Ideology Trumps Economics: Republicans’ Refusal To Raise Revenues Is Threatening The Economy With A Chaotic Default
There is a huge gap in logic at the heart of the Republican intransigence on a debt-ceiling deal, and President Obama helped to illuminate it on Monday.
The party claims, as an article of faith, if not evidence, that the government’s growing debt is the reason for persistent unemployment and economic stagnation. And yet Republicans are spurning the president’s compromise offers to reduce that debt by trillions over the next decade because he is sensibly insisting that any deal include some increase in tax revenue.
“Where are they?” Mr. Obama asked at his news conference. “I mean, this is what they claim would be the single biggest boost to business certainty and confidence. So what’s the holdup?”
The holdup, of course, is that Republicans are far more committed to the ideological goals of cutting government and taxes than they are committed to cutting the deficit. They rejected several compromise offers by the White House, even though any revenue increases would be far outweighed by spending cuts.
Republican rejectionism was on clear display Saturday night when John Boehner, the House speaker, was forced to abandon a plan he and the president had discussed to reduce the deficit by $4 trillion over 10 years.
The plan would have gone much too far in cutting discretionary spending and entitlements, taking too much money from the economy at a time when it desperately needs government investment. But it would have been better than the slashing and burning the Republicans have been demanding because it would have raised from $700 billion to $1 trillion in additional revenue beginning in 2013 by ending tax breaks and deductions for corporations and the rich, or by ending the Bush tax cuts for families making $250,000 or more.
The House Republican leader, Eric Cantor, insisted to Mr. Boehner that his members, shackled to antitax pledges, could not accept it, or anything similar. Now negotiators are trying to reach agreement on a deal to lower the deficit by $2 trillion or so over a decade. But the consequences for the economy and Americans’ lives would be just as disastrous if all of those “savings” come out of essential government programs, with no additional revenue.
Mr. Boehner’s refusal to push back against his party’s ideologues is only feeding their worst impulses. Many House Republicans have gone even further than Mr. Cantor and have rejected any deal that raises the debt ceiling, whether it contains revenue increases or not.
Representative Michele Bachmann and Reince Priebus, the Republican national chairman, airily and irresponsibly insist that the government will find some other way to pay its bills. That’s dangerous nonsense. And as the president forcefully noted, a default could propel interest rates skyward, throw millions more Americans out of work, and create another recession.
It was good to see Mr. Obama challenging the Republicans’ illogic and pushing them to make a deal before it’s too late. But we fear the sort of deal he is willing to consider, based overwhelmingly on spending cuts, could still consign the country to more years of economic stagnation.
The president spoke about the need to create an infrastructure bank, to maintain unemployment benefits, and to protect the elderly and the poor. But keeping those goals will be nearly impossible with a debt deal that cuts three times as much spending as it raises revenue. A balanced plan, like the one Senator Kent Conrad is circulating among Senate Democrats, would cut spending and raise revenue equally, and would make it possible to pay for programs that kick-start the economy.
Americans need to hear the hard economic truth that there is no way to both cut the deficit and revive the economy without finding additional sources of revenue. As the president himself said on Monday, “If not now, when?”
By: Editorial, The New York Times, July 11, 2011
GOP Passes Up Generational Conservative Victory In Order To Protect The Wealthy
Oh, the irony.
After generations of conservative dogma based solidly in the belief that fundamental changes to America’s entitlement programs are essential to the economic survival and betterment of the nation, that goal is now, finally, within the reach of the true believers.
Yet, remarkably, this dramatic change in national direction is being permitted to slip right through conservative fingers by the very people whom those ensconced on the right should be counting upon to bring home this great philosophical victory.
The fulfillment of the conservative dream is not vanishing from sight because Nancy Pelosi and the forces of progressivism are prepared to defend entitlements to the death. Nor is it happening because the President of the United States has counted up the votes and decided that messing with entitlements will cost him re-election.
It is not even the result of “bleeding hearts” like me rising nobly in defense of the needy and downtrodden.
Significant entitlement reform, long the goal of the fathers of modern day conservatism, is being flushed down the drain by the very Republican Party that has long battled to bring that goal to reality.
Somewhere in Connecticut, William F. Buckley Jr. is turning over in his grave.
On Saturday, Speaker of the House John Boehner announced that the ‘grand bargain’ – rumored to bring $4 trillion in debt reduction over the next ten years through a mixture of entitlement reform, defense cuts and a measure of revenue increases resulting from cleaning up the tax code to get rid of some of the corporate entitlement programs that result in lower taxes and higher subsidies – is now off the table.
Apparently, Boehner could not sell the GOP Congressional Caucus on a deal that involved anything in the way of revenue increases- not even in exchange for accomplishing reforms for which his party has fought since the days of FDR and his “New Deal”.
True conservatives should not blame Boehner for this heresy as it appears that he is no happier with the position he is being forced to take than the President is with his proposal being rejected by House Republicans who don’t grasp the whole compromise thing.
What Boehner likely understands – better than those who he is supposed to be leading – is that the GOP is permitting the fundamental change, long at the heart of the conservative cause, to vanish into thin air and that it is happening in the name of protecting corporate subsidies that are the very antitheses of a free market economy – another of the inviolate tenets of conservative policy.
Subsidies that provide government incentives to industry are as anti-free market as government subsidies and controls that conservatives argue have skewed the costs of health care in America and led to our current crisis.
According to American conservative scripture, a truly free market requires that players compete on level ground – not with the edge that comes from government handouts and special tax breaks, whether they be for the benefit of a corporation or an individual.
Thus, the GOP is rejecting the opportunity to accomplish a landmark, philosophical milestone by protecting a policy that is, in and of itself, a violation of that same conservative philosophy.
Is the irony of this enough to make even the most ardent conservative believer question what in the world is going on here?
It certainly should be.
Could the explanation for this odd behavior be that the Congressional Republican Caucus has decided to turn its back on what is supposed to be their most fundamental beliefs because their constituents are demanding that they do so?
Apparently not.
According to the Christian Science Monitor, the GOP Caucus does not appear to have any interest whatsoever in listening to its base.
“Two-thirds (67 percent) approve of making more of high earners’ income subject to Social Security tax, and nearly as many approve of raising taxes on incomes of over $250,000 (66 percent), reducing military commitments overseas (65 percent) and limiting tax deductions for large corporations (62 percent),” the Pew Research Center reported last month.
“Notably,” Pew found, “Republicans are as likely as Democrats to approve of limiting corporate tax deductions.”
Still, any kind of tax increases – whether it be a greater tax bite on the wealthy or on corporations seen as “job creators” – is off the table as far as large numbers of Republican House members are concerned. Via The Christian Science Monitor
So, the GOP rejection of the debt deal is neither based in the free market philosophy nor the fundamental belief in entitlement reform. It is also not based on meeting their obligations to their constituents.
So, what is driving their rather remarkable position?
It must be jobs and the economy.
Surely, the Republicans in Congress are convinced that removing tax subsidies to the oil industry and cleaning up the tax code to get rid of corporate welfare that is no longer of any discernable value to the nation will make what is already a very bad jobs situation even worse.
Except that it turns out that you have to search long and wide to find an economist who supports this notion.
The other argument that advocates of tax cuts for the rich make is that many small-business owners would be see their taxes go up and thus would be discouraged from hiring workers. The facts do not support this. “Only 3 percent of small-business owners are in the top bracket,” notes Roberton Williams, a senior fellow with the Tax Policy Center, which is sponsored by the Brookings Institution and the Urban Institute. And, he adds, “They are not all what we think of as job-creating small businesses. A lot of them are hedge-fund managers and law-firm partners.” So other than perhaps a few restaurateurs on Manhattan’s Upper East Side, the workforce is unlikely to be affected. Via Newsweek
So, while Eric Cantor continues to try and sell his base on this argument, it’s pretty hard to find anyone who knows anything about economics who actually is buying the pitch.
If it’s not philosophical dogma or fulfilling their obligation to those who elected them and it’s not the economy and/or jobs, what exactly is their problem?
I don’t know about you, but I can only think of one other explanation – fealty to the wealthy corporations and wealthy individuals who keep your Republican leadership rolling in the campaign cash so they can remain in their powerful jobs.
Now, if you believe this is a good enough reason to risk the financial stability of the nation – and possibly the world – then it’s all good.
Personally, I’m a little concerned.
I fear we are witnessing one of the most perverse and dangerous games our leaders have ever embarked upon. I’m stunned by the sheer audacity of these elected officials so ready to play chicken with the financial lives of so many simply to benefit a very few.
But what really amazes are the millions of middle class Americans who continue to believe that these officials are somehow acting in their best interest.
As curious as I am to see what will ultimately come of this game, my curiosity is far more piqued by the possibility that these middle class Americans might finally understand that the Republicans they sent to Congress work for the big corporations and care little for their needs and problems.
Should that light bulb (incandescent or otherwise) finally turn on, these folks should be assured that nobody is expecting them to run into the waiting arms of the Democratic Party. They can still quietly send their Congressional representatives a message indicating that they would prefer not to be abandoned so that Exxon might keep the government checks flowing in while maintaining their standing as upright, committed conservatives.
If these folks could – just this once – grasp what is being done in their name and communicate their rejection of the behavior of their leaders, the rest of us would genuinely appreciate it.
A true conservative should be as disgusted with what the Congressional Republican Caucus is doing as the rest of us and probably a great deal more so.
By: Rick Ungar, The Policy Page, Forbes, July 10, 2011
Republican Preachers: Believing What You Know Ain’t True
In Huckleberry Finn, Mark Twain makes a stinging observation on the overtly religious. “Faith is when you believe something you know ain’t true.” This is a perfect description of the religious asylum that is now the Republican Party and the tortured gospel they are spreading all over the country. Virtually the entire barnyard of their presidential candidates are preaching a mix of born again religious revivalism and brutal 19th century industrial capitalism, that they “know ain’t even remotely true.”
By and large these are not genetically stupid people. But the political trash talking they feel obligated to serve up to the Tea Party Gods–Rush Limbaugh and the inquisitors at Fox–has degenerated into a competition of who can do the best impression of an absolute lunatic. Rick Perry is preaching virtual secession from the union, while holding prayer vigils for God to solve our problems. By what twisted logic does contempt for the federal government and even secession equate to patriotism? Someone please show me where the founding fathers advocated prayer as the vehicle for solving a national debt crisis?
Mitt Romney and Tim Pawlenty have flip flopped on virtually every position they ever espoused so that their insanity titers can match Michelle Bachmann’s. I’ve met with Jon Huntsman on more than one occasion regarding environmental issues in Utah. He was a reasonable moderate Republican as my state’s governor and appeared on TV ads three years ago exhorting the entire country to act on the climate crisis. He did that because he respected the warnings of our climate scientists. Now he says we can’t deal with global warming in a depressed economy. He knows perfectly well that those same scientists are warning that if we don’t act on it right now, we condemn our children to a brutal, dangerous and likely unlivable world. Newt Gingrich? He appeared on national TV ads with Nancy Pelosi saying that he agreed on the urgency to deal with the climate crisis. Now he looks like a Keystone Cop, tripping over his own feet in full speed reverse.
Sarah Palin? Oh, never mind. Rick Santorum? According to him the world’s scientists are all in on a conspiracy with Al Gore. Really Rick? That conspiracy would have to have started in 1824 when the greenhouse gas phenomenon was first described by the French scientist Joseph Fourier. It would have to have involved scores of scientists in the 1800s like John Tyndall of the Royal Institute of Great Britain, George Marsh, the founder of the Smithsonian Institute, and hundreds of scientists in the 1900s like 1903 Nobel Prize winner Svante Arrhenius. The conspiracy would now have to involve virtually the entire world’s scientific community. That makes sense to you, Rick? Really?
Almost as irritating is the chorus sung over and over by Eric Cantor, John Boehner, Mitch McConnell, Paul Ryan and 99% of Republican Congressmen proudly declaring their Huckleberry Finn type faith that an unfettered free market is the only way to create to millions of new jobs. “Stop choking businesses with excessive regulations!” they chant. All businesses, all regulations. Really, Mitch? Never mind that it was precisely the elimination of, inadequacy of, or lack of enforcement of federal regulation that allowed Wall St. to drag the economy to the edge of the apocalypse and the very reason why there are no jobs. Never mind that it was poor regulation and free market cost cutting that brought us the Deep Water Horizon, Kalamazoo River, and now Yellowstone River oil spills. 1,800 oil spills have occurred in this country in the last five years totaling 16 million gallons of oil contaminating our land and water. And Mitt, you want regulators to get off the backs of the oil companies? Really?
Never mind that it was inadequate federal oversight and greedy, unfettered capitalism on steroids that allowed Massey Energy to commit manslaughter on 29 coal miners last year. Hey, Eric just what jobs are created by paring down our already bare bones federal food inspection? Will even more outbreaks of e-coli and salmonella in peanut butter, spinach, eggs, cantaloupe, sprouts and hamburger be counted as just collateral blessings from unleashing the free market? We certainly don’t want to pay for inspection of imported sea food from Japan because a little radioactivity in your tuna fish and scallops would probably just make it taste a little more crunchy.
Hey Newt, what jobs will be created by eviscerating the EPA and their enforcement of the Clean Air Act besides morticians and health care providers? Michelle, so you’re comfortable with eliminating money for bridge inspectors from the National Transportation Safety Board because the one that collapsed in your home state in 2007 only killed 13 people, and that’s a small price to pay for that warm, orgasmic tingle only the free market can give?
Lets certainly get regulators off the backs of the pharmaceutical industry because other than the millions of people who have been killed or injured by Phen-Fen, Vioxx, Avandia, Bextra, Cylert, Baycol, Palladone, Trasylol, Tylenol, Darvocet, Heparin and all the drugs now made with ingredients from China without any real standards or controls–i.e. most of them–there’s no reason to think an unregulated free market won’t work out just fine. Really, Sarah? So if defective and tainted drugs weed out the weak among us, that’s just the beauty of the Ayn Rand/Milton Friedman world view?
The entire middle class is struggling with unemployment, under employment, mounting debt, lost pensions, mortgages foreclosed or underwater, and you want to undo even the pathetic protections of the 2010 Consumer Protection Act and put Elizabeth Warren’s head on a platter? Really, Speaker Boehner? That’s the job elixir the middle class so desperately need?
As with most religions the Church of Unfettered Capitalism doesn’t have to make sense in order to thrive. But it does need preachers at the pulpit exhorting us to “believe in things that we know ain’t true” and the Republican Party can’t get enough of them. Huckleberry Finn would be so proud.
By: Brian Moench, CommonDreams.org, July 9, 2011
Sen Orrin Hatch’s Desire To Raise Middle-Class Taxes
I think the pressure is starting to get to Sen. Orrin Hatch (R-Utah). He saw what happened to his former colleague, Bob Bennett, in a GOP primary in 2010, and Hatch is starting to panic that he’ll meet the same fate.
But when the heat is on, some rise to the occasion, showing poise and grace. Some, like Hatch, just fall apart.
Sen. Orrin Hatch (R-Utah) voted against beginning debate on a measure that would have the Senate declare the rich should share the pain of debt reduction Thursday, a day after arguing that it’s the poor and middle class who need to do more.
“I hear how they’re so caring for the poor and so forth,” Hatch said in remarks on the Senate floor Wednesday, in reference to Democrats. “The poor need jobs! And they also need to share some of the responsibility.”
Hatch went on to say he finds it outrageous that so many millions of Americans don’t pay income taxes, adding, “And that’s going up by the way because of our friend down in the White House and his allies.”
Just so we’re clear, Hatch is incensed because President Obama and his allies aren’t taxing the middle class enough.
This comes up from time to time, and I continue to find it fascinating. Specifically, when conservatives complain about too many Americans not paying federal income taxes, they tend to overlook relevant details — such as the fact that these same Americans still pay sales taxes, state taxes, local taxes, Social Security taxes, Medicare/Medicaid taxes, and in many instances, property taxes.
It’s not as if these folks are getting away with something — the existing tax structure leaves them out of the income tax system because they don’t make enough money to qualify.
Moreover, the GOP has a natural revulsion to any tax system, but there’s an eerie comfort with a regressive agenda that showers additional wealth on the rich while asking for more from lower-income workers.
While we’re at it, let’s also not forget that Hatch is the ranking member on the Senate Finance Committee, and would be in a position to serve as chairman if he wins reelection and Republicans take the Senate next year. At that point, he could use his power to punish working people more directly.
Hatch has always been a conservative Republican, but he’d developed a reputation over the years for idiosyncratic positions. Despite being firmly on the right — at least as “the right” was defined in, say, the ’90s — Hatch supported stem-cell research, co-sponsored the DREAM Act, and partnered with Ted Kennedy to pass the State Children’s Health Insurance Program, bringing health coverage to low-income kids. Centrist Democrats hoping to craft a major bipartisan deal would immediately reach out to Hatch.
Needless to say, those days are over.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 9, 2011
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