The Wall Street Journal:

We think the larger problem with S&P, Moody’s and Fitch is that they make no distinction over how a nation balances its books—whether through tax increases or spending reductions. Like the International Monetary Fund, the raters care only about balance.

This takes too little account of the need for faster economic growth, which is the only real path out of a debt crisis. Britain’s government has earned rater approval for its fiscal consolidation, but its increases in VAT and income tax rates are hurting its tepid recovery. Letting the credit raters dictate tax increases is the road to an austerity trap.

For a family, how much income they need is determined by how much they want to spend. If they want a nice home, big television, decent car, and a yearly family vacation, then they need to make enough money each year to cover that and put away some each year for retirement. It’s relatively simple: how much money you need to make depends on how much you want to spend.

It’s an easy analogy to make for government—government, too, should make enough money each year to cover their expenditures. They need to be fiscally responsible just like every family in America. Therefore, since we’ve committed ourselves to this current level of spending, we should simply raise taxes to match it.

Good rhetoric, maybe, but government and families are not the same thing. Families make money because the heads of household are working—that is, creating value—and earning income as a result. For them, the only downside to making more money is that may mean less time with their family.

But governments do not make money, they take it from individuals and organizations to fund their operation. Taxes, of course, are necessary for government to function, but at best, taxes are a necessary evil. Taxes, then, aren’t the default answer, but the last resort—the solution when we have no other.

Even if we set aside the moral issues involved with taxation (see here for more discussion on that issue), though, there are others. Taxation inherently distorts society from where it would naturally be. The mortgage interest deduction, for example, encourages people to purchase homes rather than rent. The tax system also encourages employer-provided health insurance and discourages individual health insurance plans. Employer-provided insurance disconnects the individual from making cost decisions related to health care and thus has contributed to our rising health care costs.

There are numerous other examples as well; marginal tax rates can lead to perverse decisions related to work. That’s why, when trying to get our public finances in order, we must first consider whether our current spending programs are wise or not. If they aren’t, they should be restructured or eliminated. Then, if there is no other choice, tax increases should be considered.

Democrats are fond of saying that our current budget deficit is caused primarily by tax cuts passed by the Bush administration. That isn’t true, however—the current deficit is caused primarily by a reduction in tax revenue coupled with increased spending. Bush not only cut taxes, but happily signed an expansion of Medicare (that Democrats were all too happy with at the time), an increase in defense spending, and two wars. The issue here isn’t that he cut taxes; the issue is he cut taxes while also expanding government spending. That’s what’s irresponsible.

Moreover, the causes of our current budget deficit are not the causes of our long-term budget deficit, which is what’s really looming over us. Long-term, entitlement spending is the problem. Medicare costs, specifically, will continue to grow at a dangerous rate, and unless we get Medicare spending under control, we will go bankrupt as a nation.

The answer is not higher taxes. The answer is more responsible spending, and if we can’t get there without unacceptably harming the poor by reducing spending, then tax increases should be considered. But it isn’t the first solution. It’s the last resort.

William Galston:

As many critics have pointed out, this man-made crisis was entirely avoidable. The Democrats could have raised the ceiling last December. They chose not to, handing a sword to their adversaries. Senate majority leader Harry Reid wanted to force the incoming Republicans to accept some responsibility for the increase. We’ve seen how that worked out. And if President Obama genuinely believed that the Republicans would cooperate because it was the right and responsible thing to do, then naïveté was the least of his mistakes. (A moment of introspection about his own 2006 vote against increasing the debt ceiling should have sufficed to disabuse him of that notion.)

He points out, too, that in Obama’s second round of negotiations with Boehner—which, when they failed, Obama blamed on Republican intransigence—the President demanded 50 percent more tax revenue than his earlier proposal.

If Boehner had a hard time selling an $800 billion in increased tax revenues to his caucus, then there is no way he could bring a deal back to them with $1.2 trillion of higher taxes and expect their support. And the White House had to know that, yet they demanded it anyway, and raked Republicans over the coals when it inevitably failed. That’s political posturing, not selflessly attempting to avert a debt crisis and solve our deficit, as the White House is wont to portray.

This isn’t a case of one party attempting to do the right thing for the country and the other playing chicken with default. It’s a story of two parties behaving like spoiled children.

Julian Sanchez:

The very existence of such massive trade in “defensive patents” is, in itself, pretty strong evidence that there’s something systematically quite wrong with the American patent system—because a patent that’s useful for “defensive” purposes is very likely to be a bad patent.

The White House posted a chart a few days ago that splits our debt up between the Bush and Obama administrations, and alleges that Bush was responsible for $7 trillion of it, while Obama was (merely) responsible for $1.4 trillion.

Simple enough. One little problem, though: as Megan McArdle writes, the White House’s logic seems a little… tilted:

I’m a little less enamored, considering that this graph attributes decisions made by Obama and an all-Democratic Congress–like doubling down in Afghanistan–to Bush, while taking responsibility for basically nothing except the stimulus.  When Obama extends the Bush tax cuts for the rich under pressure from Congressional Republicans, that disappears from his side of the ledger, because after all, he didn’t want to do it.  When Bush enacts Medicare Part D under pressure from Congressional Democrats, the full cost is charged against his presidency.  The list of such silliness goes on.  Our president seems set to coin another presidential motto: “The duck starts here.”

I’m sure glad the President is raising the quality of the debt debate.

Jon Huntsman, running for the Republican nomination for president::

“We will be judged by how well we were stewards of those (natural) resources,” said Huntsman, a veteran of three Republican administrations who until this spring was President Barack Obama’s ambassador to China.
“Conservation is conservative. I’m not ashamed to be a conservationist. I also believe that science should be driving our discussions on climate change,” he added.

That’s called honesty. And courage.

Ross Douthat comments on the possibility that Norway’s tragedy will make discussion of Europe’s failure to integrate immigrants off-limits:

For decades, Europe’s governing classes insisted that only racists worried about immigration, only bigots doubted the success of multiculturalism and only fascists cared about national identity. Now that a true far-right radical has perpetrated a terrible atrocity, it will be easy to return to those comforting illusions.

But extremists only grow stronger when a political system pretends that problems don’t exist. Conservatives on both sides of the Atlantic have an obligation to acknowledge that Anders Behring Breivik is a distinctively right-wing kind of monster. But they also have an obligation to the realities that this monster’s terrible atrocity threatens to obscure.

It’s easy to use tragedies committed by people flying a certain ideology or religion’s banner to dismiss that ideology altogether. Some anti-immigration (xenophobic, even) conservatives in the U.S. have attempted to use radical Islam to reject Islam as a whole, and for a short period after Representative Gabrielle Giffords was shot by Jared Loughner in Arizona, some liberals used it to argue that conservatives who support reducing government created the environment for the shooting to happen, and thus, by implication, their viewpoints could be dismissed without a second’s thought.

It’s easy to do, and it’s dishonest. It’s a coward’s way of winning an argument, a win-by-default; rather than acknowledge that the people they disagree with are also well-intentioned, and deal substantively with their arguments, they seek to win by disqualifying them—after all, they agree with a mass-murderer, and… do I really need to spell out the implication?

It’s also dangerous, because when serious political and cultural issues go undiscussed, we don’t make any progress on them. We delude ourselves that they aren’t really issues at all, that only bigots and extremists are concerned about them, and we allow problems to get worse. Yes, immigration is a huge problem in Europe, because Europe hasn’t found a successful way to integrate their immigrants into existing society. That’s a recipe for disaster, and one that may be even more taboo now than before the terrible tragedy in Norway.

And that is a tragedy of its own.

Megan McArdle:

So why this urgent press conference? 

Coupled with Boehner’s rebuttal, the most plausible explanation to my mind is also the most troubling: both sides have given up making a deal, and are now just working on fixing the blame.  Boehner’s performance was uncharacteristically forceful, and even displayed a few flashes of personality, which was a nice change from his usual studied blandness.  But personal entertainment aside, this is not the moment when I really wanted to see John Boehner spontaneously generate a backbone.  He wasn’t trying to explain his position to a curious public; he was trying to justify the unjustifiable decision to risk the US credit rating rather than agree to a deal that Democrats could also live with.

Obama, meanwhile, seemed to be going out of his way to isolate Boehner from his more militant caucus members–praising Boehner’s willingness to cut a deal, if only it weren’t for the crazies on the far right.  Perhaps this makes Obama look like a nice guy to people who do’t understand the GOP intra-party dynamics, but of course, it poisons an already poisonous relationship between Boehner and the tea-partiers.  If I were feeling uncharitable, I might argue that Obama seems to be willing to lower the chances of getting a deal, as long as he raises the chances that the other guys get the blame.  And frankly, I’m not feeling very charitable right now.

New York Times editors argue that compromise is a “basic principle” of democracy:

It used to be that a sworn oath to preserve, protect and defend the Constitution was the only promise required to become president. But that no longer seems to be enough for a growing number of Republican interest groups, who are demanding that presidential candidates sign pledges shackling them to the corners of conservative ideology. Many candidates are going along, and each pledge they sign undermines the basic principle of democratic government built on compromise and negotiation.

Sven Wilson responds:

But I don’t think any sensible political theorists would say that compromise is a bedrock principle of democratic government. To do so is to deny that there are bedrock principles that one should fight for in a democracy. The Times claim is the ultimate in political cynicism, in which nothing matters except political expediency.

Many of those who make the claim that compromise is a principle are really just centrists using disingenuous rhetoric to advance their policy views. Instead of justifying and arguing for a centrist position, they tout a supposed moral authority by claiming that compromise—in itself—is the goal, something that responsible statesmen do to serve the public interest.

Absolutely right. I don’t think the people who wrote this editorial would enjoy the implications of what they argue; if compromise is a basic principle of democratic government, something we should strive for, then we should be willing to violate other principles to seek it. For example, groups advocating that we restrict the rights of Muslims should be compromised with—we should meet somewhere in the middle, they give some ground in their position and we give some in ours, and we’ll agree to a middle ground between us.

The end result of that compromise, of course, would be the violation of Muslim citizens’ rights. Less so than the groups in favor of it advocated, yes, but is that a compromise worth seeking?

Giving any ground on that issue is morally wrong, because there’s actual principles at play: individual rights.

Compromise is not a principle. It is a tactic used to secure an improvement in the status quo when the preferred solution isn’t possible.

This editorial was written in response to a pledge most Republicans in Congress have made not to raise taxes. The editors see this pledge as “pernicious” and the single-biggest reason Democrats and Republicans have not reached an agreement on raising the debt ceiling.

The editors think this pledge is repugnant because it stands in the way of compromise on the issue, their basic principle. In this case, the editors are right for the wrong reasons; Republicans should compromise their pledge not to increase taxes for the better good—the deal offered by the White House would have meant serious cuts in entitlement spending and, of course, we would continue to make good on our debts.

But it is wrong to argue that a political pledge is repugnant. Republicans pledged not to raise taxes during the 2010 campaign and they won a sizable victory over Democrats. Now, they are sticking to that pledge—and they are being demonized for making good on their campaign promises. There’s a bit of damned if you do, damned if you don’t here; we routinely chastise politicians for their post-election amnesia of their campaign promises, and accuse them of making those promises just to get votes, but now that politicians are actually doing what they said they would, people are outraged.

The Independent Payment Advisory Board was created by PPACA, Obama’s 2010 healthcare reform law, to restrain the growth of Medicare spending. The IPAB’s board members are appointed by the president, and if Medicare spending is estimated to exceed targets, they are required to make “recommendations” to Congress for reducing Medicare payments to providers that have the force of law. Basically, unless Congress overrides their recommendation with their own plan (which is difficult to do, because Congress’s alternative plan must reduce Medicare spending by the same amount as the IPAB’s recommendation during that year).

Which means that the IPAB is an unelected group with the power to make law.

What’s worse, though, is PPACA makes it almost impossible for Congress to eliminate the IPAB. Reason’s Peter Suderman writes:

That’s the other catch: ObamaCare doesn’t just create IPAB. It also sets in place a series of barriers designed to make it extremely difficult to repeal. So if Congress wants to get rid of IPAB, it will have to jump through a complex set of hoops first.

That means acting swiftly and with great unity. The health care overhaul contains a provision labeled Joint Resolution Requirements to Dissolve the Board that lays out exactly the steps that Congress must follow if it wants to take down IPAB. The provision lays out in great detail what a joint resolution to dissolve IPAB would have to look like, and then sets out a further requirement that it must be introduced between January 1 and February 1, 2017—meaning Congress would have to act in just a few working days. 

Following the introduction of the legislation, Congress would have to pass the joint resolution with a supermajority of sworn members by August 15 of the same year. “If you don’t do that,” Cohen says, “Congress has no option, at all, to repeal the board.” Meanwhile, even if the board were successfully dissolved, IPAB would keep issuing its recommendations, which would still have the force of law, until 2020.

So not only is the IPAB anti-democratic, but it also is nearly impossible to get rid of it. Amusing that a party which calls itself the “Democrats” would create such a wildly anti-democratic law.

Michael Irvin is publicly supporting homosexuals:

Irvin wants to eradicate homophobia in every corner of American society. He points to churches that have skewed the word of God to persecute those who don’t share their dogma; he shakes his head at the black culture he says has gone adrift in a sea of homophobia; and he said it’s time to end the second class–citizen status of gays in the eyes of the law.

“I don’t see how any African-American with any inkling of history can say that you don’t have the right to live your life how you want to live your life. No one should be telling you who you should love, no one should be telling you who you should be spending the rest of your life with. When we start talking about equality and everybody being treated equally, I don’t want to know an African-American who will say everybody doesn’t deserve equality.”

Good man. I’m glad it seems like Irvin’s doing well, too.

Keith Hennessey weighs in on the President’s “grand bargain”:

The President has stressed his willingness to include long-term entitlement reforms, including raising Medicare’s eligibility age to 67 and, reportedly, a correction to the CPI. Both are good policy changes, and both are elements of Bowles-Simpson. The President argues that Republicans should, in exchange, be willing to agree to the tax increases he proposes – both a significant increase in total tax revenues, and specific policies like higher marginal rates for “the rich.”

But the effects on beneficiaries of the Medicare eligibility increase, and the budget savings that would result from such a policy change, are significantly mitigated by the existence of ObamaCare subsidies for near retirees. This is nowhere nearly as big of a “give” as it would have been before the new health laws.

I’ve been quiet on the ongoing national debt negotiations between the White House and Republicans. The reason I’ve been quiet is the debate’s been long on speculation and short on facts. There’s a bit more leaking out now, though, so here’s what I’m thinking.

The consensus seems to be that Democrats (the White House, anyway; Congressional Democrats want to do no such thing) are willing to offer entitlement cuts in return for increasing taxes on individuals with income over $500,000 and eliminating tax exclusions, deductions and credits, while Republicans are unwilling to accept the deal because they refuse to vote for any tax increases.

That’s basically accurate; I disagree that Democrats are being truly ernest here (putting entitlements on the table seems more like a tactical move by the White House to make the President look like someone who’s willing to compromise while actually risking very little, because Republicans already pledged not to raise taxes), but that doesn’t matter much right now, because that’s what the White House has offered and the Republicans turned it down.

Ezra Klein nicely sums up the problem:

We’ve reached an equilibrium where Republicans can’t accept any revenues and Democrats can’t accept a deal without any revenues. And I use the word “revenues” advisedly. There was a brief, shining moment when it seemed the deal would be changes to the tax code that did raise revenues but didn’t increase rates and so Republicans wouldn’t count as tax increases. But Cantor and others have made clear that they will oppose any net increase in revenues. So there’s no deal until something breaks the equilibrium. Right now, the most likely candidates, in order, are public fury arising out of a government shutdown or a market panic arising out of near-default.

I’ll end on a more speculative note: Republicans might come to regret rejecting Boehner’s deal.

That’s right, and that’s why what the Republicans are doing is truly idiotic. By hanging tough on raising the debt limit, Republicans have already succeeded in forcing the White House to acknowledge entitlement spending needs cut, something they’ve refused to do beyond the most use meaningless of platitudes politicians are so fond of. That’s a victory. They also made tax reform a 2011 issue, when Republicans have most of the leverage, rather than a 2012 one—when the Bush tax cuts are set to expire and therefore the Democrats have leverage.

By showing their willingness to reduce the deficit through increased revenue from the tax system, Republicans could conceivably cut a deal where tax exclusions, deductions and credits are reduced (which, everything else held equal, would increase revenue) and overall tax rates are reduced, just as the President’s own fiscal commission proposed. If Democrats aren’t willing to accept that, then at least they tried to increase tax revenue (ostensibly what Democrats are seeking) in exchange for absolutely necessary spending cuts.¹

That’s a much better deal than they’re going to get next year, and even if Democrats refused to accept it, Republicans would look much better with independents. They could say, accurately, the Democrats are the “party of no”—that they offered Democrats a chance to eliminate tax breaks for wealthy taxpayers and to reduce tax rates for everyone, and Democrats refused the opportunity. By doing so, Republicans would, at worst, call the White House’s bluff on entitlements and, at best, get the best tax deal possible with a DNC-controlled Senate and White House.

John Boehner tried to do exactly that over the weekend, but from what it sounds like, the party rebuked his plan. Eric Cantor has said since that the party will not accept any increase in tax revenue.

The Republican party’s base is so blinded by their hatred for taxes that they’re unwilling to accept their own victory because it’ll increase tax revenue, and there’s no Republican leader with enough clout and cover to accept a deal that increases tax revenue.

I have to hand it to the White House for making the offer—it’s a brilliant tactical move. His “grand bargain” had very little chance of passing even if Republicans signed on, because Democrats in the House and Senate would (and have) balked at cutting Medicare, Medicaid and Social Security, and so he was risking very little by doing so. Making the offer was all upside for Obama politically; it made him look like someone willing to compromise for our financial security, while in reality there was zero risk of having to make good on his offer. That’s a smart political move.

And that’s precisely why, politically-speaking, Republicans should counter the President’s proposal with an offer of eliminating exclusions, deductions and credits in return for lower tax rates. If Obama accepted it, that would force the White House to attempt to corral enough votes in the House and Senate for their plan. If he succeeds, great; Obama will receive a bump with independents, but he’s going to have that regardless of whether Republicans accept or reject it, and I’m not sure how much it’s going to matter in November 2012 when unemployment is still above 8 percent. Republicans, for their part, will receive (1) the best tax reform deal they’re going to get, (2) substantial cuts to entitlements, and (3) their own plaudits with independents. That’s a win, and a victory they should gladly accept.

But until a figure emerges in the Republican party that’s respected enough among the base to cut a deal, it’s not possible. And that’s the issue here: Boehner’s doing exactly the right thing, but he simply doesn’t have enough power in the party to do it. No one does.

1. It’s worth noting that Obama’s apparent tax proposal—to keep tax rates where they are for now and eliminate tax exclusions, deductions and credits—is absolutely ludicrous. The President’s own fiscal commission sought to increase tax revenue to 21 percent of GDP and it did so by eliminating those tax expenditures and decreasing the top tax bracket’s rate from 35 percent to 26 percent. Obama’s proposal would amount to a gigantic tax increase. [↩]

Laurence Tribe:

The Constitution grants only Congress — not the president — the power “to borrow money on the credit of the United States.” Nothing in the 14th Amendment or in any other constitutional provision suggests that the president may usurp legislative power to prevent a violation of the Constitution. Moreover, it is well established that the president’s power drops to what Justice Robert H. Jackson called its “lowest ebb” when exercised against the express will of Congress.

Worse, the argument that the president may do whatever is necessary to avoid default has no logical stopping point. In theory, Congress could pay debts not only by borrowing more money, but also by exercising its powers to impose taxes, to coin money or to sell federal property. If the president could usurp the congressional power to borrow, what would stop him from taking over all these other powers, as well?

Keith Hennessey argues we should judge debt reduction plans by their resulting deficit, not the amount their creators think they reduce the deficit by:

It is far better to evaluate a deal by looking only at Y, the deficits that would result from the deal, rather than at X-Y, the change in those deficits from an arbitrarily defined starting point. In the first example, instead of asking “Is $2 or $7 trillion of deficit reduction the right amount,” we should ask “Is a policy resulting in $5 trillion of deficits over the next decade an acceptable outcome, or do we need to do more?”

U.S. planes are participating in air strikes in Libya:

“U.S. aircraft continue to fly support [ISR and refueling] missions, as well as strike sorties under NATO tasking,” AFRICOM spokeswoman Nicole Dalrymple said in an emailed statement. “As of today, and since 31 March, the U.S. has flown a total of 3,475 sorties in support of OUP. Of those, 801 were strike sorties, 132 of which actually dropped ordnance.”

So, not only are we providing surveillance and refueling for NATO, and striking Libyan forces with unmanned drones, but we’re also conducting traditional air strikes as well.

Remember, according to the administration, this doesn’t amount to “hostilities.” Is that the place we’re in now, where the government believes dropping 500-2000 pound bombs and Hellfire missiles doesn’t amount to hostilities?