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Archive for July, 2011

The Perils of a Balanced Budget Amendment

July 19th, 2011

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This piece was originally posted on The Huffington Post.

It’s baaaack! This week, Congress will vote, yet again, on a balanced budget amendment to the Constitution.

A two-thirds majority in each house of Congress is required to amend the Constitution. Since 1980, Congress has voted on a balanced budget amendment five times. The closest it has come to passage was in 1995, when it passed the House of Representatives but failed to pass the Senate by one vote.

The American public has long supported a balanced budget amendment. Why? It’s common sense. If you keep on spending more money than you take in, you’re headed for trouble. Every state except Vermont has some sort of requirement that its budget be balanced.

Conservatives see a balanced budget amendment as a way to institutionalize their agenda. Once the amendment is in place, it will become extremely difficult — literally unconstitutional — for the federal government to increase spending beyond revenues. Read the rest of this entry »

The Missing Crisis

July 11th, 2011

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This piece was originally posted on The Huffington Post.

How exactly did compromise come to be a dirty word?

Republicans insist that any form of tax increase be taken “off the table” in negotiations with the White House. Congressional Democrats are equally insistent that entitlement programs — Social Security and Medicare — be taken “off the table,” despite President Obama’s willingness to negotiate entitlement reforms.

It’s kind of hard to negotiate a budget deal when most of the biggest items in the budget are “off the table.”

President Obama clearly has in mind some kind of triangulation strategy similar to what President Bill Clinton did when he negotiated a balanced budget deal with the Republican Congress in 1997.

But it doesn’t seem to be working. Sen. Mark Warner (D-VA), who has been involved in bipartisan talks, wrote in The Washington Post, “We are waiting for politicians to quit drawing lines in the sand and admit that solving this gigantic problem in a time of divided government means that both sides will have to give ground.” That could be a long wait. Read the rest of this entry »

Obama Enters Deficit Primary

July 8th, 2011

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This piece was originally published  in Politico.

With today’s address on deficit reduction, President Barack Obama is making a shrewd opening move for his 2012 campaign — laying claim to the political center, challenging Beltway orthodoxies and setting the stage for a possible historic agreement on the budget.

Obama reportedly is set to propose serious entitlement reforms — only three months after 200 progressive groups lobbied the White House to keep Social Security, Medicare and Medicaid off the agenda. Instead, he’s expected to reach out tonight with both hands and grab onto the “third rail” of American politics.

But rather than getting burned, Obama may emerge well positioned for his reelection.

For months, Obama has been criticized for not taking the lead on the deficit. After appointing the fiscal commission that many Republicans had voted against creating, however, he needed to wait to see what Republicans put on the table, get the 2011 budget behind him and monitor the progress of the Gang of Six — the bipartisan group of senators whose work is likely to determine whether deficit reduction is just talked about or acted on.

In his speech, the president aims to shift the debate from “who wants to solve the problem?” to “how do we solve the problem?” And looking ahead to 2012, that shift is likely to benefit him enormously.

If there is a major, bipartisan budget agreement, Republicans cannot run on fiscal responsibility. If there is not, they get the blame. He wins either way. Read the rest of this entry »

Time to rethink spy chief

July 6th, 2011

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Does the United States really need an Office of the Director of National Intelligence to protect itself?

After all, Gen. David Petraeus, the most-lauded U.S. general in two generations, was confirmed by the Senate as CIA director June 30, and Leon Panetta — widely regarded as one of the most effective managers-who-is-also-a-Democrat — was sworn in as defense secretary July 1. The U.S. now has the national security dream team overseeing the vast majority of its intelligence community.

Better yet, there’s now a military man at the CIA and an intelligence guy at the Defense Department — so Petraeus and Panetta have a deep understanding of the other’s organization. Do they really need James Clapper, the current director of national intelligence, telling them how to “get along”? The answer, clearly, is no. The ODNI was a bad idea that hasn’t improved with age.

Read the rest of this entry »

The Danger in the Debt Ceiling Deal

July 5th, 2011

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This piece was originally published in Politico.

The danger in the debt limit negotiations is not that the two sides will not make a deal. It’s that they will. Specifically, that they will reach the kind of agreement Republicans are demanding — which would cut more than $1 trillion in government borrowing over the next 10 years.

Any deal of that magnitude would have a devastating effect on the nation’s economic recovery. And make the deficit situation worse. Economic activity would slow and government revenues fall even further.

Democrats and Republicans are arguing over the correct balance between spending cuts and tax increases. Republicans insist that all the savings come from spending cuts. Democrats are willing to accept some cuts but insist that the deal be “balanced” with new tax revenues.

What they are both missing is that the exact mix doesn’t matter. What matters is how much money is taken out of the economy at a time when economic growth is desperately needed. Economic growth is necessary for any deficit-reduction plan to succeed.

Ronald Reagan knew that. Reagan said in his 1985 State of the Union speech, “The best way to reduce deficits is through economic growth.” That is because big spending cuts and tax increases are politically impossible. Read the rest of this entry »