Josh Marshall

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Why Mitch Daniels? Here's one of the lines circulating around Washington.

You may remember that many Republicans and many Bushies put much of the blame for the original President Bush's 1992 defeat on the independent-minded then-OMB director Dick Darman. So in this administration the idea was, let's not take any chances. The new director of OMB had to be a genuine hack who not only toed the party line but jumped at the chance for assignments involving public subterfuge and dissimulation.

But you have to wonder whether confidence men and charlatans don't have some beef with this man for diminishing their reputation. In his recent article in TNR Ryan Lizza quotes Daniels as "derid[ing] debt reduction as paying off 'foreign' bondholders."

Waiter, could I have that 'responsibility era' now please?

Ryan Lizza's new article in The New Republic debuts the White House's new angle on the budget battle: in an era of declining surpluses and worsening economic numbers the public doesn't care about the budget or the surplus nearly so much as it cares about the economy. That means that all the Democratic carping about the surplus and the Social Security lockbox will pale in comparison to the White House's arguments that more spending (from the Social Security surplus) and perhaps still more tax cuts are just what the economy needs to get back on track.

At least that's what the White House hopes.

This is all grist for the mill for the things we're going to be talking about during this just-beginning budget battle. But let's start with a few points. I'm willing to concede that the Democrats, as yet, have been remarkably slow-footed in framing this debate. But it seems to me that there is a pretty clear problem with the White House's apparent strategy.

According to Lizza, one White House aide says that in contrast to Democratic yapping about the by-gone surplus the Republican line will be "`Where did the prosperity go and how do we get it back?"

The real problem here is timing and perception. Presidents don't do well blaming Congresses for economic hard times. That's just in the nature of the American political system. And it's even more so when the economy went bad on the administration's watch.

Yes, I know, I know, we now know the economy was decelerating rapidly even before the President took the oath of office. For my money, the primary culprit is Alan Greenspan's Fed, which ramped up interest rates during an energy shock in a quest to fight off inflation which (outside the volatile energy sector) showed every sign of being utterly non-existent.

But tell me, are your eyes starting to glaze over? If so, that means you're like most voters. Because all of these details are utterly beside the point. The bottom line is that the previous administration presided over one of the best economies in decades -- and one with astonishingly low levels of unemployment. So the current administration is just not in a position to make the case, as the Reagan White House did, that it needs time to fix the dreadful economy the previous administration created. (In fact, look at the 1982 election returns: it didn't even work for Reagan.) To the public, Clinton was good economic times, Bush is worsening economic times. Simple as that.

There's something else that follows from this. If the economy ran so well under Clinton's economic policies how credible is the argument that the economy can only be revived with a completely different set of economic policies? Answer: not very credible.

There's more to say about this (and we'll be saying it), but for the moment just keep in mind that this administration has a reputation for confidently spinning out wildly improbable political scenarios, thinking they can pull it off with just a big bluff. So far it hasn't worked and I doubt it will this time either.

And of course we haven't even gotten to the massive hit to the president's credibility from the lies and broken promises about the tax cut and Social Security. But let's leave that till the next post, because I want to go eat breakfast.

I'm no fan of Bill O'Reilly and his comically self-titled "spin free zone" The O'Reilly Factor. But I have to give him credit for this bracingly frank outburst on Wednesday night's show, which took place while he was interviewing Art Torres (head of the California Democratic party) about Gary Condit and Chandra Levy:

O'REILLY: Do you think Davis was correct in saying that he's disappointed in Condit's not being forthcoming?

TORRES: Yes, I think so. And I said that early on, right after the interview of Mr. Condit and I'll say it again. But the fact of the matter is that we really need to, again, concentrate on trying to find this young woman.

O'REILLY: No, but what do you mean, we need? What are you going to do? We can't find her. She's dead. All right? I mean, she's dead.

TORRES: Well, I don't know that.

O'REILLY: Well, I do. She's dead.

TORRES: I hope that's not the case.

O'REILLY: And she's at the bottom of the Chesapeake Bay or someplace like that. And that's where she is. And we can't find her. The FBI can't find her. And nobody can find her. So we need to concentrate on...

Did someone say Social Security? Lockbox? Yada?

In case the web just doesn't provide a sufficient Talking Points fix for your daily needs I'll be on CNN's Reliable Sources this weekend talking about ... well, you know.

The show's on Saturday at 6:30 PM EST and then Sunday morning at 11:30 AM EST.

Talking Points quote of the day:

In truth, anybody who really knows Jesse Helms should acknowledge him as an amiable Southern gentlemen totally uninterested in racial politics.

-- Robert Novak
August 30, 2001

Can someone pass me mah mint julep?!

I just got done watching Bill Bennett sounding off about Condit and character on the Wolf Blitzer show. Bennett, of course, has made a career of public moralizing and jawboning about the decline of the culture since getting off the public payroll a decade or so back. But my beef with Bennett is his own indirect responsibility for the decline of contemporary spoken English.

I've always chuckled as I watched interviewers try to come up with adjectives or labels to describe just what Bennett does or what sort of fellow he is (morality czar? character expert? values meister?).

But didn't we used to have a whole crop of words and phrases to describe this sort of character? You know, like stuffed shirt, bluenose, comstock, blowhard. They're not just punchy and euphonious (to my ears at least); they're also examples of those Anglo-Saxon-derived words to which Strunk & White rightly tell us we should always gravitate.

Where's H.L. Mencken when you need 'em?!?!

I've had a number of folks writing in over the last couple days asking, why -- oh why oh why oh why -- aren't you talking about the fact that the Bush administration is dipping into the Social Security surplus monies to fund the tax cut? Well, it's a good question, I suppose. But the real reason is that it's just so transparently obvious, and the administration has been caught so totally red-handed that it's hard to know quite what to say.

You start to see now why the Mitch Daniels and company put so much time in rejiggering the budget numbers to make them seem like the administration wasn't dipping into Social Security funds. Even with a billion dollars over the Social Security surplus funds the White House could hold the line on spending and try to argue that the president was trying to save the Social Security trust fund against raids by big spending Democrats.

But now the truth is out. The president's budget used up the non-Social Security surplus before the Democrats even got to sit down at the table. No degree of subterfuge or dishonesty can hide the fact that the president broke his pledge entirely on his own. Not even a master prevaricator like Mitch Daniels can undo the damage.

So that's what we know. But let's consider another part of the equation that's getting very little attention. Quite apart from how using the Social Security surplus affects the long term solvency of Social Security, using these funds also changes just who carries the burden of funding the government.

Income taxes are progressive -- that is to say, you pay a higher proportion of your income the more money you make. But payroll taxes are not only flat, they're actually regressive (very high income earners pay a lower percentage than folks at the poverty line) -- since they cut off at around $80,000 a year of income.

There is a reasonable argument (one which I and some other policy types don't entirely agree with) for Social Security being funded this way. But not the normal functioning of government -- which we've long seen fit to fund with graduated, progressive taxes.

So the net effect of floating the tax cut with Social Security revenues is to take the burden of funding the government off the most privileged (who carry the biggest burden paying for general revenue funds) and place it on the least privileged (who carry the greatest burden paying for payroll taxes).

Just another point to consider about the priorities behind the Bush tax cut.

Next up, how payroll taxes from the 1980s helped win the Cold War!

How well do most reporters and Sunday morning talking heads understand the Social Security debate? Consider this example from this past Sunday's Meet the Press. Commenting on the Social Security surplus debate NBC's Lisa Myers said:

Tim, one thing, though, we should add about the Social Security surplus, until two years ago, Congress and the president spent every dime of that money ... including the Democrats. And it is--now, it's being treated as though it's politically sacred. But economically, it makes almost no difference.
Myers' first point is accurate enough. But the second? No difference? Does Myers understand this debate? Or did she just get off the phone with Mitch Daniels?

Normally, I'm not a big fan of David Broder. But in this case, luckily, Broder was there to chime in (and gently correct Myers' foolery) by providing at least an outline explanation of why it actually does make a difference.

Well, the big fact is that 10 years from now, the boomers are going to be retiring. And unless we are saving money in this next decade, we are not able to afford the retirement and health care for that generation. That's the big fact which people need to keep in mind.
Maybe Myers should stick to the Juanita Broderick interviews.

As you'll see in this article, Condit lawyer Abbe Lowell is now saying that Condit's aides lied to the press without Condit's permission or knowledge.

Congressman Condit did not tell his staff to go out and lie," Condit's attorney, Abbe D. Lowell, said on NBC's "Meet the Press." "Congressman Condit did not authorize those statements to be made. Those staff people spoke about what they hoped was the truth and what they thought the truth was.
Now obviously this is a proposition so inherently ridiculous as to not really be intended to be believed. But I've been feeling a bit sorry for Lowell so let's play along for a moment, shall we?

The problem with what Lowell is saying is that, at the time, Mike Lynch -- the staffer in question -- was telling reporters that he was talking to Condit regularly and getting his go-ahead and direction about statements to give to the press. In fact, I've even got an example of it in an article I wrote in Salon two months ago.

When I asked Lynch, Condit's press secretary, whether Levy had ever spent the night at Condit's apartment, he responded that Levy didn't spend the night at Condit's apartment "that night." No press account has ever discussed a specific night that Levy spent at Condit's apartment. When I pointed this out, and asked if Levy had ever spent the night at Condit's apartment, he fell back on Condit's denial of having told anyone of a Levy visit.

"I asked him directly," Lynch said, "is this story true? Did you tell the police that? And he said, 'Absolutely not.'"

When I pointed out the obvious fact that denying only that he had told police the story implied that Condit would not, or perhaps could not, deny the underlying allegation, Lynch said, "To the best of my knowledge she never spent the night."

When I asked if he had asked Condit that question directly, he said, "I won't go there."

Is Lowell exploring the outer regions of ridiculousness? Or am I missing something?

In Mike Isikoff's Newsweek interview with Gary Condit, the California Congressman said:

I never had a cross word with her. The kind of conversation we had would be—[when Timothy] McVeigh was executed and Juan Garza was executed. She seemed to have a lot of interest in those two things and a lot of more interest in them than I did. So she would talk about that.
That's hard to figure, since Levy disappeared on May 1st and McVeigh and Garza were executed on June 11th and 20th, respectively.

Mike, maybe a follow-up woulda been a good call on that one.