After about an hour of studying last night's budget deal, I find it right on the borderline between (A) awful-tasting medicine we still need to take for our health and (B) a cure that is worse than the disease. But careful, careful attention pushes the calculation every-so-slightly toward the former. This isn't even a 51-49 proposition, but only a 50.1-49.9 proposition. Still, here's why the option of a "yes" vote for House Republicans -- notwithstanding my warnings yesterday that "no deal" is better than a bad deal -- is not an unacceptable decision.
First, obviously, we already have gone over the cliff, technically speaking. The tax rates now in effect under law are those of the Clinton era, not the Bush era. As Grover Norquist argues, any vote for the Senate deal now is a vote to cut a lot of taxes, not a vote to raise any. And this bill does cut a whole lot of taxes (even including some special-interest breaks demanded by liberals that don't actually make economic sense). By locking in tax cuts for couples making up to $450,000 a year, by locking in a full $5 million threshold before the death tax kicks in, and by re-cutting the top cap-gains rate and dividend rate down to 20% (worse than the former 15%, but far better than the possible 39.6% that would apply now that the Bush cuts have expired), conservatives provide a ton of room for small businesses to grow and hire more workers, etcetera, before higher rates kick in -- and also have saved pensioners who rely on dividends a whole lot of money. Permanently. This is a very good thing. We can "bank" those tax rates and then hope to achieve other rate reductions in conjunction with full-scale tax reform, as recommended by the Simpson-Bowles Commission, whose praiseworthy recommendations now in effect outweigh its remaining unpraiseworthy ones. Of course, Obama retains the bully pulpit and we retain an ineffective sense of strategy and tactics, but that's all the more reason, not less reason, to bank some tax cuts now and take them off the table.
As for spending, conservatives are (slightly) misreading this accord. In macro-terms, Republicans haven't lost any ground in the last two days on total spending levels. The exact same total spending levels, with the same amount of "cuts" as under the original sequester, still apply, but just in different form.
It's sort of complicated, but here's how it works. The blunt-instrument sequester still will kick in on March 1, absent any new agreements. In the meantime, the same amount of "cuts" that would have applied in the next two months under the sequester will still apply, but instead of being implemented immediately, it will come out of the overall budget "caps" for 2013 and 2014. In other words, those caps will be reduced by $24 billion, which is the same amount that would have come out of discretionary budgets under the sequester. The only difference is, it leaves it until later for Congress to detail where the cuts come from -- to use an alligator-skinning knife rather than a machete. In some senses, this is better than the sequester, because it means Congress can target its cuts toward truly unecessary areas rather than cutting from both the necessary and unnecessary programs alike.
LET ME REPEAT: THE SAVINGS HERE ARE THE SAME AS UNDER THE SEQUESTER. THIS IS NOT A LOSS ON SPENDING. THIS IS THE KEY FACET OF THE DEAL THAT HAS BEEN MISUNDERSTOOD, UNTIL EXAMINATION UNDER DAWN'S EARLY LIGHT.
Of course, this just means there will be two more months of haggling, two more months in which bad tactics and bad communications couldput the GOP behind the 8-ball. But, in conjunction with debt ceiling deadlines that might (possibly, maybe, we hope) play more into conservative hands, those two months also can provide the time for the GOP to improve its strategy/tactics and communications.
I am not among those who think that John Boehner has done a terrible job here. In the wake of a horrible election, he has been dealing a very weak hand. I haven't agreed with all his moves, but I think he has given it "the old college try" far better than, for example, the honorable but less feisty Bob Michel would have done in the early 1990s, and far better than Dennis Hastert would have done. And in retrospect, his "Plan B" would have been a better solution than we are faced with today.
Here's the biggest advantage to buying these extra two months: Obama's approval ratings can and almost certainly will go down. Why? Try a trillion dollars (ten-year numbers) in new tax hikes as part of ObamaCare that just kicked in ten hours ago. Conservatives will have two months now to highlight these and other parts of ObamaCare that should prove tremendously unpopular, and to lay the blame entirely on Obama and the Dems who voted for this monstrosity. Plus, there are all sorts of communications strategies and tactics that conservatives now have time to prepare and implement that weren't necessarily available to them in the past seven weeks. (Memo to leadership press: Call me or others for ideas!)
In short, it is a fallacy to say that this agreement achieves no savings. Instead, it actually banks some savings (for now) that would have occurred under the sequester.
Now, those of us who are pro-defense are still worried sick about the defense implications under sequestration, but Congress easily can pass separate legislation restoring most of the dangerous defense cuts. With Leon Panetta out there publicly arguing for restoration of many of those funds, it is hard for Obama to have a leg to stand on if he says he won't sign a separate, defense-only bill.
All in all, then, this is one of those situations where a tactical mini-retreat is not a bad option, because it allows conservatives to survive and fight another day. (And I do mean "mini"; this isn't giving up much ground.)
It might just be time to lick our wounds, take our medicine, hobble away, and prepare a counterassault from high ground of our own choosing. In those two months, conservatives should push Paul Ryan back to the fore, and should listen to the wisdom of Jeff Sessions in the Senate about using open hearings to highlight the conservative case for lower spending, and should also push people to the fore such as Wisconsin's Ron Johnson, and Marco Rubio, and Ted Cruz.
More thoughts later, here and elsewhere, on communications strategies and tactics. For now, just know that if this agreement passes, time becomes our friend rather than the enemy it has been for the past seven weeks.
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