Budget Compromise a Bad Deal for Democrats, American Economy [News Report]

by Avinash Saxena
Man of the hour, Speaker John Boehner (via Daylife.com)

While Republicans may have fallen short of their intended cuts in the deal struck last night between Speaker of the House John Boehner and congressional Democrats, it was a worse deal for Democrats. More importantly, it was a bad deal for the American people and the American economy, still struggling to recover from the crash of 2008 and the housing crisis. Ezra Klein notes the peculiar nature of the deal:

In the end, the real negotiation was not between the Republicans and the Democrats, or even the Republicans and the White House. It was between John Boehner and the conservative wing of his party. And once that became clear, it turned out that Boehner’s original offer wasn’t even in the middle. It was slightly center-left.

But you would’ve never known it from President Obama’s encomium to the agreement. Obama bragged about “making the largest annual spending cut in our history.” Harry Reid joined him, repeatedly calling the cuts “historic.”

This is obviously a page out of the Bill Clinton playbook. Remember the whole “days of big government are over” speech? Well Ezra explains why that won’t work in 2011:

The Democrats believe it’s good to look like a winner, even if you’ve lost. But they’re sacrificing more than they let on. By celebrating spending cuts, they’ve opened the door to further austerity measures at a moment when the recovery remains fragile. Claiming political victory now opens the door to further policy defeats later.

And policy defeats are what will matter. The Obama White House is looking toward the Clinton model. After all, Clinton also suffered a major setback in his first midterm, Clinton also faced down a hardline Republican Congress, Clinton also suffered major policy defeats, and yet Clinton, as the story goes, managed to co-opt the conservative agenda and remake himself into a successful centrist. The Obama administration has even hired many of Clinton’s top aides to help them recapture that late-90s magic.

That story misses something important: Clinton’s success was a function of a roaring economy.

And now the narrative is all about cuts. The story being told to the American people is one in which cuts to federal spending will revive and revitalize the American economy. Unfortunately, this is not a true story – cutting spending now, before any serious recovery is underway, could undo all the work done to improve the faltering economy over the past two years.

Once again, Democrats lead the charge to their own defeat. Because one thing is always true: Democrats can never be as good at being Republicans as Republicans can. And so we are left with $60 billion fewer federal dollars pumped into the economy, on a trajectory for far more cuts cheered on by both parties.

 

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