Krugman: Failure Is Good (super committee)

[ProSense]

Failure Is Good

By PAUL KRUGMAN

<...>

Why was the supercommittee doomed to fail? Mainly because the gulf between our two major political parties is so wide. Republicans and Democrats don’t just have different priorities; they live in different intellectual and moral universes.

In Democrat-world, up is up and down is down. Raising taxes increases revenue, and cutting spending while the economy is still depressed reduces employment. But in Republican-world, down is up. The way to increase revenue is to cut taxes on corporations and the wealthy, and slashing government spending is a job-creation strategy. Try getting a leading Republican to admit that the Bush tax cuts increased the deficit or that sharp cuts in government spending (except on the military) would hurt the economic recovery.

<...>

Democrats see social insurance programs, from Social Security to food stamps, as serving the moral imperative of providing basic security to our fellow citizens and helping those in need.

Republicans have a totally different view. They may soft-pedal that view in public — in last year’s elections, they even managed to pose as defenders of Medicare — but, in private, they view the welfare state as immoral, a matter of forcing citizens at gunpoint to hand their money over to other people. By creating Social Security, declared Rick Perry in his book “Fed Up!”, F.D.R. was “violently tossing aside any respect for our founding principles.” Does anyone doubt that he was speaking for many in his party?

more

[thesquanderer]

1. Good article, but...

...I wish he had included some reference to the ramifications of the things that will transpire if no agreement is reached.

[Proud Liberal Dem]

2. I don't like the cuts that would be triggered by the failure of the SC

however, I'll take THOSE over the Dems agreeing to an unreasonable and otherwise awful deal from the Repubs like the one they've been floating (thankfully, without any apparent success :puke:). The Republicans can't apparently grasp the unintended irony and hypocrisy of trying to propose a plan to reduce the deficit by, um, ADDING to the deficit with unnecessary tax cuts. Their "plan" to increase revenue is also a joke- given that the proposed new revenue would fall most on the 99%.

[ProSense]

3. "If the Committee Fails ..."

Fact Sheet: Reducing the Deficit, Raising the Debt Limit and Avoiding Default (PDF)

<...>

• If the Committee Fails to Report Legislation That Achieves $1.2 Trillion in Deficit Reduction, or Congress Fails to Enact the Committee’s Recommendations, Sequestration is Triggered. If the Joint Committee fails to come to a majority agreement on recommendations that achieve at least $1.2 trillion, or Congress fails to enact recommendations that produce at least that amount, sequestration is triggered, forcing across-the-board spending cuts. The sequestration will be similar to the 1985 Gramm-Rudman-Hollings trigger and, with interest savings, will make up the differential between the deficit reduction achieved by the joint committee and $1.2 trillion.
  
  
• Sequestration Will Use Balanced Approach to Spending Cuts.
  
  
  • 50% of Sequestration Will Come From Defense. If across-the-board cuts are triggered, 50% will come from defense spending (Function 050), with the remaining 50% coming from non-defense spending. The spending cuts would apply to FYs 2013-2021, and apply to both discretionary and mandatory spending programs with important exemptions (below). The amount of the defense spending cuts each year is estimated to be over $50 billion if sequestration is triggered.
    
    
  • Social Security, Medicaid, Veterans Benefits, and Other Essential Benefits Are Exempt From Cuts. If across-the-board cuts are triggered, the following will be exempt: Social Security, Medicaid, veterans’ benefits and pensions, payments to federal retirement funds, civilian and military retirement, and the child nutrition, and Supplement Security Income, among others.
    
    
  • Medicare Savings Are Capped at 2% and Are Limited to Providers Only – No Benefit Cuts. If across-the-board cuts are triggered, any cut to Medicare would be limited to no greater than 2% of the program’s cost. Any such cut would come from payments to providers and insurance plans. There will be NO Medicare benefit cuts or increases in seniors’ costs.

<…>

[DevonRex]

6. Thank you PS. I needed that information to forward to my in-laws.

Once again you're the best source on DU. :hi:

[ProSense]

14. Thanks

:hi:

[thucythucy]

12. How on earth

did the president get them to agree on 50% of the cuts being in Defense?

I'd like to add some other ideas for cuts, if the cuts must come.

Zero fund "abstinance only" sex "education."

Zero fund any "faith based initiative" started under the Bush administration.

Zero fund "the war on drugs" -- or at least portion of it focussed on non-violent offenders.

I can dream, can't I?

[ProSense]

13. Republicans

"How on earth did the president get them to agree on 50% of the cuts being in Defense?"

...are all about deception, scoring points in the moment and hoping that people have short enough memories.

Steve Benen:

<...>

Remember, during the debt-ceiling crisis, Republicans needed to give Democrats a concession to resolve the standoff. They weren’t willing to put tax increases on the table, so GOP leaders agreed to a “trigger” that would impose harsh cuts on defense spending. The point was to create an incentive for both parties to reach an agreement — if Republicans didn’t want to slash the Pentagon budget, they’d have strike a bipartisan deal.

But as the chances of the super-committee reaching a compromise evaporate, Republicans are now confronted with the possibility that their own idea — massive defense cuts — might come to fruition. And what’s their response? Spending cuts will hurt the economy and cost jobs.

<...>

[thucythucy]

15. Thanks for the info.

Funny, isn't it, how government spending NEVER creates jobs, unless it's in defense, at which point government spending becomes the lynchpin of the whole economy? Like when Republicans say "The New Deal didn't end the Depression, it was ended by World War II"--which just happens to have been the most massive instance of government spending up to that time, and by far.

Anyway, thanks again for the info.

[totodeinhere]

18. It's because the Republicans know that defense cuts like that will never go through regardless

of that agreement. Congress can change it's mind at any time and refuse to sanction those cuts. It will never happen.

Here is a very chilling quote from John McCain.

Senator John McCain (R-Ariz.) has already vowed to lead the fight against any further defense cuts beyond the $450 billion mandated last August. “Congress is not bound by this,” he said last week, “It’s something we passed; we can reverse it.”

http://www.scpr.org/programs/airtalk/2011/10/26/21155/super-committee-defense-cuts

[golfguru]

31. The cuts will NOT happen

my understanding is the cuts are scheduled in 2013.
A new congress can overrule the cuts?

[grantcart]

38. A new congress would have the power to overrule the cuts

ONLY if they passed a new bill. Even if the Republicans were to take both houses they would never have enough to overcome a filibuster nor a veto.

Without passing new legislation the Bush tax cuts are history.

More importantly the 2012 election will be run on the Bush tax cuts as the main issue.

[stockholmer]

37. ty for the info

:bluebox:

[wryter2000]

4. K&R

Kudos to Krugman for pointing out that the R's will renege on any agreement they make. Excellent article and thanks for the post below that outlines the cuts that'll be triggered.

[Johnny2X2X]

5. The deal looks pretty good now

Military cuts are not only necessary, but they are the cuts that will least effect the economy. Krugman is usually spot on.

Obama is smarter than we give him credit for. The Republican will come across as the losers on this and we'll get some well targeted spending cuts that don't put the recovery at risk. The Dems in the Super Committee need to hold strong, you don't want any type of deal to be debated in Congress where the Tea Party will ensure they fail anyway.

When this whole mess was playing out, the President knew he had all the power, that's why he was able to force this deal down the Republicans' throats. I mean how much over a barrel did he have them for them to accept the military cuts? Wow. Now either they as a party agree to a reasonable deal or they have egg on their face again and we get some good cuts that don't harm the American people. The more you look at it, the more this was a master of a deal brokered by Obama this summer.

[Pirate Smile]

30. Plus Republicans are desperately trying to make the Bush tax cuts permanent - while at the same time

wailing about the deficit. How ridiculous.

Those tax cuts expire if nothing happens. That is a real ax over the heads of Republicans.

The expiration of them would solve a TON of our fiscal problems.

The lunacy of Republicans offering $250B or $300B or $660B in tax increases while at the same time requiring making permanent $4 trillion in tax cuts is mind-boggling.

Obama is willing to take a bunch of grief in the initial reaction to a deal and then, after the dust settles, everybody notices that it was much better for his side then people thought. That happened with the budget deal that averted a shut down earlier this year. That's one reason why I wont jump in with the knee-jerk, initial freak-out.

[BlancheSplanchnik]

7. Kick for Krugman, he nails the difference.

:thumbsup:

[quaker bill]

8. The point is Obama created a win-win scenario

Either the republicans accept failure and massive defense cuts, or they compromise and protect defense spending by voting for a large tax increase.

Under option A (the failure option) the republicans in congress take funds from the "troops" that will require base closures, downsizing of the military, and the end of our Afghanistan campaign.

Under option B, (the raise taxes option), they sell out their base politically, tax the rich, and go into 2012 having flushed the tea party caucus down the crapper.

They are looking for a third way pretty hard right now, like a measure proffered to cut defense out of sequestration. But they need not only the votes to pass this, but Obama must also sign it. Isn't going to happen. He has them where he wants them and will keep them there.

[former9thward]

9. You are assuming Congress will not reverse the defense cuts.

Since Obama's defense secretary, Panetta, has said defense cuts can not be tolerated I think it will be easy for Congress to stop the cuts even over an Obama veto. http://www.thirdage.com/news/leon-panetta-to-congress-deeper-defense-cuts-would-be-devastating-to-military_11-15-2011

[harun]

16. Unfortunately you are very correct

[ProSense]

17. Well,

"You are assuming Congress will not reverse the defense cuts."

...why stop there? With enough support, they could repeal all the laws passsed (DADT repeal, health care reform, Wall Street reform) even over an Obama veto.

Wishful thinking aside, if the super committee fails, the defense cuts will kick in.

[totodeinhere]

20. Actually, I think you are the one engaged in wishful thinking.

I'll bet you anything that those defense cuts will never see the light of day no matter what. And it's not that I wish it so. I just that I am realistic.

(Please see my reply #19.)

[ProSense]

22. Why

"I'll bet you anything that those defense cuts will never see the light of day no matter what. And it's not that I wish it so. I just that I am realistic."

...because you're betting on what McCain said?

Didn't he also vow that DADT wouldn't be repealed over his dead body (or was that some other idiotic Republican)?

[quaker bill]

32. It is possible

But I don't think the override votes are there in the Senate, and perhaps not the House either.

[totodeinhere]

19. I wouldn't be so sure about that. Obama's defense secretary has made it clear that

those defense cuts are unacceptable.

Here is what Panetta said on Oct. 13th.

“You've seemed quite clear that you believe that we should make no further cuts in the defense budget beyond those which have already been enacted. Is that true?” Thornberry asked.

“Correct,” answered Panetta.

“Does the president share your view on that,” Thornberry asked.

“He does,” said Panetta.

(The bolding is mine.)

http://security.blogs.cnn.com/2011/10/14/did-panetta-commit-obama-to-no-further-defense-cuts/

So perhaps Obama would not veto a GOP attempt to reverse the defense cuts.

[ProSense]

21. Funny

"Here is what Panetta said on Oct. 13th."

...here's what Obama said last Friday.

It's also hilarious to watch the theories flowing to try to justify why defense cuts that were signed into law aren't really the law.

I mean, is it so hard for people to believe that the GOP got played?

[totodeinhere]

25. Just like he promised that he would not accept an extension of the Bush tax cuts.

Got it.

Why don't we both bookmark this thread, then after this is decided we can come back and see who was right.

[ProSense]

27. Wait

"Just like he promised that he would not accept an extension of the Bush tax cuts. Got it. Why don't we both bookmark this thread, then after this is decided we can come back and see who was right."

...not sure what's upsetting you: Is it that defense cuts, like the tax cut extensions, were signed into law?

He doesn't have to accept anything. He already signed the law mandating the cuts.

[totodeinhere]

28. I'm not upset at all. I simply do not believe that defense cuts like that will ever go through

regardless of what Obama has signed. I personally favor even larger defense cuts than that as long as veterans' benefits are not cut and our troops don't take pay and benefit cuts. But I just don't believe it will happen. But like I said, let's wait and see.

[quaker bill]

33. Perhaps, but I don't think so

To sign off, he will demand pretty much what he is demanding now. He is running against a dysfunctional congress, there is noting in it for him to act to make them functional. If you read the deal, the real cuts don't start until after the election. If he wins and gets a real majority in congress, there will be time to fix it. If he loses and republicans gain the Whitehouse and majorities, game over anyway.

Significant majorities support defense spending on "the troops" and even larger majorities support taxing the rich to get the funds. The politics works in favor of failure and that failure creating a real "crisis". The deal is worked so the "crisis" affects "the troops" but not the senior citizens. The actual impact is set for after the election, there is no need to fix it before the election, this is the point.

[quaker bill]

34. You are missing something here

if the impacts of the republican refusal to tax the rich are not "bad" or "really bad", then there is no point in having the argument. There have to be consequences, and Panetta's job is to make the consequences of inaction sound as bad as he can. Obama is obligated to agree because this sets up his argument.

You can't premise a run for President on something that is "no big deal".

[Number23]

10. I keep seeing this pop up, that if the supercommittee doesn't do anything that

it may be better than them actually doing something! Saw this a few days ago on Wash Post.

[thucythucy]

11. Amazing how Republicans are still trashing FDR

"By creating Social Security, declared Rick Perry in his book “Fed Up!”, F.D.R. was “violently tossing aside any respect for our founding principles."

So dissing that whole "promote the general welfare" thing in the Constitution -- in the preamble no less -- is somehow "respecting" our founding principles?

FDR also led the nation in defeating Nazi Germany, with its superior "Aryan" race survival-of-the-fitness uber-Ayn Rand ideology. I wonder how many Republicans secretly hate him for that as well.

[Vattel]

23. I agree: the triggered cuts would be better than a deal.

The triggered cuts to Medicare would be bad, but not as bad as the cuts to Medicare that Democrats on the Supercommittee have floated.

I sincerely doubt that Obama was hoping for this sort of failure when he supported the stupid debt deal. I could be wrong, but I strongly suspect that Obama doesn't want the triggered defense cuts.

[ProSense]

24. Here

"I sincerely doubt that Obama was hoping for this sort of failure when he supported the stupid debt deal."

...is what the President wanted from the committee (scroll down)

[Vattel]

26. I agree: Obama wants some good stuff in terms of tax hikes, etc.

My claim is that he doesn't want 500 billion dollars in defense cuts. Congress will have plenty of time to reverse the "automatic" cuts to defense if the Supercommittee doesn't reach a deal, and I predict that they will.

[ProSense]

29. There

Congress will have plenty of time to reverse the "automatic" cuts to defense if the Supercommittee doesn't reach a deal, and I predict that they will.

...are Republicans who want that, but it's not going to be easy. So until then, the cuts are mandated by law.

[Vattel]

35. That is true

[MilesColtrane]

36. "So the supercommittee will fail — and that’s good."

All "chessmaster" pokes aside, Obama knew this when he negotiated for the supercommittee's creation.

[TheKentuckian]

39. It still isn't a win, it is mitigating a loss.

We are still shrinking versus stimulating the economy. The entire topic is situationally insane and will make matters worse.

[FrenchieCat]

41. When one is dealing with a Republican Congress and a right wing media.....

mitigating a loss is part of being successful.

The entire topic is situationally insane, because Republicans are insane.....
and the only thing that will make matters better is if Voters occupy the voting booth
and elect Democrats, period. I'm surprised you don't get it yet....

[reggie the dog]

40. x

x wrong place