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And the Californiacation of America continues

Unnoticed amidst the health-care hubbub, Congress is going to have to act to raise the debt ceiling pretty soon. Keith Hennessey has a good guide for what to expect. As he says, some senator, or some group of senators, always makes a fuss over this. But at the end of the day, it always passes. "There’s a simple legislative logic that gives the Majority Leader leverage against Hostage-Taking Senators [on the debt ceiling] ... this is a must-pass bill, and if you block it, you are responsible for the U.S. government defaulting on its debt. No Member of Congress, no matter how extreme, is willing to take the blame for that."

That said, the Republican Party will doubtlessly see an electoral upside in dramatizing the hideously large deficit. In an interview yesterday, Tom Harkin told me that Mitch McConnell had said there would be no Republican votes to raise the debt ceiling. "You own this," McConnell reportedly told Reid. As far as Harkin knows, forcing 60 votes from a single party to raise the debt ceiling is unprecedented.

It's also profoundly hypocritical. The deficit is the product of both parties, not something Barack Obama created over the last year. For a long explanation, see this report from the Center for Budget and Policy Priorities. For the short version, check out this chart:

12-16-09bud-f11.jpg

Anyone interested in fast-forwarding a couple of years should glance over at California to see what happens when the minority party decides to score some points by politicizing long-term budget crises.

By Ezra Klein  |  December 23, 2009; 8:33 AM ET
Categories:  Budget , California  
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Comments

not to detract from the seriousness of this subject, i just enjoy your graphs as miniature, decorative artforms.
not having acquired graph-interpretation skills, i always admire the visual aspects of your colorful graphs.
this one resembles the layers of colored sand that one finds in souvenir glass bottles.

Posted by: jkaren | December 23, 2009 9:07 AM | Report abuse

It's been flashing-red-lights obvious since the stimulus vote that the GOP's simple strategy was and is pure obstructionism; and the Dems and the administration really, really need to wrap their heads around that fact and craft a strategy that bypasses the GOP and possibly Lieberman and Nelson and Lincoln. The party has wasted many months negotiating in public with itself, also fetishizing Collins and Snowe as "gets" -- they ain't.

Posted by: scarlota | December 23, 2009 9:21 AM | Report abuse

Perhaps this time the majority leader should ask some of his members to not vote to raise the debt ceiling. Make this information public. He needs to tell the minority party that if no member of their side votes for it that they will let the government default on their debt. Of course, he would be playing chicken with a bunch of crazies.

Posted by: just_watching | December 23, 2009 9:29 AM | Report abuse

I'd just not have Byrd come that day- then a republican would HAVE to vote for cloture and the Dems couldn't do it by a party line vote. And I think thats something distinct enough that voters would rail against republicans for pulling that crap.

Posted by: spotatl | December 23, 2009 9:35 AM | Report abuse

I have one suggestion for a modest cut in the deficits.

Since the Republican party votes in lockstep, we could replace the salaries of 40 Republican Senators and their staffs with a single super-Senator with 40 votes....

Similarly, in the House, we could something like 200 salaries.

I'm sure we could get Republican support if, in the future, rather than Republicans actually having to name candidates for Congress, they could just run the generic "Republican", not only saving the the money invested in primary battles but also hiding the ugliness of watching them Scozzafava one another in public....

Posted by: mikerose2 | December 23, 2009 9:44 AM | Report abuse

hypocritical is a feature, not a bug

Posted by: bdballard | December 23, 2009 9:50 AM | Report abuse

This chart seems to indicate that if we pull out of the econonic downturn, let the Bush tax cuts expire on schedule, and follow through on the the planned drawdowns in Iraq and Afghanistan then our deficit problems go away.

That's the Obama plan. So why does the chart project huge deficits out to 2019?.

That sounds good to me, but also seems too optimistic, too easy. Am I reading this wrong?

Posted by: bswainbank | December 23, 2009 10:01 AM | Report abuse

+1 with just_watching and spotatl. Hell, I'd go one further and have Reid only be able to round up 25 members of the Democratic caucus to vote for it. Neither party should be absolved from the mess they've both made.

Posted by: JEinATL | December 23, 2009 10:12 AM | Report abuse

I don't know if you can do this all without defaulting but if the Rs really want to play chicken we can immediately pull out of iraq and afghanistan consequences be dammed, stop sending out SS checks, stop paying Medicare and Medicaid claims, and cut the defense budget down to about 100 billion. I wonder how long it would be before some Rs got back on board the train?

Posted by: luko | December 23, 2009 10:12 AM | Report abuse

a few things about California's budget fiasco:

ongoing for three decades now...Deukmejian 1983 and $1.5 billion budget deficit

in the dictionary under "byzantine"; see California's method for funding of education

the budget requires a two-third vote for approval

and Prop. 13 is the stone tablet delivering the received "wisdom" that created it all and remains the ultimate third rail of California politics

see the flow chart at bottom of page at http://www.dof.ca.gov/budgeting/budget_faqs/information/

Posted by: hughmaine | December 23, 2009 10:17 AM | Report abuse

it's worth remembering that not a single gop senator who served during the bush years thought the iraq war needed to be paid for.

none of them thought the medicare prescription drug benefit needed to be paid for.

none of them thought spending should be cut to offset the bush tax cuts.

and now they claim to be worried about the deficit: this isn't just hypocrisy. we need a new word to express just how contemptible this is.

Posted by: howard16 | December 23, 2009 10:37 AM | Report abuse

This chart is an extremely misleading attempt to blame Obama's and Congress's ghastly spending binges on Bush. This post is Klein at his hyperpartisan worst.

1. "Bush-era tax cuts" costing up to $700 billion per year is the largest item. Note that A) Obama CAMPAIGNED on 'tax cuts for the middle class' which meant retaining the majority of those cuts, B) John Kerry campaigned on keeping even more of them, and C) the numbers are based on CBO estimates that by law must ASSUME that tax cuts lead to ZERO economic growth and reduced compliance costs, which most economists will tell you is laughable. You cut taxes so that you can direct resources to a wealth-generating private sector, and away from a wealth-eating government sector.

2. About $200 billion a year for "wars in Iraq and Afghanistan" is another howler, if you infer the "blame Bush" storyline. Sure, Bush ordered the beginning of both wars, but note: A) most of this continued deficit spending must be for Afghanistan, due to the Iraq drawdown that Bush ordered and Obama is continuing; B) Obama campaigned (and is governing accordingly) on the argument that Bush - through low intellect, etc. - had devoted to FEW troops and resources to Afghanistan; C) any future president could withdraw the military from anywhere at any time from an engagement is merely a budget-bloating expense that yields no security or diplomatic gains for the American people.

3. $300-400 billion a year ad infinitum for the 'economic downturn' is an odd one. How come it's steady, not big-now-declining-later? In any event the downturn was caused primarily by various bad loans, which Bush attempted to head off (by advocating sensible restraints on Fannie Mae and Freddie Mac) but was thwarted by (mostly) Dems. Meanwhile, a hidden story is that the crisis would have been worse had Bush not pushed for some modest improvements to personal bankruptcy laws.

Sure, Bush's lack of thrift has caused some fiscal problems for our nation, but he was only a small part of the problem. He campaigned on "compassionate conservatism," which implies "entitlements come before deficit control," and he governed that way.

It is NOT hypocritical for today's Republicans to complain about the nation's much-enlarged deficit, because they don't say that the nation's debt should never rise, only that it should only rise for GOOD REASONS. Running up the debt for good programs (liberating Iraq, tax cuts) is better than, and different from, adding debt for bad programs (low-quality public health care, inefficient green energy). It's fair to argue that the Republicans are incorrect about which programs are good or bad, but it's unfair - and stupid - for Klein to call it hypocrisy.

Posted by: angrydoug1 | December 23, 2009 10:52 AM | Report abuse

angrydoug, so what you're saying is that Republicans only believe that the debt should never rise while Democrats are in office, but are fine with it when Republicans are in office, insulating them from charges of hypocrisy. That's not exactly a compelling argument. The thing is that they're not complaining about spending-- they're complaining about the specific consequences of deficits: and if structural deficits are bad, they are bad regardless of what caused them. The basis of republican arguments is that the Democratic plans are bad ones not because the plans are bad but *because* they drive up the deficit. But they weren't complaining about driving up the deficit on even worse ideas made by the Bush administration in the past.

That "economic downturn" deficit is an odd one, though: what the heck does it mean? We had two economic downturns over the past 9 years. Does the CBPP predict that the latest downturn will extend indefinitely through 2019?

Posted by: constans | December 23, 2009 11:08 AM | Report abuse

angrydoug1, most of your comments are inaccurate or incomplete, but life is short, and why waste ezra's column inches.

instead, just explain to us: every single republican in congress voted against raising taxes to pay for the wars in iraq and arghanistan. every single frickin' one of them. what was the GOOD REASON for that.

instead, just explain to us: if the bush tax cuts were so responsible for economic growth, where was it? why didn't that economic growth produce the revenues you tax cut uber alles fantasists insist results? and why didn't the bush administration and republicans insist upon offsetting spending cuts when the revenues weren't there? what was the GOOD REASON for that.

and more generally, let me get this straight: it's your position that it's fine for the national debt to rise forever as long as you define it as a GOOD REASON? and if so, what were those GOOD REASONS during a period of economic growth (weak, but growth, nonetheless)? one would really like to know.

Posted by: howard16 | December 23, 2009 11:10 AM | Report abuse

"Californiacation"? Drop dead, Klien.

Posted by: GettingTesty | December 23, 2009 11:23 AM | Report abuse

The GOP has been trying to create a government debt crisis for 30 years so it's not surprising that they are predicting one. It's actually a wish. Somewhere around 1980 they discovered they couldn't win elections by openly opposing popular social insurance programs. Instead they began demagoguing tax cuts, hoping the bond market would panic at an exploding debt and force cuts in social programs.

In effect the GOP has punted their domestic policy to bond traders.

Posted by: stevedwight | December 23, 2009 11:36 AM | Report abuse

californication is already at the federal level

the mechanicism is the modern filibuster rule in the senate

Posted by: jamesoneill | December 23, 2009 12:30 PM | Report abuse

angrydoug:

Before you start blaming Ezra for "his" "misleading" chart, perhaps you should get a few facts straight....

1) It isn't Ezra's chart, it's a CBPP chart, which does nothing more than graph CBO numbers.
2) The claim that "by law must ASSUME that tax cuts lead to ZERO economic growth" is bogus. They estimate GDP growth on the basis of current (enacted legislation) and, since these tac cuts have been enacted for seven years, the effect (microscopic as it is) is in there.
3) The upper classes received a far greeater portion of the cuts than the middle class did (in fact, almost half of the entire cut, measured in dollars). YOU should remember that one, since the excuse thenw as that, "Well, the upper class pays most of the taxes".
4) While supply side economics is dead in respectable circles ("most economists" know that tax decreases at the current levels of taxation do *not* generate anything close to the additonal tax revenues they costs -- something even Reagans Budget director, David Stockman admitted the Reagan adminsitration knew, even when they claimed the opposite (seems there's nothing new to Pubbies knowingly using BS to fool the sheep).
5) When the economy is being slowed by a lack of capacity, you may choose to funnel any stimulus into the capital markets, but when there is excess capacity (under-utilized factories and a plethora of out of work workers, you funnel the stimulus to the consumers. THis one isn't rocket science. (BTW, TARP was a great example of what happens when you funnel money into the supply side -- *nothing* came out the other side. No easing of credit, whatsoever.)
6) CBO doesn't do "ad infinitum" projections and the chart is 10 years, not ad infititum, but the projection is based on the lag in growth in GDP from where it would have been (high utilization of existing capacity) had there been no downturn. We may well be out of the recession as of the 4th quarter of 2009, but all that means is we're growing from the bottom, not from where we were. In a way Pubbies can understand it, if one Nascar driver is travelling at 130 MPH and another is traveling at 110, each can accellerate at 5% per minute, but the slower one will continue to fall further behind (the first one will be traveling at 136.5 MPH after one minute and the second at 115.5 -- the gap in speed has changed from 20 MPH to 21 MPH).

And so on, and so on....

Posted by: mikerose2 | December 23, 2009 1:42 PM | Report abuse

angrydoug1:

This is not a new story. The CBO back in June found that the business cycle was responsible for 37% of the $2 trillion swing from surplus to deficit, 33% was due to legislation signed by Bush, and 20% due to Obama's continuations of Bush policies. Only 7% was due to the stimulus bill (a hopefully one-time expense), and 3% from Obama's agenda on health care, energy, education, and other areas. http://www.nytimes.com/2009/06/10/business/economy/10leonhardt.html

While Obama may have campaigned on keeping the "majority" of the Bush tax cuts, such a statement is misleading since the "majority" of the benefits of those cuts went to a very small minority at the top. So repealing the tax cuts for the wealthy would substantially roll back the effects of the Bush income tax cuts.

It was irresponsible to go to war without paying for it, especially when at the time we could have afforded it. Instead, we got wars AND tax cuts which drove up the deficit. The sad irony is that some people are now demanding fiscal responsibility when we're in a worse position to pay for it. Had we done the right thing to begin with, we wouldn't be in this situation today.

I agree that deficit spending can be justified for "good reasons." But we disagree on what those reasons are. One can think that liberating people is a good reason, but not good enough that it shouldn't be paid for (is the proposition that all wars of liberation be free? or all "good" wars are free? why would we engage in a bad war?). And saying that tax cuts are a good reason for running up debt implies that taxes could therefore be cut indefinitely as debt goes ever higher; after all, it's a "good reason," isn't it?

Debt is acceptable as a means for investment. From that perspective, investment that eventually lowers health care spending, and that creates jobs in new energy industries, and that lowers the strain on our military to protect our energy supplies, can justify short-term debt because it turns out to make more money over the long-term.

So yes, it is hypocrisy to say we shouldn't pay for what we want out of government when we can afford it, but we should pay when we can't afford it. Still, hypocrisy doesn't tell you which side of the argument is right. Because of our irresponsible policies of the past decade, it's up to us to clean up the mess. Yes, Obama will have to put something forward to deal with the problem (which is more than any Republican leaders have done so far). But most of the mess wasn't created by him or the Democrats.

Posted by: dasimon | December 23, 2009 2:55 PM | Report abuse

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