Once again, President Obama is pressing for a “Grand Bargain” that basically gives the right-wing Republican Party everything they have been asking for. The President wants to implement cuts to Social Security and Medicare, coupled with across-the-board discretionary spending reductions (aka austerity budgeting), and tax reform. You may recall that Willard (“Mitt”) Romney and his running mate, Rep. Paul Ryan, talked constantly about a plan to eliminate tax deductions during the 2012 election campaign.
So, basically, Obama is telling the right-wing “Here’s something you want, and something else you want, and I’m not going to ask for anything that progressives want.” And the GOP answer so far is a big fat NO. They would rather take the blame for a partial government shutdown. Does this make sense?
Jonathan Chait tries to explain:
President Obama is offering up something — hundreds of billions of dollars in cuts to Social Security and Medicare — that Republicans say they want and which (because of their unpopularity) they have proven unable to obtain even when they have had full control of government. They are instead undertaking a public showdown against a figure who is vastly more popular and trusted, who possesses a better platform to communicate his message, and whose message itself — spread the pain among rich and middle class alike, don’t cut retirement programs more deeply than needed in order to protect tax loopholes for the rich — commands overwhelmingly higher public support.
I think the Republican Party’s behavior can be at least partly explained, though not necessarily rationalized. The main thing that’s going on is that, in the face of cross-pressures, the party’s anti-tax wing has once again asserted its supremacy.
…Part of the confusion is that Republicans have been saying for months that they really just want to stop tax rates from raising. They’re happy — nay, eager — to make the rich pay more taxes by reducing their tax deductions. Certain conservative economists believe this as well. Since Obama is offering to increase revenue in exactly this way, his plan might seem inoffensive to Republicans.
…The answer to this piece of the mystery is clear enough: Republicans in Congress never actually wanted to raise revenue by tax reform. The temporary support for tax reform was just a hand-wavy way of deflecting Obama’s popular campaign plan to expire the Bush tax cuts for the rich. Conservative economists in academia may care about the distinction between marginal tax rates and effective tax rates. But Republicans in Congress just want rich people to pay less, period.
Robert Reich offers a better strategy for President Obama: Clear up all the confusion by taking on the Republicans’ big lies directly.
The first big lie is austerity economics — the claim that the budget deficit is the nation’s biggest economic problem now, responsible for the anemic recovery.
Wrong. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession — which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe.
The second big lie is trickle-down economics — the claim that we get more jobs and growth if corporations and the rich have more money because they’re the job creators, and job growth would be hurt if their taxes were hiked.
Wrong. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep economy going.
The Obama administration doesn’t have to play this crazy game of offering right-wing Republicans everything they say they want, knowing that they will refuse to take it. What they ought to be doing is explaining to the public that the right-wing is wrong, that they are lying.
Republicans have run on big across-the-board spending cuts for literally decades.
…But here we are. For the first time I think in our history we are about to go over the precipice of genuine across-the-board spending cuts. And Republicans are completely freaking out. There’s no other way to describe it.