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Debt Ceiling

We knew the “super” committee in Congress to trim the deficit was doomed to fail before it even got started.  That outcome just got a little more certain today.  Speaker Boehner gave a speech today.

Greg Sargent culled two sentences from the speech that sum it all up.

  1. If we want to create a better environment for job creation, politicians of all stripes can leave the “my way or the highway” philosophy behind.
  2. Tax increases, however, are not a viable option for the Joint Committee.
Doesn’t that just put paid to any chance the committee had of doing anything?  You have to credit the Republicans with sticking to their guns.  But all they’re doing is screwing over the rest of us in their quest to keep the rich from paying anything more in taxes.  And screwing us all over in their quest to keep Obama to one term.
The Republicans keep saying that all we have to do is cut taxes and regulation and the economy, freed from its bonds, will come roaring back.  The problem is that trickle-down economics doesn’t work.  Obama’s job plan might help.  But it looks dead on arrival in Congress.
When are the Republicans going to stop with the blatant obstructionism and actually govern?

It’s not exactly a newsflash, but the Republicans are blatantly hypocritical when it comes to their no taxes pledge.  They now want to let the payroll tax cut expire at the end of the year, adding about $1,000 a year to working Americans’ tax bills.  The same Republicans who were willing to let America default are now willing to endorse what amounts to a $120 billion tax increase.

Ezra Klein looks at this today:

One possible answer is that a large tax increase in an election year is good for them because it’s bad for President Obama and the economy. But that’s a pretty cynical explanation. Another is that they care more about tax rates on the rich than they do about tax rates on the poor. But they resist that argument. The real answer, Republicans says, is that they just don’t like temporary tax cuts.

”We don’t need short-term gestures,” explained Sen. Lamar Alexander. “Temporary tax rebates don’t work to create economic growth,” said Rep. Paul Ryan. Brad Dayspring, the spokesman for House Majority Leader Eric Cantor, says his boss “has never believed that this type of temporary tax relief is the best way to grow the economy.”

But as Jon Chait noted, Republicans proposed and passed temporary tax cuts in 2001 and 2008. Ryan voted for both packages. So did Cantor. And Alexander. So the GOP seemed to believe in temporary tax cuts when George W. Bush was president.

[…]

In other words, Republicans have frequently fought for temporary tax cuts. When offered the choice between a larger temporary tax cut and a smaller permanent tax cut, as happened in 2001 and 2003 and 2010, they have opted for the temporary tax cut. Now that Obama has come to endorse a temporary tax cut, they have stopped supporting it — a pattern we’ve seen on many other issues, as well. But the idea that the party has had some steady, policy-based objection to temporary tax cuts just doesn’t fit the record.

I’ll take the cynical views that Ezra mentions in his post.  Mitch McConnell’s stated goal was to keep President Obama to one term.  That’s pretty bold honesty from a politician.  To me, it looks like two things.  The Republicans are willing to screw the working poor and middle class to protect the rich.  The Republicans are also completely unwilling to do anything that President Obama wants to do, whether it’s good for the country or not.

During the budget ceiling and deficit reduction debate, Republicans were unwilling to consider any new revenues at all.  Let’s leave aside the obvious lie from Sen. Alexander (of course temporary measures help – all stimulus programs are temporary).  We need stimulus for this economy.  Some economists believe that the US economy is already in recession.  Again.  And all they’re doing in Washington is blathering on about the need for deficit reduction. 

We don’t need deficit reduction at all.  What we need is a robust jobs program.  We need to help the long term unemployed.  They face a real human catastrophe.  We need to get those people back to work.  The deficit will be reduced just by people working again and paying taxes again.  Keynes was right.  Government needs to step in during times when the economy is weak.  Republicans either forgot that, or don’t care.

The Republicans have forgotten – or again, don’t care – that they need to govern.  And that means doing what’s right, not trying to stack the deck with a weak economy so that Obama’s reelection chances are lessened.  A poor economy could benefit the Republicans weak presidential field in 2012.  So they do what they can to keep the economy weak and the working poor and middle class continue to suffer, and the Republicans rich friends keep getting richer.

How did the debate over the debt ceiling – something that should be a no-brainer – become such a huge political football?  I blame both the Republicans and the Democrats.  How did the “deal” that emerged last night end up such a disaster for America?

Republicans irresponsibly attached a routine debt ceiling vote to deficit reduction.  Why was that done there, instead of via the appropriations process?  That’s where it belongs, not on the debt ceiling.  The debt ceiling, of course, is not connected to appropriations; it finances deficits that Congress already authorized.  But instead Republicans acted like three-year-olds with their “I want it now and I’m not taking no for an answer” negotiation style.  They have good negotiation skills, but at such a cost to the country.  A pox on their house.

Democrats simply allowed the Republicans to control the debate, allowing them to frame it the way they wanted.  That’s weak – weak on President Obama’s part and weak on Congressional Democrats’ part.  And then Obama caved in the end.  Weak.  And the health care bill, which was needed, was done at the wrong time.  Obama’s agenda should have been all about jobs.  But he got sidetracked.  And why not raise the debt ceiling last December?  Kicking the can down the road didn’t work.  No wonder so many on the left (me included) are so angry at Obama.  A pox on the Democrats’ house.

Who loses in all this?  Americans do.  States do.  The unemployed do – there’s no extension of unemployment benefits in this deal.  It is plain nuts to cut government spending while the economy is this weak.  Did we learn nothing from the Great Depression?  History definitely does repeat itself.  Yes, disaster was averted (the House passed this mess today; the Senate votes tomorrow) and the United States won’t default.  But the economy remains stalled and cutting a lot of government programs will put more people out of work.  This deal is going to push us right back into recession.  Great job, US government.

This paragraph might be a bit naïve, but what happened to people in Congress and the administration who actually put the country first?  Ted Kennedy could be as partisan as they came, but he’d work across the aisle to make deals when they needed to be made.  Tip O’Neill did as well.  So did Ronald Reagan.  What happened to these people?  These days we have leaders like John Boehner, who can’t control his conference.  We have leaders like President Obama and Harry Reid, who keeps caving to the Republicans.

Boehner (and others) glommed on to the tea party movement as a path to power last fall.  How well has that worked out?  Let me answer: It’s been a calamity.  I hope people wake up and get these people out of office next fall.  They have misread their mandate, just as they think Obama has.

And the world laughs at us.  A pox on both their houses.

How much longer is this going to go on?  We are less than a week away from defaulting and there still isn’t a viable plan out there.  The president has offered things that make progressives gag and still the Republicans say no.  And Boehner has the gall to say that the president keeps moving the goalposts.  Nope, it’s extortion, and Boehner pretty much admitted it.

Do they think we’re stupid?  Does Boehner think that entitling his plan “The Two Step Approach to Holding President Obama Accountable” even comes close to putting the country first?  The House has forgotten to govern in all of this political bickering.  Osama bin Laden would be laughing at us.  We’re doing with internecine warfare what he could only hope to do – crumble America’s influence as a power in this world and the dollar as the basis for world finance.

It’s ridiculous and it’s criminal.  It’s time to grow up and start doing what’s best for America, not a future reelection campaign.  A lot of Americans are going to be in really bad financial shape – as if they weren’t already – if the United States defaults on its debts.

Don’t think for a second that I excuse Democrats for their complicity in this.  We would have had none of these issues if the Democratically-controlled Congress would have passed a budget and debt ceiling increase when they had control.  That said, the Democrats have been acting a lot more like adults than the three-year-olds in the Republican Party.  (And those in the Republican leadership should be ashamed for glomming onto the tea partiers as a path back to power.  They took the quick, easy path back to power.  And now we’re all suffering and stand to suffer a whole lot more.)

And through all this, we’re losing sight of the real problem: jobs.  If we put more people to work, tax receipts go up and the deficit goes down.  That seems pretty simple to me (and I know I oversimplified it).  But we’re forgetting this, just like we’re forgetting how to govern.  Ruth Marcus said it yesterday, Madison would indeed be aghast.

Since I wrote this post earlier today, the Republicans have failed to take a vote on the Boehner plan; they don’t have the votes to pass it.  What does it say when the speaker can’t get his caucus in line?  Weak.

Quite a few people have been talking and writing about the Republican Party and how right-wing radical they’re becoming these days.  I’ll add one more voice to the clamor because the GOP is way, way over the top these days.

Deval Patrick, Democratic governor of Massachusetts, has an eye-opening op-ed in today’s Washington Post.

At our 25th college reunion in 2003, Grover Norquist — the brain and able spokesman for the radical right — and I, along with other classmates who had been in public or political life, participated in a lively panel discussion about politics. During his presentation, Norquist explained why he believed that there would be a permanent Republican majority in America.

One person interrupted, as I recall, and said, “C’mon, Grover, surely one day a Democrat will win the White House.”

Norquist immediately replied: “We will make it so that a Democrat cannot govern as a Democrat.”

Patrick goes on to explain how they’ve done that.  Obama, to me, looks somewhere comparable to Ronald Reagan on the political spectrum.  That’s not really a bad thing, because I think the American electorate really is center to center-right.  It’s a measure of how successful the tea-partiers have been in framing the debate in this country.  Politically, it’s been a great success for them.  So far.

The problem isn’t that they’re trying to move the nation politically from a center to center-right ideology, they’re trying to move it far, far to the right of that, into wing nut territory.  And the GOP is being incredibly irresponsible in doing so.  By steadfastly sticking to their guns on no new taxes in the deficit reduction “negotiations”, they’re quite disciplined in staying on message and not giving at all; but they’re simply not negotiating or governing in good faith.

This spring, in an effort to reduce the deficit, a Democratic president proposed to cut $2 trillion in spending, much of it from domestic programs Democrats have long championed. Last week, Republican leaders withdrew from talks with the vice president on a bipartisan plan to reduce the deficit because, as another part of the solution and like every bipartisan budget deal for decades, the president proposed to raise revenue. Specifically, he proposed to raise $1 in new revenue (through closing loopholes or ending the Bush tax cuts for the wealthiest Americans) for every $2 in spending cuts. In response to that modest proposal, Republican leaders walked out.

It is now clear that the Republican strategy is to drive America to the brink of fiscal ruin and then argue that the only way out is to cut spending for the powerless. Taxes — a dirty word thanks to Norquist’s “no new taxes” gimmick — are made to seem beyond the pale, even as the burden of paying for our society shifts disproportionately to the middle class and working poor. It is the height of fiscal folly. It is also not who we are as a country.

For nearly a decade, our federal government paid for two wars and a costly prescription drug benefit with borrowed money. Our government paid for the Bush tax cuts with borrowed money. Now, after exhausting the budget surplus left by the Clinton administration, the only spending Republicans are willing to discuss cutting is spending that helps the poor and vulnerable — meaning anything that does not touch the interests of large corporations and the very rich. Last December, Republican hard-liners held hostage benefits for people out of work in exchange for an agreement to extend the Bush tax cuts for those who make a million dollars or more a year. Last month, many of the same lawmakers rallied to protect special tax benefits for oil companies that have made record profits on high gas prices.

Meanwhile, some mom-and-pop stores and college students pay more in taxes than some of our largest corporations. Still, taxes are sin to the hard-liners, though they have difficulty demonstrating a correlation over the past decade between tax cuts and economic growth.

Everyone knows that we have to reduce the deficit. Everyone also knows that reducing government spending and addressing revenue shortfalls have to be a part of the plan. This isn’t partisan; it’s pragmatic. Some might even call it conservative. But Norquist and the rest of the radical right have so hypnotized the Republican leadership that they can’t come out and say it. For them, maintaining their rhetoric about spending cuts is more important than preserving the civic investments that make America stand out from the rest of the world.

That political calculus has consequences for the rest of us.

If the deficit is reduced by spending cuts alone and there is no deal to raise the debt ceiling, here’s a sampling of what happens: We stop paying our soldiers or supporting our veterans. We stop feeding the neediest children and families. We stop providing nursing-home care to seniors. We stop inoculating schoolchildren. We stop helping young people go to college. The unemployed are on their own. Roads and bridges continue to crumble. And we jeopardize the creditworthiness of our economy at one of the most fragile moments in history. All to protect the marginal benefits of the most fortunate and the political purity of the radical right.

Patrick’s assessment is dead on.  We are forgetting who we are in this country.  The Republicans want to shift more and more of the burden to those who are least able to afford it.  And with the brinksmanship over the debt ceiling (read Ezra Klein’s post or Paul Krugman’s column this morning on what will happen if the debt ceiling isn’t raised), they’re going to torpedo the economy at the same time.  Some Democrats are finally telling some truths.

“Are Republicans opposing yet another measure they once supported simply because that measure might be good for the economy?” Schumer asked, also citing GOP opposition to recent measures like a payroll tax cut and to small business development programs.

Pressed by a reporter on whether he really believes the GOP wants to destroy the economy on purpose, Schumer went further than ever before and took this out of the realm of the hypothetical.

“It’s a thought you don’t want to believe,” Schumer said, “but every day they keep giving us more and more evidence that there’s no choice but to answer Yes.”

It’s pretty obvious that this is what the Republicans are doing.  They think that a poor economy will help them in the elections next year.  They’ve forgotten — or don’t care, which is worse —  that they have a responsibility to actually govern this nation as they play their Machiavellian games.

When are people going to stand up and raise hell?  When is Obama going to stand up and raise hell about this?  He started to this week with his press conference, but he really needs to keep that message up and really say it loudly.  He has the “bully pulpit”.  It’s time to use it like he never has before.  Too much is at stake for him to hang back.

We have both a spending and a revenue problem.  Spending is too much, but we’ve also fought two wars while cutting taxes.  In what sane country does that ever happen?  So both sides need to give, but the Republicans are sticking to their guns, taking us all down with them.

Some taxes are necessary.  How do we pay for putting out fires?  Policing the streets?  Fighting the wars?  Helping those who can’t help themselves?  Personable responsibility is important, but so is caring for the downtrodden.  The Republicans are irresponsible saying otherwise.  The rich don’t need more tax breaks on corporate jets.  We have individual taxpayers paying more in taxes than some major corporations do.  How does that even remotely make sense?

We need to be sensible about this.  I see the Democrats trying and trying and trying ad nauseam, but the Republicans won’t even meet them 30% of the way.  We’re in an extremely fragile state in this country.  And the Republicans want to make it worse so they can gain power.  How else should we read their actions?

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