Another awful week for the Republic–and some interesting decisions by the President. He chose to compromise in his deficit reduction negotiations with the Republicans…and got nowhere. He chose to compromise by not appointing Elizabeth Warren the director of the Consumer Finance Protection Bureau…and got nowhere.
You’re expecting me to rail against compromising with Republicans, right? Wrong.
On Friday, there were two interesting, but conflicting, columns in the New York Times about the deficit ceiling negotiations, by Paul Krugman and David Brooks. I agreed with both of them. Krugman argued that any deficit reduction compromise would be a bad deal because, given the sluggish jobs and growth numbers, the government should be trying to pump more money into the economy via stimulus. Brooks argued that the psychological effects of a big budget deal might give everyone, especially the business sector, the confidence necessary to start hiring again and expanding again.
As I said, I agree with both…but a little moreso with Brooks. The country really needs the lift that would come with a budget deal. Everyone could exhale. And the sort of deal that Obama and Boehner were working on–especially if it contained prudent, long-term entitlement reforms (like changing the way cost of living increases are computed for Social Security recipients and asking wealthier Medicare recipients to pay a little more)–would give the country some long-term benefits. Some Democrats howled over the President’s compromises, and they had a political point. The vast majority of Americans don’t want entitlement reforms. But Obama was thinking about policy as well as politics (a deal would certainly help him politically). I also think that a budget deal would make it possible to do some short-term spending, of the sort Krugman wants, in the near future.
But the argument is moot. Because the House Republicans won’t compromise at all. Let me repeat that: the House Republicans won’t compromise at all. And they are leading their party off a political cliff, as no less an expert than the wall-to-wall cynical Mitch McConnell has pointed out. Obama’s willingness to make prudent compromises has been the right thing to do. He seems strong, willing to defy his liberal base, and Boehner seems weak.
On the other hand, Obama’s unwillingness to appoint Elizabeth Warren as head of the Consumer Finance Protection Board was a silly compromise. The Republicans, as Joe Nocera points out in the column I linked to above, are going to block Obama’s fallback appointee, Richard Cordray, and anyone else the President cares to name. This is as clear-cut a fight as you can get. The Republicans are in favor of usurious payday lenders, credit card issuers and crooked mortgage-mongers. Their position is embarrassing, but it’s based in the most base of currencies–cash. One would think the President would want to draw attention to the crass Republican/banker alliance by making this as high profile a fight as possible. That would have meant appointing Elizabeth Warren, shooting off rockets and other assorted neon displays…and making clear which party wants you to pay higher interest rates and which doesn’t. But he didn’t, and I simply don’t understand it.
If his argument is that he wants to avoid lesser fights to achieve victory on the bigger issues, that doesn’t seem to be working. He is rightfully seen as the primary licensed grownup in the debt negotiations. This should give him the leverage to step it up on other fights, especially those involving the folks who trashed the economy in 2008. In other words, compromising on the debt negotiations should give him the power to not compromise on financial reform.