Wonkbook: No winners in Thursday’s debate, but many losers
The most telling moment of Thursday’s GOP debate wasn’t when Michele Bachmann cooly stuck a knife between Tim Pawlenty’s ribs, or when Rick Santorum plaintively begged for more airtime, or when Mitt Romney easily slipped past questions about his record on health-care reform. It was when every single GOP candidate on the stage agreed that they would reject a budget deal that was $10 in spending cuts for every $1 in tax increases. Even Fox News’s Bret Baier couldn’t quite believe what he was seeing. He asked again just to make sure the assembled candidates had understood the question.
Primary debates are usually watched for what they say about the candidates, but they’re generally important for what they say about the party. This one was no different. With the notable exceptions of Ron Paul and Jon Huntsman, the candidates didn’t disagree over policy. They disagreed over fealty to policy.
Bachmann didn’t attack Pawlenty’s policy proposals. She attacked him for past statements suggesting he might believe in other policy proposals, like the individual mandate and cap-and-trade. Palwenty’s assault on Romney took the same form. This debate wasn’t about what policies the candidates believed in. That was largely a given. This debate was about which of the candidates believed in those policies the most.
The best policy in this debate wasn’t the policy most likely to work, or the policy most likely to pass. It was the most orthodox policy. The policy least sullied by compromise. A world in which the GOP will not agree to deficit reduction with a 10:1 split between spending cuts and tax increases is a world where entitlement reform can’t happen. It’s a world where the “supercommittee” fails and the trigger is pulled, and thus a world in which $1 out of every $2 in cuts comes from the Pentagon. It’s not a world that fits what many in the GOP consider ideal policy. But it is a world in which none in the GOP need to traverse the treacherous politics of compromise.
Perhaps no candidate is better suited for that world than Michele Bachmann. But tellingly, the candidate who is best on the politics also proved worst on the policy.
Over and over again, Bachmann misstated basic facts. She said that Tim Pawlenty “implemented” cap-and-trade in Minnesota. He did no such thing. She said “we just heard from Standard Poor’s,” and “when they dropped our credit rating what they said was we don’t have an ability to repay our debt.” Simply not true.
S&P has never questioned our ability to repay our debt. That’s why we remain AA+. They have questioned whether political brinksmanship will stop us from paying our debt. The downgrade “was pretty much motivated by all of the debate about the raising of the debt ceiling,” said John Chambers, head of S&P’s sovereign ratings committee. That is to say, it was motivated by political brinksmanship from the likes of, well, Michele Bachmann.
It’s fitting that the candidate best able to resist compromise is the candidate who seems least able to correctly explain the policies at issue and the choices we face. It’s a lot easier to take a hard line if you don’t understand the consequences of your actions, and a lot simpler to belt out applause lines if you’re not slowed down by the messy complexities of the issues. But where Bachmann is leading, the other candidates are following. Mitt Romney knows perfectly well that a deal with $10 in spending cuts for every $1 in tax increases is a great deal for conservatives. What he probably doesn’t know is how he’s going to explain why he pretended otherwise when he was vying for the nomination.
After the debate, the punditry immediately turned to who won and who lost. Pawlenty, most said, was the clear loser. Romney, Bachmann, and maybe the absent Rick Perry were the possible winners. I would look at it more broadly.
The losers in tonight’s debate were anyone who wants to see the sort of compromise necessary for the political process to work, and anyone who has been convinced that they can achieve their goals simply by restating their convictions. As for the winners? Well, I didn’t see too many of those.
Five in the morning
1) The whole supercommittee’s been named now, report Paul Kane and Felicia Sonmez: “House Minority Leader Nancy Pelosi on Thursday filled out the final three slots on the joint deficit committee by selecting three members of her leadership team to the panel. Pelosi (D-Calif.) chose Reps. James E. Clyburn (D-S.C.), Xavier Becerra (D-Calif.) and Chris Van Hollen (D-Md.), giving the panel the highest-ranking African-American and Latino lawmakers in Congress with Clyburn and Becerra, respectively. Pelosi reiterated her call for Congress to consider ‘the grand bargain’ of major entitlement cuts matched with increased taxes...James Horney, a fiscal policy specialist at the left-leaning Center on Budget and Policy Priorities, placed the odds of the committee’s producing a big agreement at less than 25 percent. He said the appointees were the sort of dealmakers who could foster a broad pact only if party leaders loosened the reins.”
Catch up on the background of supercommittee members: http://wapo.st/oSKQ4v
The case for a supercommittee on growth: http://wapo.st/nBbRrX
2) Elizabeth Warren is moving toward a Senate run, reports Rachel Weiner: ‘It is time for me to think hard about what role I can play next to help rebuild a middle class that has been hacked at, chipped at, and pulled at for more than a generation — and that that is under greater strain every day,’ Warren wrote in a post today on the local Democratic blog Blue Mass Group. ‘In the weeks ahead, I want to hear from you about the challenges we face and how we get our economy growing again.’ A Massachusetts Democrat who is assisting Warren confirmed that the former administration official will be spending the next few weeks listening to residents across the state. She’ll make a decision on her future plans after Labor Day....Doug Rubin and Kyle Sullivan — the former chief of staff and former communications director, respectively, for Gov. Deval Patrick (D) — are assisting Warren in her decision-making.
3) In the debate last night, Michele Bachmann said Standard Poor’s proves her point. But Standard Poor’s is saying Michele Bachmann proves theirs, reports Josh Boak: “A Standard Poor’s director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default...Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that ‘people in the political arena were even talking about a potential default,’ Mukherji said. ‘That a country even has such voices, albeit a minority, is something notable,’ he added. ‘This kind of rhetoric is not common amongst AAA sovereigns.’...Some lawmakers blasted warnings by the Obama administration that a failure to raise the debt ceiling would unleash an economic catastrophe, including Republican presidential candidate Rep. Michele Bachmann (R-Minn.).”
@BradPlumer: ”Minnesotans aren’t as friendly as I’ve been led to believe.”
4) The rich aren’t suffering from the downturn the way they normally do, writes Don Peck: “Anthony Atkinson, an economist at Oxford University, has studied how several recent financial crises affected income distribution--and found that in their wake, the rich have usually strengthened their economic position. Atkinson examined the financial crises that swept Asia in the 1990s as well as those that afflicted several Nordic countries in the same decade. In most cases, he says, the middle class suffered depressed income for a long time after the crisis, while the top 1 percent were able to protect themselves--using their cash reserves to buy up assets very cheaply once the market crashed, and emerging from crisis with a significantly higher share of assets and income than they’d had before...’The rich seem to be on the road to recovery,’ says Emmanuel Saez, an economist at Berkeley, while those in the middle, especially those who’ve lost their jobs, “might be permanently hit.’”
5) When Mitt Romney said corporations were people, he was kind of right, writes Brad Plumer: “On the broader question, Mitt Romney has half a point. For a long time, the courts have treated corporations like people in many respects. They can sue and be sued. They can enter contracts. They can own property. They have some free speech rights...But Romney was also making a more specific argument -- if the government taxes corporations, those taxes eventually filter down to specific people. That’s true. But which people? That’s a much trickier question. Some economists, like Greg Mankiw, argue that it falls mainly on ordinary workers...That’s hardly the consensus, though...And, either way, the corporate tax is still considered a progressive tax -- one disproportionately paid by richer Americans -- for reasons laid out in this Tax Policy Center report.
@GrossDM: ”Question for Romney. If corporations are people, shouldn’t we make them pay taxes now on overseas earnings?”
Soul interlude: Rafael Saadiq plays “Heart Attack” on Jimmy Kimmel Live .
Got tips, additions, or comments? E-mail me.
Still to come: Supercommittee could work even if it falls short; AARP is lobbying against supercommittee cuts to entitlements; why to worry about the GOP’s attacks on the National Labor Relations Board; the White House is ignoring Congress on energy; and dog parkour.
Supercommittee could fall short but still have an effect, reports Felicia Sonmez: “So far much of the analysis of the supercommittee’s task has focused on two options facing the panel: either come to an agreement on at least $1.5 trillion in deficit savings over the next decade or pull the ‘trigger’ on $1.2 trillion in cuts, equally divided between defense and domestic discretionary spending. But there’s a third option for the panel. And it could be the most realistic - not to mention the most politically-appealing -- one for both parties. According to this ‘third way’ option, lawmakers could agree on a deal that makes significant cuts but falls short of the supercommittee’s $1.5 trillion goal. If that’s the case, then the trigger would come into play, but it would apply to the difference between $1.2 trillion and whatever agreement the committee was able to reach.”
Senate Democrats are pushing for jobs measures in the supercommittee plan, reports Scott Wong: “Nearly two dozen Senate Democrats on Thursday challenged Republicans to ensure that the super committee tasked with coming up with a deficit-reduction plan ‘embrace job creation as part of its mission.’ In a letter to Minority Leader Mitch McConnell (R-Ky.), 23 Democrats wrote that tackling the nation’s deficit problem is directly tied to the jobs crisis and urged the leader to ensure his picks for the bipartisan panel -- GOP Sens. Jon Kyl of Arizona, Rob Portman of Ohio and Pat Toomey of Pennsylvania -- are focused on creating jobs. ‘For families across the country, the biggest economic problem is high unemployment. As you know, the lack of jobs and anemic growth rate of the economy are not only enormous problems in their own right, causing great pain for millions of Americans, they are a major component of our deficit.’ the Democrats wrote in a letter circulated by Sen. Jeff Merkley of Oregon.”
Supercommittee members Pat Roomey is ruling out “big tax hikes”, reports Jennifer Epstein: “Newly appointed super committee member Sen. Pat Toomey vowed on Thursday that major tax hikes ‘are not going to be part of this,’ but said he is looking toward reforms of entitlement programs and the tax code...Toomey said he is open to reforms of the tax code “because there are tremendous inefficiencies in our tax code.” He said he would like to see ‘all kinds of deductions and write-offs and special-interest loopholes’ eliminated and then ‘correspondingly lower the marginal rate so we encourage investment and economic growth.’ Toomey also said he sees the possibility of collaboration with the Democratic senators on the panel -- Max Baucus, John Kerry and Patty Murray -- if they’re willing to examine spending on entitlement programs.”
An appeals court is blocking an SEC rule on corporate boards, reports David Hilzenrath: “Business groups fighting regulatory measures adopted in response to the financial crisis could still score a knockout in another arena: the federal courts. A recent appeals court decision could spell trouble for the Securities and Exchange Commission as it puts in place some of the most far-reaching Wall Street regulations in years, experts say. The potential points of contention include issues as diverse as whistleblower rewards, derivatives trading and executive pay. The ruling also could prompt court challenges to the work of other agencies, including environmental regulations...A three-judge panel said the SEC did not adequately analyze the economic consequences of a rule that would make it easier for shareholders to oust members of corporate boards.”
Right now, we need inflation, writes Floyd Norris: “You can’t operate an economy where huge numbers of people are desperately in debt and have no real way out. We need to either find a way to reduce what they owe or to raise the value of the homes securing the loans, or some of both. In a column in The Financial Times this week, Ken Rogoff, the Harvard economist, suggested central bankers consider ‘the option of trying to achieve some modest deleveraging through moderate inflation of, say, 4 to 6 percent for several years.’ Mr. Rogoff conceded that ‘any inflation above 2 percent may seem anathema to those who still remember the anti-inflation wars of the 1970s and 1980s.’...In an interview, Mr. Rogoff recalled how a parade of economists suggested to Japan that it seek to raise inflation to an announced target after its bubble burst, how Japan did nothing of the kind, and how it never really recovered. The Fed, he said, could make clear that it wanted some inflation and would buy Treasuries until it got that result.”
The commentariat bears some responsibility for distracting policymakers from the jobs crisis, writes Paul Krugman: “How did Washington discourse come to be dominated by the wrong issue? Hard-line Republicans have, of course, played a role...But our discourse wouldn’t have gone so far off-track if other influential people hadn’t been eager to change the subject away from jobs, even in the face of 9 percent unemployment, and to hijack the crisis on behalf of their pre-existing agendas. Check out the opinion page of any major newspaper, or listen to any news-discussion program, and you’re likely to encounter some self-proclaimed centrist declaring that there are no short-run fixes for our economic difficulties, that the responsible thing is to focus on long-run solutions and, in particular, on ‘entitlement reform’...And when you do encounter such a person, you should be aware that people like that are a major reason we’re in so much trouble.”
The system works just fine, writes Charles Krauthammer: “You know: The debt-ceiling debate universally denounced as dysfunctional, if not disgraceful, hostage-taking, terrorism, gun-to-the-head blackmail. Spare me the hysteria. What happened was that the 2010 electorate, as represented in Congress, forced Washington to finally confront the national debt. It was a triumph of democratic politics -- a powerful shift in popular will finding concrete political expression. But only partial expression. Debt hawks are upset that the final compromise doesn’t do much. But it shouldn’t do much. They won only one election. They were entrusted, as of yet, with only one-half of one branch of government. But they did begin to turn the aircraft carrier around. The process did bequeath a congressional super-committee with extraordinary powers to reduce debt. And if that fails, the question -- how much government, how much debt -- will go to the nation in November 2012.”
We need to rethink how the government treats the old and the young, writes Michael Gerson: “The ultimate cause of the economic malaise is not a political failure but a political choice. Since the New Deal -- and especially since the Great Society -- America has chosen an accelerating transfer of wealth from young to old. Some of this was necessary and desirable. Many seniors face a period of economic struggle toward the end of life, which entitlements have effectively, compassionately eased...The problem is that there are two periods of economic dependence in life -- late and early. A healthy society not only cares for its elderly but also cultivates its children. [AEI fellow Andrew] Biggs estimates that the federal government now spends $6 on seniors for every $1 it spends on children, even though the poverty rate of children is much higher. From a historical perch a century hence, this will seem an odd, sad decision.”
Barkour interlude: A dog does parkour.
AARP wants supercommittee to leave entitlements alone, reports Erik Wasson: “The nation’s largest senior lobby wasted no time in making its views known to the debt supercommittee moments after House Minority Leader Nancy Pelosi (D-Calif.) named the final three members to the 12-person panel. AARP CEO A. Barry Rand said in a statement Thursday that the supercommittee should strengthen Medicare, Social Security and Medicare, and warned that cuts to those benefits ‘could undermine the standard of living today and for future middle-class generations.’ But AARP’s tone is less strident than that of a rival coalition, which earlier this week said Social Security should not be part of the supercomittee deliberations...AARP wants a seat at any bargaining table and has been more open to a deal that could include some cuts to future Social Security beneficiaries.”
Kathleen Sebelius is touting new national health plans being to be offered in exchanges, reports Sam Baker: “Health and Human Services Secretary Kathleen Sebelius on Thursday highlighted the national healthcare plans that will be available through state-based insurance exchanges. While taking questions from viewers of PBS’ NewsHour, Sebelius was asked about exchanges’ ability to promote competition in the insurance marketplace. Exchanges are intended to function as a ‘one-stop shop’ for individuals and small businesses to compare and buy insurance. It’s up to states to decide whether they want to let their exchanges sell every policy that meets certain federal standards or impose tighter restrictions. Either way, the exchanges will bolster competition by making two nationwide plans available in every state, Sebelius said.”
Non-profit hospitals are sputtering through the recovery, reports Sarah Kliff: “The health industry tends to be relatively resilient in tough economic times for a simple reason: People don’t stop getting sick. It has led the way on job growth for the past year now, adding 117,000 new jobs since July 2010. Insurance companies have, over the past few weeks, reported robust earnings that beat analysts’ expectations. But there’s at least one place in the industry where that has not been true: not-for-profit hospitals, which make up just under two-thirds of non-government owned hospitals nationwide...Although people don’t stop getting sick, they do sometimes put off care. When volume goes down for the insurance industry, that’s good for business: They have fewer claims to pay out. But it’s the opposite story in the hospital industry, where fewer elective procedures mean fewer items to bill.”
The GOP’s battle against the National Labor Relations Board undermines the rule of law, writes Dahlia Lithwick: “Many liberals have not yet fully tuned in to the NLRB fight, but it’s a critically important marker for where the GOP House is headed. And ultimately, it differs only in kind, but not degree, from the U.S. attorneys scandal of 2006--the one where officials in the White House and Justice Department conspired to fire a clutch of U.S. attorneys who weren’t finding evidence of the sorts of crimes the Bush White House wanted to see prosecuted. The Republican war on the NLRB is really no different. Whether you like the agency or hate it, swoon for organized labor or dream only of crushing it, is immaterial. We don’t close down entire government agencies by congressional subpoena, and we don’t block administrative judges from doing their jobs because we don’t feel like waiting around for the legal process to be completed.”
The Postal Service is considering big job and health cuts, reports Joe Davidson: “The financially strapped U.S. Postal Service is proposing to cut its workforce by 20 percent and to withdraw from the federal health and retirement plans because it believes it could provide benefits at a lower cost. The layoffs would be achieved in part by breaking labor agreements, a proposal that drew swift fire from postal unions. The plan would require congressional approval but, if successful, could be precedent-setting, with possible ripple effects throughout government. It would also deliver a major blow to the nation’s labor movement...For health insurance plans, the paper said, the Postal Service wanted to withdraw its 480,000 pensioners and 600,000 active employees from the Federal Employees Health Benefits Program ‘and place them in a new, Postal Service administered’ program.”
Obama’s education waivers actually enhance local control, writes Jonathan Alter: “Republican lawmakers broadly endorse Obama’s policies, but they’re philosophically committed to less federal involvement in education and politically committed to opposing the president whenever possible. So they’ve dragged their feet on reauthorizing NCLB, as have Senate Democrats who can’t agree on how to move a bill. Duncan’s waivers, which are good for four years, actually enhance local control while ensuring greater accountability. But it’s a different kind of local control and a different vision of accountability than we’ve seen before. Obama and Duncan are selling something ambitious --a new relationship between Washington and the states. The idea is to set high education standards, then let states figure out how to meet them.”
Terrifying children’s production interlude: The stage version of How to Train Your Dragon .
The White House has gotten more aggressive about using executive powers on energy issues, report Andrew Restuccia and Ben Geman: “President Obama, during a speech Thursday in Holland, Mich., urged Congress to quickly pass a slew of bills on issues ranging from patent reform to trade deals. But one topic was conspicuously missing from his to-do list for lawmakers: energy legislation. Obama instead touted steps his administration has taken without Congress, including the new vehicle-fuel economy standards announced in recent weeks...The fuel-economy standards represent just one of several instances in which the White House has touted energy policy actions it can take without Congress. In recent weeks and months, the administration has also released oil from the Strategic Petroleum Reserve and announced a new interagency team to coordinate and streamline permitting for oil-and-gas projects in Alaska.”
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.