“The GOP And Its Urge To Purge”: Don’t Get Caught Reading Marx In The Republican Cloakroom
It seems the Republicans have run out of squishy moderates to purge. Now they’re starting to run conservatives out of town for being insufficiently doctrinaire.
Exhibit A: The defenestration of Tom Cole.
Cole, a deeply conservative congressman from deeply Republican Oklahoma, is not to be confused with a RINO: Republican in name only. But when the lawmaker, who has been part of House GOP leadership, floated a perfectly sensible notion this week — that Republicans should accept President Obama’s offer to extend tax cuts for the 98 percent of Americans who earn less than $250,000 a year — he was treated as if he had been caught reading Marx in the Republican cloakroom.
“I think he’s wrong, and I think most of the conference thinks that he’s wrong,” declared rookie Rep. Raul Labrador (R-Idaho). Cole, he said, is “a man who has voted for a lot of the increased spending in Washington, D.C., and that’s the problem. We have a lot of Republicans who are, you know, catching their hair on fire right now, but they’re the ones who were here for 10 or 20 years causing all the problems that we’re now facing.”
Rep. Scott Garrett (R-N.J.) called Cole’s position “absurd.” House Speaker John Boehner went before the cameras to deliver Cole a rare public rebuke.
Cole, who enjoys a lifetime rating of 92 percent from the American Conservative Union as he enters his sixth term, isn’t worried about a putsch. “I think I’m going to be hard to sell as a dangerous liberal,” he told me with a chuckle. The outrage, he said, “surprised me a little bit, because I think the politics of this are blindingly clear.”
Cole is correct, for two reasons. On a practical level, his plan calls Obama’s bluff: Because raising taxes on the top 2 percent of earners won’t bring in nearly enough tax revenue to fix the budget problem, Obama would likely be forced to come up with some serious entitlement-program cuts as part of a larger tax-and-spending deal.
But Cole is right for a larger reason: The Republicans’ negotiating position is morally indefensible. They are holding 98 percent of Americans hostage by refusing to spare them a tax hike unless the wealthiest 2 percent are included.
“Some people seem to think this is leverage. I think that’s wrong,” Cole said. “You don’t consider people’s lives as leverage. I live in a blue-collar neighborhood. I’ve got a retired master sergeant as my next-door neighbor, police officer across the street. These are working folks, they’re great people, and the idea that I would ever use them as leverage is just wrong.”
In defying the party purists, Cole is taking a novel approach: doing what his constituents want him to do. His staff reports that calls and e-mails to his Washington office are running 70 percent favorable, and calls to his south-central Oklahoma offices are 90 percent positive.
No surprise: Median income in his district is under $47,000, below the national average of $52,000. Only 1.8 percent of households there have income of $200,000 or more.
“They’re pro-business, they’re pro-free enterprise,” Cole said of his constituents, who are farm and ranch workers, oil employees and the like. “But they’re going to want to know that we’re not going to raise taxes on them because they make $43,000 a year, and $1,000 to $2,000 is a lot of money when you’re trying to raise a family.”
Cole, who worked as a political consultant and as chief of staff at the Republican National Committee before coming to Congress, understands this reality better than many of his peers. In their obsession with protecting the wealthiest, Republicans often work against their own constituents, because red states tend to be poorer and more reliant on government spending.
Cole’s stand is a refreshing reminder that being conservative doesn’t mean you have to be unreasonable. “Both sides, I think, need to be a lot more clear-eyed,” he told me. “We’re going to be living in this house together for four years in all likelihood. Let’s get some things done that we can agree on.”
Thankfully, Cole, who won reelection with 68 percent of the vote, isn’t intimidated. Of his intraparty critics, Cole asks: “Where’s your political courage? It’s pretty easy to vote ‘no’ around here. But we’ve got a divided government. The American people ratified that in this election. They’ve basically told us to work together. Here’s something we both agree on that would be in their interest. Why don’t we do this?”
By: Dana Milbank, Opinion Writer, The Washington Post, November 30, 2012
“A Solid Template”: President Obama’s Opening Bid To Avert The Fiscal Cliff Is Familiar And Sound
President Obama’s opening bid for negotiations resolving the “fiscal cliff” has surfaced, and the contours are both familiar and sound. The Washington Postand an unofficial outline drafted by Republican aides both suggest that the administration has essentially proposed its budget request for fiscal 2013. And the president’s latest budget offers a solid framework for navigating the fiscal obstacle course, as it would substantially moderate the pace of deficit reduction while making a responsible down payment on longer-term deficit reduction. Relative to current policy, the contours are shaping up roughly as follows:
- Allow the upper-income Bush tax cuts to expire (+$850 billion)
- Restore the estate and gift taxes to 2009 parameters (+$120 billion)
- Curb tax expenditures (+600 billion)
- Stimulus spending (-$50 billion)
- Extend emergency unemployment benefits (-$30 billion)
- Extend or replace the payroll tax cut (-$110 billion)
- Continue AMT patch, “doc fix,” and tax extenders (-$240 billion)
- Defer sequestration (?)
Most critically, the Obama framework includes a variation of his American Jobs Act, proposing increased near-term government spending on infrastructure and state fiscal relief while maintaining the ad hoc stimulus set to expire at year’s end—the emergency unemployment compensation (EUC) program, the payroll tax cut, and recent expansion of refundable tax credits—which is the single largest economic headwind threatening recovery among the major components of the scheduled fiscal restraint. (See our à la carte deconstruction of these major components’ budgetary versus economic impacts) The Republican aides’ draft suggests the administration would dedicate $50 billion for infrastructure and stimulus spending, $30 billion for EUC, and $110 billion for an extension of the payroll tax cut or a targeted tax credit, all relative to current policy. And if the administration is looking for a replacement for the payroll tax cut, they could adopt our proposed targeted refundable tax rebate, which would provide a bigger and better economic boost.
Beyond these job creation measures, the president’s proposal for dealing with the economic challenge at hand of overly rapid deficit reduction would largely adhere to current policy—the alternative minimum tax would be indexed for inflation, scheduled Medicare physician reimbursement cuts would be prevented (i.e., the “doc fix” would be continued), expiring business tax provisions would be continued, the sequester would not be implemented in 2013, and the Bush-era tax cuts would be extended for all but upper-income households (those earning more than $250,000 a year). Again, this is all consistent with the president’s budget, with the exception that the budget repealed the sequester instead of deferring it to an unspecified date.
Overall, this proposal would substantially moderate the pace of deficit reduction relative to the current policy, which is critical because this baseline includes sizable fiscal contraction (the payroll tax cut and emergency unemployment benefits are assumed to expire and discretionary spending caps ratchet down). Indeed, the entire challenge posed by the fiscal obstacle course is that budget deficits closing too quickly will push the economy into an austerity-induced recession, and the president’s opening bid actually addresses this very real economic challenge, prioritizing job creation and economic recovery over the (not imminent) problem of longer-term deficit reduction.
But the proposal would make substantial long-run deficit reduction as well. It would allow the upper-income Bush tax cuts to expire, raise roughly another $600 billion from upper-income households and business (presumably by capping the value of tax expenditures), return the estate and gift tax to 2009 parameters, reduce Medicare and Medicaid spending by nearly $400 billion (largely without cost-shifting to states or households, with most savings from providers and pharmaceutical companies). Again, these are all proposals from the president’s budget request. As I calculated a few months back, the president’s budget—as scored by the Congressional Budget Office and adjusted for subsequent baseline revisions—would reduce public debt by $3.0 trillion relative to current policy, lowering the debt-to-GDP ratio to a sustainable 73.4 percent. (Add in the nearly $1 trillion from ending the war in Afghanistan, already built into current policy, and you hit the $4 trillion mark that has become the arbitrary but symbolic threshold for fiscal seriousness.)
A back of the envelope calculation suggests that the combination of continuing EUC, continuing the payroll tax cut, increased infrastructure spending, and expiration of the upper-income tax cuts would boost real GDP growth by 1.5 percentage points and increase nonfarm payroll employment by 1.8 million jobs by the end of 2013, relative to current policy. Details on timing of other deficit reduction are lacking, and would likely somewhat reduce the net economic boost, but the proposal nevertheless offers substantial net fiscal support for our depressed economy. My colleague Josh Bivens and I estimated in another recent paper that the president’s 2013 budget would boost employment by about 1.1 million jobs in 2013, largely because of AJA spending and targeted tax cuts (which we delayed one year from the now-ended 2012 fiscal year to allow for feasible implementation).
This framework also closely resembles the proposals in our recent EPI and Century Foundation report Navigating the fiscal obstacle course: Supporting job creation with savings from ending the upper-income Bush-era tax cuts. We proposed diverting half of the savings from ending the upper-income Bush tax cuts and recent estate tax cuts—roughly $600 billion—to job creation measures heavily weighted toward the next three years, which would boost real GDP growth by 1.7 percentage points and increase employment by 2.0 million jobs in 2013. The upper-income Bush tax cuts are the least economically supportive component of the fiscal obstacle course and have a huge opportunity cost; as far as down payments on deficit reduction go, this is the most sound starting point—as the president has proposed in all four budget requests.
The one major departure from the president’s budget is the new and excellent proposal to eliminate the statutory debt ceiling. The statutory debt ceiling has proved an unacceptable economic liability, particularly since Speaker of the House John Boehner (R-Ohio) irresponsibly pledged in May that he would again hijack the nation’s debt ceiling to be used as a bargaining chip. This duplicative, ill-conceived law should be repealed, or at the very least ruled inoperative.
The president’s budget offered a sound template for moderating the pace of deficit reduction, coupled with a down payment on longer-term deficit reduction that would impose little near-term economic drag—substantially less than the economic boost from the AJA. By adding repeal of the debt ceiling to this balanced package, the president’s opening bid makes for an even more responsible economic and budgetary policy.
By: Andrew Fieldhouse, Economic Policy Institute, November 30, 2012
“Fighting Fiscal Phantoms”:The GOP Hydra-Headed Deficit Scold Movement Has Lost Some Of Its Clout
These are difficult times for the deficit scolds who have dominated policy discussion for almost three years. One could almost feel sorry for them, if it weren’t for their role in diverting attention from the ongoing problem of inadequate recovery, and thereby helping to perpetuate catastrophically high unemployment.
What has changed? For one thing, the crisis they predicted keeps not happening. Far from fleeing U.S. debt, investors have continued to pile in, driving interest rates to historical lows. Beyond that, suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much. For that’s what the “fiscal cliff” — better described as the austerity bomb — is all about: the tax hikes and spending cuts scheduled to kick in at the end of this year are precisely not what we want to see happen in a still-depressed economy.
Given these realities, the deficit-scold movement has lost some of its clout. That movement, by the way, is a hydra-headed beast, comprising many organizations that turn out, on inspection, to be financed and run by more or less the same people; dig down into many of these groups’ back stories and you will, in particular, find Peter Peterson, the private-equity billionaire, playing a key role.
But the deficit scolds aren’t giving up. Now yet another organization, Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a “core principle.” That last part makes no sense in terms of the group’s ostensible mission, but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people.
So should we take this latest push seriously? No — and not just because these people, aside from exhibiting a lot of hypocrisy, have been wrong about everything so far. The truth is that at a fundamental level the crisis story they’re trying to sell doesn’t make sense.
You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.
This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.
For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.
But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.
Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.
Still, haven’t crises like the one envisioned by deficit scolds happened in the past? Actually, no. As far as I can tell, every example supposedly illustrating the dangers of debt involves either a country that, like Greece today, lacked its own currency, or a country that, like Asian economies in the 1990s, had large debts in foreign currencies. Countries with large debts in their own currency, like France after World War I, have sometimes experienced big loss-of-confidence drops in the value of their currency — but nothing like the debt-induced recession we’re being told to fear.
So let’s step back for a minute, and consider what’s going on here. For years, deficit scolds have held Washington in thrall with warnings of an imminent debt crisis, even though investors, who continue to buy U.S. bonds, clearly believe that such a crisis won’t happen; economic analysis says that such a crisis can’t happen; and the historical record shows no examples bearing any resemblance to our current situation in which such a crisis actually did happen.
If you ask me, it’s time for Washington to stop worrying about this phantom menace — and to stop listening to the people who have been peddling this scare story in an attempt to get their way.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 26, 2012
“Bob Woodward Is Still Useless”: The Fetishization Of Compromise And The “Magical President” Theory Of Governance
Remember that long New York Times Magazine “tick-tock” (“tick-tock” is an asshole phrase for “long article about how an important thing happened involving lots of interviews with observers and participants”) about the debt ceiling deal falling apart? And then that Washington Post one? And remember how we all basically know exactly what both sides thought of the other, and how all the accounts of the negotiations collapsing amount to partisan Rorschach tests in which each side thinks the other bears responsibility for the breakdown? Well, Bob Woodward is finally bringing us the definitive (unnecessary, redundant, pointless and late) account of this thing that we have read so many accounts of already. Aaaand it turns out that both sides are to blame for everything, always.
The book is out Tuesday. Naturally, the Post was allowed to run a news story detailing some of the book’s juicier bits before the book’s release. Likewise, various other news organizations got their hands on embargoed copies (by going to bookstores and buying them early) and served up their own summaries. And so any interesting nuggets of information in this book will have been endlessly chewed over by the time the thing is officially on sale.
Not that there’s that much nugget material! The New York Times:“The book highlights problems that are well known in Washington, but Mr. Woodward manages to get the president, Mr. Boehner and their inner circles to talk about them.” Quite the journalistic coup!
The Times goes on, in a slightly catty fashion:
Last summer’s bitter budget negotiations have been hashed over in several lengthy news accounts and Mr. Woodward’s is the most exhaustive, although it is not clear how much new information, if any, he has uncovered.
The big “revelation” is that President Obama chews Nicorette and John Boehner drinks merlot. Merlot! That’s a sissy big-city effete liberal drink. Oooh, merlot, I bet that’s real refreshing after you’re done mowing your lawn (and weeping).
More revelations (that have already been reported elsewhere): Pelosi and Reid don’t work well with the president. Eric Cantor constantly undermines Boehner, and they hate each other. Everyone — Democrats and the entire GOP leadership — thinks the Tea Party people are insane. Everyone in Washington is super petty and very easily offended!
The book reflects the surreal Washington consensus surrounding the importance of immediate deficit reduction in as regressive (“tough”) a fashion as possible. All Serious People agree that it is Very Important that we rein in “entitlements” in the midst of a prolonged and disastrous employment crisis and that it is a tragic thing that we missed an opportunity to get some retirement ages raised last year, to Save The Economy. And a major theme, of course, is that Obama didn’t use his magic president powers hard enough.
The problems of a bitterly divided government, one involving dozens of choke-points for any legislative proposal and with one arm being presided over by a guy with absolutely no control over the large apocalyptic death cult wing of his party, are of course all described as failures of President Obama to “lead.” Why couldn’t he “lead” John Boehner to “lead” the fanatics in the House to do something none of them had any interest in doing??? Why couldn’t he “lead” John Boehner to call him back when Boehner was too scared to call him back because he knew he didn’t have the authority or power to promise enough votes to pass anything???
From the Post:
In his final chapter, Woodward faults both Obama and Boehner for their handling of the fiscal crisis, concluding that “neither was able to transcend their fixed partisan convictions and dogmas. Rather than fixing the problem, they postponed it. … When they met resistance from other leaders in their parties, they did not stand their ground.”
He has tougher words for Obama. “It is a fact that President Obama was handed a miserable, faltering economy and faced a recalcitrant Republican opposition,” he writes. “But presidents work their will — or should work their will — on important matters of national business … Obama has not.”
This is rich. The fetishization of compromise for the sake of compromise — merit or lack thereof of “each side’s” position wholly ignored! — plus the Magical President Theory of governance. Presidents should “work their will … on important matters of national business,” according to the guy who co-wrote “All the President’s Men” and “The Final Days.” What a wonderful combination of meaningless and craven that “work their will” construction is. Bob Woodward refuses to acknowledge the limits of a president’s power but also thinks the president has a responsibility to exceed them in the name of accomplishing a policy shift that few Americans (and not even a majority in Congress) actually want.
(The other lesson is that economic hostage-taking will never actually be punished, especially if it’s successful. Screw the economy to win a political battle over tax rates, and Democrats will be attacked for not acquiescing to large enough cuts in programs for the poor! And now here come the hacks like David Feith using the book to pin the defense cuts in the hilarious sequestration deal on the White House.)
The book also apparently features yet another entry in the “Obama fails to talk to CEOs in a way that they find sufficiently deferential” genre. This time it’s the CEO of Verizon, a corporation that is pretty much horrible.
From the Post:
In the same vein, Woodward portrays Obama’s attempts to woo business leaders as ham-handed and governed by stereotype. At a White House dinner with a select group of business executives in early 2010, Obama gets off on the wrong foot by saying, “I know you guys are Republicans.” Ivan Seidenberg, the chief executive of Verizon, who “considers himself a progressive independent,” retorted, “How do you know that?”
“Who considers himself a progressive independent.” Oh, sorry, I guess it was very rude to assume the rich, union-busting telecom CEO is a Republican and not a made-up vague other thing. IT GETS WORSE:
Nonetheless, Seidenberg was later pleased to receive an invitation to the president’s 2010 Super Bowl party. But he changed his mind after Obama did little more than say hello, spending about 15 seconds with him. “Seidenberg felt he had been used as window dressing,” Woodward writes. “He complained to Valerie Jarrett, a close Obama aide … Her response: Hey, you’re in the room with him. You should be happy.”
Thank god Bob Woodward is around to make sure the American people know the truth about whether or not the CEO of Verizon had fun at the White House Super Bowl party.
Anyway thank god this horrible deal collapsed. Good work squabbling and fighting, vile partisans!
Hey, remember when Bob Woodward said a Biden/Hillary VP switch was “on the table” and then it turned out that his source was apparently Mark Penn, who has nothing to do with this administration because he is a reviled grifter? Because no one will bring that up when Woodward makes the rounds to promote this new book.
By: Alex Pareene, Salon, September 10, 2012
“In A Saner Era”: After Sept. 11 And Two Wars, There’s No Way For GOP To Defend Tax Cuts
Among the many ways the United States went berserk after the September 11 attacks, the least remarked upon, but most morally revealing, is what happened to Republican thinking about taxes during wartime.
Since that awful morning eleven years ago, the United States has been continually at war. But never before in our history has a political party made it a national priority to cut taxes for wealthy Americans at a time of war.
The obvious pattern has been the opposite — we’ve raised taxes to fund the extraordinary expenses war requires, as well as to make sure more fortunate Americans shoulder some of the burden as young soldiers, drawn mostly from middle and low income families, do the actual fighting.
But something snapped in the Republican mind after 9/11. We’ve now put a trillion dollars of war on our kids’ credit card, with Republicans leading the charge for tax cuts for the top the entire time.
In a saner era, the big 2001 Bush tax cutsenacted a few months before September 11 would have been immediately revisited, because we were now a nation at war.
In a saner era, it would have been unthinkable for a president to push for further tax cuts for the top in 2003, because by then we were a nation waging two wars. Instead, just two months after we invaded Iraq, Republicans, in a party line vote, enacted fresh tax cuts mostly benefiting high earners.
In a saner era, Republicans would never have held the debt limit hostage last year in order to get a deal that kept taxes low for the wealthiest Americans when we were still at war.
And in a saner era, a Republican presidential candidate worth $250 million who paid taxes at the rate of 13.9 percent on $20 million in income would never makefurther tax cuts for the top the centerpiece of his agenda when we still have nearly 80,000 troops in Afghanistan.
He’d see it as unseemly.
I’ve talked to friends who are military officers about this pattern and they find it grotesque. They live by a code of honor and an ethos of shared sacrifice that makes such choices seem obscene.
What were Republicans thinking? What is Mitt Romney thinking now? Only they know for sure, but what’s clear is that Republican leaders see no moral disconnect between the sacrifices borne by the tiny fraction of Americans who serve in the military (and their families), and repeated tax windfalls showered on a relative handful of well-to-do families at the same time.
Seen in this context, Romney’s failure to mention Afghanistan in his convention speech is even more troubling than we thought. It’s the supreme symbol of Republican compartmentalization. Instead of “Believe In America, ” the de facto GOP motto has become: “Let other people’s children fight our wars, funded by debt other people’s children can pay off later.”
Can anyone really defend this position? This isn’t what Republicans have stood for in the past. It’s the ultimate proof the GOP has gone off the rails.
The amazing thing is that Democrats almost never make the tax argument this way.
When I’ve done so on cable TV over the years, Republican guests react as if I’m from another planet. It’s so outside the well-worn grooves of the debate that they’re speechless for a moment. And then uncomfortable.
“Wait a minute,” I can hear them thinking, “he’s supposed to cry ‘fairness,’ and then I shout back ‘class warfare.’ What’s with this ‘nation at war’ business?”
Yet if the debate were framed around these realities, I think most Americans would react as my military friends do. They’d say it’s wrong. That we’ve lost our senses. That this isn’t how Americans behave. (Note to David Axelrod: This is a testable proposition).
That’s why President Obama should make this case forcefully during the debates. “We’ve been at war for over a decade, Mitt,” the president can say. “We’ve still got 80,000 troops in Afghanistan. Why have you and your party repeatedly made tax cuts for people like us your top priority at a time of war? We’ve never done that before in our history. Most Americans find it shameful.”
No answer that amounts to an evasion — “Well, even during a war, we need to grow the economy and give job creators incentives to expand” — will pass swing voters’ smell test.
Yet what other answer is there? Hammering this point could create the kind of eureka moment on which elections turn.
By: Matt Miller, Opinion Writer, The Washington Post, September 10, 2012
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