The Republican Party is currently trying to sort out an internal battle between its dwindling stock of moderates who are occasionally willing to work with Democrats, and its hard-right base, which views compromise with Democrats in general, and President Obama in particular, as heresy. But in a speech Monday, Rep. Steny Hoyer (D-MD), the second-ranking Democrat in the House showed that there are significant fissures in the Democratic Party as well.
Hoyer, though nominally Minority Leader Nancy Pelosi’s second-in-command, is starkly different from Pelosi and many others on the party’s left wing when it comes to economic and fiscal issues. Hoyer spoke at an event sponsored by the self-described “centrist” group Third Way on Monday, delivering a firm defense of the “grand bargain” theory of fiscal policy.
Though his prepared remarks carefully omitted any reference to “entitlement reform,” Hoyer expressed his disappointment that the Simpson-Bowles commission’s recommendations were never adopted, and reiterated his support for a “big and balanced” deal to correct the nation’s fiscal course. Hoyer acknowledged, though, that a big deal on the scale of Simpson-Bowles may not be a possibility in the current political climate.
On the Democratic side of the aisle, the terms “big deal” and “balanced” have, in the past, applied to agreements in which the Democrats accepted entitlement cuts and Republicans accepted tax revenues. The Simpson-Bowles plan, for example, was famous for having something for everyone to hate. On the Democrats’ side, it was cuts to entitlement spending.
Hoyer’s concerns are real and genuine. “Our budget for next year is $3.8 trillion, but only $1 trillion - or a little over a quarter- of that is subject to the annual appropriations process,” he said. “Seventy percent of our budget is tied up in interest payments on our debt and other mandatory spending, including Social Security, Medicare, Medicaid, C.H.I.P., the farm bill, veterans’ health, and other programs.”
As the country continues to borrow money to find spending, he said, debt service becomes an increasingly debilitating drag on our ability to invest in the future.
Short of achieving a deal along the lines of Simpson-Bowles, Hoyer noted a number of major efforts where bipartisan agreement could lead to meaningful legislation with economic benefits, including immigration reform, tax reform, infrastructure improvements, and a budget deal that does away with the sequester cuts.
But, Hoyer still believes a big deal is preferable.
“In my opinion, a big deal is the best way for Congress to achieve a fiscally sustainable outlook that can inject certainty into our economy and help us invest in competitiveness, job growth, and opportunity,” he said. “If we can, in a bipartisan way, reach a comprehensive agreement, it would be the single most effective action we could take to stimulate our economy, give confidence to markets, and ensure that we have the resources to invest in our people. Certain reforms that wouldn’t pass on their own could be accepted as part of a broader package where everyone shares the political risks.”
When Hoyer refers to “political risks”, he’s talking about--at least for Democrats--the reaction of the base to entitlement spending cuts. His views are not shared by most of his Democratic colleagues, however.
A coalition of Democrats has come together behind a plan not to reduce spending on the biggest entitlement program of all – Social Security – but to increase its benefits. And the list of politicians behind the plan includes some big names in the Democratic Party, including Sen. Tom Harkin of Iowa, Sen. Elizabeth Warren of Massachusetts, and Sen. Sherrod Brown of Ohio.
Earlier this month, Laura Friedenbach, press secretary for Progressive Change Campaign Committee told The Fiscal Times, "Just one year ago, Democrats were stuck in defense, constantly defending Social Security benefits from cuts. We're now at a turning point -- progressives are united and going on offense."
Apparently the House Minority Whip didn’t get the memo.
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