We’re Going Over the Cliff
Another example — and they’re daily at this point — of why I think the US is about to take a dive:
A group of House Republican conservatives – incensed by its leadership’s purge of dissenters from House committees and increasingly worried about talks with the White House – put Speaker John A. Boehner on notice Wednesday that he could face trouble from the far right if he backs any deficit deal that raises taxes…
Representative Jeff Landry of Louisiana, just defeated for re-election by a fellow Republican, Representative Charles Boustany Jr., blamed Mr. Boehner for the fiscal crisis now confronting Washington. Representative Cynthia M. Lummis, Republican of Wyoming, said she would rather see the nation go over the “fiscal cliff” than embrace a deal that President Obama could accept. And Representative Tim Huelskamp, Republican of Kansas, who was removed from the House Agriculture Committee for failing to fall in line with Republican leadership, said the vast majority of his district wanted him to oppose Mr. Boehner’s re-election as speaker.
“If Speaker Boehner wants to come back to my district, he’s not going to be met with very much welcome,” said Representative Justin Amash, Republican of Michigan and another subject of the purge.
To a significant degree, this is the same dynamic that turned last year’s debt-ceiling negotiations into an economy-crippling clusterfuck. At heart, it’s not very complicated.
No person is an island, sure. But a Speaker of the House is a different thing than a person. It’s a politician. And John Boehner is living proof that — even when clothed in immense power! — a Speaker who wanders too far from his caucus is an island. Islands don’t get to keep the big gavel, and John Boehner really loves the big gavel.
So until you start seeing reports that indicate GOPers in the House are willing to sign-on to a deal, be it grand or mundane, don’t take any of the back-and-forth between the president and Boehner too seriously. Despite official titles and congressional tradition suggesting otherwise, it’s not Boehner’s call.
[x-posted @ Jubilee]
My impression from Boeher’s initial reaction to the election about a month ago was that he was moved by the election results, and was willing to consider revenue increases, if not necessarily tax hikes, as part of the deal.
I’m also not convinced that the majority of Republican voters are quite as strident on revenue increases as elected officials purporting to represent them are, either. Granted, I’m quite the RINO these days so maybe I’m the one not really in touch.
Either way, the Speaker is now faced with a “profiles in courage” moment. If he backs down in the face of rebellion from the likes of Tim Huelskamp we shall see what he is truly made of. And the sequestration mechanism, however, gives Boehner a way out of that dilemma that does not require him to make a difficult choice.
Is Representative Pelosi facing similar problems with entitlement
reformcuts on her side of the aisle?ReportD’s have cut entitlements. There was the 700-800 billion or so that was cut from medicaid in the ACA. Of course Romney said that was terrible and was going to reinstate it. Raising medicaid eligibility age is almost certainly off the table, which is a good thing since its a terrible idea.Report
Right. But I don’t hear a lot of Democrats saying that Pelosi would be unwelcome in their districts because she signed off on an unpleasant choice.Report
Boehner is on thin ice to begin with, being a person of color. (Orange.)Report
-care or -caid? I thought it was the former?Report
d’oh its medicareReport
Republicans always say they want cuts in “entitlements.” But that’s just posturing and signaling. When the cuts have actually happened, Republicans have then come back the next election just as Romney did, screaming about how the Democrats “betrayed America” by… agreeing to the cuts the Republicans demanded.
It’s impossible to negotiate when one side isn’t bothering to act in good faith. And I think it’s obvious to all right now that the GOP/TEA crowd aren’t interested in good faith negotiation and compromise. They’re into the “my way or the highway” mentality, and anything less than full capitulation to their perverse worldview is “socialism” in their eyes.Report
Republicans always say they want cuts in “entitlements.” But that’s just posturing and signaling. When the cuts have actually happened, Republicans have then come back the next election just as Romney did, screaming about how the Democrats “betrayed America” by… agreeing to the cuts the Republicans demanded.
There’s one — I hate to say “subtle” because it isn’t — difference between the sides, though. The Democrats make cuts by, in very large part, reducing payments to service providers: hospitals, doctors, nurses, labs. The Republicans make cuts by, in very large part, kicking people out of the program or making the people in the program pay more out of their own pocket. When the Democrats say “cut Medicare spending” they generally mean provide services for the same set of people more efficiently. When the Republicans say the same thing, they generally mean “serve fewer people.” The one exception to that rule in the last couple of weeks seems to be that Obama is willing to entertain the “serve fewer people” approach narrowly by considering increases to the eligibility age now that the PPACA has survived its court tests and premium supports in the state exchanges will catch at least the poorest of the 65- and 66-year-olds.
It’s not clear whether picking up a big chunk of the exchange premium for a poor 66-year-old will be more or less expensive than putting them on Medicare.Report
The one exception to that rule in the last couple of weeks seems to be that Obama is willing to entertain the “serve fewer people” approach narrowly by considering increases to the eligibility age now that the PPACA has survived its court tests and premium supports in the state exchanges will catch at least the poorest of the 65- and 66-year-olds.
It’s not clear whether picking up a big chunk of the exchange premium for a poor 66-year-old will be more or less expensive than putting them on Medicare.
This is a point that Boehner could actually get a political win… but he can’t anymore. Because it’s finally dawned on the GOP that selling anything that requires any sort of (even cosmetic) change in Medicare is jumping into a volcano. They can talk about it, but doing anything is death.Report
“It’s not clear whether picking up a big chunk of the exchange premium for a poor 66-year-old will be more or less expensive than putting them on Medicare.”
IIRC, Medicare is highly efficient; it’d be a reach to make the state exchanges that efficient, and many state governments won’t. Frankly, because those governments aren’t that competent, or are lead by political leadership which doesn’t want competency.Report
Republicans don’t want cuts in entitlements. They don’t want tax hikes either:
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/13/poll-actual-republicans-dont-want-to-cut-or-tax-anything/?wprss=rss_ezra-kleinReport
Probably not. Let’s face it, the GOP is a center right party with a heavyweight activist base and money supply that sits to the right of their leadership. The Dems by contrast are a center left party with several activist bases most of which sit either to the right of the leadership or near where the leadership currently sits.
But the GOP’s most basic problem is that all the money is tied up in things they don’t want to be specifically seen as trying to cut. Social Security, medicaid, medicare, defense… that’s where most of the dough is. The GOP is happy talking about cuts but when asked what they want to cut specifically they yammer about ending funding for robot squirrels (100 dollars out of a 400k educational grant).
What they’d like to do is dictate a spending cut number in general and then somehow force Obama and his party to specify what cuts are required to meet that number and then blame Obama for it. Obviously Obama and his party aren’t really interested in playing that game. Can’t figure why.Report
Well said. The innumeracy of the general population does not help this issue *AT ALL* either.
If most people think that 10% of the budget is aid to non-Israel foreign aid and 5% of the budget is NPR, it’s easy to think that we should just cut foreign aid and NPR and we’re at 85%, easy peasy. (Of course, foreign aid plus NPR makes up… what? Less than diddly squat?)
I don’t think that there’s any pre-crisis solution to the problem. There’s only deciding when it’s too expensive to keep the crisis from precipitating and then, shortly thereafter, crisis management.Report
North’s comment and your reply are spot on.
I think the numeracy issue is real and partly a human problem of imagination; it’s hard to understand just what happens when one thing is an order of magnitude larger than another thing. Just to keep everything in sizes we all understand, we could get rid of the words “trillion” and “billion.” That way, the annual deficit is one million million dollars, the defense budget costs five hundred thousand million dollars etc… but we are talking about cutting NPR’s five hundred million. (I hope I didn’t just embarrass myself with the math on that)
There is no word for billion in the UK, do they have one for trillion?Report
I thought that for a Brit, the word (for what Americans call a billion) is “milliard.”Report
Hmm, I see it written as x millions in their newspapers. I don’t think I have ever heard the term milliard, but I am not a Brit and I could be all wrong on this.Report
Nobody’s used “milliard” in the UK for many decades. Standard BBC usage is “billion” and has been standard government usage since the mid 1970s == 10^9Report
What they’d like to do is dictate a spending cut number in general and then somehow force Obama and his party to specify what cuts are required to meet that number and then blame Obama for it. Obviously Obama and his party aren’t really interested in playing that game. Can’t figure why.
This is pretty much how I see it.
I can’t see a deal getting cut because Obama is in a place where he’s unwilling to take any more bullshit political pummeling. If cuts are in the deal, they’re going to be enumerated and everybody that signs the thing is going to have to eat that pill.Report
Well if Obama backs down after all the language he’s thrown out you can kiss his term goodbye. His party will ignore him in disgust and the Republicans will laugh him out of the room every time he tries to say anything from that point on. He’ll be a lame duck from that day on.Report
I see several big factors – first, this is a major situation where Obama’s BATNA is better than the GOP’s; the GOP’s blocking and delaying will only lead to events they don’t want. Obama rarely has this, and isn’t going to give it up cheaply.
Second, the GOP hates his guts with a fiery passion, and will let things go to h*ll so long as it doesn’t burn them. So Obama has no incentive to play nice now, in return for the GOP playing nice over the next year or so, since they won’t.
Third, during the health care negotiations, it was clear that there is no possible deal with any individual GOP politicians; several senators asked for things, got them, and voted ‘no’ anyway. This means that much of normal haggling would be a waste of time, because the GOP will not live up to any step-by-step set of deals.
Fourth (I think that) Obama and the executive branch will probably have a lot of discretion about the exact phasing in of the shut-down. If things can be sorted by this month/next month, they can make sure that the first month of actual shut-downs will hurt the GOP more.
Finally, the GOP is not looking good right now, and is not yet institutionally capable of dealing with it. They’ll continue to scream and look like d*cks, playing to their base first and everybody else never.Report
The GOP’s big problem is the GOP itself. While Turtle Head McConnell keeps pushing the Big Red Filibuster Button like a sixth grader playing Ding Dong Ditch, Boehner won’t be able to do a thing. Did you see McConnell filibuster his own debt ceiling bill the other day?
While the GOP continues to shoot at its own feet, Obama and Harry Reid will manfully continue to manpack in the crates and supply them with all the ammunition they want. The GOP is in full meltdown. Obama has no reason to back down, nor will he.Report
Yes that filibustering himself was sheer parody. Reids expression was priceless.Report
This isn’t new. The GOP’s favorite play for decades has been to call for “across the board” cuts. This is preciously because specific cuts have specific constituencies and those folks will raise hell when they lose their funding. Then you have to make the case that these folks don’t deserve the government’s help and outside of the “robot squirrel” budget items, that case can be hard to make. (Tell the good people of the southern Washington State that volcano monitoring has no public benefit.) It’s much easier to say government should continue to do ALL the IMPORTANT (read expensive) things it does, just it should cost less.Report
I think Boehner would LOVE to cut a deal — he clearly wanted one in 2011 — but I think he wants to keep his job more. Cantor and Ryan are breathing down his neck, they’re more in touch with the fresh blood in the GOP caucus; and he’s just trying to find a way to thread the needle. But there really isn’t one in terms of cutting a deal. If we go over the cliff and taxes becomes a fait accompli, however, then he’s got more room to maneuver at least enough not to suffer a putsch.Report
If we go over the cliff and taxes becomes a fait accompli, however, then he’s got more room to maneuver at least enough not to suffer a putsch.
Exactly. If we go over the cliff, then he can negotiate a tax cut, somehow washing his hands of any responsibility for the proceeding tax increase and all the uncertainty let loose by absolute failure to compromise.Report
Obama has Keystone to bargain with.
I think that would split the opposition in the R’s.
Boehner would look good coming out of it with a deal for Keystone.Report
The election for speaker is January 3rd. I think you are 100% right, there will be no deal before that. With the slim majority he has, he needs almost every vote in his caucus to remain speaker. If he wants to keep the big gavel, Boehner can’t afford to lose any votes in his caucus by bringing an agreement that doesn’t near unanimous Republican support to the floor before then.Report
Wow, I hadn’t realized the dates lined up like that. The GOP knows that they have a lot less leverage than their base expects, and one way they could wash their hands of a predictably bad deal is by ditching Boehner. It seems like his goal now is just not to give them the chance.Report
I expect this as well. If I were betting I’d say they “cliff” occurs and then a new deal is cut that drops taxes from the new baseline. Which is, if you consider it, a massive loss for the GOP if the debt limit is addressed by this new deal.Report
Road runner: Beep beep. zoommmmmmmmmmmmmmmmmmmmm
Coyote: d
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splatReport
First view of the onion – Boehner’s the Speaker, and an equal to the President in the negotiation.
Peel off a layer, and you get Elias’s analysis. Boehner doesn’t control the House. I’d also add that he’s already agreed to a lot of the President’s positions, so that makes him look even weaker.
But peel one more layer: Boehner’s not the negotator, he’s the broker. He’s the guy standing in the middle, trying to get both parties to shake hands. It’s not a comfortable spot to be in, but ultimately, if both sides even want a deal, they have to go through him. Boehner gets all the blame short-term, but all the credit long-term. (Now, I should note that I don’t think he put himself in this position on purpose, and I’m not sure if it will hold up. But it’s worth thinking about.)Report
We are not only going over the cliff. I’m also quite certain the debt ceiling will not be raised. Obama won’t cave to blackmail this time, and the Republicans won’t yield. Prepare for a giant blow to our own and the world’s finances, and significantly increased unemployment. What kills me is that most Republicans will see this catastrophe as a victory.Report
I’m not a republican and I endorse this path 🙂
Let’s get serious, the fiscal cliff is nothing but a few measly percentages of anticipated spending being reduced over the next 10 years. Taxes are going up sure, and folks will scream, but after a while folks will get used to it.
They will probably cut a deal in late January or Feb and make it retro to January 1 after everyone goes home and says they “stood up for their side”.
As to the debt ceiling what are the odds on BOB writing a executive order to increase it?Report
The problem isn’t really the cuts but their timing: just barely after an awful recession. If the sequester was an iron-clad bond to make these cuts once unemployment hit 6-7%, I think a lot more people would be fine with going over the cliff.Report
“after”.
We’re still in a recession. We’ve done the whole Keynesian “spend money like we have it” stimulus and it didn’t work. Let’s try massive spending cuts. I really don’t think we need another carrier task force or a few new nuclear subs. We also don’t need bases all over the globe, and we can rein in some domestic spending. No need to fund folks’ retirement for 20-30 years.Report
“We’ve done the whole Keynesian “spend money like we have it” stimulus and it didn’t work.”
Wrong. Start with Krugman, and follow his links.
” Let’s try massive spending cuts. ”
Wrong. Start with Krugman (see ‘Europe’) and follow those links.Report
Wrong on both counts; the stimulus did have an effect. As Krugman said, it wasn’t big enough.
As for massive cuts, please see Europe.Report
(sorry; even after refreshing the page, the first reply didn’t show up).Report
“As to the debt ceiling what are the odds on BOB writing a executive order to increase it?”
I wonder about the legal situation; from what I can gather there are three laws:
1) Budget for spending
2) Taxation laws
3) Debt ceiling.
The particular ‘crisis’ here is that not all three laws can be obeyed, but Obama must make sure that the executive branch obeys them.Report
Sorry, I don’t read Krugman. He’s a fool and he’s wrong.Report
My own expectation after Jan 1 is that (1) Mr. Timothy “There’s no choice except default” Geithner will resign; (2) the debt limit will not be increased before we hit the ceiling; and (3) the President does a broadcast address to the people to tell them that Congress has left him in an impossible position where he can’t follow all the contradictory laws, so he’s going to instruct the Treasury to ignore the limit and continue selling bonds, as that’s the path that does the least damage. And express his heartfelt hope that the House Republicans come to their senses.
I’m a terrible political strategist, but if I were in the President’s shoes, I’d be looking for enough filibuster reform that either Harry Reid can get bills to the floor and voted on, or the Republicans have to stand up there on CSPAN and drone on and on and on…. Then work my butt off to pick up a narrow House majority in 2014…. Then do tax reform and fine-tuning of the PPACA based on the early experience.Report
Assuming that the GOP doesn’t cave on the debt ceiling (a moderate assumption*) and also assuming that Obama doesn’t cave on the debt ceiling (similarly a moderate assumption**) I would assume that the debt limit can’t actually survive a confrontation. Any lawyer types feel free to correct me on this:
-Spending levels are set by congress through budgets or continuing resolutions (which is essentially just extending existing budgets). This is laid out basically in the constitution yes?
-The debt ceiling is imposed by a law, passed by congress, which forbids the Treasury from borrowing over a certain level without affirmative permission from congress.
-We hit the debt ceiling, there’s no affirmative deal. Obama says “Fish that, sell the bonds anyhow.”*** The debt limit is exceeded, the GOP then has to go to court to stop him yes? Or impeach (not a chance without the Senate yes)?
-The supreme court kills the debt limit law stone dead. Budgetary powers are constitutionally defined. The debt limit is a legislative artifact. Constitutional trumps legislative.
*This is a moderate assumption, I’d be hesitant to even put it at fifty percent. Every businessperson and corporation in the country would be burning their congresspeoples phone lines if it looked like a default would be in the offing. The GOP resisting that pressure is far from a forgone conclusion.
** Similarly a moderate assumption. Before the election I’d say Obama was over half way likely to fold but he’s got an electoral win, his polling says the electorate has his back and if he folded now after the things he’s said he’d be an utter joke to everyone in the country.
***This is not to imply that this event would be painless. Would people accept bonds that’re being sold in violation of congress? Would they be considered as safe as normal bonds? I think not. The ratings agencies twitched over implied political dysfunction on this subject, I don’t see how they’d ignore full on political dysfunction. If the rantings drop on another agency then US debt gets downgraded and all hell breaks loose globally and at home even if the Supreme court backs Obama up on this.Report
Then work my butt off to pick up a narrow House majority in 2014….
Not going to happen. Less than 10% of House districts are actually competitive, thanks to redistricting.Report
If we drive ourselves back into recession, bets are off.Report
There’s no guarantee that “going off the cliff” will trigger a recession. When Clinton raised taxes and lowered spending in 1993, to reduce the deficit, the result was not the warned-against contraction, but instead the largest, most sustained economic boom since World War II.
For all the posturing about “uncertainty,” financial markets are pretty concerned about the ability of our political system to address the long-term structural deficit. Cutting it in half, in one fell swoop, has the potential to increase the confidence of investors in the prospects of long-term investment in the U.S..
Not to promise another boom, but it’s not outside of the realm of possibility. And a double-dip recession is not inevitable.Report
“For all the posturing about “uncertainty,” financial markets are pretty concerned about the ability of our political system to address the long-term structural deficit. Cutting it in half, in one fell swoop, has the potential to increase the confidence of investors in the prospects of long-term investment in the U.S.. ”
No they are not, or interest rates on US government bonds would be at historical record highs, rather than historical record lows.
As for the confidence fairy, he’s just as real as the tooth fairy.Report
“My own expectation after Jan 1 is that (1) Mr. Timothy “There’s no choice except default” Geithner will resign; ”
My money is on Mr. ‘There’s no choice’ Geithner finding out that there is indeed a choice, when his fate rides on it.Report
As a side note, Justin Amash is being less than honest. His district includes Grand Rapids, which is much bluer than the surrounding, more rural, area, even if it’s not particularly blue for a good size city. Grand Rapids is the only really economically vibrant large city in Michigan right now, and they do not want to take a hard line stand that could wreck the economy.
Amash is representative of the GOP’s problems–not just an old right wing religious guy that doesn’t appeal to younger, female, and minority voters, but a young right wing religious guy that doesn’t appeal to younger, female, and minority voters…meaning the GOP isn’t going to age out of it’s lack of demographic appeal very quickly.Report
So wait- this is opposite day and you don’t think the US is going over the cliff? Or it’s a regular post and you do think so? Because I’d really like to establish the betting pool that we tried and failed to set up for the election.Report
I’m not sure I like the way you’re characterizing this. It’s almost as if Obama might start to take pity on the drowning Boehner and toss him a lifeline. All Boehner has to do is have a private lunch with Obama, start bawling like a baby… next thing you know Obama makes some retrograde concession just to stop him from crying.Report
“It’s almost as if Obama might start to take pity on the drowning Boehner and toss him a lifeline. ”
I can’t see Obama having any pity on any Republican at this point.
Or any real Democrat (I’m exempting ‘liberal’ ‘Democratic’ pundits who always seem to warn against Democrats actually winning confrontations).Report
Going over? GOOD!! And its about damned time.
Humpty Dumpty needs to have a great fall, so lets through him off the Fiscal Cliff. Why? Because all the Kings horses and all the King’s men will FAIL to put Humpty Dumpty (the US Economy) back together again, and then we get what we really need which is CHAOS, meltdown and madness. The Liberals will go insane. There will be a Civilian War. The country will shatter.
Secession is the only long term answer. A NEW Constitution in the New Republic of Texas is the only answer. A NEW Bill of Rights in the Independent Republic of Arizona is the only answer. A NEW Declaration of Independence in the Constitutional Republic of Alaska is the only answer. Succession from Washington DC after Chaos is the only answer. We need to go over the cliff and we (as a people) need this crash.
Secession is the the MOST AMERICAN thing we can do. We seceded from Great Britian. We encouraged other countries to Secede from the Evil Soviet Empire. We helped lots of countries secede from their EVIL Governments. The USA is FOUNDED on and by Secession!
“When in the Course of human events, it becomes necessary
for one people to dissolve the political bands which have connected
them with another, and to …”
And believe me. Its NECESSARY!Report
This has got to be some sort of bizarre performance art. Are you, by any chance, related to Yoko Ono?Report