Lies, damned lies, and presidential reduction plans

Obama drops his facade of bipartisanship

During the debt ceiling negotiations, President Obama made an offer to Speaker of the House John Boehner that was the epitome of reasonable:: in return for lifting the debt ceiling, Obama proposed a $4 trillion reduction in federal deficits over ten years, split roughly 2-to-1 between spending cuts and revenue increases, with little to none of the cuts occurring in the next two years. Boehner, having waited for this sort of middle-of-the-road compromise for weeks, quickly accepted. And for a moment, I thought it was all going to work out.

Then, things fell apart. Obama changed his mind and said he needed $400 billion in additional tax increases, possibly more, to make the deal work. Boehner decided he could no longer negotiate with someone displaying such bad faith. Both sides retreated to their barricades and the moment of bipartisanship was gone.

Ever since then, I’ve wondered — was Obama’s bait-and-switch merely high stakes negotiating gone awry, or was it something more insidious — a strategy to find the most generous offer that Republicans would reject so that he could hold it up and claim the mantle of bipartisanship?

Today, I have my answer. One has to look no further than Obama’s recently promulgated debt reduction plan to see his full partisan duplicity on display.

The president is offering a plan that, on paper, looks just like the offer seen during the debt negotiations: $4 trillion, split two-to-one between budget cuts and tax increases, with the first couple years of budgeting left untouched. If only it were so.

This debt plan is — to borrow Rick Perry’s turn of phrase — a monstrous lie. In the spending cuts that Obama proposes, he includes nearly $2 trillion of spending that simply doesn’t exist. Roughly $1 trillion of “cuts” are drawn from the wars in Iraq and Afghanistan, even though this spending doesn’t exist in the baseline budget projection, nor is there any plan circulating the Beltway to extend those wars by the decade or two it would take to rack up $1 trillion worth of spending. The president might as well have offered to save us money by not fighting a war with Italy in 2016. A second trillion comes from the debt ceiling agreement already struck — never mind that the president already traded these cuts for an increase in the debt ceiling; now he hopes the nation will buy them again in exchange for more of his agenda.

As a kicker, the president has proposed these deficit reductions as a means to pay for his new spending plan. So, in the final tally, Obama is only offering only $245 billion in spending cuts over the next ten years. And what does he want in exchange? A small, temporary tax cut for the middle class, and a permanent $1.7 trillion tax hike on the upper class and other politically convenient targets.

The punditocracy have spent most of their time debating two questions. The first is whether or not the debt plan amounts to “class warfare.” It’s an accusation that the president deserves — you can’t tell interviewers that you would raise tax rates on the rich even if it meant no additional income for the U.S. government, and then act surprised when opponents accuse you of using tax policy punitively.

The second is whether or not tax hikes on high-earners are good economics. I’ve already written on this subject, and those looking for a refresher course can read Gruber and Saez’s paper, “The Elasticity of Taxable Income, Evidence and Implications.” Instead of rehashing that debate, I’ll leave it at this: I don’t think raising taxes on the well-to-do above and beyond their Clinton-era levels is wise, and neither did Clinton.

But both these points are missing the forest for the trees. The president has just stood up and proposed a debt reduction plan which is one half lies and one half liberal wet dream. This is the grand reveal, the tip of the hand that shows us Obama’s true nature.

In 2007, I remember watching a C-SPAN forum on the ascension of Dmitry Medvedev to the Russian presidency. Most of the participants remarked that Medvedev was Putin’s most loyal and least independent lieutenant, and concluded that Putin elevating Medvedev was simply a convenient way for the wily Russian to circumvent the two consecutive term limit on the Russian presidency. But one of the commentators had an idea so elegant that it seemed to me that it must be true.

It went like this: Putin, with all of his popularity and power, would have no problem passing a constitutional amendment to allow him to serve a third, fourth, or fifth consecutive term. So why depart the presidency and govern by proxy if he had no real intention of handing over the reins of government? As the theory went, Putin’s aim was not to do a mere end-run of an easily changeable law but instead to create a system of checks and balances in the Russian system of government. By taking the typically weak prime minister spot and leaving the presidency to a loyal lieutenant, Putin would have the opportunity to strengthen the prime minister’s role in government and make it a real counterbalance to the presidency. So Putin wasn’t merely some unscrupulous autocrat; he was a man working in a broken system, using the flawed tools available to him to make it better.

It was a cute theory, and if you looked hard enough, you could find evidence to support it right up to last week, when Putin decided that he, not Medvedev, was going to be the next president of Russia. From then on, there could be no doubt: Putin is, and always has been, a plain and simple dictator.

In 2008, Obama stood up and told me that he was a different kind of politician — that he was going to do away with politics as usual and unite the country. Like the “Good Guy Putin” theory, the “Good Guy Obama” claim was one that, on a gut level, you wanted to be true. And so I ignored the truth that, in three years of governing, Obama has made just one serious attempt at bipartisanship: the Bush Tax Cuts plus Don’t Ask, Don’t Tell plus START II plus unemployment benefit bargain struck with 2010’s lame-duck congress. Right up through the debt ceiling fight, I held out hope that the president was the man he said he was, doing his best with what he had.

Some lies can only stretch so far.

Anonymous over 12 years ago

Fortunately, you are one person voicing your attitude, as well as quoting one of the biggest perpetrators of untruths, Rick Perry to emphasize your attitude. It is a shame you have utilized a respected school's news media to do it.

Your no journalist.

Anonymous over 12 years ago

"Its an accusation that the president deserves you cant tell interviewers that you would raise tax rates on the rich even if it meant no additional income for the U.S. government, and then act surprised when opponents accuse you of using tax policy punitively."

...You're saying raising taxes wouldn't increase revenue? Hopefully not, though in some loose sense, you could be right - if you specified what type of taxes were on the table. Sure, income taxes are useless for the super-rich who don't make money that way, but capital gains taxes are fair game. Obama does have a provision to raise those.

Now, if you say the rich will find loopholes to circumvent that, then what your argument essentially boils down to is "Raising taxes on the rich won't work because they'll find a way out of it." Say what you will about the principle of the thing - I know we'd disagree there - but what I would ask is whether maintaining the wealth and standard of living for the few is worth seeing many others living in destitution.

Let's be honest: if the rich wanted to bring the economy out of a tailspin, they would have sent something to the effect of a check (or more jobs, your call) to the government, to the people, to somebody. We can't rely on sheer goodwill - it's time to firmly ask for their share.

Anonymous over 12 years ago

wow, week after week, you never cease to amaze me with these pseudo-academic arguments that are blatant b.s. i wish i had the time to write some counter-pieces, but some of us around here have actual work to do...

Anonymous over 12 years ago

Where to start with this load of drek? Keith, just admit it: You are not an objective economist or any sort of journalist - you are a partisan Republican, day by day becoming more of a hack that you used to decry. Some choice points:

- Why should Obama have had to barter for the debt ceiling increase in the first place? The Republicans holding the country's financial standing hostage in order to cut more programs for the needy doesn't strike me as a noble cause - they are the ones acting in bad faith to start with.

- When Bush continually refused to include the costs of the war in his budgets, did you object? Just because there's no plan to continue the wars, what makes you think they'll end?

- You skirt the issue of tax increases by saying that you think increasing them beyond the Clinton-era rates isn't wise. But where do you stand on the Bush tax cuts? My guess is that you refuse to state you're against them because it cuts against GOP dogma.

- We all know you don't believe in inequality, but we're not talking about what's economically optimal when we talk about tax policy, we are also talking about simple fairness. Obviously, this entire article has proven you don't really grasp this concept.

Face it - if a Republican did what you're accusing Obama of doing, you'd have his back the entire way.

Keith Yost over 12 years ago

To 1) The word you're looking for is "you're." It's not hard to use correctly-- I did it just last sentence.

To 2) I have no idea what you are rambling about. I am referring to Obama's interview with George Stephanopoulos in which he said he would raise taxes on the rich even if tax rates were on the wrong side of the Laffer Curve. What people don't like about class warfare is the idea of using taxes as a punitive measure-- if Obama says that's what he's willing to do, then the charge seems valid to me.

To 3) I took 7-8 classes per semester when I was an undergrad and worked jobs on the side to pay for college. You could write if you wanted to, you're just lazier than I am.

To 4) You could start by correctly spelling "dreck." To the substance of your points:

-- Presidents and party leaders should have to justify deficit spending, particularly when they do it on the scale that this president has.

-- To the first question, yes, and to the second question, because I possess even the most basic of political awareness.

-- I suggest you read my previous article "Keep the Bush Tax Cuts" from May 3rd, 2011. Or better yet, read the paper I cited by Gruber and Saez.

-- Fairness? Is it fair for 1 of this country to pay more than a third of its federal income taxes? On what philosophical principle would you say making them pay 50 is "fair?"

If a Republican did what Obama is doing, I'd flip tables. But thanks for playing the "I know Keith better than Keith knows Keith game," Mr. Anonymous.

Anonymous over 12 years ago

Actually, the word I was looking for was "drek", which is the original spelling, from Yiddish. It means "excrement". Maybe you're not quite as worldly as you think you are.

But, yes, let's discuss substance:

- Raising the debt ceiling is not the same as justifying deficit spending, which we all know is reasonable to do during a recession. What the Republicans have resorted to is extortion, not forcing justification. "Nice country you got here...it'd be a shame if anything happened to it." Amazing how NOW they want to stop the deficit spending, of course without raising taxes at all.

- If you don't want to get rid of the Bush tax cuts, why did you phrase your point the way you did: That you don't want the rates on the rich to go above Clinton-era levels? Because I think you know that the Bush tax cuts aren't really justifiable, but since you and Obama agree on that, it didn't fit your narrative, so you had to find a way to say it indirectly.

- Of course it's fair for the rich in this country to pay more, when they have more and earn more, and the disparity is continuing to grow.

Just like all Republicans, you are for bipartisanship when an Democrat is in office, but against it otherwise. Nevermind that Republicans have no interest in negotiating with Obama, blocking nominees, trying to overturn his laws, moving far to the right to pander to the Tea Party. As Grover Norquist said, "Bipartisanship is date rape." Of course you want him to continue to bend over.

I give you credit for writing in a public forum, and also for responding to criticism. I'd like to see you use your voice in a more objective way, possibly even for once, writing about economic justice and supporting the powerless, instead of the powerful. And you should know that if you're going to write publicly, there's going to be public criticism - take it like a man.

Keith Yost over 12 years ago

To 5)

Your first point is a bald assertion, unsupported by any sort of argument, so I'm not sure how to respond except to restate the case. The law of this country is that you have to vote to raise the debt ceiling, and that procedure exists exactly because Congress wants the ability to rein in deficit spending. When a party uses it in its intended manner, you call it extortion, even though you offer no reason why the end goal of the tactic-- cutting the deficit-- is the wrong thing to do.

I have no idea what you're implying with your second point, but it's full of erroneous information so let's start there. I support the Bush tax cuts, and wrote an article saying just as much. Obama does not. Obama's plan not only repeals the Bush tax cuts, it raises them above the levels seen during the Clinton years. What is odd about this phrasing? The president is to the left of Bill Clinton, a man currently being lionized as some great budget maestro. Seems perfectly consistent with the thesis of the article, which is, "Obama is not a moderate and never has been."

Your third point is yet another naked assertion with no supporting argument. Why is it fair? If I work harder, save more, and am more productive than my neighbor, why should it be that when the tax man comes around that I should pay a different amount? If your neighbor is richer than you, and one day a thief breaks into his house and steals his things, do you go console him by saying, "It's OK, you were better off than me, so really this is a good thing."

To your fourth point, you clearly don't read enough of my articles. In the aftermath of the 2008 election, I urged Republicans to move to the middle and support left-leaning Republicans. At the height of the health care debate, I wrote an article called "Screw Bipartisanship" in which I urged Democrats to forget trying to find a compromise and just push through an individual mandate. You make some grand claim to know how I think, but how can that be if you never read what I write?

You want me to sit back and happily take criticism from a man who writes anonymously, offers no supporting arguments, and thinks that I'm not offering my true opinion after reading one article? We both agree that one of us needs to man up, but as usual, I'm right and you're wrong. This is probably why I put my name by my words and you lob grenades from the shadows. When you've manned up, come by The Tech offices and actually write something.