Now hear this; now hear this: Capitalizing on Collapse
The National Debt Clock located off Avenue of the Americas in New York.
The following article, noting that many Republicans and Democrats have concluded that they will get more out of the failure of negotiations to cut the deficit than they would out of success, is from The New York Times:
A new political calculus is emerging on both sides of the aisle now that it looks as if the Joint Select Committee on Deficit Reduction may fail to reach an agreement by Wednesday’s deadline.
Democrats, who have taken a beating since the 2010 election, are legitimately worried that Republicans will use the collapse of budget talks to pursue their own grand strategy.
Publicly, Republicans say they are determined to do everything possible to help the so-called supercommittee achieve its goals. Kevin Smith, a spokesman for House Speaker John A. Boehner, said, “Boehner recognizes we are $15 trillion in debt, we need to deal with that right now, and he does not think we can wait until next election.”
In private, however, a number of Republicans acknowledge that alternatives to action by the supercommittee look highly attractive, if risky.
Should the supercommittee fail, the wheels begin to turn on $1.2 trillion in across-the-board cuts, known as sequestration, which split evenly between domestic and military programs.
There is bipartisan agreement that these cuts make no distinction among meat, bone and fat. The key political factor, however, is that the cuts go into effect after the 2012 election. Just as important, the “temporary” Bush tax cuts — enacted in 2001, 2002, and 2003 — terminate at the end of 2012.
Here is the Republican gamble: Intrade, the political futures market, currently puts the odds at just under three to one in favor of both a Republican takeover of the Senate and retention of the House — 74.4 to 21.5 for the Senate, 72.2 to 28 for the House.
The big question is the presidential contest. According to an ABC poll, a majority of Americans, by a margin of 55 to 37, believe that the Republican nominee will be victorious. Republican voters are overwhelmingly optimistic about their chances for the White House, 83-13. Democrats, by the far smaller margin of 58-33 percent, think President Obama will win re-election. Independents, by a 54-36 margin, believe that the Republicans will take the presidency.
The chance of all three contests going the Republicans’ way is less than 50-50, but if they do, the payoff would be huge. The risk is outweighed by the benefits of winning. What’s at stake? The power to further tilt the tax code in favor of the affluent and to perform progressively more radical surgery on the welfare state.
Given long-range demographic trends – the growth of the minority electorate and the increasing numbers of unmarried, Democratic-leaning voters, especially single women – the 2012 election could prove to be the last chance for the contemporary conservative movement to put a decisive stamp on the government.
As a top Republican Congressional aide put it in a interview about the supercommittee’s deliberations, “Winning the trifecta — House, Senate and White House — in 2012 is a game changer. We would be in the driver’s seat.”
In this scenario, Republicans in the 113th Congress would swiftly enact a version of the budget proposal put forward by Paul Ryan, the chairman of the House Budget Committee, which was approved by the House, but only the House, earlier this year.
The Ryan budget, which includes making the Bush tax cuts permanent, would meet the required $1.2 trillion in deficit reduction, eliminating the need for across-the-board cuts. The measure would be contained in budget “reconciliation” legislation so that it would not be subject to a filibuster in the Senate and could be enacted by simple majorities in both branches. A Republican president would be sure to sign it.
A central Democratic player in the supercommittee negotiations noted that “there is a lot of fear” that the failure of the supercommittee “is intentional, that the Republicans are waiting until January, 2013, after an election has taken place. Who is in control will have enormous consequence.”
Capitalizing on collapse is not the exclusive terrain of the right. There are some on the left who believe that simply taking no action whatsoever before this year’s November 23 and December 23 deadlines will force the expiration of the Bush tax cuts at the end of 2012. The expiration of these cuts will produce an estimated $3.8 trillion in new revenue between 2013 and 2022 – enough to maintain many of the key safety net programs with relatively minor tinkering.
Of course, this strategy depends either on a Democratic chief executive to veto Republican legislation extending the Bush cuts or on the less likely event of Democratic retention of the Senate or a takeover of the House.
The risks to both sides of a do-nothing-for-now strategy are arguably outweighed by the many possible advantages. The economic policy gulf between the parties has become so wide that it seems impossible, barring the use of accounting gimmicks, for them to split the difference.
The anti-tax, anti-government ideology of the right cannot be legitimately reconciled the with pro-government, high-tax commitment of the left, and vice versa. On top of that, these competing ideologies have acquired a moral dimension that makes ordinary political give-and-take intolerable.
Notions of unilateral victory, whether through Republican domination of Washington or through the expiration of the Bush tax cuts, become increasingly attractive, no matter how fanciful, if the alternative is engaging in the processes of honest bargaining, accommodation, negotiation and compromise.
The above article is by Thomas B. Edsall, a professor journalism at Columbia University, is the author of the forthcoming book “The Age of Austerity: How Scarcity Will Remake American Politics.”