Tag Barack Obama

Upon further review, we’ve determined that the deal isn’t really much of a deal

Pat Ryan 2 Comments

Well, everything turned out just swell after all the drama over the debt ceiling debate, didn’t it?  I mean, so long as you don’t mind that:

–the sorry spectacle of the political fight led one rating agency to drop America’s debt rating a notch below AAA anyway: it doesn’t doubt that the U.S. can pay its debts, but feels the political stalemate raised questions about the government’s willingness to pay its debts, and so lowered the rating as a warning to investors;

–the deal doesn’t actually reduce the nation’s debt, it just lowers the rate at which it is rising; and

–taking the nation’s financial health hostage in a political negotiation was shown to be an effective tactic, so we can expect to see it used again in the future.

Among the lessons learned:

–the deal assumes the elimination of the so-called Bush tax cuts at the end of 2012, meaning Republicans gave up the very thing they fought so hard for a year ago.

Plucking flaccid compromise from obstinacy should not be mistaken for victory, just as the smell emanating from Washington after this deal shouldn’t be mistaken for success.

—82% of Americans are unhappy (disgusted?) with the performance of Congress on the debt issue, nearly half are unhappy with the president’s handling of the situation, and 40% view the Tea Party unfavorably.

More than four out of five people surveyed said that the recent debt-ceiling debate was more about gaining political advantage than about doing what is best for the country. Nearly three-quarters said that the debate had harmed the image of the United States in the world.

–the political system in Washington, D.C. is becoming more and more unproductive, and may not be able to help us with anything.

The president has tried reasonableness and he has failed. It has been astonishing to watch Obama’s sheer unwillingness to give up on his opponents after their refusal to work with him on the stimulus package, health care reform, or the extension of the Bush tax cuts last fall. A Congress dominated by mindless cannibals is now feasting on a supine president. But surely even he now realizes there’s no middle ground with antagonists whose only interest is in seeing him humiliated.

More real fun is going to come later in the year when a new federal fiscal commission tries to come up with a plan to solve the federal government’s money problems.  If it’s anything like the most recent such commissions, it will find that cutting the budget just can’t produce enough savings to right the ship and it will also look for equitable ways to increase revenue.  It could start by checking this week’s local paper: Ezra Klein outlines a plan for Democrats to boost revenue by negotiating like Republicans, and Charles Krauthammer offers a very rational outline for reforming and simplifying taxes so our representatives in Washington could have a fresh starting point on the coming negotiations on tax rates and entitlement reforms…and they are coming.

Pas de trois, denouement, house lights up

Pat Ryan 3 Comments

With fewer than 12 hours to spare (a lifetime, apparently, in the ways of Washington) the president has signed into law the combination debt ceiling increase/spending-and-deficit reduction compromise approved by both houses of Congress.  There, now don’t you feel much better about everything?  I mean, it only took a few months of bluster and pontificating, and a little threat to keep the nation from paying its bills on time, to get our government to pass a simple debt ceiling increase and take a small step in the direction of fiscal responsibility.

The last act of this tired drama was predictable: the loudest of the antagonists made a great flowery show of establishing their innate human goodness while talking past one another directly to those in the wings who were already persuaded of the rightness of their case…they executed the thrust and parry of choreographed stage fights which held no real threat of damage since the outcomes were predetermined…when time wound down minor characters took center stage to deliver the resolution then ceded the spotlight once again to the stars, who declaimed the lessons of the play and bid us all a good night.

Now the treasury has cash to pay the bills, and Congress is faced with continuing negotiations to find ways to cut spending and/or increase revenue (I’m hoping for the “and”) to get the government closer to living within its means.  They got there by compromising, which means no one is happy with the product:

Some in both houses are unhappy that there were no tax increases to spread the pain; some are unhappy there weren’t even more cuts to get closer to a final solution in one fell swoop; Democrats are unhappy that GOP priorities suffered few hits (but pleased that the cuts are not as severe as in earlier proposal by Rep. Paul Ryan); Republicans are unhappy about potential cuts to the Pentagon budget if future negotiations are not successful; and Tea Partiers are unhappy because there are no significant spending cuts right now and promised future cuts are contingent on the approval of future Congresses.

The proponents of restraint in government spending should see this as a great victory for their cause: it’s not everything they wanted all at once, but they got the president and Congressional Democrats to give more than would have been considered realistic just a few months ago.  That many of them do not—that they feel any compromise was an unforgiveable moral failure—is cause for concern, and the proponents of responsible behavior by grown adults in elected positions of responsibility should see this as a nightmarish premonition of things to come, if not in the budget talks later this year than the next time a debt ceiling needs to be increased.

Now, for those who have the stomach for it, we face the prospect of watching a new select committee of members from both houses and both parties work to find ways to reduce the deficit, and watching both houses debate and vote on a balanced budget amendment—all by end of the year!

How will cuts in federal government spending impact an economy still struggling to recover from recession and build new jobs?  Can we do something about overhauling tax code and/or entitlements, the real answers to a healthier federal budget?  I’m much less concerned right now with who won or lost the latest political fight than I am with a more pertinent matter: how does this deal help the country?

Take your seats, please, the curtain’s going up for the Big Finish

Pat Ryan 1 Comment

Since we last checked in with our heroes: Speaker Boehner, faced with his own proposal going down to defeat in the chamber he (ostensibly) leads, capitulated—he added a balanced budget provision to his plan for lowering government spending, reducing debt and raising the federal debt ceiling, to placate enough members to get the bill passed.  It worked; and as expected, and warned, the Senate rejected the plan; now Majority Leader Reid is trying to persuade Senate Republicans to let his plan come to a vote. [UPDATE 3:03 pm: The House rejected Reid’s plan before the Senate had a chance to vote on it.]

The Wall Street Journal editorial page wants Republicans to accept a plan now, and claim a victory, even if it’s one that doesn’t solve all the nation’s economic problems once and for ever.  (Why didn’t I think of that?)  An economy struggling to recover from recession doesn’t need the government to suddenly stop making some of its payments—and you can take comfort in knowing, there is a plan for who gets paid first in the event the debt ceiling is not raised by the deadline next Tuesday…the bureaucratic imperative prevails.

I still choose to believe that Congress may bring us to the edge of default but reason will prevail and the debt ceiling will be raised to prevent a default…that puts me in the company of an American conservative icon:

Socialists-7-27-11-color-640x469 

Thanks to David Horsey, seattlepi.com and Hearst Newspapers…click the cartoon to read Horsey’s commentary:

If it were not for their powerful recklessness, I would simply get a good laugh out of the alarmists on the right who see socialism in any tilt toward moderation in our politics.

(snip)

To ensure that his country does not follow Greece into a bottomless hole of debt, Tory Prime Minister David Cameron has implemented a budget balancing formula of three-to-one – that is, three parts spending cuts to one part revenue increases. These austerity measures have, not surprisingly, provoked rioting among leftists and students. Nobody in Europe would be silly enough to call this socialism.

Yet, when President Barack Obama proposes the same formula to rein in the debt in the United States, a mental riot goes off in the heads of Rush Limbaugh, Sean Hannity, the House Republican Caucus, the Tea Party and all the others who are somehow convinced Obama wants to turn America into Sweden.

Consumed by their fear of phantom socialists, these folks see politics in stark, black-and-white terms. If you are not with ’em, you’re agin’ ’em  and even the most staunch conservative risks charges of treason if he shows a willingness to bargain with the other side.

(snip)

Like ultra-conservatives of past decades, today’s reactionaries have scared themselves silly by demonizing their opponents: every liberal hates America, every Democrat is a socialist, every moderate is a dupe, every compromise is a pact with the devil. What is new is that this mindset now dominates the majority caucus in the United States House of Representatives. And because of that, there very well could be no deal to raise the debt ceiling, unless the president and the Senate choose to grant the militants everything they want.

(snip)

…to confuse the centrist economic policies of Barack Obama with socialism is as absurd as calling a conservative like Tom Coburn a RINO – Republican In Name Only. As clean cut, moral and upstanding as my fellow citizens on the right may be, I have to say they have become unhinged from economic and political reality and, in their delusion, they are about to take us all over a cliff.

In a Newsweek interview, Tom Coburn, a guy I disagree with about most things, summed it up frightening well:

“We’ve never been in this territory before. I mean, if we handle this wrong, we’re near the end of our republic as we know it.”

A tour de farce plays on!

Pat Ryan 2 Comments

Step by step, inch by inch, the passionless play proceeds: the House speaker proposes a new combination budget-cutting and debt ceiling-raising plan, then stands back when independent analysis shows it won’t generate the savings he promised, before the Congressional Budget Office gives good grades to the Senate majority leader’s plan (which saves little more than the speaker’s proposal).  Democrats are offering more than anyone would have expected, while some Republicans are revolting against their leadership for even thinking about going along with them, for not demanding more and more.  Who will be standing when the music stops next?

While I still expect that sanity will prevail and an agreement will be reached to prevent a crisis, nobody in Washington is doing anything about anything else and we look like a bunch of doofuses to the rest of the world as our nation moves closer to default.  So what, you ask—what the hell happens to you and me if they don’t raise the debt ceiling?

Q: Won’t refusing to raise the debt limit cut the deficit?

A. No.

Q: Do you mean that Congress can pass a budget that requires borrowing, and then argue later about whether to approve that borrowing?

A. That’s right.

Q. So, what happens to government spending if the debt limit is not raised? Will the United States default?

A. The United States will not have enough money to pay all of its bills… The possibilities range from “prioritizing” some payments and paying them first to paying bills in the order in which they were received.

The Bipartisan Policy Center analysis notes that if the government were to choose to pay the interest on its debt, Social Security benefits, Medicaid and Medicare payments, defense contractors and unemployment benefits, it could not have enough left to pay for the salaries of federal workers and members of the military, Pell grants for college, highway construction or tax refunds, among other things.

It doesn’t stop there: a default means some combination of government bondholders don’t get paid, government contractors and vendors don’t get paid, government employees don’t get paid, government benefits recipients don’t get paid, and people who don’t get paid have less money to spend so the economy slows down; government creditors demand higher interest rates on future loans and that leads to higher interest rates for we consumers on credit cards and mortgages; cities and states don’t get federal program payments and their own cash flow problems become worse.  Just the threat of default is starting to make the markets nervous.

Our country’s government spends way more than it takes in, and that needs to be corrected.  But as hard as it seems right now to make the choices that will lead to a stronger economy in the long term—and this isn’t going to be all fixed in your first six months in Washington, Mr. and Mrs. first-term Congressmember—it will only be harder if all the problems caused by a default are dumped on top of the ones we already face.  And even if there’s no default, the political playacting that both parties are consumed with right now may make financial markets skittish enough about the future that the credit rating of our country’s debt might be lowered anyway, leading to higher interest rates, etc., etc.

I’ve said this before: first, Congress needs to live up to its responsibility to prevent this totally preventable problem of potential default, then it and the administration can turn full focus on the screwed up federal budget mess that threatens our long-term financial health and security.  By the way, there’s a special tactical unit now on its way to the Capitol to help with that.

Places, please, for the big finish!

Regis and Brian’s excellent adventure (as told by Brian)

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The early show on TV last night—Obama and then Boehner, repeating themselves…again—wasn’t very funny, but “The Late Show with David Letterman” was hilarious: NBC News anchorman Brian Williams came on with a mostly true story about making a trip upstate to an awards ceremony in the company of Regis Philbin.  You only have to know that Williams has a great sense of humor, that Philbin has been on television since the Garfield Administration, and that Letterman and Williams both love Reege, in that way that guys who love other guys rip on them to express affection (click the pic for the video):

clip_image002

Thanks to CBS and Worldwide Pants.