“Letting The Debt Ceiling Cave In On Seniors”: Republican Actions Could Well Spell Disaster For Them In The Mid-Term Elections
Democrats used to be able to count on the senior citizen vote. After all, it was FDR who created Social Security and Lyndon Johnson who created Medicare. But, hello, that was about 75 years ago and 50 years ago, respectively! Times do change.
As I like to scream at my Democratic friends, the post-65 generation were Ronald Reagan voters and had zip to do with FDR and LBJ.
As most now know, the only age group to support John McCain was the 65+ crowd and Romney beat Obama handily among seniors in 2012. Romney got 56 percent of the senior vote and McCain go 53 percent to Obama’s 45 percent in 2008.
The 45-64 group was very close in 2008 and Romney narrowly won it in 2012. And this was when Obama was the first Democrat since Carter in 1976 to receive more than 50 percent of the vote.
So what is my point?
Republicans have taken serious hits for their efforts to shut down the government and their possible refusal to raise the debt limit. In my blog post last week, I quoted Ronald Reagan on the debt limit. He got the message; he never drank the Kool Aid on that one.
But here is a very serious problem for the Republicans. If they really go through with their draconian plan, sure it hurts everyone, hurts the economy big time. But who does it especially freak out? You got it, senior citizens.
Why? The retired and those who live on fixed incomes and who have to draw on their retirement accounts get hammered. The last time the Republicans even threatened to hold the debt limit hostage in 2011, the stock market went down 17 percent.
Let me repeat that: After the debacle of 2008 and the economic meltdown, the stock market took a 17 percent hit for one reason and one reason only – Republicans doing what Reagan had warned against. Plus, the U.S. credit was downgraded, which was unprecedented.
Seniors can’t afford to have that happen again and they know it – their 401(k)’s can not become 201(k)’s. The crash in 2008 and the double digit hit in 2011, if repeated, will affect those who are retired and those planning on retirement, and that is about 50 percent of the voters. If Republicans lose substantial numbers of those who are over 50 years old, it won’t just impact their chances of winning the presidency, with the changing demographics of race and ethnicity, but it could well spell disaster for them in the mid-term elections as well. Republicans could lose the House and not make the gains they want in the Senate.
Republicans may think they are going strong with their base of tea party radicals bashing the Affordable Care Act, but nothing impacts voters as much as watching their monthly savings and retirement statements tank.
Seniors and upcoming retirees watch their stocks and bonds and IRAs and 401(k)’s like a hawk and if Republicans get the blame for big losses, trust me, they will feel it big time at the polls next November and for many Novembers to come.
Shutting down the government and defaulting on our obligations are not just bad policy, but they are really bad politics for the Republicans. They simply cannot afford to watch their advantage with the 50+ age group evaporate.
The real question is will the Republicans come to their senses? It is not a sure bet.
By: Peter Fenn, U. S. News and World Report, September 23, 2013
“Principles Of Hostage Taking 101”: The Debt Ceiling Is A Hostage John Boehner Absolutely Can’t Afford To Shoot
Speaker of the House John Boehner’s never-ending quest to placate the tea party resulted in the GOP approving a bill on Friday that would fund the government through mid-December, while “defunding” Obamacare. (Never mind that, as U.S. News’ Carrie Wofford has pointed out, “defunding” Obamacare in this manner doesn’t actually work.) If, as expected, the Senate strips the defund provision and kicks the bill back to the House, Boehner will have to find yet another way of keeping his radicals at bay.
The next hostage, then, is likely the debt ceiling. Technically, the U.S. has already reached its statutory borrowing limit, but the Treasury Department has been using extraordinary measures to delay the reckoning, a tactic that will no longer work come mid-October. And already, the GOP has drawn up a wish-list of policy concessions it hopes to extract in return for raising the debt ceiling, running the gamut from changes to the Dodd-Frank financial reform law and means-testing of Medicare to approval of the controversial Keystone XL oil pipeline. If defunding Obamacare doesn’t happen now, expect that to be added to the list.
But President Obama, it seems, has learned his lesson from previous debt ceiling standoffs, and this time is refusing to play ball. He even called Boehner on Friday night to reiterate that he does not plan to negotiate over whether the U.S. government will actually pay its bills (which remember, is all raising the debt ceiling ensures).
Why is Obama right to offer the GOP nothing when it comes to raising the debt ceiling? Well, the debt ceiling is a hostage which the GOP is simply not willing to shoot. As former GOP Sen. Judd Gregg, N.H., explained in an op-ed in The Hill today:
You cannot in politics take a hostage you cannot shoot. That is what the debt ceiling is. At some point, the debt ceiling will have to be increased not because it is a good idea but because it is the only idea.
Defaulting on the nation’s obligations, which is the alternative to not increasing the debt ceiling, is not an option either substantively or politically.
A default would lead to some level of chaos in the debt markets, which would lead to a significant contraction in economic activity, which would lead to job losses, which would lead to higher spending by the federal government and lower tax revenues, which would lead to more debt.
Two years ago, when the very same debate over raising the debt ceiling was occurring, House Budget Committee Chairman Paul Ryan, R-Wis. – who would go on to be his party’s vice-presidential nominee in 2012 – confirmed that taking the debt ceiling hostage is impossible. “You can’t not raise the debt ceiling. Default is the unworkable solution,” he said. He then attempted to justify the GOP’s move anyway, but the word salad that resulted shows just how untenable their plan really is.
The economic damage that would result from actually allowing the country to default on its financial obligations – be they payments to foreign debtors, Social Security recipients or government vendors – would be catastrophic, not to mention the mess that would occur in markets around the world when the absolute certainty that is U.S. payment of its debt disappears overnight. According to the Government Accountability Office, the last debt ceiling debacle, which didn’t result in a default, cost taxpayers $1.3 billion in fiscal year 2011 alone. That would seem like chump change compared to the costs of an actual default.
Now, it may be that the GOP leadership lets the tea party get its way by shutting down the government over Obamacare, rather than risking a debt default. But Republicans who remember the Clinton-era shutdowns are not ready for a sequel. So Boehner is left in the unenviable position of making his wild faction a promise on which he can’t possibly deliver. It remains to be seen how he’ll get out of it, but Obama is certainly under no obligation to help.
By: Pat Garofola, U. S. News and World Report, September 23, 2013
“Up To His Eyeballs In Alligators:” Mitch McConnell Flirts With The Tea Party Crazies On The Debt Ceiling
Sen. Mitch McConnell is so up to his eyeballs in alligators, he’s long since forgot about cleaning the swamp.
No question the senator hears the steady, galloping horses from the tea party extremists closing fast. To be sure, he faces a tough general election against Kentycky Secretary of State Alison Lundergan Grimes – some polls even show him behind. But before he gets to next November he faces the threat of a challenge from within his own party. Wealthy tea party candidate Matt Bevin is definitely nipping at his heals.
Maybe that is why McConnell is showing signs of joining the “crazy caucus” – that large band of Republicans who are ready to see a default on the debt, a shutdown of the government, a continuation of the sequester and the defunding of Obamacare – and by virtue of such insane policies, an economic meltdown.
They profess to be worried about the deficit and spending yet their policies so far, and their future plans, would see drastic reductions in tax revenue as they stall the recovery, put more people out of work and send us back into a recession.
Bad politics, bad economics and bad for America’s middle class.
Yesterday, McConnell expressed the need to use the debt for “leverage” against Obama. “It’s a hostage worth ransoming,” McConnell has said. He embraced the tea party call for not raising the debt limit and watching America default. Sorry – been there, done that, didn’t work.
Maybe the Republicans should follow the example of their hero, President Reagan.
Here is what Ronald Reagan wrote to Congress when it came to raising the debt ceiling in 1983:
The full consequences of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. 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. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.
Reagan, after all, raised the debt ceiling 18 times.
So, let’s play this out. If McConnell is so intent on joining the tea party in their efforts what is he risking if Obama calls the bluff of the “crazy caucus”? The full weight of responsible economists, editorial writers, business leaders, reasonable elected officials would come crashing down on him. As the minority leader in the Senate he would not be the engineer of a compromise but rather the creator of chaos.
The crazy caucus would become the chaos caucus, led by Mitch McConnell.
In short, he would have drunk the Kool-Aid and end up paying for it at the ballot box. He would be loudly criticized as the man who allowed what Reagan warned against to become a reality. Some legacy.
My guess is that President Obama has had about enough from the threats, the in-your-face tactics of the tea party. He’ll put his foot down, not be intimidated and let the chips fall.
And if I were betting, the Republican “crazy caucus” would morph rather quickly into the “suicide caucus.” And Mitch McConnell would be part of the carnage.
By: Peter Fenn, U. S. News and World Report, September 18, 2013
“There’s Only One Answer”: John Boehner To President Obama, Can I Please Take You Hostage?
House Republicans have spent weeks fending off right-wing demands that they shut down the government unless President Obama agrees to destroy his own health-care reform. They’re currently trying to wriggle out of this demand by promising instead to use the debt ceiling to force Obama to destroy his health-care reform, which is an even more dangerous threat. So how do House Republicans plan to wriggle out of that promise? By getting President Obama to help them. John Boehner is pleading with Obama to combine negotiations over the debt ceiling and the budget. There’s really only one answer Obama can give here: Boehner can go fuck himself.
Boehner is desperately trying to combine two separate issues: negotiating over budget policy and negotiating over whether Congress should trigger a default on the national debt. Why negotiate the two together? Boehner argues:
“I reminded them that for decades, the White House, the Congress, have used the debt limit to find bipartisan solutions on the deficit and the debt. The types of changes were signed into law by Presidents Reagan, Bush, Clinton and President Obama himself two years ago. So President Obama is going to have to deal with this, as well. It’s really no different. You can’t talk about increasing the debt limit unless you’re willing to make changes and reforms that begin to solve the spending problem that Washington has.”
So we have two arguments here. The first one is that there have been times in the past when Congress has lifted the debt ceiling and also passed changes to fiscal policy. That is true. It can be convenient to wrap up the automatic step of lifting the debt ceiling into bills that change levels of taxes and spending, because a separate vote is unnecessary in the first place.
But Boehner isn’t proposing to attach a perfunctory debt-ceiling hike to “bipartisan solutions,” as has happened in the past. He is proposing that the opposition party extract unacceptable conditions as the price of lifting the debt ceiling. That is an unprecedented demand. Under the Bush presidency, Democrats objected that tax cuts had created un unsustainable fiscal position for the government, but it never even occurred to them to threaten to trigger a debt default to force Bush to repeal his tax cuts. Before 2011, the debt ceiling was an occasion for posturing by the out-party and was sometimes raised in conjunction with mutually agreeable policy changes, but the opposition never used the threat of default as a hostage.
Boehner’s correct that the hostage-taking negotiation he wants to hold again did occur once before in 2011. But that was a white-knuckle experience that very nearly led to default, has put in place an extremely stupid policy, and amounted to a gigantic blunder by Obama that he is rightly determined not to repeat. Enshrining the precedent that the opposition party can use the debt ceiling to extract otherwise unacceptable conditions would create a permanent cycle of crisis, where every fiscal negotiation carries a systemic risk. Democrats would be much better off letting Republicans default on the debt right now than submitting to a new normal whereby they get jacked up for concessions over and over until eventually there’s a default anyway. That is why Obama can’t go along with Boehner’s innocuous-sounding request to combine debt-ceiling negotiations with fiscal-policy negotiations.
Boehner’s last sentence gives the game away. He begins by asserting that “you can’t” lift the debt ceiling without making a separate budget deal. But of course you can. Congress does it all the time. Whether or not you decide to change budget policy is unrelated to whether or not you should trigger an unnecessary debt default.
Boehner ends the sentence by demanding that Obama “solve the spending problem.” That talking point is the Republican way of summarizing the party’s stance on fiscal issues, which holds that the deficit is a huge existential crisis but must be reduced entirely through spending cuts, without reducing any tax deductions.
The two parties don’t agree on that. Obama thinks the long-term deficit should be reduced through a mix of reduced tax deductions and lower spending. Boehner clearly is personally willing to compromise in some way on this but just as clearly cannot get House Republicans to agree to compromise. Not only is Boehner unable to make a long-term budget deal that his members can accept, but he also can’t even figure out how to keep the government open, as The Wall Street Journal reports in a paywalled news story:
In a bipartisan meeting Thursday among House and Senate leaders, Senate Majority Leader Harry Reid (D., Nev.) asked Mr. Boehner what other concession could be made to satisfy conservatives, other than defunding the health-care law. The speaker said there was none, according to Republican and Democratic aides briefed on the meeting.
“Boehner said nothing will appease them but defunding Obamacare,” one aide said.
The debt ceiling is Boehner’s way around this. He wants to combine the debt ceiling with negotiations over the federal budget as a way of luring Obama into a position where Boehner can negotiate budget policy without making policy concessions.
But why on Earth would Obama agree to do that? The fact that Boehner is phrasing this as a request reveals the complete absurdity of the situation. Mr. President, would you mind dropping off your bus so I can strap a bomb to it and then make demands? Uh, no, let’s not do that.
By: Jonathan Chait, New York Magazine, September 14, 2013
“Last Phase Of The Kabuki Dance”: John Boehner’s Phony New Ransom Demand That He’s Been Saving
Boxed in by his caucus’ demand to defund Obamacare on one side, and a steeled White House on the other, House Speaker John Boehner seems ready to throw in the towel and enter the last phase of the Kabuki dance he’s staged for the benefit of his insolent Republican base.
Of course, he won’t say this, and his recent comments at a fundraiser in Idaho appear on their face to be a doubling down, but, when read correctly, they actually suggest the opposite. “I’ve made it clear that we’re not going to increase the debt limit without cuts and reforms [to mandatory entitlement spending] that are greater than the increase in the debt limit,” he said yesterday.
This entitlement demand is mostly new. While we got hints that Boehner might put Social Security and Medicare on the table back in early July, we’ve hardly heard a peep about it since. Instead, Republicans have been focused defunding Obamacare.
As Josh Barro writes, insisting on entitlement cuts is often Boehner’s last move before capitulation, because he knows it’s a ransom demand that will never be paid. He did it in December, when spokesperson Michael Steel used almost the exact same words: “Any debt limit increase would require cuts and reforms of a greater amount.” (The next month, the House voted overwhelmingly to bypass the debt ceiling and got none of those cuts.) And Boehner did it 2011. That time, he won the overall battle, but he still didn’t get any entitlement cuts.
Cutting the safety net is anathema to Democrats, and in the unlikely scenario that they’d do it, they certainly aren’t going to rush it through in the perhaps 15 legislative work days Congress has before it hits the October debt ceiling deadline. Boehner knows this.
And he’s done nothing to suggest he’s serious about entitlement cuts. There was a brief, peculiar moment this spring when the White House not only was willing to talk social safety net reform, but actually put cuts to Social Security in their budget. And Democratic congressional leaders suggested they’d deliver enough votes to pass something. What did Boehner do? He rejected the proposal out of hand, sight unseen, and called it ”no way to lead and move the country forward.” (That was basically the White House’s expectation all along, they claimed when liberals threatened mutiny.)
If Boehner’s entitlement demand was an empty threat in 2011 and 2012, and he didn’t take up his best chance at it in 2013, then it has to be even more of a bluff today as the landscape has titled decidedly against Republicans, MSNBC’s Suzy Khim notes. The deficit is falling fast and a clear majority of Americans opposed to defunding Obamacare, according to a new Kaiser poll out today, so the White House holds most of the cards. Both they and Boehner know that a government shutdown or default will be worse for Republicans than for Democrats, so this time the president is refusing to negotiate with the hostage takers.
So now, all that’s left is for Boehner to somehow bring his base along. He doesn’t necessarily need their votes, but he needs to drop the pitchforks for moment. Brian Beutler previews how it may go down:
Boehner introduces legislation that both increases (or extends) the debt limit and includes some goodies for conservatives that make the bill a non-starter with Senate Democrats and the President (maybe a year-long delay of the individual mandate — let your imaginations run wild); that bill fails on the House floor; everyone panics; faced with no better option, Boehner breaks the Hastert rule, puts a tidy, Senate-passed debt limit bill on the floor, and we all dress up as Speaker Pelosi for Halloween.
Of course, Beutler notes, plenty of things could go wrong. For instance, Boehner could decide that he’ll refuse to break the Hastert rule (meaning he won’t put anything on the floor that isn’t supported by a majority of Republicans) under any circumstance.
He’s done that when it comes to immigration reform, where he could pass a bill tomorrow if he were willing to use Democratic votes. He knows that every time he breaks Hastert, he enrages the Republican base a little bit more, so it’s possible that he’s been saving it up for this moment, which he must have known would come.
By: Alex Seitz-Wald, The Plum Line, The Washington Post, August 28, 2013
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