Editore"s Note
Tilting at Windmills

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March 3, 2011

WHITE HOUSE TO HOST BUDGET TALKS.... Once in a great while, policymakers can actually move pretty quickly. Friday afternoon, House Republican leaders came up with a plan to keep the government open for two more weeks, and Senate Democrats said they could live with it. It passed the House on Tuesday, passed the Senate Wednesday morning, and President Obama signed it into law yesterday afternoon.

That, of course, gave Washington a new deadline: pass funding for the fiscal year by March 18 -- two weeks from tomorrow -- or the government shuts down.

With that in mind, the White House, which hasn't played much of a role in the process thus far, is poised to start hosting negotiations.

Vice President Joseph R. Biden Jr. will convene a meeting of Congressional leaders of both parties in the Capitol Thursday afternoon in an effort to find a way out of a spending dispute that has the entire government operating under a stop-gap budget.

The White House announced that what could be the first of several sessions of talks would be held at 4 p.m. Also taking part from the Obama administration will be Chief of Staff William Daley and Jacob Lew, the budget director. President Obama called for the negotiations on Wednesday.

Keep in mind, as recently as 24 hours ago, GOP leaders refused to say whether they'd attend. As far as Republicans were concerned, the brutal cuts approved by the House represents one part of the debate, and they wouldn't come to the table until Senate Dems presented their comparable plan.

But that never made much sense. The Republican argument, in a nutshell, has been, "We'll talk after we've seen an unwritten Democratic plan we know we won't like."

Today, the GOP dropped the posturing and accepted the White House's invitation.

OK, so everyone will get together for a chat. We can say with some confidence what Republicans will demand. What, pray tell, will Democrats say? That's far less clear.

The Dems' relative silence on this isn't nearly as strategic as Republicans make it out to be. The truth is, Democrats haven't pushed their own spending plan for the rest of the fiscal year because they just haven't seen much of a point -- why invest energy in a proposal that can't pass? House Republicans did this, but only because they wanted to, in part to establish a baseline for future talks, and in part to thump their chests for the party's right-wing base.

But when GOP officials complain that they have no idea what Democrats actually want from this process, they're not wrong. Indeed, no one does.

Ezra Klein had a good post on this earlier.

The Republicans want to cut federal spending at an annualized rate of $100 billion, which means cutting about $64 billion for the rest of the year. Democrats want to ... win the future? Simply keep the government from shutting down?

In a more normal world, the Democratic position would be that we're staring down 9 percent unemployment and it's too early for any fiscal contraction whatsoever. But that's not their position, at least not publicly. They want to make spending cuts, but somewhat less than the Republicans do. They want to protect investments for the future, but they haven't offered any benchmarks for how much investment we should be doing. They long ago gave up trying to push for further net stimulus. So when they sit across a table from the Republicans, either during this negotiation or the coming negotiations over the debt limit and the 2012 budget, what are they going to say? What does a policy win for the White House look like?

Those are excellent questions, for which there is no obvious answer. When it comes to Democrats, all we can say with certainty is that they consider the House GOP proposal a "non-starter." I'm glad, but that's not much to go on.

And when it comes to Republicans, all we can say with certainty is that they consider the figure to be paramount -- they expect a $61 billion package of cuts, no exceptions. They seem far less concerned about what, exactly, gets cut, but they're desire to meet the dollar target borders on obsession.

Irresistible force? Meets an immovable object.

Steve Benen 2:00 PM Permalink | Trackbacks | Comments (29)

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This seems like the perfect time to introduce some significant defense cuts. Dems: Meet the $61 billion that the GOP demands in defense custs and see who blinks first.


Posted by: danimal on March 3, 2011 at 2:06 PM | PERMALINK

Now there will be some more jockying to see who is blamed for the shutdown.

I know, let the Democrats propose cutting oil company subsities to zero. That should be worth several billion.

Posted by: Ron Byers on March 3, 2011 at 2:11 PM | PERMALINK

The Democrats will fold.
As usual.

They'll see having some underfunded remnant of a semi-functioning goverment to be better than no government at all.

I'd love them to go to the American people, make their case for further stimulus, and tax increases, which Americans seem to say they want in polls, and see what happens.
But when you haven't already laid the groundwork for that, it's kind of useless - which kind of describes most Democrats.

Posted by: c u n d gulag on March 3, 2011 at 2:12 PM | PERMALINK

Oooohhh, I can't wait to see President Obama bear hugging a RepuG, as he did with Senator Coburn during a similar meeting at the WH over health care. It did him ever sooo much good in getting Coburn's vote.

Posted by: berttheclock on March 3, 2011 at 2:13 PM | PERMALINK

I wish that the headline inspired confidence.

Posted by: doubtful on March 3, 2011 at 2:13 PM | PERMALINK

The Democrats should go ahead and propose $61 billion of cuts, all coming from Republican constituencies. Farm subsidies. Defense contracts. Oil and gas subsidies.

If Democrats make it clear that they'll support cuts, but only cuts Republicans hate, I think maybe the enthusiasm for cuts will wane. If not, fine; most of the stuff the Republicans like is wasteful anyway.

It really shouldn't be that hard, but Dems always seem terrified of pissing off people who aren't going to vote for them anyway.

Posted by: dbeach on March 3, 2011 at 2:21 PM | PERMALINK

I said something similar on TPM. Dems have embraced the GOP line so much that essentially theyve thrown away their own beliefs. I say start with the obvious cuts. Cuts in agri-subsidies gas subsidies and tax loopholes and that GAO report about duplicative programs. Going after big business who arent hurting and benefited largely from the recession wins over "independents" and you can say you are makin the government more efficient. Wining the future means doing what? when? and how? This is what we can do to win the future.....go from there. I say doing something dramatic say you want to create a new tax which goes directly to paying for continuing operations in Iraq and Afghanistan. see how those budgets hawks react to that.

Posted by: allamr18 on March 3, 2011 at 2:23 PM | PERMALINK

The folks on the sidelines- here, and elsewhere- have one definition of what it means to be a Democrat.

Democrats in office have a very different definition.

Posted by: DAY on March 3, 2011 at 2:23 PM | PERMALINK

I like it, come up with 57 Billion in cuts hurting Republican corporate constituencies and tell the Republicans that since they got to pick the total amount there will be no compromise in the cuts we select.

Posted by: Ron Byers on March 3, 2011 at 2:31 PM | PERMALINK

At times like this I'd like to see Congress cut the federal budget to the bare minimum needed to keep the DOD running and nothing else. Put themselves on non-paid furlough days; stop all federal spending on highway construction and maintenance; suspend all ag and business subsidies including to oil companies; stop the US postal system; lay off all food inspection staff. Then wait about 9 months and see what people think.

Posted by: Lifelong Dem on March 3, 2011 at 2:32 PM | PERMALINK

We have a general consensus from a guy that worked on the McCain/ Palin campaign, Goldman Sachs, Moody's, and Ben Bernanke that the House budget is will cost several hundred thousands of jobs and growth in the economy.

We have proof that the budget includes massive cuts to programs that the GOP claims is essential to National Security: nuclear weapons tracking and protection of nuclear plants, border patrols, etc. Not to mention kneecapping the IRS, despite evidence that they bring in $10 for every $1 spent going after tax cheats.

We have an NBC/ WSJ poll that confirms an overwhelming majority of the US public is against this budget and support causes the Democratic Party is supposed to represent.

OF COURSE the Democrats are going to give the GOP what it wants. After all, we wouldn't even be in this position if they'd had the balls to pass a budget when they were still in power before the election. *sigh*

Posted by: Kiweagle on March 3, 2011 at 2:37 PM | PERMALINK

The Democrats HAVE already proposed ending oil company subsidies, it was voted on before the general spending bill was voted on. And of course, every single Republican voted against it.

This was noted by Steve just the other day, is no one paying attention? I swear, all the belly aching about the Democrats from supposed "progressives" is really just a sign that Firebaggers are also low information voters and whiners as well.

Posted by: Dr. Morpheus on March 3, 2011 at 2:45 PM | PERMALINK

Can they save $61B by closing down the overseas bases? The war in Europe ended 65 years ago and the Soviet Union no longer exists. My wingnut neighbors all liked that idea when I went to my wingnut congressman's "town hall". End the "War on Drugs" while we're at it. Plus shutting down overseas spending won't put anybody in the U.S. out of work.

Posted by: Stella Barbone on March 3, 2011 at 2:52 PM | PERMALINK

I'm not sure I agree with the notion from Republicans and others that the Democrats haven't pushed a spending plan. They tried to pass a budget during the lame duck, and of course, Obama just proposed a budget. Nothing mysterious here. Anybody asks, point them to the budget that failed in Decembers?

Posted by: Chris on March 3, 2011 at 2:53 PM | PERMALINK

@Dr Morpheus - We already have a well-documented and long history of what we now call "pre-emptive concessions" by the Democrats (particularly President Obama), where they give the GOP some of what it wants without ever bothering to call their bluff.

As for that amazing vote by the GOP on oil subsidies, you might want to remember that the Democratic Party was in charge of the White House and BOTH Houses of Congress for 2 years. Strange that they would think to introduce a bill like this when OUT of power.

Posted by: Kiweagle on March 3, 2011 at 3:12 PM | PERMALINK

"I swear, all the belly aching about the Democrats from supposed "progressives" is really just a sign that Firebaggers are also low information voters and whiners as well. "

Yes, why don't we "firebaggers" (?) take seriously the Democratic attempt to pare back the oil companies? Could it be because President Obama radically expanded offshore drilling? Or because he picked a fossil fuel flack as Secretary of the Interior? Maybe it's because Obama's MMS just gave BP another deep-water drilling permit.

No, we must be ignorant of what's going on. That's the only possible, conceivable reason for someone to be disappointed in Obama.

Posted by: Notorious P.A.T. on March 3, 2011 at 3:15 PM | PERMALINK

Actually, it shouldn't be that hard to find $96 billion in cuts. (96 + 4 = $100)

Repeal some corporate welfare loopholes (I don't hink McDonalds or Exxon needs a penny of subsidy), shut down some unneeded weapons programs at the Pentagon and you are there.

By the way, polls say Americans like the idea of cutting foreign aid. What do they think aid given to new governments in Egypt, Tunisia or Libya will be called?

Posted by: Sarafina on March 3, 2011 at 3:17 PM | PERMALINK

What @Chris said. I don't why Klein and Benen are so mystified. If you want to know what Democrats want, laid out in black-and-white, grab a cool drink and a good armchair and saunter over to omb.gov, aka budget central.

Now, if the reference is, what do Democrats want in two words or less for the 11pm local news soundbite - yes, Democrats can certainly do better on communicating that. The words Hillary used at the 2008 convention come to mind - Dems want to "Keep going!" Keep going with education, keep going with developing new technologies, keep going with safety-net programs, keep going with making government more efficient and cost-effective. Etc.

Posted by: June on March 3, 2011 at 3:25 PM | PERMALINK

Actually PAT it's pretty pathetic to complain about people not doing something when they, in fact, just did what you're talking about. The level of hostility and projection from firebaggers towards Obama is pretty unbelievable. Anyone who is paying attention to what is going on right now has to be nuts to tag *Obama* as the biggest problem. But, hey, a bunch of upper-class white liberals don't actually have to suffer from what the Republicans are doing. So they can play purity games.

Posted by: Marc on March 3, 2011 at 3:25 PM | PERMALINK

You know, i'd much rather see Joe Biden in Madison than at the negotiating table.

Just sayin'.

Posted by: barry on March 3, 2011 at 3:39 PM | PERMALINK

The Democrats always move quickly when they're pre-compromising.

Posted by: Steve LaBonne on March 3, 2011 at 3:53 PM | PERMALINK

The Democrats HAVE already proposed ending oil company subsidies, it was voted on before the general spending bill was voted on. And of course, every single Republican voted against it.

I'm quite aware of that. But the Dems have two options, as I see it. 1) Try to minimize the cuts, which appears to be a loser, or 2) Change what gets cut. This seems more promising, since the programs Dems want to keep are more popular than the ones the Republicans like.

I think Steve's right that the Congressional Dems need to lay out some sort of a vision, and while they may have had a vote that few people knew about to cut oil and gas subsidies, that is quite a different thing from proposing it at a White House press conference and making Boehner defend keeping them.

Posted by: dbeach on March 3, 2011 at 4:38 PM | PERMALINK

I don't know what a policy win looks like, but I know what a political absolute victory looks like: a budget that passes the House with all the Democrats and a bunch of non-Teanut Republicans.

Probably unobtainable on the 2011 budget, but if I were the Dems, I'd be looking to do everything possible to set the stage for that event somewhere down the road, whether it's on the debt ceiling, or the 2012 budget or any of the other innumerable crackpot imbecilities the teanuts are screaming for.

Posted by: Another Steve on March 3, 2011 at 4:43 PM | PERMALINK

It's about time the American people stirred. Their savings have been stolen, their homes taken away, their health put at risk, their very ability to work sold overseas.

And now it is the time to cut deeper into their pockets and strip them of their representational rights, lower their health care and create an underclass of hungry people willing to do anything for a minimum wage job.

All at the benefit of the rich.

I'm sorry, the war of the rich against the poor has gone on for a decade - it's about time somebody noticed and got mad that the ones benefiting from America are the ones not reinvesting that back into the people that made them what they are.

Posted by: Dean on March 3, 2011 at 4:52 PM | PERMALINK

Ditto what Dean said.

Posted by: Alrighty Then on March 3, 2011 at 7:11 PM | PERMALINK

Are you serious; particularly about farm subsidies? Midwestern Democrats are the leaders in ethanol subsadization.

Posted by: depressionbaby on March 3, 2011 at 9:26 PM | PERMALINK

We are so screwed.

Posted by: LosGatosCA on March 4, 2011 at 12:52 AM | PERMALINK

Is there not a moral obligation for America's corporations to look after it's own, the American People?

Posted by: Dean on March 4, 2011 at 2:02 AM | PERMALINK

The Basics:
$10 billion - The amount, on average, that our federal government spends every day of the year.
$6 billion - The amount, on average, that our federal government collects in revenue every day of the year.
$4 billion - The amount, on average, that our federal government adds to its total debt and has to borrow every day of the year.
$1.5 trillion - The current projected annual deficit for the federal government, due to the difference between its annual spending and its annual revenue.
$14 trillion - The total federal debt at the beginning of 2011.
$15.5 trillion - The total federal debt projected for the end of 2011.
$17 trillion - The total federal debt projected for the end of 2012.
$45,000 - The debt, per every U.S. resident, resulting from the total federal debt at the beginning of 2011.
$5,000 -- The approximate debt to be added each year to the obligation of every U.S. citizen, if the projected annual federal deficit of $1.5 trillion, per year, continues.

The Entitlements:
The “entitlements” of Social Security and Medicare have little or nothing to do with the federal debt. The federal payroll tax is the dedicated funding source for these programs.
Social Security, which has a Trust Fund that currently holds about $2.5 trillion, has not added a dime to our federal debt. Each year, this Trust Fund receives approximately $200 billion in interest payments. Its annual balance increases or decreases because of this, plus or minus any annual surplus/deficit in the payroll tax revenue.
Medicare also is funded by the payroll tax, but it is also supplemented by premiums paid for Part B and Part D by Medicare beneficiaries. And, it receives funding from the general fund of approximately $200 billion per year.

The Options:
Spending Reductions: Significant reductions in federal spending are not likely in the near future. Too much of the federal spending is connected with “sacred cows.” Many do not want reductions to costs connected with “national security.” Many do not want reductions that would eliminate federally funded jobs, especially in U.S. communities that heavily depend on jobs with the federal government.
Increased Revenue: It is said that federal tax revenue is at a 30-year low, when compared with the nation’s overall economy. Revenue from corporations has been reduced significantly. People in the U.S. have been led to believe that they are paying “enough” in federal taxes. But they are not. Most in the U.S. suffer from “deficit denial.” Most in the U.S. do not realize the magnitude of the current annual federal deficit.

Implementation of the recommendations in the ”THE NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM (of December 2010),” also known as the Simpson-Bowles Deficit Plan, offers a comprehensive set of suggestions for federal financial reform. This document appears to be the best hope we have to turn our “deficit denial” around. The document can be found via the following link: http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf
Continuation of our annual federal deficit of $1.5 trillion per year is unsustainable. This requires us to, essentially, find a way to take out and maximize a new credit card every year just to pay our bills. Every year the per-person debt for U.S. residents increases by approximately $5,000. Again, the continuation of our annual federal deficit of $1.5 trillion per year is unsustainable.
We cannot “grow” our way out of this problem. Reducing our federal spending, even by hundreds of millions per year, will not solve our problem. Only a combination of a reduction of federal spending over time, plus significant increases in federal revenue soon, will solve our problem. Again, the recommendations from the Simpson-Bowles Deficit Plan document would appear to be our best hope. These should be implemented by the end of 2011, if at all possible.

Posted by: George Fulmore on March 4, 2011 at 2:34 AM | PERMALINK



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