Yesterday the messy and disgusting process of raising the nation’s debt ceiling was resolved. (Here’s a great explanation from the NYT on the convoluted process that will raise the debt ceiling.) The bill, which we all hate, passed the House and is expected to fly through the Senate today. However, not all people on the left agree that the bill is the most awful thing ever. Here’s Ezra on what it means for tax increases. TPM offers an alternative view on what the deal means. The most interesting take is from Jonathan Chait. Chait argues that the trigger mechanism is cleverly designed and has the potential to tear the Republicans apart:
I actually think the design of this plan is fascinating. You take a couple of the most powerful forces preventing major policy change — partisan gridlock and special interest influence — and turn them into forces for change by rejiggering the default setting.
It’s going to get interesting. Liberals widely assume they’ll just get rolled once again, as Republicans will insist on zero revenue, and Democrats will cave. I’m not so sure. For one thing, the trigger really is finally balanced. Last December, inaction on taxes meant an economy-crushing tax hike at a really bad time for Democrats. This summer, inaction on the debt ceiling meant economic cataclysm at an even worse time, the cost of which would mostly be born by President Obama. But the inaction trigger in the fall will be something genuinely painful to both parties.
The anti-tax movement has held absolute sway within the GOP for two decades. But it’s worth noting that the GOP has never had to choose among its constituencies in a zero-sum fiscal environment before. The policy of huge tax cuts and big defense spending hikes could coexist as long as Republicans could just run up the budget deficit. The party refused to reconcile its contradictions by refusing to acknowledge fiscal reality. Higher revenue to pay for the wars? Reagan proved deficits don’t matter. It’s easy to hold all your factions together when you refusing to acknowledge basic accounting properties (deficits equal expenditures minus revenue, not just “too much” expenditures by definition.) George W. Bush made the defense hawks happy, made the medical industry happy with a prescription drug bill designed to maximize their profits, and made rich people in general happy with a series of regressive tax cuts.
But imagine Democrats insist on higher revenue, and they decide, sensibly enough, that failure to cut a bipartisan deal is better than $1.8 trillion in cuts. (Which is probably is.) Then what? Well, then the entire defense lobby plus the entire medical and insurance lobbies turn fiercely against the very people with whom they had marched shoulder-to-shoulder under Bush. If the Democrats hold the line and insist on more revenue, the committee has the potential to split the GOP coalition wide open.
So far constituent calls, gangs of Senators and deficit commissions have not made Republicans believers in reality. Could the pressure from Washington lobbyists actually do it? I don’t know but it’s worth a shot.
I want to add – don’t just moan that Dems will cave. Start your action now. I think we’ve learned that action is much more effective when it’s done before the deal is made, not during and definitely not after. Start lobbying Congress now for a balanced approach that must include revenues. I think we should lobby to make sure Bernie Sanders and Nancy Pelosi are on the 12-member committee. Once the committee is chosen, lobby members of that committee too.