“A Deal For All”: A New Focus For Congress Called “Fixing The Economy”
The Perils of Pauline melodrama over the “fiscal cliff” will drag on as Washington heads toward another “debt ceiling” faceoff that will climax over the next eight weeks or so.
This farce captivates the media, but no one should be fooled. This is largely a debate about how much damage will be done to the economic recovery and who will bear the pain. There is bipartisan consensus that the tax hikes and spending cuts that Congress and the White House piled up to build the so-called fiscal cliff are too painful and will drive the economy into a recession. So the folderol is about what mix of taxes and spending cuts they can agree on that won’t be as harsh.
Largely missing is any discussion of how to fix the economy, to make it work for working people once more. Just sustaining the faltering recovery won’t get it done. We’re still struggling with mass unemployment, declining wages and worsening inequality. Corporate profits now capture an all-time record percentage of the economy; workers’ wages have hit an all-time low. A little constriction, or a lot, won’t do anything to change that reality.
So how about a New Year’s resolution for Washington’s political class: Vow to focus on what can be done to fix the economy, rather than on how much to lacerate it. That would require dealing with causes, not effects. And those surely would include:
Inequality: Clearly — as even the International Monetary Fund has recognized — extreme inequality saps the effective demand needed for a robust economy.
We need to rebuild a middle class if we want to again have a vibrant, growing economy. That requires a lot more than repealing the Bush tax breaks for the top 2 percent. We should be lifting the minimum wage, empowering workers to bargain for a fair share of the productivity and profits they help to generate, and limiting CEO pay packages that give them multimillion-dollar incentives to ship jobs abroad or plunder their own companies. Congress and the White House might also imitate the Federal Reserve and keep pressing the stimulus pedal until we move much closer to full employment.
Catastrophic climate change: Gross domestic product registers growth when people go to work picking up the pieces after a climate disaster, but Americans suffer rather than benefit. It’s long past time for the United States to get serious about global warming, make the investments needed to capture a lead in the green industrial revolution that is sweeping the world, end the subsidies to Big Oil and King Coal, and help the movement to clean energy.
Fixing health care: The wrongheaded agonizing over whether to cut scholarships for poor students or lay off food inspectors ignores the gorilla in the accounting books. Our long-term budget deficits are a consequence of our broken health-care system. If we spent per capita what other industrial nations spend on health care (with, incidentally, better health results), we would be projecting surpluses. This isn’t about stripping 65-year-olds of Medicare; it’s about taking on the drug and insurance companies and hospital complexes that drive up our costs. Affordable health care is a right, not a privilege.
Rebuilding America. While Washington hyperventilates about cutting spending, the excesses of this conservative era have starved society of essential building blocks. A high-wage economy needs a modern, efficient, world-class infrastructure to be competitive. Families depend on effective governance for clean air and water, safe sewage, enforcement of occupational safety standards, world-class schools and more. Our debate has deteriorated to the point that a Democratic president brags that domestic discretionary spending — which covers basic public services from the Coast Guard to child nutrition — will be cut to a share of the economy not seen since Eisenhower. That is, in a word, goofy.
Why not at least begin an informed discussion of the services we need and the ways we can afford them?
The Congressional Progressive Caucus has started that discussion with its “Deal For All” — a smart mix of fair-share taxes and cuts designed to ensure that those who never benefited from “shared prosperity” don’t get whacked unjustly by the prevailing mantra of “shared sacrifice.”
Americans, sensibly enough, will grow more disgusted with Washington whatever resolution is reached on the fiscal cliff over these next weeks. Politicians will continue to fight about how much damage to do, not how to build what comes next. What the country needs is legislators who will focus on building rather than dismantling.
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, December 31, 2012
“Deeply Irresponsible”: It’s Clear Now Why The “Boehner Rule” Is Such A Terrible Idea
The GOP’s insistence on using the debt ceiling as “leverage” is deeply irresponsible.
But politics and philosophy aside, let’s quickly examine the practicality of the GOP’s stance in these negotiations.
In 2011, when the GOP made its debt ceiling stand, there emerged a concept now known as “The Boehner Rule” which basically says that any debt ceiling hike has to be matched dollar for dollar with cuts. So a $1 trillion hike to the debt ceiling must see $1 trillion in cuts, and so forth.
Already, everybody hates the fruits of the 2011 fight, because now we have the “sequester” which caps spending on defense and other domestic programs — which is something that everybody wants to undo.
But even though everyone hates what came out of the 2011 fight, the GOP is at it again.
Senator Bob Corker said this weekend that a good trade will be a debt ceiling hike for cuts to Medicare.
From Burgess Everett at POLITICO:
Tennessee Sens. Bob Corker and Lamar Alexander pitched a plan on Friday to cut federal spending by $1 trillion — much of it from Medicare — in exchange for increasing the nation’s borrowing limit by that amount. The plan would raise the Medicare eligibly age to 67 and require wealthier Medicare users to pay higher premiums. Treasury Secretary Tim Geithner has estimated extraordinary measures can push the necessity of Congress addressing the debt ceiling until perhaps February.
“Here we are on Dec. 29 without a serious proposal before us to deal with the biggest issue, which is entitlements,” Corker said. “There’s been a lot of discussions about figuring out a way to deal with the … revenue side and at least getting that portion out of the way. Since we know it’s going to happen either before the 31st or after.”
(As an aside, remember that less than two months ago, the GOP was still bashing Obama for Medicare cuts, so… yeah.)
Tonight Corker is talking about tying a debt ceiling hike to Social Security cuts.
So okay, let’s imagine Obama caves on this (something he’s already pledged not to do). So we hike the debt ceiling and cut medicare. Then in a year or so, we hike the debt ceiling again by another $1 trillion and cut Social Security. These programs can’t be cut forever. If we raise the Medicare eligibility age to 67 now, we’re not going to come back and raise it to 68 or 69 the next time the debt ceiling fight comes up.
There just aren’t that many times you can keep squeezing another $1 trillion in spending cuts. The “Boehner Rule” might give you a couple of whacks, but as an actual policy it will quickly fail.
So practically, risking the U.S. full faith and credit every time this comes up, to being able to agree on new spending cuts is unrealistic. And as a matter or principal it’s awful.
By: Joe Weisenthal, Business Insider, December 30, 2012
“A Pig By Any Name Is Still A Pig”: Why Congress Cannot Operate Without The Bribing Power Of Earmarks
It seemed like a great victory at the time.
After years of federal taxpayer dollars being misappropriated to pay for pet projects in the districts of congressmen and senators looking to curry political favor with the voters back home, a moratorium was passed in 2011 ending the Congressional pork parade known as “earmarking”.
It appeared to make sense. Federal taxpayers had grown sick and tired of paying the bill for something like the construction and renovation of a botanical garden project in Brooklyn, New York when such a project, obviously, had nothing to do with core federal objectives, serving only to improve the re-election prospects of the Congresswoman who brought the money home to Brooklyn—along with the few Americans who spend their Saturday’s enjoying a picnic in the greatly improved botanical gardens at your expense and mine.
While the concept of earmarking—at the outset—had merit in that it compensated for the inability of the executive branch, who proposes the federal budget, to fully understand what might be rightfully required to achieve federal objectives in a state far away from the nation’s capital, earmarking quickly devolved into a system of vote-buying where a Member of Congress, reluctant to cast a vote for a particular piece of legislation, could be ‘persuaded’ to do so if enough pork was piled onto that Member’s plate in the effort to satisfy an important constituency at home.
Let’s face it—at a point, almost any elected official’s objection to a bill or judicial appointment will crumble when offered enough goodies to ensure endless re-election to office because the elected official is bringing home the bacon to the voters who hold his or her fate in their collective hands.
So, when the Senate and the House of Representatives agreed to end the earmarking process a few years ago, it certainly appeared to be a positive step in the direction of gaining a little control over wasteful government spending and a move towards bringing a bit of honestly to the process of government.
But what actually happened?
For starters, if you believe we have done away with the concept of earmarking money for special projects back home—thing again. The earmark moratorium has brought forward an even more insidious process called “lettermarking” where Congressional slush funds are created as tools for funding pet projects without even the limited accountability and public information that came with earmarking. While earmarks required publication of a pork project—along with the amount of taxpayer money being spent and identification of the elected official proposing the earmark—lettermarking allows for such expenditures without any identification of the project, sum and sponsoring legislator whatsoever.
Additionally, we now find that when an elected official is unsuccessful in convincing an agency of the executive branch to contribute money to a pet project, that official often turns to blackmailing the agency involved by threatening to cast a vote to deny some Administration objective. This is precisely what occurred when Senator Lindsey Graham (R-S.C.) threatened to block Obama administration appointments unless money was provided for a harbor dredging project in his home state.
But something even more insidious has followed the ban on earmarking—
Without the persuasive powers of the political ‘carrot’, congressional leaders and the President no longer have the ‘stick’ required to move Congress to get anything of significance accomplished.
The moratorium on earmarks went into existence in February 2011. Since that time we have seen some of the greatest legislative fails in the history of the nation, highlighted by the debt ceiling fiasco of 2011, the inability to pass a jobs bill, an ever-increasing vacancy rate in the federal judiciary as one nominee after another is shelved and, of course, the current fiscal cliff clunker that might be the most embarrassing and damaging display of congressional incompetence of all.
One cannot help but wonder if our current inability to legislate our way out of a paper bag might be different were party leaders and the President to, once again, be free to avail themselves of the one thing that could always win the hearts and minds of elected officials who care, first and foremost, for their own jobs—a healthy and legal bribe.
If the fiscal cliff fiasco has taught us anything, it is that our elected officials no longer even pretend to place the needs of the nation ahead of their own—to quote Mel Brooks—phony baloney jobs. Does anyone imagine that it is a coincidence that Speaker John Boehner has disappeared into the background in the final days of the fiscal cliff debate so as to avoid another misstep that might cost him the Speakership? Does anyone doubt that Boehner’s inability to deliver his own caucus’ support for his ill-conceived “Plan B” is the direct result of special interest groups—such as Club For Growth—whose political contributions are the life-blood that flows into the treasure chests of the more extreme elements of Boehner’s GOP caucus and remain the only carrot of any value when it comes to winning the affections of Congressional Members ?
Indeed, the only politician involved in this game of political chicken who appears to have a reason to actually put the public before politics would be the President—not because he is above playing the game, but because he no longer has to run for political office.
Accordingly, as we head into the new Congress and the expiration of the earmark moratorium, should we not be questioning whether the ban on earmarks has delivered the results that were intended? If Congress has already found a way around the ban—and is doing so by using a process that is even less transparent than what we previously had in place—maybe we would be better off simply accepting that our government only works when legalized, congressional bribery is allowed to more easily enter into the equation.
Cynical? Absolutely.
But how is it any more cynical than a political system that welcomes the bribery offered up by special interests in the guise of huge and often unlimited campaign contributions that benefit incumbents in exchange for their vote—particularly if the cost of earmarks to the taxpayer is far less than the cost to taxpayers when our legislators refuse to act, despite knowing that their inaction will cost our economy, and therefore our taxpayers, even more money?
According to Taxpayers for Common Sense, the cost of earmarks to taxpayers in 2010 totaled $15.9 billion dollars—a drop in the bucket when compared to the economic losses resulting from the failure of Congress to act rationally during the 2011 debt ceiling drama or what we stand to suffer if government cannot find a little courage as we hang over the edge of the fiscal cliff.
Accordingly, while returning to earmarks may mean a return to wasteful spending of taxpayer money on projects that bring no benefit to the nation as a whole, it could also mean saving even more money than is wasted by avoiding the financial setbacks that come with endless debt ceiling debacles and fiscal cliff fumbles.
Until we decide to completely remove the systematic rigging of elections to favor incumbents—which is precisely what earmarks seek to do as does the unlimited money that flows to incumbents from the myriad of special interests who call the shots in Washington—we may as well give in and allow the system to, at the least, function.
Conversely, if you are offended and troubled by earmarks—and you should be—you should be equally offended and troubled by the special interest groups that have taken their place. When incumbents cannot gain an advantage over challengers by bringing home the pork, they will go for the next best thing—enough campaign cash to allow them to outspend their challengers at election time.
To get rid of one without getting rid of the other makes no sense. At least earmarks produce legislation that might protect and create jobs for taxpayers while unlimited campaign money produces only jobs for elected officials themselves.
By: Rick Ungar, Op-Ed Contributor, Forbes, December 29, 2012
“A Resettling Of The Hostages”: What The Tea Folk Want In The Fiscal Talks
To properly assess the lay of the land for the continuing fiscal negotiations in Washington, it’s kind of important to understand what those conservative Tea types fighting John Boehner actually want. You get the general impression they just want less compromise than Boehner. But the reality is quite different. Here’s an appropriate reminder from Breitbart’s Joel Pollak:
The present Tea Party dilemma did not begin in November 2012 but in January 2011, when the new Republican leadership in the House of Representatives excluded Tea Party members from the highest leadership positions. The Tea Party, used to opposing but not to governing, acquiesced in a faulty arrangement that allowed the Republican establishment to lead the legislative agenda, and to blame the Tea Party when it failed.
That is exactly what happened in the summer of 2011, when Speaker of the House John Boehner quashed efforts by Rep. Jim Jordan to rally support around the Tea Party’s preferred “Cut, Cap and Balance” proposal in the debt ceiling debate. Boehner then signed onto an ill-fated deal that led to the present “fiscal cliff” impasse–while the Tea Party, slandered by the mainstream media as “terrorists,” bore the burden of blame.
Sounds semi-reasonable until you focus on what the “Cut, Cap and Balance” proposal involves. Here’s a description from June of 2011:
1. Cut – We must make discretionary and mandatory spending reductions that would cut the deficit in half next year.
2. Cap – We need statutory, enforceable caps to align federal spending with average revenues at 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached.
3. Balance – We must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and a Spending Limitation Amendment (SLA) that aligns spending with average revenues as described above.
The “Cut, Cap and Balance” Pledge that was signed by 12 senators and endorsed by every one of the viable GOP presidential candidates (including Mitt Romney) made all three elements a condition precedent to support for any debt limit increase.
Since constitutional amendments require passage in both Houses of Congress by a two-thirds vote, and the version being promoted by conservatives involves a radical and permanent reduction in federal spending, it ain’t happening unless and until vast changes in the composition of Congress occur–maybe on the order of four or five straight 2010-style GOP landslides. So we’re not talking about some temporary “hostage-taking” involving the debt limit, but the kind where the hostage is resettled in another country under armed guard for years.
It is rather important that the media and Democrats understand where the Tea Folk are coming from. They aren’t just trying to push the country towards their policy priorities. The whole idea, and the rationale for all the revolutionary trappings, rhetoric and other folderol, is permanent repeal of much of the domestic policy legacy of the twentieth century–back towards what they imagine the Founders (and for many of them, Almighty God) intended. For the most part, they have little to fear from voters back home. There is no price to be paid for craziness and intransigence, though in most cases there is decidedly a big risk in exhibiting reasonableness.
So that’s who we are dealing with, and best we can tell, there are enough of them in the House to keep Boehner from showing much reasonableness as well.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, December 27, 2012
“Hijacked By Ideologues”: The Republicans Have Now Agreed To Raise Taxes For The Entire Country
The inside line from Washington is that there will be no Fiscal Cliff deal before the end of the year.
That’s not surprising. Unfortunately, it always seemed unlikely that our politicians would agree to any vote that could be framed as them having voted to “raise taxes” — which any deal before December 31 could have been framed as.
The more likely scenario seemed to be that politicians would wait until taxes increased automatically on January 1 and then heroically vote to cut them — at least some of them.
And that’s still my bet about what will happen in January.
But just because it seemed likely that politicians would be ruled by “politics” instead of pragmatism doesn’t mean this is something to be proud of.
And let’s be clear about what has happened in the past two months.
What has happened is that the political party that has based its entire existence on never agreeing to a tax hike of any kind has essentially agreed to tax hike for the entire country.
By not accepting the Democrats’ offer to extend the Bush tax cuts for ~98% of Americans, the Republicans have agreed to let taxes rise on ALL Americans.
The Republicans have done this, it appears, only (or at least mainly) in a stubborn attempt to preserve lower tax rates on the highest-earning Americans.
And now those tax rates, too, will go up.
And the economy will slow down.
The Republicans have tried to pin the blame for the tax hikes on the Democrats, but most Americans have seen through this. And rightly so. The Republicans agreed to the coming tax hikes when they voted for the legislation in the summer of 2011. And now, by refusing to extend the tax cuts for all Americans but the richest 2%, the Republicans have tacitly once again agreed to raise taxes on all Americans.
This is what happens when a party that used to be known for pragmatism and responsibility allows itself to be hijacked by ideologues.
A deal to mute the impact of the Fiscal Cliff and raise the debt ceiling should be within easy reach of reasonable people on both sides of the aisle.
Unfortunately, our government isn’t run by reasonable people anymore. Especially on the Republican side.
NOTE: This is my personal view, not “Business Insider’s” So if you want to lecture someone about how the Republicans are absolutely right to agree to raise taxes on the entire country just to avoid voting to increase taxes on the highest-earning Americans, please direct those notes to me.
By: Henry Blodgett, Business Insider, December 27, 2012
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