"This deal is a sugar-coated satan sandwich," Democratic congressman Rep. Emanuel Cleaver tweeted this morning. "If you lift the bun, you will not like what you see." I'm not so sure about "sugar-coated"; he deal looks pretty awful even this side of the bun: to oversimplify, the agreement reached on Sunday by the White House and congressional leaders – and headed for a vote in Congress – heads off economy-crashing default by raising the debt ceiling in two steps while making $1 trillion in cuts now and $1.5 trillion later. It contains new revenues – that is, no tax hikes, not even on corporate jets. Which is to say, it shrinks government. Republicans got much of what they wanted; Democrats got ... well, they successfully fended off cuts to Medicare and Social Security, for now.
Here, some early reactions:
The deal is a "disaster ... that will take America a long way down the road to banana-republic status," says Paul Krugman in his Times column today. The worst thing about it: by cutting government spending – extensions to unemployment insurance and the payroll tax credit were among the chips the White House bargained away – it deprives the weak economy of a key booster (consumers and businesses aren't spending), making slow growth more likely and the long-run deficit problem worse, not better.
The spending cuts, even if they reduce some waste, will undermine vital government services, notes TNR's Jonathan Cohn, inflicting "pain" on middle-class Americans. And just to be clear, "Pain means more people eating tainted food, more people breathing polluted air, more people pulling their kids out of college, and more people losing their homes -- in other words, the hardships people suffer when government can't do an adequate job of looking out for their interests."
The deal is a good thing, writes former Obama administration economist Jared Bernstein, “in the same way that ceasing to bang yourself on the head with a hammer would be a good thing." But he points out that talk of reductions to "discretionary spending" mask the reality that “these cuts will hurt our ability to pursue … most positive aspects of the President’s economic agenda—investment in infrastructure, clean energy, research, education. They will pinch programs that are already budget constrained…programs that help low income people with child care, housing, and community services."
Kevin Drum at Mother Jones says the agreement is “a shit sandwich no matter how you look at it,” and in two specific ways: “(1) It means we'll continue to live in a fantasyland that says we don't need any tax increases even though our population is aging and we're plainly going to need higher revenues to support this demographic reality. (2) We'll continue to live in a fantasyland that says our problems are primarily caused by discretionary spending. This is, of course, exactly the opposite of reality, which means we're going to screw the poor and do nothing serious about the long-term deficit. Nice work, adults.”
Democrats in congress should turn this deal down, says John Judis at TNR: "They should demand that any deal include compensatory increases in spending (or tax cuts) aimed at creating jobs and that any future spending cuts be contingent upon the economy achieving a specific lower unemployment rate—say, below 7 percent. … It’s time the president feels some pressure from people who want to create jobs rather than destroy them."
Make no mistake about it, writes Michael Tomasky at The Daily Beast, entitlements – especially Medicare and Medicaid – are next on the GOP’s list. "Now, entitlements need reform and savings, no doubt about that. If Republicans were interested in a good-faith way in shoring up the programs for the long-term even if it meant, say, that Medicare wouldn’t kick in until age 67 for people now in their 40s, that would be one thing. But in fact, they want to destroy it. And Medicaid’s position is even more precarious. We spend too little on it as it is – the barest minimums for poor people’s health costs, which inevitably result in higher-cost treatments down the road. This December, liberals will be counting on Barack Obama to defend those programs. What a disgrace that that is now a frightening proposition."
Democrats have lost -- but they can win later, writes the Washington Post's Ezra Klein: "Democrats will have their turn. On Dec. 31, 2012, three weeks before the end of President Barack Obama’s current term in office, the Bush tax cuts expire. Income tax rates will return to their Clinton-era levels. That amounts to a $3.6 trillion tax increase over 10 years, three or four times the $800 billion to $1.2 trillion in revenue increases that Obama and Speaker John Boehner were kicking around. And all Democrats need to do to secure that deal is...nothing. ... Republicans will still be able to refuse to raise taxes. But if they do, it won’t matter. The only way they can succeed in keeping taxes from rising is if the Obama administration and the Democrats stand shoulder-to-shoulder with them to extend the Bush tax cuts."