issue: Politics

Wingnut Watch: Romney’s Perry Problem

Posted on by The Progressive Policy Institute

In the traditionally sluggish Dog Days of late August (interrupted, of course, on the East Coast by the occasional earthquake or hurricane), wingnuts, like other Americans, have been a bit distracted from politics. But those answering the phone calls of ever-vigilant pollsters are building a wave of buzz for new presidential candidate Rick Perry for which there is little recent precedent. Perhaps it is just a reflection of long-simmering unhappiness with the candidate field, but in survey after survey, national and local, Perry is quickly moving ahead of not only the Star of Ames Michele Bachmann, but also long-time front-runner Mitt Romney. Five national polls taken since August 15 show Perry up over Romney by margins ranging from six to thirteen points. Two polls of Iowa Republicans taken during the same period show Perry edging out Bachmann, even though the Texan skipped the Iowa GOP Straw Poll and has appeared in the state exactly once. Two new polls in South Carolina show Perry trouncing the field; one has Perry up 23 points over Romney and 29 points over Bachmann. Even in Mitt Romney’s stronghold of New Hampshire, Perry is rapidly moving into serious contention. Where available, poll internals typically show Perry racing past Bachmann among Tea Party conservatives, and holding his own against Romney with more conventional conservatives and moderates alike.

It’s unclear at this point whether the various controversies already surrounding Perry—from his published views on the New Deal and the Great Society to questions about his intelligence—are being brushed off by Republican voters or simply haven’t sunk in. But the reining question in the conservative chattering classes is whether his rivals—and particularly Mitt Romney—should be panicking or beginning to go negative on him, or at least reconsidering their strategies.

The thinking in RomneyLand, it is being reported, is that Perry’s surge in the polls is likely to abate somewhat on its own, and that MSM scrutiny of the Texan will also take a toll. Perry is also gaffe-prone, and doesn’t have a reputation as a particularly good debater (there will be three televised candidate debates in September alone). The main trouble for Team Romney, however, is strategic timing. One nightmare scenario is that Perry will trounce the field in Iowa, giving him enough of a bounce to run a strong second in New Hampshire and then build up an invincible head of steam going into South Carolina and then other southern states. Uncertainty over the primary calendar is a big issue as well. If a Romney-friendly state like Michigan manages to move up to the early stages of the contest as it did in 2008, he can perhaps stick to his original game-plan. But if, say, Georgia and Florida wind up holding primaries the week after South Carolina, then the risk of a Perry sweep would go up considerably. In theory, the Perry-Bachmann competition over the hard-core conservative vote in Iowa could create an opening for Romney in that state; a Romney victory upset there followed by a win in New Hampshire could leave him in a very good position. But this “quick kill” approach is obviously the strategy that blew up on Romney—and for that matter, Hillary Clinton—in 2008.

Romney has a number of more immediate trials to overcome during the Labor Day weekend. He’s the featured speaker at a Tea Party Express event in New Hampshire, a development that has spurred a formal protest by the rival tea party group FreedomWorks, which has long harbored an animus towards Romney.

The same weekend all the major candidates will face an early and potentially difficult test: a command-performance inquisition in South Carolina by a conservative group that has joined forces with ideological commissar Jim DeMint to quiz the hopefuls on various matters of conservative orthodoxy. Most of the media attention on the event has focused on Romney’s initial refusal to participate on specious-sounding scheduling grounds, followed by his sudden decision yesterday that he would, after all, come to Columbia to pay homage to DeMint. But there is another subplot to the story that could become important: one of DeMint’s co-inquisitors will be Iowa Rep. Steve King, who has yet to make a presidential endorsement despite his close relationship with Michele Bachmann. King rivals Tom Tancredo as a right-wing firebrand on the immigration issue, where Rick Perry’s record is significantly out of line with prevailing conservative views. It wouldn’t be that surprising to see King hold the Texan’s feet to the fire on this issue and then sadly decide he has to back someone else back home in Iowa.

Speaking of Labor Day weekend, and of Iowa, there’s all sorts of confusion surrounding the long-anticipated appearance of Sarah Palin at a big Tea Party gathering just outside of Des Moines on Saturday. This event was where a lot of Palin-watchers originally thought she might either launch or definitively foreswear a presidential campaign. Team Palin has thrown cold water on that assumption (saying the deadline for an announcement of her plans is the end of September, not Labor Day), and now, her appearance is “on hold” due to conflicts with local Tea Party planners. One report is that Palin and her staff are fed up with the vacillation of event organizers over a speaking role—offered, withdrawn, and then reoffered—for former Delaware Senate nominee Christine O’Donnell, who is fresh from one of the more disastrous book launch tours in recent memory. In any event, Palin will do at least one public event in Iowa this weekend, followed quickly by another in New Hampshire. But the ranks of those expecting her to run for president in 2012 are thinning rapidly.

Photo credit: Aaron Webb

Defense’s Careful Contribution to Deficit Reduction

Posted on by The Progressive Policy Institute

PPI’s Will Marshall and Jim Arkedis have a piece in the Detroit News this morning on the defense budget. Here’s an excerpt:

Recently, Republican and Democratic leaders of Congress unveiled their choices to head the so-called “super committee” entrusted with forging a long-term agreement to reduce the nation’s deficit.

The stakes are high for the Department of Defense. Should the super committee fail to propose legislation, or a divided Congress fail to pass a compromise, the deal to avert national default would automatically trigger a $500 billion cut from the Pentagon’s budget. Added to the $350 billion already cut by the deal, the Pentagon’s budget could shrink by $850 trillion over 10 years.

If the Department of Defense is forced to make such a substantial contribution to deficit reduction, one point is clear: Our political leaders remain unwilling to tackle the national deficit’s two main cost drivers — entitlements and taxes.

Nothing is set in stone, but the congressional super committee now faces two crucial questions: Should defense contribute more toward deficit reduction? And, if so, how do we save?

Our answers are that defense can contribute, but carefully.

Continue reading in the Detroit News by clicking here.

Photo credit: Brave Heart.

Strategic diplomacy needed on Israel

Posted on by The Progressive Policy Institute

PPI Senior Fellow Josh Block writes in Politico:

Seven months ago, Secretary of State Hillary Clinton expressed strong U.S. opposition to the Palestinians’ unilateral statehood bid at the United Nations. One month ago, Congress threatened to cut off U.S. aid for the Palestinian Authority if it carried on. Yet President Mahmoud Abbas is still moving full-speed ahead to September with his U.N. initiative.

The Obama administration and Congress have rightfully taken a firm stance against unilateral recognition of a Palestinian State. But with every sign indicating that the Palestinian leadership won’t be changing course, it’s time for the White House to assert a more active approach to blunt the potential impact of this collision.

The United States must begin a vigorous public effort to lobby other countries, large and small, to oppose the Palestinian effort and join President Barack Obama in pressuring the PA to call it off. Acting decisively now, we can persuade the Palestinians not to press ahead with this damaging course – which undermines our quest for peace and risks anti-Israel terrorism and violence on the Palestinian side, when carelessly raised hopes are dashed.

The good news is that the administration has plenty of opportunities to speak out. Last week, a delegation of 18 Washington-based ambassadors from four continents took part in a fact-finding mission to Israel and the West Bank. They were not from major international players but smaller countries like Albania and Macedonia in the Balkans and St. Lucia and Grenada in the Caribbean.

The administration should start by inviting these 18 ambassadors to the White House and directly appealing that their countries vote against the Palestinian bid. In this game by numbers, the smaller countries—which account for a sizable portion of the U.N. General Assembly—can make a meaningful difference.

This can underscore for the Palestinians and the international community the peace is the goal — not just statehood — and there are no short cuts to negotiation.

Read the rest at Politico here.

Wingnut Watch: Perry’s Tightrope

Posted on by The Progressive Policy Institute

Rick PerryWith the end of the brief, Weekly Standard-driven boomlet for a Paul Ryan presidential candidacy, it’s increasingly certain that the 2012 GOP presidential field is set. Yes, there are still some observers who believe (with hope or fear) that Sarah Palin is going to announce a 2012 bid in Iowa at a big Tea Party rally over the Labor Day weekend. But Team Palin’s abrasive push back against a Karl Rove prediction that this would happen is a pretty clear indicator that it won’t, unless St. Joan of the Tundra really enjoys misdirection.

So there are by most accounts three viable candidates—Perry, Romney and Bachmann—with Ron Paul formidable enough to wreak some occasional havoc, and perhaps someone else—most likely Rick Santorum, possibly Herman Cain—having enough juice in Iowa to affect other candidates’ performances at the margins. Perry is the “it” candidate of the moment, and fans of Bachmann are praying that her candidacy can survive his current surge in the national and early-state polls.

Meanwhile, Perry himself is negotiating a pretty interesting tightrope that shows both the power and perils of wingnuttery. On the one hand, it’s important that he provide a credible challenge to Bachmann for the support of serious Tea Party and Christian Right activists; perhaps his camp even thinks they can drive her from the race before voting begins by pushing down her poll numbers and drying up her money sources. This would explain the savagely carnivorous nature of his early speeches, and certain other maneuvers like his decision to sign onto the Susan B. Anthony List’s highly prescriptive anti-abortion pledge, which Mitt Romney declined to do. That pledge, it should be noted, would prohibit Perry from appointing his 2008 presidential favorite, Rudy Giuliani, to any cabinet post with an influence on abortion policy.

But at the same time, Perry is having some problems generated by wingnut-pleasing passages in his 2010 book, Fed Up, most notably an expression of interest in repealing the Sixteenth Amendment (which made possible the establishment of a federal income tax), and exceedingly hostile remarks about the constitutionality and morality of Social Security. Indeed, he’s already back-peddling pretty fast on Social Security, as reported by the Wall Street Journal:

His communications director, Ray Sullivan, said [last] Thursday that he had “never heard” the governor suggest the program was unconstitutional. Not only that, Mr. Sullivan said, but “Fed Up!” is not meant to reflect the governor’s current views on how to fix the program.

Perry is also drawing unfriendly mainstream media attention for more conventional (among today’s conservatives, at least) sentiments denying man-made global climate change and treating evolution as a mere egghead theory. But one Perry controversy also shows how thoroughly previously unconventional views have become common among GOP elites. His attack on Federal Reserve Board Chairman Ben Bernancke made some Republican opinion-leaders nervous on grounds that a potential POTUS should not be assaulting the independence of the Fed. Hardly anyone questioned the underlying policy stance Perry embraced, suggesting a Ron-Paul-style deflationary monetary policy in the midst of a deep recession.

As Perry’s audition as a possible chief executive continues, the broader question is whether the specific views of Republicans matter a whole lot to anyone outside the hothouse atmosphere of conservative activists. A new Gallup survey testing the incumbent against Romney, Perry, Paul and Bachmann among registered voters showed remarkably little variation. Romney, predictably, did best, edging Obama 48-46. But Gallup also showed Perry tied with Obama at 47-47, with Paul only trailing by two points (47-45) and Bachmann only trailing by four (48-44).

Those who wonder why the Obama re-election team is reportedly planning a scorched-earth campaign criticizing the eventual Republican nominee should stare at those numbers a while. A “comparative” campaign is not simply essential in order to prevent the election from becoming a referendum on life in the Obama Era at a time when “wrong-track” sentiments are extraordinarily high. Perry, Paul and Bachmann, at least, offer a treasure trove of oppo research opportunities that any Democratic candidate would be foolish not to exploit.

But it’s equally interesting to wonder if findings like Gallup’s will convince conservative activists there is no electoral risk attached to their own choice of a candidate. If so—if, in other words, “electability” is not really a factor in so polarized an electorate–you can expect them to indulge themselves ideologically without much in the way of inhibition.

Photo credit: Gage Skidmore

Score One for NATO

Posted on by The Progressive Policy Institute

Libyan rebels—the “rats” as Muammar Qaddafi calls them—are closing in on the eccentric dictator. Although a hundred things could go wrong in post-Qaddafi Libya, Americans should always welcome a tyrant’s fall.

Rather than ponder what comes next, the ever-parochial U.S. media is fixated on whether Qaddafi’s ouster will boost President Obama’s sagging poll ratings. Thus do all those ordinary Libyans who gave and risked their lives to liberate themselves get reduced to bit players in Washington’s never ending political melodrama.

Obama deserves some credit for lending a hand, but he wasn’t the instigator of the Libyan intervention. That honor goes to France and Britain, who were most determined to prevent Qaddafi from carrying out threats to obliterate regime opponents. Already mired in two wars, the United States was happy to fall in behind its allies, and after some opening salvos, content itself with mainly providing logistical support.

So credit NATO as well as the rebels if Qaddafi is toppled or flees. Assuming Libya does not dissolve into Iraq-style chaos, either outcome would be a big morale boost to an alliance that hasn’t gotten much respect lately. NATO’s decision to enforce a “no fly, no drive” zone in Libya was widely panned as ineffectual, a half measure that would make Europeans feel good but only prolong the violence and end at best in stalemate. On the other side, non-interventionists of the left and right complained that NATO has used its U.N. mandate to protect civilians as cover for waging an offensive war on the regime.

Well, that’s true—NATO’s real, if undeclared, goal has been regime change. Airstrikes on regime ground forces first stopped Qaddafi’s drive on the rebel stronghold of Benghazi, and have played a critical role in the rebels’ counterattack since then. A heavy NATO bombardment paved the way for their dramatic entry into Tripoli over the weekend. Maybe the Chinese or Russians are scandalized by NATO’s loose construction of the U.N. resolution, but strictly playing defense would undoubtedly have led to more bloodshed.

NATO’s success may or may not breathe new life into the creaky old alliance, which suffers from a cloudy rationale and steep cuts in European defense spending. It would, however, challenge assumptions about the supposed folly of using limited force in situations where the strategic stakes don’t justify “all-in” intervention. Foreign policy realists recoil at the idea of limited war— recall the Powell Doctrine, which says go in big or don’t go in at all—but in fact such interventions have become the norm since the end of World War II. None of the NATO allies has a compelling strategic interest in what happens in Libya, but there as elsewhere a strong humanitarian case for intervention could be made.

If Libya turns out well, it will be another step toward entrenching the “responsibility to protect” as a new global norm. But isn’t this a slippery slope? If limited war worked to prevent massacres in Libya, don’t we have a moral obligation to intervene next in Syria, whose thuggish dictator has killed close to 2,000 civilians over the last five months?

Well, no. International politics, like domestic politics, is the art of the possible. Each case is unique and requires its own careful balancing of prudential and moral considerations. Given Libya’s relative backwardness and Qaddafi’s political isolation, the risks of Western military intervention there are less than in Syria. Call it opportunism if you like, but it beats the perverse logic of denying anyone help because we can’t help everyone.

The most persuasive objections to the Libyan intervention have always turned on the question of what comes after Qaddafi. Have we opened the door to radical Islamists, as many U.S. conservatives fear? Can the National Transitional Council (NTC) established by the rebels last February, and united mostly by hatred of Qaddafi, sustain the support of a fragmented, tribal society? Will a rural country without a large, educated middle class be able to establish a stable, representative and effective government?

We’ll see. But having abetted the NTC’s victory, the NATO allies should have considerable leverage over the course of events there, especially if they are willing to follow military with economic and political support. In any event, Qaddafi’s imminent fall will likely invigorate the Arab spring and encourage a tougher regional and international response to Syrian dictator Basher al Asad’s depredations in Syria.

That alone would be a solid return on NATO’s modest investment in helping Libyans free themselves from a mad tyrant.

Photo credit: Defence Images

Wingnut Watch: The GOP’s ‘Movement Conservative’ Conquest Achieved

Posted on by The Progressive Policy Institute

Last week was a pretty good week for hard-core conservative ideologues in terms of their domination of the Republican Party. In the Fox News/Washington Examiner presidential candidates’ debate on Thursday night, every single would-be president on the stage—even Jon Huntsman—rejected a hypothetical deficit reduction deal involving a 10-1 ratio of spending cuts to tax increases. At the same event, an extended exchange in which Tim Pawlenty went after Michele Bachmann for being a windy bomb-thrower who had never actually been able to accomplish anything in public life went pretty well for the windy bomb-thrower. Meanwhile, the discussion of cultural issues featured differences of opinion that ranged from hard-core opposition to same-sex marriage (with the exception of the pariah Huntsman) and abortion to hard-core opposition to same-sex marriage and abortion enshrined in the U.S. Constitution.

At the Iowa GOP Straw Poll on Saturday, over half the votes were cast for two candidates generally considered to be minor fringe characters in the House Republican Caucus until quite recently, Michele Bachmann and Ron Paul. Tim Pawlenty, who began his national political career calling for a Republican Party that would be amenable to the views and practical needs of Sam’s Club shoppers, ended his audition for Electable Conservative Alternative to Mitt Romney with an ignominious third-place finish. Given his world-class organization in Iowa, T-Paw’s poor showing in this test of organizing strength indicated his failure to make the sale to serious conservatives, and he dropped out of the race the very next morning. Other than Bachmann and Paul, the candidate with the most to boast about on Saturday was Rick Santorum, who managed to get past Herman Cain to finish fourth and keep alive a campaign focused almost entirely on representing the most extreme right-wing cultural views (Santorum’s big moment in the Thursday debate was probably his passionate defense of a ban on abortions where the woman in question had been raped).

Bachmann’s narrow win over Paul in the Straw Poll was significant in Wingnut World for three reasons. First, it confirmed Paul’s continued marginalization in the GOP because of his highly unorthodox views on foreign policy and defense (in the debate, Paul spent an extraordinary amount of time defending Iran’s pursuit of nuclear weapons, and went all Chomsky in attacking the CIA’s meddling in Iran in the 1950s, not a major concern of conservative Republicans then or now). Second, it lifted Bachmann into the top tier of candidates moving towards the actual delegate-selection contests next year. And third, it confirmed the relevance of wingnut-friendly Iowa in the nominating process; a Paul win would have called that relevance into question.

Meanwhile, down in South Carolina, the long-awaited announcement of Rick Perry’s presidential candidacy further tilted the field to the right. His speech, delivered at the annual gathering of devotees of the fervent take-no-prisoners conservative website RedState.com, was a masterpiece of the rawest ideological red meat. Perhaps the most significant moment was when Perry slipped into a tirade about high taxes a nasty comment about the injustice of low-to-moderate-income Americans owing no federal income taxes while “we” are expected to pay more. The desire to raise taxes on the poor is one of the more ironic preoccupations of Tea Party activists, reflecting the reverse class warfare sentiments made so plain in the foundational “rant” by Rick Santelli that launched their movement back in 2009.

Bachmann and Perry, both major figures in the iconography of both the Tea Party Movement and the Christian Right, now represent two-thirds of the viable Republican presidential field for 2012. Realization of that fact has some of the more Establishment-minded Republicans a bit panicked. The New York Times columnist Ross Douthat looked at the field on Sunday and didn’t like what he saw:

No one doubts Romney’s intelligence or competence, but he has managed to run for president for almost five years without taking a single courageous or even remotely interesting position. The thinking person’s case for Romney, murmured by many of his backers, amounts to this: Vote for Mitt, you know he doesn’t believe a word he says.

But his phoniness would remain a weakness even if he won the presidency. He’s a born compromiser pretending to be a hard-liner, and the hard-liners know it—which means he would enter the Oval Office with conservative knives already sharpened and ready for his back.

Rick Perry has many of the qualities that Romney seems to lack: backbone, core convictions, a killer instinct and a primal understanding of the right-wing electorate. He also has the better story….

What Perry doesn’t have, though, is the kind of moderate facade that Americans look for in their presidents. He’s the conservative id made flesh, with none of the postpartisan/uniter-not-a-divider spirit that successful national politicians usually cultivate.

And Douthat didn’t even address Bachmann’s even more strident stance. He concluded his column with that most thread-bare of Republicans cries for help: a plea to Chris Christie to repudiate months of disavowals of candidacy by jumping into the race. Other elite malcontents are promoting a candidacy by the very epitome of conservative fiscal orthodoxy, Paul Ryan, a more reliable figure than Romney who is also more seemly than Perry.

Aside from these desperate measures to add to the field the big debate in the chattering classes right now about the Republican nominating contest is whether it’s effectively a Romney-Perry contest or if Bachmann can remain viable by winning Iowa. Either way, the pressure will remain on Romney to perpetually prove his conservative bona fides, and the most GOP “moderates” can hope for, as Douthat observes, is that he’s lying through his teeth.

Any doubt that the “movement conservative” conquest of the GOP has now been consummated should pretty much be consigned to the trash bin. The main question now is whether conservatives prefer their presidential candidate to be cool and shifty, or raw and shrill.

Photo credit: DonkeyHotey

Political Memo: The “Centrist Premium”: The High Cost of Moderation

Posted on by The Progressive Policy Institute

For most of the last 30 years, self-described ideological moderates have comprised a plurality of the American electorate. While the share of moderates has dropped slightly in recent years, 38 percent of voters in 2010 still described themselves as such.

In Congress, on the other hand, moderates are decidedly—and increasingly—a minority. Among Democrats, the moderate New Democrat and Blue Dog Coalitions suffered heavy losses among their respective memberships in 2010 and are now outnumbered by their liberal counterparts in the Progressive Caucus. Among Republicans, moderate members are an even rarer species. In fact, there are only 33 members of the moderate Republican Main Street Partnership who are not also part of the 177-member conservative Republican Study Committee.

Analysts have offered up structural explanations—such as gerrymandering and the current political primary system—for why there aren’t more moderates in elected office to reflect America’s true ideological complexion. This paper looks at another structural disadvantage that moderate candidates and incumbents face: campaign finance.

For better or for worse, financing plays a major role in a candidate’s viability and success. Financing buys the ads and ability to raise a candidate’s profile, counter the opposition and turn out the vote. A hefty campaign war chest can be enough in itself to discourage potential rivals. According to the Federal Election Commission, House Congressional races cost a grand total of nearly $1.1 billion in 2010—or $2.5 million per seat. Moreover, elections are becoming increasingly expensive. The spending in 2010 was nearly double the $563 million spent just a decade ago in 2000.

Read the entire memo.

Did the Debt Deal Open the Door to a Third Party?

Posted on by The Progressive Policy Institute

Most political reporters have chalked up the debt ceiling deal as a “W” for House Republicans and a humiliating loss for President Obama. But when we consult actual voters, the political scorecard looks quite different.

Americans, says veteran pollster Stan Greenberg, aren’t just irritated by the games politicians play, they are “explosively angry” at Washington. There’s no love lost for either party, but Congressional Republicans now actually rank lowest in public esteem. The only “winners” in the debt limit fiasco were potential third party candidates.

According to Greenberg’s latest Democracy Corps survey, a majority of Americans (53 percent) say they would consider voting for a third party candidate. That could just be a momentary measure of public disgust, but it also points to the first serious opening for a challenge to the two-party duopoly since Obama took office. And when you break down the numbers by party affiliation, or lack of it, things start to get interesting.

By a whopping, 45-point margin (70-25) independents are the most receptive to a third party candidate. These voters swung decisively toward Obama in 2008, cementing his majority, but they are utterly up for grabs in 2012.

Democrats, on the other hand, are the most solid in their partisan commitment. By 57-39 percent, they reject the idea of a third party challenge. The big surprise is how open Republicans seem to be to bolting from their party’s ticket. A substantial majority (58-38) say they are willing to consider a third party alternative, with 38 percent “strongly” willing.

It’s hard to know exactly what to make of this. Maybe these numbers register tepid enthusiasm for GOP front runner Mitt Romney (the poll was taken before Michele Bachmann won Iowa’s straw poll and Rick Perry threw his Stetson in the ring). It’s possible GOP voters just don’t see the candidate yet who can unhorse Barack Obama. But since there aren’t many GOP moderates left, there’s another, more chilling possibility: Maybe the current crop of GOP hopefuls aren’t conservative enough for a sizeable chunk of the Republican base.

In any case, what Greenberg describes as the “unsettled” nature of Republicans’ partisan attachment could be good news for Obama and the Democrats. It could portend renegade candidacies that splinter conservatives; it’s not difficult, for example, to imagine Ron Paul running on a libertarian line if he doesn’t win the GOP nomination.

On the other hand, the public’s increasingly sour mood toward politics as usual has thrown the spotlight on a new political venture called Americans Elect. It’s a non-profit (full disclosure: I’ve volunteered to help) that is organizing a virtual or online nominating convention next June. The basic idea is to use the internet and social media to bypass the duopoly and give voters who don’t feel at home in either party a way to directly chose their own presidential ticket and platform.

Americans Elect isn’t a third party but is offering what it describes as a “second process” for choosing the next president. And it’s working to ensure that whoever wins the internet-based convention will be guaranteed ballot access in all 50 states.

I’ll have more to say about this intriguing experiment in empowering voters later. For now, it’s enough to say that the debt debacle has whetted Americans’ appetite for something completely different in national politics – and political entrepreneurs are responding.

The Consumption Economy Is Dying-Let it Die

Posted on by The Progressive Policy Institute

With the stock market plunging, we’ve heard plenty of warnings that a “pullback” in consumer spending could trigger another recession. Let me suggest an alternative. The last thing this economy needs is more debt-fueled consumer spending which mainly creates jobs overseas. Instead, we should be focused on boosting investment in physical, human, and knowledge capital.

Now, who am I to be dissing the American consumer? Don’t I know that consumer spending “accounts for 70% of economic activity,” as many economic reporters have written in recent weeks? (Indeed, if I have to read that number in another story, I might be forced to go all Office Space on a piece of expensive consumer electronics.)

It’s true that consumer spending creates economic activity. But it’s not true that all that economic activity is in the United States. Many of the consumer goods we buy are imported. If you buy a shirt or television, you are stimulating manufacturing jobs in China, or perhaps Mexico. You aren’t doing as much to stimulate jobs at home.

This is true across the economy, but a helpful example is the clothing, or apparel, industry. Since the fourth quarter of 2007, clothing purchases by consumers have increased by about 5% in real terms, according to the latest figures from the Bureau of Economic Analysis. Over roughly the same period, shipments from U.S. apparel factories fell by 31% in real terms, while apparel jobs fell by 26%. The winner: Factories in China and elsewhere making clothes for the U.S. market.

It’s not just clothes, of course. In many stores, it’s getting harder and harder to even find products that say “Made in the U.S.A.” That’s one reason why much of the economic stimulus escaped out the back door in the form of imports.

Now, this doesn’t mean imports are evil. When we buy goods from overseas, we generate some jobs in retail and wholesale. If you buy a shirt for cheaper than it would otherwise be if we made it here, you have more money left over to buy other things, like health care.

But the big problem with consumer spending is that if you buy a product made outside the U.S., it doesn’t encourage domestic investment. And that’s what we really need. In the past, a dollar spent on a shirt would start a virtuous circle, as the clothing factory expanded, adding more workers and buying new sewing machines. That investment in new machines, in turn, would create more business for the sewing machine company, who would then hire more workers who would need new shirts.

Today, the cycle is happening overseas. We have a genuine investment shortfall in the U.S., where both business and government are way below historical norms for spending on equipment, buildings, software, and infrastructure.

Consider this: Personal consumption in real terms is 11% below its long-term trend, based on the 1997-2007 period. That sounds bad enough. But nondefense government investment is 17% below its long term trend, as state and local governments cut back. And counting all private sector enterprises, nonnresidential investment is a stunning 25% below its long-term trend.

nonresidential investment.png

These figures are devastating for our economic future, both short and long-term. Low investment means fewer jobs and weaker productivity growth. The longer the investment shortfall lasts, the more damage it does. However, we’re not going to close the shortfall by encouraging debt-financed consumer spending. Instead, we need to redirect resources to productive investment.

Here’s a couple of examples of what we can do. First, I like to see the Obama administration publicly identify and applaud “investment heroes”: the top companies who are investing domestically in either physical capital or knowledge capital (R&D, design, and other forms of intellectual investment). The bully pulpit of the president can be a wonderful tool, if it directed toward the right cause, and this would send a signal of the importance of investment.

Second, Obama should come out in favor of countercyclical regulatory policy. We should accelerate the regulatory approval process during periods of economic weakness to boost corporate investment, just as countercyclical monetary and fiscal policy have been used to stimulate consumer spending. This is a message that has to be sent from the top to encourage regulators to consider the effects of their action on the economy.
The potential list of policies to boost investment goes on and on, including targeted infrastructure spending, as I described in my previous Atlantic piece, and perhaps a rationalization of the corporate tax code.

But what’s important is that none of these policies is about boosting consumer spending. If we want Americans to prosper, we need consumer spending to become less important to the economy, not more. In the end, we need a production economy, not a consumption economy.

The piece was originally written for the Atlantic.

Photo credit: Grace

Wingnut Watch: Wisconsin Recall Relief and Iowa Showdown

Posted on by The Progressive Policy Institute

There is joy and relief in Wingnut World today thanks to the narrow failure of Wisconsin Democrats to win enough recall elections to take over the state’s Senate chamber (needing three new seats out of the six being contested, Democrats won two and lost the crucial third by just over 2,000 votes). Though this was a very unusual election in which vast quantities of last-minute conservative money (a total of $8 million was spent in the pivotal district, a bit more than the average state legislative race) probably made the difference, you can expect many jabberers from the Right to call this the final, definitive victory of the people over “labor bosses” determined to keep Scott Walker from giving job-creators the encouragement they need to invest in the state. Next week’s recall elections for two Democratic senators, which are not expected to go well for Republicans, probably won’t get as much national attention. Democrats will then have a tough decision to make about whether to seek a recall of Walker next year. But overall, the main importance of the Wisconsin struggle is that it will likely become a sort of laboratory for what the contending parties—and their ideological allies—will do nationally in 2012.

Aside from Wisconsin, and the continued preparatory skirmishing over the budget timeline set out in the August 1 debt limit, there are two main preoccupations among conservative activists and talkers. One is the war of interpretation over economic developments, including the threat of a double-dip recession, the Standard & Poor’s downgrading of its rating for federal bonds, and the extreme instability of U.S. and global stock markets. So far few, if any, conservatives are bending their general line on the ontological necessity of sharp and immediate federal spending cuts and radical deficit reduction measures in the face of poor economic growth indicators. For example, conservatives have shown no signs of interest in the president’s call for extension of the payroll tax cuts agreed to last December. Presidential candidate Michele Bachmann gets points for audacious consistency in arguing that the bond downgrading, explained by S&P as in no small part attributable to pessimism about future debt limit agreements because of Republican fanaticism on taxes, was actually caused by the debt limit agreement itself.

The second preoccupation in Wingnut World, as in the broader world of political junkies, is with the developments in the Republican presidential race that will unfold over the next few days. In Iowa, a presidential candidate debate on Thursday will immediately be followed by Saturday’s State Republican Party straw poll in Ames. The debate, sponsored by Fox News and the conservative Washington Examiner, will include not only the candidates competing in the Straw Poll, but also Mitt Romney, who is not, and could therefore be the target of zingers from rivals desperately trying to create some turnout-generating buzz in Ames.

In terms of what is likely to happen at the Straw Poll, there is a general consensus that Tim Pawlenty has the best organization but little enthusiasm; Michele Bachmann has the most enthusiasm but a questionable organization; Rick Santorum could well surprise people by doing better than Herman Cain; and Ron Paul, with the right combination of committed supporters and superior organization, could win the whole thing if turnout is not very high. Both Pawlenty and Bachmann really need a win in Ames. But it’s Pawlenty who needs it the most, having focused on Iowa for many months and positioned himself to become the “electable conservative alternative to Mitt Romney” down the road. His limited financial means and terrible poll standings across the country—and the impending entry of another “electable conservative alternative to Mitt Romney,” Rick Perry—could mean curtains if he doesn’t pull off the Straw Poll victory.

Speaking of Perry, he’s apparently going to announce or at least semi-announce his candidacy in South Carolina in the friendly confines of the annual get-together of Erick Erickson’s Red State community. The fact that his speech in Charleston occurs the very same day as the Straw Poll has caused some angst among Iowa Republicans, who view it as an effort to horn in on their media attention. So it’s not surprising Perry is planning to scurry up to Iowa (to Bachmann’s original home town of Waterloo) on Sunday. From Perry’s point of view, a Paul win in Ames, damaging Bachmann and perhaps finishing off T-Paw, and making the entire exercise (which he skipped) otherwise irrelevant, would be ideal. But even before announcing, Perry has managed to vault himself into the top tier of candidates, essentially succeeding in taking over T-Paw’s spot as the putative “unity candidate” between the electability-challenged Bachmann and the ideologically-challenged Romney. That’s quite a feat for a guy who keeps flip-flopping on hot-button social issues; has gotten dangerously cozy with religious extremists; has a habit of startling his fellow-conservatives with stunts like his 2008 championship of Rudy Guiliani; and has never been terribly popular in his own state.

Photo credit: WordShore.

STATEMENT: PPI Warns of Rigid Ideologues on Supercommittee

Posted on by The Progressive Policy Institute

PRESS CONTACT: Steven Chlapecka – schlapecka@ppionline.org, T: 202.525.3931

WASHINGTON D.C. –PPI issued the following statement on the new congressional “supercommittee”:

“The composition of the congressional supercommittee gives leaders of the Senate and House of Representatives a unique opportunity to forge a bipartisan plan for deficit reduction. PPI encourages both Democratic and Republican congressional leadership to appoint pragmatic members and give them the political flexibility needed to make difficult sacrifices that put our country’s future before partisan interest.

“If the supercommittee is composed of rigid ideologues who staunchly refuse to compromise on increased tax revenues or reformed entitlement programs, this week’s legislation will trigger unnecessary cuts to discretionary and defense spending. PPI fears these draconian cuts would further weaken our economy, sacrifice overdue investments in infrastructure and education, and cripple our military. Failure to compromise on the deficit’s biggest drivers–entitlements and taxes–should not jeopardize these national priorities.”

Wingnut Watch: Pivoting to Ames

Posted on by The Progressive Policy Institute

Formally, at least, Wingnut World was divided over the big votes earlier this week on the debt limit increase “compromise” package. Even as conservative blogs (generally) urged a “no” vote, with varying degrees of heat, House Republicans approved the bill by a robust 174-66 margin. The House Tea Party Caucus even favored it 33-29, though the major “splits” were less ideological than institutional; virtually anyone with a connection to the House GOP leadership or in a senior committee position voted “yea.”

But in the immediate wake of the vote, conservatives seem to have united in a strategy of utilizing the “deal” to plot an incessant, scorched-earth campaign for more spending cuts, and particularly an assault on entitlements. The deal certainly does provide many opportunities for additional fights: an appropriations battle prior to the end of the fiscal year (less than two months from now), which will almost certainly involve another effort to shut down the government; a “disapproval” vote for the president’s scheduled second-stage increase in the debt limit, which will probably occur in early October; the “debt committee” struggle over additional deficit reduction measures in November, which will occur against the background of pending automatic spending cuts that will occur in December if no action is taken; and then a longer-term fight over tax policy in 2012 in anticipation of the expiration of the Bush tax cuts at the end of that year.

While many wingnuts are relishing these battles, they will involve some intra-conservative tensions, especially in terms of the priority assigned to protection of defense spending and avoidance of revenue increases, and the relative emphasis placed on entitlements cuts as opposed to even deeper discretionary spending cuts than are already baked into the cake in the debt limit deal. On the former front, it’s worth noting that three presidential candidates who opposed the deal—Mitt Romney, Tim Pawlenty and Michele Bachmann—all cited fears of defense cuts as a factor. Efforts to resolve the conflict between defense hawks and anti-tax militants will probably push conservatives into the perilous territory of insisting on major cuts in Social Security, Medicare benefits and Medicaid. The programs are all protected in the “deal” from automatic cuts and the cuts themselves are unpopular and reinforce Democratic attacks on earlier Republican support for Paul Ryan’s radical Medicare and Medicaid proposals. Indeed, one of the major conservative grievances about what is otherwise a pretty solid victory for their cause is that the “deal” did not provide bipartisan cover for significant changes in the big entitlement programs.

All these issues, of course, will be problematic for the GOP presidential candidates, for whom the schedule of regular fiscal battles through the nominating process and into the general election campaign, will represent at best a major distraction, and at worst a long series of right-wing litmus tests in which there is only one right answer. Without question, this scenario will make it hard for any eventual nominee to “pivot” to a swing-voter friendly general election strategy.

At the moment, though, the would-be 45th presidents have other, more immediate, fish to fry. The candidates competing in the August 13 Iowa GOP Straw Poll are moving into the pre-event mobilization phase, buying tickets for anyone they think will vote for them in Ames that day, gassing up the vans and buses, planning entertainment for attendees, and managing expectations. The big question according to most handicappers is whether Pawlenty’s statewide organization can overcome Bachmann’s enthusiasm and momentum. There’s some talk that Ron Paul could sneak past both Minnesotans and pull off an upset. Rick Santorum’s organizational efforts could well push him past Herman Cain, who does a lot better in the polls but hasn’t spent much time in the state.

Meanwhile, a candidate who is not competing in Ames but is expected by most observers to announce his candidacy soon afterwards, Rick Perry, is having some issues with his outreach to the Christian Right. After last week’s conspicuous Perry flip-flop towards support for a federal constitutional amendment banning gay marriage, he’s now executed a similar maneuver on abortion, eschewing earlier statements in favor of state control of that subject and endorsing a federal constitutional ban. Additionally, there are signs that the big prayer rally he is sponsoring in Houston this weekend could have an attendance problem. A spokesman for the event, however, had this to say:

We are not really concerned with the quantity of people that come. It’s frankly more about the powerful event that will speak to those who do come. It’s never been about the numbers.

That’s probably code for what matters to Team Perry–who is on the podium representing important Christian Right factions, not who is in the seats taking in the show. They are basically props.

Photo Credit: Gage Skidmore

Wingnut Watch: Jim DeMint’s Filibuster, T-Paw and Bachmann’s Catfight.

Posted on by The Progressive Policy Institute

Like most politically active Americans, the residents of Wingnut World are heavily focused on the debt limit negotiations. Unlike many politically active Americans, hard-core conservatives by and large are just fine with a failure to reach any agreement. In some cases, it’s because they don’t buy the idea that failure to raise the debt limit will cause a default on federal government obligations. The “Full Faith and Credit Act”, introduced some time back by Sen. Pat Toomey (R-Club for Growth) and backed by most Tea Party groups, is designed to bolster that case by directing the Treasury to pay creditors, the armed services, and Social Security recipients first if the debt limit is reached (this approach, of dubious legality, would virtually guarantee a major shutdown of unprotected federal programs).

Then there are those conservatives who don’t necessarily dispute that a debt limit increase is necessary to avoid a default, or that a default would produce economic havoc, but nonetheless argue that cutting federal spending, taxes and debt is more important (economically and morally) in the long run. Thus, they are adamantly opposed to any deal that doesn’t meet the politically impossible “Cut, Cap and Balance” template. This is the official position of the 183 conservative organizations, including those that have signed onto the “Cut, Cap and Balance” Pledge, along with nine presidential candidates (ten if you count likely candidate Rick Perry), 12 senators and 39 House Members. There is no deal anywhere in the works that these folks can support without subjecting themselves to charges of hypocrisy and betrayal. And the senators among them—including wingnut Big Dog Jim DeMint—have regularly threatened a filibuster against any deal they don’t like, which would produce highly dangerous delays even if it is not backed by sufficient votes to thwart the majority.

Outside this circle of solemn oaths to wreck the national economy if it’s necessary to pursue their ideological agenda, conservatives vary in what they might consider acceptable, with some focused on the precise extent of the concessions that might be wrung from the administration and congressional Democrats, and some standing with Senate Minority Leader Mitch McConnell in making political point-scoring against the administration the top priority. Virtually no conservatives have conceded the possibility of a deal including revenue measures that aren’t pared with tax rate cuts. And on top of everything else, profound institutional rivalries between House and Senate Republicans that have already become a problem in coordinating GOP strategy will make expeditious final action difficult. It’s going to be a very long week.

Meanwhile, on the presidential campaign trail, the rivalry between those Minnesota twins, Michele Bachmann and Tim Pawlenty, has been heating up. T-Paw has recently taken several shots at Bachmann’s record in Congress—and lack of executive experience—along with making what looked to be a thinly veiled reference to her medical condition as a possible problem (he later flatly stated he had never seen Bachmann suffer from any incapacity in fulfilling her duties). Bachmann fired back harshly with a denunciation of Pawlenty’s earlier positions on health reform, climate change, and TARP, suggesting he had a lot in common with Barack Obama.

The knife-fight reflects the fact that Pawlenty is fighting for his political life in Iowa, and can ill afford to lose badly to Bachmann at the August 13 Iowa GOP Straw Poll. But both Minnesotans are increasingly laboring under the tall shadow of Texas Governor Rick Perry, who is reportedly 99% sure to announce a candidacy next month. Already in the double-digits in national and some state polls (a statute that poor T-Paw has yet to reach after months of campaigning), Perry probably benefitted from the decision of the Iowa GOP to keep him off the Straw Poll ballot, which means he doesn’t have to rush his announcement and won’t suffer from a poor showing in Ames. But Perry also courted controversy on the Right the other day by expressing indifference to New York’s recent legalization of same-sex marriage on states’ rights grounds:

“Our friends in New York six weeks ago passed a statute that said marriage can be between two people of the same sex. And you know what? That’s New York, and that’s their business, and that’s fine with me,” he said to applause from several hundred GOP donors in Aspen, Colo. “That is their call. If you believe in the 10th Amendment, stay out of their business.”

This comment immediately attracted criticism from Christian Right leaders, including Gary Bauer and Iowa kingmaker Bob Vander Plaats, who don’t think their “marriage is between a man and a woman” stance is a matter of state preference any more than individual preference. Perry’s stance, and the casual attitude he conveyed in talking about it, could give Bachmann fresh traction in her struggle to compete with the Texan for Christian Right support.

No Bargain for America

Posted on by The Progressive Policy Institute

When you compromise between a good plan and a bad plan, you get a less good plan. So what happens when you compromise between two bad plans? We’re about to find out, as Congress this week tries to reconcile deficit reduction blueprints drawn up by House Speaker John Boehner and Senate Majority Leader Harry Reid.

That we are now reduced to fallback House and Senate plans reflects the failure of the nation’s political leadership to rise to the occasion and forge a common approach to solving the debt crisis. The road not taken was the “grand bargain” every serious budget analyst knows is substantively and politically the only way to control the debt: trade more tax revenues for cuts in the unsustainable growth of entitlement spending.

While it’s easy to assume a posture of Olympian detachment and blame both sides for this failure of nerve, it’s wrong. The grand bargain died because House Republicans killed it. As President Obama said last night, it was scuttled by the “ideological rigidity” of Tea Party extremists who are trying to dictate national fiscal policy from the House.

Recall that once it was clear that he couldn’t get a “clean” bill raising the debt limit, President Obama decided to go big. That is, he pushed for a big debt reduction package of about $4 trillion, which would stabilize and eventually shrink the debt. That idea appealed to Boehner – at first. But when House GOP freshmen made it clear they would not vote to raise revenues, insisting that our massive deficits be closed through spending cuts alone, Boehner walked away from talks with the President. Not once, but twice.

As liberals ruefully noted, the House GOP’s zero-concessions approach contrasted sharply with Obama’s pliability. First he agreed to trillions of dollars of domestic spending cuts. Then he offered to put entitlements on the table, causing conniptions among the “progressives” who oppose long-overdue reforms in Medicare, Medicaid and Social Security. The president endorsed a package that was 3-1 spending cuts over tax revenues. Rather than accept it and declare victory, conservatives demanded unconditional surrender.

So now the spotlight shifts to the Boehner and Reid plans. Both fall well short of what the country needs. Boehner calls for a two-step process: First, Congress would cap discretionary spending and raise the debt ceiling by $1 trillion. Then a bicameral joint committee would be charged with finding another $1.8 trillion in savings. If Congress approves the second tranche, it would lift the debt ceiling by the same amount.

The Reid bill also would cut discretionary spending by nearly $3 trillion over the next decade, and leave revenues untouched. But as critics have rightly pointed out, that includes savings from military spending as the U.S. interventions in Iraq and Afghanistan wind down that have been accounted for already. Nonetheless, Obama last night endorsed Reid’s approach, which has the virtue of extending the debt ceiling until after the next presidential election.

Neither bill, of course, offers a permanent solution to the debt crisis. It’s not even clear that each could pass its respective House of Congress. It’s not hard to imagine Tea Party types balking because the bill doesn’t cut deeply enough, or because they’d rather force the country into default as a way of defunding federal programs. Some Senate liberals are chafing over Reid’s approach, which does not ask the rich to pay higher taxes or even close tax loopholes, thereby putting the entire burden of debt reduction on domestic spending.

In the end, as everyone expects, some kind of package will be cobbled together to avoid a prolonged default. But that means the whole sorry spectacle, replete with dogmatic posturing and politically evasive behavior will drag on into next year.

Photo Credit: Robert Reed Daly

Wingnut Watch: Cut, Cap, Balance, Perry.

Posted on by The Progressive Policy Institute

It’s a High Noon moment in Wingnut World, as conservatives do everything possible to sabotage a deal to increase the debt limit even as their congressional leaders negotiate behind the scenes to make a deal possible. Yesterday’s near-party-line vote in the House passing the “Cut, Cap, Balance Act” represented a particularly vivid demonstration of conservative inflexibility and its grip on the GOP. CCB would write directly into the U.S. Constitution the Right’s current contention that fiscal problems are always and invariably the result of excessive spending, and that a fixed, ideal ratio between spending and GDP can be deduced and legislated forever.

But extreme as the CCB exercise appeared in terms of all precedent, from the perspective of many conservative activists it was a bit of a wimpy compromise. CCB suggests, after all, there is a circumstance—an insanely remote circumstance, to be sure—under which a debt limit increase would be appropriate. That’s offensive to those who earlier staked out a “just say no” position Indeed, two of the nine votes cast by House Republicans against the CCB bill were from presidential candidates Michele Bachmann and Ron Paul. Bachmann had just, earlier this week, become the ninth candidate (everyone in the race other than heresiarch Jon Huntsman) to sign the Cut-Cap-Balance Pledge, after adding a proviso that she wouldn’t support a debt limit increase until such time as the Affordable Care Act of 2010 is repealed.

With CCB going nowhere in the Senate, Wingnuts now have at least a few days to fulminate against, and then to oppose, any actual debt limit deal. Their public rationales for obstructionism vary: Many conservatives are default denialists, who claim there are actually no significant economic consequences to a failed debt limit increase because the feds will figure out some way to pay creditors until something can be worked out. Others are what might be called bullies-and-bluffers, who are convinced (like some of their brethren on the Left) that the president and congressional Democrats will always and invariably surrender in any negotiations on any subject, making the maximum hard line the appropriate GOP starting point. And still others profess to believe that excessive federal spending—and/or the continued existence of entitlements like Social Security, Medicare and Medicaid—is the real threat to the economy and indeed to human liberty, making some short-term global economic collapse a small price to pay for a return to the lost Eden of the Coolidge Administration.

If, of course, a deal is struck and somehow can be maneuvered through Congress with just enough Republican votes to obtain a majority, we’ll see a whole new cycle of recriminations against this fresh “betrayal” by “RINOs”, complete with threats of primary challenges and maybe even third parties. That any such deal will almost certainly involve unprecedented Democratic concessions on spending, bipartisan “cover” for unpopular changes in entitlements, and abandonment of longstanding Democratic demands for higher taxes on the wealthy, won’t cut much ice on the Right.

As the countdown to default continues in Washington, two very different countdowns are underway on the presidential campaign trail: the countdown to the first real contest of the cycle, the August 13 Iowa GOP Straw Poll, and the countdown to Texas Gov. Rick Perry’s decision on whether to join the race.

Michele Bachmann continues to be the favorite to win the Straw Poll; she’s using her hard-line position on the debt limit to maximum advantage in Iowa, making it the subject of her first statewide TV ad (entitled “Courage”). But she’s now undergoing the first real rough patch of intense media scrutiny and personal questions, some undoubtedly inspired by her opponents. At present, the chattering classes are buzzing over anonymous claims that she is frequently incapacitated by migraine headaches and/or treatment for that condition.

Meanwhile, speculation mounts that Perry will soon jump in (though it’s no more definitive than earlier claims that Haley Barbour and Mitch Daniels were minutes away from candidacy). The implications of a Perry run depend on how you see his appeal. Some observers appear to think that the combination of his fundraising prowess, his Tea Party connections, and the “story” of Texas’ economic success, is simply unbeatable. The Hill’s Christian Heinze, for example, who is following the race full-time, appears to think Perry would almost immediately create a one-on-one battle for the nomination with Mitt Romney as Tea Partiers abandoned Bachmann and Cain for the pretty-boy Texan. But as Heinze himself notes, some New Hampshire Tea Folk, however, are raising questions about Perry’s chronic resistance to anti-immigration laws and rhetoric (a smart stance in Texas, but not necessarily elsewhere) and his staunch support for Rudy Giuliani in 2008. And Texans do not quite seem to share the national conservative belief they are living in an economic paradise engineered by Perry’s determination to give corporate executives absolutely everything they want.

If Perry does run—before or after his August 6 prayer-a-thon event in Houston that is certain to raise some questions about his relationship with the theocratic wing of conservative evangelicalism—he will face an immediate strategic decision about whether to plunge into the Iowa Caucus campaign full-bore (it’s already a bit late for a Straw Poll bid by Perry, though the Iowa GOP could put him on the ballot for the event), or instead lay a trap in South Carolina for whoever wins Iowa and New Hampshire (say, Bachmann and Romney). A complicating factor for a Dixiefied strategy by Perry is that wingnut kingmaker Sen. Jim DeMint has successfully convinced most Palmetto State pols and donors to hold off on any candidate endorsements or financial commitments until after Labor Day, apparently to increase his own leverage over the field. Leave it to virulently anti-union South Carolina Republicans to make Labor Day a signpost for keeping rightward ideological pressure on their party and its presidential field.

Photo credit: Bonzo McGrue

Balanced Budget Amendment: A Gimmicky Disaster-in-Waiting.

Posted on by The Progressive Policy Institute

By refusing to budge on tax revenues, House Republicans have blown a rare chance to get Democrats to swallow trillions of dollars in federal budget cuts. As New York Times columnist David Brooks notes in a shrewd piece today, cuts of such magnitude would have provoked a rancorous split between President Obama and liberals.

Instead, Republicans have opted for ideological purity, including today’s purely symbolic vote on a balanced budget amendment that isn’t going anywhere.

The Balanced Budget Amendment (BBA) is an almost perfect embodiment of the contemporary GOP’s gimmicky approach to governing. It’s an uncomplicated way to convey toughness, and it allows conservatives to drape themselves in the mantle of fiscal responsibility without taking the heat for cutting specific programs. And like many of the faux solutions to which Republicans seem fatally attracted, it would damage our economy.

A balanced budget amendment would handcuff the federal government in times of emergency. Backers say the rule could be waived during recessions, but it’s never clear until after when recessions begin and end. Since most of the states have balanced budget mandates, only Washington can spend at the right time and on a scale sufficient to exert counter-cyclical pressure during downturns. The federal government’s superior resources and borrowing capacity make it in effect the nation’s fiscal reserve.

Republicans almost rammed through a BBA in 1997. In the years that followed, the Clinton administration produced balanced budgets the old-fashioned way, by cutting actual programs and making trade-offs among competing public priorities.

Nonetheless, House Republicans once again claim that only a Constitutional amendment can force Congress to do its fiscal duty. Their “Cut, Cap and Balance” plan not only would bar budget deficits, but would also limit federal spending to 18% of economic output, two points below the average of the past several decades.

In other words, it would force massively disruptive cuts in all federal spending, from Medicare and Social Security to the Pentagon and domestic programs. Not even Budget Committee Chairman Paul Ryan, the GOP’s uber fiscal hawk, goes this far.

At the same time, the proposed amendment would make it well-nigh impossible to raise taxes, which would require a two-thirds vote in the House and the Senate. It’s a formula for rigidity at best and fiscal paralysis at worst. It would invite judicial interference in a power the Constitution unambiguously delegates to Congress – the power of the purse – and narrow the scope of democratic decision-making.

So why are House Republicans pushing it now? Because they know that, in the end, at least some House Republicans will have to vote to raise the debt limit to avert an economic calamity. They want the political cover of having voted for a “permanent” solution to the debt crisis – the BBA – to shield them from the Tea Party’s wrath.

Senate Democrats of course aren’t about to let Republicans write their economic ideology into the nation’s fundamental law, and President Obama has threatened a veto. Still, it’d be a relief if Republicans could find ways to score political points with their base that don’t injure our economy — either by plunging the nation into default, or enshrining archaic notions of a feeble national government in the U.S. Constitution.

Photo Credit: Common Pixels