretionary programs would fare any better than the $500 billion in cuts that it’s already receiving in the trigger, so in that sense, if there is a cuts-only proposal, the trigger will likely already be the favorable option to democrats. On the Medicare front, those cuts are limited and to providers, so they’re not all that bad, and such cuts would probably become necessary in any bill to address Medicare spending now or in the future anyway, so it doesn’t seem to be all that big of a loss.

Meanwhile, if the GOP insist on cutting discretionary spending further, or on cutting Medicare further, or on cutting Social Security or Medicaid or other programs Democrats want, they can just threaten to pull the trigger, which doesn’t include those cuts.  About the only real incentive for Dems to deal, if it’s a cuts only proposal, is to make the cuts more focused instead of just being across the board, but I’m not sure that will be enough incentive to not just pull the trigger.

The GOP, on the other hand, would be facing a pretty ugly choice: raising revenue or having the $500 billion in defense cuts in the trigger.  If democrats are smart, that will be the choice they give them: give us revenue or we pull the trigger, because Democrats, frankly, aren’t going to lose much more by pulling the trigger than by having a cuts only deal as I laid out above.  Neither of those choices would be popular with GOP politicians or their base, and many of them live in districts that would be hit hard by budget cuts.

I’m sure the GOP will try to attack Democrats for “gutting the defense budget,” but that is going to be hard to make fly. First, they would have agreed to this deal in the first place (if they do, indeed pass it), and any recommendations that come from the committee, if they include new revenues, would have to be bipartisan.

It also gives democrats the chance to turn the national defense argument on it’s head and against Republicans. If the GOP decides to pull the trigger instead of raising revenue, it opens them up to attacks that they chose to gut defense so that billionaires and oil companies can keep their tax breaks.  I don’t know about you, but it’s hard to see how that becomes a defensible position at all. That doesn’t mean the GOP will choose the tax cuts, but it will be exceptionally hard for them to defend that position during the election.

4) Bush tax cuts are still scheduled to expire

I’m still not sure about the entire dynamic with the Bush tax cuts yet, but this leaves the Bush tax cuts as they are, meaning they are all set to expire come 2013.  I still think the GOP feels like they have some leverage on the issue because they may feel Obama won’t let the cuts expire for everyone, so they may not be willing to deal with them in the commission.  However, when it comes to the tax cuts, Democrats, if they choose, can use it as leverage, because they will simply expire by doing nothing.

The Bush tax cuts were extended back in 2010 for a few reasons.  One reason was that we were just coming out of a recession and Obama didn’t want to risk raising taxes on the middle class.  The deal was also a vehicle to gain several important things as well including an extension of unemployment insurance, as well as clearing the way to pass the START treaty and Don’t Ask, Don’t Tell repeal.  If one actually looks at the details of that deal, Democrats really got more than the Republicans did in the end.  However, that dynamic may change later.  The ONLY reason Obama may have to not repeal them later is to keep tax cuts for the middle class, and I’m not really sure that’s a good enough reason, especially when it can be used an election issue against Republicans.  This should have been done back in 2009 (no thanks to the Democratic Congress) but, anyway, what’s past is past in that regard.

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While, again, I wouldn’t characterize this as a win, there are a lot of things here that aren’t what the GOP wanted, and they may be faced with some potentially ugly choices in the future.  Their goal was to get “Cut, Cap, and Balance” and they didn’t really get any of it in the form that they wanted.  They don’t get the “cut” part – spending cuts aren’t supposed to take place until 2013.  The “cut” part of their plan was supposed to go into effect in FY 2o12.  They got a sort of “cap” in the form of spending caps, but they are nowhere near as deep as the spending caps in their Cut, Cap, and Balance bill.  And while they do get a vote on a balanced budget amendment, 1) nothing is bound to it to require that it passes, 2) it will lose, 3) there are at least whispers that the GOP may offer a plain vanilla balanced budget amendment (ie, no spending caps and no 2/3 tax requirement) to try to maximize the votes that it gets, which is a major loss for the tea party which saw both spending caps (at 18% of GDP) and a 2/3 requirement to raise taxes as an essential part of a balanced budget amendment. I’m sure they would figure that if the amendment is going to go down in flames anyway, at least make it worth it.

The final remaining piece of this puzzle is who gets put onto the joint committee. This isn’t an insignificant matter as both parties will likely go after the most moderate member of the opposing party.  I have a feeling both Boehner and Pelosi will likely ensure that whoever gets put on the committee from the House will look after their interests, so the real action regarding who is placed on the committee will likely be from the Senate. There is a big difference between having Schumer be the most moderate member vs. Baucus vs. Manchin for the Democrats. Likewise, there is a difference between having a committee made up of Hatch, Lee, and Paul for the Republicans vs. one made up of, say, Cornyn, Coburn, and Kirk.

Remember, the gang of six included two moderate Democrats, Warner and Conrad, as well as three republicans, Crapo, Coburn, and Chambliss, and they were able to come up with a plan that included revenue.  It seems likely, unless someone like Senator Manchin or Representative Schuler gets put on the committee, that all six democrats will be pro-revenue.  It’s also likely that all three Republicans from the House will be anti-revenue.  So the question is, will McConnell put anyone on the committee that he knows might consider revenue?  And unlike the House, there are a considerable number of Senate Republicans who might be open to the suggestion, ranging from Brown to Kirk, to the Maine twins, to the three members of the gang of six, and perhaps others.  It may truly be up to McConnell’s choices as to whether revenues become a significant part of the committee’s recommendations.

I know many Democrats are unhappy with deficit cutting, and virtually all Democrats want new revenues.  However, with the Bush tax cuts still scheduled to expire, the revenue side is still open for Democrats, even if they don’t get it in the committee or if the trigger is executed.  However, here are some cold hard facts:

  1. Many, many people are freaked out by deficits as large as we have right now.  It’s not good politics or policy to run $1.5 trillion deficits, no matter what anyone tries to argue.  While reducing unemployment is seen as the more pressing matter, people do care about the deficit, and anyone who tries to argue otherwise is fooling themselves.
  2. Yes, revenues are a problem. In FY 2010, the United States was looking at receiving the lowest share of revenue, as % of GDP since 1950. That’s a problem.  However, spending was also the highest it had been as a % of GDP since 1945, so clearly spending is part of the problem as well. Part of that is stimulus spending and other short lived spending, but it’s still a problem.

At this point, after the FY 2012 budget fight, the fight for what direction the United States should go will be fought out in the 2012 direction, and I know one thing: the only way we’re going to move in the correct direction is by re-electing Obama and electing a Democratic Congress, regardless of how one feels about this deal.

Debt Ceiling: A Proposal

As most people probably know, Speaker Boehner and Senate Majority Leader Reid (acting as President Obama’s proxy) introduced competing plans over the weekend to deal with the debt limit crisis.  While these plans look somewhat similar on the surface, quite a bit is different when one gets down into the nitty gritty.

Republicans don’t like Reid’s plan because…well, that’s a good question isn’t it? Their supposed reason is because it uses “fuzzy math” by including the ending of the wars in Iraq and Afghanistan (which is counted by the CBO as deficit savings, by the way) toward it’s $2.7 trillion.  Also, the GOP are determined that, if anything passes, it’s going to be a bill they introduce, even if it ends up being effectively identical to the Reid bill in the end. They also don’t like it because, while Reid includes a joint committee to recommend additional deficit reduction measures, there is no penalty if Congress doesn’t pass those recommendations.

Democrats don’t like Boehner’s bill because it just punts the debt ceiling battle 6 months down the road, and requires that congress pass the recommendations of a joint committee before the 2nd half of the debt ceiling increase goes into effect.  And given the current dynamics, such a deal would almost certainly be lopsided toward the GOP since many on the GOP see no problem with letting the debt ceiling expire anyway.

Most Democrats, including those introducing Harry Reid and President Obama, don’t like either bill because they are revenue free.

It seems to me that the main sticking point for Republicans with the Reid plan is the belief that it doesn’t include real cuts while Democrats feel that they’ll just be forced into another hostage situation in 6 to 8 months down the road with the Boehner plan.  So let’s resolve both of those issues.  Thus, I present the following proposal, using the Reid plan as a base:

1) Extend the debt ceiling by $2.7 trillion so that it gets extended past the 2012 elections.  Virtually every credit rating agency out there says we have to do at least this much to avoid a credit downgrade, so we just as well go ahead and extend it that long.

2) Use the Reid plan’s cuts for the initial budget cuts – count drawing down the wars plus the $1.2 trillion nominally agreed upon between Obama and Boehner before.  That with debt savings should result in the CBO scoring a $2.7 trillion in savings. $1.7 trillion if you don’t want to count the wars ending.

These two points should satisfy the Democrat’s worries of punting the debt ceiling issue down the road.  But what about the GOP’s concern?  To address that, I propose the following:

3) Have a joint committee, like what both the Reid and Boehner plans propose – 12 members, 6 from each party and 6 from each chamber, with the goal of finding an additional $1 to $2 trillion in debt savings (I would prefer no actual savings requirement, but if the GOP demands it, it should be on the lower end of that scale – about $1 trillion. That would result in $3.7 trillion in total savings).

4) If the committee fails to report a plan, or if Congress fails to pass it, automatic penalties kick in.  These penalties should be structured so that each party would gain something significant, but at the cost of losing something significant.  The gain and loss should be equal in importance so as to create an equal footing between the two parties.  Such a proposal could perhaps be structured to mean that, upon failure of adoption by Congress of the plan, revenues are increased by $1.5 trillion by closing loopholes, raising taxes on the rich, and other revenue increases that the GOP opposes.  On the flip side, there wold be cuts worth $1.5 trillion, mainly centered in entitlements, or in programs that Democrats are highly defensive about, such as the EPA.

This would create two dynamics within the committee and within Congress when debating the bill.  First, blocking the recommendations would mean you gain something significant, but it also means you would lose something just as significant, meaning that there is little incentive for one side to actively try to block the proposal.

On the other hand, it would prevent either side from making ridiculous demands within the committee.  For example, if the GOP demanded $2 trillion in budget cuts with no revenues, how is that any better for Democrats than no deal at all?  The answer is that it wouldn’t be, so it would be in the Democrats interest to block any deal, and thus not in the GOP’s favor to demand a deal that would put the Democrats into that position.

The likely scenario would probably be something that is either half and half, about $800 billion in both cuts and revenues (making the total $3.5 trillion in cuts and $800 billion in revenue, which wasn’t really that far from the deal Boehner and Obama were close to finishing) or maybe a balance of $1 trillion cuts / $600 billion revenue or something like that.  Any less revenue than that, and it starts becoming more likely that Dems would take their chances by going without a deal.

The only question is whether the GOP would ever accept a solution that, while it would guarantee additional debt savings, would pretty much require new revenues, and whether Democrats would ever accept a proposal that, while they would almost be certain to get new revenues, would almost certainly mean accepting some level of entitlement reforms.  However, if there is one way to get things done in Washington, it’s by forcing action by making the result of inaction equally bad for both parties.

Clarification: I would note, there isn’t necessarily a reason for Democrats to propose something like this right away.  I actually think the chance of the Reid bill being “the solution” are near 50/50 given the current dynamics of the situation. However, if both the Boehner and Reid bills fail to make it to the President, this could be a plausible compromise that might be able to pass both houses.

The Debt Limit: Where there only ever two choices?

There was a huge bru-ha-ha on Twitter yesterday about a supposed plan being offered by Obama to Boehner that would have offered anywhere from $2 trillion to $3 trillion in cuts in exchange for an increase in the debt ceiling and essentially the promise that they would look at tax reform next year, but with no guarantee that it would either be done or that middle class tax cuts wouldn’t be held hostage again.  Both House and Senate Democrats blasted the rumor, as did many people on twitter and in the netroots.

In the end, both Boehner and the White House vehemently denied any deal was imminent, but it made people wonder where the plan came from.  Was it a trial balloon by the White House just to see what might be acceptable to Congressional Democrats or was it something thrown out by some Congressman or Senator in hopes of putting pressure on Obama to stand firm and for Republicans to compromise?

All of the commotion led me to go back and remember things that I thought about when this whole debt ceiling battle started (and really, before then even). The whole situation centers around 5 key questions:

  1. How much influence does Wall Street have over rank and file Republicans now? If Wall Street says “make a deal,” will Republicans fall in line?
  2. Will Republicans really be willing to go all the way to default before accepting any new revenues?
  3. What items, if any, are worth defaulting over for Democrats? Changing SS COLA? Significant cuts into social programs?
  4. Is the demand for new revenue worth defaulting over for Democrats?
  5. Which is worse in the short term and the long term, capitulation or default?

While some of these can’t be answered with complete certainly, it’s sure looking like the answer to #1 is that Wall Street doesn’t have enough sway to get a deal through on demand.  Hell, the US Chamber of Commerce is threatening to pull support from candidates who refuse to raise the debt ceiling.  Nevertheless, not only does it not seem to have made the US House any more amenable to a deal, there are now up to 90 House Republicans who have said “no way” to the McConnell “fall back” plan.  In fact, the House GOP has pretty much said no to any plan that raises the debt ceiling, sans the insane Cut, Cap, and Balance plan, which would effectively force a thorough gutting of the nation’s entitlement programs and write right-wing economic policy into the constitution.

It’s also looking increasingly likely that the House GOP and John Boehner are willing to jump off the cliff over new revenues.  There has been absolutely no indication of any give there.  Even compromises that sort of give Democrats something but don’t mean actually raising any revenues now – such as saying that they’ll tackle tax reform later but with the tradeoff of decoupling Bush’s tax cuts for the rich – are a no go.  Basically anything that might even create the possibility that revenues might be increased is being rejected out of hand.

That leads us into a difficult situation, and a situation that many progressives don’t want to think about but may soon have to admit: There may be two, and only two choices when it comes to the debt ceiling debate. Either:

  1. You can essentially capitulate – take $2 trillion to $3 trillion in cuts, with no new revenue, plus an increase of the debt ceiling – essentially the GOP’s opening offer, or
  2. The nation defaults on it’s obligations

If Republicans are really willing to bring the world economy on our heads in order to keep tax cuts for the rich, there are really no other options, and there is nothing Obama or Congressional Democrats can do about it (well, other than very constitutionally suspect ideas like using the 14th Amendment, but it’s not clear that even going that route would prevent a downgrade of the US’s credit rating at this point, which is, after all, what this is all about. And don’t get me started on other asinine ideas such as minting trillion dollar coins and the like).

If it truly becomes a choice between either capitulating to the GOP’s original offer or default, we have to start considering what the answers to the other 3 questions above are.

First, what cuts, if any, would be so egregious that default would be preferable? I’d say if the choice was Cut, Cap, and Balance and default, then default probably would be the better option in the long term since not only would CCB destroy entitlements but it would essentially make the Democratic Party irrelevant.  Also, something like Ryan’s Medicare plan does so much damage that default would probably be, in the long term, preferable.

But what if it came down to something like, raising the Social Security retirement age, something that, while a majority oppose, it’s not overwhelming (a recent ABC News/Washington Post poll showed 42% support and 57% oppose raising the retirement age).  What if it came to changing how the COLA is calculated, something which is almost even in the same poll (with 45% supporting and 48% opposing). Would those be items that Democrats would or should push a default over, if it came down to it? [Talking about Social Security COLA calculations could be it's own post]

What if Obama proposed means testing for Medicare? That is something many progressives are against, but which actually polls quite well. A recent Bloomberg poll showed that 2/3 of Americans support means testing so that wealthier Americans receive less coverage. Would holding out because of that be worth defaulting over?

And what about revenues.  Is a guarantee of increased revenues something that Democrats are willing to fight for, even to the point of default? From the statements made by Congressional leaders made today, they sure seemed to indicate that might be the case.  Of course, if the GOP is willing to jump off the cliff to ensure no new revenues and Democrats are willing to jump off the cliff unless they get new revenues, it seems like the only end result of this situation will be jumping off a cliff.

The last question is more a question of pride, I suppose, than anything else.  The base is already (I think unjustifiably) angry at Obama for his past compromises.  They’re angry that he didn’t get a public option passed even though it’d be likely we wouldn’t have any health care reform bill if he had insisted on it.  They’re angry that he agreed to extend Bush’s tax cuts for the rich for two more years, even though not doing so would have raised taxes on everyone, resulted in no new unemployment benefits, probably would have doomed START, and DADT would probably still be in place.  They’re also angry (though seemingly less so) over the budget compromise, even though holding out there would have led to a government shutdown (though that may be the only situation out of the three I may have some empathy for their position on…but not much).

The base is basically demanding that Obama “listen to them,” come hell or high water and damn the consequences.  Polls seem to indicate that this segment of the base isn’t that large, but one can’t ignore what happened during the 2010 midterms either.  If Obama or Congressional Democrats are worried about 2012, they may feel like they have to throw some real red meat to their base, and they may feel that this might be their last chance to do it.  There is also the matter of the fact that it’s a big hit to Democrat’s pride to basically have a complete surrender, and it would, of course, only encourage the GOP more.

But then you have the ask the questions: Is keeping your pride worth defaulting over? Is keeping your base happy worth defaulting over? Is “making sure the GOP doesn’t win one” worth defaulting over?  These are all real questions.  I have a feeling that, for Obama at least, the answer to all three will probably be “no,” but that may not be the case for Congressional Democrats, especially those in the House, whom Obama and Boehner will increasingly need to pass a deal.

I know it makes a lot of progressives squeamish that there isn’t some third way choice other than blowing up the budget or blowing up the economy.  Hell, it makes me squeamish. But that may very well be result of being forced to work with a party that quite literally does not care how much damage it causes in pursuit of it’s goals.

While there is a lot of talk about hostage taking, this isn’t very similar to a real life hostage situation.  Obama can’t just call the sniper and tell him to take out the hostage taker.  We’re stuck with them for another year and a half, whether we like it or not, and there is little or nothing we do can about it.

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