What the White House Left on the Table
By NATE SILVERI wrote at length earlier Monday about why I think the proper characterization of the deal that President Obama struck with Republicans is “pretty bad” rather than “terrible.” (That’s from a Democratic point of view. For Republicans, I’d say the deal should be thought of as “quite good” rather than “awesome.”)
It seems as if the results of the House’s vote on Monday tend to back up that assertion. In the end, exactly half of the Democratic caucus members voted for the debt ceiling bill, which makes it hard to classify the deal as “terrible” from their point of view.
But almost three-quarters of Republicans voted in the affirmative. And even the Tea Party came around in the end. By 32-to-28, members of the Tea Party Caucus voted for the bill, despite earlier claims — which now look like a bluff — that they wouldn’t vote to raise the debt ceiling under any circumstances.
These results seem to suggest that Mr. Obama left something on the table. That is, Mr. Obama could have shifted the deal tangibly toward the left and still gotten a bill through without too much of a problem. For instance, even if all members of the Tea Party Caucus had voted against the bill, it would still have passed 237-to-193, and that’s with 95 Democrats voting against it.
Specifically, it seems likely that Mr. Obama could have gotten an extension of the payroll tax cut included in the bill, or unemployment benefits, either of which would have had a stimulative effect. Some Republicans would have complained that the new deal expanded rather than contracted the deficit in 2012, and Mr. Obama would have lost some of their votes. But this stimulus spending wouldn’t have overtly violated their highest-priority goals (no new taxes, and a dollar in spending cuts for every dollar in borrowing authority). And Mr. Obama, evidently, had a few Republican votes he could afford to lose.
With that payroll tax cut, the deal becomes a much easier sell to Democrats — and perhaps also to swing voters, particularly given that nobody spent much time during this debate talking about jobs. Plus, it would have improved growth in 2012 and, depending on how literally you take the economic models, improved Mr. Obama’s re-election chances.
No, we can’t know this for sure. Voting during roll calls can be tactical, and the results may have been skewed by the heartwarming and unexpected return of Representative Gabrielle Giffords to the House chamber. But this is at least a little bit more tangible than simply asserting that Mr. Obama did as well as he could under the circumstances.
It wouldn’t have been a great deal for Democrats — still no tax increases, still lots of spending cuts, still buying into Republicans’ premise that the debt ceiling is an appropriate vehicle for fiscal reform. But it would have been a fair one, and better than what Mr. Obama got.
The Fine Print on the Debt Deal
By NATE SILVERIf Democrats read the fine print on the debt deal struck by President Obama and Congressional leaders, they’ll find that it’s a little better than it appears at first glance.
That’s not to say that the deal is a good one for them. It concedes a lot to Republicans, and Democrats may be wondering why any of this was necessary in the first place. But the good news, relatively speaking, has to do with the timing and structure of the spending cuts contained in the deal.
First, the timing: the cuts are heavily back-loaded, so the deal is unlikely to have much direct effect on the economy in 2012.
The spending cuts will proceed in two stages. There is an initial round of about $1 trillion in cuts, which will be locked in place when (and if) the deal is signed by the president. Then there is an additional $1.5 trillion in cuts, which will go into effect if Congress is unable to agree to the recommendations of a bipartisan commission (or “Super Congress”) by the end of the year.
The first round of cuts include “only” about $22 billion in reductions in 2012 spending — the same as the bill proposed last week by Representative John A. Boehner, which provided some of the outlines for this deal. That would reduce 2012 G.D.P. by just 0.1 percent, other factors being equal.
The second and larger round of cuts, according to the White House’s summary of the deal, would not include any reductions to the fiscal year 2012 budget. Instead, those cuts would kick in during 2013 and last through 2022.
Congress could decide to accept the bipartisan commission’s recommendations, which would override the second round of cuts and identify some new mechanisms to provide for $1.5 trillion in deficit savings, although for reasons I will detail below, this is unlikely. And even if it did, one presumes that Congressional Democrats would insist that the new measures abide by the spirit of the original bill and back-load the cuts. Read more…


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