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Take the Deal

By definition, no compromise is perfect. Given the circumstances, the question facing members of Congress is not even whether or not the compromise struck by negotiators is so bad that they cannot support it. The question is whether or not the agreement would be worse than a government default. That is an easy question to answer.

The worst part of the deal is obvious: It requires no new taxes and it closes no existing tax loopholes. It is a scandal that the wealthiest pay less of a percentage of their income than the middle class. It is a scandal that the right-wing mantra about “job-killing tax increases” has been accepted as Gospel when, in fact, budget cuts will have a worse immediate effect on the economy and jobs than would a tax cut. Money that goes to the poor through government social programs is guaranteed to be spent. A tax cut may be spent, but it might not: As we know, corporations are currently sitting on huge mountains of cash. As I have argued before, if tax cuts resulted in job growth, the last ten years would have seen full employment. They did not.

That said, the special committee of Congress the deal sets up will look at the tax code for new revenues as part of the second round of negotiations to close the budget deficit. The bad news is that entitlement reform will be in front of that new committee also. But, here is where there is a glimmer of hope for Obama and the Democrats. The choice before the new committee will be closing tax loopholes or cutting Medicare. You do not need to take a poll to know where voters come down on that one. In most regards, the GOP completely out-negotiated Obama and the Democrats, so I was surprised that they did not see this debate coming.

The best news about the compromise deal is that specific programs that help the poor, including Social Security and Medicaid, are specifically off-the-table should across the board cuts be required should the new committee fail to reach its targets, or should both houses of Congress fail to pass what the committee produces. This shows the influence of the United States Conference of Catholic Bishops and the coalition of religious leaders they helped organize into the “Circle of Protection.” Religious leaders met with President Obama last week. They have met with leaders in Congress too. Evidently, there is still a unique moral authority that comes from people who ask nothing but themselves but only ask that the poor be spared. Bishops Stephen Blaire and Howard Hubbard have led the lobbying effort on behalf of the poor. Bishop Ricardo Ramirez represented the USCCB at the meeting with Obama. John Carr and Kathy Saile, who work at the USCCB on these issues, were tireless in their efforts to protect programs that help the poor. But, they were more than tireless. By carefully, over many years, refusing to be seen as the pawns of either political party, their voice could be heard by both parties. Kudos to these four churchmen and one churchwoman for their efforts.

Of course, the deal also requires $1 trillion cuts in domestic discretionary spending over the next ten years. That is $100 billion per year. Most of those cuts will be in later years, once the economy improves, which is a good thing. But, the USCCB must keep up the pressure to ensure that the bulk of those cuts, whenever they occur, do not fall on the backs of the poor. As Carr said at the Social Ministry Gathering in February, NPR can take care of itself, the poor can’t. (I like NPR a lot, but Carr was right.) The White House and Congress should look at those programs, many of them outdated, that can be cut without further pain to the social fabric.

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The second best thing to come from the negotiations has to do with military spending. Finally, that most bloated part of the federal government was put on the table. If the new committee does not meet the deficit reduction goals as planned, the across the board cuts would extend to the Pentagon. This puts pressure on the committee from the right. And, it gives the Democrats on the committee a strong negotiating tool: If the committee does not include cuts in defense spending as part of the deficit reduction effort, there will be yet larger cuts mandated by the across the board mechanism.

Both parties emerge from these messy negotiations with some soul searching to do. Democrats need to figure out how they so thoroughly lost the messaging war that tax increases on the super-rich were seen as a deal breaker. Republicans, especially House Speaker John Boehner, need to figure out how to tame their base which forced the Speaker into the embarrassing position of having to pull his bill off the floor lest it go down to defeat and make ridiculous changes in it to appease the Tea Party Caucus. In an off-year midterm election, the Tea Party was able to win many races, but the complexion of the electorate in a presidential election year is decidedly different. By appearing beholden to their extremes, the GOP leadership allowed their entire brand to be stamped with ideological foolishness. Conversely, the President’s sweet reasonableness may have hurt him at the negotiating table, but he emerges from this mess looking like an adult.

It has been difficult finding specifics this morning on what, exactly, the immediate $1 trillion in cuts look like. But, there is no alternative to voting for the compromise. The prospect of rising interest rates threatens everybody, including the long-term fiscal health of the country, to companies that require lines of credit (which is to say almost all companies), but also the low-income person struggling to improve his or her credit score. Finally, the grown-ups in the room have averted that crisis. It will be curious to see how many in the Tea Party caucus back this final measure. It will also be curious to see how many Republican members of Congress who back the compromise find themselves facing primary opponents in the next few months. And, it will be curious to see if the President learns from this debacle that it is time to get better at shaping the political landscape. He did that in 2008 on the strength of his personality. Now he must do so on the strength of his policies.

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August 15-28, 2014

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