January 7, 2013

In the wake of the fiscal deal raising taxes only on income over $450,000, Republicans are declaring that the debate over taxes is finished. The next fiscal deal will contain nothing in new revenues. Yesterday, Mitch McConnell said:

“The tax issue is finished. Over. Completed. That’s behind us. Now the question is what are we going to do about the biggest problem confronting our country and that’s our spending addiction. We didn’t have this problem because we weren’t taxing enough.”

As Jonathan Cohn notes this morning, this talking point may have some potency: Hey, we just raised taxes on the rich, so the next bite at the apple should be focused on spending cuts, right? So it’s worth putting the GOP demand in clearer perspective. What Republicans are saying here is that they intend to use the debt ceiling as hostage to ensure that all of the deficit reduction in the coming “grand bargain” is paid for by spending cuts — such as cuts to entitlements and other social programs — with not a penny coming from new revenues via the closing of loopholes and deductions enjoyed by the rich.

But as always, this requires the willful forgetting of an inconvenient fact: Dems have already agreed to massive spending cuts. They supported well over $1 trillion in cuts as part of the 2011 debt ceiling deal. What’s more, as Cohn notes, achieving substantial deficit reduction only through spending cuts is not even remotely realistic and would require cuts that are truly draconian:

This may not be what most Americans want to hear. But most sensible budget observers, even more conservative ones determined to enact substantial budget cuts, believe taxes must rise even more — because the population is getting older and the government has, quite rightly, assumed so much responsibility for health and retirement benefits. [...]

Republicans and their allies take a different view, because, if they had their way, the government would provide a lot less than what it does now. But it’s not a popular view and they know it. That’s why … McConnell declined to get specific about exactly how he’d reduce spending. He didn’t say that the discretionary spending cuts he’s embraced would mean fewer food inspectors, longer delays at airports, or less housing assistance for poor people. And he didn’t reveal that the entitlement changes he’s endorsed would mean less financial protection for people on Medicare and Medicaid. 

Nobody likes paying taxes, but everybody likes the services that taxes finance. The Republican strategy is to make people focus on the former and ignore the latter.

It is going to be far harder for Republicans to make their case than they may think. While people tell pollsters they favor cutting spending in the abstract, when the talk turns to specifics, they suddenly aren’t so anti-government, after all. And so, when the talks really get started, the public will be told by the White House and Dems that Republicans are trying to gut entitlements and popular social programs in order to further protect the wealth of the rich. That is not an argument Republicans can win — and that dynamic has not been changed by the fact that the first fiscal compromise raised tax rates on the ultra wealthy. We are not “finished” with this debate at all.

Democrats, by the way, are pushing for as much as $1 trillion in new revenues as part of a broader deal to get $2 trillion in deficit reduction. My bet is that ultimately, Republicans will have to agree to something approaching this.

(Update: To be clear, I’m not saying Republicans will necessarily agree to $1 trillion in new revenues, just that they will likely have agree to something approaching a one-to-one balance between spending cuts and more revenues — whatever the final sums — rather then the completely lopsided approach they’re currently pushing.)

 * Why Chuck Hagel will get confirmed: Scott Shane and David Sanger get inside the administration’s thinking: While some Republicans don’t like Hagel because he was a leading critic of the Iraq War, this won’t be enough to spur genuine opposition from them, because the verdict of the American public on Iraq is that it was a disaster. If Republicans want to use the Hagel nomination to reopen a conversation about Iraq, I’m sure the White House will be all for it.

* Dems will support Hagel: Relatedly, ignore the rumblings among Senate Democrats that they may withhold support over his comments about the “Jewish lobby” or about gays. They will support him in the end. A Senate Dem leadership aide emails me:

Most D’s will support. Some with reservations; some not. He’ll be confirmed.

In another telling sign, the National Jewish Democratic Council, the voice of many pro-Israel Dems in Congress, came out for the Hagel pick today, arguing that Hagel will “follow the President’s lead of providing unrivaled support for Israel — on strategic cooperation, missile defense programs, and leading the world against Iran’s nuclear program.”

* Hagel pick will upend the debate about Iran: Also, some left-leaning foreign policy thinkers are happy about the choice, because it shows that the Obama administration is willing to pick a fight with conservatives over their support for a more bellicose policy towards Iran. This quote from Peter Beinart seems key:

At the heart of the opposition to Hagel is the fear that he will do what Republicans have thus far largely prevented: bring America’s experiences in Iraq and Afghanistan into the Iran debate.

* Hagel nomination will push boundaries of Israel debate: Also in the above link, some liberals support the pick because it will challenge the dominance conservatives — who have denounced Hagel as anti-Israel, in part over his “Jewish lobby” quote — have been able to exercise over the terms of the debate about the Mideast. J Street’s Jeremy Ben Ami:

“It’s good to see the nomination moving forward because it means there’s more bark than bite to the intimidation some right-wing groups have tried to exert over those who disagree with them.”

The idea is that the Hagel pick will challenge the limits — largely dictated by the right — on what it’s acceptable to say out loud in Washington about Israel.

 * Vietnam veterans will head both State and Defense Departments: Max Cleland, the former Senator who was severely wounded in Vietnam, argues in an interesting interview with TPM that Hagel’s experience as a Vietnam veteran means he’s pretty much assured Senate confirmation. more to the point, with Vietnam vets running the Defense and State Departments (John Kerry), it ensures that our foreign policies and international relations will be shaped by people who have firsthand experience of war.

* Lines drawn in gun debate: Philip Rucker’s piece yesterday confirms that the White House is taking a sweeping approach to gun control, mulling a package of reforms that goes far beyond just an assault weapons ban and includes beefing up the background check system and perhaps even executive actions designed to improve federal tracking of guns.

What I’m watching for in particular is how Republicans (and “gun rights” Democrats) justify opposing improvements to the background check system, which would not infringe on the rights of the law abiding in any way.

* Heitkamp’s disappointing start: Relatedly, it’s sad to see that newly elected Senator Heidi Heitkamp of North Dakota is already dismissing the package of reforms being discussed as “way, way in extreme of what I think is necessary or what should even be talked about.” Fortunately, other “gun rights” Democrats, such as Joe Manchin, are showing more courage and are opening the door to talking about real gun law reform.

* And Paul Krugman endorses the “platinum coin”: Krugman goes there:

It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years.Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin.

 ICYMI: A veteran hostage negotiator told me on Friday that having a backup plan — such as the coin — is key to Obama’s ability to regain the leverage in the coming hostage negotiation over the debt ceiling.

What else?

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.