Budget Deal: When Bipartisanship Sucks

I like to think of myself as a moderate - or at least as a reasonable person supportive of compromise and happy when compromise happens. However, the recent budget deal does not make me happy - and for two reasons.

First, to the extent that we have a debt problem that needs to be addressed, it is a long term problem. Our current spending levels are unsustainable only in the long term considering the trends we see in our entitlement programs, especially Medicare and Medicaid. But there is no evidence of short term problems; bond markets are not signifying that they are worried about American debt.

And yet, if you listen to our dialogue, you would think the problems are short term and immediate. Republicans have done a great job at framing the issue about something that has to be addressed now.

Whether or not deficit spending is dangerous right now is especially important since we are in a recession where monetary policy is largely ineffective (as we are up against the zero bound). Since deficit spending is not a problem, the ideal policy, if we were actually smart and objective, would be to deficit spend (fiscal stimulus) right now to help get the economy going while addressing the long term problems.

We are of course doing the opposite. We are cutting spending now, when we need it most, and not addressing future issues at all. And Paul Ryan's plan, which pretends to be addressing those issues, cuts taxes as much as revenues, leaving us in the same place long term we are now (the plan also uses unbelievable forecasts about employment and discretionary spending).

The second reason this budget deal depresses me is that Democrats, especially the President, have not been standing up for Democratic causes and they have not been making the case I made above. Instead, they have ceded the issue, accepting that we need to make cuts. And Democrats have refused to point out that as Republicans talk about making sacrifices, they are really asking the poor and middle class to make sacrifices while pushing for the rich to get rewards.

I would feel much better about compromise if Democrats were at least defending their position before accepting a deal. There is a real argument for why cuts shouldn't happen now, and nobody in government is making them.