Game for Chumps

Obama & the Failure of the Deficit Hawks

For thirty years, conservative ideologues have played moderate deficit hawks for suckers.

You'd think that might endow those middle-of-the-road deficit-busters with a touch of humility. Fat chance. Instead, they stick with their self-righteous moralism, pretending to be bipartisan and beyond ideology. In fact, they make the problem they want to solve worse by continuing to empower the tax-cuts-in-every-season conservatives.

So it's satisfying to see President Barack Obama ignore the willfully naive who are wailing over deficits. He knows that new revenues will have to play a big role in deficit reduction. He also knows that House Republicans are pretending we can cut our way out of this mess and would demagogue any general tax increases.

So he has proposed some serious spending cuts and some modest revenue increases to keep things stable as he embarks on a long struggle to move our dysfunctional budget politics to a better place. This annoys his deficit-obsessed critics. He should smile, let them rage, and go about his business.

Let's look at history. When Ronald Reagan took office in 1981, he won big tax cuts coupled with big increases in military spending. The tax cuts and a severe recession tanked government revenues.

Unlike today's conservatives, Reagan at least acknowledged mathematical reality and signed some tax increases. But these were insufficient, and it fell first to George H. W. Bush—the last truly fiscally responsible Republican—and then to Bill Clinton to restore budgetary sanity.

But the conservatives who dug the hole did nothing to get us out of it. On the contrary, they denounced the first President Bush for raising taxes, and every Republican voted against Clinton's economic plan. For their bravery in supporting tax increases in 1993, Democrats lost control of Congress in 1994.

By the end of the Clinton years, we had a handsome surplus. In came the second President Bush who, with Republicans in Congress, declared the surplus too big. It was one problem they worked very hard to solve. Two tax cuts and two wars later, we were plunged into deficits—again. And the economic downturn that started on Bush 43's watch made everything worse, cutting revenues and requiring more deficit spending to get the economy moving.

Where were the moderate deficit hawks in all this? They have a very bad habit. When conservatives blow up our fiscal position with their tax cuts, the deficit hawks are silent—or, at best, mumble a few words of mild reproach to have something on the record—and let the budget wreckage happen. Quite a few in their ranks (yes, including some Democrats) actually supported the Bush tax cuts.

But when it's the progressives' turn in power, the deficit hawks become ferocious. They denounce liberals if they do not move immediately to address the shortfall left by conservatives. Thus, conservatives get to govern as they wish. Liberals are labeled as irresponsible unless they abandon their own agenda and devote their every moment in power to cutting the deficit.

It's a game for chumps. The conservatives play it brilliantly. The moderate deficit hawks give them cover every time.

How do we know our difficulties stem primarily from a shortage of revenue? Consider what would happen if we allowed all the tax cuts now scheduled to expire in 2012, including the ones enacted under Bush, to go away. That would produce nearly as much deficit reduction over the next decade—roughly $4 trillion—as all the maneuvers of the Bowles-Simpson commission put together.

And the work of the commission showed just how effective conservatives have been. By saying they will never, ever, ever raise taxes, conservatives intimidate moderates into making concession after concession.

In the end, the Senate conservatives on the commission—but not the House conservatives—supported some mild tax increases. But Bowles-Simpson proposed about twice as much in spending cuts as in revenue increases. You would think that moderates could at least hold out for a 50-50 split. But no, they'll do anything to win over a few conservatives.

As a result, any conservative who supports even the smallest tax increase is hailed as courageous. Any liberal who proposes moderate spending cuts is condemned as a gutless coward unless he or she also supports slashing Social Security and Medicare. What's "moderate" or "balanced" about this?

I hope Obama has the spine to keep calling the bluff of the deficit hawks until they get serious about changing the politics of deficit reduction. We can't afford another thirty years of fiscal evasion. 

(c) 2011, Washington Post Writers Group


Related: An Expensive Loyalty, by the Editors

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E. J., thanks for this column---straightforward and in proper historical context.

I note how once again President Obama seems to have "begun with the end in mind" by placing himself in the middle of a center-left consensus, which then requires congressional Republicans to choose whether they will negotiate and compromise within the framework established by Obama, or whether they will stake out the remaining (right-wing) turf. 

If they do the former, Obama gets the credit---much as he did during the lame-duck session last December.  If they do the latter, they can rally their base by refusing to compromise---at the cost of losing 3/5 (or more) of the public.  Or they can compromise from their initial position, in which case they risk dividing their base, with the added insult of Obama again getting most of the credit.

The most dangerous part of this partisan fight is the growing attacks on MediCare, Medicaid, and Social Security as 'entitlements' of which people are just obviously unworthy. Or that these safety nets are just unaffordable. Or that they are full of fraud and waste. The direct frontal attack on well established programs that help millions of people live a life of dignity, often just barely eking by on minimal income is unconscionable. The media and pundits must cease giving the drastic cuts proposed on these programs any credibility at all. Let us instead investigate the costs of our bloated military budget with its destructive toys and aimless killing. Now there is some fodder for analysis.

What part of "we're broke" do you not understand?  ..And, if I may say so, who gave anyone the right to condemn defense spending?  Frankly, at the risk of being banned from here, I'll contend that this howling about military actions is hateful and insulting.  It may even be treasonous.  But we're not supposed to be that concerned about the Constitution or morals, I guess, are we?  That's been unacceptable for 40 years.

 

If the Republicans in Congress do not hold the line on the budget or insist that we cut spending dramatically, we won't have any particular tax base left with which to raise revenues.  Those whom you might wish to tax will have already sent their money elsewhere, somewhere that spendthrift politicians can't touch.

Whether it's moral or not, there'll be a great deal of suffering in this nation either way.  Those who've been dependent upon government spending to sustain themselves will discover the government has nothing left to offer.  It'll have been spent on something else.

No degree of screaming about social justice will change that.

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About the Author

E. J. Dionne Jr. is a syndicated columnist, professor of government at Georgetown University, and a senior fellow at the Brookings Institution. His most recent book is Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent (Bloomsbury Press).