Late Night: The Wimpy Deal
There have been, at my last count, roughly 379 posts in the last few days here proclaiming the incoherence of President Obama’s strategy in the current debt-ceiling negotiations. (I blinked while typing this, so a few more may have appeared by now.)
Yesterday, though, both Ezra Klein and Matt Yglesias made the case that pursuing apparent austerity during an economic slump isn’t as insane as it seems — and, in fact, isn’t really pursing austerity in the short term, as Klein notes:
A big deficit deal could include mild stimulative measures such as unemployment insurance and an extension of the payroll tax cut. That’s not much, but it’s better than nothing. A small deficit deal, or no deficit deal, won’t include any extensions of stimulus.
… [Meanwhile, on spending cuts,] if you strike a deal that lasts 10 years, you can backload the savings to protect the recovery over the next three or four years.
The Prez himself alluded to this strategy during one of his 80 press conferences this week, when he explained that any tax increases he was seeking in the debt-ceiling talks wouldn’t take effect until 2013.
And I can see why he might have chosen this angle. Of all the disappointments and botched opportunities that have marked Obama’s presidency to date, I will submit that there’s only one that truly damaged Barack O. politically: the stimulus package in early 2009 wasn’t nearly big enough to get the economy moving forward.
Yes, the failure to include a public option or other strong progressive elements in the health care bill is a strong runner-up. If you ask me, though (and it’s my post, so I’m going to pretend you did), if unemployment had been a few percentage points lower, the Republican-esque health care legislation wouldn’t have kept Democrats from maintaining their majorities in Congress — and conversely, even a more populist health care bill wouldn’t have kept a GOP tide from swamping the Dems with the jobless rate as high as it was/is.
So, surveying the political landscape after the 2010 electoral fiasco, it shouldn’t be surprising if Obama came away with one simple conclusion: He needed to pass more economic stimulus, and he somehow needed to get it past a GOP-controlled House of Representatives. Which, in effect, has meant wrapping it in spending cuts the same way you’d slip an unappetizing pill into your dog’s Alpo.
This is what Obama did in the budget talks to avoid a government shutdown a few months ago (including accepting the ineffective stimulus of the Bush tax cuts for the rich in order to keep better measures in the deal), and it would make some sense if that was what he’s trying to do now.
Sure, it would would be better if B.O. laid down a progressive gauntlet and challenged GOP budget priorities head on, daring them to oppose aggressive job-creating measures without any deficit-cutting camouflage. But then, we all know that frontal assaults aren’t exactly Obama’s thing.
So instead we get the reluctant(?) endorsement of conservative budget frames, and a passive-aggressive approach to boosting the economy that might have been borrowed from a character in the old Popeye cartoons: “I’ll gladly pay you in budget cuts Tuesday for some stimulus today.”
Call it the Wimpy Deal.