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Speaker Boehner’s Folly Leads To Standard And Poor’s Downgrade Of US Debt

I’m no expert, but I don’t think S&P downgrading its rating of US debt will, as such, have any really big practical implications other than becoming the next political football. If you look at S&P’s definition of the AA rating, after all, it says:

“An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.”

Scared yet? Me neither.

The issue today continues to be what it was a week ago. For years now, if you look at a projection from CBO or OMB it shows a spending curve that steadily accelerates. It accelerates because the government currently pays for health care for old people and for poor people, and because the cost of health care services has been accelerating.

Consequently, for a long time now it’s been clear that in the future either the US has to stop paying for old people’s health care, or else raise more revenue in taxes, or else reduce the growth in the price of health care services. And for a long time now it’s been unclear what combination of those strategies will be adopted. But people have generally had confidence that some combination of them would be adopted.

Once upon a time earlier in the Obama administration, I asked a senior official how he thought this would ever get resolved. A deal, everyone agreed, had to be bipartisan. But to be bipartisan, it would have to include tax increases. But Republicans wouldn’t vote for tax increases. He told me that of course that made sense, but at some point pressure from bond markets would be unbearable and Republicans would come to the table.

Broadly speaking, that’s the thing that most people generally believed would happen. What we saw with the debt ceiling was a mini-test of that theory, and the theory failed. “No new revenues” wasn’t just a GOP bargaining position, it turned out to be something they were really committed to even in the face of an imminent financial crisis. You can see why that would dent confidence in the long-term fiscal trajectory of the country.

The person who looks bad here, in my view, is John Boehner. President Obama wanted to do a “grand bargain.” The Gang of Six Senators wanted to do a “grand bargain.” And it looked for a moment like Speaker Boehner was going to be part of a grand bargain. But ultimately he decided that he didn’t want to sign a deal that would fracture his caucus, so the grand bargain talks fell apart. And yet the little bargain that did eventually pass the House ultimately couldn’t pass with Republican votes alone. So what did Boehner really achieve? If he was ultimately destined to strike a deal with the White House that needed Democratic votes to pass the House, why not go for the grand bargain? According to Boehner “When you look at this final agreement that we came to with the white House, I got 98 percent of what I wanted. I’m pretty happy.”

How happy is he now?

 

By: Matthew Yglesias, Think Progress, August 5, 2011

August 6, 2011 Posted by | Congress, Conservatives, Consumer Credit, Consumers, Debt Ceiling, Debt Crisis, Economic Recovery, Economy, GOP, Government, Health Care, Ideologues, Ideology, Lawmakers, Middle Class, Politics, President Obama, Republicans, Right Wing, Tax Loopholes, Taxes, Teaparty | , , , , , , , , , , | Leave a comment

The FAA Shutdown And The New Rules Of Washington

Congressman John Mica, the Florida Republican blamed for single-handedlyshutting down the Federal Aviation Administration, sounded like a beaten man when he called me Thursday evening.

The usually biting chairman of the House transportation committee spoke with remorse about the standoff, which put 74,000 people on furlough or out of work, delayed airport-safety projects and cost hundreds of millions of taxpayer dollars.

“I’ve had a brutal week, getting beat up by everybody,” Mica told me, minutes after Senate Majority Leader Harry Reid announced a deal that would end the shutdown and avoid the cuts to regional air service that Mica wanted.

“I didn’t know it would cause this much consternation,” Mica said. “Now I’ve just got to get the broom and the shovel and clean up the mess.” Switching metaphors, he said he wanted “to unclog the toilet, but it backed up. So I don’t know what to do, what to say.”

One thing he’s going to do is make amends. He said he would introduce legislation Friday to pay FAA workers for their furlough days. “We just want to cheer all those workers who have been left out on a limb by this,” he explained.

Mica’s experience shows the high-risk nature of business in the new Washington, where even routine issues like FAA funding can become conflagrations. With no goodwill between the two parties, or the two chambers, ordinary disagreements mushroom into governing crises, with unpredictable results.

In the debt-limit standoff, Democrats capitulated to most Republican demands to avoid a default. In the FAA confrontation, Republicans pursued similar brinkmanship — but this time Democrats resisted, let the shutdown happen and, at least in Mica’s view, won the fight.

Mica started out with a sensible aim: He wanted to clean up years of messy funding for the FAA. Lawmakers hadn’t been able to agree on issues such as rural-airport subsidies and landing slots at Reagan National, so they kept the agency going with 20 stop-gap funding bills since 2007.

But Mica overreached. Letting his anti-labor ideology take over, he tried to use the FAA bill to overturn a decision by the National Mediation Board to rescind an old rule that had made it unusually difficult for airline workers to organize. Delta Air Lines furiously lobbied Congress to intervene.

Mica knew Senate Democrats would resist, so he tried to create a bargaining chit: He drafted plans to cut funds for small airports in the home states of Reid (Nev.) and Jay Rockefeller (W.Va.), chairman of the Senate transportation panel.

The Floridian publicly admitted his ruse. “It’s just a tool to try to motivate some action” on the labor rule, he told a group of airport executives last month, according to Aviation Daily. “I didn’t plan it to be this national issue,” he told me.

Senate Democrats, seizing on Mica’s admission that the bill was a “tool,” refused to deal. They let the shutdown happen and railed against Mica after lawmakers left for recess.

Reid accused him of taking “hostages.” House Minority Whip Steny Hoyer pointed out that the shutdown cost taxpayers more than the program Mica tried to cut. Privately, Mica’s GOP colleagues harshly criticized him.

The Orlando Sentinel, near Mica’s district, took the congressman to task and said it was “pathetic” that “members of Congress now are enjoying their summer vacations, while some essential FAA inspectors are working without pay.”

On Thursday, Democrats announced a plan to reopen the FAA and said they would use waivers from Transportation Secretary Ray LaHood to avoid Mica’s rural airport cuts. Mica, pronouncing himself thwarted, said he was stunned that Democrats took Republicans “by the short hairs,” as he put it. “Quite honestly we did not expect that.”

They should have. The 10-term lawmaker was operating under archaic rules. “In our business, you use your legislative tools . . . and put a little leverage on it,” he said. “How else do I do it? Am I going to send them a bouquet?”

But Mica, as much as anybody, created a culture of distrust, where staking out bargaining positions leads not to compromise but to warfare. And now he’s surprised?

“People don’t have to get so personal,” he said with a sigh. “A lot of people hate me now and think I’m the worst thing in the world for what I did.” It’s “this sort of gotcha,” he said, “that’s changed the dynamics of people working more effectively together.”

Hopefully he’ll remember that the next time he sticks it to the other side.

By: Dana Milbank, Opinion Writer, The Washington Post, August 4, 2011

August 6, 2011 Posted by | Congress, Conservatives, Democrats, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Labor, Lawmakers, Lobbyists, Politics, Public, Public Employees, Republicans, Right Wing, Union Busting, Unions | , , , , , , , , , , , , , , | 1 Comment

Crime Pays: Mitch McConnell, Hostage Taker

This quote from Senate Minority Leader Mitch McConnell (R-Ky.) has been making the rounds today, and with good reason. It’s interesting from a variety of angles.

After [the debt-ceiling fight] was all over, Obama seemed to speak for revolted Americans — the kind of people who always want a new Washington — when he described the government as “dysfunctional.”

But at the Capitol, behind the four doors and the three receptionists and the police guard, McConnell said he could imagine doing this again.

“I think some of our members may have thought the default issue was a hostage you might take a chance at shooting,” he said. “Most of us didn’t think that. What we did learn is this — it’s a hostage that’s worth ransoming. And it focuses the Congress on something that must be done.”

Let’s unpack this a bit.

First, after this brutal fiasco undermined the economy and made the United States an international laughingstock, the leading Senate Republican fully expects to do this again. McConnell believes his party has “learned” the value in pursuing this, regardless of the consequences. I wonder if voters might want to consider this before the 2012 elections.

Second, it’s a little surprising to hear him concede that “most” Republicans didn’t think the hostage should be shot. If that’s true, maybe next time, Democrats shouldn’t pay the ransom?

And third, note that McConnell was quite candid in his choice of words. It’s not just Democrats talking about Republicans taking “hostages” and demanding “ransoms”; here’s the leading Senate Republican using the exact same language. In other words, Mitch McConnell admitted, out loud and on the record, that his party took the full faith and credit of the United States hostage, demanded a ransom, and they fully intend to do it again.

Given all of this, it’s rather bizarre for Republicans to complain about being equated with terrorists. As Dave Weigel noted yesterday, “If you don’t want your opponent to label you a hostage-taker, here’s an idea: Don’t take hostages.”

By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, August 3, 2011

August 4, 2011 Posted by | Class Warfare, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Elections, GOP, Ideologues, Ideology, Lawmakers, Middle East, Politics, Public Opinion, Republicans, Right Wing, Teaparty, Voters | , , , , , , | Leave a comment

Iowa’s GOP Governor Vetoes Tax Break For The Poor Because It Didn’t Lower Corporate Taxes

Iowa Gov. Terry Branstad (R) has a curious justification for vetoing a tax break last week for 240,000 Iowa families making $45,000 or less a year: the plan didn’t also include a tax break for corporations. Members of both partiesin the Iowa House and Senate agreed to increase the state’s Earned Income Tax Credit (EITC), which reduces the amount of income taxes lower-income families owe:

The change would have saved Iowa families an estimated $28.5 million in taxes   over two years.

Branstad vetoed that part of the bill writing that it is his desire to approach tax policy in a more comprehensive and holistic manner. […]

Branstad additionally campaigned last year to slash Iowa’s corporate income tax rate by 50 percent, which he said would attract businesses while costing the state about $200 million a year in lost revenue. That proposal also failed.

Ironically, given Branstad’s fondness for expensive corporate tax breaks, he said he was concerned about the cost of the measure, estimated at $28.5 million a year. Branstad explained that he would only support “an overall tax reduction package that both fits within our sound budgeting principles while reducing those taxes that are impeding our state’s ability to compete for new business and jobs.”

Tim Albrecht, a spokesman for the governor, reiterated that Branstad would have supported the tax break if it had been part of a “larger effort” that included lower taxes for corporations. But since this tax break was only for poor families, Branstad suddenly abandoned his “strong support for tax relief.”

Sen. Joe Bolkcom (D), the chairman of the Senate Ways and Means Committee, points out that the EITC “is the most effective antipoverty program for working families.” Bolkcom said of Branstad’s veto, “He has again shown that he will only consider tax cuts that benefit Iowa’s wealthiest citizens and corporations.” The tax break for working families would have translated into more money for people to spend in Iowa’s economy, but Branstad apparently prefers “huge, unaffordable tax breaks for Wal-Mart and other wealthy out-of-state corporations.”

Branstad has the authority to veto individual items in spending measures. He also effectively shut down dozens of unemployment offices by vetoing language that would have prohibited the Iowa Workforce Development from closing 37 unemployment field offices across the state.

By: Marie Diamond, Think Progress, August 3, 2011

August 4, 2011 Posted by | Businesses, Class Warfare, Conservatives, Corporations, Elections, GOP, Governors, Ideologues, Ideology, Jobs, Labor, Middle Class, Politics, Republicans, Right Wing, State Legislatures, States, Taxes, Unemployment, Wealthy | , , , , , , , , , , , , | Leave a comment

A Right-Wing Jobs Program For America: To Apply, Just Go Directly to Jail

Attention jobless Americans! If you’re among the millions of long-term unemployed people searching in vain for a job, here’s a hot tip: they’re hiring in Wisconsin.

There’s one little catch, though, you have to be a Wisconsin jailbird to get one of these dandy positions. But that’s no hill for a climber — I’m sure America has plenty of out-of-work folks who are enterprising enough to move to the Badger State, steal a six pack from a 7-Eleven, go to jail, and become eligible. I should mention, though, that you won’t get paid.

This so-called “work opportunity” is the first tangible product of Gov. Scott Walker’s corporate-scripted mugging of the collective bargaining rights of teachers and other civil servants. Having stripped public employees of their democratic rights in the workplace, government managers can now replace them willy-nilly with low-wage workers — even with free prison labor.

Jim Ladwig, the executive honcho of Racine County, has leapt on this like a chicken on an extra-juicy June bug. The day the law took effect, he announced that such jobs as landscaping and snow shoveling would be transferred from unionized county workers to prisoners. The captives will receive no pay, but they could be rewarded with reduced sentences. “We have a win-win when we use the inmates,” Ladwig exulted.

He’s not the only one thrilled with this scheme to take middle-class paychecks from public employees. The Washington Examiner, a far-right newspaper that cheers on the privatization of public services, hailed Racine County’s jailbird ploy as “great news for Wisconsin taxpayers. Hopefully, we’ll see more of it.”

So there you have the right-wing’s idea of a good jobs program for America. When Walker ran for governor last year, he promised to create 250,000 new jobs, and now he’s delivering. To apply, just go directly to jail.

By: Jim Hightower, CommonDreams.org. Originally Published by OtherWords, August 1, 2011

August 2, 2011 Posted by | Class Warfare, Collective Bargaining, Conservatives, Democracy, Elections, GOP, Gov Scott Walker, Government, Governors, Ideologues, Ideology, Jobs, Labor, Middle Class, Politics, Public Employees, Republicans, Right Wing, States, Unemployed, Union Busting, Unions, Wisconsin, Wisconsin Republicans | , , , , , , , , , , | Leave a comment