Get ready to be let down in a big way: The Deficit Reduction Supercommittee faces a deadline of Wednesday, November 23rd–the day before Thanksgiving–and all current signs are inauspicious. There is no evidence that the Supercommittee’s Republicans are really willing to accept new tax increases, their much-publicized proposal to raise a net of $300 billion in income taxes through reforms that close loopholes and lower marginal tax rates aside; likewise there is no evidence that the Supercommittee’s Democrats are prepared to address the skyrocketing liabilities of Medicare and Medicaid, the fastest-growing and already among the largest parts of the Federal budget. Republicans appear to be completely beholden to the fundamentalist anti-tax Americans for Tax Reform, and Democrats appear either sufficiently cowed by or committed to the AARP and advocates defending health care spending for the poor.
Don’t worry, deficit hawks: A mandated minimum of further deficit-reduction will occur if the Supercommittee fails to produce a plan or if Congress subsequently fails to act. These mandatory cuts, which will occur over a decade of future Federal budgets, include $492 billion in cuts to the Defense Department (in addition to $450 billion in cuts to the Defense Department over the course of this decade already committed to in the August debt limit deal, for a grand total of $942 billion in Defense cuts during the ‘Teens); $322 billion in cuts to Federal programs, notably in the Departments of Health and Human Services and Education, and to the Drug Enforcement Agency; $47 billion in cuts to mandatory Federal programs, mostly farm subsidies; and $123 billion in cuts to Medicare service providers such as doctors, hospitals and clinics–but not to Medicare benefits.
This amounts to a total of $984 billion in 10-year spending cuts, in addition to $915 billion in 10-year spending cuts specifically agreed-to by Democrats and Republicans in early-August, for a total of $1.899 trillion in spending cuts. Nearly $1 trillion of those spending cuts are to expenses which are traditionally Republican ideological or parochial interests, in the form of cuts to military spending and farm subsidies. If a deficit-reduction plan cannot be reached, Republicans will nonetheless gain nearly $1.9 trillion in spending cuts without any tax increases, but they will accept budget cuts that on balance attack their priorities while not cutting spending on entitlement benefits at all.
Is the Liberal Ironist appraising the Supercommittee’s failure to act in a strictly partisan prism? Well, sorta. Acting to reduce deficits must be a budgetary priority, but it needn’t be an urgent budgetary priority. Frankly, this isn’t a good time to reduce Federal deficits; it is a good thing (in a less strenuous version of the Republican refrain) that taxes are low-enough so that a lot of private money is potentially available as either investment capital or for consumption; likewise it is a good thing that we have thus far moved to confront deficits without threatening the basic Federal social safety net.
We’ve all heard the conventional wisdom about why the Supercommittee has thus far failed to produce a plan to reduce the deficit: Special interest groups have either intimidated or dominated the thinking of Democrats and Republicans alike, leaving thoughtless politicians to make confrontational gestures that will please their base or confer temporary partisan advantage (if, indeed, these should be conceived of as separate effects at all) rather than to serve the will of the people.
But what is that will of the people? Majority opinions sum to contradictory concerns: Americans overwhelmingly say that the issue that most-concerns them right now is the national economy, particularly in the context of jobs. A majority of them has also said they are worried about our government’s large deficits. In most polls, majorities of Americans oppose both raising taxes and cutting spending on entitlements–both the largest and most-complex drivers of Federal Government spending liabilities. This doesn’t leave a whole lot of wiggle-room. It leaves Defense spending–which is massive and suspected of an unspecified and ultimately somewhat-subjective amount of pork–wide-open for deep cuts, which it has received already and which it appears shall soon be doubled.
The will of the people has, in fact, been done.
No, really: If most Americans wanted deficit reduction without broad tax increases or cuts to Federal entitlement benefits, a half-complete deficit reduction package that savaged military spending and arrived at through a back door after probing but fraught and inconclusive debates over the budget was 1 of the more-likely outcomes. Many–perhaps most–of us political junkies may be unhappy with the results as the media narrative tells us we should be, and the process itself hasn’t left anyone singing in a major key, but “we” actually got what “we” asked for. If the projected savings given Supercommittee deadlock–$1.899 trillion–are about 1/2 of what the President’s Deficit Commission called for last December or what the Gang of 6 called for when they aired their deficit-reduction outline this summer, well, 2 things warrant mention on that count: 1) Most of the public isn’t as concerned about deficit reduction as they are about the qualification they put on deficit reduction; and 2) As I’ve said before, this isn’t a good time for us to concern ourselves with deficit reduction anyway. You don’t have to be a strict Keynesian to think so: Cutting Federal Government spending cuts jobs–good jobs. That’s an odd thing to do when the public expresses overriding concern with high unemployment and US debt–high though it admittedly is–remains historically cheap to finance.
So, is the Liberal Ironist happy with the extorted, fitful, endlessly-debated, half-automated and only half-completed deficit-reduction plan the President, a small-majority-Democratic Senate and Republican House has left us? I would be, were it not for the deep cuts in military spending.
I don’t want the Department of Defense to be forced by a politically-driven, suboptimal negotiated outcome to cut $942 billion from its budget over the next 10 years. Congress already received warnings from Defense officials, including the responsible and diligent former Defense Secretary Robert Gates, that cuts to defense spending beyond the $450 billion initially accepted between Congress and the President would amount to more than just a “flesh wound,” and would cut more than just pork and wish-list items. Right now our Defense Department budgets in preparation for the possibility of conventional war with 1 superpower and 2 regional powers. This may sound grandiose or even delusional, but critics of our large Defense posture just don’t take stock of the strategic challenges the United States faces.
The People’s Republic of China is about to undergo a leadership transition, and the next generation of Chinese leaders appears to be more-ideological. (On that note, the already-ideological generals of the People’s Liberation Army have become increasingly-strident in their criticism of US power projection in East Asia in recent years. Many of China’s near neighbors, most-notably Japan, Vietnam, and the Republic of Korea, have eagerly solicited a closer military relationship with the United States in response to Chinese indications that it leadership aspire to regional hegemony. A closer alliance with these countries now could be profitable in policy terms; conversely, failure to provide security guarantees to these countries now could result in their folding in front of Chinese pressure on a host of issues–or in the case of Vietnam, it could even lead to war over existing territorial disputes.)
The Islamic Republic of Iran is very close to the development of a nuclear weapons capability. The United States remains non-committal–as it was under President George W. Bush–over whether to use military force to destroy Iran’s bomb-making capacity. In order for all options to remain on the table (as we are often informed they are), we need not only the capacity to fly many planes over Iran to strike bomb-making facilities but some slack in our military strength, including our ground forces, to address possible Iranian reprisals, either through its Revolutionary Guard corps or through foreign terrorist proxies such as Hizballah.
North Korea and Pakistan both hover near the point of collapse. At 5.7 million strong including reserves, the Korean People’s Liberation Army is actually the largest in the World. This increasingly cash-strapped military force may attack South Korea simply out of a desperate attempt by its generals to extort money. Pakistan, home to about 170 million people, probably has at least 90 nuclear weapons and has a long history of state sponsorship and sheltering of terrorists. (Terrorist overlord Osama bin Laden was of course killed in Abbottabad, a Pakistani garrison city close to the capital.) This is an exemplary case of a country where anything could happen; should the unthinkable occur and the United States is compelled to intervene in this country in some way, we will face a great and painful undertaking with a drastically-reduced military force.
Then there is the enduring potential, in a number of the World’s more-vulnerable countries with war-weary and paranoid leadership, of genocide. President Obama’s Libyan intervention ultimately cost the United States only $1 billion–a bargain in light of the removal of 1 of the World’s most-vicious dictators and the prospect of the transfer of government of Africa’s most-affluent countries to its own people–but a future intervention to prevent large-scale government violence against civilians may be even more in the national interest yet more-expensive and protracted. This could open an unwelcome controversy about whether the United States has the means to intervene in foreign theaters even of direct relevance to us.
So our stunted, chaotic, back-door compromise at deficit-reduction has managed to trade-off a lot of domestic policy pain in favor of real foreign-policy vulnerability. I hope a future Congress will roll up its sleeves and restore half of the likely cuts to military spending, then finally get around to making us all suffer equitably at home.
For the sake of keeping the peace abroad, we should all be willing to take some bitter medicine. Let’s rise to the occasion–if not by Thanksgiving, then soon.