Dec 14, 2010
One of the things that makes the Washington budget hard to follow is that there are multiple procedural votes, any one of which can hamper a plan, well before anything actually becomes final. The tax cut compromise is like that, getting past a Senate vote yesterday and facing another today. The consensus seems to be it’ll pass the Senate, but may face a rougher ride in the House.
Also getting a lot of attention in today’s headlines: the federal court ruling striking down part of the health care reform law. On this issue as well there’s a lot of legal wrangling yet to happen before the law’s fate is finally settled. Not many commentators are linking the ruling to the budget, but the connection is very real: We can’t control our national debt in the long run without controlling health care costs, which are driving up spending on Medicare and Medicaid. If the Obama health care plan is struck down or repealed, we won’t be able to just go back to the status quo – we’d have to come up with something else.
The Public: Bipartisan on the Tax Plan, Anyway
Two new surveys suggest the public backs the compromise plan on the Bush tax cuts and unemployment insurance with surprising bipartisan support, even if it increases the federal deficit. The Pew Research Center finds 60 percent in favor, with “virtually no partisan differences in opinions.”
“Nearly half (48%) say the agreement will help the economy, while just 29% think it will hurt the economy. Opinions are similar about the personal impact of the deal: Nearly twice as many say the agreement will help (47%) rather than hurt (25%) people like themselves.
However, far more people say the agreement on tax cuts and unemployment benefits will hurt (46%), rather than help (26%) the federal budget deficit. Opinions about the impact of the agreement – like views of the deal itself – show little difference across parties.”
A Washington Post/ABC survey also finds a solid majority (69 percent) in favor with bipartisan support, but the survey authors also say:
“The high bipartisan support for the package masks more tepid public approval for some of the main components of the agreement that comes before a key Senate vote Monday afternoon.
A slender 11 percent of those polled back all four of the deal’s primary tax provisions: an across-the-board extension of Bush-era tax cuts, additional jobless benefits, a payroll tax holiday and a $5 million threshold for inheritance taxes. Just 38 percent support even two of the components…But put all four items together, and 69 percent of all Americans support the package.”
Our take on this? At Public Agenda, we do a lot of public opinion research, including most recently our “The Buck Stops Where? series of reports on the national debt. It’s a lot easier to get public support (and bipartisan support) for giving something away than for taking something back. The tax cut plan promises something for everyone. The surveys will get a lot more interesting when Congress is debating what, if anything, to take back to control the budget.
Conservatives Push Back
The initial pushback on the tax deal was from liberals, but now conservatives like Rush Limbaugh and the influential Red State blog are coming out against it as well, the Caucus blog at the New York Times reports:
“Erik Erickson, the conservative blogger, wrote at Redstate.com that the “deal must now die.”
“It must now be opposed by Republicans,” Mr. Erickson wrote. “Released now in print, the legislation is loaded up with budget-busting pork of ridiculously absurd levels.”
“…because the tax deal is temporary, a large portion of this beneficent effect is missing. What some are calling a grand compromise is not grand at all, except in its price tag. The total package will cost nearly $1 trillion, resulting in substantial new borrowing at a time when we are already drowning in red ink.”
Former Reagan budget director David Stockman also weighs in, calling the deal a “Keynesian flimflam.”
“I find that most arguments about a negotiated compromise boil down to the simple question, “Compared to what?” Mr. Limbaugh and Mr. Chocola are comparing the deal to their preferred policy. I judge the deal compared not just to my preferred policy, but also to where we are now, and to where we will be if there is no deal and taxes go up 19 days from now.”
Can We Get on Track Again?
Maya MacGuiness of the Committee for a Responsible Federal Budget says for a moment she saw the deficit debate turning around (but since it hasn’t, she has suggestions for what to do now):
“And then with whipsaw speed, the White House and members of Congress came up with a stinker of a compromise tax cut plan. In typical Washington fashion, it included lots of goodies. The result was new spending; tax cuts for businesses; tax cuts for the rich; tax cuts for the middle class; tax cuts for the poor … even tax cuts for the dead. And it comes at a massive cost.”
“In general, 2011 is going to be very disappointing as far as the federal budget is concerned. Anyone who thinks there are going to be major changes in the outlook for federal spending and revenues will be very unhappy. Gridlock and stalemate are going to be the words most often used in 2011 to characterize every step in the fiscal 2012 budget debate. With tea party types defining compromise as a four-letter word and negotiations increasingly seen as collaborating with the enemy, especially on budget issues, it’s hard to see how much of anything — process or substance — will get done on the budget next year.”
Chart of the Day
As we mentioned, controlling health care spending is fundamental to getting the federal budget on track. This chart looks at what’s projected if we do nothing (with a baseline set before the Obama health plan was passed) and how things would shape up under the Committee on the Fiscal Future’s four paths to a sustainable budget:
Join the discussion! Your voice is important. You can comment here at OurFiscalFuture.org, on Facebook, and on Twitter. And to learn more about the numbers that set the stage for some of our choices, check out our slideshow, iPhone and Android apps, and Our Fiscal Future’s Visual Budget Tool.
Fiscal Future Daily is produced by Public Agenda for Choosing Our Fiscal Future, in partnership with the National Academy of Public Administration and with support by the John D. and Catherine T. MacArthur Foundation. The editor in chief is Scott Bittle, with contributors Francie Grace, David White, Jen Vento, Hart Hooton and Tom Watson.