The Spectacle Blog

The Deal Sort of Stinks… But Only ‘Sort of’

By on 8.1.11 | 11:18AM

I have no business "endorsing" or not "endorsing" this budget deal, or urging anybody to vote or not to vote for it. I think it is worth puzzling out how I would vote if I were in the House (or Senate). I haven't seen all the fine print, but from what I understand, I'll start by saying that my dire warnings last week appear to have been slightly off.

(See, readers: I can admit when events prove me partly wrong.)

I worried (by implication; I didn't spell it out this specifically) that failure to support the Boehner plan would end up producing either a default or else a deal so favorable to the left that it would make us all gag. I feared something that might get, say, 52 Dems (all but Bernie Sanders) and eight or nine GOPers in the Senate, and then get about 180 Dems plus just 40 Repubs in the House. Such a deal would probably have included only the most nominal or non-defense cuts, plus a bias towards higher taxes. It would have been almost worse than a "clean" debt limit hike.

Well, that's not what happened. The week-long circular firing squad over the Boehner plan ended up harming the Boehner end-stage negotiations only a little, apparently. I never foresaw much better than what finally emerged yesterday. But I did envision something a little better than this. In particular, I am worried sick about the likelihood of harmful defense cuts. And while my reading of this new agreement is that while it makes it very, very difficult to force new tax hikes, it also makes it very, very easy to allow the Bush tax cuts to expire at the end of next year.

As for the Defense cuts, let me appeal to the authority of... John McCain. Conservatives should take this seriously. Lord knows I have blasted McCain again and again and again over the years, and he's frankly a rather nasty personality, and far from a conservative on a lot of things (although he is and always has been far better against wasteful spending than conservatives give him credit for -- check the record!). But the one and only subject on which he always has been reliable is on fighting for a strong defense. Again, check the record: He is extremely knowledgeable, and extremely pro-defense.  McCain, with reservations, says that he can "swallow hard" and stomach the potential for defense cuts in this bill. That's at least somewhat reassuring.

As for the Bush tax cuts, here's the reality:  If Obama gets re-elected, there's no way to save those cuts anyway. If Obama is not re-elected, then the math on the cuts is simple: Using the budget reconciliation process, Republicans will be able to save the tax cuts if they have 52 members in the Senate (this allows for two defections), and may be able to save those cuts with as few as 50 Senators (no defections, or with a crossover Dem or two, which is unlikely) plus the GOP Veep casting a tie-breaking vote. (In other words, the tax cuts would expire under Obama, but likely be reinstituted as the first order of business under a GOP Congress and president.)

In short, this budget deal probably won't really determine the fate of the Bush tax cuts after all, but it will guard against broad-based tax hikes of any other kind, as long as the GOP appoints people like Sessions and Toomey to the commission, which is something I imagine Boehner and McConnell understand is quite necessary for purely political reasons (they know that agreeing to tax hikes before the 2012 election would be political suicide; their insistence during the debt-limit debate that no tax hikes be included shows that they understand this).

So what this boils down to is this: At a bit of risk to defense spending, and to a lesser extent than conservatives would like in terms of savings, this deal starts to turn the ocean liner around. It starts the process of getting budget deficits down to manageable size. As I said on a radio show the other day, this is an 800-bite hippo of debt that we're facing, and the difference between Cut/Cap/Balance and the (now-modified) Boehner plan is really just the difference between five bites of the hippo and six or seven bites of the hippo. Either way, we need to come back for more.

In a vacuum, I am enough of a defense hawk that if I were faced with this vote with weeks to go before the debt ceiling deadline, or without being tied to the debt ceiling, I probably would vote no on this. But the risk of undermining the full faith and credit of the United States is far more profound than some conservatives are acknowledging. Hitting the debt ceiling and being forced to leave private vendors unpaid would cost a vast amount of private-sector jobs, rapidly hasten the abandonment of the dollar as the world's reserve currency (a status that is a huge benefit to the American economy and which would be a huge detriment to lose), and have negative repercussions for years to come.

Finally, from a political standpoint, I actually think that anydeal is going to reassure markets so much that a large portion of the $1.5 trillion plus that has been sitting on the sidelines will finally start being reinvested in the economy. The economy will indeed start to pick up -- slowly, to be sure, but still noticeably. If conservatives do not take partial ownership of this deal, they will cede all the credit for the "turnaround" to Obama. That would be a bad thing politically, in any circumstance.

The message COULD be:

Look, all the way through April, the president insisted that there be a "clean" debt-ceiling hike with absolutely no savings. The Democrats never produced a budget in 825 days; the Democrats never produced a single plan in legislative language to accomplish any savings. The only reason we got a deal that reassured the markets and helped the economy start to recover was because we conservatives insisted on significant savings. If we had gotten the savings we wanted, the recovery would be even greater. This is our recovery, not his.

So if the deal will help the economy at least somewhat, it is both decent policy and decent politics. If conservatives win the 2012 elections, they can ensure in the future that taxes are kept low and that defense isn't gutted. If the 2012 elections go badly, there will be no way to do well on taxes and defense no matter what is in this deal. Therefore, the upside of this deal is ever-so-slightly greater than the downside.

If I were in Congress, I would be holed up in my office with the door closed, studying all the details, looking for jokers in the deck. I would reserve the right, in the next few hours, to change my mind, based on that detailed study. I would know that these savings won't go far enough, but I would understand that a budget cap is different from a budget mandate -- in other words, that absolutely nothing precludes us from producing Appropriations bills that save more money than called for in this deal, but that the caps ensure that the spending absolutely will not exceed these caps.

In short, let's forget what I would do. Here's what a lot of conservatives right now might be thinking: They would be leaning right now in favor of holding their noses, even though it sort of stinks, and voting for this thing.

Then, they could quote Ben Franklin, from the last day of the Constitutional convention, to this effect:

On the whole, Sir, I can not help expressing a wish that every member of the Convention [Congress] who may still have objections to it, would with me, on this occasion doubt a little of his own infallibility, and to make manifest our unanimity, put his name to this instrument.

Then, having banked these savings, they would immediately start planning their next assaults on overbearing government, my next assault on spending. They would indeed come back for more cuts, starting with the remaining Appropriations bills this year. Take ground, consolidate it, and then plan the next assault. Take ground, consolidate it, and then plan the next assault. And so on. In the Madisonian system of government we have, that's what works. That's how it is designed to work. And it's a profoundly conservative approach.

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