Monthly Archives: July 2011

What I Think Really Happened In the Debt Negotiations

I go out for a run and a swim, and the debt negotiations break down. That will teach me.

I can’t be sure, but based on the dueling press announcements as well as some of my own contacts, here’s what I suspect – and I stress that this is largely speculation – happened between the time of my last post and the dueling announcements from Boehner and Obama that a debt deal was off – at least until 11 a.m. tomorrow (Saturday). First, let’s hear both sides of the story, beginning with the President. Here is what Obama said he was offering when Boehner called him to say he was walking away from the talks: “What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base.”

Now, here is Boehner’s version: “[A]n agreement had been reached” earlier in the week that included about $800 billion in new revenue (but not through increases in tax rates). However, the White House on Thursday “moved the goal post” by insisting on an additional $400 billion in tax increases, which Boehner refused to accept. “I take the same oath of office as the president…to do what is in the best interest of our country,” Boehner said. “And it’s not in the best interest of our country to raise taxes in this economy.”

Translation: As I suggested in several posts, the framework of a deal that included additional revenue (of about $800 billion it seems), by closing tax loopholes, eliminating exemptions but not based on raising tax rates, had been negotiated between Obama and Boehner, but when Obama went back to Reid and the Senate Democrats with the plan, they balked and demanded more revenues before they would sign on. When Obama came back with the request for an additional $400 billion, Boehner walked away.

So, is the U.S. going to default on its debts? Nonsense. At this point it is clear that Boehner has decided to cut out the middleman – that would be the President – and deal directly with the people who actually wield power in this negotiation – that would be Senate Democrats. Obama will sit on the sidelines and accept what he can get to avoid a debt default. As he stated a few hours ago: “So they will come down here at 11:00 a.m. tomorrow. I expect them to have an answer in terms of how they intend to get this thing done over the course of the next week. The American people expect action.”

And they will get it, almost certainly in the form of a short-term agreement that avoids default but puts off any “grand bargain” for the time being. One possibility is some version of the McConnell plan which essentially gives Obama the power to raise the debt limit, but allows Republicans to go on record opposing it. I don’t think that’s going to fly with the Tea Party caucus, however. It’s far more likely that we will get a short-term agreement to raise the debt ceiling that Obama will reluctantly sign, with some indications suggesting long-term negotiations are in the works (which may even be true).

A couple of things to keep in mind here. First, the media will play up the impending catastrophe of a debt default – it’s in their interest to do so. But don’t mistake that for an accurate assessment of the possibility that this will happen. Second, when parties declare they are walking away from the endgame of negotiations, that’s often when agreement is most likely to happen. These negotiations aren’t over by a long shot.

The Debt Negotiations: When An Irresistible Force Meets A Moveable Object

If as the LA Times is reporting, Speaker Boehner and President Obama are working on a plan that would link a raise in the debt ceiling to some $3 trillion in spending cuts – and without any revenue offsets – it would represent still another concession by Obama to the Republicans in these ongoing negotiations. After pledging not to support another short-term extension in the nation’s borrowing limit, Obama reversed course this week and signaled that he would accept still another extension if there was progress on a broader deal and it was necessary to prevent an immediate default. Now, if reports are accurate, he appears willing to cut a deal on spending as part of a “grand bargain”‘ that includes entitlement reform, but without any provisions for tax increases.

When word leaked that Obama was considering a deal to cut spending without any firm revenue offsets, liberal Democrats were reportedly outraged. “Many of us were volcanic,” said Sen. Barbara Mikulski (D-Md.). If Obama does sign on to such a deal, pundits on the Left will undoubtedly excoriate him for folding like a cheap suit in these negotiations.

But that would be unfair to Obama. No one should be surprised that he is apparently willing to make the concessions necessary to secure a deal. As I have said repeatedly, he is a process-oriented pragmatist – not a principled ideologue. To Obama, effective leadership means mediating differences to achieve an outcome that has the broadest possible support. He is not wedded to any particular set of principles or numbers here so much as he is cutting a deal to avoid default. If, in addition to cutting spending it addresses entitlement programs as well, what’s not to like? This is a major accomplishment for the President – one that eluded Bush.

In contrast, Boehner is dealing with a group of Tea Party-backed ideologues who are driven by principle, not pragmatism. They were elected to cut spending, not raise taxes. And they are not going to budge from that. Critics like Ross Douthat and David Brooks who can’t understand why Republicans didn’t take a deal that involved spending cuts that were three times bigger than tax raises are missing the dynamic driving these negotiations – a dynamic that Obama recognizes all too well.

In short, when an irresistible force – the Tea Party-backed fiscal ideologues – meets a moveable object – a President guided by political pragmatism more than principle – the moveable object moves. Purists will howl, but Obama is not a party purist. He came to Washington to get things done.

Moreover, keep in mind that Obama has another card to play. If he can get spending cuts now in the context of a major budget deal that addresses entitlements, he is gambling that will be enough to get him elected in 2012, at which point he can make his principled stand on revenue by refusing to renew the Bush tax cuts for upper income earners. In short, political pragmatism dictates deal making now – even deal making on Republican terms, for the moment.

It is premature, of course, to assume a deal will get cut on the terms discussed in this article. Liberal Democrats in the Senate may scuttle any plan that doesn’t include tax hikes or revenue increases as part of entitlement reform. But at this point the negotiations have already moved solidly into Republican turf, with the emphasis on spending cuts, not tax hikes.

Where do negotiations go from here? I expect that, Obama’s stated objections notwithstanding, a short-term extension of the debt limit will be agreed to shortly, while negotiations continue on a plan that entails deep spending cuts coupled with entitlement reform and with minimal, if any, tax increases. By minimal, I mean closing of deductions, eliminating subsidies, and curtailing exemptions – but not a hike in tax rates. This is still a long way from a done deal, of course. But if the deal is struck, it will be largely on Republican terms. Pundits on the Left will howl. And that will be fine with Obama.

Breaking News from Politico: Michele Bachmann is “in the dark” and “lies down on the job”!

Maybe I was wrong about Bachmann. Maybe the migraines are a bigger worry than the hot flashes. In a sign that this story has legs, the Politico website published some blockbuster information today that casts serious doubt regarding Bachmann’s ability to serve as president. In Politico’s words, the migraine issue that I so cavalierly dismissed has “threatened to spiral out of control as the media sought more details about a potentially debilitating condition.” Why, you ask, is this illness so potentially debilitating? Politico gives us the unvarnished truth: “The issue may be complicated for Bachmann by the fact that the condition affects her brain and requires her to take psychoactive drugs.”

Migraines affect the brain? Who knew? And what about those “psychoactive” drugs? I can tell you that caught my attention. Does she inhale, I wonder?

And listen to this. According to the same story, “A migraine attack in May 2010 forced Bachmann to retreat to her congressional office and lie down in the dark.”! Imagine that! And this wasn’t an isolated incident – indeed, according to a staffer who remained anonymous, “it was a common for the congressional office to literally go dark when Bachmann had a migraine.

‘The congresswoman would go into her personal office, turn off the lights and close the door, sometimes for hours, waiting for the headache to pass,’ the staffer said. ‘On multiple occasions, we had to basically turn out the lights in her office, shut the door and put a virtual do-not-disturb sign on her office for hours on end so she could lie there and try to recuperate from the headaches,’ according to the staffer.” Shades of Strom Thurmond!

But it gets worse. “The Daily Caller [the conservative website that originally broke this story] also reported an October 2010 incident that forced Bachmann to lie down at the home of a Connecticut donor who was hosting a fundraiser, then to seek urgent care in New York. Sources with firsthand knowledge confirmed the report to POLITICO.”

So it appears that Bachmann spends much of her time in the dark, lying down on the job. I don’t know about you, but these aren’t the qualities that I want in my president. No wonder “there are signs that the issue is overwhelming her campaign’s ability to respond effectively. One reporter’s attempt to get to the bottom of the story resulted in another unwelcome headline for Bachmann on Tuesday when her campaign seemed to manhandle ABC News investigative reporter Brian Ross. As he pursued her to her car outside an Aiken, S.C., event, Bachmann staffers grabbed and pushed him forcefully, according to one reporter’s account of the incident.”

I’ve seen “campaigns” “seem to manhandle” things before. Let me tell you, it’s not a pretty sight. I hope that type of rough handling doesn’t intimidate reporters like the intrepid duo at Politico that brought us this groundbreaking story. Note that Bachmann is not suffering from ordinary headaches – migraines are “a neurological disorder characterized in part by its incompatibility with normal activity… .” Read that again: Bachmann’s not normal! Doubtless you won’t be surprised to learn that migraines afflict women more than men. The always helpful Politico told me so.

Lying down on the job? In the dark? Abnormal brain activity? Using psychoactive drugs? These are not the qualifications for an effective president. And this is before the hot flashes!

Michele Bachmann. It’s all in her head.

Michele Bachmann: Too Hot To Be President?

A few days ago the Daily Caller, a conservative website, broke the story that Michele Bachmann suffers from debilitating migraines that may disqualify her from serving as president. The story set off a wave of debate regarding Bachmann’s medical condition and what it meant for her presidential campaign. According to the story, “The Minnesota Republican frequently suffers from stress-induced medical episodes that she has characterized as severe headaches. These episodes, say witnesses, occur once a week on average and can ‘incapacitate her for days at time. On at least three occasions, Bachmann has landed in the hospital as a result.”

The worry, of course, is that this might make her unfit to be president. “Bachmann’s medical condition wouldn’t merit public attention, but for the fact she is running for president. Some close to Bachmann fear she won’t be equal to the stress of the campaign, much less the presidency itself.” Although Bachmann has had this condition long before she entered Congress, the unnamed sources went public now because “they are terrified about the impact the condition could have on Bachmann’s performance if she actually became president. They also worry that the issue could blow up in the general election campaign, giving President Obama an easy path to re-election.”

Really? She’s unfit to be president because she has migraines? Both Thomas Jefferson and Ulysses S. Grant suffered from migraines. John F. Kennedy reportedly suffered from severe headaches if he didn’t have sex frequently enough (evidently any reasonably attractive woman would do). No one questioned their capacity to be president. I wonder whether this would even be an issue if it were Mitt Romney or Tim Pawlenty or any of the other male candidates who suffered from migraines.

But that doesn’t mean I think Bachmann is qualified to be president. Here’s what really concerns me.

Hot flashes.

Let’s be candid here. We are all adults. The woman is 55 – prime age for menopause. That means she’s susceptible to mood swings, forgetfulness, trouble sleeping, fatigue and night sweats. Talk about being incapacitated!

Remember Hillary Clinton’s 3 a.m. phone call? What if Michelle gets this in the midst of a hot flash? The missiles will be flying before she understands what she’s done! Or consider a particular tense face-to-face negotiation with a foreign leader – say, Moammar Khadafy – and suddenly Bachmann’s face flushes. That could be easily misinterpreted.

Or, she’s in the middle of a key diplomatic meeting with Arab leaders and suddenly has the need to take her jacket off to cool down.

I’m just saying.

Let’s be clear – I’m not blaming her. She’s a woman of a certain age – hot flashes go with the territory. And yes, I understand that women have been elected to leadership positions in other nations. But we are talking about the United States of America! It is true that some of our male presidents had their own medical issues. Lincoln suffered from bouts of depression, but it didn’t stop him from freeing the slaves. Roosevelt had congestive heart failure, died in office, and probably never should have run for a fourth term, but we at least got three good terms from him. Eisenhower suffered a heart attack at the start of his second term, but I wouldn’t say he was incapacitated – he just spent a couple of weeks resting. Kennedy? His Addison’s disease was treatable with daily injections that kept him alive. True, the additional daily amphetamine-laced shots he received for his back pain might have affected his judgment a wee bit, but in a crisis he could handle it. And Clinton? Yes, we all knew he was a compulsive womanizer, but that was his private life – it’s not like it would affect his public performance or anything.

I hope my point is clear. All these presidents had problems that did, or potentially could have proved incapacitating, but we elected them anyway because they knew how to handle these things. In comparison, how do we know Bachmann is tough enough to handle hot flashes?

I understand that she’s served a couple terms in Congress, and during that time her voting attendance record surpassed most of her colleagues, but nonetheless, she missed close to 5% of the votes. How many of these were menopause related?

Look, I understand that this is a sensitive topic. But it’s not like I’m calling her a flake or “too sensitive” or anything sexist. I just think we need to be reasonable here. After all, we are talking about the most powerful position in the world.

Michele Bachman – She’s too hot to be President.

If Moses Polled the Israelites…Why Public Opinion Is Of Little Help In Solving the Debt Crisis

So, when it comes to solving the debt crisis, what do Americans want? More importantly, are politicians even listening? Should they be listening – is public opinion, as measured by surveys, even a reliable guide to policymakers? To answer these questions, in this post I want to summarize some survey data dealing with the debt crisis. As I noted in my last post, President Obama cautioned that survey results regarding how to solve the debt impasse differ depending on survey question wording. He is exactly right. But, citing surveys, he also claimed that 80% of Americans want the debt crisis solved using a “balanced” approach that presumably involves a mix of tax hikes and spending cuts. That includes a “clear majority” of Republicans who support tax hikes. As it turns out, it’s not as simple as that, at least as far as one can tell from the surveys (and the part about a majority of Republicans supporting tax cuts is misleading). It does seem true that Americans support compromise solutions, at least in general; according to a poll described in today’s USAToday 67% of those surveyed say they want Obama and the Republicans to compromise, “even if that means policymakers have to accept a plan with provisions they don’t like. Twenty-seven percent say lawmakers should hold out for the plan with everything they want, even if that means the debt ceiling isn’t raised by the Aug. 2 deadline.”

So it seems Americans want compromise. The problem, however, is that when presented with specific compromise proposals, support drops off. It turns out the public is a lot like politicians – they advocate compromise, but then reject compromise proposals that involve making hard choices.

Let’s begin with a basic overview of where the public stands in the debt debate. Mark Halperin at Pollster.com summarized several surveys asking whether people favored or opposed raising the debt limit.

As you can see, a plurality and sometimes a majority of respondents consistently opposed raising the debt limits. However, two cautions are in order here: first, these polls date back to the beginning of the debt debate, so they may not capture recent changes in attitudes. A more recent CBS polls indicates support for raising the debt limit going up, although a plurality of Americans still oppose doing so.

More importantly, however, when provided a “don’t know enough” option, as is the case with the Gallup and Wall St. Journal polls, fully a third of respondents check this box, indicating many Americans are not confident they understand the details of the debate.

Now, let’s look at how Americans want to solve the debt crisis. Here’s where things get interesting. As Obama indicated, there is support for a balanced approach involving both tax hikes and spending cuts, but of the two, Americans are much more supportive of making spending cuts, as illustrated by this Gallup Poll.

Interestingly, even among Democrats support for focusing on spending cuts is greater than relying on tax increases:

Ok, if Americans support spending cuts, what would they like to see reduced? Let’s consider the major spending programs, where the most money can be saved. How about Social Security? Nope. Medicare? Natch. Medicaid, then? No. Military spending? Probably not. (For particulars see these polls by the Pew Research Center and ABC/WaPo). About the only programs that voters would like to see cut are the perennial whipping boys: foreign aid and spending on overseas military commitments. (Never mind that the public consistently overestimates how much is spent on these programs.) Indeed, we find more support in these two polls for targeted tax increases (raising tax rates on those earning more than $250,000, closing tax loopholes, ending subsidies, etc.) than for cutting spending on the major government entitlement programs.

What we see, then, is a public about evenly split on the necessity of raising the debt limit, although as debate goes on support for raising the limit increases. People do want a “balanced’ approach to reducing the deficit – if by balanced one means predominantly focusing on spending cuts as opposed to raising taxes. However, when offered a choice of specific spending reductions, support drops off while support increases for limited, targeted tax increases.

There is a story, perhaps apocryphal, that Harry Truman once responded to adverse polling results by asking, “How far would Moses have gone if he had taken a poll in Egypt?” Truman’s point is a reminder that we live in a republic, not a democracy. The Framers created a representative system of government in which elected officials were largely insulated from direct popular opinion, except for elections. Leadership meant refining public opinion, not being led by it. Looking at the polling pertaining to the debt impasse, we can understand the Framers’ reasoning. It is often the case that public opinion is not a reliable guide to making difficult policy choices. The worry today, however, is that in a 24/7 news cycle that feeds on polling data, the insulation protecting elected officials from direct popular opinion that the Framers expected has been stripped away. I don’t mean to suggest that politicians blindly follow the polling results – as we see here in examining recent surveys, there is no clear message emerging from polls on how to solve the debt impasse. Instead, elected officials have become increasingly adept at using polling to provide political cover to do what they want to do anyway. We see this in the debt crisis debate, with politicians and their activist supporters eagerly citing portions of those polls that they believe buttress their preferred policy options.

In the end, Obama, Republicans and Democrats are going to have to choose a policy option, secure in the knowledge that when they do, a sizable portion of the activist segment of the political community will accuse them of cowardice, treason and moral turpitude. Following the Framers, however, I also believe the public at large will reward leadership – particularly leadership that centers on compromise. Time will tell if I am right, or if we are destined to remain stuck in our own budgetary Egypt, slaves to rising deficits.