NYT Op-Ed (David Brooks) : The Mother of All No-Brainers (Solving Deficit Problem)

[killerbee99]

Beautiful piece about how some Republicans are wasting a great opportunity in Compromise and fixing this debt issue

The Republicans have changed American politics since they took control of the

House of Representatives. They have put spending restraint and debt reduction at

the top of the national agenda. They have sparked a discussion on entitlement

reform. They have turned a bill to raise the debt limit into an opportunity to

put the U.S. on a stable fiscal

course.

Republican leaders have also proved to be effective negotiators. They have

been tough and inflexible and forced the Democrats to come to them. The

Democrats have agreed to tie budget cuts to the debt ceiling bill. They have

agreed not to raise tax rates. They have agreed to a roughly 3-to-1 rate of

spending cuts to revenue increases, an astonishing concession.

Moreover, many important Democrats are open to a truly large budget deal.

President Obama has a strong incentive to reach a deal so he can campaign in

2012 as a moderate. The Senate majority leader, Harry Reid, has talked about

supporting a debt reduction measure of $3 trillion or even $4 trillion if the

Republicans meet him part way. There are Democrats in the White House and

elsewhere who would be willing to accept Medicare cuts if the Republicans would

be willing to increase revenues.

If the Republican Party were a normal party, it would take advantage of this

amazing moment. It is being offered the deal of the century: trillions of

dollars in spending cuts in exchange for a few hundred billion dollars of

revenue increases.

A normal Republican Party would seize the opportunity to put a long-term

limit on the growth of government. It would seize the opportunity to put the

country on a sound fiscal footing. It would seize the opportunity to do these

things without putting any real crimp in economic growth.

The party is not being asked to raise marginal tax rates in a way that might

pervert incentives. On the contrary, Republicans are merely being asked to close

loopholes and eliminate tax expenditures that are themselves distortionary.

This, as I say, is the mother of all no-brainers.

But we can have no confidence that the Republicans will seize this

opportunity. That’s because the Republican Party may no longer be a normal

party. Over the past few years, it has been infected by a faction that is more

of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter

how sweet the terms. If you ask them to raise taxes by an inch in order to cut

government by a foot, they will say no. If you ask them to raise taxes by an

inch to cut government by a yard, they will still say no.

The members of this movement do not accept the legitimacy of scholars and

intellectual authorities. A thousand impartial experts may tell them that a

default on the debt would have calamitous effects, far worse than raising tax

revenues a bit. But the members of this movement refuse to believe it.

The members of this movement have no sense of moral decency. A nation makes a

sacred pledge to pay the money back when it borrows money. But the members of

this movement talk blandly of default and are willing to stain their nation’s

honor.

The members of this movement have no economic theory worthy of the name.

Economists have identified many factors that contribute to economic growth,

ranging from the productivity of the work force to the share of private savings

that is available for private investment. Tax levels matter, but they are far

from the only or even the most important factor.

But to members of this movement, tax levels are everything. Members of this

tendency have taken a small piece of economic policy and turned it into a sacred

fixation. They are willing to cut education and research to preserve tax

expenditures. Manufacturing employment is cratering even as output rises, but

members of this movement somehow believe such problems can be addressed so long

as they continue to worship their idol.

Click link for rest

http://www.nytimes.com/2011/07/05/opinion/05brooks.html?partner=rss&emc=rss

[mardi gras skin]

Real Clear Politics has that David Brooks article linked right next to this one:

David Brooks Needs A Vacation

http://townhall.com/tipsheet/guybenson/2011/07/05/david_brooks_needs_a_vacation/print

Might I briefly interrupt Brooks' festival of anti-Republican name-calling (say what you will about the man, he's mastered the skill of bestowing leg thrills upon Times readers) to point out a small fact? This "mother of all no-brainers" deal that Brooks accuses the GOP of turning down doesn't exist. There is no deal on the table.

[killerbee99]

Hmmm...never mind then.....

[techboy]

Hmmm...never mind then.....

Well, that was fast.

[twa]

Show me the money

[Mad Mike]

There is no deal on the table

Bull****.

There is a verbal offer. An actual paper offer requires that the republicans consider it.

[Hersh]

Real Clear Politics has that David Brooks article linked right next to this one:

David Brooks Needs A Vacation

http://townhall.com/tipsheet/guybenson/2011/07/05/david_brooks_needs_a_vacation/print

The townhall.com piece is a hack job that is simply another example of the no compromise style of these Republicans.

[mardi gras skin]

Bull****.

There is a verbal offer. An actual paper offer requires that the republicans consider it.

Blah.

When everyone gets done vilifying their political opponents, playing the tough guy or the victim, and posturing for the cameras, a deal will get done:

http://swampland.time.com/2011/07/06/what-congress-can-cut-anatomy-of-a-grand-bargain/

For all the melodrama in weeks of Washington’s deficit reduction talks – Republicans walking away from the table, President Obama calling them on the carpet, Wednesday’s purely symbolic vote on “shared sacrifice” from the wealthy – things have actually turned a corner in recent days. We are approaching the end of what I like to call the Five Stages of Washington Theatrics. Stage 1: The wrong politicians sit down and try to hash out a deal (In this case, Joe Biden’s Blair House talks and the bipartisan “Gang of Six” Senators were doomed to inefficacy). Stage 2: Negotiators on one side furiously abandon talks, thumping theirs chests to appease the base and say, “We will never agree to X” (Eric Cantor and Jon Kyl left the Biden talks forswearing any and all tax hikes). Stage 3: The other side thumps their chests too, rallies the base and says, “We will never agree to Y” (Obama was combative in his June press conference). Stage 4: Disaster looms, an agreement looks increasingly bleak. Stage 5: The right people get into a room, hammer out a deal, usually at the last possible minute.

Washington now seems to be between stages 4 and 5, where the right people are in the room, and each day the news vacillates between hope and despair, depending on which side’s base needs a little extra convincing. But more importantly, Washington has stopped asking if the two sides will reach an agreement, and started asking what the agreement might look like. How much spending will be cut? How long will the debt ceiling be extended by?

While the leaders may be drawing stark lines in the sand, rank-and-file members are coming around to a compromise. In the last week, several Republican Senators, including Lamar Alexander, the No. 3 Senate Republican, and John Cornyn, the head of the National Republican Campaign Committee, have said they’d accept ending some corporate tax breaks. On background, Some House aides have said they expect that some small snips to the tax code– such as the corporate jet subsidy named six times by Obama at his press conference – could get through the House. And while House Minority Leader Nancy Pelosi and Senator Chuck Schumer have dug their heels in on Medicare, other rank and file members on background have conceded that if Republicans can swallow some revenue increases, modest Medicare cuts to providers — not to benefits — could be on the table.

These concessions may seem slight – only hundreds of billions of dollars in a deal worth trillions – but they are the most politically difficult of the package. Democrats cannot raise revenues – even if they’re ending unpopular corporate subsidies – without GOP support in the House. Meanwhile Republicans are clamoring to include some Medicare cuts, however small and symbolic, so that Democratic cooperation can help protect them from lingering anger over Paul Ryan’s voucher proposal. Bipartisan cuts would provide Republicans with a much-needed retort to accusations that they want to do away with Medicare.

[Burgold]

Is compromise really a four letter word?

[BRAVEONAWARPATH]

Paul Ryan Responds To David Brooks: We Won’t Cut Tax Loopholes To Reduce Deficit, Only To Finance More Tax Cuts

As the August debt ceiling deadline looms and Republicans continue refusing to consider revenue increases, conservative New York Times columnist David Brooks excoriated the GOP for its intransigence. Writing yesterday that it “may no longer be a normal party” but rather a movement of “fanatic” with a “sacred fixation” on tax cuts, Brooks slammed the GOP for rejecting a “no-brainer” compromise with Democrats, which would include closing tax loopholes for things like corporate jet ownership:

On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.

This, as I say, is the mother of all no-brainers.

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

But Brooks’ plea for sanity was lost on House Budget Committee Chairman Paul Ryan (R-WI), who responded to the column on conservative radio host Laura Ingraham’s show this morning. Ryan said that if Republicans gave up the loopholes now without securing a deal to lower marginal tax rates overall, they would lose an opportunity to demand new tax cuts in the future:

RYAN: What happens if you do what he’s saying, is then you can’t lower tax rates. So it does affect marginal tax rates. In order to lower marginal tax rates, you have to take away those loopholes so you can lower those tax rates. If you want to do what we call being revenue neutral … If you take a deal like that, you’re necessarily requiring tax rates to be higher for everybody. You need lower tax rates by going after tax loopholes. If you take away the tax loopholes without lowering tax rates, then you deny Congress the ability to lower everybody’s tax rates and you keep people’s tax rates high.

Ryan is arguing that raising taxes on corporate jet owners and others is only acceptable if the money raised is plowed back into new tax cuts, not to paying down the deficit. He is clearly more interested in cutting taxes than dealing with the deficit, and is willing to let these egregious loopholes stay in the tax code until he can best exploit their removal to lower taxes sometime in the future.

Given the conservative preference for cutting taxes on high-income earning “job creators,” its conceivable Ryan would use the new taxes on corporate jet owners to help fund a new tax cut for people who happen to own corporate jets. Ironically, just moments earlier in the interview, Ryan attacked President Obama for wanting to close the loopholes, saying doing so would generate an insignificant about of revenue to pay down the deficit. But when it comes to tax cuts, closing those same loopholes would apparently generate plenty of revenue.

http://thinkprogress.org/economy/2011/07/05/260523/paul-ryan-david-brooks-loopholes/

[mardi gras skin]

Is compromise really a four letter word?

I remember Bush Sr. getting eviscerated for compromising on taxes.

[Burgold]

I remember Bush Sr. getting eviscerated for compromising on taxes.

Yup, I remember "Read My Lips" too. I think there are two differences... one) we're talking about members of Congress compromising versus a President's chief campaign commitment and two) the economic circumstances and reality of today.

Country should come first. Politicians need to be intellectually flexible enough to adjust to the demands of the day. Changing course when we're about to default is understandable. Is it better to hold to a promise or risk the collapse of the U.S. economy?

[mardi gras skin]

Compromise is going to happen. But both sides are going to hold on real tight to their pet issues to the last minute to avoid coming across as weak.

[Burgold]

Compromise is going to happen. But both sides are going to hold on real tight to their pet issues to the last minute to avoid coming across as weak.

And I hate that. All the brinksmanship and political gameplaying for the sake of playing roulette instead of doing the country's work frustrate me to no end. Again, Pelosi and the Dems did damn near the same thing after 2006 so I am not saying Repubs are unique in this... but man, I hate modern politics.

[Rocky21]

Can we e-mail this article to everyone in the Congress and the Senate?

[Elessar78]

Talking to a World Bank economist friend last week the simplest way to put it is that the problem needs to be attacked from two sides: reduce spending and increase taxes.

A reduction in spending affects a whole slew of things that are politically touchy: military pensions, medicare/medicaid (the entitlement programs essentially). Increasing taxes riles the other side of the aisle equally. As with anything, the concept is simple, the application is difficult.

A "national default" would be disastrous. The whole concept of our economy is based on the idea of money being backed by the full faith and credit of the US Gov't. If that concept of trust gets shattered the future (economic outlook) looks pretty bleak.

[PleaseBlitz]

And I hate that. All the brinksmanship and political gameplaying for the sake of playing roulette instead of doing the country's work frustrate me to no end. Again, Pelosi and the Dems did damn near the same thing after 2006 so I am not saying Repubs are unique in this... but man, I hate modern politics.

I agree, but this is what happens in a negotiation. If you get what you want unexpectedly early, you don't stop and call it a day, you ask for more until the time is up. The deadline is almost a month away. Just like the last minute deal in April, this one will happen with less than 24 hours to go.

That being said, negotiations happen behind closed doors. All this being played out in newspapers and on radio programs is pure political grandstanding and schoolyard shennanigans.

---------- Post added July-6th-2011 at 11:24 AM ----------

Talking to a World Bank economist friend last week the simplest way to put it is that the problem needs to be attacked from two sides: reduce spending and increase taxes.

A reduction in spending affects a whole slew of things that are politically touchy: military pensions, medicare/medicaid (the entitlement programs essentially). Increasing taxes riles the other side of the aisle equally. As with anything, the concept is simple, the application is difficult.

A "national default" would be disastrous. The whole concept of our economy is based on the idea of money being backed by the full faith and credit of the US Gov't. If that concept of trust gets shattered the future (economic outlook) looks pretty bleak.

Did he mention that increasing taxes and slashing spending at the same time is a good idea during a boom period so reduce debt, but potentially disastrous in the middle of a recession? Nobody seems to be mentioning that.

[@DCGoldPants]

Feels like every week we get another example of why the two party system is so bad. In a Nation built as a melting pot, compromise shouldn't be a cuss word.

[Tulane Skins Fan]

I remember Bush Sr. getting eviscerated for compromising on taxes.

This mistake was not raising taxes. The mistake was promising not too.

---------- Post added July-6th-2011 at 11:37 AM ----------

Feels like every week we get another example of why the two party system is so bad. In a Nation built as a melting pot, compromise shouldn't be a cuss word.

What on earth makes anyone think throwing a third group of nut jobs into the fray will make things easier? In some sense, we have a three party system now with the tea party, and things are more difficult than ever.

Or did you mean we should have a single party?

[@DCGoldPants]

This mistake was not raising taxes. The mistake was promising not too.

---------- Post added July-6th-2011 at 11:37 AM ----------

What on earth makes anyone think throwing a third group of nut jobs into the fray will make things easier? In some sense, we have a three party system now with the tea party, and things are more difficult than ever.

Or did you mean we should have a single party?

Two parties are fighting for a majority. A 3rd party which would hopefully take from the middle would mean working together and give/take would be required to Govern.

http://www.amazon.com/Declaring-Independence-Beginning-Two-Party-System/dp/1400067332

Check this out.

[mardi gras skin]

This mistake was not raising taxes. The mistake was promising not too.

We have politicians promising not to slash medicare and not to raise taxes. One vows not to reduce spending without raising taxes, the other side promises not to reduce spending if it means they have to raise taxes.

Promises are out there so they're all worried they could be in Bush Sr.'s shoes if they cave without a knock down drag out fight.

[The Sisko]

I remember Bush Sr. getting eviscerated for compromising on taxes.

So just imagine what'll happen if the GOP is seen to be the cause of a U.S. Govt. default? Evisceration would probably be the starting point for the political bloodbath.

Personally I think the Dems should back the GOP into a corner and make them agree to actual tax increases, i.e. letting the Bush tax cuts expire in exchange for entitlement cuts. I'm unimpressed by the closing of loopholes since those can be quickly and easily replaced.

[mardi gras skin]

Personally I think the Dems should back the GOP into a corner and make them agree to actual tax increases, i.e. letting the Bush tax cuts expire in exchange for entitlement cuts. I'm unimpressed by the closing of loopholes since those can be quickly and easily replaced.

Demanding across the board tax creases would be a...unique political strategy.

[SnyderShrugged]

http://curiouscapitalist.blogs.time.com/2011/07/05/debt-ceiling-could-ron-pauls-plan-save-us-from-disaster-twice/

A unique, yet viable plan.

[Tulane Skins Fan]

http://curiouscapitalist.blogs.time.com/2011/07/05/debt-ceiling-could-ron-pauls-plan-save-us-from-disaster-twice/

A unique, yet viable plan.

Haven't clicked on it yet, but here are my expectations: Reduce all taxes to 5% of income. No deductions. Get rid of all government agencies. Go back to days of horse and buggy and everyone farms their own food. Then the farmer barters with the doc for health care, etc.

Ok, clicking in 3...2....

[After click]

1... Have the US Government default on purpose? Really?