Like most Americans, I didn't know Eric Cantor before today. But he stood toe to toe with the President and neither of them blinked. I think we're going to find out what those two men are made of in the next few days.
As much as I take tax abatement to be a one note drone with the intellect of a stone, I gave it a second thought today as I read the various hearsay over the negotiation showdown. The counter to the argument I've been making presented itself to me as I thought about the size of our numbers.
When you're spending trillions and you start negotiating between 1.5T and 1.7T, it's easy to forget that how big that T is. Somewhere I read that 2.5T was within the realm of possibility, if the appropriate cuts were made. Now splitting the difference between 1.7 and 2.5 with some mix of tax increases and loophole closings sounds like a deal. Let's say you split it 50/50. You're trying to cut 800Billion.
So you say OK Mr. President if you cut 400B in spending I'll concede 400B in revenue. Deal.
Hold up. Wait a minute. What's 800Bilion? 800 Billion is the total cost of the Iraq War to date, with 100 Billion to spare. So you're telling me that to meet the President halfway, you have to raise taxes to the tune of more than half the cost of the Iraq War? Just to get cuts in *discretionary spending*?
Sorry. Didn't I mention that? Non-Defense discretionary spending is about 600 billion per year. Defense is another 600 billion. The 2011 spending plan is 3.8 and the revenue plan is 2.1T leaving a shortfall of 1.65T except we're so deep in the hole paying interest on the debt that number keeps growing.
So we spend 1.7 trillion more than we make, we keep raising our credit limit, and to meet the President halfway means we pay 400B more in taxes. Given all that, we break even and we're spending 2.5 Trillion a year.
The temptation here is to keep using the Ts and the Bs and look at 'split the difference' and abstract with percentages. It's very easy to get comfortable doing that, which is exactly why the banking industry failed and has yet to be fixed, recovered or trusted. I kid you not when I tell you that we used to have something called a Savings & Loan industry whose focus was getting people in America mortgages without using leveraged CDOs and hedged tranches of loans who originators were 6 parties removed. America doesn't have a Savings & Loan industry any longer. It's gone. Like the Apollo Program. Like $1 gas with 10x Blue Chip Stamps. They are all uneconomical now. The opportunity to go back does not exist. That's why that temptation is foolish in the extreme.
What the President has now is the bully pulpit, which means a script and some fraction of the American public that still trusts men in blue suits, white shirts and red ties when they speak on that thing called 'prime time television'. But the bully pulpit doesn't make money and I've never seen it make people want to spend money.
No Mr. President I'm not going to eat my peas because they're not my goddamned peas. I didn't order the peas. You and your predecessor did while you were out shopping for stuff you thought would be good for me. I'm pushing the plate back and I'm not eating those peas. And I'm not going to scrape them off my plate to the dog, or my kids either. Matter of fact, I'm going on a diet. And I'm going to the cupboard and see what other expensive fatty crap you've been out buying. And we're going to make you take it back.
So this is the standoff.
It has come to this, and this will end in tears. I'm afraid our President is unprepared to convince the American people that he's the kind of leader who can make us eat our peas and dare us to say something. He's right, this wouldn't have happened to Ronald Reagan because Reagan enjoyed being a cowboy. But Candidate Obama was a healer, a community man. A lover, not a fighter. Which is why Eric will call the bluff, and face what?