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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Month: February 2013

Political Strategy Notes

Charles Babington’s AP article “Republican losses obscure US drift to right” is more about Republican success in pushing policy rightward than than a real transformation of public attitudes.
Molly Ball’s post, “5 False Assumptions Political Pundits Make All the Time” at The Atlantic is based on an article in The Forum by Stanford political scientist Morris Fiorina arguing that: 1. The electorate is not “polarizing.” It’s “sorting.”; 2. Candidates change more than voters do; 3. Independents aren’t partisans; 4. “Division” is easy to overstate; and 5. Campaign ads really, really, really don’t make much difference.
Linda Feldmann’s “Obama’s divide-and-conquer strategy: Is it really about destroying GOP?” at the Monitor observes: “there’s a case to be made that Obama has helped exacerbate the GOP’s internal divisions by highlighting wedge issues. Gay marriage, the expansion of Medicaid, immigration reform, even the “sequester” – all have splintered the Republicans and at times forced them into debate among themselves as much as with Democrats…”Obama’s doing a good job of exploiting internal discord,” says Ford O’Connell, president of the conservative Civic Forum PAC.
Thomas Ferraro’s Reuters post, “In separating gun-control bills, Democrats reveal strategy” signals a departure from the Democratic proclivity for “big package” reform. As Ferraro explains, “President Barack Obama’s fellow Democrats in the Senate have spread his gun-control proposals across four bills in an effort to get at least some of the less controversial measures – such as expanded background checks for gun buyers – passed into law…By breaking Obama’s gun-control agenda into pieces, supporters hope to avoid having a less popular proposal such as the assault weapons ban contribute to the rejection of other proposals, aides said.”
Milwaukee police Chief Edward Flynn takes no guff on gun control reforms from the insufferable Sen. Lindsey Graham in this video clip.
Democrats Oppose Flexibility in Sequester Cuts” by Shane Goldmacher, Amy Harder and Stacy Kaper of the National Journal provides perspective on the latest debates going on inside both Democratic and Republican strategy sessions.
Liberal Supreme Court justices are reportedly making a big pitch to Justice Kennedy to join them in upholding the Voting Rights Act, according to Reuters’ Joan Biskupic. Seems like a long shot, given Kennedy’s hardening conservatism. But if he joined the liberals on the court on this important vote, it would increase his influence considerably to the dismay of the CJ who prefers the idea of “the Roberts court.”
At The Daily Beast Ilana Glazer reports “A new Washington Post-ABC News poll reveals more self-identified Republicans disapprove of the way Republicans are handling federal spending than approve of their performance. Barack Obama’s handling of federal spending did not rate well, either, with 52% of all adults disapproving. Democrats, though, show much more unity and cohesion, with 74% of self-identified Democrats approving of President Obama’s handling of federal spending.”
Commenting on the same poll, Chris Cillizza and Aaron Blake note at the Fix that “Republicans have put their battle to rein in federal spending front and center as they seek to (re)define who they are as a party. And, at least according to these numbers, that effort has yet to pay dividends — even within their own base.”
According to a new Field Poll, 54 percent of California RV’s now support legalization of pot, with 43 percent opposed — quite a contrast from the 13 percent who favored legalization in 1969, the 30 percent who supported the reform in 1983 and 2010, when voters rejected Proposition 19, which would have legalized pot, by 54 percent to 46 percent.

New D-Corps Survey: Public Looking for Investment and Balanced Approach in Face of Sequester

As the country approaches the next self-imposed crisis deadline of the prolonged budget battle, politicians in Washington and state capitals across the country would do well to take note: swing voters have no appetite for the severe cuts that will result from the sequester, and they have little patience for the crisis-to-crisis approach to fiscal governance that has defined the last two years. And now, as they are poised to experience painful austerity measures induced by Washington, these voters give clear signals about what the policy priorities should be moving forward. They are also very clear about who should be the priority in any budget deal–the middle class, seniors, and working families, rather than the wealthiest and elites with access to the halls of power.
Many voters are on the edge financially and face immense economic pressure on a daily basis and they can ill-afford to experience these cuts of essential support. And as the country hurtles toward sequestration, all voters, certainly Democrats and independents, prioritize a balanced approach that does not put the burden on the backs of the most vulnerable, and instead invests in education, research, and infrastructure in a long-term and meaningful way.
To find out how these voters are thinking about the big fiscal choices ahead and the President’s second term policy agenda, Greenberg Quinlan Rosner, along with Democracy Corps, the Roosevelt Institute, and Women’s Voices. Women Vote Action Fund, conducted dial meter and follow-up focus groups with 44 swing voters (including 11 unmarried women) in Denver, Colorado during the 2013 State of the Union address. These voters in Denver watched closely and responded positively to President Obama’s speech. The President’s supporters cheered his bolder approach and stronger tone. Even those who began the night more skeptical of the President left the speech hopeful that he will take action on some of his key policy proposals.
Methodology
Research was conducted on February 12, 2013 by Greenberg Quinlan Rosner Research for Democracy Corps, Women’s Voices. Women Vote Action Fund and the Economic Media Project. Participants were 44 swing voters from the Denver, Colorado metro area who split their votes evenly between Democratic and Republican candidates over the past several Presidential and Congressional elections. 25 women and 19 men split their 2012 votes for President based on Colorado statewide results, and split the 2010 votes evenly between U.S. Senate candidates (Bennett/Buck).
Dial testing focus group research was conducted using the Perception Analyzer powered by Dialsmith. Perception Analyzer measures participant opinions in a real-time, second-by-second methodology that provides instant and precise measurements of quantitative research within a qualitative audience. Greenberg Quinlan Rosner Research measured and examined several participant subsets including political identification, candidate preference and many demographic variables to aid analysis.

S.C. Shows Why the Voting Rights Act is Still Needed

Alec Macgillis has a post up at The New Republic “Until this generation of people dies out,” subtitled “Think the Voting Rights Act is outdated? Come to South Carolina,” which the Supreme Court conservatives ought to read. Macgillis shares some observations by Dr. Brenda Williams, a family-practice internist in Sumter, South Carolina, who is helping disadvantaged people get their i.d. cards and whatever else is necessary for them to vote. Williams relates incidents of discrimination, including these examples:

…Amanda Wolfe, 28, not only did not have a birth certificate but did not know who her birth parents were. Naomi Gordon, 57, had a birth certificate but it misspelled her first name as “Lmnoie,” the apparent result of having been birthed by a midwife with sloppy or poor writing skills. Her brother Raymond Rutherford, who works at Wal-Mart, had his name misspelled as Rayman; his only photo ID was one he’d bought from the local liquor store in 1976 for $10. Junior Glover, 78, didn’t have a birth certificate; his name was recorded in a family Bible that was destroyed in a fire in 1989. Clyde Daniels had a birth certificate but no proof of his current address, as all his household records were in his wife’s name. He told Williams, “There’s nothing wrong with my mind, Dr. Williams, my wife is just a better businessperson.”

Multiply these accounts by tens of thousands, and you will get some idea of why Section 5 preclearance provision is still very much needed. As Macgillis explains:

Williams says that she helped well over 100 people get photo IDs (South Carolina officials estimate there are about 180,000 eligible voters in the state who lack a valid driver’s license). Rutherford, Gordon, Glover and one other person are still waiting for their corrected birth certificates. But with Williams’s help they have been able to get a qualifying voter registration card under language in the South Carolina law that exempts people facing a “reasonable impediment.” A federal court in Washington approved the South Carolina law in October only after state officials pledged to give an “extremely broad interpretation” to that exception.
That guarantee would not have come about, Williams notes, but for Section 5 of the Voting Rights Act, which is why it would be a “terrific mistake” for the Supreme Court to do away with preclearance. She acknowledges that South Carolina and other southern states are hardly alone in pressing stringent voter ID laws–Pennsylvania, Wisconsin, and other northern states have done so as well. But her experience has shown, she says, that the Deep South remains in a league of its own in seeking to disenfranchise racial minorities. “South Carolina was the first state to secede from the union, for goodness’ sake, and now it’s talking about seceding again,” she said. “Without question, there is still a staunch racist atmosphere in the South. It gives me a bad feeling in my gut to say that but it’s true. We have a Confederate flag flying on the State House grounds, for God’s sake!”

It’s hard to see how the Supreme Court conservatives can credibly deny the unending struggle people of color face at the polls in the south. For the high court conservatives to invalidate this historic reform, which has done so much to democratize the states in question, would bring great shame on the legacy of the Roberts court.

‘Fever Swamp Centrists’ Diddle While GOP Blocks Recovery

From Paul Krugman’s ‘The Conscience of a Liberal’ blog:

I love Jonathan Chait’s phrase “the fever swamp of the center”; it really is true that self-identified centrists are sounding crazier and crazier, as they try to reconcile their fanatical devotion to the proposition that both parties are equally at fault with the distressing reality that Obama actually advocates the policies they claim to want….

Krugman goes on to cite a Washington Post editorial calling “entitlement reform” an “urgent national need.” He calls out the editorial for going all Chicken Little about the “astonishing” $857 billion interest on the debt, which is actually close in percentage terms to what it was when Bush I ran the white house –“not particularly astonishing in the aftermath of the worst economic crisis since the 1930s,” says Krugman, who concludes:

So it’s all there: hyperventilating about the deficit, together with an absolute determination to blame both sides equally no matter how unbalanced they really are. And as Chait, Greg Sargent, and others say, this refusal to hold the worse parties accountable is in itself an important source of our political dysfunction.

Unfortunately, the fever swamp centrists do seem to sway public opinion to some extent, as suggested by the results of a just-released to an NBC/Wall Street Journal poll, noted by Ariel Edwards-Levy at HuffPo:

Opinion on the automatic budget cuts is conflicted, if not confused: A majority of people say the sequester is a bad idea, but the public is split over whether Congress should embrace more or fewer cuts, and respondents only narrowly preferred avoiding the sequester altogether to facing its results (and reducing the deficit), the survey found. In addition, the pollsters caution those numbers could look very different should the cuts go through.

While it is disappointing that nearly half of the public thinks we need more spending cuts, at least they are clear about which party is more responsible for the problem, as Edwards-Levy explains:

For now, Americans aren’t convinced that anyone in Washington is interested in compromise, but they view Republicans as especially intransigent, echoing the results of another poll released Tuesday that found most view the party as extreme. While President Barack Obama is viewed as only slightly more interested in unifying the country, the Republican party is seen as emphasizing partisanship by an almost 3-to-1 margin.
Just 29 percent of Americans hold a positive view of the Republican party, compared to 41 percent with a positive view of the Democrats, the NBC/WSJ poll found. The GOP is still more trusted to manage the debt and control government spending, but, for the first time in years, the new polling gives Democrats a small edge on handling the economy and taxes.

The Republicans have had a pretty easy ride of it, pandering at every opportunity to lower-information/lazy or conflict-averse voters who, against all evidence, hold both parties equally responsible for our economic predicament. But recent polls indicate Dems are beginning to make a little headway with the public in terms of a more realistic assessment.
Robert Reich is undoubtedly correct that Dems must more vigorously challenge the GOP’s core myths about the merits of austerity when the economy is down and trickle-down largesse of the wealthy as a panacea for all of our economic ills. President Obama is the messager in chief, but all Democrats must do more to help him bust these twin enablers of Republican obstructionism.

Kilgore: CPAC No Forum for ‘Problem-Solving, Pragmatic Conservatives’

Ed Kilgore’s “Ghosts at the CPAC” at The Washington Monthly is just the tonic for those who may be still suffering the delusion that “wonderful problem-solving, bipartisan-oriented Republican governors” will have their say at the CPAC conference. As Kilgore explains:

…Such stories never seem to mention the large number of Republican governors who don’t fit that description by any stretch of the imagination: e.g., Kansas’ Sam Brownback, Texas’ Rick Perry, Maine’s Paul LePage, South Carolina’s Nikki Haley, Mississippi’s Phil Bryant, Wisconsin’s Scott Walker, Louisiana’s Bobby Jindal, Georgia’s Nathan Deal, and probably several others with whom I’m less familiar. A couple of others (John Kasich and Rick Scott) seem to have been elevated to Good Republican status because of the single act of accepting the Affordable Care Act’s Medicaid expansion, which is to say they finally decided they couldn’t continue to look a gigantic gift horse in the mouth…
…Among the 41 speakers currently being confirmed for the 2013 CPAC conference next month, you do not find the health-care heretics Kasich and Scott, or the serial heretics Bob McDonnell and Chris Christie. It is interesting that McDonnell’s successor as Republican nominee for governor of Virginia, Ken Cuccinelli (who has been at odds with McDonnell on a host of issues lately), will be there with bells on.
… If you are looking for a problem-solving “pragmatic conservative” who is willing to work with Democrats, CPAC offers pretty slim pickins. There’s Jeb Bush, Kelly Ayotte, Artur Davis, Carly Fiorina and Mitch McConnell, if you think any of them qualify, cheek by jowl with Alan West, Sarah Palin, Rick Santorum, Ted Cruz, Rick Perry, Newt Gingrich, Rand Paul, Mike Lee, Scott Walker, Bobby Jindal, Ron Johnson, Pat Toomey, Wayne Lapierre, Paul Ryan and Eric Cantor, among others…

As Kilgore concludes, “There will be much howling at the moon, and maybe some “reform” talk–you know, of the sort Cruz and Jindal inspire, based on ethnically diverse howling at the moon, done more clearly and with better technology. That’s the ticket!”

Why the GOP Says They Are Ready to Throw Down

Ed Kilgore and George Lakoff have a couple of well-stated insights on why the now dominant right flank of the GOP is making positive noises about bringing the crazy with respect to the sequester. First Lakoff from HuffPo:

…Ultra-conservatives…believe that Democracy gives them the liberty to seek their own self-interests by exercising personal responsibility, without having responsibility for anyone else or anyone else having responsibility for them. They take this as a matter of morality. They see the social responsibility to provide for the common good as an immoral imposition on their liberty.
Their moral sense requires that they do all they can to make the government fail in providing for the common good. Their idea of liberty is maximal personal responsibility, which they see as maximal privatization — and profitization — of all that we do for each other together, jointly as a unified nation.
They also believe that if people are hurt by government failure, it is their own fault for being “on the take” instead of providing for themselves. People who depend on public provisions should suffer. They should have rely on themselves alone — learn personal responsibility, just as Romney said in his 47 percent speech. In the long run, they believe, the country will be better off if everyone has to depend on personal responsibility alone…Moreover, ultra-conservatives do not see all the ways in which they, and other ultra-conservatives, rely all day every day on what other Americans have supplied for them. They actually believe that they built it all by themselves.

At The Washington Monthly Kilgore observes,

…I’m not among those who think the moans emanating from various trees struck by sequester lightning will necessarily convince congressional Republicans to back off and cooperate with Democrats in fixing selected appropriations levels when the continuing resolution runs out next month.
But there’s a long-term effect this rolling fiasco could produce that is worth keeping in mind. The central chimera of American politics at present is that a stable (if slim) majority of voters dislike government spending in the abstract, but resist reductions in almost every identifiable category of government spending one they become concrete. This is why so many Democrats talk tough on the budget deficit even as they contend that austerity policies hurt the economy and that domestic safety-net programs and discretionary investments are essential to the long-term strength of the country. And this is why Republicans are willing repeatedly to bring the country to a standstill to press their repeated demands that Democrats propose “entitlement reforms” even as Republicans pose as the heroes who will ensure there is never a provider claim on Medicare that’s not paid in full.
… The only people who will be pleased by the sequester are ideologues who view the beneficiaries of public-sector programs as “takers,” and who actively enjoy their pain. That these people happen to form the conservative base of the GOP is not going to enhance their reputation one single bit.

There is not a lot of room for sanity to prevail in the GOP, either in terms of time or in current Republican inclinations. While neither party will look very good if the sequester kicks in, one may be betting the ranch on pullling an inside straight.

Reich: Two Big Lies Enable GOP Obstructionism

Former Secretary of Labor Robert Reich’ HuffPo post, “Why Obama Must Meet the Republican Lies Directly” merits a thoughtful read by President Obama and his messaging team. Reich faults the administration for being anchored in a short-sighted strategy regarding the sequester, which is to “tell Americans how awful the spending cuts will be, and blame Republicans for them.” Reich responds:

It won’t work. These tactical messages are getting in the way of the larger truth, which the President must hammer home: The Republicans’ austerity economics and trickle-down economics are dangerous, bald-faced lies.

Reich concedes that the sequester cuts will cause a lot of pain, but it will be delayed in some cases and too many Americans won’t feel the pain in time to hold the Republicans accountable. Many others won’t experience much hardship. In addition, the GOP message machine could mobilize to blame the President for “high-visibility consequences of the spending cuts — such as a sudden dearth of air-traffic controllers” and force Obama to make the cuts himself. Worse, adds Reich, “there’s no end to this. After Friday’s sequester comes the showdown over continuing funding of the government beyond March 27. Then another fight over the debt ceiling.”
Instead argues Reich:

The White House must directly rebut the two big lies that fuel the Republican assault — and that have fueled it since the showdown over the debt ceiling in the summer of 2011.
The first big lie is austerity economics — the claim that the budget deficit is the nation’s biggest economic problem now, responsible for the anemic recovery…Wrong. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession — which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe.
The second big lie is trickle-down economics — the claim that we get more jobs and growth if corporations and the rich have more money because they’re the job creators, and job growth would be hurt if their taxes were hiked…Wrong. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep economy going.
…These two lies — austerity economics and trickle-down economics — are being told over and over by Republicans and their mouthpieces on Fox News, yell radio, and the editorial pages of the Wall Street Journal. They are wrong and they are dangerous…Yet unless they are rebutted clearly and forcefully, the nation will continue to careen from crisis to crisis, showdown to showdown.

Reich argues that the white house should play to its strength and the GOP’s weakness:

President Obama has the bully pulpit. Americans trust him more than they do congressional Republicans. But he is letting micro-tactics get in the way of the larger truth. And he’s blurring his message with other messages — about gun control, immigration, and the environment. All are important, to be sure. But none has half a chance unless Americans understand how they’re being duped on the really big story.

The President’s messaging team may differ with Reich on this. But it’s important that they give due consideration to his point that a bully pulpit confrontation of the two big Republican lies — about value of austerity budgeting and ‘trickle down’ economics — is much needed.

Political Strategy Notes

Postpone the sequester, say 54 percent of respondents in a new Bloomberg news poll.
The Monitor’s Brad Knickerbocker has more numbers in his post,”Sequester and public opinion? Advantage Obama. (+video)“.
Anna Chu breaks down “The Impact of the Sequester on Communities Across America” at The Center for American Progress web pages.
Despite all of the Democratic anxieties about the sequester, Lisa Lerer’s Bloomberg post “Democrats Zero In on Vulnerable Republicans Tied to Cuts” reveals a major political liability for the GOP, particularly in districts which are disproportionately impacted by defense cuts.
Ezra Klein explains at Wonkblog why Bob Woodward’s gripe that the Obama Administration is “moving the goalposts” on the sequester is a big stretch.
Claude S. Fisher’s “Can Liberals Get a Witness?” at the Boston Review illuminates the relationship of religious belief to voting. Among his revelations: “In the 2000s, 49 percent of white Gore-Kerry-Obama voters were church avoiders, nineteen points more than the white Bush-McCain voters. Put another way, nearly all of the white Americans who drifted away from organized religion in the last few decades were liberals…The latest election reinforced the trend. Obama lost weekly church attendees (of all races) by 20 points, while winning those who never attended by 28 points…Obama lost white evangelicals by 57 points and won the unaffiliated by 44 points, but white evangelical voters had twice the numbers of the unaffiliated of all races. Fisher goes on to suggest that the disconnection is a formidable obstacle for Dems in the south.
“A majority of Kentucky voters say they favor amending the state constitution to allow convicted felons to regain their right to vote once they serve their full sentences,” reports Andrew Wolfson for the Lousiville Courier-Journal.
24/7 Wall St. profiles “The States with the Strongest and Weakest Unions.”
You won’t find a more thorough, state-by-state update on how the Governor’s races are shaping up than “Red Alert, Part 2 – the Governors” by Larry J. Sabato, Kyle Kondik and Geoffrey Skelley at Sabato’s Crystal Ball.
Rob Kall has an OpEd News podcast, “NeuroPolitics; Darren Schreiber Does Brain Studies that Differentiate Democrats and Republicans.” Among Kall’s notes accompanying the podcast: “Amygdala activations, associated with externally directed reactions to risk, are stronger in Republicans, while insula activations, associated with internally directed reactions to affective perceptions, are stronger in Democrats. These results suggest an internal vs. external difference in evaluative process…” OK, now I understand…

Surrealist politics

Several days ago James Vega carefully deconstructed one example of the way in which polling data can be distorted by commentators to support an “Americans say both side are equally to blame” argument even when the data itself shows nothing of the kind. At the same time, however, political commentators can also present arguments that ignore empirical data entirely and express what can only be described as a weird kind of political surrealism.
Case in point, Mike Murphy in Time:

…Saying the words [“Some beneficiaries pay more” and “lower benefit increases over time”] would mean the President is finally serious about facing the soaring cost of entitlements, with adjustments to future cost increases in Social Security and Medicare as well as a modest increase in what some must pay into the programs.
The Democratic leadership will violently oppose this, but if the President really aspires to use his political capital, as he says he does, then he must use it on his own party, where it can actually accomplish a result.
The President should not forget that the Republicans are also willing to do very unpopular things to confront the national-debt crisis. He should take advantage of that rare impulse of theirs, not dismiss it.

When one tries to unpack this argument, it comes to this:

To combat the riding cost of entitlements the president should do things that are unpopular with public and which will outrage and infuriate his political base.
After all, the GOP is equally willing to do very unpopular things to combat the rising cost of entitlements — things that are unpopular with the public but which will delight and thrill their political base.
The president would be foolish not to take advantage of this “rare” opportunity.

What? The commentary asserts the existence of a parallel “willingness to do unpopular things” between GOP and Dems where in fact no actual parallel exists, it proposes that Obama should prefer to expend his political capital fighting with his own party instead of fighting for his own agenda (the exact opposite of what Republicans think political capital should be used for when they are in power) because that is “where it can actually accomplish a result,” and it describes as a “rare” opportunity a proposal for him to do something that will please his opponents, anger his friends and antagonize the public all at the same time.
Even if one sincerely believes that reducing the cost of entitlements represents a critical national problem, this argument simply makes no logical sense. It is a verbal version of a surrealist painting. From a distance it appears as if it is actually presenting a rational political argument but when one looks more closely it dissolves into a completely incoherent cluster of words.

For political dominance the Obama coalition must win congressional elections and be widened to include more white working class voters. The Obama team knows this but the strategy they have developed isn’t fully adequate to achieve it

This article by Ruy Teixeira is cross-posted from the New Republic where it ran under the title “Good Speech, Bad Strategy.”
…There are two keys to achieving real political dominance for the new Obama coalition. First, it must be mobilized beyond presidential elections–in congressional elections, where turnout patterns don’t yet align very closely with presidential elections, and between elections, in the struggle to achieve legislative victories. Second, the Obama coalition must be widened to take in a larger share of the white working class. Otherwise, the hostility of these voters will undercut public support for the president’s agenda, as well as remaining a lurking threat in every election, particularly congressional ones.
The Obama team is not unaware of these necessities. But the strategy they’ve developed to address them isn’t entirely adequate. It seems to consist of emphasizing particular fights like immigration reform, gun control, same sex marriage, and climate change that appeal most strongly to different elements of the Obama coalition. This strategy does have merit. The thought is that even if all these fights don’t yield legislative victories (and they won’t so long as Republicans control part of Congress), they will nevertheless serve to generate more enthusiasm among key parts of the coalition, without imposing much of an electoral cost. Moreover, these fights are all substantively important in policy terms, so any victories attained will be important breakthroughs.
But the strategy has serious limitations. To begin with, even if these issues do little damage to Democrats’ standing among white working class voters, they will also do little to win their support. These voters are primarily looking for material improvements in their lives, improvements that are not possible without strong economic growth and the jobs, tight labor markets, and rising incomes such growth would bring. In a low-growth environment, these voters will remain exceptionally pessimistic and inclined to blame Democrats and government for their lack of upward mobility.
Even more serious, core groups of the Obama coalition will be weakened by continued slow growth. Obama was well-supported by these groups in 2012, but a sluggish economic environment, where unemployment continues pushing 8 percent, will try these voters’ patience. How much enthusiasm will Hispanics, blacks, youth, single women, etc., whose unemployment rates are considerably above the national average, continue to have for a party that cannot do more to improve economic conditions? Attrition in support will be inevitable in such a scenario and the opportunity to consolidate a dominant coalition will be lost.
How likely is it that slow growth will continue? Unfortunately, it appears to be a very serious possibility. The last quarter of 2012 actually saw the economy contract by .1 percent. And CBO’s latest economic projections, just released on February 5, anticipate that the economy will grow by only 1.4 percent this year (halving CBO’s previous projection) with an average unemployment rate of 7.9 percent. They project 2014 to be slightly better–2.6 percent growth and 7.8 percent unemployment–but the economy doesn’t really pick up until 2015. Even then, unemployment remains above 7 percent in 2015, above 6 percent in 2016, and doesn’t approximate full employment until 2017.
The reason for these gloomy projections is fiscal drag–that is, lower spending and higher taxes are subtracting demand from the economy, thereby slowing the still-fragile recovery. The fiscal cliff deal did considerable damage, chiefly due to the expiration of the payroll tax cut, which raised taxes 2 percent for middle and low income earners. The sequester will do more damage if implemented, indiscriminately cutting $85 billion from federal spending this year and every year thereafter for 10 years. And then there is possible further damage from whatever deal might be struck around the next extension of the debt ceiling, due in a few months (damage not included in the CBO projections).
It’s a bleak picture to be sure. What the economy really needs is something like Obama’s initial offer on a fiscal cliff deal. That offer included, besides tax increases on the wealthy and long-term cost reductions for Medicare, extensions of both unemployment insurance and the payroll tax holiday, as well as a roughly $50 billion jobs plan focused on infrastructure spending. The Republicans rejected the offer out of hand, of course, and the administration quickly yielded on the payroll tax cut and the jobs spending, leaving just the unemployment benefits extension. Rescinding the Bush tax cuts for those with $450,000 in income and higher was the laudable centerpiece of the deal, making the tax code fairer and helping to reduce long-term deficits, but that did nothing to alter the contractionary nature of the deal.
Now Obama has to deal with the extremely contractionary sequestered spending cuts. One of his stated operating principles on dealing with the sequester is to “do no harm” to the economy. However, the only way to really do that would be to avoid short-term spending cuts altogether.
Will he try to do that? It’s possible. But it doesn’t help matters that he has consistently evoked the possibility of a Grand Bargain with the Republicans that would, in a “balanced” way, attain $1.5 trillion in debt reduction over ten years. In all likelihood, that would mean agreeing to hundreds of billions in cuts (Obama would be lucky if only half ($700 billion) of the total savings was from spending cuts; Republicans will demand much more), starting this year and continuing until 2023. Leaving aside the content of the cuts, we know this means one thing that is indisputably bad–subtracting demand from the economy while it is still struggling, thereby making CBO’s gloomy economic projections more and more likely.
It therefore seems that another contractionary deal, despite Obama’s stated commitment to “do no harm,” is a distinct possibility. He would be well-advised to forget about such a Grand Bargain-type deal, which is not necessary in the short run (the deficit is already declining, as the CBO report notes, and will continue to do so for several years) and concentrate on what is necessary: growth. This starts with delaying or ending the sequester. As Paul Krugman points out, “kicking the can down the road,” so derided by Washingon commentators and elites, is in reality the responsible thing to do, given the state of today’s economy.
Then Obama should move to actually getting the economy some help. One obvious way to do this is through infrastructure investment. As Neil Irwin recently noted, low interest rates, millions of unemployed construction workers, and high economic development payoffs make such investment amazingly close to a free lunch. Obama did call for more infrastructure investment in his SOTU, including a new proposal for infrastructure repair called “Fix-It-First”, but this was in the wish list portion of his speech and had no clear urgency or timeline attached to it. These investments need to be moved up to short-term priority number one.
Indeed, if any deal is cut with the Republicans, it should be to put such investments immediately in the pipeline. We need a Grand Bargain for growth far more than we need a Grand Bargain for deficit reduction. Besides as many analysts have noted, the best medicine for deficit reduction is a higher growth rate, so the two goals are intimately and virtuously related. Add a half point to the growth rate and you knock $1.5 trillion off the national debt over ten years, thereby achieving Obama’s current debt reduction target.
And then there is the political payoff. The faster we move into a high growth economy, the better the opportunities for consolidating and expanding the Obama coalition. Conversely, if we stagger along for the next several years, the coalition has an excellent chance of falling apart. A very simple equation captures what’s at stake here:
Demographics + Growth = Dominance
Democrats have the demographics part of the formula already. Now what they need is the growth part to achieve electoral and policy dominance. That is the real challenge for Obama and his party if they wish to see the many worthy ideas in his State of the Union become reality.