Paul Ryan vs. Patty Murray: a real budget process emerges

Eric Shierman thb Paul Ryan vs. Patty Murray: a real budget process emerges

by Eric Shierman

On Tuesday, Paul Ryan did what he has done every year this earnest fellow has been chair of the House Budget Committee; he proposed a budget for his committee to vote on and send to the House floor for an up or down vote. The Senate has not done the same since 2009, but this year Senate Budget Committee Chair Patty Murray D-Washington, claims to be working on doing the same, releasing a less detailed plan yesterday that appears to only cut the deficit in half even as late as ten years from now. It falls far short of Ryan’s balanced budget in 2023, but at least it is something more than a sound bite which is all Senate Democrats have produced in four years.

Last fall, I read Bob Woodward’s masterful work The Price of Politics which lays out in detail the sloppy and ad hoc way in which the President led his party in negotiating with Republicans in 2011.

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Woodward of course is no partisan pining for Republican affection, but by simply laying out the facts of what transpired the book reads like an indictment of Obama’s leadership. His book has gotten much attention, primarily for showing how it was Obama that walked away from a deal despite blaming Republicans for never saying yes to anything, but what has gotten less attention is the news Woodward has made uncovering how it all began. The innovative new idea to use the debt ceiling vote as leverage to force reductions in deficit spending actually originated from a Democrat:

On Tuesday, November 24, 2009, just before Thanksgiving, Senator Kent Conrad headed down Pennsylvania Avenue for a private meeting at the White House with his former colleague, now the president. It was another step in a career-long effort of what could be called “The Project,” or “The Mission.” Conrad, the head of the Senate Budget Committee, believed the country was heading off a fiscal cliff. He could prove it, and he was going to fix it.

His intense, scholarly look inspired one Senate colleague to refer to him as “The Auditor.” But the 61-year-old North Dakotan also had an honorary tribal name given by the Sioux Indians in his home state: It translated as “Never-Turns-Back.”

From his five years as state tax commissioner to his 23 years in the Senate, Conrad was the quintessential fiscal hawk. He had been the second senator to endorse Obama for president, and the two had a friendly, though not close, relationship.

In the Oval Office with Obama and his economic troika, Geithner, Summers and Orszag, Conrad warned that federal debt and spending posed a long-term threat, more now than ever. The country’s present course was not sustainable. And that’s not just my view, he said. It’s the view of your budget director, Orszag. It’s the view of the head of the Congressional Budget Office. It’s the view of the Federal Reserve.

“Kent,” Obama said, “I’ve seen your charts.”

Everyone laughed. Conrad’s charts were notorious. He used so many on the Senate floor and in committee hearings— more than all the other senators combined— that he had earned his own printing equipment. He could wear out even the most dedicated green eyeshade with his presentations of the nation’s finances and their descent into oblivion.

“You convinced me long ago that we’re on an unsustainable course,” Obama said. The reasons to rein in the deficit were abundant and obvious. The public debt was now approaching $ 12 trillion, about 85 percent of the Gross Domestic Product (GDP), the sum of all goods and services in the American economy. Just paying the interest on the debt cost the country hundreds of billions of dollars per year.

Conrad knew their cordial conversation would go nowhere, so he came prepared with an innovation. Conrad pioneered the leverage of debt ceiling brinksmanship:

“I believe so strongly in what you’re saying,” the president said, “I’d be willing to be a one-term president over this.”

It was a stark private declaration that Orszag had heard from the president before. But the president’s assurances weren’t enough for Conrad. About a dozen senators, Conrad warned, felt strongly enough about the issue that they were going to take it to the next level by insisting that Congress create a commission to tackle the problem. Until the commission was in place, they would block any increase of the debt ceiling.

That is the conception of the Bowles Simpson commission, but after its birth it no longer had a Democratic father. Woodward details how Obama promptly bought off Conrad and his fellow “blue dog” Democrats. In the case of Conrad the transaction was made with farm subsidies, massive discretionary farm subsidies to the little state of North Dakota.

When Republicans gained control of the House a year later, they could not be bought off, but Woodward identifies the President’s key flaw that doomed the process from the very start. Obama sidelined his own Democratic congressional leaders while trying to negotiate two separate tracks: one with Boehner and another with an informal collection of Senators called the Gang of Six. The President reached a deal with Boehner first. Before the details of this deal could be scored by the CBO and formally announced, the Gang of Six came up with their own which raised slightly more revenue. Congressional Democrats rejected the President’s deal and rather than twist their arms Obama backed away from it too, leaving Boehner hanging in the wind.

Woodward explores accusations that a brilliant Obama who wanted no deal did this intentionally and Woodward ends with a conclusion that it remains unclear if this was intentional grounding of the budgetary football or simply the President’s incompetence. What stand out as very clear is that this was all avoidable if the established procedures of Congress were used. Let’s not forget, budgets cannot be filibustered. If each chamber controlled by each party simply passed their partisan bill, the right place to hold negotiations is in a conference committee.

By following established legislative processes there would have been no room for chaotic accusations of reneged agreements and missed phone calls. A formal approach would have also been able to leverage the power of the CBO to filter some of the White House’s tactics of deception. Woodward’s reporting was able to discover that White House staffers were secretly using numbers from 12 year projections to make their savings look bigger to Republicans who thought they were talking about standard 10 year numbers. The CBO has its flaws, but those flaws are well known and intentionally designed to make lawmakers think we can mostly grow our way out of budget problems using a famously rosy methodology which always projects a future decade of uninterrupted 4% annual growth. As long as that is known, the CBO’s methodology is valuable because it’s transparent and consistent. In 2011, throwing cooked numbers back and forth was an utter waste of time.

Now we see a healthy development. In response to House Republicans, the Senate seems serious about passing a budget this year. The President then met with his congressional Democrats inoculating them to the fact they will have to compromise on entitlement spending. These are good signs.

There is just no getting around the fact that Republicans will have to compromise too, but it does not necessarily have to be entirely on revenue. Ryan’s budget leaves defense spending slightly above where current law’s sequester is, but it stands out as $2.3 trillion less than where he was forced to campaign on as Mitt Romney’s running mate. That’s a promising overture to Democrats. Forty percent of Ryan’s cuts come from eliminating Obamacare’s expansion of Medicaid and the expensive subsidies for the health exchanges. Obviously that won’t fly with Democrats, but if the Democrats respond with further defense cuts, there is opportunity here for a serious deal. Republicans need to greet that counter offer with a hand shake, shoving their Neocons into the basement to avoid the usual demagoguing of the issue with scare tactics warning of a terrorist under every bed. We spend way too much on defense, and deep defense cuts offer a compelling chip to bargain away.

When Democrats actually spell out their budget in a bill that gets scored by the CBO, they will be looking for cuts in spending not just revenue. So far the amount of revenue from tax increases that Murray has made public amount to only $975 billion over ten years. It will take around four times that to balance the budget a decade from now. Democrats need to vote for either a $4 trillion tax increase or find some spending to cut. Keep in mind Ryan does not even actually cut spending; he simple reduces its rate of growth from current law’s 5% to a more manageable 3.5%. Let Democrats find their own means to achieve the same responsible ends.

Let Democrats send their partisan bill that represents their progressive priorities to a conference committee and let’s have a real budget process this time around, because time is running out. Don’t be surprised if that final agreement looks a lot like Bowles Simpson, a sensible framework that came into being because a Democrat forced the leader of his own party to stop ignoring fiscal gravity.

Eric Shierman lives in southwest Portland and is the author of A Brief History of Political Cultural Change. He also writes for the Oregonian’s My Oregon blog.

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Posted by at 05:00 | Posted in Federal Budget, Fiscal Cliff, President Obama | 22 Comments |Email This Post Email This Post |Print This Post Print This Post
  • T. Partee

    Patty Murray, Nancy Pelosi and Debbie Wasserman Schutz have minds akin to Charlotte Lehan’s. ‘Nuff said.

  • Qwerty

    What you’re missing in the 2011 fiasco is Valerie Jarrett’s role in derailing the agreement. CBS (wonder of wonders) reported on it last summer.

  • DavidAppell

    You have to love Paul Ryan — he is the best thing to happen for the Democrats since Joseph McCarthy.

    Except maybe for Rand Paul. (PLEASE let him be the R nominee in 2016.)

    Do you people really not see how easy it is to beat crazy? Or are you only interested in some immediate emotional relief?

    • ardbeg

      Are you talking about Ryan 2012 or Ryan 2002 when he pleaded for stimulus spending under Bush II? His spending speech was a total 180 from 2012. http://www.youtube.com/watch?v=BlwAToAj7cE is the you tube site where he implores the house to not only approve the stimulus but approve extended unemployment and health insurance for the unemployed! Wow! and conservatives wonder why the majority of Americans don’t trust the words coming out of their mouth. What a douche!

      • DavidAppell

        Thanks for the link….

        Paul Ryan is the most odious of politicians — someone who say absolutely anything at any time, whatever is required by politics.

        You can tell just by looking at him. The man has no morals at all. It’s why he’s risen so high.

        • ardbeg

          Yea, but 47% of the fools still vote for him. I’m wondering what his tune will be in another 10 years.

          • DavidAppell

            His tune will be whatever he things can get votes. That’s what liars like him do.

          • guest

            IMPEACHED President Clinton grandstands behind you DA!
            Meanwhile, Kenya believe BHO delivers moron the subject matter with tongue-in-chic sock puppet verbiage and expects US to believe it?

            Lo, nuts to you and dours DEMmings gone over a cliff including an addVice president bereft of an ounce of truth in him, Jo Jo Biden.

            In foreclosing, funk you very much for your jackassment Mr Applesass, left wing nut.”

        • Frar Francis

          That’s a lot nonsense, DA!

          • Friar Fansis

            Moniker in screed is Friar Francis concerned that your hokum, is not in facet, monsieur howlee. monkee DA!

      • J. Pardee

        Hokum it’s so easy for ardbeg to post his stringers while others must beg?

        • ardbeg

          Proof of what a tool this guy is and you still can’t see it? Should I go with “can’t fix stupid” or “stuck in stupid” to describe your response. Oh yea, using Hokum and Stringers makes you a douche. Keep drinkin the Kool-aid and living in fear.

          • J. Pardee

            Yes v’gina, there is an ardbeg clause and judging by “what you don’t know cant hurt you,” he’s practically invulnerable.

    • Oy vey is mir

      “You people”…ruminates rabble Appell, separatist.

  • Damascusdean

    We don’t have 2 extreme positions. We have one position, supported by Obama and the Senate Dems and probably 80% of the American people, that long term deficit reduction should include additional revenue and cuts in the growth of spending. And we have a Paul Ryan/R Party position that only offers cuts.

    Obama and the Senate Dems have no reason to find a middle ground. They already have the middle ground and just need to hold their position and watch the Republicans gradually give in or get voted out.

    Any way you look at it the economy appears to be gaining steam, which makes the big deal less important by the day in any case. The deficit is already down a couple hundred billion this year from last after all.

    • Aghast

      You belie. Pithy you’re on the bong side of what’s left or bereft of US.

  • http://www.facebook.com/people/Larry-Sparks/100000792793213 Larry Sparks

    We must have a balance budget not the wastful budget of Senate Demos as the majority of the american people support the ryan plan.

    • DavidAppell

      I am dubious that a majority of Americans support Ryan’s plan. You got data proving it?

      • guest

        DA, your google image portrays it all as as being a jackass whoop, whoop me worry as a demcompoop!
        Google this dour apple up folks and see zit for what it is.

    • http://www.facebook.com/people/Larry-Sparks/100000792793213 Larry Sparks

      The non partisan Tax Foundation analyzed both the Ryan Plan and Murray Plan. The Ryan plan was deemed the best budget approach to reduce spending, balance the budget, and increase economic growth. For all those doubters and blind Obama voters, just go read the Tax Foundation report and do not come back and misrepresent what is says.

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