Wednesday, July 20, 2011

Gang of Six

I think Jonathan Cohn nails it in his post this morning:
[W]hile it’s not inconceivable that leaders from the two parties could figure out some way to pass a plan like this, they would need time -- and that’s the one thing they do not have now...first we have to get past August 2. And it’s not clear this plan actually makes that easier.
The famous 1986 tax reform bill was a grueling two-year struggle that involved leadership from many quarters, including the White House and Members from both parties and both chambers, all united by a goal of a revenue neutral improvement to the tax code. It involved multiple complex fights over a wide variety of obscure provisions, each of which meant a whole lot to, generally, a small number of people. It was, in all respects, an improbable accomplishment.

And yet we're not supposed to believe that we can get not only a repeat of that, but also a major restructuring of the budget process, and specific spending cuts, and raise lots of money...all against a backdrop of the various mishegas of the debt limit...and in two weeks.

It's not going to happen. It's not going to come close to happening.

If you told me it was going to get done by the end of the year, I'd tell you that you were wildly optimistic.

What could happen is that everyone could decide they would rather have a resolution supporting Gang of Six principles than to actually have deficit reduction (since actual, specific deficit reduction has to include unpopular spending cuts or tax increases). They could even do a bit more; they could put a mechanism into place to turn the principles into legislation, and they could provide favorable parliamentary treatment for that legislation. But they can't guarantee that a bill would emerge, and they certainly can't guarantee that it will pass.

They also could peel off a piece of it and pass it now -- say, some spending cuts. But the problem with that is that it undermines the whole idea of the grand bargain; if some people get what they want now, they'll have no incentive to vote for the rest of the package down the road.

Of course, for those who believe that kicking the deficit can down the road is best policy, the Gang of Six approach has a lot going for it. But beyond that, in my view at least it counts on the side of symbolic deficit reduction, rather than actual deficit reduction. Whether that's enough to get it through the House? I have no idea, but I doubt it.


  1. Doesn't the Reid variation to McConnell's escape hatch also undermine the idea of a grand bargain in coughing up spending cuts without any revenue? And there doesn't seem to be much reporting on the counter-narrative aspect that McConnell essentially offered a clean ceiling lift provided the GOP could pretend to oppose it and Democrats appear to have attached major spending cuts. Not sure what Obama gains out of the change to McConnell's original escape hatch. Perhaps he's pushing back on the image of him as free-spending for moderates, but couldn't he have accomplished the same thing by offering the same cuts in exchange for new revenue and GOP support on jobs bills. Even if the GOP stonewalls him, he positions himself well for moderates.

  2. What if some version of the McConnell bill came with say $1.2 trillion in cuts up front and mandated that the rest of the Gang of Six plan be fleshed out by year's end, with the front-loaded cuts counted as part of the total - and if not, there'd be some consequence, such as empowering Obama to raise the debt ceiling enough to get past Nov 2012 without further conditions?

  3. Well, I think that part of this is that I don't really think that Republicans are substantively against raising the debt limit; they're against having to vote for raising it. If that's the case, the part about empowering Obama is a reward, not a punishment, as long as Tea Partiers don't hold them responsible.

    So that means that if, say, GoF calls for $3T in spending cuts, $1T in revenues, and supposing that Republicans would vote for that (which of course is probably not true anyway)...regardless, their December vote would be on a package of $1.8T cuts, $1T revenues, and that's even harder for them to support.

    If what they actually are about is policy. Which isn't, to say the least, clear.

  4. I think the GoS plan, combined with yesterday's Kabuki, can work.
    My logic is that since this whole thing is about the theatrics anyway, I think they can cobble together a majority in the House for phony deficit reduction. Whatever Congress passes now can easily be toothless, because unless they change the rules of the chambers, any law passed now can be superseded by a law passed later. This is a variant of the 14th Amendment logic: if the debt ceiling limit law passes BEFORE the authorization and appropriations laws that follow it, those laws actually make new policy, overriding the previously existing law. When Congress authorizes more in spending than comes in in revenue, it raises the debt ceiling, because that itself is just a statutory limit, and can be changed by passing new statutes.

    Even if teeth are put in, those teeth are going to have a bite, and future Congress isn't going to like that bite. Look at how Gramm-Rudman-(Hollings) worked. Deficit reduction, with teeth, that was routinely ducked by Congress forcing the numbers to be fudged. (Let's ignore the fact that it was unconstitutional, since that wasn't about the budget part of it) Once the numbers were unfudgable, the shit hit the fan, and we read Bush's lips. But that took Congress wanting to no longer ignore the fudging. Then they supposedly balanced the budget in 1990, but again, not really. PAYGO was the rule in the 1990s, until it wasn't. Congress cannot tie Congress' hands.

  5. Thanks for this post, and for the post over at Plum Job.

    I do not understand (well, I suppose I do) why the reporting on this is so incredibly wrong. They can't pass anything substantive in this time frame. All they can pass are promises to do something substantive later.

    Sure, if the GOP were serious and concerned about policy issues, rather than trying to keep the Big Lie afloat while also passing the debt ceiling, this would be easier to game.

    OTOH, if the DEMOCRATS were actually interested in advancing the policy agenda their supporters favor, the Senate would pass a clean bill, right now, and send it to the House. Force the House Republicans to a vote. Then do it again. And again. Until the markets freak and enough of the House GOP caves.

    But they aren't doing that. They aren't reciting the Reagan debt ceiling letter aloud at every presser, every teevee appearance. They aren't holding the Republicans accountable for this idiocy, because, you have to conclude, they want these expenditure reductions, and are grateful for the GOP cover.

    In a brutal recession.

    As atrios says, we're doomed.


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