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The Obama Administration’s Campaign-Promise Body Armor

April 18th, 2010 . by economistmom

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[UPDATE 6 pm Monday: video clip fixed and complete now!]  Watch the video clip from this Sunday’s Meet the Press of Treasury Secretary Tim Geithner to see how amazingly thick–and dense–that campaign-promise body armor is.  It’s obviously the Administration’s favored strategy to avoid the “politically explosive choices” that David Gregory attributes to my boss Bob Bixby.

This is more of the same: no courage from our policymakers on laying out the specifically tough choices necessary to get back to a sustainable federal budget outlook.  Administration officials and members of Congress are only willing to talk about tough choices until you ask them to explain “what tough choices, exactly?”

That’s also why many members of Congress aren’t so enthusiastic about laying out their plan for the budget this year.  (See the Concord Coalition’s statement on the need for a budget resolution.)  The necessary choices are so tough that the policymakers don’t want to spell them out in any way if they can help it.  They’d rather turn away from the problem than confront it.  It’s like they’re saying “it’s so bad, I can’t bear to look.”  And so nothing is done, nothing changes, and the problem gets even worse.  But the policymakers keep thinking everything’s alright because they feel safely ensconced in their thick (and dense) political body armor.

10 Responses to “The Obama Administration’s Campaign-Promise Body Armor”

  1. comment number 1 by: John Bailey

    Diane,

    The academic/policy communities are guilty of exactly the same actions as the politicians.

    Social Security, Federal civilian and military retirement, state and local pension funds, the Pension Benefit Guaranty Corporation, Medicare, Medicaid, state and Federal retiree health benefits, private health insurance, Federal, state and local spending, U.S. Postal Service, unemployment, underwater mortgages, Fannie, Freddie, et.al., bank failures, the FDIC, and the Federal debt, all need bailed out/fixed/replaced.

    If you agree, you need to say it. If you don’t, then debate it.

    John Bailey
    jbailey@envision.bz

  2. comment number 2 by: SteveinCH

    I agree with John and I’ve said it several times. The academic literature and the advocacy groups have largely focused on process solutions (CBPP and Peterson) or laundry list type solutions (the CNN special).

    It’s only when a specific solution that accomplishes the task is put on the table that the ball can move forward. I sometimes feel like we’re all afraid to do so because we feel the pain of the solution is so bad that people will go back to denying the problem.

  3. comment number 3 by: Brooks

    Steve,

    You make an excellent point. Although some advocacy groups/think tanks should stay neutral in order to maintain broad credibility and acceptance in building awareness, educating regarding the budgetary impact of policy changes and potential changes, etc., those that are not neutral (those on right or left already) should develop and present their plans (as Congressman Ryan did), and even some of those that are neutral would probably have the greatest impact if they put together a variety of alternative plans showing the trade-offs, while also advising on the political plausibility of each. Of course, some organizations may lack the resources to construct plans in such detail, but that would be ideal.

    One or two advocacy groups (or coalitions thereof) are working on plan(s). One is the Bipartisan Policy Center’s Debt Reduction Task Force, which has some great members http://www.bipartisanpolicy.org/news/press-releases/2010/01/bipartisan-policy-center-launches-debt-reduction-task-force

    I heard/read somewhere about a week ago from some source that seemed credible (but I can’t remember who) that the president’s commission is terribly understaffed, which, if true, is disappointing. That commission has enough hurdles, given the partisanship and likely obstinacy of some of its members combined with the 14 votes needed.

  4. comment number 4 by: SteveinCH

    Brooks,

    It looks like a good group. We’ll see how specific the recommendations ultimately are. I’m increasingly convinced a commission cannot succeed in building a recommendation because the requirements and tradeoffs are too difficult to do as a group exercise (or in Washington, a staff driven exercise). This is a case where leaders must lead on content, not something that a career in Washington encourages.

  5. comment number 5 by: Brooks

    The ideal would be if they present at least 3 plans: a compromise plan if possible, plus a right-of-center and a left-of-center (but both within the bounds of some political plausiblity, not clearly unrealistic politically).

    If they can’t achieve a compromise plan on which most/all can agree, at least having the other two (or more) plans would be significantly better than nothing. Any plans that are comprehensive and sufficiently detailed and use reasonable economic assumptions could move the public and Washington toward actually grappling with the “tough choices” within the framework of comprehensive plans. All the better if such plans are at least somewhat politically plausible (Ryan’s spending-side-only plan probably isn’t politically plausible).

    Re: This is a case where leaders must lead on content, not something that a career in Washington encourages.

    Although I’m ambivalent on term limits, that’s what I consider the strongest argument for them. More lame ducks might mean more fiscal responsibility (not necessarily, but perhaps).

  6. comment number 6 by: VAT Brat

    Budgets are complicated, and not everyone has access to a CBO model, but here are a few easy steps to take that can put yourself on the spot. I insert my own answers to the questions:

    How many years to reach a balanced budget? 10

    What percentage of budget deficit reduction comes from tax revenue increases? 35%

    What percentage of budget deficit reduction comes from expenditure decreases? 65%

    How you answer those questions is a pretty good indication of your political leanings. Paul Ryan would have given 0% and 100% for his answers.Answering those 3 questions puts constraints on the range of answers to more specific programs and tax policies. Then you can get more specific:

    Percentage of Expenditure Reduction from:
    Medicare: 35%
    Medicaid: 21%
    Social Security: 30%
    Defense: 12%
    Other: 2%
    Total: 100%

    How would you Increase Taxes?
    Phase in VAT and phase out Income Taxes over 10 year period. Have VAT rate eventually rise to whatever is required to balance budget.

    It would be nice if a interactive budget model could be built that would spit out answers. The key is to start at a high level and work your way down to the nitty gritty stuff.

    I’d be interested in seeing the Concord Coalition or some other think tank (or a collaboration of think tanks) build an interactive model that would allow someone to go in and iteratively change percentages and get feedback on how that changes the policy options.

  7. comment number 7 by: AMTbuff

    More lame ducks might mean more fiscal responsibility

    The Health Care drama proved this false. As soon as the swing Democrats realized that they would not be-reelected, they voted for the spending spree. Lame ducks behave more ideologically, not less.

  8. comment number 8 by: Brooks

    AMT,

    I’m cynical enough that I don’t think members of Congress are driven primarily by ideology, but rather by self-interest, in particular serving their ambition for re-election and increased power and status. It’s certainly possible that a lame duck will act more ideologically, particularly if they are lining up their next career move or just want to be popular among one “side”. But all things considered, I’m inclined to think that the aforementioned factor of political self-interest is a greater obstacle to fiscal responsibility, and thus removing it probably, in general, nets out conducive to greater fiscal responsibility (net of both sincere ideological inclinations and personal practical incentives to act more ideologically). Just my sense, not a firm conclusion; I’m certainly open to arguments to the contrary.

  9. comment number 9 by: STDog

    Brooks, like Bart Stupak?

    He dropped all his ideological concerns and voted for the HC bill know that he was not going to seek reelection.

    AMT, I like you proposed spending cuts in general, but I don’t think Defense spending is the place to cut. That’s one of the few Constitutionally authorized expenditures by the federal government. And give the age of our aircraft and lack of naval vessels cuts in spending are not a good move.

    Move that amounts to other welfare programs,including corporate welfare and farm subsidies.

  10. comment number 10 by: weapon2277

    Someone suggested moving to a VAT tax system, but the FairTax would be far superior to a VAT. Both are paid on consumption rather than income, which is certainly a good thing, but the VAT ends up hiding the true amout of taxes an individual pays on a product while the FairTax is completely transparent.

    Compared to our current tax system, the FairTax would cost Americans over 90% less in compliance costs. It would treat all businesses the same as each other and it would treat all U.S. citizens identically. By doing away with corporate taxes, we’d attract many businesses to our shores meaning more jobs for Americans. With more Americans working and bringing home more money due to there not being any Federal Tax or Payroll Tax witholding, we’d have more money being spent into our economy. We’d also spread the tax burden out over a much larger group including many people (criminals, illegal immigrants) who currently consume resources yet do not contribute to our tax system.

    The FairTax system does not tax investments, so we would bring home much of the money that currently sits in off-shore tax-sheltered accounts. That capital would allow U.S. institutions to make more loans to those wishing to buy a home, car, or expand a business.

    The FairTax was developed by many of the top economic think tanks in the country. Considering how many jobs this system would ultimately bring to our country, I can’t think of a better plan to get us back on track economically.