Where Are The Rational People In The Debt Ceiling Debate?

The participants in the debt negotiations are being led by constituencies that have little interest in compromise.

In a column out today at National Journal, Charlie Cook comes up with the best explanation I’ve seen so far for why the debt ceiling negotiations are floundering:

Republican members of Congress and presidential candidates are hearing almost exclusively from tea party activists and other vocal conservatives, who are saying, “Don’t do anything that would raise taxes or even close tax loopholes.” Democratic lawmakers are hearing from activists on the Left and their own constituencies, who are saying, “Any reduction of any kind in Social Security, Medicare, or Medicaid would be absolutely unacceptable.”

The bases on both sides view any deviation or compromise as blasphemy. The astute veteran political columnist Mark Shields likes to say that he would rather belong to a church that is seeking converts than one intent on driving out heretics. But that’s not the approach that many rank-and-file Republicans and Democrats in Congress are taking these days.

This observation comes on the same day that The Washington Post reports that the partisan divide over the debt ceiling has deepened over the past couple days:

Talks between President Obama and congressional Republicans grew increasingly contentious on Monday, as GOP leaders flatly rejected his call to raise taxes on the wealthy as part of a bipartisan agreement to restrain the nation’s mounting debt.

Dueling news conferences by Obama and House Speaker John A. Boehner (R-Ohio) served as a testy prelude to an afternoon bargaining session that only emphasized the partisan divide, according to people on both sides with knowledge of the closed-door discussions.

During the meeting, Obama challenged Boehner to buck the anti-tax hard-liners in his party, who, the president suggested, are blocking the path to a landmark compromise to reduce borrowing by as much as $4 trillion over the next decade. Boehner and House Majority Leader Eric Cantor (R-Va.) responded by urging Democrats to settle for a more modest reductions-only deal that would save $2.4 trillion but would not touch tax breaks for the nation’s richest households.

(…)

At a White House news conference hours earlier, a clearly exasperated Obama said he has “bent over backward” to meet Republican demands for sharp cuts in government spending, citing his offer to trim Social Security and Medicare benefits — an offer that has drawn howls from liberal Democrats. That offer included raising the Medicare eligibility age, said the official, who spoke on the condition of anonymity to discuss the talks.

Unless Republicans are willing to make the same ideological concession on taxes, Obama said, “I do not see a path to a deal.”

“We keep on talking about this stuff and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it,” Obama said. “I’m prepared to take significant heat from my party to get something done. And I expect the other side should be willing to do the same thing.”

Republicans fired back that they already are taking plenty of heat for considering an increase in the legal limit on the debt, which stands at a record $14.3 trillion. In a sign of deepening tensions, Boehner suggested that the only concession Obama should expect from Republicans is a vote to allow the Treasury to continue borrowing.

“Most Americans would say that a ‘balanced’ approach is a simple one: The administration gets its debt-limit increase, and the American people get their spending cuts and their reforms,” Boehner told reporters at a news conference before heading to the White House. “Adding tax increases to the equation doesn’t balance anything.”

Obama and Boehner took pains to express their admiration for each other, but the prickly rhetoric suggested that hope has faded for a far-reaching $4 trillion agreement. After a friendly game of golf and three weeks of secret talks, the two had hoped to forge a historic deal to tackle the biggest drivers of the debt, including health-care and retirement programs, military spending and an inefficient tax code.

However, when one reads the accounts of what occurred at yesterday’s meeting, it seems as though it isn’t really a conflict between Boehner and Obama that’s driving this right now:

Boehner hardly said a word in the meeting. His stance seems to be: if Cantor didn’t like the grand bargain, he’s welcome to negotiate one on his own. Republicans left the meeting noticeably subdued. Few had anything they wanted to say about it. And Cantor may have just jumped from the frying pan of Biden’s debt talks and into the fire of Obama’s. He has little experience hammering out legislative deals — particularly at this level. He wanted a smaller deal, and now Boehner’s sitting back and watching silently as Cantor flounders. A deal without at least some symbolic revenue increases, even if they’re offset with an Alternative Minimum Tax or another fix, cannot pass the Senate. Cantor is quickly learning that the purism that plays with the freshmen doesn’t work in the Oval Office. It will be interesting to see how long he lasts as the loudest negotiator, especially if the markets start to freak out. The Dow dropped nearly 200 points on Monday. Give it a week and we’ll be near TARP levels of panic.

There are other reports of tension between Cantor and Boehner, and when Cantor walked out of the Biden debt talks last month, there was some speculation that what he was really doing was throwing the negotiations to Boehner in order to force him to make the deal. The thing to keep in mind is that, although he’s been in Congress himself since 2001, Cantor is much closer to the GOP base and the Tea Party than Boehner is. Boehner has been around since 1985 and is much more comfortable with the dealmaking side of Congressional business than Cantor. In essence, then Cantor represents the base that Cook speaks of above and its his intransigence that is driving the GOP debate right now and it was reportedly his objections that were responsible for Boehner rejecting the “grand bargain” that he and President Obama had been discussing this past weekend. Based on the excerpt above, one could theorize that Boehner is giving Cantor some rope right now and waiting for him to hang himself so that he can step in finish the deal that he and the President had been talking about.

House Democrats, meanwhile, are engaging in their own intransigence with their insistence that neither Medicare or Social Security cuts be part of any deal to raise the debt ceiling.

Cook’s hypothesis that both sides in the negotiations are being driven primarily by their respective bases strikes me as largely accurate, and it provides a good answer to the questions raised by Robert Samuelson and my c0-blogger Steven Taylor about why the negotiations don’t seem to be getting anywhere. Republicans, especially in the House, are beholden to the “no tax increases” meme pushed by people like Grover Norquist, while Democrats are refusing to budge on anything that they can characterize as a “benefit” cut to Medicare, which happens to be one of the biggest line items on the Federal Budge and one which must be brought under control if we are ever to return to fiscal sanity.  More importantly, the fact that they are being driven by the base gives them the incentive to remain intransigent and engage in hyperbolic rhetoric about what the other side is proposing.

A deal will be made when the adults in the room finally take over and tell the base on both sides that they’re going to have to accept the fact that, in an era of divided government, they’re not going to get everything they want, and they’re going  to have to give in on something. Boehner pushing Cantor to the forefront of negotiations could be part of a strategy to bring that moment about, we’ll see. As the next few days unfold, however, remember one thing — most of what you’re hearing in public statements from both sides is posturing for the sake of the base, or a desire not to be seen as weak. What matters is what’s happening once the doors closed, and if the people in the room can figure out a way to deal with this issue rationally then we may just avoid a fiscal crisis that makes us look like history’s most technologically advanced Banana Republic.

Photo via The Washington Post

FILED UNDER: Barack Obama, Congress, Deficit and Debt, Politicians, US Politics, , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Moosebreath says:

    Yet another example of Doug ignoring reality to say a pox on both houses:

    From the quoted Washington Post article: “At a White House news conference hours earlier, a clearly exasperated Obama said he has “bent over backward” to meet Republican demands for sharp cuts in government spending, citing his offer to trim Social Security and Medicare benefits — an offer that has drawn howls from liberal Democrats. That offer included raising the Medicare eligibility age, said the official, who spoke on the condition of anonymity to discuss the talks.”

    From the deep recesses of one of Doug’s orifaces: “while Democrats are refusing to budge on anything that they can characterize as a “benefit” cut to Medicare”

    Your willingness to do backflips to avoid seeing that the Democrats have already compromised greatly on their basic principles does you zero credit.

  2. Doug — you mischaracterize the House Democratic position — no benefit cuts to Medicare/Social Security. That means no change in eligibility ages, no changes to co-pays etc. It does not mean changing payment formulas, it does not mean changing Medicare Part D rules to allow Medicare to use its market power to compete against private providers; it does not mean saying no to a public option on the exchanges which the CBO scored as saving 100+ billion over a decade. It does not mean strengthening IMAP, it does not mean saying no to pay for performance.

  3. Are you really quoting Time magazine as a reputable on the interpretation of these events? I read that article earlier and couldn’t help but laugh as Preidsnet Obama and even Joe Biden are presented as nothing more than honest brokers trying to the good work of the American people. Good God Mr. Mataconis.

    And how dare Republicans listen to their constituents? Amazing. Those darn Tea Partiers, if they would just shut up Obama could get what he wants, and he only wants what is good for America. And what’s with dropping Grover Norquist’s name into the middle of it. Some of us have an equal distaste for taxes, more spending and Grover Norquist.

    Ah, never mind.

  4. hey norm says:

    The President talking to CBS for an interview to air tonight (Tuesday):
    “…This is not just a matter of Social Security checks, these are veteran’s checks, these are folks on disability and their checks. There are about 70 million checks that go out each month. I can not guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it…”
    Check.

  5. David M says:

    Even if you accept the position that the Democratic base doesn’t want any cuts to SS / Medicare, there have been many reports that Obama is in fact negotiating on those items. So in reality the Democratic base is being ignored but not the GOP base, much to the detriment of the negotiations.

  6. hey norm says:

    I’m getting annoyed at this view that this is all symetrical…it isn’t.
    Democrats already took $500 billion in savings out of Medicare administration, so to say the left is unwilling to look at entitlements is absolutely baseless. And before the silly folk with tea bags dangling from their hats jump up and down and stomp their feet say that’s not a real number – Ryan took credit for the same savings in his Tea Stain Manifesto.
    Moreover the responses I have seen and heard, to extremely vague proposals, are more along the lines of “We’ll look at the details – but not if republicans aren’t willing to increase revenues.” On the off-chance a deal is made moderate dems will be on the bus and the base will get dragged along. Unfortunately there are no moderate Republicans. That’s call assymetry. Boehner tried to be reasonable – and got bitch-slapped by Cantor.
    Additionally the President is currently floating a 4:1 mix of cuts:revenue increases. If the so-called republicans were serious about debt reduction they would jump at this – the largest reduction in history. Sadly – they are not. They are only interested in protecting the tax status of their wealthiest donors.
    This Kibuki Theater is not symetrical by any stretch of the imagination.

  7. hey norm says:

    “…he only wants what is good for America…”
    The most fact based thing Austin has ever typed.

  8. lunaticllama says:

    This analysis completely ignores the fact that Republicans intentionally created this “crisis.” There is no precedent for tying anything to a debt ceiling increase. Republicans decided to go for deficit reduction, but now realize they don’t want to cut a deficit deal with Democrats.

    And as other people have noted, the pox-on-both-houses mentality does not account for how much more flexible Democrats are then Republicans. And after the breakdown last weekend, Republicans have shown that maintaining low levels of taxation for wealthy Americans and corporations is more important than deficit reduction. Regardless, the biggest problem with the pox-on-both-houses idea is that Republicans intentionally created this crisis for what seems now to be no reason. I guess they wanted us to be more like Europe with their debt crises.

  9. mantis says:

    Where Are The Rational People In The Debt Ceiling Debate?

    On the left.

    while Democrats are refusing to budge on anything that they can characterize as a “benefit” cut to Medicare, which happens to be one of the biggest line items on the Federal Budge and one which must be brought under control if we are ever to return to fiscal sanity.

    Fine. How do we fix Medicare? Single payer. Any other solution is just killing people to save money. Do you think any Republicans are open to the only real solution? Didn’t think so.

  10. WR says:

    It really doesn’t matter what anyone says here. In an hour, Doug will give us yet another “pox on both houses” post. Reality’s got nothing to do with it. Facts have nothing to do with it. It’s all he chooses to see.

  11. Are you kidding me? You think Obama is the adult in the room? The man is infantile. Where was all his supposed fiscal sanity in 2009? In 2010? For that matter, in 2007 or 2008, when he was voting present in the Senate or voting for every spending increase the Democrat Congress shoved through?

    Last February, Obama proposed a budget (in a speech, not an actual budget document, mind you) for which most optimistic assumptions added at least $600 billion of new debt every year for 10 years. It has been over two years since the federal government has had a budget, and during that entire time the Congress was controlled by Democrats.

    The fact is – and no amount of Obama hagiography by the left can hide it – that the annual deficits exploded beginning in 2007 when the Democrats controlled both houses. I do not defend G.W.B.’s fiscal record, but Obama makes Bush look like a piker. The graphs for federal deficits for the last 100 years, by administration, are here. See for yourself what I mean.

    Once upon a time a Democrat presidential nominee could stand before the American people and say, “”We are living on borrowed money and borrowed time. These deficits hike interest rates, clobber exports, stunt investment, kill jobs, undermine growth, cheat our kids and shrink our future.”

    Proof that a Democrat actually said that is here. But there is no one in the Democrat party with either the courage or conviction to say that now.

  12. michael reynolds says:

    Where Are The Rational People In The Debt Ceiling Debate?

    Answer: in the White House and in the Democratic Party.

    Yet another lame “pox on both” post based on sheer fantasy.

    I know you don’t want it to be the GOP’s fault. I know you can’t stand admitting that the Democrats — for whom you refuse to vote for reasons that remain obscure — are the rational adults. But that’s the truth.

    The conservatives are the crazy, we are the sane, everyone knows it, start dealing with reality rather than trying to justify your unrealistic world view. It’s not 20 years ago anymore. Life has moved on. The Democrats are not the tax-and-spend party anymore, and we haven’t been for a long time now.

  13. hey norm says:

    @ Sensing…
    Please show me where Obama voted “present” in the US Senate…seriously.
    Neve mind – let me help you.
    He never voted present in the US Senate because it’s not an option.
    He did vote present in the Illinois Legislature – one of three options. Important to note that he did so less often than the average amongst his colleagues.
    This is just another of the myths you absorb when you listen to the right-wing echo chamber. It’s like tax-cuts pay for themselves, or WMD in Iraq, or Gore said he invented the internet. It doesn’t matter that they are not true…Hannity and Limbaugh and the rest know you will believe whatever they say and repeat it verbatim. And yuo do.
    If your opinion is based upon factual inaccuracies – your opinion is…well, you know.

  14. There was an observation once, NRO IIRC, that any institution not explicitly conservative gets taken over by the Left eventually. OTB threads are now merely another verification of that observation. When I see Donald Sensing being effectively shut out I can feel a little more secure about having the right enemies.

  15. Steve Verdon says:

    Fine. How do we fix Medicare? Single payer.

    Medicare is single payer.

    The only solution regarding Medicare is changing the growth rate, that will likely mean less health care over all, when you get right down to it.

    As for the claims that the rational people are only on the Left I think that is a bit misleading. Sure Obama is willing to look at cuts to entitlement programs, but what about the rest of his party? Obama wont actually get a vote. He might be able to get some party discipline, but I have no idea how much. That is really the question…how will members of the Democratic Party in the House vote? If they dig in and wont vote for benefit cuts, then Obama’s posturing is empty.

  16. michael reynolds says:

    I do not like this down-voting of people because of their opinion.

    If a person is abusive, or spamming, that’s one thing. But the “like” “dislike” function should — iMO – be reserved for shutting down people who undermine debate, not people who disagree with the consensus.

    I don’t think it should be a “shout down” function.

  17. Steve Verdon says:

    Hmmm, this says the House Democrats don’t like Obama’s position. Maybe they’ll fall into line behind the President, but it seems there is some reason for Doug to make the claims he has. More here. President Obama gets no vote in the House of Representatives in case anyone forgot. And more here.

    Doesn’t fit with the narrative by Michael Reynolds, Mantis, Moosebreath, et. al.

  18. mattb says:

    @Charles…

    Thats ’cause RNO has teh realz conzervitizms…

    Or perhaps that’s because the current conservative contributors to OTB often fail to make coherent arguments.

    (Of course the word salad issue is at times not reserved just for the conservative commentators. Its that right now there are currently more articulate commentators on the left on OTB)

  19. Steve Verdon says:

    Michael,

    I hear you, but to tell the truth, if somebody has a hidden comment due to negative votes, that is one of the first I go to. Just curious what has people so ticked off. So, when it comes to me that is a sure fire way to get me to read it. :p

  20. hey norm says:

    @ Austin – look – Sensing was spewing factual inaccuracies. He started out by making an error (being generous) about Obama’s voting record. The he linked to cherry-picked data, in which the author shows that Bush spent more than Obama, but Sensing states the opposite.
    So if your point is that factual innacuracies get shut out – then yeah – as they should.

  21. hey norm says:

    I’m with M. Reynolds.
    Don’t see much positive out of the like/dislike feature.

  22. WR says:

    @hey norm: I admit I down vote sometimes, but I try to save it for when the commenter is spouting obvious lies — like “Obama voted present in the US Senate.”

  23. David M says:

    @Steve Verdon: Steve, even if Obama would have some difficulty getting Democratic votes for his proposals, it’s a completely different magnitude of problem on the GOP side with regard to revenue increases. When the Democratic negotiators start from the position that all spending should be increased in one area to offset cuts in other areas, then their level of irrationality will have reached parity with the Republicans.

  24. michael reynolds says:

    @Steve Verdon:

    70 Democrats signed a letter, that’s roughly a third of the caucus. Democrats generally have agreed the debt ceiling has to be raised — the position held by all rational people. The House Democratic leadership, while anxious to defend SS and Medicare, are not the leaders of their party, unlike Boehner and McConnell.

    A Democratic president and the entire Democratic leadership agrees we need to maintain the credit of the US and raise the debt ceiling. They agree major cuts are required. They agree that revenue needs to be increased.

    The Republican leaders apparently do not believe we need to maintain our creditworthiness. They agree major cuts should be made, but not if it means even one extra dollar cut from a rich man’s tax loophole. In short they are willing to burn the country’s economy down to maintain the privileges of a handful of rich people who have successfully gamed the system.

    We’re trying to save the country. The Republicans are trying to destroy Obama. In terms of rationality, there’s no contest.

  25. hey norm says:

    @ WR…
    I have not voted once since it started. If I can’t vote for myself…well what’s the point? Besides – I think Reynolds has beaten my best top score, so I’m bitter!!!
    Seriously – how about a “Report Comment” instead? That way anyone abusive or undermining the conversation will be brought to the attention of the web-gawds.

  26. Steve Verdon says:

    Okay so you both admit that there are irrational people on the Left, starting with Nancy Pelosi? Is that fair?

    Man this is like pulling teeth.

  27. David M says:

    @Steve Verdon: Might be a little bit of a strawman there, as no one is claiming there aren’t any on the left.

  28. Liberty60 says:

    @michael reynolds:

    I do not like this down-voting of people because of their opinion

    I come here specifically to engage and argue with conservatives- I get bored with listening to the amen chorus of my fellow libs.

  29. WR says:

    @hey norm: Fine with me. I wouldn’t mind if the whole voting thing went away. But this isn’t my site!

  30. WR says:

    @Liberty60: “I don’t like it when people don’t agree with me. I like a stimulating debate where we all think and say the same thing, right after Rush tells us what it is! Now that’s a discussion worth having!”

  31. Steve Verdon says:

    @David M:

    The question really boils down to, can Obama delivery 74 Dem votes, and can the Republicans provide at least 144 votes. These things are that easy to gauge. If the Republicans can get more votes, that means fewer Dem votes are needed, and same on the other side.

    Does anyone disagree that programs like Social Security and especially Medicare are on unsustainable trajectories? Admittedly we could probably deal with Social Security if it was the only program that was unsustainable. However, if we exempt it from cuts that means Medicare has to carry the brunt of the reductions which isn’t going to be easy and will really hurt those elderly who rely on it (which is a large percentage of them).

    As such, aren’t the 70 Democrats who are being obstinate being irrational, and since they are not supporting Obama’s plan it makes getting that plan passed even harder?

    At best we are arguing matters of degree here. Are the Democrats and Republicans acting stupidly? Sure. Are the Republicans being the worst of the two? Yeah sure, but the Democrats who are digging in on SS and Medicare are in a round about way helping them. Instead of marginalizing the more extreme Republicans they are actually bolstering their position, albeit indirectly.

    Here is my guess, the debt ceiling will be increased, the question is who blinks first. Neither side wants to confront a default/mess, but each side is waiting to see if the other blinks. Given that there is at least 16 days to go neither side is willing to blink yet.

  32. WR says:

    @WR: Hey, WR, that was a cheap shot and not germane to the conversation, especially since Liberty60 has actually been posting some really interesting comments elsewhere. The statutory three minute editing period has passed, and I can’t give myself a thumbs down on this one, but I invite everyone else to!

  33. michael reynolds says:

    @Steve Verdon:
    Steve, I’ve never denied that Democrats are also often irrational. Just as I’ve never denied that pre-Clinton they seemed to believe there was some kind of magic checking account that just automatically refilled itself.

    But since Reagan the GOP has also believed in magic. We’ve sobered up, but they still believe in magic. They think we can fight wars and never pay for them. They think if we cut taxes we’ll have more money. They think if billionaires get to keep an extra million that will mean more guys with jobs at Wendy’s.

    I’m not saying we never take a sip, but we are far more sober than we were, and far, far more sober than Republicans, who have simply abandoned reality.

    So we will make a deal. We are not the ones threatening to destroy the economy rather than close a tax loophole. That’s them.

    Add to this latest madness that this is a party obsessed with illegal immigration, hating on gays, secretly still angry about civil rights and thinks we need more torture.

    This isn’t one of those, “on the one hand,” and, “on the other hand,” situations. This is mental and moral collapse by one party, and only one party. Over the last 30 years or so we’ve gradually become more sane, and they have lost their freaking minds.

  34. john personna says:

    It is a strange construction: sure Obama is willing to go against his fringe, but since there is a fringe, Obama made no move.

    Weird.

  35. Eric Florack says:

    @Moosebreath:

    So, what are the specifics of the offer, then?
    Can you point them out to us?

  36. Eric Florack says:

    THe rational people are the ones who recall they were lied to several times when the Democrats promised cuts in the past.

  37. Console says:

    The debt ceiling debate is in and of itself irrational. Tying the risk of economic default and immediate catastrophe to the accomplishment of some long term and not really even significant reduction in the deficit is stupid enough. Why expect rationality from the negotiators?

  38. anjin-san says:

    Tomorrow, bit will get up and be able to make his living because of roads that are built and maintained by the government, and paid for by taxes.

    Then he will come home and post that the government is evil, that taxes are theft, and that those who pay them are slaves.

    The very model of the modern conservative. He wants the things the government does that benefit him, he just does not want to pay for them. The people that need things from government that don’t benefit him, why they can go to hell.

    Like George Harrison said “I, me, mine, I, me, mine, I, me, mine.

  39. Jay Tea says:

    I agree with Obama on this one.

    Senator Obama, that is. From 2006:

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

    That was when he voted AGAINST raising the debt ceiling to roughly 8.5 trillion. He subsequently didn’t vote on the raises to 9 trillion and 10 trillion respectively.

    Can we get rid of President Obama, and replace him with Senator Obama?

    J.

  40. anjin-san says:

    Senator Obama, that is. From 2006

    Umm, yea. That was before 8 years of the Bush admin left us with an economy on the verge of a depression. That sort of changed things.

  41. Stan says:

    @Steve Verdon: “The only solution regarding Medicare is changing the growth rate, that will likely mean less health care over all, when you get right down to it.”

    No, it means lower compensation for doctors, nurses, hospital administrators, and insurance company executives. That’s the way the rest of the OECD countries hold down their medical costs even though they get more medical care than we do. See “It’s the prices, stupid” at

    http://www.medscape.com/viewarticle/452954_5

  42. john personna says:

    Speaking of rational, interesting bit from Martin Wolf in the Financial times:

    The view of Republican hawks in the US and of German or Dutch hawks in Europe that the crisis has fiscal roots alone is wrong. Easy credit ends up in fiscal crises.

    US evidence is striking. Compare the forecasts for fiscal years 2010, 2011 and 2012 in the 2008 and 2012 presidential budgets, the first under George W. Bush shortly before the crisis and the second under Barack Obama well after it (see chart). The 2011 deficit was forecast in 2008 to be a mere $54bn (0.3 per cent of GDP). But in the 2012 budget, it is forecast to be $1,645bn (10.9 per cent of GDP). 58 per cent of this rise is due to unexpectedly low revenue and only 42 per cent due to a surge in spending, both of these changes mostly due to the financial crisis, not the modest stimulus package (about 6 per cent of GDP).

    Google “From Italy to the US, utopia vs reality” for access.

  43. john personna says:

    More:

    The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 per cent of GDP in 2011, far below their postwar average of close to 18 per cent. Individual income tax is forecast to be a mere 6.3 per cent of GDP in 2011. This non-American cannot understand what the fuss is about: in 1988, at the end of Ronald Reagan’s term, receipts were 18.2 per cent of GDP. Tax revenue has to rise substantially if the deficit is to close.

  44. Moosebreath says:

    Bithead,

    If you cannot read the papers to see what was in the package, I am not about to do your research for you.

  45. Rob in CT says:

    @Jay Tea:

    Obama scored a cheap political point with that, sure. It’s worth noting two things, though:

    1) His no vote had no consequences, and he knew it. Hence cheap points. The Democrats did not turn that debt ceiling vote into a huge crisis. They did some grandstanding, but ultimately did no harm. I’d guess that it was done routinely that way for some times by the opposition party. The present crisis is unprecedented, and is wholly the creation of the GOP.

    2) The economic situation was signficantly different then (though it was still BS of him to frame it like that). The economy had been doing well (or so it seemed, now we know it was largely a house of cards) and yet the government was running large deficits (which didn’t even account for the wars, since those were off-budget). That’s quite a bit different than the aftermath of the crash of ’08.

  46. Steve Verdon says:

    No, it means lower compensation for doctors, nurses, hospital administrators, and insurance company executives. That’s the way the rest of the OECD countries hold down their medical costs even though they get more medical care than we do. See “It’s the prices, stupid” at

    I have read it, and in the section on quantity and quality the authors point out that both could go down with lower prices. They might not, might even increase, but I’m skeptical of that.

  47. Tony says:

    @michael reynolds:

    What?! The democratic party isn’t the tax a spend party anymore?! Is your head completely in the sand or in some other dark place? The democrats have spent more in the past 3 years than ever before. The stall on the issue of the debt ceiling isn’t spending. The republicans are not arguing against raising the debt ceiling. They are drawing the line on raising taxes during (to quote Obama) “the worst financial crisis since the great depression”. Taxing companies and small business (yes, small business is the target, not jet owners) when unemployment is at 9.2% and climbing would be far more damaging to the economy than a down grade in the AAA bond rating.

    Dems aren’t tax and spend anymore? Get real dude!

  48. Tony says:

    @michael reynolds:
    You are dilusional. The liberals of today are sane?! Spending literally like there is no tomorrow on the backs of the tax payers is what the democrats have become famous for doing. They have broken all records in the past 3 years. The American people spoke loud and clear in the last election and our law makers had better hear the message if they want to keep thier jobs come next November. Sanity would be anyone who puts and hand up and shouts from the roof tops that the practice of living on a credit card has to end.