Tuesday, April 19, 2011

The Hammer's grand compromise


Patrick_L said...

I'm glad the Hammer is arguing that Republicans should accept revenue increases as part of deficit reduction- it's the only way a bipartisan (i.e. viable) agreement can be reached. This type of agreement is really essential for our nation's fiscal health, because it allows for significant and sustainable deficit reduction (which partisan approaches don’t achieve because they only rely on one policy lever). That's what all of the fiscal commissions have recognized, and what the "Gang of Six" is struggling to achieve (Each day I make a wish they succeed). Hopefully more conservative commentators push Republicans to accept revenue increases for the greater good- the pressing need for deficit reduction.

TJE said...


Patrick_L said...

nothing about Obama's speech changed anything. Their are just huge political differences between the political parties. Nothing Obama said or did is going to worsen those differences. People have said similar things about Ryan's approach- that now House Republicans are onto an approach, they aren't going to be willing to move on any "Gang of Six," bipartisan Senate ideas.

The lesson to take away from Republican whining is that they need to "grow a pair," "man-up," or in the spirit of Sarah Palin- "fight like a girl."

Republicans are saying they want an adult conversation. An adult conversation occurs between ADULTS. Like all political leaders in this country, they need to start acting like adults.

TJE said...

"Didn't change anything" Not exactly high praise for presidential leadership.

Patrick_L said...

You expect Obama to give a speech that will magically eliminate or reduce serious and substantial party differences?

It sounds like maybe you actually believe in Obama's "hope" and "change" abilities.

TJE said...

Mr. L, you cynic!

TJE said...

PS. A bit more candor and detail would have been helpful. Many of your points about Ryan plan are well taken. But you seem to be giving the President something of a free pass.

Patrick_L said...

Thoughts on Obama's approach
1) We need more revenues than we can get from just allowing the Bush tax cuts for the wealthy to expire. I've talked about this before. We should broaden the base and clean the code by eliminating most tax expenditures, particularly deductions. Obama was right, and it was a positive step, for him to say we should tackle this area. However, it would have been nice if he had been more specific- my thoughts: phase out/cap/heavily reduce benefits/alter mortgage deduction interest, phase out (pretty quickly) the health insurance deduction, reform other elements. On tax reform, Obama gets more points than Ryan for pointing out deficit reduction will need to include revenue increases. He gets low points for doing this approach by just sticking to just high-income tax increases. He needs to get off that ridiculous campaign promise. He gets no points, like Ryan, for not being specific about what deductions he would target.

2) In some sense, Obama is trying to lower health care costs more than the original Ryan-Rivlin proposal would have allowed for/hoped for. That’s tricky- and the IPAB isn’t necessarily a politically feasible approach to achieving these savings, even if they are possible in the short-run. There are other options, and I would support some program/benefit changes, even to current beneficiaries. But there is a limit to how much savings we can get from this.

3) Obama could go further on defense (Bowles-Simpson did for instance, and Rivlin-Domenici went even further).

4) On non-security discretionary spending, we could get more savings. However, Ryan’s proposal is extreme. I don’t think the answer lies halfway inbetween, but we will probably end up somewhere’s inbetween (hopefully closer to Obama’s position, which is closer to the deficit reduction panels’ levels). I’d score Obama here higher than Ryan, but not by much. Ryan loses points because his cuts would likely cause economic contraction in the short-run due to their size.

5) Like Ryan, no points for failing to tackle Social Security. It’s an easy area for reform through a mix of benefit cuts and dedicated revenue increases, as well as other structural changes.

6) In general, Ryan gets more deficit reduction than Obama. However, both don’t get as much deficit reduction as I’d like because the approaches are either unbalanced (Ryan) or inadequate in scope (Obama).

7) I would appreciate more specific proposals from Obama, though it's important to note that even Paul Ryan was lacking in many details.

TJE said...


Patrick_L said...

Yes, Obama- like all politicians, including Paul Ryan, exaggerates things and flubs on the numbers. (Though you'll notice everything was either an exaggeration so het got the numbers largely right, or he didn't add enough caveats to his statements. ex: he accurately could have said "a voucher program that leaves FUTURE seniors at the mercy of the insurance industry."

A pox on both their houses. With my personality, I stridently dislike all politicians attempts to deceive people or play off the public's ignorance. They especially like to fudge the numbers a little to get better sound bytes. Unfortunately these people are politicians, so I'm not expecting any radical improvment any time soon. Ryan's budget also made multiple mistakes and deceptive number presentations.

Two wrongs obviously don't make a right- they just make everyone wrong.