Who Killed the Supercommittee, Part II

Ramesh Ponnuru and Reihan Salam both posted responses to my piece about Republicans the supercommittee, quibbling with/shredding my conclusion that Republican intransigence is what really spiked it. They’re both worth reading, but I’ll just deal with the specific things they call me out on.


Weigel himself cites poll data showing that the public blamed Republicans for the debt-ceiling standoff over the summer. In itself, those polls might explain why blameless Republicans might be particularly eager to make the case for their blamelessness.

And Ponnuru points out that John Kerry and Chris Van Hollen have also spun against the GOP. It’s just hard to argue that they’ve spun as much as the GOP members. Fair enough, but the fact voters blamed Republicans for the impasse before and after the collapse doesn’t really suggest that Republicans are blameless. Perhaps the voters are on to something. They demanded concessions in exchange for a debt limit hike, which precipitated the showdown and created the committee in the first place. I’d agree with anyone who says Obama punted on debt reduction by not, say, proposing Bowles-Simpson as the heart of his 2011 State of the Union and budget rollout. But if we’re talking about the supercommitee, yes, the public was right to think that the Rs were more intransigent.

[T]he Republicans, by saying that they would accept a reduction in tax rates and tax breaks that yielded a net tax increase over the current tax code, showed a willingness to compromise–even Senator Durbin called it a breakthrough–that was not matched on the Democratic side.

Ponnuru is using the language that Republicans used – the “current tax code.” The current tax code has an expiration date of January 2013; current tax law, which both parties agreed to in 2010, brings back the Bush tax rates. The Obama position from 2008 on has been that the Bush tax rates should stay, except for the top rates, which should return to Clinton-era levels. The GOP position is that the tax rates, all of them, should be made permanent. But having agreed to extend the rates only temporarily, Republicans demanded that reform start with the assumption that the rates would never go away. Objectively, they were demanding more and refusing to move. In its downgrade memo, explaining why the rating agency had lost confidence in American polity, S&P specifically cited worries that the Bush tax rates would never be allowed to expire.

More Ponnuru, on whether I should have laughed off the Toomey/Portman suggestion that the Bush tax rates are perfectly adequate for revenue collection, because during the height of the bubble, they brought in almost enough to balance the budget.

Weigel seems to assume that the bubble represented an increase in economic activity over its natural levels, whereas it seems to me more plausible to see it as having replaced healthier economic activity that would otherwise have taken place. In any case, it seems to me quite implausible to suggest that we can never reach the levels of economic activity and real economic growth achieved at that time.

This is a fair point, but I agree with what Ponnuru says next: We’re looking at the retirement of the baby boomers and a massive spending crunch. The Bush tax rates ended up pulling in revenue at historically average levels; by 1999, the Clinton tax rates were pulling in more. Hence the surplus. Instead of tax revenue at 18 percent of GDP, it was cresting around 20 percent. If we’re trying to solve a deficit crisis, why not base pro-growth tax reform on rates that collected more revenue?

And now, Salam:

If we accept that it is true that Republicans have resisted net tax increases before the Super Committee, accepting net tax increases represents movement “leftward” — and that is what we tend to think of as a willingness to compromise.

They didn’t accept “net” tax increases, though. They accepted some tax increases while asking for the Bush tax rates to be made permanent – a net tax cut. I’d agree that any Republican discussion of higher revenue is progress, and that there’s a polite civil war about the meaning of Grover Norquist’s pledge, which in itself represents some Republican movement. But what we know – and our knowledge is limited by the gauzy backroom nature of the supercommittee – is that Democrats were willing to give ground on entitlement spending while demanding net tax increases. They were asking for something and giving up something. The Republicans were asking for something and asking for something else.