Tag Democrats

What the hell just happened here?

Pat Ryan 2 Comments

For someone who didn’t just go over the fiscal cliff, I’m pretty disappointed with our House and Senate and president. Not surprised, but disappointed…if I can summarize out loud, to help organize my thoughts:

Our elected leaders were faced with some $600 billion worth of automatic tax hikes and spending cuts that might or might not have any real impact in reducing the government’s debt and deficit, but which arguably might push our struggling-to-recover national economy back into a recession; they set a deadline for themselves to act a year and a half ago; then they did nothing, waiting until after the national election to bother to talk about it among themselves so the nasty details of our national fiscal crisis wouldn’t intrude on an otherwise uplifting discussion of the issues of the day; and the best they could come up with—even after the deadline had passed anyway—was a bill that raises marginal income tax rates for some well-to-do folks but not for most of us and kicks the budget cuts can down the road again?! So it’ll have to be taken up at the same time as another increase to the debt ceiling—what could possibly go wrong?!?!

It’s a plan that a majority of Republicans in the House voted against, even though—since the Bush-era tax cuts had just expired at the end of 2012—they were, technically, voting against lowering the tax rate for the bottom 98% or so of Americans.  Because there weren’t enough spending cuts.  Or in this case, any.

Which Barack Obama were Republicans negotiating with—was it the same one that the Conservative Industrial Complex consistently criticizes for being too soft, too dumb to get a good deal for America?

I try to look on the bright side: at least they finally agreed on something, even if it was only that going over the fiscal cliff would be a bad thing. Hooray…take an honorable discharge out of petty cash. (Thanks, Hawkeye.)

(Heavy sigh.)

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?

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!

T-minus three weeks and counting…

Pat Ryan Leave a comment

There’s just the faintest whiff of default in the air in Washington, D.C., so the frequency of budget meetings is on the rise.  Late last week President Obama and Speaker Boehner sounded confident they could make a deal  that would reduceBoehner government spending by $4 trillion over ten years, but Boehner has backed off from what The New York Times characterizes as “a transformative proposal, with the potential to improve the ugly deficit picture by shrinking the size of government, overhauling the tax code and instituting consensus changes to shore up Medicare and even Social Security. It was a once-in-a-decade opening.” 

Why?  According to the Times’ analysis Boehner faced the realities of preserving his own power as speaker versus trying to get his own party to accept compromise on taxes; he also may be passing on a rare chance to get Democrats to compromise on major entitlements.

Kathleen Parker is another conservative voice making the case that Congressional Republicans may be pushing their advantage too far, turning their noses up at serious concessions from Democrats while making no progress on solving the immediate issue of the debt limit:

Few honest brokers think that we can prevent a financial catastrophe without both cuts and revenue increases, but there are surely ways to get there from here without necessarily punishing the poor or the wealthy.

(snip)

Meanwhile, not raising the debt ceiling is fraught with peril. Even prolonging raising the ceiling is potentially hazardous before a default happens, as investors take preventive actions that could distort the money markets.

Republicans have made enormous advances toward government reforms that were viewed as unachievable a year ago. Voting no may have become the aphrodisiac of small-government conservatives, but it is not necessarily an act of bravery or wisdom.

Sometimes it’s just stubborn.

If Parker’s suggestion of possible pig-headedness by Republicans is too harsh, Obamaconsider the perspective offered today by David Gergen: with Obama’s indication today that he won’t accept any short-term agreement, all of the players have now painted themselves into their separate corners, and we all will pay the price if they don’t find their ways out:

Republican and Democratic leaders on Capitol Hill, fortunately, agree that it is essential to avoid a default on the debt. They are right. But to get there, each side is going to have to give a little.  It is impossible to imagine either side doing what it would take to reach a $4 trillion deal; the GOP won’t ever agree to tax increases of as much as $800 billion to $1 trillion, nor will Democrats agree to major entitlement cuts. They especially won’t do it in the rush of last-minute negotiations over the next few days.

But in the name of fiscal sanity, they may be willing to agree to a much more modest set of compromises—something that prevents default, allows dust to settle, gives them a chance to build up support back home and keeps negotiating over a longer period of time.

Props to the GOP for getting Democrats to agree to so much of what Republicans want; please don’t get carried away and push for “too much” and not get the debt ceiling resolution that’s needed right away.

Tick…tick…tick…

Grand Old Party, or Grumpy Old Protesters

Pat Ryan 4 Comments

President Obama hosts another Big Budget Meeting tomorrow at the White House with a deadline looming for raising the nation’s debt ceiling to keep the country from defaulting on its loan payments, and both political parties are acting as if they’re serious now.  (Now?  Yeah, now…finally, now.)  Republicans, who’ve been spurred in part if not entirely by tea party pressure, have been very tough in the negotiations, demanding that Democrats agree to trillions of dollars in spending cuts and no tax increases in return for the votes to increase the debt ceiling.  Sounds like the Republicans have won this round, doesn’t it?

Columnist David Brooks makes a very good case that the GOP has wrought amazing concessions from Democrats on the economy, spending cuts and debt reduction, and that if it takes what’s been offered it will be good for the country, set a new starting point for future negotiations on more cuts, and be a significant political victory for Republicans to campaign on in 2012.  But he also warns that if they don’t agree soon, people will have good reason to wonder if the GOP has ceased to be a political party capable of governing and turned finally into a mere protest movement that has a “no tax hike” fetish—even when the effective tax rate in this country is now the lowest it’s been since 1950!  The long-time conservative idea man is worried that no-tax-hike-ers threaten the future of his party:

The members of this movement do not accept the logic of compromise, no matter how sweet the terms…The members of this movement do not accept the legitimacy of scholars and intellectual authorities…The members of this movement have no sense of moral decency…The members of this movement have no economic theory worthy of the name.

(snip)

If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.

That makes sense to me, and I hope it makes sense to everyone, even the very fanatics that Brooks warns about.  The New Republic’s Jonathan Chait praises Brooks’ column for its emperor-has-no-clothes statement about GOP radicalism, and assigning all of the blame to “Republicans” who would stand in the way of shrinking government, who would cripple the economy and emasculate the recovery, just to make a point.  Something for all of us to keep in mind, as the clock tick-tick-ticks down to possible, and completely avoidable, national default.