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Would Biden return to the politics of the Grand Bargain?


I think this is the single thing that would concern me most about a Biden presidency compared to the other viable Democratic candidates:

The connective tissue between the times Biden has proposed Social Security cuts and the time Biden criticized Ryan is that for most of his career, Biden has taken the view that a large budget deficit is bad (he signed on to a balanced budget amendment proposal way back in 1995, for example).


The larger context here is that when George W. Bush was president, Democrats routinely assailed him for running up a high budget deficit and frequently forecast dire consequences to come if it was not addressed. And one thing you have to understand to make sense of Obama’s first term in office is that mainstream Democrats were completely sincere about this. As Columbia University’s Adam Tooze writes in Crashed, his history of the Great Recession, Obama and his team were already prepared for an economic crisis before it arrived. The problem is they were prepared for “the wrong crisis” — a crisis of confidence in the US dollar and soaring interest rates provoked by Bush’s irresponsible fiscal policy.


But once the stimulus was enacted — and especially after getting beaten badly in the 2010 midterms — the administration pivoted back to the deficit question, even though it had no immediate urgency. 

This eventually took the form of a search for a “grand bargain” between the administration and House Republicans, one that would pair tax increases with cuts to long-term spending on entitlement programs. Initially the hope was that a grand bargain would be reached as part of a deal to raise the statutory debt ceiling

That failed, and instead the debt ceiling was raised but paired with big automatic short-term cuts to discretionary spending on both military and non-military spending. The idea was that ultimately both Democrats and Republicans would prefer a grand bargain on long-term issues to economically harmful short-term cuts, and so would reach the bargain in order to avert them. That effort failed, too. Last but by no means least was the “fiscal cliff” occurring shortly after Obama won reelection, when the White House tried and failed to get House Republicans to agree to a deal that would raise taxes and cut long-term spending. 

In all these cases, cuts to Social Security — typically either raising the age at which one could claim full benefits, switching the cost of living adjustments to a less generous measure of inflation, or both — were, broadly speaking, on the table. And in all cases, the Obama administration, Biden included, was very much hoping for a deal. The reason Social Security and Medicare left the Obama years untouched was fundamentally that Republicans didn’t want to make a deal. Rather than raising taxes and cutting entitlements, their idea, outlined in multiple budget documents written by Paul Ryan, was to cut taxes as well as entitlement spending.

While some of the retrospective criticism of Obama’s track record is dumb, his pursuit of a Grand Bargain to reduce the deficit really does deserve all of the criticism it gets and more, and it’s very fortunate that Republicans let their commitment to obstructionism get in the way of a deal that would have been very good for them. The proposed Grand Bargains were bad deals on their face, because trading Social Security cuts for deficit reduction isn’t a good tradeoff. But given the reality of the bargaining partner of course it’s much worse than that. Even if you think in principle that deficit reduction makes it worth agreeing to Social Security cuts, you don’t actually get the deficit reduction. The next Republican government will with 100% inevitability pass a massive upper class cut that explodes the deficit again anyway! You can’t make a “grand bargain” on the deficit with a party that doesn’t care about deficits, and Republicans have proven again and again that they Do Not Care About Deficits At All.

This isn’t to say that Biden becoming president would lead to a Grand Bargain. The most charitable way to describe Biden’s politics is that he’s generally been smack dab in the middle of the Democratic coalition of the time, and as the party has moved left he might have finally gotten over his deficit hawkery. But the better move for Democrats would be a candidate who never bought into this bullshit in the first place.

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