A Cacophony of Pundits

What’s the collective noun for pundits? If President Obama, Congressional Republicans, or Congressional Democrats are looking for advice on the debt ceiling there certainly no lack of it, all pulling in different directions. A cacophony of pundits.

George Will thinks that the McConnell plan, which hangs the increase in the debt ceiling around the president’s neck, is to be preferred:

The Goldwater impulse took 16 years to reach fruition in the election of Ronald Reagan. The Tea Party can succeed in 16 months by helping elect a president who will not veto necessary reforms. To achieve that, however, Tea Partyers must not help the incumbent achieve his objectives in the debt-ceiling dispute.

One of those is to strike a splashy bargain involving big — but hypothetical and nonbinding — numbers. This would enable President Obama to run away from his record and run as a debt-reducing centrist. Another Obama objective is tax increases that shatter Republican unity and dampen the Tea Party’s election-turning intensity. Because he probably can achieve neither, he might want market chaos in coming days so Republicans henceforth can be cast as complicit in the wretched recovery that is his administration’s ugly signature.

Mitch McConnell’s proposal would require Obama to make three requests for additional debt-ceiling increases. Each time he would be required to recommend commensurate spending reductions. Concerning them, Congress would, of course, retain its constitutional power to do what it wishes.

Obama could muster sufficient Democratic votes (one-third plus one, in one house) to sustain his veto of Congress’s disapproval of his requests. But this would not enhance presidential power. Rather, McConnell’s proposal would put a harness on the president, tightly confining him within a one-time process.

Peggy Noonan likes the “Gang of Six’s” plan:

It’s good, it represents progress, build from it. That would be a helpful approach to the Gang of Six proposal on the debt. Don’t deep-six it because it’s flawed. Flawless isn’t going to happen. There will be a big election in 2012. A lot can be settled then, and after.

The Gang of Six—three Democrats and three Republicans in the Senate—this week put forward a plan aimed at reducing the national debt by almost $4 trillion over the next 10 years. It includes $500 billion in immediate cuts, and repeals a costly provision of ObamaCare. The plan would lower the top individual tax rate to 29%, push corporate tax rates down to 29% from 35%, and abolish the Alternative Minimum tax. On long-term spending the plan includes a legislative supermajority and sequester feature. In the words of a senator involved in the bargaining, “For the first time, we have some real teeth” in spending controls.

This is all pretty good. It moves the ball forward in the right ways.

Charles Krauthammer rejects any “grand solution”, which is apparently the direction that President Obama and House Speaker Boehner are headed in:

In my view, the Half-Trillion [ed. a relatively small increase in the debt ceiling] is best: It is clean, straightforward, yields real cuts, averts the current crisis and provides until year-end to negotiate a bigger deal. At the same time, it punctures President Obama’s thus far politically successful strategy of proposing nothing in public, nothing in writing, nothing with numbers, while leaking through a pliant press supposed offers of surpassing scope and reasonableness.

As part of this pose, Obama had threatened to veto any short-term debt-ceiling hike. Which has become Obama’s most vulnerable point. Is the catastrophe of default preferable to a deal that gives us, say, five months to negotiate something more significant — because it doesn’t get Obama through Election Day?

Eugene Robinson can’t accept anything that reduces entitlement spending:

Do we want a government that ensures medical care for senior citizens and the poor? According to a recent Post poll, 72 percent of Americans oppose cutting spending on Medicaid as a way to reduce the debt; 54 percent oppose raising the eligibility age for Medicare from 65 to 67.

Do we want a government that provides retirees with an adequate baseline income? Fifty-three percent of Americans oppose changes to Social Security that would reduce the rate at which benefits rise over time, according to the Post poll. These entitlements are sacred cows not just for Democrats but Republicans as well. Across both parties, Americans would rather see increased taxes on the well-to-do.

Far-right conservatives who harbor a radically different vision — of a much smaller government without the wherewithal to provide this kind of safety net — now control the House of Representatives and the Republican Party. In the debt-ceiling debate, they have rejected long-term solutions that have conceded most of what they demand. They want it all.

Progressives who say no — who acknowledge that we must reduce the debt but in ways that do not kill economic growth or gut entitlements — are being partisan for the best possible reason: Much is subject to compromise, but not our future as a great nation.

And, needless to say, Paul Krugman strenuously rejects any plan that reduces spending:

In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended.

Let’s talk for a moment about why our economies are (still) so depressed.

The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

Everything might still have been O.K. if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand.

I had thought that the debt ceiling debate was solely a matter of political posturing and that after enough pious speeches had been given and enoujgh points scored that debt ceiling would have been raised without further ado, just in the nick of time. Now I’m not so sure.

Can President Obama secure his grand plan? Can John Boehner get enough votes in the House for any increase in the debt ceiling at all? What will pass in the Senate? The situation has been likened to The Perils of Pauline. I’m beginning to think it’s more like Rebel Without a Cause.

Update

For a wryer take on the debt ceiling debate see the collection of political cartoons at U. S. News