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Stabenow: Republicans want to 'create as much pain as possible'

stabenowjobs.JPGSen. Debbie Stabenow came right out and said what lots of Democrats think in a conference call with reporters today. "If [Republicans] can stop the recovery from occurring, if they can create as much pain as possible, people will be angry and will not vote at all or will vote against those in the majority," she sighed. "This is a very cynical political strategy."

I'd say it's all less sinister than that: People convince themselves of what's in their political best interest. When the economy tanked in 2001 and Republicans stood to bear the blame, suddenly tax cuts -- that is to say, deficit-financed countercyclical spending -- were a great idea. “Because the economy is slowing down, I believe it is vital that Congress pass a pro-growth tax cut," explained Dick Armey. They went on to pass another round of tax cuts in 2003, which were also deficit-financed, and the Medicare Prescription Drug Benefit, which was, you guessed it, paid for by adding to the deficit.

Now that unemployment is mired at 9.7 percent and the Republicans stand to gain from the public thinking the Democrats are failures, deficit-financed countercyclical spending suddenly seems like a terrible idea. Deficits in general seem like a terrible idea, though they're much more defensible now than they were in 2003 (and it's much cheaper for the government to borrow money, and thus run deficits, than it was in 2003).

I don't question the sincerity with which Republicans are concerned about the deficit. But if they were in power and the economic fundamentals looked the way they do, I have no doubt that they'd be passing stimulus bills, and quick. Voters judge the majority party based on economic conditions across the country. The minority party benefits from the failure of the majority and is able to make the majority fail by massing 41 senators together to filibuster legislation. And as even the most conservative economist would agree, incentives affect behavior. This is all playing out much as you'd expect. The question is whether this is a wise way to run the government.

Photo credit: By Mark Wilson/Getty Images

By Ezra Klein  |  June 24, 2010; 5:16 PM ET
Categories:  Stimulus  
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Next: Tax extenders bill fails

Comments

It’s been a long time since the GOP cared about policy. See "Mayberry Machiavelli’s" for proof of that. No, what they care about is politics.

If voting against a bill helps them politically, then they'll vote against it.
The question Democrats should be asking themselves is, "How can I make voting against this hurt the GOP politically?"

Senator Stabenow's comments are a good start. Dem Senators need to engage in hyperbolic language because that is the only way the press will cover this. And if the press doesn’t cover this there will be no downside for Republicans.

Posted by: nisleib | June 24, 2010 5:27 PM | Report abuse

In 2001 the budget deficit was pretty close to zero. We had a budget surplus for the previous 4 years, so jump-starting the economy with some expansionary tax cuts made sense.

Now we have a $1.6 trillion budget deficit and have had almost 10 years of budget deficits on top of one another. Adding more expansionary spending on top of that is totally different than 2001.

Context matters and you are not accounting for the context one bit.

Posted by: lancediverson | June 24, 2010 5:35 PM | Report abuse

If the minority party has this great incentive to try to stealthfully harm the country greatly because the majority nonetheless gets blamed, this is a severe problem with the system that should be dealt with -- and made a high priority (this doesn't help just one important issue, it helps all, and for as long as the improvements to the political system last, maybe decades or a lot longer). Here are powerful remedies:

1) Abolish the filibuster, to make minority opposition with the purpose of hurting the country much harder -- we would have had far larger and more stimulus with only 50 votes needed, plus a few new and better seats on the FOMC.

2) Improve the press greatly so a lot more people know when the minority party is willfully trying to hurt the country in order to get the majority party blamed. See: http://richardhserlin.blogspot.com/2009/10/lets-consider-magnitude-of-costs-of.html

Posted by: RichardHSerlin | June 24, 2010 5:38 PM | Report abuse

"I don't question the sincerity with which Republicans are concerned about the deficit."

You don't? Why don't you? You know that they don't care about policy - they care only about winning elections. They'll say anything and they believe nothing, other than in their own claim to power.

"After 9/11 and the war in Afghanistan, the budget deficit was growing. So at a meeting with the vice president after the mid-term elections in 2002, Suskind writes that O'Neill argued against a second round of tax cuts.

“Cheney, at this moment, shows his hand,” says Suskind. “He says, ‘You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.’"
http://www.cbsnews.com/stories/2004/01/09/60minutes/main592330.shtml

Posted by: Bloix | June 24, 2010 5:44 PM | Report abuse

I have to say that this is a very disappointing post from usually dependable Ezra. First, in this debate I'm quite happy to agree with the political professional who understands the workings of Congress first-hand over the intelligent outside observer.

Beyond that, the point he's making has some merit, but he fails to see that "convincing yourself of something" and cynicism can coexist rather easily. I guess my way of looking at it is, do the Republicans have an honest case that every single filibuster was taken in the effort to improve the country? Even the most generous analysis would have to concede that their picture of "improving the country" is predicated entirely on the long term. That's not a crime, but in politics it's cynical to think in the long term so exclusively, as events in the medium term interfere with intended effects. (This used to be a big Republican contrarian tenet.)

Posted by: wovenstrap | June 24, 2010 6:03 PM | Report abuse

I still don't see how a deficit at 3.5% of GDP when unemployment was 6.3% was bad and think a 10% deficit somehow insufficient when unemployment is 9.7%. Either they are both wasting money or both appropriately stimulative.

People keep forgetting how rough of a recession 2001-2003 was from a labor input perspective (Democrats seemed to have forgotten as soon as Kerry lost). Nonfarm business hours worked declined 5.5% from 2000Q3 to 2003Q2. For context, during the monster recession of 1973-1975, hours worked fell 6.1%, and in the Great Recession it was a 10.6% decline.

In addition, the Fed Funds Rate was at 1%, and in 2003 plenty of people were concerned about 'deflation' and the 'zero bound'. That concern prompted Bernanke's helicopter speech. It would be one thing if the deficits were of equivalent magnitude - but given the relative size of the two recessions they seem more or less proportional.

Do you really expect me to believe that Krugman & Co. wouldn't have blasted Bush's 10% deficit if he had been elected in 2008, or failed to praise Obama's 3.5% deficit had he been elected in 2000?

Both deficits weren't stimulative. As Tyler Cowen puts it, the central bank moves last. The Fed isn't going to allow any extra inflation - it has said this explicitly. Any positive demand shocks from fiscal stimulus will be largely offset by an inflation targeting Fed (by earlier rate hikes, less quantitative easing, etc).

By the way, when Republicans go for tax cuts, they preferentially cite the positive effects on behavior via marginal rates, and keeping money with individuals and businesses (which they view as more efficient). Republicans selling 'stimulus' tax cuts were probably being dishonest, or perhaps they really believed what they said but happened to be incorrect.

Posted by: justin84 | June 24, 2010 6:11 PM | Report abuse

"I don't question the sincerity with which Republicans are concerned about the deficit. But if they were in power ... they'd be passing stimulus bills, and quick. Voters judge the majority party based on economic conditions... The minority party benefits from the failure of the majority".

But when I imagine the current situation with the parties' positions reversed, with a Republican majority were trying to pass stimuli (and quick), I really can't see the Democrats standing shoulder to shoulder to filibuster the measures. Some might oppose it, especially if it were all in the form of high income tax breaks, but I have no doubt that the measures would pass.

Posted by: Unwisdom | June 24, 2010 6:19 PM | Report abuse

There can be no resolution while the conservative media makes it impossible to exact a political price for this kind of cynical decision by public officials to profit party and self over country.

Fox delenda est.

Posted by: adamiani | June 24, 2010 6:22 PM | Report abuse

Higher taxes like VAT do not avoid the deficit. This entitlement oriented welfare State, no matter how much money is collected, would still continue the spending. That is the Europe lesson, people are realizing. The dangers in the entitlement oriented welfare state are becoming so obvious. Add to that HCR passed. Dems could have made it more 'cost control' oriented; but that is weak. So everyone things Obama and Dems are on the European Path and hence the reluctance.

It is the job of Majority to sell their 'story' well. Ya, GOP tax cuts were bad, but that was the story they sold successfully.

Don't Dems want to see why they are not able to sell their story well?

Blaming on GOP is the easy route here. Fact is neither Obama nor Dems are showing any Leadership here.

Posted by: umesh409 | June 24, 2010 6:24 PM | Report abuse

Other than yourself, where is this story in the media?
Everyone knows we have problems to solve; everyone wants them solved; but the minority in the Senate says no and there are barely any mentions.
Shouldn't the crippling of the greatest nation on earth by its own citizens be page one everyday?
And where is the polling on the Republicans? We spend hours on end dissecting the President's every nuance yet barely mention the obstructions to progress. Is Obama supposed to march the Marines into the Senate in order to get things done?
Personally I would prefer that the media do its job and let the sunshine in rather than constantly inspect entrails in order to foretell the next election.
Unless Democracy returns to the Senate the next election will be meaningless.

Posted by: ostrogoth | June 24, 2010 6:41 PM | Report abuse

I thought the same thing as many of the the commenters. I think it's very likely that many of the Republican politicians and strategists are consciously trying to prevent the economy from improving because that will help them greatly in the upcoming elections.

I know it's hard for you to say this, Ezra, with your position, but it's not hard to see looking at the track record, the abundant evidence, of the behavior of Republican politicians and their machine.

What you can say for them is that they may perhaps think that they are harming the economy and the country in the short run, but it will be better for the country in the long run because it will get them elected (and look at what a harmful phenomenon this is that our system does all too little to discourage -- please see my comment above). But this is the most charitable you can realistically be for many Republican politicians.

Posted by: RichardHSerlin | June 24, 2010 7:38 PM | Report abuse

@umesh409 :The dangers in the entitlement oriented welfare state are becoming so obvious.

False...Where are these supposed dangers? Unemployment insurance in the US is by far the stingiest of any industrialized democracy. In Europe, unemployed people don't automatically lose their insurance so at least the unemployed here aren't being babied by being able to go to the doctor when they are sick. Where exactly is this huge nanny state that conservatives fear so much? As far as I can tell, the spectre of entitlements like they have in Europe is at bay for the moment.

"Add to that HCR passed. Dems could have made it more 'cost control' oriented; but that is weak. "
False...It was in fact the republicans that unanimously opposed every part of HCR including the cost control measures. They in fact demagogued the potential savings in medicare instead of supporting fiscal responsibility. Their relentless scare tactics are the reason that seniors are the only group that both receives single payer health care (medicare) while being the only age cohort that doesnt support HCR for other people. Republicans like UM above can't have it both ways. They can either support the cost control measures in HCR or they can criticize and repeal HCR, but it is hypocritical to slam HCR for not controlling costs enough when they did nothing to improve the cost containment parts of HCR while it was being passed in the house and senate.

"It is the job of Majority to sell their 'story' well. Ya, GOP tax cuts were bad, but that was the story they sold successfully."

So UM's opinion of policy debates is that sounding good is more important that telling the truth. Cynical, but it does sound like a republican. Of course, its always easy to sell tax cuts. Its like offering people candy. Selling responsible fiscal policy is a lot tougher, so republicans just don't do it and wait for the dems to take the heat to pay for their wrongheaded tax policy.

Posted by: srw3 | June 24, 2010 7:57 PM | Report abuse

It's the Noah Cross strategy. Forget it, Ezra, it's D.C.

Posted by: boloboffin1 | June 24, 2010 8:43 PM | Report abuse

'srw3' - to start with I am not Republican. I am a registered Democrat who only vote Democrats. So let us get that out. There are different reasons for my allegiance to Democrats.

Second, I have been through my fair share of unemployment, tough time, etc. etc. (as well as still facing recessions as like any working wage earner); so it is not that I am not aware of difficulties faced by many Americans in these tough times. My point is extending unemployment is not same as spending the same money to create new jobs.

Medicare and all Medical related Fed expenses are categorized as 'entitlement' and that is draining Fed money. Social security is today in surplus so we cannot blame it right now. Defense is another big chunk and we do need to cut money there too. Americans do not get enough of entitlements as like Europeans is not a reason for we not to be aware of dangers of European model. Regardless of how much entitlement is offered by State, if that is draining coffers of State means that is bad.

About HCR - it really does not matter what GOP was doing there. Did Dems go to public and call the 'bluff' of Republicans then? You look at the entire debate of HCR and it was the traditional Dems who were least interested in controlling costs. Remember the horrible House bill? Remember how Labor forced dilution of 'excise tax' on employer funded medical plans? Do you remember how Dems tried to dilute Medicare Cost Control Commission? Where do Republicans come here? I went and even argued that in the end 'it is about pulling the plug on Grand Ma'. You want to spend money on Grand Ma or yourself; go ahead with your own money beyond a point. Don't 'milk' State unreasonably. I suppose you know how recklessly money is spend in Regan Hospital in LA, mostly paid by Fed.

Finally, selling 'story'. Yes, that is Politics is all about. Read some of Ezra's own post and then you will realize beyond a limit, positives of a policy do not matter; what matters is the politics / optics of those policies. I do not think what I am talking here is surprising. The job of politicians is to 'sell' policies to public. Just because some economists say that is the best policy, it does not mean it will be enacted. Otherwise why have 'elected folks', let Bernanke Fed do everything.

Posted by: umesh409 | June 24, 2010 9:01 PM | Report abuse


The republican’s weren’t worried about the deficit when that big insurance company and their friends the Wall Street execs were giving themselves bonuses with taxpayer money!!! Next election – let Congress feel the sting of the unemployment lines!!! No more raping and pillaging the middle class!!! – How many years have you paid taxes? 30? 40? Your government bails out bankers and Wall Street execs using your tax dollars – but unemployment is allowed to expire? What happened to "by the people" or "for the people"? Or are the big campaign contributors the only "people" who count to congress? They are playing games AGAIN FOR THE THIRD TIME while you are wondering how to feed your kids? Figure it out! Malfeasance – Failure of a public official to perform their duties!!! Next Election MAKE YOURSELF MATTER BY VOTING!!! 10% unemployment carries 10% of the vote! Use it!! Fire them all next election or recall every Congress member NOW for Malfeasance – Failure of a public official to perform their duties!!! Next Election - Lets get people elected who actually represent all the People- this current congress represents only special interest groups!

Posted by: agh1 | June 24, 2010 9:21 PM | Report abuse

Great job Republicans, so much for winning back the House and Senate in November! The Republican Party, winning over the hearts and minds of the American people, while killing their unemployment benefits!

Posted by: Hillary08 | June 24, 2010 9:28 PM | Report abuse

There are only two things that surprised (and disapointed) me about this happening:
1) It wasn't until about 4 PM that I saw the story post to a MSM source, prior to that it was all blogs. Since when did Miley Cyrus and Lady Gaga become more important than millions of Americans losing their unemployment?

2) After reading about this all day, all over the internet, I haven't seen one person mention the truly frightening parallel this move has to the Great Depression. Remember that there were two dips in the economy then, the first lasted about a year, and with many "stimulus" plans had just begun to pull out of the slump when FDR decided he needed to balance the budget and start cutting the programs that helped turn the economy around, what followed was the much larger, much longer slump which this country didn't fully recover from until the 40's.

I pray that this isn't the case, but my gut tells me what has happened today is going to be devastating if not rectified.

Posted by: E_V_ | June 24, 2010 11:32 PM | Report abuse

I hate to beat a dead horse. (Okay, not really.) But Democrats are just as much to blame as Republicans. They are the ones that chose not to get rid of the filibuster, even though that was well within their power.

If the Democrats are victims of Republican abuse, they are the ones empowering their abusers.

Posted by: DavidWelker | June 24, 2010 11:50 PM | Report abuse

I agree completely with these fiscal evangelists who find it more important to atone for their past excesses than to help put food on the table of millions of Americans. Fortunately, the sacrifices that these dedicated senators have had to make (and so soon after their vacations)on behalf of our unborn grandchildren help to alleviate the pain of America's living children and grandchildren who's parents are out of work and now, sadly, out of luck. I say kudos, senators. Your resolve may one day bring you into the pantheon of America's other great leaders such as Tailgunner Joe McCarthy, Jesse Helms and Strom Thurmond.

Now, of course, all you fine senators are going to bring out the budget cleavers and wield them in your own states, right? Senator Nelson, you have crossed the aisle in the name of fiscal conservatism and restraint, will certainly be the first to surrender your constituents needs for the greater good of doing the right thing. Oh wait, you were the senator who held the healthcare bill hostage and won full federal funding of additional Medicaid costs associated with health-care reform in Nebraska only, in exchange for your vote. No, I didn't think so.

Senator McConnell, now certainly you are going to step up to the plate. You do, afterall represent the great state of Kentucky where the Louisville Slugger is produced. Certainly, you are willing to for go $1.6 million for a forage animal production research laboratory in Lexington, $1.088 million for an animal waste management research lab in Bowling Green, $2.945 million for LexTran to purchase buses and $950,000 for a Western Kentucky University bikeway. No? I didn't think so, senator.

It really is too bad that our president unable to take his straying party members to the woodshed and tell them exactly what they have to lose by going against him and his agenda. The republicans are in locked goosestep and any straying by the democrats is as disloyal as a crack from McChrystal. I am sure the threat of closing a military base or the decision to redirect a military contract would have these fiscal hawks back in the fold in no time.

Posted by: GhostofTomJoad | June 25, 2010 12:12 AM | Report abuse

"suddenly tax cuts -- that is to say, deficit-financed countercyclical spending"

Tax cuts don't equal increased government spending.

Posted by: staticvars | June 25, 2010 7:51 AM | Report abuse

Medicare keeps going up, in the part a deductible, and the part b deductible, that is the amount you must pay, or your medicare supplemental insurance plan plan must pay before medicare will. also my medicare ;art b monthly cost went up again too. I was finally forced to find a lower prices medicare supplement plan f, as the one i had had, kept going up too, I found a new one with Gerber Insurance, and got it online through national Medicare Supplements, at http://nationalmedicaresupplements.com/index.htm
Another good resource for the latest changes to medicare is American Seniors Insurance at http://americanseniors.com/

Posted by: jackchoice | June 25, 2010 10:05 AM | Report abuse

I can sum-up the Republicans in one word - Hypocrites!

Posted by: HemiHead66 | June 26, 2010 5:08 AM | Report abuse

Republicans miraculous return to being anti-deficit spending is because that is what the majority of the american people want right now and they want to get elected. It sounds like the system is working just fine. The problem is we've been living on borrowed money for a long time. Returning to a sustainable path is inevitable but the decision to return gets more difficult and painful as time ticks by. Passing unempoyment benefit extensions or more stimulus to me is akin to a crack head just wanting to get high one more time and then he'll go to rehab. I'm totally against it and just want to see this country get to the hangover phase so we can start a real recovery.

Posted by: peterg73 | June 26, 2010 9:25 AM | Report abuse

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