“John Boehner’s Christmas Gift”: A Guarantee That The Republican House Will Destroy The Economy
Last week, we learned that Speaker of the House John Boehner has no control over his majority. We’ve seen Boehner have trouble with his caucus before, of course — a significant portion of these people are crazy — but the failure of “Plan B” was different. In the past Boehner has had trouble whipping votes to support things that were destined to become law. Boehner couldn’t get his caucus to support TARP because TARP was awful and was also definitely going to happen. Boehner couldn’t get the votes for the 2011 debt deal because conservatives thought they’d eventually force an even better deal. But this was a totally symbolic gesture that never had any shot at passing the Senate or getting signed by the president. Boehner’s “Plan B” was a stupid pointless empty gesture, and that is why its failure is actually slightly scary, in addition to being hilarious.
The point of “Plan B” was to give Republicans a means of blaming Democrats when everyone’s taxes go up next year, while also giving them an opportunity to claim that they supported raising taxes on rich people. The problem was, Republicans really don’t support raising taxes on rich people, and they feel so strongly about this that they didn’t want to pretend to support a tax increase.
What is especially silly about all of this is that in any sort of sensible political system none of it would be happening. A majority of Americans just voted for Democrats to control the White House, Senate and House of Representatives, which would seem to indicate that a majority of American voters would just prefer it if Barack Obama, Harry Reid and Nancy Pelosi decided all of this for themselves. But that’s not the way our archaic political system works, and instead we will watch this unpopular anthropomorphic Camel 100 carefully negotiate a compromise with the president that his party will refuse to support, until we either extend all tax cuts forever or “go over the cliff” and cause every Sunday show panelist in the country to hyperventilate until losing consciousness.
How did we get here? Keep in mind, your average congressperson is as dumb as your average regular person, and Republican members listen to the same talk radio and read the same right-wing blogs and watch the same Fox News as every other conservative. It’s always been comforting to imagine that canny evil masterminds huddle in backrooms plotting how to use the right-wing media machine to manipulate the rubes into accepting whatever the corporate elites want, but the story now is that the canny masterminds have no control over the media operation they’ve built and the “grownups” cannot convince the true believers to do shit. There’s really no talking sense into Michele Bachmann and Steve King, and every two years gerrymandered ultra-conservative districts send more and more Kings and Bachmanns to the House. And Republicans know that their safe districts are only safe from Democrats, not even-crazier Republicans.
John Boehner will probably be fine. He’ll likely remain speaker even, mostly because no one else wants that horrible job. America might not be fine.
“Going over the fiscal cliff” will be a fun adventure at first, especially because it has been so long since America has had any sort of tax hike or defense budget cut, but shortly after the “cliff” comes the debt ceiling increase vote, and there is really no chance, at all, of the House raising the debt ceiling, under any circumstance. Maybe if the president agrees to block grant Medicare and return America to the gold standard. And promises to personally fire 100 teachers.
The idea that “going over the cliff” would give the president enough leverage to get a halfway decent deal — with some stimulus up front and everything! — depended on a House of Representatives capable of acting rationally. It’s apparent that they are in fact prepared to intentionally tank the entire American economy.
By: Alex Pareene, Salon, December 24, 2012
“Willy Nilly Nonsense”: Mitch McConnell Doesn’t Understand What The Debt Ceiling Is
Now that Republicans have pretty much resigned themselves to the idea that there is going to be some kind of tax increase for the wealthy, they’re comforting themselves with the idea that come early next year, they’ll still be able to re-enact the lovely conflict we had over the debt ceiling in 2011 and hold the American economy hostage to their demands. President Obama has quite sensibly said that we ought to just get rid of the debt ceiling itself, since it serves no purpose and allows a party to engage in just this kind of economic blackmail if it’s desperate and cynical enough. So Republicans are pushing back, none more so than Senate Minority Leader Mitch McConnell. But in the process, McConnell has revealed that he has no idea how the debt ceiling actually works.
What McConnell has been saying is that if we eliminate the debt ceiling, it will give the president all kinds of new powers, to spend money willy-nilly however he wants to, run up the debt, and generally become a kind of fiscal dictator. Yesterday he said about the prospect of eliminating the debt ceiling, “I don’t think that there’s any sentiment whatsoever for giving the President perpetual authority without congressional involvement.” And last week in a speech on the Senate floor, he said this:
By demanding the power to raise the debt limit whenever he wants by as much as he wants, he showed what he’s really after is assuming unprecedented power to spend taxpayer dollars without any limit. This isn’t about getting a handle on deficits or debt for him. It’s about spending even more than he already is. Why else would he demand the power to raise the debt limit on his own? And by the way, why on earth would we even consider giving a President who’s brought us four years of trillion dollar deficits unchecked authority to borrow – he’s the last person who should have limitless borrowing power.
Wow, that really would be terrible, if the president had “unprecedented power to spend taxpayer dollars without any limit,” with “unchecked authority to borrow.” The only trouble is that eliminating the debt ceiling does nothing of the sort. In case you’ve forgotten your fourth-grade civics, Congress sets the budget, not the president. The president can’t spend a dollar that Congress doesn’t appropriate. He can’t borrow a dollar that Congress hasn’t said he should borrow. When we reach the debt limit and then go past it, it isn’t because of anything the president has done, it’s because of the budget Congress has written. The reason we take on debt is because federal spending, set by Congress, exceeds federal tax revenues, also set by Congress. The only thing the debt ceiling does is require Congress to have what is in effect an additional vote on their own budget. Eliminating the debt ceiling doesn’t give the president one iota more authority or power. What it does, however, is take away the power the Republicans now have to use blackmail to achieve their policy goals.
OK, so I was kidding when I said Mitch McConnell doesn’t know how the debt ceiling works. He knows exactly how it works. But he also knows that most Americans know next to nothing about it, and he knows that reporters will dutifully pass on whatever he says about it, without adding the appropriate disclaimer that would make their reporting about this topic accurate.
By: Paul Waldman, Contributing Editor, The American Prospect, December 12, 2012
“Hostage Takers, Act II”: GOP To Hold Debt Ceiling Hostage Again As Leverage For Medicare Cuts
On Sunday, Sen. Bob Corker (R-TN) conceded that Democrats have won the debate on raising taxes on the richest Americans and said that he would likely vote to increase rates on the top 2 percent of Americans in order to shift the debate to cutting entitlement programs and improve the GOP’s leverage in the debate over how to avert the so-called fiscal cliff.
During an appearance on Fox News Sunday, Corker explained that if Republicans “give Obama a 2 percent increase,” the party can then hold the debt ceiling hostage in order to secure real cuts in spending:
CORKER: The Republicans know they have the debt ceiling, that is coming up around the corner, and, the leverage is going to shift, as soon as we get beyond this issue. The leverage is going to shift, to our side where hopefully we’ll do the same thing we did last time and that is if the president wants to raise the debt limit by $2 trillion we get $2 trillion in spending reduction and, hopefully, this time, it is mostly oriented towards entitlement and with no process. […]
[Obama] has the upper hand on taxes and you have to pass something to keep it from happening. We only have one body. If we were to pass, for instance, raising the top 2 rates, and that’s it, all of a sudden we do have the leverage of the debt ceiling and we haven’t given that up so the only way the debt ceiling.
House Speaker John Boehner (R-OH) has indicated that the GOP plans to use that leverage by demanding more spending cuts, but the move will result in great economic costs. In 2011, Republican demands nearly led to a credit default and ultimately cost taxpayers “$18.9 billion over 10 years, due to elevated interest rates between January and August 2011.”
Obama slammed the GOP’s strategy during a meeting with business leaders last week. “The thinking is the Republicans will have more leverage because there will be another vote on the debt ceiling, and we will try to extract more concessions with a stronger hand on the debt ceiling,” Obama told members of the Business Roundtable. “That is a bad strategy for America, it’s a bad strategy for your businesses, and it is not a game that I will play.”
By: Igor Volsky, Think Progress, December 9, 2012
“A Very Dysfunctional Party”: GOP Needs To Choose Between The Business Community And The Tea Party
How long will the major GOP-aligned interest groups, particularly business groups, stick with the Republican Party, if Republican tax monomania, and intransigence on the debt ceiling, threaten to tank the economy?
Barack Obama, in his interview today with Bloomberg, tried to exploit the business community’s apparent discomfort with Republicans when it comes to the debt limit. He noted that Republican efforts to crash the economy every time it is reached is hardly good for business:
Another thing that CEOs have mentioned is making sure that if we do get a deal done now, that we don’t have another crisis two or three months from now because of the debt ceiling, what we went through back in 2011. You know, the U.S. Chamber of Commerce, which is hardly an arm of my administration or the Democratic Party, I think said the other day, we can’t be going through another debt ceiling crisis like we did in 2011. That has to be dealt with.
Indeed, there really is a question here about the extent to which businesses will follow the GOP down the rabbit hole of another debt limit crisis.
Recall that in the health care debate, Republicans wound up losing several GOP-aligned special interests, including the doctors, because Republicans were far more interested in ideological extremism than in cutting deals to help Republican-aligned interest groups.
Will that happen again in the fiscal cliff negotiations? Note that many business interests are not nearly as interested in the tax-rates-above-all Republican negotiating position as they are in, well, avoiding a recession. It’s not as if the business community is going to suddenly turn into loyal Democrats. It’s just that the more the Republican Party’s positions are dictated by fear of being labeled “RINOs,” forcing them to adopt Tea Party positions, the less Republicans leaders will find themselves responsive to other normally GOP-aligned groups.
That’s a key question to look at not only in the continuing fiscal cliff talks, but really in every issue, from taxes to immigration, that will show up in Congress this year. Republicans simply can’t be a functional party if their politicians only care about possible primary challenges. Before this is all over, the Republican Party may finally have to make a critical choice between the pragmatic concerns of the business community and the fundamentalism of the Tea Party.
By: Jonathan Bernstein, The Washington Post Plum Line, December 4, 2012
“An Issue Of Fairness”: Suddenly America’s Top Corporate Leaders Are Shunning Tea Party Extremism
Leaders of the American business community, who have long indulged the Republican far right as an instrument toward their own ends, seem to be growing weary of its political excesses. Recognizing the public verdict of last month’s election, corporate officialdom is moving toward moderation on taxes and other issues, showing support for the Obama White House and edging away from congressional Republicans.
The latest top executive to endorse the president’s position on rescinding the Bush tax cuts for the top two percent is Fred Smith, CEO of Federal Express and a former economic advisor to Senator John McCain — who denounced as “mythology” the notion that raising the top rate would damage the U.S. economy.
Smith joined a lengthening queue of business leaders from all sectors who have stepped up over the past week to voice their acceptance of increased taxes as part of a budget agreement to break the stalemate on Capitol Hill — not only to avoid the so-called fiscal cliff on December 31, but because fairness requires the wealthy to pay their fair share. Randall Stephenson, chief executive of AT&T, the nation’s largest telecom company, told Business Week that higher taxes and more revenue must be part of any budget agreement. So did Lloyd Blankfein, the CEO of Goldman Sachs. And so did a group of defense industry executives from companies such as United Technologies, RTI International, TASC and Northrop Grumman.
Income tax rates “need to go up some,” said David Langstaff, the CEO of TASC, at a Washington press event organized by the Aerospace Industries Association, a defense lobby. “This is a fairness issue — there needs to be recognition that we’re not collecting enough revenue. In the last decade we’ve fought two wars without raising taxes. So I think it does need to go up.”
Indeed, the president was warmly received this week when he visited the Business Roundtable, a powerful Washington lobbying group that officially prefers Republican policy on maintaining the Bush tax cuts unchanged. “This room likes a winner,” said Roundtable chairman James McNerney, the CEO of Boeing, as his members applauded the president, who worked the room as if among old friends. They didn’t seem terribly upset when the president told them that tax rates — their tax rates — would have to go up, and in fact, they are reportedly supporting him on the need to avoid another destructive struggle with Congress over the debt ceiling. Evidently they won’t go along with the kind of blackmail game that congressional Republicans played with the debt ceiling in the summer of 2011, leading to a credit downgrade and slower growth for months afterward.
The suddenly sensible sounds emanating from the business community are astonishing when contrasted with the anger displayed toward the president by many of these corporate suits only weeks ago, when they berated Obama as “anti-business” and loudly yearned for a corporate-style Romney presidency. Resoundingly rebuked by the electorate, which overwhelmingly favors Obama’s positions on taxes and entitlements — and stands ready to blame the Republicans if no budget agreement is achieved — the business leaders are backing ever so subtly away from their traditional alliance with the GOP.
These brand-conscious executives suddenly have realized that the Republican brand, especially at the congressional level, is politically toxic. And they would rather not be too closely identified with it at this dangerous moment.
Remarkably, the Tea Party Republicans have now alienated their party’s most important constituency — the upper echelon of the business community. It is a profound irony that the issue raising friction between these politicians and their erstwhile backers is a fanatical partisan determination to defend the tax benefits enjoyed by those same wealthy executives.
The president’s opponents are backing themselves into a corner where even their own old friends cannot defend them. Meanwhile Obama may finally have learned that if he stands firm and refuses to negotiate with himself, he can win over public opinion and break the partisan obstructionism.
By: Joe Conason, The National Memo, December 7, 2012
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