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With Deal Announced, The White House Makes It’s Case

So the final deal has been announced, pending approval by the House, and one of the key new pieces of the compromise is that the Congressional committee tasked with coming up with a second round of spending cuts in exchange for the later debt ceiling hike would be forced to act by the new “trigger.” In the event that the committee deadlocks, that trigger would force an even division of non-defense and defense cuts, and since the latter is anathema to Republicans, they would not have any incentive to deliberately sabotage the committee in order to force the deep entitlements cuts they want.

The White House’s argument is that even if the deal is far short of what liberals hoped for, Republicans have effectively surrendered the amount of leverage they were expected to have over entitlements cuts. Now that the committee — which is half Republicans and Democrats — will all but certainly advance a package of cuts in exchange for the later debt ceiling hike, the argument is that Democrats can live to fight it out another day on entitlements.

The White House is also arguing that the deal sets the stage for a re-litigation of the tax cut fight, and it’s now distributing talking points to outside allies that are heavily devoted to making that case on entitlement and taxes, an argument that seems designed to quiet angst and criticism among liberals:

* Expedited Process for Balanced Deficit Reduction: Puts in place a longer term process for additional $1.5 trillion in deficit reduction through a committee structure that will put everything on the table, including tax and entitlement reform. To prevent either side from using procedural tricks to prevent Congress from acting, the committee’s recommendations will receive fast track authority, which means they can’t be amended or filibustered.

* Sets the Stage for a Balanced Package Including Revenues: The American people and a growing number of Republicans agree that any deficit reduction package must be balanced and included revenue.

* Even Speaker Boehner was open to a deal with $800 billion in revenues, and nearly 20 GOP senators were supportive of the Gang of 6 framework, which had more than $2 trillion in revenue.

* If the Committee does not succeed in meaningful balanced deficit reduction with revenue-raising tax reform on the most well-off by the end of 2012, the President can use his veto pen to raise nearly $1 trillion from the most well-off by vetoing any extension of the Bush high income tax cuts.

By;: Greg Sargent, Washington Post-The Plum Line, July 31, 2011

August 1, 2011 Posted by | Budget, Class Warfare, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economy, GOP, Government, Ideologues, Ideology, Lawmakers, Middle Class, Politics, President Obama, Public, Republicans, Right Wing, Senate, Taxes, Teaparty | , , , , , , , , , , , , , | Leave a comment

The GOP’s Lost Debt Ceiling Opportunity

As we teeter closer to the edge of ” Debtmageddon,” it’s worth pausing to recall the “grand bargain” between Republicans and the White House—the Deal that Almost Was.

With no increases in individual tax rates and three dollars in cuts for every new dollar in revenue, could the House have swallowed it?

It’s a question that answers itself: If House leaders are having difficulty pressing through a standalone Republican bill, a “grand bargain” never had a snowball’s chance in the Sahara.

Sensing this, a new strategy unfolded: reframe the debt ceiling debate in terms of scoring a political victory against Democrats.

This had potent visceral appeal. It won over superstar pundits like Charles Krauthammer as well as rank midlevel propagandists such as Jennifer Rubin (“the left will be demoralized”), Pete Wehner (“Obama Will Be Biggest Loser”), and Marc Thiessen (“a modest victory for Republicans, but a major defeat for Obama”).

It almost worked—and it may yet.

But think of what might have been if commonsense prevailed over politics. What if these conservative commentators had spent this energy encouraging a compromise that would have benefited the White House, yes, but also would have gored the sacred cows of the left and yielded significant debt reduction as well as a relatively smaller government?

Instead, they’re left scrambling at the eleventh hour to isolate the “suicide bombers,” who now hold all the cards. They could have been isolated weeks ago.

It would’ve necessitated compromising with Democrats, to be sure. But we’re learning—the hard way—that this was always going to require compromise with Democrats.

 

By: Scott Galupo, U. S. News and World Report, July 29, 2011

July 29, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Politics, Public Opinion, Right Wing, Teaparty | , , , , , , , | Leave a comment

Up Is Down: Michele Bachmann Distances Herself From Reality

Talk about cognitive dissonance. I went to a breakfast this morning with Alice Rivlin and lunch with Michele Bachmann. How to put this politely? If men are from Mars and women from Venus, Rivlin is from Earth, Bachmann is from Saturn. Someplace way out in the solar system and removed from reality.

Rivlin, a Democrat, is a former director of the Congressional Budget Office, former director of the Office of Management and Budget, and former vice chairman of the Federal Reserve. She is, in short, a Very Serious Person and, like every serious person around, finds herself somewhere between disbelieving and aghast at the current crisis over raising the debt ceiling.

“Putting a limit on the debt and saying, ‘Hey, we made these decisions but we didn’t really mean it, we’re not going to pay our bills,’ is just an unthinkable thing to do,” Rivlin said at an event sponsored by Atlantic Media.

“This is outrageous, folks,” she told interviewer Linda Douglass. “The greatest democracy, oldest democracy in the world should not be behaving this way.…It’s embarrassing for us to have a government that is so dysfunctional and that has created this artificial crisis.”

And the consequences could be catastrophic. “Suppose the world has decided that [debt ceiling crisis] might happen again and this democracy isn’t quite as solid or thoughtful as we thought it was, so we not going to stop lending to the United  States but we’re going to charge more interest. As the interest bill goes up, two things happen. One is it’s must more expensive for the government to carry this large debt….But more seriously it means that everybody’s interest payment goes up….So we would be paying more on our mortgage, more on our car loans, more on our credit cards, more for business loans and that’s not good for the economy.

It takes nothing away from Rivlin’s considerable intelligence and insight to say that she is expressing the conventional wisdom.

Fast forward a few hours to Bachmann, a congresswoman from Minnesota and Republican presidential candidate, addressing the National Press Club. Bachmann’s position is two-fold:

First, the debt ceiling should not be raised, under any circumstances. No deal could be good enough, Bachmann said, to induce her to do so. “I won’t raise taxes. I will reduce spending and I won’t vote to raise the debt ceiling,” she said. “And I have the titanium spine to see it through.”

Second, the United States will not default. “I want to state unequivocally I think for the world as well as the markets as well as for the American people, I have no doubt that we will not lose the full faith and credit of the United States,” Bachmann said.

Huh? Bachmann accused President Obama of employing “scare tactics” in warning of “catastrophic results for our economy.” But what do she and others in the titanium spine caucus think is going to happen when the United States can’t pay its bills?

Sure, Treasury Secretary Tim Geithner could manage to pay off bondholders. But as Rivlin and others explained, it won’t be too long before the checks due exceed the amount in the coffers.

An analysis by former George W. Bush administration Treasury official Jay Powell by the Bipartisan Policy Center shows that if the administration prioritizes payments to bondholders, Social Security recipients, Medicare and Medicaid providers, defense contractors and unemployment benefits (total $172.7 billion for the month) then it wouldn’t be able to pay another $134 billion worth of bills, including military active duty pay, veterans affairs programs, federal salaries and benefits, food stamps and Pell grants. You can shift around the numbers all you want but the bottom line is that refusing to increase the debt ceiling is not a sustainable option.

Bachman said that “saying no” to an increase in the debt ceiling would be “saying yes to job creation and to the next generation.” Up is down in Bachmann-world. The credit rating agencies are already threatening a downgrade. The grave implications of that are clear, for jobs now and stretching into the next generation with the hangover of higher interest rates.

Bachmann spent a lot of time invoking Ronald Reagan, so here’s one from the Gipper back at her. “The full consequences of a default—or even the serious prospect of default—by the Untied States are impossible to predict and awesome to contemplate,” he wrote to then-Senate Majority Leader Howard Baker in November 1983. “Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The nation can ill afford to allow such a result.”

By: Ruth Marcus, The Washington Post, July 28, 2011

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July 29, 2011 Posted by | Budget, Conservatives, Consumer Credit, Consumers, Debt Ceiling, Debt Crisis, Deficits, Democracy, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Medicaid, Medicare, Politics, Public, Republicans, Right Wing, Social Security, Taxes, Teaparty | , , , , , , , , , , , , , | Leave a comment

Blame For The Debt Ceiling Crisis Rests With Republicans

Are you watching your 401(k) drop? Are you seeing your retirement tank? Are you waiting for higher interest rates on your credit cards and mortgages? Are you nervous about another recession?

Well, thank the Republicans.

This debt crisis is totally of the Republicans’ making. From the beginning we should have had a clean vote—up or down—on the debt ceiling, just as Ronald Reagan and other presidents have done.

If Speaker John Boehner and the Republicans allow a default with  their last minute antics things are only going to get worse. That is  clear.

And the very notion of revisiting this silly scenario in six months  is absurd. For the life of me I can think of no quicker way to sink our  economy. Will that give confidence to the markets? Not a chance. Will it  result in a downgrading of our credit rating? In all likelihood it  will.

The sad truth is that without the Bush tax cuts for the wealthy,  without the oil and gas loopholes and, most important, without two wars  that the Republicans and Bush failed to pay for, we would be in the  black right now, or close to it.

Democrats will have to come up with a grand compromise, hurting many  segments of our society, to bail out the Republicans, much the way Bill  Clinton did in the 1990s. Revenues will have to be part of that package.  Hopefully, that can happen when cooler heads prevail and the Tea Party  stops their nonsense.

In the meantime, if the stock market continues to drop and Americans  are taken to the cleaners, pick up the phone and thank John Boehner and  the Tea Party Republicans for what they have done to your bank accounts  and your savings.

All this sound and fury comes out of the majority in the House and  not one bill on jobs, not one piece of legislation to help our economy.  Sad.

 

By: Peter Fenn, U. S. News and World Report, July 28, 2011

July 28, 2011 Posted by | Budget, Class Warfare, Congress, Conservatives, Consumer Credit, Consumers, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Lawmakers, Middle Class, Mortgages, Politics, Public, Public Opinion, Republicans, Right Wing, Teaparty, Wealthy | , , , , , , , , , , | Leave a comment

Circular Firing Squad: Boehner Bill Is Showdown Between House Republican Purists And Realists

The run-up to the vote expected Thursday on House Speaker John A. Boehner’s proposal to provide a short-term increase in the national debt limit is quickly turning into a time of clarity for the chamber’s Republicans.

If GOP leaders are unable to muster enough support to get the plan out of the House, the only measure left would be a Democratic proposal by Senate Majority Leader Harry M. Reid (D-Nev.), and voting with Reid is not a concession many House Republicans are willing to make.

“There’s only three choices,” said Rep. Steve LaTourette (R-Ohio), a close Boehner ally. “One is to vote for Senator Reid’s plan. One is to default. And one choice is the Boehner bill. It should be pretty self-evident what the best choice is to someone who’s a Republican.”

Increasingly, the vote on Boehner’s proposal is shaping up not as a test of wills between moderates and conservatives, but as a face-off between political purists who scorn the bill and realists who prefer it to the alternative.

“We came here to reduce the size of government and reduce spending, and this bill, I think, begins to accomplish that goal,” said Rep. Sean P. Duffy (R-Wis.), who decided Wednesday that he will vote for the measure. “It’s by no means perfect. But it’s the best bill we have.”

At a closed-door meeting for House Republicans on Wednesday, where leaders tried to rally support for the measure, House Budget Committee Chairman Paul Ryan (Wis.) read from a blog post by conservative commentator Bill Kristol. “To vote against Boehner is to choose to support Barack Obama,” Kristol wrote.

But it is not an easy sale for a party that won back control of the House last year on promises to vote without regard to political consequences.

Boehner’s bill would postpone major entitlement reform and other deep cuts by passing such decisions to a new committee that would report its recommendations by year’s end. The proposal also would not require Congress to pass a balanced-budget amendment to the Constitution, but only that it vote on one.

Some Republicans have vowed that they will not raise the debt ceiling under any circumstances.

Others preferred a conservative bill dubbed “cut, cap and balance” that passed the House this month but was killed in the Senate. It would have required Congress to vote to send the amendment to the states for ratification.

“The credit rating agencies have been clear that no matter what happens with the debt limit, the U.S. will lose its AAA credit rating unless we produce a credible plan to reduce the debt by trillions of dollars,” said Rep. Jim Jordan (Ohio), chairman of the Republican Study Committee. The group comprises more than 170 House conservatives. “Cut, cap and balance is the only plan on the table that meets this standard,” he said.

House leaders expressed cautious optimism Wednesday that they were convincing members that the plan advanced by Boehner (R-Ohio) is the best that Republicans can hope to get.

It would avert a government default, take a bite out of the deficit and require Congress to adopt $1.8 trillion in additional cuts before the debt ceiling could be raised again next year.

Freshman Rep. Michael Grimm (R-N.Y.), whose district in Staten Island and Brooklyn is home to many Wall Street professionals, said he decided Wednesday that he will vote for the bill after he was convinced that its failure would hand Democrats control of the debate.

“I don’t think it’s perfect. I don’t think it’s close to perfect. I don’t think it’s in the realm of what I expected to get,” he said.

But, Grimm said, it would require deep spending reductions over the coming years. “That’s historic. And that’s a step in the right direction.”

The public infighting has served to rally some Republicans. Behind closed doors, members erupted Wednesday over an e-mail that a staff member of Jordan’s Republican Study Committee sent to outside conservative groups. It listed undecided members who could be pressured to vote against the Boehner plan.

“I think it’s offensive when a group that you’re a part of uses your bullets to shoot you,” said Rep. Bill Flores (Tex.). “So I have a problem with it.”

Those entreaties did not quiet conservatives who are urging that the plan be abandoned: On Wednesday, the head of the group Tea Party Nation accused Boehner of surrendering to Washington’s status quo and called for him to be replaced.

The House proposal was panned at a small rally held at the Capitol by the Tea Party Express and the American Grassroots Coalition. The GOP that rode tea party energy and activism is hoping that some of it members can look past that relationship.

“Some people are new here and this is part of the learning curve,” LaTourette said. “At times you have to say ‘no’ to people you represent who are yelling at you, if you’ve reached the conclusion that it’s in the best interests of the country.”

By: Rosalind Helderman and Felicia Sonmez with Contribution by David Fahrenthold, The Washington Post Politics, July 27, 2011

July 28, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Deficits, Democrats, Economic Recovery, Economy, Elections, GOP, Government Shut Down, Ideology, Lawmakers, Politics, Republicans, Revolution, Right Wing, Teaparty, Voters | , , , , , , , , , , , , , , , , , , , , | Leave a comment

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