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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

From Crazy To Insane: Conservatives Still Want More In Debt Ceiling Deal

Over on the progressive side of politics, they’re nursing their wounds and drowning their sorrows as details of the deal to increase the debt ceiling emerge. They feel like they lost to a Republican party that dug in and used the debt ceiling to achieve their goal of dramatically shrinking government spending and solving the deficit problem without raising a single penny in new revenue.

So they might be surprised to know that conservatives don’t think they won, either. The right, despite apparently negotiating Obama into a corner that pits him against large parts of his base, still isn’t satisfied.

“While this deal is moving in the right direction rhetorically thanks to pressure from conservatives, it still falls well short of the standards we have consistently laid out,” wrote the Heritage Action’s Michael Needham.

The group, a sister organization to the Heritage Foundation, says the upfront cuts included in the reported deal are “insufficient” and the super committee in charge of creating the next round of deficit reduction is a bad idea as reported.

“This deal highlights how dysfunctional Washington has become and we will continue to oppose it as insufficient to the task at hand,” Needham wrote.

On TV Sunday morning, Sen. Lindsey Graham (R-SC) said he expected a large number of conservatives to share Heritage’s view.

“It’s a $3 trillion package that will allow $7 trillion to be added to the debt in the next decade,” Graham said, dismissively. “So how much celebrating are you going to do?”

Graham said he expected around half of the House GOP caucus to vote against the deal. It doesn’t have his vote yet, either.

One of the patron saints of those hardcore conservative Republicans in the House, blogger Erick Erickson, is also underwhelmed by the deal (it’s not the first time.)

Despite the fact that progressives and Democrats are publicly lamenting the reported deal as indicative of the effect of rhetoric like Erickson’s has had on Washington, Erickson sounds as if he feels as betrayed as some on the left.

“What we know about the pending deal is that the Democrats and Republicans are agreeing to a Deficit Commission,” Erickson wrote Sunday. “Despite the media spin — and the spin of some Republican sycophants — the deficit commission, which will be a super committee of the Congress, will have the power to come up with new tax revenue.”

By: Evan McMorris-Santero, Talking Points Memo, July 31, 2011

August 1, 2011 Posted by | Congress, Conservatives, Constitution, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Government, Ideologues, Ideology, Journalists, Lawmakers, Media, Politics, President Obama, Press, Public, Republicans, Right Wing, Taxes, Teaparty, Voters | , , , , , , , , , , , , | Leave a comment

Strangling Our Nation: ‘A Self-Inflicted Wound Of Monumental Stupidity’

There are, regrettably, plenty of prominent media voices who insist on characterizing the Republicans’ debt-ceiling crisis as a disaster brought on by “both sides.” Yes, David Gergen, I’m looking in your direction.

But for all the complaining I do about this, it’s only fair to also note those who get it right, and resist the Village’s agreed upon narrative. Here’s Time’s Joe Klein yesterday, before last night’s breakdown in the House.

[S]o, here we are. Our nation’s economy and international reputation as the world’s presiding grownup has already been badly damaged. It is a self-inflicted wound of monumental stupidity. I am usually willing to acknowledge that Democrats can be as silly, and hidebound, as Republicans-but not this time. There is zero equivalence here. The vast majority of Democrats have been more than reasonable, more than willing to accept cuts in some of their most valued programs. […]

The Republicans have been willing to concede nothing. Their stand means higher interest rates, fewer jobs created and more destroyed, a general weakening of this country’s standing in the world. Osama bin Laden, if he were still alive, could not have come up with a more clever strategy for strangling our nation.

That last line was of particular interest, because it echoes a recent point from Nick Kristof. Indeed, the NYT columnist recently argued that Republicans represent a kind of domestic threat, possibly undermining the nation’s interests from within: “[L]et’s remember not only the national security risks posed by Iran and Al Qaeda. Let’s also focus on the risks, however unintentional, from domestic zealots.”

Are Klein and Kristof suggesting Republican extremism has become dangerous? It certainly sounds like it.

This is pretty bold stuff from media establishment figures. It also suggests the “both sides” nonsense hasn’t exactly achieved universal acceptance.

 

By: Steve Benen, Contributing Writer, Washington Monthly, Political Animal, July 29, 2011

July 29, 2011 Posted by | Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Lawmakers, Media, National Security, Politics, Press, Public, Public Opinion, Pundits, Republicans, Right Wing, Teaparty, Terrorism, Voters | , , , , , , , | 1 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

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