Cities have iconic streets that define them. New York has Wall Street – the seat of all money and power in the city that never sleeps and takes no prisoners. Paris has its Avenue des Champs-Élysées – the Elysian Fields, the heart of all that is devastatingly fashionable and fine in life for more than a hundred years now. Billy Wilder tried to define Hollywood as Sunset Boulevard and he got it mainly right. It’s simultaneously seedy and glamorous and a bit sad – at least it seems so from the window here tonight. Aix-en-Provence has its wide Cours Mirabeau with its double rows of plane-trees and the fine houses with their fancy fountains, and the little markers in the pavement so you can follow in the footsteps of the local boy who did well, Paul Cézanne, who pretty much painted everything is sight. That’s a fine place. Sit at one of the cafés there on a sunny June day, sipping yellowy pastis, and you too will feel all artistic. You can even pretend you’re French.
It’s a matter of finding the one street that’s at the heart of things, and in Washington that’s not Pennsylvania Avenue. Yes, the White House is at one end and the Capital Building at the other, but Pennsylvania Avenue is just a way to get from one to the other, mainly useful for parades at each inauguration and little more. Take a look – it’s boring. The real action is elsewhere, on the side streets, which are, curiously, lettered. The real action is on K Street. That’s where all the lobbyists are headquartered, the folks who spend hundreds of millions of dollars to get the right legislation passed, the legislation that keeps their clients rich or at least in business. Our government is bought and sold there, with elections, and voters, being a periodic minor inconvenience. That’s where all the grand strategies are worked out, and who should say what, and in which way – they call that framing the message – so that a senator or congressman gets the support he needs from the right people, along with the appropriate goodies for his district. That’s where like-minded people decide what the government should do. That’s where the action is, where lobbying firms fight it out, with each other, for control of the direction of the country. The senators and congressmen are only their proxies. The National Association of Home Builders might face off against America’s Health Insurance Plans over some issue or other perhaps, tossing money around and giving politicians advice, or specific talking points, but what the politicians later say, just down Pennsylvania Avenue, is the secondary effect of something that was already being fought on that famous side street.
That may seem far too cynical, but there’s a reason that retired politicians, or those voted out of office, often become lobbyists, paid to explain to those still in office just what’s what and what’s at stake, and what they should say and how they should vote, if they know what’s good for them. This is almost a promotion to the big leagues, with the real power players, and the cool thing is that you don’t even have to go out and talk to stupid voters every few years. Basically, between the partisan think-tanks, with all the academics and retired politicians mulling over the big conceptual issues of what policy should be, and the lobbying firms working on ways to implement those policies, for the good of those who throw money at them, the work of government gets done. Everything else is just a show, for the rubes.
If you accept that premise, then you’re not surprised by small news items like this:
Frustrated by a White House that’s winning the fiscal cliff messaging war, senior aides to House Republican Whip Kevin McCarthy assembled some of K Street’s top GOP communicators for a Monday briefing and brainstorming session to turn the tide, according to multiple sources inside the room.
Tim Berry, McCarthy’s chief of staff, told the group of eight GOP message mavens that the White House is not seriously engaged in talks with House Republicans, but is still successfully painting them as the obstructionists.
“One of the things that was said was that the White House is winning right now and we’ve got to turn that back around because we do want a deal,” said a meeting participant. “But right now, the narrative is it’s Republicans who are standing in the way of getting a deal.”
In short, they turned to the real experts in government, the lobbyists, for help, because they’re in trouble:
Republicans think President Obama is pushing them toward the cliffs in hopes that they’ll cave on their opposition to raising tax rates on top earners – and Republicans are searching for a way to flip the script on the president.
“They’d rather win the political victory on this. How can we fight back against that and how can we make that point and how can we message that we’re the party of small business owners and we’re not defending the rich?” asked a meeting participant.
Well, they literally are defending the rich. There must be a way to say that nicely, so it doesn’t seem as if that’s all they’re doing. Lobbyists know such things, so in these meetings they talked about the need to “personalize” their message. Maybe they should talk about how going over the fiscal cliff would hurt people, using stories of real Americans, so to speak. Lots of ideas were tossed around, although Kevin Drum, who pointed to this small news story, certainly isn’t impressed:
It’s sort of fascinating to read this kind of thing. The obvious problem Republicans have is that their single-minded opposition to raising tax rates on the rich is, in fact, employed in defense of the rich. Even the fabled low-information voter knows this perfectly well, and mounting a messaging campaign to convince the public that Republicans are actually defending small businesses is an exercise in futility. It will just convince people that Republicans are unusually shameless hucksters who think their constituents can’t distinguish fecal matter from shoe polish.
Yes, that’s a reference to the old saw about fools who don’t know shit from Shinola – a brand of shoe polish from the days when people actually shined their shoes – indicating that the Republicans are in an odd spot and may well come off as shameless hucksters:
Reading stories like this, I wonder if the GOP brain trust understands this. Have they drunk their own Kool-Aid so deeply that they truly think they’re not defending the rich, or is stuff like this purely for public consumption, and they just haven’t figured out yet that it has no chance of working? It’s a mystery.
At least these guys went to the right place, that famous and important street where such mysteries are solved, although at the same time ABC News was reporting this:
President Obama’s lead negotiator in the “fiscal cliff” talks said the administration is “absolutely” willing to allow the package of deep automatic spending cuts and across-the-board tax hikes to take effect Jan. 1, unless Republicans drop their opposition to higher income tax rates on the wealthy.
Treasury Secretary Timothy Geithner said in an interview with CNBC that both sides are “making a little bit of progress” toward a deal to avert the “cliff” but remain stuck on Obama’s desired rate increase for the top U.S. income-earners.
“There’s no prospect for an agreement that doesn’t involve those rates going up on the top two percent of the wealthiest,” Geithner said.
That only makes the Republican discussions on K Street even thornier, although Obama and Boehner spoke by phone that same afternoon, which is a good sign. Last year, in that mess leading up to a possible default on the debt ceiling, Obama and Boehner had a deal and Obama phoned Boehner to confirm it, and Boehner wouldn’t take his call for a day and a half. He was washing his hair or something. Actually he couldn’t sell the deal he had made to his own caucus. The Tea Party crowd wanted that default on all of America’s obligations, and the ensuing economic chaos and collapse, on principle – we borrow too much already. Boehner was caught between a rock and a hard place, so he simply dodged Obama’s call. Yes, that was rude and maybe as disrespectful as anything in recent US history, but Boehner got points for that with the Tea Party crowd – and black men really should be used to that sort of thing by now or something. However, because we got no deal then we got this fiscal cliff arrangement now, basically a postponement of all issues at hand, with the threat of disaster again if something, anything, couldn’t be worked out. These two talking on the phone now is thus a good sign, as is Boehner hammering his Tea Party folks – he’s not going to be pushed around by his own people anymore. Maybe he grew a pair, as they say.
Obama did too:
President Obama today issued a stern warning to Republicans in Congress threatening to use the debt ceiling as a bargaining chip in deficit negotiations, saying “it is not a game that I will play.”
“I want to send a very clear message to people here: We are not going to play that game next year. If Congress in any way suggests that they’re going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation, which, by the way, we have never done in our history until we did it last year, I will not play that game,” Obama told some of the nation’s top CEOs at the Business Roundtable in Washington. “We’ve got to break that habit before it starts.”
Obama referred to those odd reports – Republicans may be willing to extend middle-class tax cuts and agree to higher tax rates on the wealthy now, because they think they can use the raising of our debt limit as leverage to get what they really want. They can once again threaten to bring down our economy, and the world’s, by having us default on all our obligations, effectively declaring bankruptcy. It’s their ace in the hole – give in a little now and destroy Obama later – but Obama is preempting them by making them look bad now, before they even try:
“That is a bad strategy for America, it’s a bad strategy for your businesses, and it is not a game that I will play,” he said, cautioning that the U.S. economy cannot afford the kind of uncertainty that resulted from the debt ceiling fight in August 2011.
“When I hear some on the other side suggesting that to resolve the possibility of a perpetual or a quarterly debt ceiling crisis that there is a price to pay, well, the price is paid by the American people and your businesses and economic environment worldwide,” he said.
The Washington Post’s Ezra Klein tries to figure out just what’s going on here:
Hill Republicans tell me that the underlying insight is that while the president can permit the economy to fall over the fiscal cliff, he can’t allow a default. That gives Republicans a stronger hand, or so they think. But run the scenario out in more detail and its political risks come clear.
Think about it:
Come early next year, the economy would likely be entering a recession, and markets would be convulsing as they realize that an austerity crisis is about to slam into a possible default on the national debt. Poll after poll shows the Republicans receiving more blame for the possible failure of the debt talks, and after a high-profile stunt like voting “present” on the tax cuts and allowing everything else to expire, those numbers are likely to turn even more sharply against the GOP.
Meanwhile, Republicans will be threatening not just to take us over the fiscal cliff, which will already have happened, but to trigger a financial crisis by breaking through the debt ceiling. And they will be doing all of this after having lost an election. And for what? Because they want deeper Medicare cuts that they refuse to publicly specify?
It is a bit mad:
Meanwhile, the White House will find the negotiations easier, not harder. After all, they’ll already have banked $1 trillion in tax revenue. They’d be much closer to their goal, and their offer of another $600 billion in spending cuts in return for another $600 billion in tax revenue (delivered, this time, through tax reform) will sound perfectly reasonable to most Americans.
Republicans may believe that the White House would be so afraid of default that it would simply capitulate, but my reporting suggests the opposite: The White House is utterly steadfast in its insistence that it will not permit the debt ceiling to be used as leverage against it again. White House officials see this as a matter of good governance. It would be irresponsible of them – a breach of trust with their successors – to permit this kind of economic brinksmanship to become the norm.
It is hard to see how this strategy gets the GOP what it wants, either substantively or politically.
This is the sort of problem these guys should take back to the real experts on K Street, unless those guys suggested this in the first place. On the other hand there’s stuff like this:
On Sunday, during an appearance on Meet the Press, Sen. Bob Corker (R-TN) reiterated his call for restructuring entitlement programs like Medicare, highlighting the “very painful cuts” he has proposed as part of a package to avert the fiscal cliff. Corker 242-page plan calls for a Paul Ryan-like proposal to transform the guaranteed Medicare benefit into a voucher plan for beneficiaries.
Host David Gregory seemed to agree with Corker’s characterization and pressed fellow panelist Sen. Claire McCaskill (D-MO) to accept reforms that will shift health care costs to seniors in order to show that Democrats are “serious” about entitlements…
If the rich are going to get hurt, equivalent pain must fall on those who aren’t rolling in dough, although Nancy Pelosi says no to that:
Those issues – Social Security, Medicare and Medicaid - they should be in their own realm. Whatever adjustments would be made in Social Security should be there to strengthen Social Security, not to subsidize a tax cut for the wealthiest people in America and say that’s how we balance the budget. The same thing with Medicaid and Medicare…
That’s an impasse, and here Kevin Drum tries to untangle things:
A couple of days ago John Boehner unveiled his fiscal cliff proposal, which included $800 billion in tax revenue that he refused to provide any detail about. That gave everyone a good chuckle. But if you ignore Boehner’s pro forma insistence that we should lower tax rates on the rich, the truth is that his figure is at least plausible. A cap on deductions of about $40,000 would probably do the job. That’s a big political lift, but it’s not impossible and it’s not mysterious.
What is more mysterious is Boehner’s contention that he can get $600 billion in health care cuts. (All numbers are savings over ten years.) There’s no simple solution for that. Raising the Medicare eligibility age is a bad idea for a bunch of reasons, but even if we do it, it will only save about $100 billion. Where’s the rest coming from? The answer won’t come from any Paul Ryan-ish plan, which explicitly doesn’t affect current and near-retirees and wouldn’t begin saving money for many years.
This is a hard nut to crack:
The Simpson-Bowles proposal includes a long laundry list of small changes in health care policy that amount to about $80 billion per year, but it includes things like higher costs for military retirees (not likely); tort reform (obviously not going to happen in the next three weeks); cuts in medical education (probably not a good idea since we need more doctors over the next decade); and a strengthening of IPAB (the fabled “death panel” of the tea party’s fevered imagination). Beyond that, there are a bunch of smallish benefit cuts that add up to a few tens of billions of dollars per year.
In other words, there are no easy answers here. You can punt, by simply declaring that Medicare growth will be limited to GDP + 1 percent and calling it a day, but that’s a chimera. The truth is that cutting health care costs is really, really hard. Obamacare includes a bunch of provisions that will probably reduce the rate of growth, but they’ll take years to kick in and no one knows for sure how well they’ll work. Alternatively, you can just flatly cut benefits, but Republicans have (to be charitable about it) taken a fairly erratic set of positions about that.
So this is where things stand:
For all the bluster, a deal on taxes is eminently possible. Discretionary cuts of $300 billion are also possible, especially if you agree to split them between defense and domestic cuts. Even a $300 billion deal on Social Security is possible. But $600 billion in medium-term health care savings? It’s not impossible, but it’s pretty damn close.
So what are people talking about anyway? It could be all nonsense, but Paul Krugman puts it this way:
A while back I worried that the Obama administration actually believed in pundit fantasies, those elaborate psychodramas supposedly going on in voters’ minds as they contemplate whether Obama has reached out enough to the center or whatever. My point wasn’t that voters are stupid; it was that people have lives, they aren’t following politics at all closely, and they vote based on broad perceptions of where politicians stand, not on the kind of thing that pundits obsess about.
If the folks on K Street run the government, by proxy, then everyone else just does what they do. They vote when they must, if they even do, on the basis of some very general ideas:
I couldn’t resist flagging a couple of examples of what voters really know. First, Public Policy Polling found that 39 percent of voters have a view, pro or con, about Simpson-Bowles. Not bad, you might think. But a quarter of voters also had views on Panetta-Burns, a plan that as it happens doesn’t exist.
Meanwhile, another poll - internet-based, but by a firm with a good record – finds that, by a margin of almost four to one, people think that going over the fiscal cliff will cause the deficit to increase. In a way, I understand this: the Very Smart People have been pounding the drum over and over again about how deficits are bad, evil; now they are warning about a fiscal something-or-other, so how are people supposed to know that they’re suddenly worried that we’ll reduce the deficit too much?
Anyway, these are useful reminders that politics isn’t about policy details, it’s about broad thrusts and whether people think you’re on their side.
Hey, that’s what that Republican meeting on K Street was all about in the first place. Is there a way to cut Social Security and Medicare and Medicaid – severely – in order to assure that the rich don’t pay a dime more in taxes, and maybe can pay even less – and make everyone who isn’t rich love that idea? The folks who really run everything from their odd side street in Washington seem to be working on that problem. That’s where the real action is, and the lobbyists will instruct their minions to say and do what is appropriate – so know your geography. And if you get to Aix, sit at Les Deux Garçons right on the Cours Mirabeau and sip pastis in the sun until you’re pie-eyed. Some streets are far more pleasant than others.