“GOP Has Been Wrong For The Past Six Years”: Mitch McConnell’s “No Compromise” Strategy Is Finally Failing
In his seventh State of the Union on Tuesday night, President Barack Obama touted the low unemployment rate, low gas prices, increase in clean energy production, lower teen pregnancy rates and host of other statistics that supported his optimistic vision. “The shadow of crisis has passed,” he said. “And the state of the union is strong.”
Giving the official Tea Party response to Obama’s address, Representative Curt Clawson painted a very different picture of the state of America. “In 2014, our economy continued sluggish growth and millions of Americans are still out of work,” he said. “We know them. We see them.” This message was echoed in every other Republican response to Obama’s speech—five in all.
These dual visions of America have been competing since the midterms, when Republicans trounced Democrats in races across the country. But every day, since then it’s become increasingly clear that Obama’s message is a much more accurate depiction of the United States than what Republicans are offering—and the GOP message will likely look more ridiculous as the 2016 presidential election approaches.
Take the Affordable Care Act. Republicans have been arguing for years that Obamacare would cripple the health care system and destroy the economy. Clawson repeated those claims in his response. “We also need to lift the economic shackles of Obamacare,” he said. “It makes us uncompetitive.” These are ridiculous arguments. The odds that Obamacare would cause a death spiral in the insurance industry, for instance, were always exaggerated. But the topline metrics now show that Obamacare is working. Millions more people now have insurance. Health care cost growth has slowed, although it’s unclear how much of that is due to the health care law. Insurers aren’t fleeing the exchanges and premiums aren’t skyrocketing. All of the fatal scenarios that the GOP predicted aren’t happening. It’s possible those trends will change dramatically in the years to come, but right now, there are no signs of that.
Or take the economy. Remember threats that Obamanomics would strangle the recovery? That hasn’t played out either. The unemployment rate is down to 5.6 percent. Growth is strong. Obama can’t take all the credit for the recovery. The Federal Reserve’s willingness to ignore inflation hawks and keep interest rates at zero is a key reason why the U.S.’s recovery is the envy of the developed world, for instance. But the fact is that the economy really has strengthened considerably over the past year. Republican arguments that Obama’s policies would stifle growth and prevent the economy from bouncing back no longer are credible.
As Senator Elizabeth Warren points out, the recovery has not been felt equally—wages are still stagnant. Obama made that point in his address. Yet, lower gas prices, even though they aren’t due to Obama’s actions, are effectively acting as a tax cut for middle class Americans across the country. In turn, optimism in the economy has ticked up considerably over the past two months—and so have Obama’s approval ratings. Americans are starting to believe in the recovery—and to give Obama credit for it.
Republican talking points largely haven’t adjusted to this new reality. “We see our neighbors agonize over stagnant wages and lost jobs,” said Senator Joni Ernst in the official Republican response to Obama’s State of the Union. “We see the hurt caused by canceled healthcare plans and higher monthly insurance bills. We see too many moms and dads put their own dreams on hold while growing more fearful about the kind of future they’ll be able to leave to their children.” Clawson even said Obama’s speech was “pretty much the same rhetoric we’ve heard for the past six years,” which is simply not true.
But some Republicans are starting to realize that this message doesn’t jibe with an improved economy. Senate Majority Leader Mitch McConnell, for instance, opened the 114th Congress by trying to take credit for the recovery. But even if more Republicans adopt new talking points, the president and his party are generally the ones who benefit, politically, from an improving economy. Given Republicans’ doomsday predictions through the first six years of Obama’s presidency, it’s hard to imagine voters crediting the GOP for the recovery over Obama.
McConnell has largely been treated as a political mastermind during Obama’s presidency. He was one of the leaders of “no compromise” strategy that the party adopted to stifle Obama’s agenda and prevent him from claiming credit for any bipartisan accomplishments. In many ways, it was a success. Republicans won landslide victories in 2010 and 2014. They soured the country on the president and have, until now, sunk his approval ratings on many issues.
But it came at a major cost, and the cost seems to be getting greater by the day: Republicans lost all ability to shape policy, especially in the first two years of Obama’s presidency. Instead of compromising on issues like health care reform, financial regulation, and fiscal stimulus, Republicans sidelined themselves in lockstep opposition, determined not to leave fingerprints on the legislation. In turn, they adopted a message that each of Obama’s major legislative achievements—Obamacare, the Dodd-Frank financial regulatory law, and the stimulus—were going to crush the economy and destroy different industries. It was an appealing message when the economy was still struggling. Now it’s rapidly becoming a political liability.
That doesn’t mean McConnell’s strategy was wrong. If the GOP had compromised with Obama and pulled his policy rightward, voters almost certainly would have rewarded Democrats. The country might even be in better shape, but the Republican Party probably wouldn’t be. Ultimately, Republicans were in an impossible position. The economy was eventually going to recover, and Obama was going to get credit for it.
The president has spent the first six years of his presidency waiting for the moment he could take that credit, knowing it was coming. On Tuesday night, it came. Even with five separate responses to the president’s address, there was nothing Republicans could say to fight the growing sense that Obama’s policies are working and that the GOP has been wrong for the past six years.
By: Danny Vinik, The New Republic, January 20, 2015
“Time For The GOP To Pitch In”: Passing Bills That Have No Chance Of Ever Becoming Law Is Not Best Advertisement For Effectiveness
With Republican majorities in both houses, the new Congress should begin by focusing on traditional GOP priorities: improving the nation’s sagging infrastructure, reforming an unwieldy tax code and finding ways to boost middle-class opportunity.
When pigs fly, you say? Skepticism is definitely in order. But Senate Majority Leader Mitch McConnell and House Speaker John Boehner have a fundamental choice to make. They can acknowledge the obvious areas of common ground they share with President Obama — thus showing that the Republican Party can participate responsibly in government — or they can throw temper tantrums.
McConnell told The Post that one of his goals, as he takes leadership of the Senate, is to avoid doing anything that would make it harder for the party to elect a president next year. “I don’t want the American people to think that, if they add a Republican president to a Republican Congress, that’s going to be a scary outcome,” he said.
The scariness of the GOP field probably will also depend on Ted Cruz’s apocalyptic rhetoric and Chris Christie’s progress in anger management. But McConnell is right that the whole “Party of No” routine, which he helped orchestrate, is unlikely to yield further political benefit — and may, at this point, inflict more damage on Republicans than on Democrats.
It is perhaps inevitable that the GOP will use its control of Congress to highlight the party’s pet issues — advocacy for the Keystone XL pipeline, for example, and opposition to the Affordable Care Act. Every once in a while, Republicans may even muster the needed 60 votes in the Senate — and force Obama to use his veto. But then what? Passing a bunch of bills that have no chance of ever becoming law is not the best advertisement for effectiveness.
McConnell told The Post he wants voters to see his party as a “responsible, right-of-center, governing majority.” Well, two obvious things such a majority should be doing right now are celebrating the economic recovery and looking for ways to ensure that more of its benefits reach the middle class.
Growth is accelerating, inflation is virtually nonexistent, stocks had a great year, unemployment is down and the U.S. economy is the envy of the developed world. That all of this has happened under the leadership of a Democratic president may be inconvenient for GOP leaders, but it’s the reality. Sourpuss grousing about how Obama is somehow “killing jobs” sounds ridiculous and out of touch. It seems to me that a “responsible” majority ought to be able to bring itself to say, “Nice job, Mr. President.” Even if it hurts.
Such a majority then should recognize that present economic conditions offer the opportunity to address big structural problems — and that addressing these problems can, in turn, broaden and deepen the recovery.
Infrastructure is perhaps the most obvious place to begin. Our airports are getting old. Many of our seaports cannot handle the newest generation of container ships. Thousands of our bridges need to be repaired or replaced. Century-old municipal water systems are breaking down. The electrical grid needs to be more robust and secure. And while we invented the Internet, citizens of other countries enjoy networks with faster speeds and lower costs.
Republicans used to agree with Democrats that good economic times offer the opportunity to invest in infrastructure — which creates jobs, both now and in the future. Deficits are falling rapidly and interest rates are at historic lows. What are we waiting for? Shouldn’t a “responsible” Congress have a bill on Obama’s desk by the end of the month?
Another subject on which Obama and the Republicans in Congress agree, at least in principle, is the need for corporate tax reform. Obama has acknowledged, and Republicans have long contended, that the current top corporate rate of nearly 40 percent is too high — and that the strategies corporations use to avoid paying those taxes, such as moving their headquarters overseas, are detrimental to the national interest. There is a larger debate to be had about overall tax policy, but couldn’t we just start by lowering the corporate rate and closing the loopholes?
Finally, a “responsible” party that’s prepared to govern would have some ideas about how to boost economic mobility, which is what we really mean when we talk about “opportunity.” If Republicans think the American Dream means the rich getting richer and the poor getting poorer, then no, they’re not remotely ready for prime time.
By: Eugene Robinson, Opinion Writer, The Washington Post, January 5, 2015
“Betraying His Ignorance”: Mitch McConnell Blames The Slow Recovery On Regulation Because He Doesn’t Understand How The Economy Works
On CNN’s “State of the Union” Sunday, incoming Senate Majority Leader Mitch McConnell said that Republicans in the 114th Congress will focus on blocking environmental and healthcare regulations: “We need to do everything we can to try to rein in the regulatory onslaught, which is the principal reason that we haven’t had the kind of bounce-back after the 2008 recession that you would expect.” But that is exactly the wrong lesson to take from the slow recovery. Rather than laying the foundation for the GOP’s agenda, McConnell is betraying his ignorance on economic issues.
After the financial crisis struck, consumers cut back on their spending and businesses stopped investing. This created a shortfall in aggregate demand—people weren’t buying enough stuff. As consumers stopped buying goods and services, businesses were forced to fire workers, who then cut back their purchases—a vicious cycle. The government’s role is to fill the shortfall in demand, which it can do either through fiscal or monetary stimulus. We’ve done both in the past few years. The stimulus pumped hundreds of billions of dollars into the economy through targeted tax cuts and spending programs. The Federal Reserve cut short-term interest rates to zero to spur investment and used unconventional monetary policy tools like large-scale asset purchases to lower long-term rates. All of this helped avoid a second Great Depression. In fact, as Paul Krugman explained in Rolling Stone in October, the current recovery is actually above average compared to recoveries from past financial crises.
It’s understandable that McConnell would think that this recovery has undershot expectations. Economic growth has been slow and wages haven’t rebounded for the majority of Americans. In fact, only recently—more than six years after the Great Recession—have Americans become more upbeat about the recovery. In other words, this recovery may be above average, but that doesn’t mean it’s been good.
McConnell’s real sin Sunday was his belief that “regulatory onslaught” has been the “principal reason” for the slow recovery. Republicans have made this argument throughout the Obama presidency. If we would only cut government spending, eliminate red tape, and cut taxes for the rich, they say, the economy would thrive. The problem is that these are all supply-side solutions intended to increase productivity and prevent government from crowding out investment. Yet, the economy has faced a demand problem. The GOP’s job agenda, or what they call a jobs agenda anyway, does little to address it.
That doesn’t mean that their agenda will always be unresponsive to the economy’s issues. As the recovery continues and the economy nears full employment, the demand problems will be much less of an issue. Then, Republican supply-side proposals will look more like a legitimate plan to boost growth. Those ideas still may not make sense for other reasons, but at least they could be considered an actual economic platform. Throughout the Obama presidency, though, they have failed to offer such a platform. By suggesting that excessive regulations are the primary driver of the weak recovery, McConnell is only revealing that the GOP hasn’t learned anything during that time either.
By: Danny Vinik, The New Republic, January 10, 2015
“The Facts Aren’t On Mitch McConnell’s Side”: Sorry, GOP, Tax Cuts Don’t Pay For Themselves
As they prepare to take control of Congress, Republicans are looking to change the rules of the game. To lend budget-busting tax cuts the illusion of fiscal responsibility, conservatives would codify the notion that these cuts pay for themselves into congressional accounting rules.
Democrats should not allow this to happen. But if conservatives insist on fudging the numbers, liberals shouldn’t shy away from making creative budgetary arguments of their own.
The accounting device promoted by the right is known as “dynamic scoring,” and it’s politically significant because of the basic policy positions of the two parties. Conservatives tend to favor tax cuts, which come at the expense of social services. Liberals tend to support increasing social services, which come at the cost of higher taxation.
But conservatives have an end-run around this dynamic. They point to the Laffer curve, an economic theory proposing that we can cut tax rates without sacrificing tax revenue, thus avoiding cuts to social services. This is because tax policy has dynamic effects on the macro-economy — that is, cutting tax rates incentivizes people (and particularly high-earners, who gain the most from tax cuts) to work harder, invest more, and generate more economic growth. As the economic pie grows larger, tax revenue can remain constant even as tax rates fall.
Though logical in theory, this idea hasn’t really been borne out in practice. The Bush administration repeatedly predicted that tax cuts would boost overall revenue, but they assuredly did not. And they still don’t, as Kansans have learned during Gov. Sam Brownback’s “real live experiment” in conservative economics, which has only blown a hole in the state budget.
This is because any potential dynamic effects of tax cuts take a long time to materialize, which makes these future benefits extremely difficult to quantify today. And as Congress’ authoritative accountant, the CBO is in the business of attaching hard numbers to would-be laws.
Understandably, the CBO has resisted the uncertain and speculative math of dynamic scoring. But the underlying argument still infuses and skews our political debate. Republicans feel less constrained when proposing tax cuts, while Democrats struggle to shore up revenue sources for government service proposals.
Ostensible fiscal conservatives like Sens. Mitch McConnell (Ky.) and John Kyl (Ariz.) argue that tax cuts need not be paid for at all because they are inherently good for the economy. “[T]here’s no evidence whatsoever that the Bush tax cuts actually diminished revenue,” McConnell contends, in spite of overwhelming evidence that these cuts diminished revenue at historic rates.
Yet these same Republican leaders still insist that spending on unemployment benefits be accounted for by cuts or tax increases elsewhere, even though there’s little compelling economic reason to treat tax cuts and social insurance transfers like unemployment benefits differently. Both policies promote economic growth by increasing disposable income and thereby boosting consumption.
Liberals have largely failed to point this out and haven’t effectively countered conservative attacks on these transfer programs. Contrary to what Speaker John Boehner (Ohio) says, there’s no evidence that unemployment benefits reduce work ethic. And other transfer programs can be carefully structured to minimize any potential work disincentives.
Liberals can do more than play defense in these debates. They, too, can conjure creative arguments for how targeted spending programs can “pay for themselves.”
Take liberal proposals for new or expanded transfer programs like refundable tax credits, child allowances, and other income subsidies. These relieve some of the strain on the budgets of low-income and middle-class Americans. More disposable income means more consumption, which generates higher economic growth and higher overall income, producing more tax revenue. By this logic, transfer programs could pay for themselves, too.
In fact, targeted transfers to the poor and middle class would likely give a stronger immediate jolt to the economy than would tax cuts for the wealthy. Compared with the wealthy, the poor spend a much higher share of each additional dollar of disposable income that they receive, providing greater stimulus to the economy. Policy measures that alleviate inequality are thus a boon for economic growth.
This isn’t to say that liberals should sit back and let dynamic effects fund their policy priorities. Any responsible party must provide revenue sources for new tax or spending programs. But drawing on this rhetoric would level the playing field of our skewed politics. The parameters of our current debate — where liberal proposals must be paid for while conservative ones don’t — are stacked against the interests of average Americans in favor of the wealthy.
Conservatives want to muddy the numbers for our lawmaking process. For the sake of a fair debate, liberals can and must show that two can play at that game.
By: Joel Dodge, The Week, December 19, 2014
“Buying And Selling Political Campaigns”: McConnell’s Eyes On The Prize–Repealing All Campaign Finance Laws
The big unfolding story of the post-election period is the ever-rising clamor of Republicans for appropriations riders “defunding” Obama’s executive action on immigration, or this or that feature of Obamacare. I am sure others will get into line holding up additional conservative ideological totems.
But what does it appear Mitch McConnell is focused on? Further deregulating campaign money, of course (per a report from Paul Blumenthal at Huffpost):
Sen. Mitch McConnell (R-Ky.) is trying to use a massive appropriations bill to loosen campaign finance rules.
The Republican leader’s office is attempting to attach a policy rider to the omnibus bill that would effectively end limits imposed on coordinated spending by federal candidates and political party committees.
Currently, coordinated spending by candidates and political parties is limited based on a series of formulas for different offices. For example, the total amount presidential candidates may coordinate with political parties is calculated as the national voting-age population multiplied by two cents — a figure that is adjusted for the cost of living each election cycle.
The McConnell rider would allow parties to consult with candidate campaigns on advertising or other electoral advocacy without having the resulting spending count towards their coordinated limit, so long as the spending is not “controlled by, or made at the direction of” the candidate. The change would create a loophole essentially making the coordinated limits moot…..
In practice, discarding the current limits would give candidates significant input into the spending of party committees that can accept much larger direct contributions than the candidates are allowed to receive for their own campaigns.
This is pretty typical of McConnell’s priorities. This supremely cynical man may or may not actually believe in the various tenets of conservative orthodoxy. But he believes in buying and selling political campaigns with vast and unlimited appeals for cash from special interests with the tenacity of a mystic in direct communication with God Almighty.
By: Ed Kilgore, Contributing Writer, Political Animal, The Washington Monthly, December 2, 2014
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