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The Notion

Unfiltered takes on politics, ideas and culture from Nation editors and contributors.

When Will the Press Wake Up and Blame Republicans?

This, via Politico’s Playbook, is the new Republican spin:

Steven Law, president of Crossroads GPS and American Crossroads: “Our economy really is hanging by a thread, and Republicans must stop President Obama’s reckless scheme to raise taxes in the middle of a jobs recession. The fact that Obama is willing to hold our country’s fiscal stability hostage over more taxes shows how ideologically committed he is to expanding government regardless of the economic cost.”

Of course, It’s no surprise that the president of a conservative political action committee would repeat the fiction that President Obama is somehow responsible for the brinksmanship on display in negotiations over the debt limit. What’s disappointing is the extent to which this lie has wormed its way into mainstream journalism and opinion writing. Yesterday, for example, David Brooks bemoaned Obama’s tone, blaming his press conference last week for any recent intransigence by House Republicans. Likewise, headlines at MSNBC, CNN and the Washington Post—“Boehner, Reid Appear to Give Ground”—imply a parity of intransigence, as if both Republicans and Democrats refused to compromise on their priorities.

Of course, the literal opposite is true. It’s the Republican Party that broke from decades of precedent in order to use the debt ceiling as leverage for right-wing policies, and it’s Republican leaders who pledged—from the beginning—to take this to the brink unless Democrats capitulated to their demands. Here, for example, is what House Speaker John Boehner said several months ago in an address to the Economic Club of New York:

“Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” Mr. Boehner told members of New York’s business and finance community. “And cuts should be greater than the accompanying increase in debt authority the president is given.” Mr. Boehner said those cuts should be in the trillions of dollars, not billions.

After a month where Democrats have repeatedly given into Republican demands—even going as far as to raise the Medicare eligibility age as part of a deal—is too much for the press to say that this is a crisis of GOP’s making?

Nation Conversations: Katrina vanden Heuvel and Dave Zirin on The Nation's Sports Issue

Sports is an integral part of our political culture—the struggles for racial justice, gender equality, social and economic change are all reflected in sports culture and history. Though many treat sports as an "escape," it is almost impossible to escape politics and social issues through sports. From Jackie Robinson and the first integrated sports teams to Pat Tillman and our wars in Afghanistan and Iraq, the politics of sports is woven into the fabric of our nation. 

In this Nation Conversation, Sports Correspondent Dave Zirin joins Editor and Publisher Katrina vanden Heuvel to give some backstory to The Nation's second-ever special issue dedicated to sports, and explains how progressive politics and sports continue to overlap today.

—Anna Lekas Miller

The Trouble With Tomatoes: Slave Labor (and That Cardboard Taste)

The tomato is in trouble. The tomatoes in Big Macs and Taco Bell tacos and in supermarkets, especially in the winter, all come from the same place: South Florida. “Tomatoland,” Barry Estabrook calls it—that’s the title of his new book. Those tomato fields are “ground zero for modern-day slavery”—that’s what the chief assistant US attorney there says. And there’s one other problem: those tomatoes taste like cardboard.

Tomato plants don’t like it in Southern Florida. “From a purely botanical and horticultural perspective,” Estabrook says, “you would have to be an idiot” to try to grow tomatoes commercially there. The soil, Mark Bittman writes, is like “a lousy beach,” sandy and poor in nutrients. The humid climate provides breeding ground for voracious insect pests.

It takes a lot to grow a tomato in the sand of South Florida: tons of pesticides, herbicides and chemical fertilizers. Florida, Estabrook reports, uses about eight times as many chemicals per acre on tomatoes as California.

Pesticides and herbicides are bad for the environment, and also for the tomato workers. But they aren’t the workers’ biggest problem. “If you have ever eaten a tomato during the winter months,” Estabrook writes, “you have eaten a fruit picked by a slave.” The chief assistant US Attorney in Fort Myers, Douglas Molloy, says that’s not just a metaphor, “that is a fact.” He has “six to twelve slavery cases” in the tomato industry at any given time. In recent years, more than a thousand slaves have been freed there. Undoubtedly, there are many more who haven’t.

The pay is miserable. When two growers offered to pay workers a penny a pound more, the Florida Tomato Growers Exchange told them they couldn’t do it; if they did, they would be fined $100,000. The workers live in squalid trailers with faulty plumbing. Child labor and other abuses are rampant.

Yet from October to June, virtually all the field-grown tomatoes in supermarkets come from Florida. One billion pounds of tomatoes. They are picked when they are green; the only reason they are red in the stores is that they’ve been gassed with ethylene, which changes their color.

And there’s that other problem with tomatoes grown in Southern Florida: they have no flavor. They are bred to be indestructible. Estabrook saw tomatoes falling off a truck going 60 mph; when he stopped to examine the tomatoes that hit the road, he says, they “looked smooth and unblemished. Not one was smashed.”

But the tomato workers have a wonderful grassroots group or organizers and activists fighting the growers: the Coalition of Immokalee Workers (CIW) (“Immokalee” rhymes with “broccoli”) and their Campaign for Fair Food. The campaign has had some huge victories. Four years of protests against Taco Bell culminated in 2005 with the company agreeing to meet all the demands of the campaign, starting with better pay: the percentage of the retail price that now goes to the workers has nearly doubled. Also, an enforceable Code of Conduct has been established, and the CIW is part of the investigative body that monitors worker complaints.

McDonald’s signed an even better agreement in 2007, and Burger King followed in 2008. So did Sodexo, which runs dining halls at hundreds of schools and colleges. All have promised not to deal with growers who tolerate serious worker abuses, and to a pay a price for their tomatoes that supports a living wage.

This year the campaign is taking on the supermarkets. Whole Foods is the only one thus far to join. Trader Joe’s has refused, and the Campaign for Fair Food has made them the target of nationwide demonstrations this summer. The Trader Joe’s Truth Tour just finished up in California, and is now heading east. Next come protests at Trader Joe’s in Washington, DC; Baltimore; Philadelphia; and New York City. Those demonstrations start Tuesday, August 2.

Also targeted: Stop & Shop, Giant, and Kroger, which next to Walmart is the biggest food retailer in the country (and owns Ralph’s in California). The campaign has model letters to send or deliver to these stores.

The Campaign’s Fair Code of Conduct includes informational sessions for workers. Estabrook reports at his website that he went to one recently in Immokalee, along with fifty migrant laborers: “I learned that I had a right to earn a minimum wage of $7.25 an hour, and could take regular breaks in a shady area provided by the farm, including a lunch break.… For some of my work, I would get an extra penny per pound for the tomatoes I picked—which amounted to a 50 percent raise. I was informed that sexual harassment would not be tolerated. And finally I received a card with the number of a 24-hour confidential help line.” None of this happened before the Coalition’s recent victories.

As for the Florida tomato, it’s possible that modern science will someday come up with a new breed that not only can be transported long distances but actually tastes good. In the meantime, it’s tomato time at local farmers’ markets everywhere, and also in the backyards of those wise enough to have planted their own tomatoes a few months ago.

The Markets, the Pols and the Greek Bogeyman

When Greek finance minister Evangelos Venizelos met Timothy Geithner in Washington yesterday, did they commiserate about the depredations of the rating agencies which have wreaked havoc on European economies over the last months, and which are now attempting to dictate terms in Washington? Standard and Poor’s has threatened to withdraw the United States’ AAA rating unless a timely agreement is reached on raising the debt ceiling—and unless legislators agree on a $4 trillion package of deficit reduction measures. Greece has suffered repeated assaults from the three unelected Fates, which have now pushed interest payments on the country’s two-year bonds up to 27.7 percent. On Monday Moody’s cut Greece’s rating by three notches to Ca—implicit default—further dampening the squib of euphoria that greeted last week’s European summit agreement on a new bailout for Greece, along with measures meant to contain the crisis and stabilize the Eurozone.

Not that the agreement was about to save the world, though some of its terms are welcome. It does ease the pressure on Greece, Ireland and Portugal by extending the term of EU loans from four to thirty years and reducing the interest rate to 3.5 percent; it also provides for a voluntary “haircut” of 21 percent (too little and too late) for Greece’s private creditors—a victory for German Chancellor Angela Merkel, who didn’t want to hand the whole burden to German taxpayers. (An arcane mechanism is supposed to contain the rating agencies’ threat to consider such a haircut a technical default, triggering debt insurance payments across the world; it is still not clear how far this has been successful.) The agreement is also a step towards greater European fiscal union—read redistribution—with provision for the new European Financial Stability Fund to buy up sovereign debt and recapitalize the banks not only of failing Eurozone countries but of those deemed at future risk. Of course, no decision has yet been reached on how the EFSF itself is to be financed; details at eleven, or more likely in September when the Bundestag gets back from its vacation, hopefully in a more charitable frame of mind.

But the EU’s attempt, once again, to ringfence Greece as if the European debt crisis was caused by Greece alone looks doomed and dangerous: Paul Krugman responded to it with a short blog titled “1937! 1937! 1937!” After emphasizing that the haircut for private lenders applies only to Greece’s creditors, the document goes on to whistle loudly in the dark, “All other euro countries solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms.” As any parent knows, making concessions to one child while strictly forbidding the same concessions to the others is a fatal sign of weakness; and as the Greek economist Yiannis Varoufakis points out, expecting Portugal and Ireland (and Italy and Spain) to go on making pledges they can’t meet is an open invitation to speculators (and the rating agencies that serve them) to push up bond spreads, hedge their bets and keep the whole destructive cycle going.

This is why the popular game of Blame the Greeks, played in the Western media since the crisis began, is so irresponsible: it perpetuates the myth that the whole European financial crisis with its global repercussions has been caused by one little country and its pathetic people who won’t pay their taxes and who expect to retire at 55, and that if those people can be made to stop whining and take their medicine, everything will be all right. The wizards at Moody’s know this isn’t true; the Greeks know this isn’t true; and, judging by the defensive tone of the summit agreement, European leaders also know this isn’t true—only they can’t admit it, because that would mean acknowledging that they have no idea how to get out of this mess, caught as they are between the financiers threatening Armaggedon on the one side and their own voters threatening to unelect them on the other.

This is not to say that Greece’s economy and political culture are not in need of root-and-branch reform, or that the country has not been living beyond its means for decades; they are, and it has. But to rehearse Greece’s ills yet again (as a piece on this website did last week) without acknowledging the wider context of an unbalanced European economy and a deregulated, overpowerful financial system is to obscure the systemic problems, which will keep erupting until Europe decides what it wants to be when it grows up and the markets are restrained from dictating government policy. Inside and outside Greece, there’s a misleading argument between those who think the roots of the problem are domestic and those who think they’re international and systemic; both are right, and both aspects need to be addressed.

There’s often a political difference, though, between those in either camp. Those on the domestic causes side also tend to dismiss the Greek protests against austerity measures imposed by the EU and IMF as self-interested resistance to necessary reforms—a canard levelled at popular movements for centuries. But while many Greeks voted for George Papandreou’s government precisely because they were sick of politics as usual and wanted an end to corruption and clientelism, none of them voted for the extreme wage cuts, pension cuts and tax rises that are now pushing them into poverty, or for the forced sell-off of public assets and public lands that will lay the country open to further exploitation and environmental damage. Reform was bound to be difficult and painful; but it need not have been devastating.

The problem of political agency is fundamental here. As John Lanchester pointed out in The London Review of Books, we can’t retroactively demand of individuals an agency they never had, expecting them to make personal decisions based on an abstract sense of what might be best for the country—to turn down a public sector job, for instance, because the state has too many people on its payroll—and then be surprised when they won’t pay for the “past sins” of their goverment. We may like to dream that we live in democracies, but they were long ago hijacked by the Hydra of “the markets”; the question is whether the leaders we elect, in Athens or in Washington, can find the will to tame them, and whether we can keep the pressure on until they do.

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'Jobs' Missing From Washington Conversation

In the past few weeks President Obama has made a relentless sales pitch for a “grand bargain” deal to cut the deficit and raise the debt ceiling. He’s persuaded many leaders in his own party, including liberal stalwart Nancy Pelosi, who said yesterday “it is clear we must enter an era of austerity.”

If only President Obama and the rest of Washington’s political class had tried to solve the jobs crisis with such aggressive persistence. The fact is, aside from the stimulus bill, the Obama administration never seriously pushed for a comprehensive jobs bill, even though it’s been clear for quite some time that more action is needed from Washington to help solve the economic crisis. Republicans, meanwhile, always propose the same solution to any problem: massive tax cuts for rich people and giant corporations. No wonder the public is in a restive mood and getting more anxious as the economy continues to lag and both parties ignore the number-one issue facing the country.

According to a new Washington Post poll flagged by Greg Sargent, only 39 percent of Americans approve of how Obama is handling the economy (the number for Congressional Republicans is even lower, at 28 percent). Voters trust Obama more than the GOP to handle the budget deficit, yet remain incredibly pessimistic about the federal government and the economy as a whole. Only 20 percent of voters feel positive about how the federal government works, the lowest number since October 1992, and 90 percent of voters describe the state of the economy as “negative.” Eighty-two percent of voters say jobs are “difficult to find” where they live. A mere 29 percent of voters say the Obama administration has made their lives better, while 37 percent say worse and 33 percent report no effect.

It goes without saying that these are very bad numbers for the president. “Washington’s obsession with the deficit, at the expense of job creation, is doing nothing to help Obama’s standing on the all-important issue of the economy, where the president continues to slip,” Sargent writes.

The president and his advisors are convinced that massive spending cuts, as part of a larger deficit reduction deal, is the only way for Obama to win back elusive independent voters in 2012. “Obama’s political advisers have long believed that securing such an agreement would provide an enormous boost to his 2012 campaign, according to people familiar with White House thinking,” the Post reported Monday. “In particular, they want to preserve and improve the president’s standing among political independents, who abandoned Democrats in the 2010 midterm elections and who say reining in the nation’s debt is a high priority.”

At a time of rising economic insecurity, the White House is placing a very risky bet. I’d argue that independent voters—and the electorate as a whole—will ultimately judge the Obama administration based on how the economy is performing, not on the size of the deficit. If the jobs crisis doesn’t improve by November 2012, no one will remember the deal Obama struck to prevent an economic catastrophe.

—Ari Berman is the author of Herding Donkeys: The Fight to Rebuild the Democratic Party and Reshape American Politics. Follow him on Twitter at @AriBerman.

Mitt Romney's Dishonest and Unsuccessful Record on Job Creation

Mitt Romney has made weak job growth under President Obama and his promise to do better the central argument of his candidacy. The Romney campaign sends out daily missives with headlines like “College Students to Obama: Where are the Jobs?” and “President Obama has Failed to get California Back to Work.” They have made multiple videos to hammer the point home.

In fact, whenever Romney is asked about another issue, he is liable to preface his answer by saying that nothing matters so much as jobs. In the last Republican debate,when asked about “don’t ask, don’t tell” repeal, he began with the total non sequitur, “Well, one, we ought to be talking about the economy and jobs.”

At the same debate Romney asserted:

“What this president has done has slowed the economy.  He didn’t create the recession, but he made it worse and longer.  And now we have more chronic long-term employment than this country has ever seen before.... This president has failed.  And he’s failed at a time when the American people counted on him to create jobs and get the economy growing.... I spent my life in the private sector, twenty-five years.... You can tell how—how to get jobs going in this country, and President Obama has done it wrong.”

Such a claim—that President Obama has failed at creating jobs and Romney’s private sector experience means he would do better—naturally raises the question: How has Mitt Romney done at creating jobs?

Not so well, as it turns out. First, during that quarter-century of private sector experience, Romney worked at a private equity firm that attempted to take over and turn around failing companies. As Bloomberg reported last week, that often meant laying off workers. Other times, they failed to revive companies and shed workers in bankruptcy. Relative to an innovative entrepreneur such as New York Mayor Michael Bloomberg, who invented a product and built a large company, Romney’s record in the private sector was not one of impressive job creation. These incidents have haunted Romney’s career since 1994, when laid-off workers protested his Senate campaign.

But even if you were to assume that any private-sector experience equals job creation, it does not necessarily follow that business success translates into success in public office. As governor of Massachusetts from 2003 to 2007, Romney presided over anemic job growth. According to Reuters, “Labor Department figures showed Massachusetts ranked forty-seventh among the states in the rate of jobs growth in those four years —ahead of only Ohio, Michigan and Louisiana.” You might expect this to make Romney shy about constantly attacking anyone else’s record on job growth, but it hasn’t. Nor, apparently, has a series of embarrassing revelations about Romney’s campaign commercials and speeches. 

In June Romney released an ad featuring a recent college graduate named Ryan King of Midland, Michigan, who complained that he could not find a job. As it turned out, King got a job within days of his college graduation and also happens to be vice-chair of the Midland County Republican Party. The Wall Street Journal dubbed the ad “A Baloney Sandwich.”

Meanwhile Romney’s bizarre commercial in which Nevadans stand up and declare they are “not a bump in the road” as a retort to President Obama’s acknowledgment that there have been bumps in the road to economic recovery was plagued by similar dishonesty. Two of the people holding up signs complaining about the lack of jobs available to them turned out to be full time students and leaders in the University of Nevada–Las Vegas College Republicans chapter.

Undeterred, Romney has pressed ahead with using these phony stand-ins for supposed victims of Obama’s economic record. Last week a Romney ad in New Hampshire featured Packy Campbell, a former Republican state legislator whose business suffered “in the Obama economy.” It turns out that, even by Campbell’s own admission, his business was falling off before Obama took office.

Meanwhile Romney visited the Valley Plaza shopping center in North Hollywood, California, to lament that it has not been redeveloped because of economic conditions. As TPM’s Benjy Sarlin explains, the strip mall was badly damaged in a 1994 earthquake and has struggled ever since. And the death blow to its redevelopment plans were delivered by none other than iStar, a company owned by Romney donor Jay Sugarman, which foreclosed on the property. The Romney campaign did not return a request for comment.

Will any of these embarrassing, dishonest gaffes cause Romney to shift his campaign’s focus? Thus far they have not. On Monday, Romney was back at it, with a press release titled “President Obama has Failed Hispanic Americans on Jobs.” Of course, being shamelessly hypocritical has never bothered Romney before, so why should it start to now?

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Obama's Dangerous Campaign Pledge

As part of his latest offer on the debt ceiling, House Speaker John Boehner has proposed a ceiling on future federal revenues, reports John McKinnon for the Wall Street Journal. The ceiling would limit total revenues to $36.2 trillion over the next decade, or $800 billion more than the amount that would be produced if current policies, including the Bush tax cuts, were set in stone. As McKinnon notes, Republicans hope that savings would come from “higher economic growth stemming from a streamlined tax system, rather than any policy changes that would be involved in a tax overhaul.”

In essence, this proposal is an attempt to match the administration’s earlier goal of $800 billion in new revenue without raising taxes and invoking the ire of right-wing House Republicans. Think of it as the lowest common denominator for Republicans. Of course, this makes it a terrible deal for the White House, especially given the alternative —next year, if the president does nothing, the Bush tax cuts will expire and taxes will return to Clinton-era rates. Over the next ten years, this would provide $4 trillion in additional revenue, cut the deficit in half, and stabilize the debt.

If President Obama is willing to go back on his campaign promise to freeze taxes on the middle class, then he doesn’t actually need to raise revenue as part of a deal on the debt ceiling. He could take a package of cuts now, and look to revenues when the Bush tax cuts come to an end.

Insofar that progessives should be worried, it’s because of Obama’s steadfast opposition to a middle-class tax hike. The progressive agenda is unsustainable without a return to Clinton-era tax rates; anything less requires cuts to the social safety net. Republicans understand this, hence their frantic effort to lock tax rates in at the Bush level or lower. Progressives have zeroed in on Obama’s poor negotiating as evidence of his betrayal, but if they’re really concerned with the viability of the progressive project, they’ll turn their attention to that dangerous campaign pledge.

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Against All Odds: NFL Players Association Emerges From Lockout as Bruised, Battered Victors

A sports media consensus on the end of the NFL lockout has already emerged. Like 6-year-old kids getting trophies after soccer practice, everyone’s a winner. As Don Banks at Sports Illustrated, assessed, thrilled that the golden goose will lay eggs another day, “Neither side got everything they wanted, but good negotiations are like that. Now that this CBA fight is almost over, and labor peace seems finally at hand, both the players and the owners have the right to claim success.”

These parroted assessments by focusing on the final score, miss the true, overarching story of the longest work stoppage in NFL history: at the opening kickoff, the sides weren’t close to evenly matched. I think that what the NFLPA has done is the equivalent of the Bad News Bears squeaking out a victory against the 1927 New York Yankees. It’s The Haiti Kid taking down King Kong Bundy. It’s workers, in an age of austerity, beating back the bosses and showing that solidarity is the only way to win.

When the lockout began, NFL’s owners had, in their judgment and, frankly, mine as well, every possible advantage. They had a promise from their television partners of $4 billion in “lockout insurance” even if the games didn’t air. They had a workforce with a career shelf-life of three to four years, understandably skittish about missing a single paycheck. And most critically, they had what they thought was overwhelming public opinion. After all, in past labor disputes, fans sided against those who “get paid to play a game.” Owners wanted more money and longer seasons and approached negotiations with an arrogance that would shame a Murdoch spawn.

I remember talking to NFLPA executive director DeMaurice Smith at the start of this process, and hearing his optimism in the face of these odds, as he spoke of the bravery of workers in Wisconsin and the people of Egypt who he said were inspiring him to fight the good fight. He mentioned the books he was reading like the classic civil rights history Parting the Waters: America in the King Years, by Taylor Branch. I remember smiling politely at De Smith and thinking, “This guy is going to get creamed.”

I was very wrong. I didn’t count on Judge David Doty, a Reagan appointee, putting an injunction on that $4 billion lockout slush fund, taking away the owner’s financial upper hand. I didn’t count on the way that health and safety issues would bond the players together, making defections among the 1,900 players nonexistent. I didn’t count on the way many fans, upset at the lockout and well-educated on the after-effects of the brutality of the sport, would side with the players. I lastly didn’t count on the way that reservoirs of bitterness felt by NFL players and the union would bind them together against NFL Commissioner Roger Goodell and an ownership group that had just lied to them once too often.

They stuck it out, and now the end results of the Collective Bargaining Agreement, look quite good for players. We are looking at a ten-year CBA in which minimum salaries will go up 10 percent a year for the life of the agreement. Players get a slightly lower percent of revenues (about 46 percent down from 50 percent), but they will receive 55 percent of future national media revenue, which, will mushroom in the years ahead. Teams also will now have to spend at least 90 percent of the salary cap on actual salaries. In other words, there won’t just be a salary cap, there will be a salary floor. In return, rookies will need to sign four-year contracts that are scaled at a lower rate. The net affect of all of this is that veteran salaries will go up perhaps quite dramatically, and if players can stay healthy beyond that fourth year, they will be very well compensated.

But there’s the rub. If the average career is only 3.4 years, how can players be ensured to stay healthy enough to get the big payday? Here is where I think the NFLPA made the most headway. Not only did they beat back the owner’s dream of an eighteen-game season, they also negotiated a much less arduous off-season regimen. The off-season program will now be five weeks shorter. There will be more days off. Full-contact practices are going to be greatly curtailed. This matters because it will limit not just the wear and tear on players’ bodies, but also concussions and other brain injuries, which are far more likely to happen in repetitive drills than in games.

Also when careers finally do end, players can now be a part of the NFL’s health plan for life. This is a mammoth deal for players who previously were kicked off of all plans five years after retirement. Getting private insurance after playing in the NFL is a nightmare, as your body is a spiderweb of pre-existing conditions. Retirees also will now receive up to a $1 billion increase in benefits, with $620 million going to increasing pensions for those who retired before 1993.

Yes, owners received a bigger piece of the pie, and yes they received their rookie pay scale. Yes, I agree with Brian Frederick, director of the Sports Fans Coalition, who commented today that it’s a problem that “fans were forced to sit on the sidelines during these negotiations, despite the massive public subsidies and antitrust exemptions we grant the league.” This is especially true given the fact that, as SFC reported, “Thirty-one of the 32 NFL stadiums have received direct public subsidies. Ten of those have been publicly financed and at least 19 are 75 percent publicly financed.”

But in the end, this deal—against all odds—is a victory for players, their families, their health and their long-term financial solvency. It’s also an example for workers across the country. There is power in labor and there is power in solidarity.

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Democrats Capitulate on Revenue—or Do They?

The proposals and counter-proposals and counter-counter-proposals on how to pass a debt ceiling hike have been flying at a furious pace in Washington. Most people left their offices in the capital on Friday contemplating a “grand bargain” between President Obama and House Speaker John Boehner, in which there would be about $3 trillion in cuts, serious reductions in Social Security, Medicare and Medicaid benefits, and $800 billion in new revenues—generated by a tax code overhaul that would have lowered overall rates but closed a wide variety of personal and corporate loopholes and exemptions.

But before Friday’s happy hours were even over, the deal was dead. An angry President Obama appeared from the White House podium just after 6 pm, blasting Boehner for pulling out of the deal that Obama described as “unbalanced in the direction of not enough revenue.” Boehner appeared at a Hill press conference not long after, blaming Obama for insisting on an additional $400 billion in revenue.

Negotiations are now being conducted between Congressional leaders. Republicans are crafting plans to enact a short-term debt ceiling hike, with commensurate cuts and no revenue, while the White House and Congressional Democrats insist any short-term hike is unacceptable and won’t pass the Senate nor be signed by the president. Instead, Senate Majority Leader Harry Reid is reportedly crafting a package that cuts $2.7 trillion in spending, with no revenue increases, and raises the debt ceiling until 2013.

Though it’s hard to rule out any possibilities as Boehner and Reid crank the debt ceiling Rubik’s cube, one thing seems clear: revenues are permanently off the table. Since Reid has released a revenue-less proposal with one week and a day until the country defaults, it’s hard to see how revenue is revived for any deal.

Removing revenue from the deal seems like (yet another) stunning capitulation by Democrats. For months, both the White House and Congressional Democrats have been insisting that new revenue must be part of any deal. As recently as Thursday, Reid himself said “there has to be some revenue in the cuts, my caucus agrees with that, and hope the president sticks with that.”

In this sense, the Republicans have won. Their original position all along was to cut spending without revenue increases, it now seems they will succeed in making Grover Norquist happy. And in a larger sense, forcing a Democratic president and a Democratic Senate to cut trillions of dollars in spending amidst a recession is a substantial political feat.

But there are some important ways in which the Republicans’ hard line on taxes may have been self-defeating in the long run, and why Reid’s new proposal isn’t so bad given the alternatives.

For one thing, entitlement cuts seem to also be off the table, and that would have been a disaster at both the political and policy levels. (Paul Krugman has a terrific evisceration of the proposed entitlement cuts today.)

More important to note is that the new revenue in the grand bargain would have essentially replaced an expiration of the Bush tax cuts. Under the grand bargain, a tax code overhaul—which, again, lowered rates while eliminating exemptions—would have done away with the old tax system and replaced it with a new one, and the Bush tax cuts become a non-issue.

The expiration of the Bush tax cuts would generate far more revenue for the government than the $800 billion in the original grand bargain—and would also raise rates on top earners instead of lowering them.

Obama already pledged a fight on letting the Bush tax cuts expire—he was actually slyly reneging on that pledge with the tax overhaul proposed in the grand bargain, but with its death comes an opportunity for Democrats to fight another day on a more fair tax system that generates more revenue.

It’s extremely unlikely that Boehner didn’t realize this. But reports suggest he just can’t get his hard-line members to agree on any revenue generation now. Too bad for them—and not so bad for Democrats. 

Democrats Rebel Against Compromiser-in-Chief

“I’ve never won a tough election,” concedes Paul Krugman, “but neither has Obama!”

The Nobel Prize–winning economist is fuming about the White House’s “ludicrous” view of what independents want—a president, apparently, who embraces anti-spending conservatism.

That’s the core thesis in a new article by Elizabeth Drew, which Krugman flagged Sunday and is now roiling the liberal blogosphere. Drew, 76, is one of the good ones—she spent nineteen years as The New Yorker’s Washington correspondent, authored thirteen books, and has an intimate yet relentlessly independent outlook on Washington. In The New York Review of Books, her political essays are originally reported and exhaustive; this one runs 4,800 words and features some telling anonymous quotes from Democrats in high places.

Taking the economic malpractice in Washington as a given, Drew focuses on figuring out “what were they thinking?” For Republicans, the answer is simple and well known: by primarying and defeating even stalwart conservatives, the Tea Party has turned positions once on the outer edge of conservative politics, like dismantling Medicare, into a minimum litmus test for GOP candidates. It has been considerably harder, however, to figure out what Obama is thinking.

This president is not responsible for most of the actual deficit—two-thirds of it is from Bush administration policies and the business cycle. Nor is he to blame for the accompanying political crisis manufactured by Republicans, who, like gauche dining companions, are complaining about a bill for food they’ve already eaten. All that, you might think, would leave Obama with very little patience for obstinate BS. Instead, the president has shown the opposite instincts on both temperament and policy. Why? Drew reports damning allegations from “someone familiar” with Obama’s internal deliberations—almost certainly a White House official or senior, trusted Democrat—who argues that Obama has now traded unpopular but necessary Keynesianism for swing voter posturing.

“If the political advisers had told [Obama] in 2009 that the median voter didn’t like the stimulus, he’d have told them to get lost,” says the source. But by January 2011, the State of the Union address didn’t even propose spending to address unemployment, and the other shoe dropped in April, when Obama first outlined his plan to cut $4 trillion from the deficit.

“It was all about reelection politics, designed to appeal to this same group of independents,” Drew reports, and the same politics drove Obama to put Social Security on the table. “[It’s] consistent with that slice of the electorate they’re trying to reach,” the source explained, although “there’s a bit of bass-ackwardness to this; the deficit spending you’d want to focus on right now is the jobs issue.”

Then Drew moves from insiders to electeds. An anonymous Democratic senator recounts the caucus’s mounting frustration with Obama, Drew reports, and his slow-motion acquiescence:

Because of the extent to which the President had allowed the Republicans to set the terms of the debate, the attitude of numerous congressional Democrats toward him became increasingly sour, even disrespectful. After Obama introduced popular entitlement programs into the budget fight, a Democratic senator described the attitude of a number of his colleagues as: “Resigned disgust at the White House: there they go again. ‘Mr. Halfway’ keeps getting maneuvered around as Republicans move the goalposts on him.”

That kind of critique is common on blogs and liberal talk shows, sure, yet it’s rare for senators, even anonymously, to air it in the open. Presidents always have some tension with the parties that they lead, but Drew’s sources suggest a White House political strategy that is now fundamentally at odds with Congressional Democrats.

Still, nobody really wants to default. Despite some progressive attacks, Republicans are not literally shorting the US economy, given the risk that voters would punish them. They are threatening a murder-suicide on the bet that Obama will fold—and he appears to be playing a good hand badly. But incompetence is not the worst sin. The key allegation in Drew’s article is that Obama is not only giving too much away (e.g., needlessly undercutting spending, stimulus, seniors or Medicare) but that he is doing so to politically save only himself.

None of that changes the Republicans’ culpability.In an emphatic response to Drew’s article, StevenD, a writer for the liberal blog Booman Tribune, argues that the GOP are abusers and Obama has become their enabler:

we are in this situation primarily because the Republicans are dogmatic to the point of insanity.… They bear the greatest portion of blame for this ‘crisis’ because of their adherence to an economic cult and political ideology grounded in selfishness, unfettered and unregulated capitalism and the destruction of the Federal Government.… However, as Drew’s reporting shows, Obama own actions this year have often enabled the worst and most cynical among the Republicans to give no quarter in negotiations…

the President’s failure to consult and work with the leaders of his own party on a strategy to combat the [GOP] has placed him at odds with senior leaders of his party to his detriment, the detriment of his party and quite possibly the severe detriment of millions of Americans who will suffer whether “a deal” (which I predict will have spending cuts but no revenue increases) is reached before August 2nd or not.

Harry Reid is pushing a deal without revenues this week, as it happens, but it it’s pretty hard to tell what is genuine at this point.

Finally, turning back to Mr. Krugman, there is the political argument that Obama is just, to use a technical term, tripping. He explains:

As I recall, two things happened last year: voters were angry about the weak economy, and older voters believed that Obama was going to take away their Medicare and send them to the death panels. And so the way to win those voters back is to cut Medicare and weaken the economy?

[E]ven if Obama really does cut spending, will anyone notice? Even people who are supposedly well informed believe that there was a vast expansion of government under Obama, when in fact there wasn’t. So we’re supposed to believe that independent voters will actually be able to cut through the fog—the deliberate fog of Fox, the he-said-she-said of most other media organizations—and give him credit for spending cuts? Remember, whatever he does Republicans will claim that the government is getting bigger—and news organization will report only that “Democrats say” that this isn’t true.

Obama has made Republicans “look bad,” Drew concludes, but he is not actually getting much for it. I’d go even further. By fully caving on this standoff, where the White House is backed by the general public and large swaths of the GOP (the financial community and the well-informed), Obama would not only fail to impress independent voters, he’d ensure a drubbing on a series of future fights, large and small, with his unreasonable opponents. 

Sometimes politics really is like parenting. You don’t reward tantrums.

For the latest coverage on President Obama's national address on the debt ceiling, see Ari Melber's new post, Obama Asks Americans to Raise The Roof.

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Photo credits
Elizabeth Drew image courtesy of C-SPAN
“P-Krug: Enemy of the Good” by Mike McCAffrey, All Rights Reserved.

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