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“We Don’t Want Nothing Out Of This Debt Limit”: Paul Ryan Says He Isn’t Done Holding The Economy Hostage

In the spectacular Republican burnout at the end of the October government shutdown, it was easy to miss that America came within just hours of a full economic meltdown.

The brinksmanship over the demand to defund Obamacare or at least completely maim it lasted for 16 days and cost an estimated $24 billion. But if the standoff had gone on just another day longer, the debt ceiling would have been breached, causing economic chaos.

It’s difficult to predict what kind of damage the economy might have suffered, because no Congress had ever been stupid enough to default on our debts on purpose. The debt limit crisis of 2011 cost the stock market thousands of points and stunted job creation for months. There wasn’t a similar effect in 2013 because Wall Street assumed the GOP was crying wolf, and they were right.

But one mistake, one procedural error, one coup against a congressional leader could have sparked the beginning of a default. And many economists believe the results would have resembled the 2008 financial crisis — but worse.

As she’s sold the budget deal she negotiated with House Republicans that doesn’t extend the debt limit, Senator Patty Murray (D-WA) has said, “We have brought certainty and stability.”

And the economy does seem to be more stable since the GOP capitulated in October. “The volatility of the U.S. dollar in the last 90 days fell to 4.93 percent on Dec. 13 from a yearly high of 7.34 percent in September as a shutdown and debt ceiling crisis loomed, according to the Bloomberg U.S. Dollar Index that represents 10 major currencies weighted by liquidity and trade flows,” Bloomberg‘s Derek Wallbank and Kathleen Hunter noted.

But Murray’s partner, Rep. Paul Ryan (R-WI), seems intent on disrupting that stability.

“We don’t want nothing out of this debt limit,” he told Fox News Sunday.

In other words, House Republican demands are forthcoming. The last time they put together a list of such demands, it was an insane laundry list of right-wing wishes cribbed from the Koch Brothers’ letter to Santa. Somehow being the party held responsible for the greatest financial crisis in a half-century has given Republicans the freedom to boldly threaten a return to such a crisis again and again, without fear of destroying their party.

The president offered, in return, nothing. Obviously regretting setting the precedent that the economy could be held hostage, President Obama has vowed never to negotiate over the debt limit again.

With Republican factions warring with themselves and everyone in Washington seeing their approval ratings shrink, would they dare play chicken with the economy as the midterm elections rapidly approach?

Paul Ryan knows he can’t afford not to at least seem as if he’s willing to do so without losing the Tea Party support that makes him such an asset to House Speaker John Boehner (R-OH). And the president knows he can’t afford to give in.

The result is that another crisis has been averted, but a far worse one looms.


By: Jason Sattler, The National Memo, December 16, 2013

December 17, 2013 Posted by | Budget, Debt Ceiling, Paul Ryan | , , , , , , | Leave a comment

“The Biggest Losers”: Conservatives Continue To Impose Gratuitous Suffering On Working Americans

The pundit consensus seems to be that Republicans lost in the just-concluded budget deal. Overall spending will be a bit higher than the level mandated by the sequester, the straitjacket imposed back in 2011. Meanwhile, Democrats avoided making any concessions on Social Security or Medicare. Call this one for Team D, I guess.

But if Republicans arguably lost this round, the unemployed lost even more: Extended benefits weren’t renewed, so 1.3 million workers will be cut off at the end of this month, and many more will see their benefits run out in the months that follow. And if you take a longer perspective — if you look at what has happened since Republicans took control of the House of Representatives in 2010 — what you see is a triumph of anti-government ideology that has had enormously destructive effects on American workers.

First, some facts about government spending.

One of the truly remarkable things about American political discourse at the end of 2013 is the fixed conviction among many conservatives that the Obama era has been one of enormous growth in government. Where do they think this surge in government spending has taken place? Well, it’s true that one major new program — the Affordable Care Act — is going into effect. But it’s not nearly as big as people imagine. Once Obamacare is fully implemented, the Congressional Budget Office estimates that it will add only about 3 percent to overall federal spending. And, if you ask people ranting about runaway government what other programs they’re talking about, you draw a blank.

Meanwhile, the actual numbers show that over the past three years we’ve been living through an era of unprecedented government downsizing. Government employment is down sharply; so is total government spending (including state and local governments) adjusted for inflation, which has fallen almost 3 percent since 2010 and around 5 percent per capita.

And when I say unprecedented, I mean just that. We haven’t seen anything like the recent government cutbacks since the 1950s, and probably since the demobilization that followed World War II.

What has been cut? It’s a complex picture, but the most obvious cuts have been in education, infrastructure, research, and conservation. While the Recovery Act (the Obama stimulus) was in effect, the federal government provided significant aid to state and local education. Then the aid went away, and local governments began letting go of hundreds of thousands of teachers.

Meanwhile, public investment fell sharply — so sharply that many observers refer to it as a “collapse” — as state and local governments canceled transportation projects and deferred maintenance. Researchers, like those at the National Institutes of Health, also took large cuts. And there was a major cut in spending on land and water conservation.

There are three things you need to know about these harsh cuts.

First, they were unnecessary. The Washington establishment may have hyperventilated about debt and deficits, but markets have never shown any concern at all about U.S. creditworthiness. In fact, borrowing costs have stayed at near-record lows throughout.

Second, the cuts did huge short-term economic damage. Small-government advocates like to claim that reducing government spending encourages private spending — and when the economy is booming, they have a point. The recent cuts, however, took place at the worst possible moment, the aftermath of a financial crisis. Families were struggling to cope with the debt they had run up during the housing bubble; businesses were reluctant to invest given the weakness of consumer demand. Under these conditions, government cutbacks simply swelled the ranks of the unemployed — and as family incomes fell, so did consumer spending, compounding the damage.

The result was to deepen and prolong America’s jobs crisis. Those cuts in government spending are the main reason we still have high unemployment, more than five years after Lehman Brothers fell.

Finally, if you look at my list of major areas that were cut, you’ll notice that they mainly involve investing in the future. So we aren’t just looking at short-term harm, we’re also looking at a long-term degradation of our prospects, reinforced by the corrosive effects of sustained high unemployment.

So, about that budget deal: yes, it was a small victory for Democrats. It was also, possibly, a small step toward political sanity, with some Republicans rejecting, provisionally, the notion that a party controlling neither the White House nor the Senate can nonetheless get whatever it wants through extortion.

But the larger picture is one of years of deeply destructive policy, imposing gratuitous suffering on working Americans. And this deal didn’t do much to change that picture.


By: Paul Krugman, Op-Ed Columnist, The New York Times, December 12, 2013

December 15, 2013 Posted by | Budget, Unemployment Benefits | , , , , , , , | 1 Comment

“Boehner Might Be A Pragmatist, But He’s No Moderate”: The Budget Deal Has Passed, But Don’t Hold Your Breath For Bipartisanship

For the first time in months, Washington seems…optimistic. Not only did House Republicans pass the budget deal brokered by Budget Chairman Paul Ryan and his counterpart in the Senate, Senator Patty Murray, but Speaker John Boehner made news with a small Howard Beale moment:

“Frankly I think they’re misleading their followers. I think they’re pushing our members in places where they want to be. And frankly I just think they’ve lost all credibility,” he told reporters at his weekly press conference Thursday. “There comes a point when people step over the line. When you criticize something and you have no idea what you’re criticizing, it undermines your credibility.” […]

“You know, they pushed us into this fight to defund Obamacare and shut down the government,” he said. “It wasn’t exactly the strategy I had in mind. But if you recall, the day before the government re-opened, one of the people at one of these groups stood up and said, ‘well we never really thought it would work.’ Are you kidding me?”

Asked if he thinks the groups should “stand down,” Boehner said, “I don’t care what they do.”

This looks like the establishment backlash we expected during the shutdown fight, or—as Molly Ball put it for The Atlantic—“House leaders stopped trying to get along with the enforcers of an impossible conservative standard and started fighting back.”

Now, the speculation is that, perhaps, Boehner is prepared to buck Tea Party Republicans on other issues. Immigration activists, for example, are hopeful that this development could change the calculus for reform, and give Boehner the room he needs to pass a bill with votes from pragmatic Republicans—who have an agenda they want to accomplish—and Democrats. Indeed, there’s the potential for a whole rush of activity around issues where Democrats and Republicans can come to narrow agreement, from an extension of unemployment insurance to the Employee Non-Discrimination Act.

The problem is that, aside from this budget deal, it doesn’t look like Boehner has broken from conservatives on much at all. In that same press conference, for instance, he repeated conservative boilerplate on repealing the Affordable Care Act. And afterwards he went to the House floor and blocked a vote on extending emergency unemployment benefits. Likewise, there’s no real indication that he’s changed his mind on the EDNA or unemployment insurance. The House Speaker might be a pragmatist, but he isn’t a moderate.

Earlier this year, Boehner bucked conservatives by violating the “Hastert rule”—the faux requirement that all legislation passed by the House have support by a majority of the majority—to pass a deal on the fiscal cliff, authorize aid for Hurricane Sandy, and renew the Violence Against Women Act. The prediction was that this could be the new normal, and that Boehner could restore a modicum of sanity to the House by refusing to rely on Republican votes for legislation.

What followed, instead, was a year of inaction, culminating in a government shutdown and a stand-off over the fiscal cliff.

All of this is to say that we shouldn’t hold our breath about Boehner and his “new” approach. The Ryan-Murray deal was a necessity: Not only does it preclude Tea Party conservatives from forcing another shutdown, but it preserves most of the sequester and hands Republicans a solid victory.

As for the other agenda items? Most Republicans don’t want them and there’s no reason for Boehner to go against the tide.


By: Jamelle Bouie, The Daily Beast, December 13, 2013

December 15, 2013 Posted by | Budget, John Boehner | , , , , , , , | Leave a comment

“There’s Only So Far You Can Follow Your Extremists”: Conservative Anger Over Budget Deal Now Purely To Save Face

Have we finally reached a point where the perpetual anger of Washington conservatives is no longer a threat to the republic? The budget deal announced yesterday suggests that it may well be, at least for the moment. It isn’t that conservatives aren’t raising a stink about it—they’re displeased that it doesn’t repeal the Affordable Care Act, slash Social Security and Medicare, and do more to punish food-stamp recipients, among other things—because they certainly are. Indeed, they were decrying it even before it was announced, which tells you how concerned they are about the details. But they seem to be just going through the motions. Send the press releases, say you’ll vote against it, tell Fox News why it doesn’t get to the real problems … and then we’ll all move on. The budget will pass, mostly because it averts the possibility of a government shutdown (at least over the budget, though not over the debt ceiling) for two more years. And even the most conservative Republican knows that’s a good thing for their party.

Just look at how John Boehner is acting. Boehner, who spent the entire period of the shutdown (and the weeks leading up to it) stepping gingerly around his party’s right wing as though it were a Bengal tiger that could rip his throat out with a single swipe if angered, now feels free to attack the likes of Heritage Action, obviously without concern that they can make him pay for his insolence:

At a press conference Wednesday, a visibly angry Boehner said conservative groups who oppose the two-year budget deal struck by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) are “using our members and they’re using the American people for their own goals. This is ridiculous.” Moments earlier, during a closed-door meeting, Boehner told House Republicans that the well-funded and influential organizations “aren’t acting out of principle, and they’re not trying to enact conservative policies. They’re using you to raise money and expand their own organization,” he said, according to a source in the room.

Those are some pretty strong words. Meanwhile, primary challenges to Republicans who have sinned against purity aren’t exactly looking formidable at the moment. Steve Stockman, who could well be the single nuttiest Republican in the House (and that’s saying something), is mounting a challenge to already extremely conservative Texas senator John Cornyn, one that will produce some moments of comedy but is almost certainly doomed. There are other primary challenges in progress to high-profile Republicans like Lindsey Graham, but most of those will probably fail as well.

That doesn’t mean that the Tea Party is irrelevant, or that events couldn’t conspire to renew their power and influence over the Republican party. For the moment, however, it does appear that the shutdown provided everyone in the GOP a valuable lesson: there’s only so far you can follow your extremists before they lead you off the cliff, and once you’ve plunged to the bottom, you don’t much want to climb back up and hurl yourself off again.


By: Paul Waldman, Contributing Editor, The American Prospect, December 11, 2013

December 12, 2013 Posted by | Budget, Conservatives | , , , , , , , | Leave a comment

“Treading Carefully”: Paul Ryan’s Big, Tricky Budget Moment Is Here

Congress has been historically inactive this year. But with the clock winding down on 2013, there is still a glimmer of hope that bicameral negotiations could produce a modest budget deal that would replace some of the sequester cuts.

For Rep. Paul Ryan (R-Wis.), the House GOP budget guru and potential presidential aspirant, that presents both an opportunity and a challenge. A bipartisan deal could serve as a rare (for him) legislative achievement that pads his credentials and charts the GOP’s course heading into the next election cycle. Yet at the same time, Ryan would risk spurning the GOP base — and its vocal Ted Cruz types — if he’s perceived as bending too far to Democratic demands.

Ryan and his Senate counterpart Sen. Patty Murray (D-Wash.) are believed to be close to a very small deal that would eliminate some of the automatic budget cuts scheduled to go into effect over the next two years. Though nothing is finalized, the deal would reportedly nix about one-third of the sequester-mandated cuts, splitting the reinstated funds between defense and non-defense spending.

Since Republicans won’t go for tax increases, and Democrats won’t tackle entitlement reform without also touching revenue, Murray and Ryan have been reduced to “pulling together odds and ends to make a deal, including non-tax revenue like auctioning broadband spectrum and airport security fees, as well as increasing employee contributions to federal workers’ retirement programs,” wrote MSNBC’s Suzy Khimm.

In short: The negotiators are looking at a tiny deal, far less than the sweeping budget overhaul Ryan has famously proposed before in his spending blueprints.

Still, a deal would be a success for a Congress so dysfunctional it triggered a two-week government shutdown and flirted with debt default. Republicans would love to roll back some of the cuts to defense spending. And Democrats are eager for a deal that would wipe out some of the cuts to cherished domestic programs like Head Start.

Such a deal, if passed, would also be a significant accomplishment for Ryan to add to his otherwise unimpressive legislative record.

Though a noted policy wonk, none of Ryan’s radical budget bills have gone anywhere in Congress. In fact, only two Ryan-drafted bills, neither of which were anything truly groundbreaking, have become law in the congressman’s entire House career. One bill named a post office; the other amended a tax on arrows.

A deal would thus “burnish an image of someone willing to find — and tout — common ground in a historically divided Washington,” wrote Politico’s Jake Sherman and John Bresnahan. “It’s a credential that could serve him well as he looks to grab the chairmanship of the Ways and Means Committee or run for his party’s nomination before the 2016 presidential contest.”

Still, an agreement almost assuredly wouldn’t do anything about long-term GOP priorities Ryan has championed before, like cutting entitlement spending.

And there’s the rub for Ryan: A small deal could turn off both conservative lawmakers and voters.

Conservative House members dug in on their impossible demands during the shutdown even as it obliterated the party’s approval rating. Those same members could balk at a proposed deal that doesn’t cut deeper. And though a deal could still pass with the help of Democratic votes, Speaker John Boehner (R-Ohio) would risk further splitting his fragile caucus by cobbling together a Democratic-heavy coalition.

A mini-deal could also be problematic for Ryan’s perceived presidential ambitions if it causes the party’s right flank, which plays a disproportionately large role in the primary nominating process, to sour on him.

“If the Tea Party turns up the rhetorical heat, would Ryan risk a presidential bid to rescue the country from another government shutdown?” wrote Salon’s Joan Walsh. “I’ve never seen him stand up to that kind of ideological pressure from the right, but there could be a first time.”

If he’s keen on keeping his conservative hero status and pursuing a 2016 run, Ryan really ought to tread carefully.


By: John Terbush, The Week, December 4, 2013

December 5, 2013 Posted by | Budget, Paul Ryan | , , , , , , , | 1 Comment

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