By Robert L. Borosage
This year's contrived budget crisis is headed to its climax, as the date for defaulting on the nation's debt approaches.
Washington's budget debates are dizzying and incomprehensible. But at stake is what kind of country we will have. House Republican Tea Party zealots, backed by well-funded right-wing lobbies, continue to manufacture budget crises. They want to alarm Americans into accepting cuts in basic security — in food stamps, and home heating, in Social Security or Medicare benefits — that would otherwise be utterly unacceptable.
Lost in the uproar is any reasoned discussion of the real strategies we need to make this economy work for working people. It is vital that the president and the Democrats in Congress end this macabre dance and make it clear to people just what the stakes actually are. The measure of any compromise deal is whether it will crush the hostage-takers.
Last week, Tea Party Republicans finally blinked. The big money that drove the effort to hold government hostage in order to defund, or at least delay, Obamacare called off the dogs. With catastrophic financial default looming, and Republicans already plummeting in polls measuring voter approval, the lavishly funded right-wing lobby groups — Heritage Action for America, the Koch Brothers' Americans for Prosperity, the Club for Growth — unfurled the white flag, announcing that they would not punish House Republicans for voting for a short-term hike in the debt ceiling.
Simultaneously, conservative business money — the U.S. Chamber of Commerce, the National Association of Manufacturers, and others — carefully leaked plans to protect incumbents in primaries against zealous Tea Party challengers. The Koch Brothers took a step back; the corporate and bank money looked to limit the damage.
Once the money spoke, House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) scrambled to find a strategic retreat.
The Republican leaders are cunning, if not courageous. They are now suggesting lifting the debt ceiling and reopening the government for a short time in exchange for the president agreeing to negotiate on the "pressing problems" of the budget (a euphemism for talks that would include proposals to cut Medicare, Medicaid and Social Security benefits and to sculpt "revenue neutral" corporate tax reform — which asks companies to contribute not one additional cent to deficit reduction). Republican senators are also casting about for largely symbolic swipes at healthcare reform — like delaying the tax paid by employers for a year, or entirely removing a tax on medical devices — both of which will add to the deficit.
A deal said to be emerging from the Senate early on Tuesday afternoon includes avoiding default by extending the government's borrowing authority until February, and funding the government until January at levels that include the current sequester cuts.
House Republicans, widely scorned across the land, are demanding even more concessions as the price of ending threats they've already been forced to abandon, but so far they haven't been able to agree among themselves about any compromise.
If accepted, a short-term hike of the debt ceiling and funding of government would put all the pressure back on the president. President Barack Obama would be forced to enter into negotiations framed entirely by wrong-headed, right-wing assumptions: that deficit reduction is a "pressing problem;" that crucial security programs for Americans, including Medicare, Social Security and Medicaid have to be cut; that corporate tax reform should be "revenue neutral."
The Republican zealots would still be able to hold the country hostage — with more automatic sequester cuts, a government shutdown, and the debt ceiling and default looming again three months from now. The mainstream media would clamor for compromise. Instead of the Koch Brothers driving this debate about the debt, billionaire Pete Peterson's empire of outside groups would generate the hype.
Over the years, the president has flirted with means testing Medicare. He's proposed cutting Social Security benefits over time by reducing inflation adjustments. He's embraced "revenue neutral" corporate tax reform that asks corporations to contribute not a penny more to deficit reduction. No person concerned with the security of the country's most vulnerable citizens would want to leave the president in that bind. Republicans, meanwhile, would be emboldened to contrive another crisis next year.
The Democratic position should have been made crystal clear and repeated over and over: "We will accept your budget figure, minus another round of sequester cuts. We'll lift the debt ceiling for a year to cover the debts that you already voted for. Then we can get on to sensible talks on the budget that should include a jobs agenda and increased revenues. If you want to continue the extortion — a short-term debt ceiling limit, negotiations with a gun to our head, leaving markets nervous, hurting the economy and families — then you are on your own. Pass those measures with your own votes."
The bigger problem is that even as Tea Party Republicans keep losing popularity, they keep gaining on policy. Hostage-taking seems to work.
Every assumption of this debate is wrong. America isn't broke. We don't have a deficit crisis — since the deficit is now falling faster than any time since the demobilization after World War Two. Spending isn't out of control — with all the cuts in government, discretionary spending is declining to levels not seen since Dwight D. Eisenhower was president. We have no near or mid-term debt problem. These long-term projections of rising deficits and debt are driven entirely by our wasteful healthcare system — which costs about twice per capita of any industrial nation. In fact, those projections have improved dramatically as the rise of healthcare costs has slowed, in part due to reforms passed as part of Obamacare.
Rather than a sterile debate about how and what to cut, we should be having a debate about a strategy for generating good jobs in this economy. That is what matters to Americans. It should include making public investments that are vital to our future — in education, in rebuilding our decrepit infrastructure, in renewable energy, research and technology. We can pay for these with sensible tax reforms that close the loopholes that now reward multinationals for shipping jobs abroad and storing profits there as well.
Republicans invent these crises because they win even when they are losing. Austerity — cutting spending — becomes the accepted frame of the debate. Essential security programs — Social Security, Medicare, Medicaid — are put on the chopping block. Tax hikes — even closing loopholes that reward multinationals for shipping jobs abroad — are shunned. Programs for the vulnerable are cut. And excluded from the debate is any discussion of the investments vital to making this economy work.
The chaos serves conservative ideological ends. Tea Party Republicans are being discredited — but they are besmirching government with them.
These repeated crises also serve the right's political cause. Each fight over the debt ceiling damages the economy, erodes consumer and business confidence and adds to the nation's insecurity. Each exacts more austerity that costs jobs and slows growth. Next fall, Republicans can use the failure of a recovery — that they helped to stall — as the centerpiece for their election strategy.
Not surprisingly, these repeated crises dismay Americans, who view it all as petty partisan politics. Beneath these destructive manufactured crises, however, is a fundamental debate about the country's future. Will we recover widely-shared prosperity and rebuild a broad middle class? Or will the rich and powerful 1 percent continue to rig the rules, adding to extreme inequality, shutting down opportunity, and rolling back the minimal shared security we now offer one another?
These face-offs are ugly, messy and confounding. But they must be fought until American voters make their mandate clear.