And here’s a video just released by Cato on why the debt deal – at best – is a holding action that postpones the real fights until later. I give some analysis, along with my colleagues Chris Edwards and Jagadeesh Gokhale.
And here’s some of what I wrote in a column for CNN. My basic messages is that establishment politicians of both parties got what they wanted – which was no heavy lifting and all tough choices postponed. (I also wrote it early yesterday on the assumption that the bill would pass both the House and Senate, so I’m glad I didn’t look like a fool)
…politicians of both parties were the victors and taxpayers are the ones left in the cold. In other words, the budget deal was a victory for the political establishment. Here’s why Republicans are winners. They get to tell their tea party activists that they forced Obama to cut spending. It doesn’t matter that federal spending will actually be higher every year and that the cuts were based on Washington math (a spending increase becomes a spending cut if outlays don’t climb as fast as some artificial benchmark). They also get to tell their anti-tax activists that they held the line. Perhaps most important, the supercommittee must use the “current law” baseline, which assumes that the 2001 and 2003 tax cuts expire at the end of 2012. But why are GOPers happy about this, considering they want those tax cuts extended? For the simple reason that Democrats on the supercommittee therefore can’t use repeal of the “Bush tax cuts for the rich” as a revenue raiser. This means that most Republican incumbents are well-positioned to win re-election. Here’s why Democrats are winners. Thanks to the magic of government math, despite all the talk of budget cuts, discretionary spending will be more than $100 billion higher in 2021 than it is this year. And since defense spending in Iraq and Afghanistan presumably is winding down, this means even more money will be available for domestic programs. In addition to telling the pro-spending lobbies that the gravy train is still on the tracks, they also get to tell the class-warfare crowd that there’s an improved likelihood of higher taxes for corporate jet owners and other “rich” people. Notwithstanding GOP assertions, nothing in the agreement precludes the supercommittee from meeting its $1.5 trillion target with tax revenue. The 2001 and 2003 tax legislation is not an option, but everything else is on the table. This means that most Democratic incumbents are well-positioned to win re-election.
But don’t forget that postponing a fight doesn’t make it go away. We’ll have at least two more big fiscal fights this year – the spending bills for fiscal year 2012 (which begins October 1) and the “super committee,” which has to make recommendations by Thanksgiving. I’ll have more to say on those issues soon.
Last but not least, here’s an entry in the Powerline contest from my Cato colleague Caleb Brown. I like the huckster theme.