“Calling The Great Turtle’s Bluff”: President Obama Should Raise The Debt Ceiling Himself
The budget deal that just averted the supposed fiscal cliff was only a warm up. The next fiscal cliff is the $110 billion in automatic budget cuts (sequesters) that last week’s budget deal deferred only until March. But, as long as we are using topographic metaphors, this is less a cliff than a bluff.
On the Sunday talk shows, Republican leaders were full of bravado and swagger. Representative Matt Salmon of Arizona, on CBS “Face the Nation” said it was about time “for another government shutdown.”
Senate Minority Leader Mitch McConnell, speaking with ABC’s George Stephanopoulos, ruled out any further tax increases, declaring that “the tax issue is finished, over, completed.” He insisted, “Now it’s time to pivot and turn to the real issue, which is our spending addiction.”
But is spending really the problem? For most the postwar era, federal tax revenues hovered around 19 percent of GDP, and spending a bit more than that. But for the four years since the financial collapse, federal revenues have been under 16 percent of GDP, thanks to the Bush tax cuts and the weak economy. It’s true that spending is up—it peaked at 25.2 percent of GDP in FY 2009, mainly because of the stimulus. But if it were not for the stimulus, unemployment would be even higher and growth even lower.
The point is that none of these fiscal issues caused the financial collapse, nor are they retarding the recovery. Were Congress to reduce the budget deficit, it would weaken, not strengthen the recovery. That is the real danger of the so-called fiscal cliff.
Spending relative to GDP was as high as 23.5 percent in the Reagan years, a shade above its projected level for this year. So there is no “addiction to spending.” If a free society wants to tax itself more to pay for decent retirement and health benefits, that is a political choice. Even with the slight tax increase of last week’s budget deal, limited to the top one percent, we still have the lowest tax rates of any wealthy country.
Seemingly, the Republicans hold a much stronger hand in the next round of budget talks: If Congress does nothing, the automatic cuts of the sequester take hold.
But Republicans have been blustering on taxes and spending for years. They were never going to raise taxes (Sorry, Grover), but when Obama decided to hang tough they turned around and voted to hike taxes on the richest one percent.
Obama needs to call McConnell’s bluff. On the issue of the debt ceiling, he can invoke his authority under the Fourteenth Amendment, which provides that the U.S. government’s debts must be honored. He’d get wide backing.
On the sequester, Obama can keep Social Security and Medicare cuts off the table. There is more than one way to balance accounts going forward. One way is to raise the ceiling on incomes subject to payroll taxes. That would be a lot more popular than cutting benefits.
And does McConnell really want the sequester to bite, with its $60 billion in Pentagon cuts? In the great budget showdowns of the mid-1990s with Newt Gingrich, Bill Clinton got the GOP to blink first.
If Clinton could achieve that with the Great Newt, Obama can do no less with the Great Turtle.
By: Robert Kuttner, The American Prospect, January 7, 2013
“Unicorn’s And Other Fables”: Grover Norquist’s Latest Plot To Drown Government…Monthly Debt Ceiling Fights
There’s two ways to look at Grover Norquist. He’s either the most powerful unelected man in the world or an amazing self-promoter who is about to be proven obsolete. Norquist obviously feels he’s the former. For nearly two decades, he’s held Republicans to a pledge to never raise taxes. Now he wants them to force the president to cede to their wishes on a monthly basis.
The President of Americans for Tax Reform is urging Republicans to use the debt ceiling to exact spending cuts or continue the Bush tax cuts for incomes over $250,000.
“The debt ceiling that Obama’s plans bump into every month or so for the next four years provides plenty of ‘leverage’ for the GOP to trade for spending cuts — as done in 2011 — or continuing the lower rates,” Norquist wrote Wednesday in The Hill.
Nearly 6 out of 10 Americans want to end the Bush tax breaks for the rich. But enough Republicans in the House and Senate have signed Norquist’s American Taxpayer Pledge that he’s certain that the negotiations on the so-called “fiscal cliff” can end without taxes going up.
After an electoral college landslide, many — including the White House — believe that the president has the leverage in negotiations. But the debt ceiling, which we will hit in February, does give Republicans a chance to make demands on the president.
When President Obama asked Speaker Boehner to raise the debt limit, Boehner reportedly said, “There is a price for everything.”
In 2011, Republicans, for the first time ever, used the debt limit to force cuts — something they never asked for in the dozens of times they raised the limit for the last three Republican presidents.
Though senators Lindsey Graham, Saxby Chambliss and other Republicans have said they would break their pledge with Norquist, the lobbyist seems unfazed. He told Slate’s Dave Weigel that he has no concerns that his pledge is about to crumble.
“I’ve talked to Lindsey Graham on the phone after some of his pronouncements, and he’s said, ‘Oh, I would need 10-1 [ratio of cuts to tax hikes], and it would have to include permanent, unalterable entitlement reform.’ I said, ‘Lindsey, if that’s what it’s going to take to get you to raise taxes, I’m not going to worry about you,” Norquist said. “You are not in danger of being offered a silver unicorn, because unicorns don’t exist.”
The Washington Post’s Greg Sargent keeps insisting that the GOP is just trying to present an appearance of compromise. Some Republicans are making news with their alleged willingness to buck Norquist — but votes speak louder than words.
Unlike many Republicans, Norquist would be pleased if the so-called sequester goes into effect. He’s a Republican who believes the Department of Defense isn’t sacred when it comes to spending cuts.
The question is, how many Republicans would be willing to risk the cuts to Defense along with responsiblty for a middle-class tax increase by holding out for a deal that honors Norquist’s pledge?
And if the president won’t agree, will they doom the United States’ credit and cause unprecedented “uncertainty,” which Republicans claim to hate, by holding the debt limit hostage on a monthly basis?
Even if Republicans were to go down that path, the president would have to adopt a strategy advocated by former president Bill Clinton often called “the 14th Amendment option.”
The amendment includes the sentence, “The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion shall not be questioned.”
In 2011, Clinton said that “without hesitation” he would invoke the 14th Amendment “and force the courts to stop me.”
President Obama nixed that plan, saying his lawyers didn’t see the validity in it. But if Republicans decided to use the debt ceiling to keep him on an “allowance,” it wouldn’t be hard to imagine him deciding that it was worth going to court.
Norquist has never been shy about his disdain for government. He’s often joked,” I just want to shrink it down to the size where we can drown it in the bathtub.” But he’s never faced a predicament like expiring tax cuts and a president with the political capital to fight to keep some of them expired.
Soon we’ll find out how much power he actually has.
BY: Jason Sattler, The National Memo. November 28, 2012
“You Talkin’ To Me?”: Obama Calls The GOP’s Bluff
Here’s how to negotiate, GOP-style: Begin by making outrageous demands. Bully your opponents into giving you almost all of what you want. Rather than accept the deal, add a host of radical new demands. Observe casually that you wouldn’t want anything bad to happen to the hostage you’ve taken — the nation’s well-being. To the extent possible, look and sound like Jack Nicholson in “The Shining.”
This strategy has worked so well for Republicans that it’s no surprise they’re using it again, this time in the unnecessary fight over what should be a routine increase in the debt ceiling. This time, however, something different is happening: President Obama seems to be channeling Robert De Niro in “Taxi Driver.” At a news conference last Wednesday, Obama’s response to the GOP was, essentially, “You talkin’ to me?”
Obama’s in-your-face attitude seems to have thrown Republicans off their stride. They thought all they had to do was convince everyone they were crazy enough to force an unthinkable default on the nation’s financial obligations. Now they have to wonder if Obama is crazy enough to let them.
He probably isn’t. But the White House has kept up the pressure, asserting that the real deadline for action by Congress to avoid a default isn’t Aug. 2, as the Treasury Department said, but July 22; it takes time to write the needed legislation, officials explained. Tick, tick, tick . . .
“Malia and Sasha generally finish their homework a day ahead of time,” Obama said, gratuitously — but effectively — comparing his daughters’ industry with congressional sloth. “It is impressive. They don’t wait until the night before. They’re not pulling all-nighters. They’re 13 and 10. Congress can do the same thing. If you know you’ve got to do something, just do it.”
Obama’s pushing and poking are aimed at Republicans who control the House, and what he wants them to “just do” is abandon the uncompromising position that any debt-ceiling deal has to include big, painful budget cuts but not a single cent of new tax revenue.
The president demands that Congress also eliminate “tax breaks for millionaires and billionaires . . . oil companies and hedge fund managers and corporate jet owners.” Without these modest increases in revenue, he says, the government will have to cut funding for medical research, food inspection and the National Weather Service. Also, presumably, whatever federal support goes to puppies and apple pie.
In truth, some non-millionaires who never fly on corporate jets would also lose tax breaks under the president’s proposal. And it’s hard to believe that the first thing the government would do, if Congress provides no new revenue, is stop testing ground beef for bacteria. But Obama is right that the cuts would be draconian — and he’s right to insist that House Republicans face reality.
My view, for what it’s worth, is that now is the wrong time for spending cuts or tax increases — that it’s ridiculous to do anything that might slow the lumbering economic recovery, even marginally. But if there have to be cuts, then Republicans must be forced to move off the no-new-revenue line they have drawn in the sand.
Even if they move just an inch, the nation’s prospects become much brighter. This fight is that important.
Every independent, bipartisan, blue-ribbon panel that has looked at the deficit problem has reached the same conclusion: The gap between spending and revenue is much too big to be closed by budget cuts alone. With fervent conviction but zero evidence, Tea Party Republicans believe otherwise — and Establishment Republicans, who know better, are afraid to contradict them.
The difficult work of putting the federal government on sound fiscal footing can’t begin as long as a majority in the House rejects simple arithmetic on ideological grounds.
“I’ve met with the leaders multiple times,” Obama said, referring to House Speaker John Boehner and Senate Minority Leader Mitch McConnell. “At a certain point, they need to do their job.” The job he means is welcoming fantasy-loving Republicans to the real world, and it has to be done.
The stakes are perilously high, but Obama does have a doomsday option: If all else fails, he can assert that a section of the 14th Amendment — “The validity of the public debt of the United States, authorized by law . . . shall not be questioned” — makes the debt limit unconstitutional and instructs him to take any measures necessary to avoid default.
Maybe that’s why, in this stare-down, the president doesn’t seem inclined to blink.
By: Eugene Robinson, Opinion Writer, The Washington Post, July 4, 2011
Debt Ceiling Hostage Taking: Section 4 Of The 14th Amendment Was Designed To Stop John Boehner
Kevin Drum is skeptical that the Obama administration would really be within its rights to ignore the debt ceiling:
Maybe I’m missing something here, but it strikes me that this doesn’t come close to implying that the debt ceiling is unconstitutional. What it really suggests is merely that the public debt is the only untouchable part of the federal budget.
Jack Balkin delves into the legislative history and shows why the 14th Amendment has a provision guaranteeing the debt in the first place. The sponsor of the provision, Benjamin Wade, wrote at the time:
[The proposed amendment] puts the debt incurred in the civil war on our part under the guardianship of the Constitution of the United States, so that a Congress cannot repudiate it. I believe that to do this wil give great confidence to capitalists and will be of incalculable pecuniary benefit to the United States, for I have no doubt that every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.
Balkin explains:
If Wade’s speech offers the central rationale for Section Four, the goal was to remove threats of default on federal debts from partisan struggle. Reconstruction Republicans feared that Democrats, once admitted to Congress would use their majorities to default on obligations they disliked politically. More generally, as Wade explained, “every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.”
Like most inquiries into original understanding, this one does not resolve many of the most interesting questions. What it does suggest is an important structural principle. The threat of defaulting on government obligations is a powerful weapon, especially in a complex, interconnected world economy. Devoted partisans can use it to disrupt government, to roil ordinary politics, to undermine policies they do not like, even to seek political revenge. Section Four was placed in the Constitution to remove this weapon from ordinary politics.
In other words, it’s in the 14th Amendment to guard against exactly what Congressional Republicans are doing right now.
Balkin does not suggest, nor do I, that the legal merits are open and shut. It’s certainly risky to take a flyer in the middle of a debt crisis. But if we do reach h-hour, we’re probably better off if the Treasury simply announces it’s going to continue to pay the bills and dares Republicans to take them to court than repudiating the debt, right?
Matt Steinglass argues that the Supreme Court would likely side with the Treasury:
If there’s one thing we’ve learned in the past 11 years, it is that the Supreme Court’s decisions on critical issues are very strongly influenced by political pressure. In a situation where the entire weight of world bond markets was bearing down on Anthony Kennedy’s head, would he really vote to crash the economy and destroy the credit rating of the United States? Would any individual do that? I don’t think even Eric Cantor would, if he were solely and publicly responsible for the decision. The ability of the GOP to push the government to the brink of default, and possibly ultimately over it, depends on the diffusion of responsibility: Republicans can only do it because they can hold Democrats to blame. It’s also driven by political vulnerability: Republicans have gotten themselves into a spiraling tea-party-driven political dynamic where they seem, on issue after issue, to be incapable of voting for any proposals that a Democrat might be able to accept, for fear of the consequences from their base. Anthony Kennedy does not have to fear a primary challenge, and if the United States’ ability to pay its debts comes down to his single vote, he’ll have no excuse. Maybe I have no idea how these things work. But I can’t see a Republican Supreme Court going toe to toe with the entire massed forces of Wall Street and not blinking.
A point that I think is worth drawing out here is that it’s not even clear the GOP leadership wants the power to take the credit of the Treasury hostage, or — more likely — if it’s simply been forced into this position by a financially uneducated base. Republicans in Congress might be relieved to have a deux ex machina absolve them of the need to walk a fine line between the demands of the base and the demands of their business constituency.
By: Jonathan Chait, The New Republic, July 1, 2011
Massachusetts Republican: Undocumented Immigrant Rape Victims ‘Should Be Afraid To Come Forward’
Massachusetts GOP state Rep. Ryan Fattman has such contempt for illegal immigrants that he believes undocumented women who are raped should be afraid to go to the police. Yesterday, the Worcester Telegram & Gazette reported on Fattman’s incendiary comments, which he made while defending a controversial federal immigration program that many say will damage the relationship between law enforcement and immigrant communities. Massachusetts Gov. Deval Patrick (D) has refused to join the program out of concern that immigrants who are victims of violent crimes will be afraid to report them and seek help:
Mr. Fattman dismissed concerns of some law enforcement officials — cited by the governor — who said using local police to enforce immigration laws could discourage reporting of crime by victims who are illegal immigrants.
Asked if he would be concerned that a woman without legal immigration status was raped and beaten as she walked down the street might be afraid to report the crime to police, Mr. Fattman said he was not worried about those implications.
“My thought is that if someone is here illegally, they should be afraid to come forward,” Mr. Fattman said. “If you do it the right way, you don’t have to be concerned about these things,” he said referring to obtaining legal immigration status.
Instead of helping rape victims, the new federal program would have police turn them directly over to the federal government to be deported. Fattman believes that’s exactly what should happen:
Mr. Fattman acknowledged that people could be deported after an arrest even if they are not convicted of a crime, under the program in use in more than 30 states.
While citizens have the right to be viewed as innocent until found guilty in court, he said, “I don’t think that principle extends to illegal immigrants.” He said he had no concerns about racial profiling by police.
According to Fattman, deporting undocumented immigrants who have not committed a crime is more important than deterring violent crime or helping rape victims. “Innocent until proven guilty” isn’t the only principle he doesn’t think should apply to illegal immigrants — apparently basic human decency is only a luxury American citizens should enjoy. Fattman is such a radical that he believes American-born children of illegal immigrants should be deported with their parents, which would be in direct violation of the 14th Amendment.
By: Marie Diamond, Think Progress, June 9, 2011
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 
