Why we need a ‘Grand Bargain’ and why it's also possible

‘’John Boehner is like a Republican state senator. He’s a golf-playing, cigarette-smoking, country club Republican, who’s there to make deal. He’s very familiar to me.’’

President Obama

‘’The President and I, as I’ve made clear, have a very good relationship.’’

John Boehner

Paul Ryan is right - debt negotiations are long overdue. In his op-ed, the Wisconsin Congressman focuses on serious reforms. For a start, he suggests a GOP openness to raising medicare premiums for the wealthy. Raising taxes on the wealthy? Hardly the ramblings of an ideological warmonger.

But Ryan's seriousness only speaks to a broader, growing movement in the GOP.

Recognizing that Obama cannot and will not yield on ObamaCare, a number of Congressional Republicans are hinting at an alternate path towards ending the shutdown. Instead of focusing on health care, they want to pursue a ‘grand bargain’ with Democrats- addressing spending, revenue and entitlement reforms all at once. However, as Robert Costa has noted, other House Republicans are focused on a smaller deal - one that ends the shutdown but kicks big reforms down the road.

I understand the skepticism, but America needs a ‘grand bargain’. In the end, it’s the only way that we’ll cut to the heart of the shutdown.

Let’s be clear. Ultimately, this standoff wasn’t caused by ObamaCare. It’s always been about a bigger issue; the most abiding of political issues – the question of America’s state-society relationship. We’re witnessing a broader struggle for America’s future.

On one side, Democrats believe that the Federal government should constitute the central, redistributive support structure for those in economic difficulty.

In the GOP, the power of social conservatism is being displaced by an energetic fusion of fiscal conservatism and libertarianism. Still, the central Republican belief remains the same - that the common good is best served by facilitating individual aspiration.

In governing practice, where liberals see virtue in an American version of the European style ‘safety net’ social contract, conservatives (like myself) see disaster.

But though they're passionately held, these ideological divisions hide a simple truth.

We’ve seen the dividend of years of dysfunctional government. It hasn’t worked. Instead, Americans need a grand solution that rebuilds our political discourse. We need a solution in which both sides give and get. In short, we need Republicans to yield on sensible revenue generation and Democrats yield on entitlement reform.

For sure, the hacks will scream. Nevertheless, a ‘grand bargain’ compromise needn’t be toxic (my proposal!). Just as revenue generation can be centered in tax code reforms, entitlement reform can be rooted in protecting America’s most vulnerable. When the governing pillars of prosperity, responsibility and social justice are mutually reliant, all sides win.

And don’t believe the doubters, a ‘grand bargain’ is politically possible.

Consider Boehner’s warning that he won’t allow a debt default to occur. This message carries an implicit understanding – if necessary, Boehner will rely upon Democratic votes. Yet the Speaker knows that if breaks the ‘Hastert rule’, his Speakership may break along with it. Correspondingly, his statement illustrates something important – Boehner is willing to embrace major political risks for causes he believes in.

Recent evidence suggests that Obama may feel similarly.

In the cancellation of his long planned Asia trip (‘the pivot’ agenda being a key priority of his Administration), Obama has signaled that ending the shutdown is, at least in part, a Presidential responsibility. Though he's aware that his base is against a deal, the President also realizes that his shutdown legacy won’t be defined by the shutdown itself, but instead by what follows. More compelling - the President has regularly made clear that he wants a bargain. At this juncture, it would offer a positive conclusion to the shutdown.

In his book, ‘The Price of Politics’, Bob Woodward notes the respectful, friendly rapport that characterized the Obama-Boehner (and Biden-Cantor) interactions during the ‘grand bargain’ effort of 2011. Even though they didn’t reach a deal, the leaders ultimately respected each other.

Today, as in 2011, the President and the Speaker have two choices.

They can continue to clog Pennsylvania Avenue with partisan vitriol. Or they can take shared risks in the nation’s best interest.

President Obama's Mathematical Incontinence

Speaking on today's edition of Fox News Sunday, Treasury Secretary Jack Lew repeatedly asserted that the US Government has already made major progress towards reducing the national deficit/debt. This is an absurd suggestion and an argument that would only make sense were it an effort at sarcasm. As I've argued for The Week, the US national debt remains a crisis situation. It threatens to drown America's future. Resolving this great challenge will require major reforms. That's a fact. It's non-negotiable. By revelling in their realm of fiscal delusion, by pretending that major entitlement reforms won't be necessary, Lew and the President deserve condemnation.

It's ironic that the President spent most of last week claiming that Congress is playing politics with critical issues. Perhaps they are, but he's doing just the same.

Israeli air strikes, gun debate, US economic news, drones in Africa,

1) The Israelis are increasingly uncomfortable with the evolving security situation in Syria. As the Syrian regime disintegrates, the risks of political instability escalate. For Israel, the primary concern (as evidenced by last night's IDF air strike) resides in the possibility of the Lebanese Hizballah accessing Assad's chemical weapons. Such a development would fundamentally challenge Israel's security/security posture. As I argued for the Huffington Post before Christmas, if Assad employs his chemical weapons, President Obama must order decisive US Military action. On a side note, with each passing day it becomes increasingly clear that the Syrian rebels will accept no outcome other than Assad's removal from power.

2) The Senate is currently hearing from various advocates on both sides of the increasingly polarised gun control debate. The left is trying to shred the second amendment and LaPierre, the PR nightmare to end all PR nightmares, retains false comfort in his self-created realm of delusion. Personally, I think that Congress should focus on improved background checks, better enforcement of existing laws and increased mental health information sharing.

3) The economy didn't have a great final quarter in 2012. The left are complaining that the cause for this retrenchment was spending cuts and that future cuts must therefore be avoided. In making this argument, they are obsessing over the short term. While in truth spending cuts will probably cause short term economic harm, without such cuts America will continue on a path towards the fiscal abyss. This would be a disaster. Ultimately, until we see comprehensive debt reform (cue medicare), economic growth will be suffocated by consumer/business doubt over the future.

4) The US Government is quietly improving its ISTAR/strike capability for operations against Islamist militants in West Africa. Because of the size and population sparsity that defines much of that region, drone platforms provide a crucial asset for on-going counter-terrorism efforts.

Enjoyed this. Earlier today, George Galloway was shut down by PM Cameron.

Fiscal Cliff?

The DC rumor mill is awash with news that a debt deal may be on the horizon. We shall see. Until news of a deal (or failure to reach a deal) becomes clear, I won't make any more comments. 

My most recent writings on this topic -

Why the fiscal cliff is preferable to the economic abyss

Compromise for Country - My plan to solve the national debt

Susan Rice and the Debt Negotiations

1) Susan Rice is facing some stormy waters in her move to succeed Hillary Clinton at State. Earlier today the Ambassador met with three top Republican Senators on Capitol Hill. The meeting didn't go well. A couple of weeks ago I blogged about why I didn't support Rice's nomination for State (and why I support Kerry instead). My feelings haven't changed. It should be evident even to hard-core Democrats that if Rice is incapable of talking privately with three Senators without infuriating them, then she probably isn't suited to the role of America's chief 'diplomat'.

2) The New York Times is reporting that the fiscal cliff negotiations are facing resistance by Democrats to entitlement reform. If the Democrats are unwilling to negotiate in good faith, the only option open to the GOP will be the cliff. It's either the cliff, or the abyss that will surely follow if we don't face up to our problems. I have long argued that Republicans must be willing to be make serious compromises as part of these discussions. But only if reciprocity is the tenor of the talks. Resolving America's fiscal crisis requires reform of Medicare. This is a truth that cannot be escaped.

Paul Ryan - VP

IF Paul Ryan is indeed to become Romney's VP running mate, he would be an extremely strong choice. Ryan has been one of the few Republicans willing to propose a serious process for reducing the catastrophic federal debt. He has been clear and articulate in taking apart the President's disingenuous and failed debt reduction policies. The Ryan debt reduction plan (which Romney has endorsed) makes bold choices on tax (it reduces loopholes - some popular) in return for lower rates. The Ryan plan also offers substantive reforms to social security and medicare, in order to maintain those programs for future generations. In contrast, Obama's plan would let those programs erode with the weight of the baby boomers. Ryan will be able to articulate why the President's policies are so abysmal and how America can do better. It is important that this election is centered around intelligent debates concerning the deep financial difficulties that we are facing. No candidate is better suited to that debate than Paul Ryan.

I am much happier with this VP choice than the last one!

The Republican Budget

Paul Ryan's budget shows that House Republicans are focused on advancing serious plans to resolve the extraordinarily high federal deficit/debt. The Democrats will scream that the Ryan budget will hurt the poor, but the simple fact is that Ryan has offered a plan that resolves America's fiscal crisis and preserves medicare/social security for the benefit of future generations. 

As the NY Times notes, 

'Under the House plan, the current $1.18 trillion deficit would fall to $797 billion in the coming fiscal year, compared with $977 billion under Mr. Obama’s plan. By 2016, the deficit would fall to $241 billion by Republican estimates. The Congressional Budget Office estimated last week that Mr. Obama’s budget would still have a $529 billion deficit in 2016.

The Ryan plan would accumulate $3.1 trillion in additional debt through 2022. The president’s would add $6.4 trillion, more than twice that total. The Republican budget cuts spending by $5 trillion more than the president’s plan.' [5.3 trillion/10 yrs]

Ezra Klein at the WPost argues that the Ryan plan resolves the debt on the backs of the poor. I challenge that premise.  49% of Americans don't even pay federal income taxes. In addition, the Ryan plan cuts tax rates to just two rates (25% and 10%) by ridding the system of the tax loopholes/inefficiencies that are used by the rich and that lose the Government huge amounts of revenue each year. At the same time, Ryan adopts the bi-partisan medicare proposal that Democrat Ros Wyden helped author. The Democrats have offered no solutions to the looming medicare bankruptcy. The US should not be a something for nothing society.  Klein suggests that the $5.3 trillion reduction is unnecessarily high..  My response? Not when our interest payments are this high.

Obama and the Democrats in Congress have abdicated the responsibility of governing. They are in full election mode. Look for more political scare tactics like this. There is no question that the GOP is taking substantial political risk in proposing this plan. Pain is rarely popular but sometimes it is necessary. Republicans are gambling that Americans will prefer a future in which medicare and social security are preserved for those who will need it, taxes are low and personal responsibility remains part of the American way of life. The Democrats want to drag America towards a European style social welfare system..  with high taxes and big government. There's nothing wrong with this (in a democracy people should be able to chose to live in whatever kind of system they want and many Europeans are v. happy with their system), but the Democrats are lying to the American people when they pretend that the rich alone can pay off the debt. 

The Republicans now have a plan in which the sums add up. Democrats have a joke.

40% of Americans identify themselves as conservative, 35% as moderates and 21% as liberals. This is a fight that Republicans will ultimately win.

On the debt, Republicans must decide between Norquist and the nation.

Republicans in congress have a clear choice between common sense compromises on revenue or, an illogical orthodoxy that will paralyse the country's finances, gut the military and render the party totally divorced from the values of compromise, national interest and reason on which it was formed. In terms of the national interest, reforming the tax code by lowering rates and eliminating deductions, is very literally a small price to pay for a comprehensive deal. Refusing such a deal on the basis that more revenue is inherently wrong, is not just illogical in terms of the need for a debt deal, but serves only a small class of Americans- mostly ideologues like Norquist and tax lawyers working the system. Republicans must decide whether the party stands for an enlightened view of the national interest or for the whims of special interest groups detached from reality.

Obama's Budget

The President's budget is a joke. It counts savings from Iraq and Afghanistan.. it fails to make any substantial reforms to medicare/medicaid (obviously the political loss of raising the entitlement age was not worth the good it would do for the country) and it uses a class warfare narrative to raise taxes on the wealthy without instituting tax reform. At least the restrooms in the Republican caucus will be well stocked with paper. That's all this bill is good for..

Tom Rogan Thinks..

1) The FIFA scandal http://news.bbc.co.uk/sport1/hi/football/9481461.stm is a disaster for two reasons. Firstly in the suggestion that the World Cup wins for Qatar and Russia may have been bought. Secondly in that the allegations were not made prior to the World Cup allocation, through fear of defamation suits being brought in English courts. In one example we see the true cost of England's disastrous defamation laws. By the perceived absence of a public interest protection and the heavy burden of evidence that publishers/speakers must present to support their story, speech is avoided and the chilling effect becomes real. Sepp Blatter needs to resign, this should be the final nail in his already heavily nailed coffin. FIFA also now needs to conduct a major investigation into the allegations. If proven, the bid process should be reconstituted and Qatar/Russia stripped of their tournaments.




2) The debate on Afghanistan that is following Bin Laden's death is to be expected, but for me it is also problematic. the Obama counter-insurgency surge (a strategy I wrote in support of -http://www.guardian.co.uk/commentisfree/cifamerica/2009/oct/29/obama-mcchrystal-afghanistan ) has produced major security and governance gains across Afghanistan. These successes are creating space for political reconciliation by building local empowerment that increasingly rejects the Taliban. While the corruption of the Karzai administration is  a major issue and while local governance is no where near the level of proficiency we would hope to see, I would argue that with a little more time (2-3 years) we can and we will reach a point in which violence and meaningful political stability; stability characterized by a just, albeit basic democratic peace will emerge. This evolution will allow an orderly and meaningful withdrawal of forces. We have lost much blood and treasure to the effort in Afghanistan and in a situation where a positive outcome is increasingly possible, we have a strategic and moral responsibility to stay and finish the mission.


3) It is a tragedy that HAMAS still does not accept that they cannot win. There will be no peace until they change their outlook towards Israel or they become politically isolated. I suspect the later will happen. People are tired of the cycles of violence. http://www.haaretz.com/news/diplomacy-defense/hamas-accepts-1967-borders-but-will-never-recognize-israel-top-official-says-1.361072


5) Finally.. Roberto Mancini successfully navigates the Sea of Egos - http://news.bbc.co.uk/sport1/hi/football/13346933.stm Good for him.