Deficit hawks have been in full flutter mode. Pete Peterson and his friends have gotten together in recent days for one of their periodic teeth-gnashing, rending-of-clothes bacchanalias, and President Obama's deficit commission is having its first meeting today.
While progressives have done some good things in response to all this deficit hawk fervor- like repeatedly pointing out that if we cut deficits too fast, the economy will tank, and reminding people that some of the biggest deficit hawks (such as Greenspan and Rubin) are people who ignored the housing bubble or even benefited from it. I think it is incumbent on us, though, to have a sharper, less defensive message overall on the deficit. It is not politically tenable for us to ignore or downplay the big deficit numbers that are projected. We need a proactive deficit strategy of our own to push back on the conservative deficit hawks. Such a strategy should be built on two major messages, both of which are good economic policy as well as good politics.
There's been a lot of talk in Washington, DC lately of a "new, centrist compromise" gaining momentum in terms of how to fund health care reform, and that is taxing health care benefits. The problems? It's not new, it's only centrist in the bizarre inside-the-Beltway world of what qualifies for centrist, it's one sure way to make health care reform incredibly unpopular, and it's a bad policy idea. Remember how popular Ira Magaziner's "health alliances" were in the Clinton health reform battle? This would be worse. So let's go through this point by point:
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