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Saturday, October 22, 2016

The Fiscal Cliff Deal: Useless Little Battles And A Worse Government

The Fiscal Cliff Deal: Useless Little Battles And A Worse Government

The year ahead will be full of petty budget battles that solve nothing and distract from the real issues.

On the one hand, the last-minute December 2012 fiscal cliff deal was in no respects a policy breakthrough, but on the other hand, it didn’t solve any process issues, either. There will be no grand resolution, which pleases the ideologues on both sides. God forbid that we come to any workable compromises. And there is no framework. So the 2013 stage is set for a series of useless little budget/deficit/debt wars.

We face, in turn, 1) the sequestration battles starting in March (over irresponsible cuts we agreed to 15 months ago as a way of avoiding doing anything then), 2) continuing resolution battles starting in April (a series of confrontations over spending this year because Congress couldn’t pass spending bills), 3) 2014 budget battles starting in May (but then we haven’t actually agreed on a budget for years), and 4) the return of the debt limit debacle sometime around August. (You thought this was over because Congress has declared that the debt limit has been suspended, but it’s coming back.)

These little battles will not — either singly or together — lead to a resolution of the deficit/debt/budget debacle. No actual problems will be solved. Everything will be kicked down the proverbial road. My bet is that each of the impending possible battles will wind up the same. There will be high drama moving toward farce, forecasts of doom, tense last-minute negotiations in which various congressional and executive leaders will try to act as though something important is happening. Each time the Republican House will back down, because if your approval rating is lower than cockroaches, you have surprisingly little political leverage.

We are seeing this whole drama playing out now in the run-up to the sequester. To remind everyone, these are cuts (roughly $85 billion in 2013 divided between domestic and defense programs) Congress and the president agreed to because they were thought to be so awful that the same two parties would agree to solving the whole budget problem to keep these cuts from happening. So now they are likely to happen and we’ve decided we hate them.

I hated them a year ago and said so at the time, but predicted that we would in the end make the domestic cuts and finesse the defense cuts. To be clear, I believe we must, over a 10 year period, slow down the growth of public debt, and this has to mean budget cuts. But these reductions will occur at the wrong time, they are done in the wrong way, they hit the wrong part of the budget, and they do nothing whatsoever to alter the 10- year picture of debt growth that impends. They are a wholly symbolic and harmful ritual dance.

We should not make these cuts now. We should, if necessary, make smaller cuts so Congress can say it got a “down payment.” Then Congress and the president should agree there will be no debt ceiling fight this year and should publicly and together commit to a process that might work.

In my dreams.

We seem intent on having these useless little battles. They will not actually lead to disasters. On the other hand, they won’t make anything better. But they will take up time, consume political capital, raise the level of distrust in government, maintain a high level of economic uncertainty, lower our economy’s growth rate, and impede the administration’s and the Congress’s focus on the real issues of our future. Both parties will look worse after all of this.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic presidents.

Cross-posted from the Roosevelt Institute’s Next New Deal Blog

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Photo credit: AP/Jacquelyn Martin, File


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  • nobsartist

    Useless politicians is more like it.

    The republiCONs are fighting biden, shumer and the rest of the “Democrats” that helped them along for the last 30 years.

    This is no fight, its a farce.

  • Our budget battles, debt ceiling exercises, and calls to solve our problems by implementing an austerity program are distractions designed to hide the obvious. Our government is dysfunctional, we are rapidly becoming a second tier economic power, we are spending enormous amounts of money on Defense and other programs that benefit a few at the expense of many, our standard of living has declined during the past several decades, and our insistence on not paying for the programs that we need and benefit from are destroying our fiscal integrity and ability to compete.

  • ococoob

    Anyone with a 401k or pension and is nearing retirement better wake up and raise holy hell to the Congress for “destabilizing” the markets with their idiocy and incompetance! 2014’s next year, folks!

  • Sigh. This has gone beyond ridiculous. You would have thought that since the Republicans failed in their efforts to tank the economy and affix the blame on Obama, they would have stepped back and re-thought their strategy. But no . . . they’re (once again) doubling down on the crazy. This petty, reflexive obstructionism is not only harming the economy, the nation, and its citizen, but it’s making the GOP look like petulant children.

    The voters have made it very clear that what they want is for government to work, and the Republicans have stated as a basis of their ideology that they intend to destroy the government. They are willfully blind to the fact that they are losing support across the board, and are only looking inward to their base. Which is shrinking day by day. The people are not fools. They have eyes, they can see what the GOP is doing, and if they continue, the GOP is going to be reduced to a regional rump party centered in the old Confederacy. For a while . . . even there, the next generation of voters is falling away from the fanatics who are bent on ‘purifying’ the party.

    What is scary is that they seem determined to take the country down with them. The once principled and proud Republican party has become an apocalyptic death cult which has declared war on pretty much everything.

    • sigrid28

      What if these skirmishes repeat all year, right up until the 2014 election? Will that frustrate centrist Republican and Independent voters sufficiently to drive enough Republicans out of House seats so Democrats can pass legislation like the American Jobs Act, or begin to reverse of the impact of Citizens United, or stop the attack on voting rights in federal elections? I cannot imagine this White House and this Democratic party letting the war of attrition taking place right now go on, unless they have some strategy in mind.

      Call me a Pollyanna, but I think the country is too vast, its resources too powerful, its population too well-educated and self-reliant to be brought down by the current batch of ignorant Republican obstructionists. The idea that they could do this may be just a Beltway illusion through which we give them far too much credit. The worse Republicans make themselves look, the more they reveal their true identity, the faster we shall be rid of them.

      I do think the president needs more effective surrogates replacing tired Republican talking points with progressive ideas attractive to a wide swath of the electorate. A good first step would be to refuse to let Republicans and the far right define the terms of the conflict any more, by crushing the idea that it’s just about the deficit and debt. As the kindergarten teacher tells students when a bully–or the class clown–tries to take over: “Don’t feed into that.” Let’s dismiss their debt and deficit idea by refusing to discuss spending cuts at all. Instead, we need to fill the airways with talk of jobs and investment, making the minimum wage a living wage and restoring fairness nationwide, especially through improvements in the tax code. Don’t discuss “cuts” to entitlements. Just make them as small as possible to straighten out the systems, while loudly and articulately promoting the jobs and fairness agenda everyone can support.

      • You might want to keep in mind that a blood clot less than a quarter the size of a BB can kill a 200 pound person in an instant. The insertion of a semicolon rather than a colon in the right place can crash a piece of software with a million lines of code. The GOP base is committed to the destruction of the US government, with a view to reclaiming the wreckage they caused and rebuilding the country in their image. It’s easy to destroy, but difficult to build.

        The Democrats and the White House are powerless to stop the infighting in the GOP. They cannot compel anyone to be reasonable, be nice, or get along together short of total capitulation and surrender. There is no Democratic strategy here, other than handing the Republicans plenty of rope, more shovels, and pointing out that nice patch of soft ground over there, right under that tree branch.

        The problem the Republicans have is that they are a house divided, which as Lincoln observed, cannot stand. They are up against it right now – either they purge the party of the cancer they cultured which now threatens to destroy them, or the party will be reduced to squabbling factions more at war with one another than the Democrats. And no matter what, they’re boxed in with a ticking bomb beside them. If they freeze out the Tea Party candidates in the primaries (like they did to Ron Paul), the radical base will bolt, put up their own nominees, and split the vote in the general election. If they allow the crazies to stand in the general election, history has shown that they will be trounced anywhere other than a blood-red district or state.

        And worse, their base is shrinking as the angry old white people die off and the minorities who cleave to the Democrats grow. They need to do what the Democrats did decades ago, but the monster they created will not allow it. To remove them would require surgery they are loathe to undergo, and without that surgery, all they can do is try to bring down the edifice of government with them into the tarn (think of it as The Fall of the House of Grover). The GOP is inextricably linked to a pack of fanatical, paranoid, lowbrow extremists, and as such they are doomed.

        • sigrid28

          I get this: NOTHING can be expected of the Republicans. What I don’t get is why the Democrats and the White House cannot be more vocal about bypassing this current batch of Republican obstructionists in the House while they implode. Why can’t the White House and House and Senate Democrats be more assertive, even aggressive, about getting on with the business of governing, without the GOP if need be?

          To me, it seems like sheltered Beltway thinking, to imagine that the self-destruction of the Republican party has to take the rest of us with it. Or it is a false equivalency cooked up by the news media to drum up ratings. The GOP may indeed be inextricably linked to a pack of fanatics, as you so eloquently point out, but the rest of us don’t have to be. Why can’t we detach? Why can’t we figure out a way to be OK?

          I will tell you a story about the black market in modern Moscow. It is very difficult to catch a cab, and if you catch one, by some miracle, it is very expensive. So regular citizens driving in Moscow, who want a little extra cash, will sometimes offer would-be taxi riders a lift. Driver and rider agree on a fee, and off they go.

          • idamag

            Yes, the Democrats need to let the country know what is happening and to speak out against it.

        • Ed

          Yes, they are deyermined to “drown the government in a bath tub”! But they also intend to smear Obamos presidency for all of eternity, showing him as weak and useless. As for the rest of us, weell, we are collateral damage.

          • idamag

            The United States of America is collateral damage to them.

    • idamag

      Siegfried, It would be interesting to know the I.Q.s of the tea party reps.

      • I suspect it’s in the same general range as their belt sizes . . .

        • idamag

          (chuckling) I think you might be right.

    • charleo1

      Thank you Sir! Whenever I read a comment so crisp, concise, and absolutely true.
      I am inspired.

  • Stupidity is alive and well in the House of Representatives(?).

    • idamag

      Jim, for some reason, they think stupidity is a virtue.

  • judgeglenda

    its not time to worry about the debt ceiling.put some people to work on our highways and etc.

  • onedonewong

    This is what happens when you have an unqualified president who is over his head. No question Barak isn’t growing in the job he just returns to his quota cry baby base

    • charleo1

      Ah, what happens then, with a, “qualified,” President? Three thousand killed in a terrorist
      attack, the, “qualified,” President, and his, “qualified,” National Security Advisor, missed
      entirely? A major American city drowns, while the, “qualified,” former horse breeder, now
      the, “qualified,” FEMA director, is warmly praised by his, “qualified,” President? But, that’s
      old history. And what would a cry baby like me know about, “qualified,” anyway?
      The only, “qualified,” we understand is if we, “qualified,” for our food stamps! Right?
      So, we totally missed that a 72 year old cancer survivor, and his sharp as beaver’s teeth,
      running mate from Alaska, where she could see Russia from her house, was almost
      over, “qualified,” to be President. Old history too. You’re right, it was probably Mitt
      Romney that was, “qualified,” to be the leader of the free world, and decider and chief.
      There’s no arguing, he certainly knew both sides of the issues. In fact, he had held both
      sides of the issues at one time or another. No doubt about it. Us cry babies missed a
      golden opportunity to elect a strong, President. Who was just as sure of his beliefs then,
      as he was sure now, that he had originally made a mistake in what he believed.
      But now, he was absolutely positive, that he definitely knew the views he held now,
      were most likely, in the strongest sense of the word, “severely Conservative.”
      And so, who did you vote for?

      • onedonewong

        No yo forgot that CLINTON gutted the CIA NSA and Military as part of hie peace divided. They were so short staffed that most of their intelligence was gleaned from Newsweek. Besides Billy boy was offered up binladin by Sudan and he refused to take him. Th entire episode would have been prevented if Bill wasn’t screwing monica.
        NO drowns because they turned off their pumps and had a quota Mayor who couldn’t move the school buses to prevent them from being damaged. W asked the governor what she needed and once again a quota female said NOTHING…
        And yes Palin could see Russia from her house you like the rest of the state media don’t even know where Alaska is, reflects on what passes for education for quota babies.
        I voted for some one to LEAD the country not some one who’s only skill set is basketball and dope

  • They don’t “seem” to be intent. They are intent.

    This, after all, is how the great majority of Tea Party Republicans made their way into Congress in the first place: By manufacturing reasons to feud with the President out of nothing.

    This is the same Congress that has voted to overturn the Affordable Care Act over thirty times. Fighting useless battles is all they know how to do.

    So until the 2014 midterms, this is what we should expect: A bunch of useless battles that Congress can’t afford to fight, and can’t win, but are going to fight anyway because they don’t know how to do anything else.

    • The agenda of the Tea Party, as articulated by their Imperial Wizard Grover Norquist, is the destruction of the US government and the dissolution of the United States back into independent states, each being sovereign and independent. Precisely the same goal as the old Confederacy. The current politics on the part of the bagroes is a continuation of the Civil War by other means.

  • charleo1

    It seems to me, the author, Mr. Cutter, has it about right. The budget battles can’t help but make
    business less optimistic about the strength of the economy, going forward. And will hurt economic
    growth, and make the debt, the Republicans, especially the ultra conservative T-Party, like to talk so apocalyptically about, worse. As far as making both Parties look bad, it probably will. Worse
    than caving to the T-Party demands? Not a chance. But the President, and Democrats in Congress
    need to be specific about where the dysfunction is located. Just generic calls from the President
    for Congress to act, will allow those who believe it’s all of, “them,” to give cover to those, mainly
    in the out of control, House. Who are actually trying to cause a crisis that would require some
    action by them, to avert. Then, the demands start. “Wouldn’t it be a shame, if something were to
    happen to that recovering economy?” “So, here’s what’s going to happen.” You’re going to put
    the EPA, Dept. Of Education, the 14th Amendment, ObamaCare, 11 million illegal aliens, and
    Elizabeth Warren, in a plain brown paper sack, and leave them at a location we will reveal after
    the impeachment of Barack Obama!”

  • clarenceswinney

    He would have continued Clinton/Newt Fiscal Policies of Pay Your Way
    We would continue to have Surpluses not Debt as far as the eye can see
    Debt today would be 6000B not 15000B
    2010 Budget would be 3000B not 3800
    Unemployment would be 5% not the real 17%.
    Food Stamp Roll would be 10% not 46%
    Unemployment Insurance Roll would be low
    Redistribution of Wealth back to Middle Class would have continued
    The top 1% would own 20% not 43% of Total Financial Wealth
    He would have continued Taxing the top 1%
    Wall Street Regulators would be under experts not Partners In Crime
    We would have 400 military bases not 800 worldwide
    We would not have two wars
    We would not have lost thousands of lives of young youths
    Hundreds of thousands of Muslims would still be alive
    Thousands of young Muslims would still have legs feet and minds
    America would still be the most admired nation on Earth not the most despised
    We would go back to behaving as a Christ-Like nation via our national policies
    Millions would own homes not foreclosure notices
    States would not be laying off hundreds of thousands in such important jobs as
    Teaching and Policing California would have a balanced budget
    John Kerry would be President.
    Sound common sense policies would continue.