Why I’m (Reasonably) Happy and (Cautiously) Optimistic about the Fiscal Cliff Deal

          Yeah, I get it. Congress didn't really do anything but solve a  phony crisis of its own making. And nearly everybody I know is unhappy about the deal. Conservatives hate it because it increases taxes a lot more than it cuts spending. Liberals hate it because fails to soak the moderately rich and leaves the door open to too many cuts down the line. And pragmatists point out that, pragmatically, it doesn’t really do very much to change the current, highly dysfunctional environment in which budget choices are being made. 

       All of this is true, of course. But I would humbly suggest that it is not the point. Here is the point: they did something when doing something was hard, and we all need to show our appreciation so that they will do some more of it.
       And, make no mistake about it, what they did was hard. The debate over taxes and spending occurs at the core of what E.J. Dionne calls “our divided political heart,” which is to say that it flows directly from the different moral sensibilities that make some people ”liberal” and other people “conservative.” Those of us on both sides of the issue know that we are right with the same depth and conviction that we know everything else in the world worth knowing. And the things that we know are, ultimately, incompatible with the things that other people know.
       And this is why I am (reasonably) happy and (cautiously) optimistic about this week’s fiscal cliff compromise. As modest as it is, and as dysfunctional as we still are, I think that at least four things happened during the negotiations that needed to happen and that bode well for the future:

• Joe Biden and Mitch McConnell have emerged as a negotiators who can actually work together AND deliver the votes. Negotiation is often about personal chemistry, and, though I have no idea whether or not Biden and McConnell like each other, it is clear that their negotiating chemistry works better than either Harry Reid and anybody or President Obama and anybody. As a result, the Senate voted for the proposal 89-8, a level of unanimity that we have yet to see in budget discussions.

• John Boehner has emerged as an actual individual who is in charge of the House of Representatives. In previous negotiations, Boehner has been a wholly owned subsidiary of the Tea Party, with Eric Cantor wielding the actual power in the Republican caucus. This time, Boehner emerged from the shadow, either because he has become more willing to fight or because (more likely) his hand within his own caucus has been strengthened by the recent election results, which were not favorable to the Party of Tea.

• The “Hastert Rule” appears to have fallen. For years, House Republicans have operated under an informal agreement that they will not bring anything to a full House vote that has not been approved by a majority of the Republican caucus—thus ensuring that moderate Republicans never join with Democrats to pass legislation offensive to ultra-conservatives. Boehner broke the rule, and, as a result, moderate Republicans joined with Democrats to pass legislation offensive to ultra-conservatives. This can only be a good thing.

• Grover Norquist is under the bus where he belongs. Yes, Grover is going to say that this legislation does not raise taxes. Technically, he is correct, since taxes went up on everybody for a few hours before this vote brought them down again. But this is obvious spin designed to preserve the mystique of the tax pledge going into future negotiations. Taxes went up—albeit not much and not on very many people—but they went up none the less. And, during the process, a number of high-profile Republicans rejected the “taxpayer protection pledge” on principle. Grover Norquist will (hopefully) never again have the power over Congress that he had during the last term. And that (for me) is an unqualified good.

         So, while it is certainly true that Congress is spending the day congratulating themselves for not having done much, they did do some things, and those things have had reasonably encouraging results. Not guaranteed results, of course, just encouraging. And this is why I say let them celebrate and give them all of the positive feedback you can muster. The feedback loop is crucial. When you are training a dog, you have to give it a small treat and say "good doggy" each time it makes the tiniest move in the right direction. Even if this current bill is only "not piddling on the carpet," we need to pat our representatives on the head so that, some day, they will learn how to roll over and beg like good doggies should.

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Why We Should Care that 279 Members of Congress Have Promised Not to Do Their Jobs

"For heaven’s sake, you have Grover Norquist wandering the earth in his white robes saying that if you raise taxes one penny, he’ll defeat you. He can’t murder you. He can’t burn your house. The only thing he can do to you, as an elected official, is defeat you for reelection. And if that means more to you than your country when we need patriots to come out in a situation when we’re in extremity, you shouldn’t even be in Congress."—Former US Senator Alan Simpson, “I Guess I’m a RINO”

       When the current moment becomes history, I suspect that historians will be as baffled as I am by the fact that 238 members of the House of Representatives and 41 Senators—all but three of them Republicans—have signed something called the “Taxpayer Protection Pledge” in which they promise that they will never (ever, ever) cast a single vote to raise taxes. Given that “the power of the purse” is one of the most important duties entrusted to Congress by the Constitution, the pledge they have taken amounts to a solemn oath not to do their jobs.

       Let me be very clear here. I am not saying that the job of a legislator is to raise taxes. It is to determine, by the facts available at a given moment, what the appropriate rate of taxation should be. This is not an easy job; it requires a painstaking balancing of different interests and potential consequences, which is why legislators get large staffs, big salaries, and choice parking in downtown Washington DC to deliberate about such things. Nothing shuts down the purpose of a deliberative body quite like an a priori declaration that you will not, under any circumstances, deliberate.  

       Anyone making an absolute and unconditional promise not to ever vote to increase taxes must, of logical necessity, accept one of the following statements: 1) that there will never ever ever come a time when raising the tax rate is in the best interest of the country; or 2) that something (i.e. campaign contributions, the political support of the anti-tax lobby, etc.) is more important than doing what is in the best interest of the country.

       Since no politician will ever admit to believing the second statement (as true as it might be), the only possible grounds for signing the tax pledge is that one believes that there is NOTHING that could EVER justify a tax increase, which is clearly an insane position to take, our not being gods or having access to the future and all.

       The Founders—especially Alexander Hamilton—thought about this stuff quite a bit, and they tried hard to design a system that would be capable of responding to anything that the future might throw at them or us. In Federalist #34, Hamilton argues that the government’s power to tax should be virtually unlimited because the issues requiring a government response are impossible to anticipate:

We must bear in mind that we are not to confine our view to the present period, but to look forward to remote futurity. Constitutions of civil government are not to be framed upon a calculation of existing exigencies, but upon a combination of these with the probable exigencies of ages, according to the natural and tried course of human affairs. Nothing, therefore, can be more fallacious than to infer the extent of any power, proper to be lodged in the national government, from an estimate of its immediate necessities. There ought to be a CAPACITY to provide for future contingencies as they may happen; and as these are illimitable in their nature, it is impossible safely to limit that capacity.

          What is the “Taxpayer Protection Pledge” if not a unilateral decision by an individual elected official to limit the government's capacity to raise revenue for an indefinite period of time? It assumes, not only that the government does not need more revenue right now; it assumes that the government will never, under any conditions, need more revenue. Such an assumption as Hamilton clearly understood, is an abdication of the Constitutional responsibility to govern.

       Alan Simpson has apostatized from the Republican Party to tell us that now would be a good time to consider raising taxes--and cutting spending--in order to reduce the deficit. There are some fairly compelling reasons to listen to him. The federal tax rate is currently at its lowest point since the end of World War II, and, not coincidentally, the deficit is higher as a percent of GDP than it has been since 1947. Serious economists on both the left and the right agree that we cannot manage the debt without raising taxes, and Americans support modest tax increases for deficit reduction by a 2-1 margin. And yet, as Simpson acknowledges, we will almost certainly not see any Republicans voting to increase taxes any time in the near future because “Grover Norquist won’t let them.”

       The important question, now, is ours: why do we keep sending people to Congress to do a job that they have signed a written agreement not to do?

A Balanced Budget Amendment? Not for These Guys

The Balanced Budget Amendment didn’t even get out of the starting gate this term. The House of Representatives rejected it with a vote of 261 for to 165 against, 23 votes short of the 2/3 majority necessary to send a proposed Constitutional Amendment to the Senate. And—though I would not have said so a few years ago—I’m glad it failed.

I actually do think that balancing the federal budget would be a good idea most of the time, but not all of the time. Without sufficient safeguards, a Constitutional requirement for a balanced budget would limit America’s ability to respond to genuine emergencies (think: World War II) or no-brainer opportunities (think: Louisiana Purchase) that could not be anticipated by any rational budget process.

There are, of course, emergency safeguards built into most contemporary versions of the balanced budget amendment. The resolution voted on yesterday—H.J. Res. 2—allows for deficit spending with approval of a 3/5 supermajority in both houses. If the United States is engaged in a military conflict, a deficit can be approved by a simply majority. So there are safeguards in the resolution that would allow reasonable people to react to situations where deficit spending is the only rational choice.

But we are not dealing with reasonable people.

This, unfortunately, is the logical conclusion to draw from last summer’s debt-ceiling debate. This was an excellent preview of how our current leaders would respond to a genuine fiscal emergency. On the day before America was set to default on its debt obligations for the first time since the Revolutionary War, 161 members of the House of Representatives voted against raising the debt ceiling. And even now, months after the debate, the “Supercommittee” that was formed by the debt compromise is on the brink of failing and throwing the nation back into the same crisis we faced in July and August.

And why has every attempt at a debt compromise failed? Because nearly every Republican currently in Congress has signed a pledge to never raise taxes, ever, under any circumstances, for any reason. Tea Party (and Utah) Senator Mike Lee even argues in his (genuinely awful) book The Freedom Agenda, that any balanced budget amendment should require a Congressional Supermajority to increase taxes (72)—a provision that found its way into an earlier version of the rejected amendment. And this, ultimately, is why Americans should not trust the current Congress with a balanced budget amendment. They have made it abundantly clear that goal of balancing the budget is less important than the goal of reducing taxes.

No quickie-mart manager would seriously set out to balance a budget by declaring a moratorium on any increase in revenue, much less a pledge to reduce revenues by any means possible. The Chair of the House Budget Committee, on the other hand, seriously proposed a budget that would try to balance the budget with nearly 2 trillion dollars in tax cuts. Such uncritical belief in the power of tax cuts, as I have argued before, goes well beyond rational economic theory and becomes a belief in magic.   

Really balancing the budget will require real pain and real sacrifice on the part of all Americans—those who pay taxes and those who receive entitlements. Those who believe that they can pull it off one hand tied behind their backs are deluded. Let’s not change the Constitution to make their delusions permanent.