The Utterly Wrong Beltway Myth Driving the Debt Ceiling Insanity

On Monday night, Barack Obama painted the debt ceiling fight as a product of Republican extremism. He said that everyone in Washington agrees we need to enact deep and painful cuts, and that “the debate has centered around two different approaches. The first approach says, let's live within our means by making serious, historic cuts in government spending. Let's cut domestic spending to the lowest level it's been since Dwight Eisenhower was president.”

That, according to the president, is the “balanced,” Democratic approach – asking “everyone to give a little without requiring anyone to sacrifice too much.” But, “Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they'll vote to prevent America's first-ever default is if the rest of us agree to their deep, spending cuts-only approach.”

All of that, for better or worse, is accurate. But the surreal dance over raising the debt ceiling is not only a result of Republican intransigence. It is also the result of a bipartisan embrace of a fundamentally flawed reading of the current political climate -- an abiding belief that, rather than being confused about how we came to run today's high deficits, there exists a "silent majority" of Americans who hate government, who want nothing more than an opportunity to support politicians who favor deep cuts to the public sector, and who are appalled at the lack of "bipartisan cooperation" standing in the way. Unfortunately, Republicans stand to gain the most from that misunderstanding.

Obama gave the speech after the GOP's refusal to release the economy they hold hostage even after the Democrats capitulated entirely to all their demands for cuts. Over the weekend, Senate Majority Leader Harry Reid offered a package that would decrease spending by $2.7 trillion over the next decade, without any revenues increases, in exchange for raising the debt ceiling and avoiding default through the 2012 elections.

As the president noted, it's everything the GOP has asked for during the standoff. But they keep moving the goalposts. GOP leaders had previously opposed a short-term hike, arguing that it would cause “uncertainty” in the markets. So Speaker of the House John Boehner, R-Ohio, is rolling out a counter-proposal that would raise the debt ceiling by around 1 trillion – enough to keep the government funded through the beginning of next year – in exchange for a trillion in cuts, and then a 12-member, bipartisan “super-Congress” would come up with another round of deep cuts, and their recommendations would get an automatic up-or-down vote on the eve of an election year.

With offers on the table that fall well to the right of what even Republican voters want, why does the GOP refuse to accept victory? On its face, there are two reasons. First, Boehner doesn't have the votes within his own party – a group of House Republicans who are pushing the ludicrous “cut, cap and balance” bill have already rejected his counter-offer – and bringing any bill to the floor that might attract enough Democratic votes to push it over the top would surely cost him his speaker's gavel. Second, while Reid's proposal gives them everything they wanted in terms of cuts without revenues, it leaves Medicare intact. Republicans very much want concessions on Medicare in order to blunt Democratic attacks on incumbents for supporting Rep Paul Ryan's, R-Wisconsin, plan to privatize Medicare.

But the larger context in which this fight is playing out is important to understand. On the same day that Republicans rejected Reid's offer, New York Times columnist Tom Friedman penned his 1000th homage to a mythic creature: the centrist “swing voter” whose views line up remarkably well with those of the Washington establishment. Friedman calls them the “radical center,” and has long pined for a third party that would fight hard for their values – perhaps the most over-represented interests in Washington today.

The mythic swing voter is concerned about deficits, wants to see less spending and rejects the partisanship inherent in politics. Both parties have embraced the narrative that voters want to see public spending drastically reduced, despite the fact that the polls all show that while “cutting spending” is popular in the abstract, voters don't want to see any specific programs cut; the only roads toward reducing the deficit that voters favor are raising taxes on the wealthiest and reducing military spending significantly – two things that aren't on the table in the current debate.

You can't find a Republican in Washington today who doesn't insist that the American people gave them a mandate to force deep cuts in last year's midterm elections. That's par for the course, and entirely untrue, as I've noted before.

But the Washington Post reports that the narrative has also penetrated deeply into the administration's thinking. Obama's advisers are looking for a big deal – possibly to include cuts to Medicare and Social Security – because, according to the Post, it “would provide an enormous boost to his 2012 campaign.”

In particular, they want to preserve and improve the president’s standing among political independents, who abandoned Democrats in the 2010 midterm elections and who say reining in the nation’s debt is a high priority.

This is a belief that is more or less ubiquitous within the Washington Beltway, but it's entirely wrong. The data show that while the number of Americans who identify themselves as “independents” has grown significantly over the past two decades, all but a handful are in fact loyal to one party or another. And, as political scientist Alan Abromowitz notes, “these independent partisans are virtually indistinguishable from regular partisans in political outlook or behavior.”

It's true that the polls find “independents” swinging back and forth between the parties, but that's rarely a result of voters' loyalties shifting. Rather, it's a question of which independents are more likely to turn out and vote in any given election. The “lesson” that the administration appears to have learned from the 2010 midterms is wrong: voters didn't move to the right between 2008 and 2010; the Democratic base simply didn't turn out in the same numbers as did highly motivated Republican voters and Republican-leaning independents.

And while GOP over-reach has led to a backlash among much of the electorate that may well cost them in 2012, that reality represents a particular hazard for the Democrats. In a highly polarized environment, motivating the party's base is the key to winning elections, and while the Right broadly approves of the Republicans' intractable stance on the debt ceiling negotiations, a good chunk of the Democratic base is outraged by Obama's willingness not only to concede to Republican demands on spending generally, but specifically to put cuts to Social Security and Medicare on the table. The most recent CNN poll found a sharp drop in support for the president among self-identified liberals – the people most likely to man phone-banks, canvas and send money to Democratic candidates. 

So, in their belief that there is some large “radical center” within the electorate who are ready to line up behind a candidate who will slash their retirement benefits in order to finance tax breaks for the wealthy, it's conceivable that Obama could win against a weak GOP candidate while dooming dozens of Democrats in down-ballot races.

Of course, Obama and the Democrats have only themselves to blame for making the strategic decision to tackle the deficit in the middle of a crushing economic downturn. They could have pointed out that 75 percent of the public debt incurred since Clinton left the country a budget surplus was run up by George W. Bush. They could have made the case that taking money out of consumer's pockets when demand is in a trough is the worst thing to do. They could have pointed out that the debt ceiling was raised seven times without incident under Bush, and must be raised now to accommodate every budget proposal under the sun -- including Paul Ryan's hard-right budget -- and refused to offer a single concession in exchange for doing so.

In other words, they could have tried to shape the discourse in a way that would be conducive to progressive policy outcomes. But they chose instead to try to thread an impossible needle; they embraced an inherently conservative view of the deficit, and then tried to argue that they'd reduce it slightly less painfully than their Republican counterparts would. “It is clear we must enter an era of austerity; to reduce the deficit through shared sacrifice,” said House Minority Leader Nancy Pelosi, D-California, this week.

Why is it clear that we have to swallow some “austerity”? Because, as Obama said in his high-profile deficit speech back in April, "The greatest long-term threat to America’s national security is America’s debt."


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