Every major newspaper is reporting tonight that Barack Obama has been holding secret post-golf meetings with John Boehner and is now pushing for a much larger budget deal than anyone has been talking about so far. Here's the Washington Post:

At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

....Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

The Wall Street Journal reports that means testing of Medicare is one proposal on the table, while the New York Times reports that Boehner might agree to $1 trillion in revenue increases in return for the bigger deal, possibly including an end to the Bush tax cuts for the wealthy. A few comments:

  • Unlike a lot of liberals, I'm open to deals on Medicare and Social Security. Obviously the details matter, but means testing of Medicare has always been a reasonable policy option, while small changes to Social Security's inflation calculations have a lot of support from both liberal and conservative analysts. This isn't necessarily a disaster.
  • I think it's now finally time to stop pretending that Obama has miscalculated, or blundered, or been out-negotiated, or somehow forced into a bad position. Rather, everything he's done for at least the past six months is consistent with the idea that he considers the long-term deficit a problem, he wants to address it, and he views the debt ceiling talks as an ideal opportunity to do so with bipartisan cover. Obama isn't doing this because he has to. He's doing it because he wants to.
  • Jon Chait argues that Obama would be a fool to allow the Bush tax cuts to be part of this deal. Instead, "If Obama wins election, he needs the ability to use the GOP's opposition to any middle class tax cut extension without an extension for the rich as leverage to let Republicans kill the whole thing for him." But this assumes that Obama secretly wants to kill the whole thing. I don't think he does. He's said all along that he wants to let the high-end tax cuts expire but keep the middle-class cuts, and it's time to take him at his word. That's what he wants to do.

A friend emails a question about all this: "Obama can survive 2012 without my vote and even with my working actively for his GOP opponent, which I will do if he does this, suicidal as it may be. But do you think he can survive, can the Democratic Party survive, if he actually does this?"

Answer: yes I do. This isn't what I want, and it's not what the progressive wing of the party wants. But the plain fact is that deficit cutting is pretty popular across the board, modest reductions in Social Security and Medicare will probably go over fine with independents, and anyway, liberals have nowhere else to go. A few might actually do what my friend threatens to do, but in the end it won't be many — especially after the Republican Party settles on a candidate and we've all had a year or so to get to hate him (or her). And Obama will raise a fantastic amount of money from wealthy donors who are OK with this kind of dealmaking regardless of whether the progressive blogosphere is happy with him. Like it or not, the sad fact is that Obama doesn't need us. We're mostly going to vote for him regardless of what he does, and he's going to get all the money and organization he needs without us. Lefties simply don't have much leverage these days.

So not only can the Democratic Party survive if Obama does this, it will probably flourish, electorally speaking. That's not a happy conclusion, but I think it's likely an accurate one.

But needless to say (again), details matter. So before we get too hot under the collar in either direction, let's wait and see what kind of deal Obama and Boehner really make.

Paul Broun's Budget

Republican congressman Paul Broun — the same Paul Broun who doesn't know if Barack Obama is a U.S. citizen but does know that he's a socialist — the same Paul Broun who believes the federal government plans to force us all to eat more fruits and vegetables — yes, that Paul Broun — serves up some outside-the-box thinking today:

Today, I introduced a unique bill that goes in a completely different direction than everything else we’ve been hearing out of Washington. It would force politicians to start practicing what they’ve been preaching by lowering the debt ceiling from $14.3 trillion back down to $13 trillion.

I'm increasingly convinced that there's some kind of gigantic practical joke being played on all of us. But by whom? Who has the power to orchestrate such a thing? I think someone needs to waterboard Glenn Beck to find out.

But back to Broun. Oddly enough, he concedes that "to be realistic, we can’t lower the debt limit today, but if we set a deadline, the beginning of FY 2012, it would force politicians to make those decisions in the months to come." My back-of-the-envelope guess — and I'm not willing to do anything more than that — is that this would force federal spending down to about $1.3 trillion in FY2012. Slice off interest on the debt and you'd have about a trillion bucks left over. That's enough to fund, say, the Pentagon plus half of Social Security and nothing more. That's outside the box all right.

You might reasonably ask, who cares? So Paul Broun is an insane wingnut. There are always a few of them around. Answer: because this proposal is currently being hosted by the fine folks at National Review. They don't endorse it, of course, but presumably they think it's sane enough to deserve a wider audience. This, ladies and gentlemen, is the flagship of mainstream conservatism. Revel in it.

From Bill Clinton, talking to a group of college students about the relentless two-decade Republican effort to restrict voting among minorities, the young, and felons who have done their time and finished their probation:

One of the most pervasive political movements going on outside Washington today is the disciplined, passionate, determined effort of Republican governors and legislators to keep most of you from voting next time....There has never been in my lifetime, since we got rid of the poll tax and all the Jim Crow burdens on voting, the determined effort to limit the franchise that we see today. Why should we disenfranchise people forever once they’ve paid their price? Because most of them in Florida were African Americans and Hispanics who tended to vote for Democrats. That’s why.

Good for him for saying this so directly. The Republican push for "voter ID" laws that address no actual problem and are plainly designed solely to reduce voting among Democratic-leaning constituencies is one of its most disgraceful projects. And it's not just the formal party apparatus either: the Supreme Court's refusal to overturn these laws is one of the clearest indications we have of the nakedly partisan turn the court has taken in recent years. It's shameful.

Farhad Manjoo writes in Slate today about the holy grail in indoor lighting: an energy-efficient bulb that's dimmable and produces nice warm light. It comes from a company called Switch, and it all sounds very nice. But I found this parenthetical pretty interesting:

(The 60- and 75-watt-alternative bulbs are also available in neutral white, which Sharenow says is a popular color in many different places around the world—people in Japan, India, and other Asian countries can't stand the yellow light we find comforting, Sharenow says.)

Obviously people don't like bulbs that flicker, can't be dimmed, and don't come on immediately. But the recent freakout over the end of incandescent bulbs has been at least equally driven by an insistence that a less yellowy light than Thomas Edison bequeathed to us is simply intolerable. This is, and always has been, nuts. It's a product of habit, not a law of human optics. The warm incandescent bulbs we use today are closer to candlelight than to sunlight, and I'll bet that every single person in America would very quickly get accustomed to a more neutral color in light bulbs if they'd just use them for a while and allow their old habits to die out.

In any case, if the Switch folks are on the level, they've got an LED bulb that doesn't flicker, comes on immediately, can be dimmed, and is available in old-school "warm" white or a more neutral white. So now you'll have your choice. But the neutral bulb puts out more light per watt, and it's almost certainly a better light source for anyone willing to give it a chance.

Karl Smith agrees with Casey Mulligan that reducing the minimum wage would boost the job market:

I understand that there are sophisticated studies showing a limited impact of the minimum wage on employment. My judgment is impacted by those studies. Nonetheless, they are climbing a steep hill against intuition and a supply and demand paradigm that has proved incredibly powerful in the past.

It may not be the case that the minimum wage cut employment by 800K but I have a hard time swallowing that it does not impede recovery and exacerbate long term unemployment.

I can’t imagine that there are no workers at all in America whom it is profitable to hire at $4.75 an hour but unprofitable to hire at $7.25.

This kind of stuff bothers me on a bunch of different levels. Let's count the ways:

  • You either believe empirical studies or you don't. If you have reason not to believe them, then let's hear it.
  • Intuition about supply and demand just flatly won't work in this case. We're talking about a market with (probably) low elasticities and a huge number of confounding factors that could push it in multiple directions. It's easy to see that a small increase in the minimum wage could be overwhelmed by other factors and lead to either a very small or zero impact on employment levels.
  • Are there jobs where it's profitable to hire at $4.75 but not at $7.25? Well, there must be some, but we're talking about such low skill levels here that there very well might not be many. That's why empirical studies are so important. The effects are just too small to intuit.
  • Is this really what we've come to? That we should provide a (probably very small) boost to the job market by allowing businesses to hire people for $9,500 per year instead of $14,500? Seriously? I mean, this is the ultimate safety net program, aimed squarely at working people at the very bottom of the income ladder. If we're willing to throw them under the bus, who aren't we willing to throw under the bus?

There are, obviously, nuances here. Maybe you think we should do away with the minimum wage and instead beef up the EITC or something similar. Or maybe we should directly subsidize higher wages instead of making businesses pay them directly. For a variety of non-economic reasons I don't think that's a good idea, but reasonable people can differ. But what it's hard to differ about is that this is pie in the sky. If we reduce the minimum wage, nothing is going to take its place and we all know it. It would increase corporate profits and dramatically reduce the wages of the poorest workers, and that's about it. Employment would probably be affected only marginally, and nothing would take the place of that lost income. Welcome to America.

David Leonhardt complains that the business community likes to talk big about how damaging the deficit is, but in practice lobbies extensively for policies that would increase the deficit. Even the Business Roundtable, a supposedly moderate business group, lobbies for lower tax rates, more loopholes, and increased spending on stuff it cares about:

It’s easy to look at the squabbling politicians in Washington and decide that they are the cause of the country’s huge looming budget deficit. Certainly, they deserve some blame. The larger problem, though, is what you might call roundtable syndrome.

In short, there isn’t much of a constituency for deficit reduction. Sure, plenty of people and special-interest groups say that they are deeply worried about the deficit. But they are not lobbying for specific spending cuts or tax increases. They aren’t marshaling their resources to defend politicians who take tough stands, like President Obama’s 2009 Medicare cuts or Rand Paul’s proposed military cuts.

Well, look: business groups learned long ago that they no longer had to compromise. In 1986 they managed — barely — to support an agreement to remove lots of tax loopholes in return for lower corporate tax rates, but that was the last gasp of a dying era. Since then, the Republican Party, with an ever-growing assist from a newly corporatized Democratic Party, has made it clear that this kind of deal is no longer necessary. The business community can get lower rates and more loopholes, and once they get them they'll never have to give them back.

It's hardly a revelation that people prefer to raise taxes and reduce spending only on other people. Take taxes off the table, as they have been, and that leaves only spending cuts on others. In our current political environment, "others" means not businesses and not the elderly and not the middle class. By elimination, it means spending cuts on programs for the young and the poor, which is exactly what the Republican base has bent all its energies toward for the past 40 years. Here it is in terms everyone can understand:

"Deficit reduction" = spending cuts on social programs for the young and the poor.

Republicans don't want to cut the deficit. They want to cut liberal social programs. Anyone who continues not to understand this is simply being willfully ignorant.

The debt ceiling fight is sucking up all the wonk blogging oxygen these days, but I'm struggling to think of anything new to say about it. Republicans are great negotiators, Obama left himself wide open to lose this battle, Republicans are crazy, Democrats have no consistent position on offer, Republicans may benefit if the economy tanks, Democrats may benefit if independents conclude that Republicans are reckless and crazy, etc. etc. I guess it's worth repeating this stuff to make sure the point gets across, but there are only so many synonyms for "insane."

So instead, let's have a pool. Answer the following three questions:

  1. When will we finally reach a debt ceiling agreement? (The drop-dead date is supposedly July 22, with a second really-for-sure drop-dead date of August 2.)
  2. How much will the debt ceiling be increased? A lot (the full $2 trillion or so) or will it just be a stopgap ($400 billion or so)?
  3. Will it include any net revenue increases? How much?

I know, I know, I'm asking you to bet on the end of the world. And I'm not even offering any prizes. But the winner gains much commenting-fu in the coming year. Here's my entry: (1) August 7, (2) $1.7 trillion, (3) Yes, $200 billion.

"Given a choice," says McClatchy's Steven Thomma, "59 percent of Americans prefer reducing debt even if that slows the economic recovery." Thomma wouldn't lie about his own poll, but that's still a pretty gobsmacking result. So I had to go look for myself. And luckily for my sanity, I don't believe the poll says quite what Thomma thinks it does. Here's the detail:

It turns out only that most people want to reduce the national debt "even if the economy is slow to recover." That's quite a bit different from wanting to reduce the national debt "even if it causes the economy to be slow to recover." There's a little bit of association between spending and strength of recovery when you read both of the poll's options to people, but it's pretty thin.

At the same time, whether we like it or not, this poll does pretty clearly tell us two things: (a) most people probably don't link stimulus spending with helping the economy to recover faster, and (b) large majorities are pretty obsessed about cutting the national debt — and those large majorities cut across practically every demographic subgroup. If you want to know why President Obama is willing to cut a deal with Republicans to drastically cut federal spending, this is it. We liberals have miserably failed to make the case for stimulus spending, and as a result conservatives have spectacularly succeeded in reverting the American public to its default state of believing that the federal books should always be balanced, the same as household books. On this score, we've just been flatly outplayed over the past couple of years.

David Brooks is getting lots of hosannas today for a column that forthrightly calls the Republican Party nuts for its unwillingness to accept a debt ceiling compromise that's weighted something like 5:1 in favor of spending cuts and doesn't raise marginal tax rates a dime in order to generate its modest revenue increases. The GOP, he says, should grab a deal like this with both hands:

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise....The members of this movement do not accept the legitimacy of scholars and intellectual authorities....The members of this movement have no sense of moral decency....The members of this movement have no economic theory worthy of the name.

....If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.

I've avoided commenting on this today because I didn't want to seem churlish. But on second thought, there's nothing wrong with some occasional churl, is there?

So here's my churlishness for the day: I'll believe that Brooks has seen the light when he actually keeps this up for a few consecutive weeks. I've never been a Brooks hater, but the fact is that he occasionally writes columns like this. Normally, though, having done it, he then devotes his next five or six columns to nitpicking at Democrats and pretending that they are, when all's said and done, just as bad as Republicans after all.

They aren't, of course. They're just a normal party with all the virtues and all the pathologies of any broad-based political party. That means it's easy to find a laundry list of things to criticize and then add them up to make it seem as if everyone's equally to blame for the insanity of our current political impasses. But it's not true, and it's long past time for non-insane conservatives to give up on this kind of faux Olympianism. As Brooks says, the GOP is no longer a normal political party and they are not fit to govern. The question is, will Brooks still believe that in a couple of weeks when — and it's bound to happen — Democrats do something he dislikes? I'll wait and see.

From Jon Chait, explaining how the definition of "reasonable" changes over time:

The GOP's willingness to undermine the full faith and credit of the Treasury in pursuit of anti-tax fundamentalism is shocking now, but eventually it will come to be seen as simply part of the process.

Yep. In the same way that Wall Street hoovering up a third of all corporate profits is the new normal. Or that 9% unemployment is the new normal. Or that obstruction, rather than legislation, is the new normal for Congress. Or that massive spending cuts during a recession is the new normal. Or that conducting three overseas wars at the same time is the new normal.

The new normal kind of sucks, doesn't it?