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It's second-best overall, since military spending is one of those cases where no one argues that the multiplier is anything greater than 0.6 or 0.7, and it's the best option for cutting excessive spending.
Given, as Jared Bernstein points out, that non-military social spending has already been cut to a ridiculous extent, it would be nice to see the deadweight spending cut as well.
But you're correct that that won't happen alone, and no cut is better than deeper muscle-cutting (op. cit. Janet Yellen's speech on the "slow recovery").
You forget that the ratings agencies expect the deficit reduction. It is part of their calculus for the ratings on govt debt. If Congress voids the sequester, the ratings agencies will immediately downgrade.
Budget resolutions don't get signed by the president; they are internal working documents of Congress and not laws so they don't have to be approved and can't be vetoed by the president.
Also...there's no requirement that the House and Senate go to conference (it's not called a reconciliation committee) once they pass their own budget resolutions. And, as we saw with the hardly super committee, just because a joint committee meets doesn't mean it agrees to anything.
This is what the joint budget reconciliation committee is for. Stick Paul Ryan and Patty Murray in a room and make them hash it out. Or not, and let it 'die in conference'. Either way, passing something at least suggests that the Senate is credibly trying to do its job. I suspect the problem isn't the House budget, it is that the President won't sign off on any budget that would win the support of enough Senate Republicans to get passed, leave alone House Republicans, and Harry Reid won't put forth a budget the President doesn't bless.
I still think there will be an eleventh hour can kick on the sequester. It will get postponed to April 15th (the budget deadline) or thereabouts. The real fight will be over the expiration of the CR on 3/27.
A big step forward toward what? If Senate leaders, who do this stuff for a living, are convinced that any budget they pass will have no chance of passage in the House, then what's the point of the Senate passing a budget? How does passing a budget represent a good thing to do, when it's probably not going to end up being "the budget"?
The House has passed some budgets, it's true, full of ideas meant to play well in GOP primary races, however dangerous they might be if released into the wild. Senate Democrats think anything they pass will be put to some political use by Republicans, but will never come close to becoming law, while House Republicans run around passing budget after budget, knowing they will never come close to becoming law.
Assuming, since lawmakers do this for a living, that they know more than either of us about the odds in this situation, how is the Senate passing a budget a "step forward"?
Maybe.
But the issue hasn't been that the two chambers have been unable to reconcile different versions in conference committee. The problem has been that the Senate has avoided being put on record with any budget, not just the House passed version. So even under your view of how No Budget No Pay might play out, getting the Senate to introduce and then mark up and then vote on a specific bill is a big step forward. And it will be a big albatross around the neck of some in-cycle D senators.
I think they'll let the sequester go through and then quickly send several bills up to increase defense spending, etc.
I believe this is the most perilous time for our economy in my lifetime and I am over 60. I was curious though, shouldn't it read,"Than the sequester," rather than, "That the sequester," in the post.
There is zero chance that the defense sequestration will occur. Dems don't want it; Repubs don't want it; Obama doesn't want it. The only question is how they will arrive at that outcome.
Does "no budget, no pay" require a FY14 budget resolution or would a FY13 resolution suffice? The Senate hasn't passed the latter, AFAIK.
This is (sadly) a typical political sham. All that is happening is that Congressional pay will be put in escrow until they finally pass a budget and then they get it all - i.e. no net fiscal implications.
Congressional budget resolutions are empty. Get rid of both and leave the budgeting up to the executive. Then Congress can devote its attention to the real deal -- appropriating, taxing, and entitlement formulas.
Articles like this make it seem like we can just issue long term debt in place of short term debt with no impact. As if such a massive shift in duration would have no impact on rates. If we ramp up long duration supply rates will go up to some degree, dampening the positive budgetary impact. The interest rate reaction could be larger than we anticipate, because this shift would be understood by buyers to indicate a higher willingness to tolerate higher inflation. While the U.S. continues to borrow heavily at the short end, it sends a signal that inflation is not a planned strategy to de facto default on the debt.
Also, it's important to understand that short term U.S. government debt plays an important role in many markets, including money markets. Eliminating (sharply curtailing) short term government debt will have ripple effects.
Except that "tinkering" is not what was needed to allow a reasonable legislative process, and tinkering is all that was done. Right off the bat, Senate Republicans are threatening to block the appointment (again) of the CFPB head unless the CFPB is neutered. That's what you get from tinkering. Tinkering deserves a good mock.
If a cartoon doesn't convey the entire logic of what needed to be done and where filibusters fit in the scheme of DC politics, well, it is just a cartoon.
Indeed.
Seriously?
You have to be pretty ignorant of how the Capitol works to think that "tinkering" with filibuster rules is some kind of distraction from bigger problems. It's the filibuster that prevents any serious work from getting done up there. Fix it, and the place can get down to business.
I still wring my hands about the prospects for long term control of health care costs. They are still rising above the rate of inflation, making long term projections somewhat dubious.
Still, it is notable that the most important steps to address this issue occurred during the construction of the Affordable Care Act, a bill that received not one Republican vote.
A great discussion is going on here, I found a number of important things that I needed to learn. Here arguments and counter arguments are great to read.
Then there's the little issue that a bunch of constitutional conservatives now support "No budget, no pay" which is, to put it mildly, incontrovertably unconstitutional. Perhaps the GOP didn't get to the 27th Amendment when they read the Constitution at the beginning of the session.
Yes, I'm aware that NBNP is a gimmick and the GOP will gladly rail against activist judges for throwing out the pay restriction (if it ever gets to court), but jeez, you'd think they would try to protect their pretense of concern for the Constitution.
Agreed on fetishizing the near term and the opportunities we may end up missing. I just fear that myopic talking points will continue to get political cover as we collectively confront an aging demographic structure, resulting in some unnecessarily cruel policy.
Stan, my sense is that you greatly overestimate the extent to which ordinary non-budget-wonk citizens have any clue about this crappe. All this kind of legislative maneuvering is all just contentless murmuring to them, like the teacher in Peanuts. The only things that have salience are real, big, scary things: default, government shutdown, actual tax or benefit increases/decreases.
So yeah, Boehner and the Repubs looked like total patsies when they caved on the fiscal cliff and debt ceiling. But these subtleties about whether the requirement to pass a budget actually means anything is not going to register.
And yet, the President achieves nothing lasting from this surrender. Republicans should have surrendered even more obviously with a 1 or 2 year deal without gimmicks. The debt ceiling was a pure poison pill except for a few fanatics, but what truly exerciseable influence over fiscal matters have Republicans given up here? None. This does not mean they are going to get their way on everything, but the President doesn't have one more vote available than he did a week ago and clearly has one less giant hammer to beat Republicans with.
Yes, but...
C'mon, you know this. By increasing the average maturity of Treasury debt outstanding, we are also likely to steepen the curve. The extent to which that would happen is uncertain, but there would be a reaction to extending the Treasury maturity profile. We would end up paying more in the near term by missing out in the near term on lower short end rates to avoid someday paying higher rates.
To the extent that higher long-end rates in response to longer average maturity leads to higher private borrowing rates, maturity extension could slow growth in the near term.
There are pretty obvious short-term costs to dealing with a long-term deficit issue. Normally, we might want to argue that our culture values the near term to much relative to the longer term, but I'm not sure that is a great argument to make when there are millions more unemployed looking for work than is normally the case.