Thursday, December 12, 2013

The Murray-Ryan Budget Deal, and the Strangest False Equivalence Yet

-- Posted by Neil H. Buchanan

The legislation in October that ended the government shutdown, and that put the debt ceiling back to sleep until early February, required House and Senate negotiators to reach a budget agreement by tomorrow, December 13.  That deadline was a bit difficult to understand, because the same legislation reopened the government through January 15, 2014, giving this month's deadline little more than symbolic significance.

To everyone's surprise, however, a "breakthrough agreement" was announced by some Congressional leaders earlier this week.  The two houses' budget chairs, Sen. Patty Murray and Rep. Paul Ryan, agreed in principle to a deal that they and others described as preventing budget brinksmanship for two years.  The details are somewhat unclear, but apparently Murray and Ryan agreed to overall budget numbers for fiscal years 2014 (which is already in its third month, operating for the time being on that "continuing resolution" that ended the shutdown on October 17) and 2015.

No more shutdown threats ... for almost two whole years!!  The Beltway conversation, which had been happily preoccupied with www.healthcare.gov and various foreign policy matters, suddenly lurched back toward the budget wars.  And the consensus quickly emerged that this is a good deal, showing what real compromise looks like.

And what is that compromise?  Well, there is some additional revenue, in the form of a "fee" on airline tickets.  Showing his fealty to form over substance, however, Ryan led off the press conference by saying that the deal includes no new taxes.  More significantly, the mindless sequestration cuts in discretionary spending would be replaced with targeted cuts, preventing some of the worst looming effects on human-needs programs like Head Start, and allowing the Pentagon to plan with more flexibility.  The overall level of spending would be less than $20 billion higher than the levels that would have been reached had the 2014 round of sequestration-related cuts taken effect, which means that overall spending would still be down.  And the increase in 2015 is even smaller, which amounts to a spending cut in inflation-adjusted terms, and an even bigger cut when measured on a per-capita basis or as a percentage of GDP.

So, Republicans should love this, right?  They get the Democrats to agree to continue to shrink the government, hide one small targeted tax increase, and call it a "compromise where both sides gave up significant ground."  Of course not.  The hard-right immediately rejected it, both because of the revenue increase and because it allows spending to go up at all.  Senate Minority Leader McConnell announced that he very much likes the effects of sequestration, which puts the final nail in the coffin of the initial belief that sequestration would be equally unpalatable to both sides.

As of this writing (Thursday morning), I have not seen any further reporting about the scheduling of any votes, or whether the Tea Party's opposition has scuttled the deal.  No one, however, should be surprised if the deal is never consummated.  Either way, I offer here a few observations.

First, this is another example of the Democrats' repeated failure to press an advantage.  Last year at this time, the Democrats held a trump card in the looming repeal of all of the Bush/Obama tax cuts (part of the ill-named "fiscal cliff"), but they failed to exercise that powerful advantage, allowing the sequestration deadline and the debt ceiling deadline to be moved to times when the Democrats would have no negotiating advantage.

Here, the Democrats are letting Republicans off the hook again.  The big political lesson from the October insanity was that Republicans were blamed for the shutdown.  They have made it abundantly clear that they do not want another shutdown in January (or later), because "shutdown" and "Republican" are now inextricably linked in the public's mind.  Even so, Democrats have dropped their earlier hope that they could include an extension of unemployment benefits (in an economy that still has over 3 million long-term unemployed, looking for jobs that still do not exist).  Not to worry, say the Democrats, because they plan to bring up that idea in separate legislation.  Good luck with that.

Second, and much more importantly, the deal does absolutely nothing about the debt ceiling.  As a result of October's events, we now know that even a shutdown does not prevent a default crisis; but even if it did, this budget deal certainly implies an increase in public debt over time.  The increase is too slow to count as good fiscal policy, but any increase is enough to create another debt crisis, putting the President again in a "trilemma," forced to choose how (but not whether) to violate the Constitution.  The rough guesses that I have seen suggest that "extraordinary measures" will again allow the government to avoid defaulting on some of its obligations until roughly March 15, at which point we will be exactly where we were in mid-October of this year (just as we were in February of this year, and in July/August of 2011).

Even if the hardest right of the hard right party forces itself to choke down the Murray-Ryan deal, why would anyone imagine that they would allow a straight vote on the debt ceiling?  Although anything is possible, it seems the height of folly to reach any deal -- much less hailing that deal as a "breakthrough" that will end the budget brinksmanship -- while simply ignoring the debt ceiling.

Third, it is not at all surprising that the reporting on this deal has been rife with ill-informed silliness.  Regular readers of Dorf on Law know that I periodically decry the "false equivalence" that infects standard reporting on political matters in the U.S.  (See an example from this past April here, and one from a year ago here. I have even written about "False Equivalence About False Equivalence.")

The standard form of false equivalence is to "balance" a news report by describing some bad act or statement by a Republican with a description of a bad act or statement by a Democrat, even though the significance or degree of the two matters is grossly disproportionate.  During the 2012 elections, for example, reporters turned somersaults to try to balance the torrent of dishonesty from Mitt Romney and Paul Ryan with supposed fibs from Barack Obama and Joe Biden.  ("Ryan decries Obama's cuts in Medicare that Ryan himself has proposed, but Biden correctly described a study by an economist in a way that might or might not have not have given Romney's tax plan the full benefit of the doubt.")

On the Murray-Ryan deal, false equivalence of this now-standard variety is again in full flower.  For example, in a comedy bit on last night's "The Daily Show with Jon Stewart," NBC White House reporter Chuck Todd seriously claimed, as a counter-point to Republicans' refusal to consider serious tax increases, that Democrats "refuse to deal with entitlements."  What?!  The Republicans in 2012 screamed about the $750 billion in Medicare savings that were part of the Affordable Care Act, and Democrats regularly talk about the need to rein in health care costs.  Some Democrats, very much including the President, are eager to cut Social Security as well, even though that would be a terrible idea.  The notion that Democrats are to entitlement cuts as Republicans are to tax increases is a notion that is taken seriously only in the weird world of Beltway punditry.

Even worse than Todd's standard-issue false equivalence, however, was this gem from a news article (not an editorial) in The New York Times, describing the Murray-Ryan proposal: "But both parties sought to preserve their ability to force another showdown over fiscal matters; the government’s statutory borrowing authority will lapse as early as March, another potential crisis"?

In what universe do Democrats want to "preserve" the ability to force a showdown over the debt ceiling?  For all of my complaints about Obama's mishandling of the debt ceiling, one at least has to admit that he and his party are not trying to keep that issue alive.

But maybe the Times reporter is saying something much more interesting.  Maybe this heralds a decision by the President to engage in the "reverse psychology" that I suggested more than two years ago here on Dorf on Law.  Is Obama finally going to use the debt ceiling to inflict pain on the spending programs that Republicans love most?  Will he refuse to allow the debt ceiling to increase by threatening a veto, allowing the government to default in an effort to prove that he does not "want" a debt ceiling increase any more than Republicans should want one, if they care at all about the U.S. and global economies?

OK, I doubt it.  But if that is not the explanation, then this is the oddest reporting ever.  In the midst of a story that all but begs for an answer to the question, "Uh, does this bold breakthrough actually address the much more dangerous tactic that Republicans have engaged in for the past three years?" the answer is, "Well, no, and that could be a 'potential crisis.'  Both sides preserved that tactic, though."  As I find myself saying far too often: Yikes.

1 comment:

The Dismal Political Economist said...

While Mr. Buchanan’s analysis here is absolutely correct from a purely pragmatic point view, a view that says government should operate efficiently and effectively, the politics and strategy aspects would support the Democratic position of not placing an extension of the debt ceiling in the budget talks and ultimate resolution.

First of all, it seems it would have been almost impossible for Mr. Ryan to agree to include an extension of the debt ceiling, and even if he had agreed the inclusion of a provision raising it may well have prevented enough Republicans for voting for the compromise to pass it. But more importantly, from a politically and strategic point of view, assuming the Ryan/Murray deal passes, leaving the vote ceiling fight, if there even is one, until next year is the right position for the President and the Democrats.

The reason for this is that the debt ceiling fight was not only a winner for the President in October, if there is a fight in early 2014 such a battle is even more of a winner for the Democrats. Republican leaders, having agreed upon a budget, a position by these same Republican leaders that they would not raise the debt ceiling to account for the new budget is so ludicrous that only the die hard supporters would not desert the Republicans in such a fight.

The budget agreement has made things better for the President in getting a debt ceiling extension, or winning a showdown if there is one, assuming he is astute enough (always a question mark with this President) to just stand his ground as he did in the past and won. And what exactly do Republicans demand in a debt ceiling fight? Repudiation of a budget agreement negotiated by Paul Ryan that just passed? Ridiculous. A reduction in Medicare and Social Security benefits in an election year. No way. If the President plays this correctly, the debt ceiling issue, at least for now ends with a whimper, not a bang.

In legal terms, a vote on the debt ceiling is not yet ‘ripe’. It will be in 2014 and the best thing for the Democrats then would be for the Republicans to threaten another shutdown over the issue. The nation has tired of this game; McConnell has said he will not shut down the government and the even Speaker is condemning the hard right. The opportunity for a fight over the debt ceiling, an opportunity which the Democrats have given to the extreme right, can be solely in the interests of the Democrats. What is not clear is whether or not Democrats were smart enough to realize this in their negotiations (not likely) or that they have just stumbled into the right strategy. I’ll vote for the stumbling, Democrats are just not that smart.