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A Conspicuous Pattern: The GOP Is Really Not Interested In Governing

At his press conference the other day, President Obama noted the recommendations of the bipartisan deficit-reduction commission (which, by the way, failed to reach an agreement). He mentioned in passing that his White House set up the structure for the commission: “As you will recall, this was originally bipartisan legislation that some of the Republican supporters of decided to vote against when I said I supported it — that seems to be a pattern that I’m still puzzled by.”

It is, to be sure, quite a pattern. For two-and-a-half years, Obama has run into congressional Republicans who not only refuse to take “yes” for an answer, but routinely oppose their own ideas when the president is willing to accept them.

This seems especially relevant in the context of the current debt-reduction talks. At a certain level, it’s almost comical — here we have a Democratic president agreeing with a conservative Republican House Speaker on a massive deal that would lower the debt by over $4 trillion over the next decade. It would tilt heavily in the GOP’s direction, and address the problem Republicans pretend to care about most. Obama is even willing to consider significant entitlement “reforms,” which should be music to the ears of the right.

And yet, in the latest example that “puzzles” the president, Republicans aren’t interested.

Now, part of this is obviously the result of Republicans adopting a faith-based approach to revenue, which happens to be wildly disconnected to reality. But that’s not the only angle that matters. Matt Yglesias had a good item the other day that raised a point that’s often lost in the shuffle.

[H]ere we get to the problem that’s recurred throughout Obama’s time in office. If members of Congress think like partisans who want to capture the White House, then the smart strategy for them is to refuse to do whatever it is the president wants. The content of the president’s desire is irrelevant. But the more ambitious his desire is, the more important it is to turn him down.

After all, if the President wants a big bipartisan deal on the deficit, then a big bipartisan deal on the deficit is “a win for President Obama,” which means a loss for the anti-Obama side. When Obama didn’t want to embrace Bowles-Simpson, then failure to embrace Bowles-Simpson was a valid critique of him. But had Obama embraced Bowles-Simpson, then it would have been necessary for his opponents to reject it.

For weeks, many have marveled at the priorities of the Republican policy wish-list — given a choice between the larger debt-reduction plan in American history and preserving some tax breaks for the wealthy, GOP officials at nearly every level strongly prefer the latter. Indeed, for nearly all Republicans, it’s such a no-brainer, this question is almost silly.

But there’s a separate challenge — Republicans have a choice between advancing policies they ostensibly agree with and Obama scoring a legislative victory. And as it turns out, that’s a no-brainer, too, since GOP lawmakers don’t really care about governing so much as they care about denying the president political victories. It might make them appear ridiculous — why would anyone reject their own ideas? — but looking foolish isn’t a major concern for congressional Republicans.

Obviously, this makes compromise literally impossible, and all but guarantees the least productive legislative session in many years. But it also suggests the president needs to adapt to an awkward set of circumstances: given Republican beliefs, Obama must realize his support for a legislative idea necessarily means it’s less likely to happen.

By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, July 17, 2011

July 18, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Deficits, Democracy, Democrats, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Medicare, Politics, President Obama, Republicans, Right Wing, Tax Loopholes, Taxes, Wealthy | , , , , , , , , , , | Leave a comment

On Debt Impasse, GOP Full Of Contradictions

Sen. Mitch McConnell has a clever plan to resolve the federal debt impasse. Congressional Republicans would invite President Barack Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.

Hmm. Just a bit contradictory?

Meanwhile, the impasse arose because congressional Republicans thunder against government red ink, yet refuse to raise revenue by ending tax breaks that help Warren Buffett pay a lower tax rate than his receptionist (which he agrees is preposterous). Another contradiction? Of course.

McConnell’s plan – a pragmatic way to avert a catastrophic default – may be torpedoed by more extremist House Republicans, such as Michele Bachmann. They seem to fear that ending tax loopholes for billionaire fund managers would damage a fragile economy. Yet they seem to think that this invalid of an economy would be unperturbed by the risk of a default on our debts.

A contra- . . . yes, you got it!

What about this one? Republicans have historically been more focused on national security threats than Democrats. Yet what would do more damage to America’s national security than a default that might halt paychecks for American military families?

This game of “spot the contradiction” is just too easy with extremist Republicans; it’s like spotting snowflakes in a blizzard. Congressional Republicans have taken a sensible and important concern – alarm about long-term debt levels, a genuine problem – and turned it into a brittle and urgent ideology.

Politicians in both parties have historically been irresponsible with money, but President Bill Clinton changed that. He imposed a stunning fiscal discipline and set the United States on a course of budget surpluses, job growth and diminishing federal debt – until the Republicans took over in 2001.

In the Bush years, Republicans proved themselves reckless both on the spending side (unfunded wars and a prescription drug benefit) and on the revenue side (the Bush tax cuts). Their view then was, as former Treasury Secretary Paul O’Neill quoted Vice President Dick Cheney as saying, “Reagan proved deficits don’t matter.”

It may seem odd that Republicans were so blithe about debt in the Bush years, yet now insist on addressing the problem in the middle of a downturn – even though basic economics dictates that a downturn is the one time when red ink is advisable. Well, just another of those contradictions.

Then there’s the rise of health care costs, a huge burden on our economy. It’s pretty clear what doesn’t work: the existing, dysfunctional system. A forthcoming book on health care by Paul Starr, “Remedy and Reaction,” notes that in 1970 the United States spent a smaller fraction of income on health care than Denmark and the same share as Canada.

Today, in dollar terms, we spend 21/2 times the average per capita of other rich countries.

When congressional Republicans do talk about health care, they have one useful suggestion – tort reform – and it was foolish for Democrats (in bed with trial lawyers) to stiff them on it. But research suggests that curbing malpractice suits, while helpful, would reduce health costs only modestly.

Beyond that, the serious Republican idea is to dismantle Medicare in its present form. That would indeed reduce government spending but would increase private spending by even more, according to the CBO.

The Obama health care plan could have done better on cost control, but it does promote evidence-based medicine, so that less money is squandered on expensive procedures that don’t work. And the Independent Payment Advisory Board will recommend steps to curb excess spending in Medicare.

Yet congressional Republicans are trying to kill the Obama health plan. Yes, of course: another contradiction.

A final puzzle concerns not just the Republican Party but us as a nation. For all their flaws, congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts – and most voters say in polls that they’re against raising the debt ceiling. I fear that instead of banishing contradictions, we as a nation may be embracing them.

By: Nicholas Kristof, Columnist, The New York Times, Published in the Milwaukee Journal Sentinel, July 14, 2011

July 18, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, GOP, Government, Government Shut Down, Health Care Costs, Ideologues, Ideology, Jobs, Medicare, Middle Class, National Security, Politics, President Obama, Republicans, Right Wing, Tax Loopholes, Taxes | , , , , , , , , , , , , , , | Leave a comment

The Incredible Crazies: Finding Someone The House GOP Will Listen To

Negotiating with House Republicans isn’t just difficult because they refuse to compromise; it’s also because they don’t even appreciate the point of the exercise. Told, for example, that failure on the debt ceiling would lead to a disaster, the House GOP simply doesn’t believe the evidence.

It’s challenging enough trying to craft an agreement when the parties have the same goal. But what happens when the crew of the Titanic says, “The captain’s wrong; icebergs are no big deal”?

The trick is finding someone the crazies find credible. (thanks to T.K.)

Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation’s debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default. […]

At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling. […]

The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills. [emphasis added]

Right-wing freshman Rep. Steve Womack (R-Ark.) said he found the presentation, particularly the parts about skyrocketing interest rates, “sobering.”

Oh, now it’s “sobering”? We’re 17 days before the drop-dead crisis deadline, and now it’s dawning on some House Republicans that they’re not only playing with matches, but may actually torch the entire economy?

At this point, of course, I’ll take progress wherever I can find it. If some of the House GOP’s madness is “softening,” maybe they’ll be slightly more inclined to be responsible.

But I can’t help but find it interesting the limited pool of individuals Republicans are willing to listen to. The Treasury tells the House GOP caucus members they have to raise the debt ceiling, and Republicans don’t care. The Federal Reserve tells them, and they still don’t care. House Speaker John Boehner tells them, and that doesn’t work, either. Business leaders, governors, and economists tell them, and Republicans ignore all of them.

But Paul Ryan warns of a meltdown and all of a sudden, the House GOP is willing to pay attention.

I guess we should be thankful the radical House Budget Committee chairman is only wrong 90% of the time, and not 100%.

 

By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 16, 2011

July 17, 2011 Posted by | Budget, Businesses, Class Warfare, Congress, Conservatives, Consumer Credit, Corporations, Debt Ceiling, Deficits, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Middle Class, Politics, Republicans, Right Wing, Taxes, Wealthy | , , , , , , , , , , , | Leave a comment

How Default Would Harm Homeowners, Cities, Businesses And Everyone Else

It’s easy to understand why the government will have more trouble borrowing if it fails to pay its debts, or even has a difficult time paying its debts. It’s a bit harder to see why ordinary Americans, the city of Pittsburgh, hospitals in Iowa, and medium-sized corporations will have more trouble borrowing. But they will. And their trouble borrowing is the main channels through which a default, or even something too close to it for the market’s comfort, could deal a body blow to the economy.

On Wednesday, Moody’s warned that it was putting the U.S. government credit rating on review for a downgrade. But they didn’t stop there. Another 7,000 debt products that are “directly linked to the U.S. government or are otherwise vulnerable to sovereign risk” were also put on review for a possible downgrade. That’s about $130 billion worth of debt. If America tumbles, so do they. But Moody’s still wasn’t done. An unknown amount of “indirectly linked” debt is also getting reviewed.

If America’s credit rating falls, it’s taking a lot more than just Treasury securities with it. It’s going to take the whole credit market with it. Which, as you’ll remember, is exactly how the subprime housing sector took the economy down in 2008.

The first to fall will be “directly linked” debt. These are bonds that rely on payments from the federal government. Naomi Richman, a managing director in Moody’s Public Finance division, puts it bluntly: “There are certain kinds of municipal bonds that are directly reliant on Treasury paying or some other direct payment,” she says. “If those bonds don’t receive their payment, they have no other source of revenue.” So down they go.

Then there’s the “indirectly linked” debt. That’s debt from state government, local governments, hospitals, universities and other institutions that rely, in some way or another, on payments from the federal government. If Medicaid stops paying its bills, all the hospitals that rely on Medicaid’s payments become less creditworthy. If we stop funding Pell grants, then all the universities that enroll students who pay using financial aid become less creditworthy. And since the federal government passes one-fifth of its revenues through to the states, and the states pass those revenues through to cities, if the federal government stops paying its bills, all states and all cities are suddenly in worse financial shape, which will make it harder for them to get loans.

And then there’s everything else. Mortgages. Credit cards. Loans that businesses take out to expand. Much of the debt in the American economy, and in fact globally, is “benchmarked” to Treasury debt. When your bank quotes you a mortgage rate, the calculation begins with the rate on 10-year treasuries and then adds premiums for various types of risk specific to you and your area on top of that. “There’s a whole credit structure,” says Pete Davis, president of Davis Capital Investment Ideas. “Think of it as roads and bridges, but it’s finance, it’s all connected, and it’s all on top of treasuries. Your CD at a bank, your credit card interest rates, your car loans, your mortgages — that’s all built on Treasury rates. So when you shake the basis of it, everything on top of it shakes, too.”

The 2008 economic crisis wasn’t started by a nuclear bomb detonating in New York, or a campaign to sabotage the country’s factories, or a plague that struck our able-bodied young males. Rather, investors bought a lot of debt based on subprime mortgages. They performed some tricky financial wizardry that they thought made the debt low-risk. They found out they were wrong. And then, because the players in the financial system no longer knew how much money anyone had, the credit markets froze and the economy crashed.

Now imagine that happening, not with the housing market, but with the government of the United States of America. The cornerstone of the global financial economy is the idea that Treasuries are risk-free. If they’re not, then like in the financial crisis, no one knows how much money anyone who holds treasuries has. But they also don’t know how much money anyone who depends on the federal government — be they businesses or individuals — holds.

This is how a default gets into the rest of the economy: It takes everything the financial markets thought they could know and rely on and upends it. It then shuts off credit, or makes it prohibitively expensive, for nearly every participant in the economy, from states and cities to hospitals and universities to homebuyers and credit-card applicants. That, in turn, freezes all of their activity, which destabilizes everyone who relies on them, which then destabilizes financial markets further, and so on.

It was one thing to have forgotten that this sort of thing could happen in 2006, when America hadn’t seen it for 70 years. But we just went through it. And if we go through it again, the Federal Reserve, which has pushed interest rates as low as they can go, and Congress, which has vastly expanded the deficit, have a lot less ammunition left for a response.

Are we likely to get to that point? No, of course not. But between here and there are worlds where the economy doesn’t crash, but because the federal government panics the market, interest rates rise and the economy slows. In a recovery this weak, that would be a disaster. And it would be entirely of our own making.

By: Ezra Klein, The Washington Post, July 15, 2011

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July 17, 2011 Posted by | Banks, Budget, Businesses, Congress, Conservatives, Consumer Credit, Consumers, Debt Ceiling, Deficits, Democrats, Economic Recovery, Economy, Financial Institutions, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Medicaid, Middle Class, Politics, Public, Republicans, Right Wing, States | , , , , , , , , , , , , , , , , | Leave a comment

Why The Tea Party Should Stop Fearing Compromise

Among tea party voters, there is a belief that the right is always getting sold out  by the political establishment. In their telling, Reagan-era conservatives agreed to an amnesty for illegal immigrants on the condition that the law  would be enforced going forward, then deeply regretted having done so.  George H.W. Bush broke his “no new taxes” pledge. The  Contract with America failed to deliver on many of its promises. George  W. Bush joined forces with Ted Kennedy on No Child Left Behind, changed  positions on campaign finance reform, and closed out his presidency by  bailing out undeserving Wall Street firms. In all this, he was abetted  by GOP legislators.

These tea party voters  are sometimes justified in feeling betrayed. Other times, they misinterpret what happened. Right or wrong, however, they’re powerfully averse to compromise. Mere mention of the word aggrieves them. They  don’t think of it as a means of bringing about a mutually beneficial  change in the status quo, where one of their priorities is addressed in return for giving up something on an issue they care less about. When  they hear the word compromise, the knee-jerk reaction is to oppose it.  In their experience, going along with compromise is tantamount to  getting screwed. The insistence that pols “stand on principle” is a  defense mechanism.

This attitude helps explain why tea partiers  are so frequently attracted to relatively inexperienced politicians like Sarah Palin, Marco Rubio, and Michele Bachmann. More experienced pols  have been forced to compromise as the price of achieving something, just as a President Palin, Rubio or Bachmann would be forced to compromise  in order to pass the parts of their agenda most important to them. Having  gotten so little of substance done in their careers, however, they haven’t yet had to give up anything significant, so they can maintain the fiction that they never would. As Daniel Larison puts it, “Bachmann’s lack of  achievements is in some ways a blessing for her, because it is proof  that she has never compromised. In today’s GOP, that is very valuable,  and she doesn’t have many competitors in the race who can say the same.”

The tea party movement should know better. The Founding Fathers engaged in an endless series of compromises. Abraham Lincoln  compromised. Franklin D. Roosevelt compromised. So did Ronald Reagan. Every consequential leader in the history of the United  States has had to compromise.

It defies common sense to think the next  Republican president will be different. So why are tea party voters asking  themselves, “Which of these presidential candidates is least  likely to compromise?” They ought to be pondering different questions, such as: “What  style of negotiation and compromise does this candidate employ? How much have they  gotten in the past for what they gave up?”

“Do the issues they’ve treated as most important align with my priorities?”

Viewed in  that light, Mitch Daniels’ talk of a truce on social issues in order to  focus on the budget deficit should’ve appealed to a large faction of tea partiers. He laid out his  priorities. They aligned perfectly with tea party rhetoric: it is a movement focused on economic issues and individual liberty far more than social conservatism if you trust what its typical adherents themselves assert. But even tea partiers who  shared Daniels’ priorities didn’t like that he talked of compromise.

They got self-righteous about it.

Tea partiers would be better off accepting that every politician cares about some things  more than others, that there is no such thing as successfully governing America as an uncompromising social, economic and national security conservative, and that pretending otherwise results in choosing candidates who are  marginally less likely to choose the best compromises.

Another way to put this is that if tea party voters were  less naive about the centrality of compromise to politics — and more  willing to believe that a principled person can compromise — they’d  feel  less victimized by an unchangeable fact of democracy. They’d also be  more frequently empowered to bring about  policy outcomes that better align with what they care about most.

 

By: Conor Friedersdorf, Associate Editor, The Atlantic, July 15, 2011

July 16, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Deficits, Democracy, Economic Recovery, Economy, Elections, GOP, Government, Government Shut Down, Ideologues, Ideology, Iowa Caucuses, Liberty, Politics, Republicans, Right Wing, Taxes, Teaparty, Voters | , , , , , , | Leave a comment