NYT: Senate Leaders At Work On Simpson-Bowles Equivalent

Der Krugman says the Grand Bargain game is on: So, is my timing good or not? Right after I warn about the risk that Democrats, including the president, might betray the mandate they seem likely to get for preserving the safety net, we learn

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Der Krugman says the Grand Bargain game is on:

So, is my timing good or not? Right after I warn about the risk that Democrats, including the president, might betray the mandate they seem likely to get for preserving the safety net, we learn that Senate leaders are at work on a plan based around, well, you guessed it:

If those efforts failed, another plan would take effect, probably a close derivative of the proposal by President Obama’s fiscal commission led by Erskine B. Bowles, the Clinton White House chief of staff, and former Senator Alan K. Simpson of Wyoming, a Republican. Those recommendations included changes to Social Security, broad cuts in federal programs and actions that would lower tax rates over all but eliminate or pare enough deductions and credits to yield as much as $2 trillion in additional revenue.

Just to say, this would be politically stupid as well as a betrayal of the electorate. If you don’t think Republicans would turn around and accuse Democrats of cutting Social Security — probably even before the ink was dry — you’ve been living under a rock.

As David Atkins points out:

There is no reason for Democrats to cooperate with this. Since Republicans or some version of them will inevitably win the White House about half the time in our binary system, let the Republicans take responsibility for cutting the popular stuff. They're the ones who "starved the beast" in the first place. It's not our job to clean up their mess. Let them embrace Simpson-Bowles and the rest of the lemmings, and we can do things the Keynesian way.

And Digby, who's skeptical the austerians will be able to pull it off anyway, says:

Considering the circumstances and political environment, the best result of all this deficit fulminating we can hope for would be to postpone the tax hikes and postpone the spending cuts. And that's because the "fiscal house" is still on fire and if anyone has any sense at all they'll stop this talking about how much it's going to take to rebuild it and put the blaze out first. Or at the very least stop putting gasoline on the fire. That's pretty weak considering what really needs to be done but at least there's some basic Keynesian logic to it.

I don't know if that's what will happen. It all depends on whether the Democrats agree to take any kind of chump change the Republicans throw out there as a victory and whether the Republicans wise up and see how that would advance their own agenda. If they stay stuck, then postponing both tax hikes and spending cuts would be far better for the economy than anything else that's on the menu. It's not much, but I'd take it.

Here's hoping Digby is right and they can't pull it off. We can only pray.

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