Wednesday, May 11, 2011

Same old, same old.

So John Boehner wants trillions of dollars in cuts. Trillions. And everything is on the table. Except tax increases. And except for allowing expiring tax cuts to expire.

But everything is not on the table if everything isn't on the table.

This, of course, is why the President should have embraced the recommendations of his debt commission that was released last December. Because Washington is unable to even pretend to have a real discussion about the fiscal direction of the country.

And the consequences of continuing down this path will be disastrous.

Just because U.S. treasuries are trading at their lowest levels in history should not be taken as much comfort. It just means that the end is not near. Yet.

If we get past May 21st—the beginning of the end of days according to some Biblical prophesiers—the next apocalypse on the horizon will be the one when the world finally decides that currency stability and fiscal self-discipline are necessary attributes of a nation hosting the global reserve currency. Somehow, a currency that offers a yield of below 1% in interest while declining in purchasing power by 20% does not serve the long-term interests of the global community.

For Boehner to even posture as part of the solution—and not even give a nod to the irony of the moment—is in itself frightening. It is one thing to appeal to your newest voting block by embracing anti-deficit rhetoric as part of the ongoing spectacle that has become our politics. And as long as that voting block is willing to buy the absurd notion that spending causes deficits but tax cuts don't, Boehner can keep riding that wave.

But if the issue is deficits and debt, then the measure of one's words must be in the outcome one produces. Yet Boehner stands before a crowd of bankers and traders and says with a straight face that he wants trillions in deficit reduction as the price of not accelerating the pace of the nation's march down the road toward judgement day.

Accelerating because he is not serious for one minute about tacking the problem. His goal, as the leader of his party in Congress, is the pursuit of power and majority status. That means winning middle class votes and upper class political contributions. And standing before that room of bankers and traders, he postured effectively to get the latter at the expense of the future dreams of the former.

He will get the political contributions not because anyone in that room buys the notion that this is about cutting deficits, but rather because everyone in that room stands to reap great benefit from keeping the Bush-era tax cuts in place, and putting off the day when we actually pay for what we budget at the federal level.

No. Boehner is not serious about achieving trillions of dollars in cuts. His is just a rhetorical flourish. And the proof is in the budget that the House has just embraced. Paul Ryan's budget plan, as economist Bruce Bartlett has pointed out, does nothing to tackle deficits, but instead produces deficits far larger than current Congressional Budget Office projections. Current budget policy produces $3.2 trillion of deficits through 2019, while the Ryan budget projects $4.3 trillion of deficits during that same timeframe.

Of course, one of the major differences is that the Ryan budget cuts taxes, but those tax cuts are not paid for even with the significant cuts in spending that are in that budget. Therefore, the debt ceiling argument that Boehner made this week—his appeal to step back from our bi-partisan march toward the next fiscal train wreck—is contradicted by his own budget: If Congress were to pass the Boehner-Ryan budget, the debt issuance through 2019 would project to be $1,000,000,000,000 higher than the path we are on now.

My only question is whether, as Speaker Boehner stood before that Wall Street crowd, he believed his own words. Does he believe that the House budget proposal fixed the problem—if the problem is debt and deficits? Does he believe that putting half of the budget on the table makes his words ring true? And which is worse, if he does believe or if he doesn't?

This is just the same old game. Listen to my words, write your check, give me your vote, but God forbid I should be held accountable for the results I produce. This is the rhetoric that has destroyed the Republican Party brand of my youth. Fiscal responsibility and intellectual integrity. Prudence at home and tempered humility abroad.

Those were the days.

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