MORNING MESSAGE: Is Our Budget Out Of Control? IMF Says Yes. Charts Say No.
OurFuture.org’s Richard Eskow: “The IMF report calls us ‘profligate’ because of the imbalance between the amount of money our government collects and the amount it spends. But, as Howard Schneider notes in The Washington Post, Denmark offers much better social benefits than the U.S. and isn’t called ‘profligate’ because it collects the revenues to pay for it. Still, the term’s a loaded one and shouldn’t have been used. It won’t lead to a serious debate about tax revenues in this country, and we’re certainly not having one now. We’re fixated on spending, and the revenue side of the discussion has been narrowed so radically that the only debate going on in Washington is over which six-figure incomes will be taxed at a historically low rate of 39.5 percent.”
WH Rejects Coin, Renews Pressure on GOP
President rejects $1T coin, puts pressure on Republicans to take responsibility for their own spending, raise debt limit. HuffPost: “‘This now puts all the pressure back where we believe it belongs: on the Republicans,’ a senior administration official told the Huffington Post. ‘There are no magic coins. There is no way to get out of this. We feel fine about the politics of it. We think we are in a stronger position if Republicans realize there is no out.’”
WH move boxes in GOP on retirement security, according to TPM: “That leaves Republicans in a difficult position vis-à-vis their promise not to raise the debt ceiling without improving the long-run solvency of programs like Social Security and Medicare. If they propose safety net cuts that Democrats oppose, they risk political blowback. If they back off, conservatives will accuse them of surrender on a top priority … During the fiscal cliff battle, they abstractly demanded scaling back entitlements but avoided putting specifics on paper. House Speaker John Boehner’s failed fallback plan didn’t touch entitlements … That’s the GOP’s dilemma in a nutshell: fulfilling their promise to their base requires pushing for something highly unpopular.”
TPM’s Josh Marshall adds: “…the Platinum coin has the additional magic of making it look like the President is the one doing something reckless and totally crazy rather than Congressional Republicans who are the ones really doing it. That’s a problem.”
But will WH hold firm against needless cuts? TNR’s Jonathan Cohn: “…having foresworn the coin option, the administration puts even more pressure on itself to prevail in a standoff with the Republicans … The question remains, will the administration flinch first? The administration says no, but its allies wonder. ‘Ruling out the coin idea is, by itself, understandable,’ one senior Democratic aide said via e-mail, ‘but the refusal to assert any form of leverage whatsoever is maddening.’”
Congressional Republicans warming up to government shutdown and debt default. Politico: “The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter … Republican leadership officials, in a series of private meetings and conversations this past week, warned that the White House, much less the broader public, doesn’t understand how hard it will be to talk restive conservatives off the fiscal ledge … House Speaker John Boehner ‘may need a shutdown just to get it out of their system,’ said a top GOP leadership adviser. ‘We might need to do that for member-management purposes — so they have an endgame and can show their constituents they’re fighting.’”
House conservatives may still try to block Sandy disaster aid. NYT: “A bare-bones package totaling $17 billion would come to a vote first, followed by a $33.7 billion amendment written by New Jersey and New York Republicans. That way House conservatives can vote for some, but not all, of the assistance, which ultimately would rely on Democratic votes to push it to the finish … Supporters of the larger aid package say that many of the items are legitimate and that critics are misconstruing them. For instance, under the larger bill, drafted by Representative Rodney Frelinghuysen, Republican of New Jersey, $16 billion in development funds would be designated for any community declared a disaster zone between 2011 and 2013; that includes 47 states and Puerto Rico. And $2 billion is set aside for highway spending nationwide. In both those cases, an aide explained, federal rules make those huge infusions necessary if money is to get to New York and New Jersey. Highways needing repair after the storm, for instance, fall to the back of the line of projects still awaiting assistance after earlier disasters. Only by financing those previous projects can lawmakers rush aid to the Northeast storm zone.”
More Jobs … In Japan?
Expectations low for major jobs push. HuffPost: “With the conversation in Washington focused not just on austerity but how much austerity to apply to a sputtering economy, it’s hard to imagine what kind of rebooted jobs plan the president could propose for his next term while staying within the bounds of political reality … Without a clear and politically viable policy objective for jobs — unlike, say, banning high-capacity magazines to address mass shootings — the administration is likely to continue the piecemeal approach to economic recovery that it took for most of the president’s first term, observers say.”
Japan is showing how to do a one-two punch of stimulus, says NYT’s Paul Krugman: “[The new prime minister] has been pressuring the Bank of Japan into seeking higher inflation — in effect, helping to inflate away part of the government’s debt — and has also just announced a large new program of fiscal stimulus. How have the market gods responded? The answer is, it’s all good.”
WH Gun Violence Prevention Package Expected Tomorrow
WH ponders how to circumvent House GOP. NYT: “The most contentious initiatives, like reviving a ban on assault weapons, would require Congressional approval and have drawn fierce opposition from gun rights groups and Republican lawmakers, making passage a long shot … In the face of those difficulties, the White House has said it is looking for actions it can take without Congressional approval. Increasing the number of prosecutions for lying on background-check forms is an effort that the administration can undertake largely on its own …”
Mayor Bloomberg pledges to match NRA’s spending. W. Post: “His hope is that he can break the GOP of what he sees as its National Rifle Association addiction by using his considerable resources to promote gun laws with which many NRA members will agree. ‘I’m going to prove a counterweight’ to the NRA, said Bloomberg, who spent about $10 million in five congressional and statewide races against NRA-supported candidates last year, winning four of those contests. ‘It seemed effective, and I’m certainly going to take a good, hard look at next time. . . . You can organize people, I can write checks.’”