Hearing the word “compromise” at all in association to the debt limit talks is a bit of a revelation, so I suppose there should be some hope that something gets done after all. But take a look at this article from Lori Montgomery and Paul Kane. It posits that Republicans are considering a compromise on their demands for all spending cuts. The compromise is that they’ll allow a different kind of spending cut.
As President Obama prepares to meet Monday with Senate leaders to try to restart talks about the swollen national debt, some Republicans see a potential path to compromise: significant cuts in military spending.
Senior GOP lawmakers and leadership aides said it would be far easier to build support for a debt-reduction package that cuts the Pentagon budget — a key Democratic demand — than one that raises revenue by tinkering with the tax code. Last week, Republicans walked out of talks led by Vice President Biden, insisting that the White House take tax increases off the table.
In listening sessions with their rank and file, House Republican leaders said they have found a surprising willingness to consider defense cuts that would have been unthinkable five years ago, when they last controlled the House. While the sessions have sparked heated debate on many issues, Rep. Peter Roskam (Ill.), the deputy GOP whip, said there are few lawmakers left who view the Pentagon budget as sacrosanct.
“When we say everything is on the table, that’s what we mean,” said House Majority Whip Kevin McCarthy (R-Calif.), the No. 3 leader who has been hosting the listening sessions in his Capitol offices.
Everything, that is, but raising revenue from its current level, the lowest in 60 years.
I don’t think you could find one liberal to disagree with the statement that the Pentagon budget could be trimmed. And there are certainly efficiencies – ending wars comes to mind – that would constitute spending cuts, but not have a material effect on the overall economy. It’s probably the case that the assumption of an accelerated drawdown will be part of the debt limit deal because the savings are scored pretty high by CBO – ending wars would save as much as $1.4 trillion.
But if you cut military spending, you’re probably cutting factory jobs at defense contractors. There’s not much of a way around that. I think that’s worth doing, to channel that energy into more productive capacities. And cutting unnecessary defense spending beats cutting social spending that helps provide economic opportunity for Americans. But standard economics would tell you that spending cuts are more damaging to an economy in recession than tax increases. And the most beneficial policy would actually be to increase spending, since when faced with a demand gap, government is the spender of last resort. So at the root, this “compromise” says that spending cuts will be replaced… by other spending cuts.
It’s certainly interesting, as the article notes, that Eric Cantor was trying to exempt the Pentagon from spending cuts. And that’s simply the wrong path. But let’s not pretend this is some kind of brave and bold compromise.