The Party of Austerity: Still Seeking that Grand Bargain
I want to hone in on one part of Matt Stoller’s acidic take on politics circa 2012, the part about social insurance programs:
Whether Romney wins or Obama wins, both Social Security and Medicare are on the table for deep cuts. Romney is explicit about this, whereas Obama couches this in terms that liberals will not understand. When he talks about popping a blister of partisanship by winning an election, what he means is cutting a deal with the Republicans to restructure these programs. Sen. Dick Durbin has been telling reporters that the Obama administration is going to give the entitlement-gutting Simpson-Bowles budget framework another try if he wins, and close Obama advisers are looking for a grand bargain on taxes and entitlement reform. Obama already tried to raise the Medicare eligibility age and cut Social Security benefits during the debt ceiling negotiations. Meanwhile, corporate titans and Democratic elites like Andy Stern and Steny Hoyer are already gathering to put this framework into place in the post-election environment, regardless of who wins.
You know where I stand on this. There’s a fault line between the parties on this – particularly on Medicaid, where there’s a legitimate difference – but overall the fault line is not at all worthy of being called a “great debate.” One side (Republicans) wants to transform safety net programs and would probably get no further than cutting them; the other side (Democrats) wants to cut them and will use its power to force their allies along. Democrats have become the party of austerity, and they see the question as, bizarrely, one of credibility. You don’t earn your stripes in Washington unless you hurt a poor person, I guess.
Sadly, even in the midst of the speeches over the last two days, you had some austerity policy snuck in. Bill Clinton had a piece about Bowles-Simpson, the least well-received part of the whole address. Elizabeth Warren had a (fleeting, admittedly) reference to reducing debt, and she wasn’t talking about private individuals, for whom it would be a good strategy. Cory Booker introduced the party platform with several paeans to deficit fetishism. And according to a top aide, the President will pursue this as well tonight.
Stephanie Cutter, appearing on CNN’s Starting Point on Thursday, said, “I think you will hear the president lay out his plan of balanced deficit reduction where everybody pays their fair share and we cut what we don’t need and that includes entitlement reform.”
It doesn’t matter that the rank-and-file views this with skepticism. We saw how much the rank-and-file mattered on that platform vote yesterday. They’ll fall in line.
The austerity experiment in the rest of the world has been a total failure. The US is in a slightly better economic position at the moment, but that doesn’t really make it any better a position to sharply pull back on fiscal accommodation. Indeed, the fiscal accommodation is one of the reasons the country IS in that better economic position, relatively speaking. And the adequacy of these programs for beneficiaries should really be the focus rather than actuarial projections 25 years in the future. That’s especially true when there’s an ongoing mass employment crisis, a fire burning through the country of wasted human capital.
But Democrats have truly embraced this policy of fiscal austerity. What saved us from this once is the total intransigence on the part of Republicans to accept a good deal and provide the cover in the form of a modest tax increase. If Democrats let the Bush tax cuts expire, however, they can get what they term a modest tax increase through a tax cut bill, and layer on their spending austerity changes, including social insurance. So even if there’s no warp-speed “deal” after the elections, you would have to look out for one shortly thereafter.
If you want to raise your voice in dissent, now would be a good time.