“This Is Not 2009”: Democrats Have No Reason To Prematurely Throw Up Their Hands About 2014 Midterm Elections
With the scent of scandal encircling the White House, some Republicans are already licking their chops over the 2014 midterm elections, while some Democrats are pre-emptively licking their wounds.
Not so fast, folks. Retract those tongues.
While it is impossible to predict what might drive voter attitudes in an election 18 months away, there are quite a few signs that 2014 will be nothing like 2010, which produced tremendous success for Republicans.
First, the electorate is less conservative.
In May 2009, the Tea Party had just begun to flex its muscle and feel its power on a national level. Now, the movement has lost momentum.
An April 2012 Associated Press report included a finding from Theda Skocpol, a Harvard professor, that the number of Tea Party groups had fallen from about 1,000 to about 600. And a Washington Post/ABC News poll released this week found that the portion of people saying they strongly support the Tea Party, just 10 percent, was the lowest they had recorded since 2011.
Furthermore, according to a Gallup poll released Friday, the shares of Americans describing themselves as economic conservatives and social conservatives are down by more than a tenth since 2009, after having risen sharply following Barack Obama’s election a year earlier.
The portion of Republicans who said their position on economic issues was conservative — the Republican Trojan Horse for a retrograde social agenda — has seen little movement since 2009, dropping just five percentage points, from 75 percent to 70 percent.
(On the other hand, the share of Democrats who describe their positions on social issues as liberal has increased, from 45 percent to 50 percent.)
Speaking of economic issues, the economy is experiencing a resurgence, at least in some quarters.
In May 2009, the United States economy was nearing the end of the Great Recession. The unemployment rate had risen to 9.4 percent from 5.5 percent the previous year. People were losing their homes to foreclosures in record numbers. The Dow Jones industrial average had fallen to about 8,500 from more than 13,000 the previous May. And the deficit tripled from the 2008 fiscal year to the 2009 fiscal year, according to the nonpartisan Congressional Budget Office.
This had Americans rightfully worried and near-panicked about their economic prospects.
Now the economic picture couldn’t be more different.
The unemployment rate has dropped to 7.5 percent. The Dow is above 15,000 and continuing to set records. The housing sector is rebounding — “Sales of previously owned homes reached the highest level in more than three years, with the share of foreclosure purchases shrinking, as the housing market continued its rebound last month,” according to a report Thursday in The Wall Street Journal.
And the deficit is shrinking faster than expected, according to a report released last week by the budget office. The report found that if current laws are unchanged, “Relative to the size of the economy, the deficit this year — at 4.0 percent of gross domestic product (G.D.P.) — will be less than half as large as the shortfall in 2009, which was 10.1 percent of G.D.P.”
This takes almost all of the air out of the Republicans’ economic argument.
Lastly, legislative unease has become about what Republicans haven’t done, rather than what Democrats have done.
By May of 2009, President Obama had already signed the huge — though many still believe not huge enough — stimulus package, Chrysler and General Motors were in need of a bailout and the ball was rolling on the president’s historic health care law.
Conservatives were railing against what they saw as an unprecedented, ominous and ultimately ruinous expansion of government, driven by the president and made possible by a Congress controlled by Democrats.
Now, the tables have turned. Two of the most glaring legislative failures this year have ostensibly been the work of obstinate Republicans: the failure to avoid the sequester and the failure to pass expanded gun background checks legislation. According to that recent Washington Post/ABC News poll, most Americans still disapprove of the sequester’s automatic spending cuts, and according to a Pew Research Center poll released Thursday, 81 percent of Americans still favor the passage of a bill expanding background checks.
The next hurdle will be immigration reform. But Republicans may find a way to derail that legislation, too.
The signs look positive for Democrats this spring. This is not to say that they should prematurely lift their glasses, only that they have no reason to prematurely throw up their hands.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, May 24, 2013
“It’s All Your Fault”: Federal Reserve Chair Calls Out Congress For Being The Drag On The Economy
The stock market is testing new highs, the unemployment rate is declining and consumer confidence is at a six-year peak, but the Federal Reserve chairman Ben Bernanke wants Congress to know that things could be a lot better.
Testifying Wednesday in front of the Joint Economic Committee of Congress, Bernake pointed out that the economy has been improving, but one obstacle is keeping a real recovery from sparking — them:
“Most recently, the strengthening economy has improved the budgetary outlooks of most state and local governments, leading them to reduce their pace of fiscal tightening. At the same time, though, fiscal policy at the federal level has become significantly more restrictive. In particular, the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of the sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year.”
President Obama was able to delay serious austerity — tax increases paired with budget cuts — from coming into effect until this year. This delay has given housing a chance to recover, as evidenced by strong recent earnings from The Home Depot.
However, there’s no doubt that the payroll tax holiday, which Republicans never considered extending, is affecting every America who lives paycheck to paycheck. The sequester will take $85 billion and 750,000 jobs out of the economy this year. Even the ending of the Bush tax cuts on income over $400,000 will take some steam out of the economy, though tax breaks for the rich have the least stimulative benefit for the economy.
Bernanke points out that the biggest problem with the sequester is that it has no real effect on the actual problem this country faces — the long-term deficit.
“Although near-term fiscal restraint has increased, much less has been done to address the federal government’s longer-term fiscal imbalances,” he said. “Indeed, the [Congressional Budget Office] projects that, under current policies, the federal deficit and debt as a percentage of GDP will begin rising again in the latter part of this decade and move sharply upward thereafter.”
Basically, Bernanke is echoing what New York Times‘ columnist Paul Krugman has been saying for years: Get the economy going, then worry about long-term fixes.
By: Jason Sattler, The National Memo, May 22, 2013
“The Media Has Cast Its Traditional Role Aside”: Washington Circus Steals The Spotlight From Where It Belongs
Can President Barack Obama put out the brush fires that are sucking the air out of his second-term agenda? Can he stop the spread of mini-scandals that are consuming Washington?
No, he cannot. The president could (unconstitutionally) shutter every Internal Revenue Service office and fire every staffer, from top-ranking executives to lowly administrative aides, and it would hardly matter. Republicans would simply change the terms of the debate and impeach him for destroying the 16th Amendment.
Official Washington is now all spectacle, all circus, all manufactured outrage abetted by a press corps addicted to controversy. Actual policies are slighted while political posturing takes the stage; simmering problems are ignored while canned contretemps and stale theater consume all the attention. That has been true for years now, but it just keeps getting worse.
There are serious failings at the heart of each of the sideshows currently consuming officialdom. The most egregious concerns the IRS, where bureaucrats singled out conservative groups for a vetting that veered into political harassment. That not only violates deep-rooted ideals of fairness and justice, but it also contravenes federal law. It raises the specter of the sort of political harassment carried out by Richard Nixon, who wielded the IRS as a bludgeon against his political adversaries, and by J. Edgar Hoover, who ordered tax audits of the Rev. Martin Luther King Jr.
While IRS-gate reflects poorly on Obama’s leadership, there is not a scintilla of evidence that he had anything to do with it. Further, the president has responded with aplomb: He has forced the resignation of the acting head of the agency as the FBI launches a criminal investigation. (That’s about all the administration can do since federal rules insulate IRS bureaucrats from elected officials, all in an effort to prevent scandals such as those mentioned above.)
If Republicans doubt the president’s ability to impartially oversee an investigation of his own administration, they might appoint a special prosecutor. Instead, they have promised more hearings on Capitol Hill — more partisan spectacle, more canned outrage, more useless theater.
Though the national press corps sticks to its unwritten rule of blaming Democrats and Republicans equally for the mess our national politics have become, the facts show that responsibility cannot be equally apportioned. Democrats don’t eschew partisan mudslinging, but they are not very good at it. The GOP, by contrast, has raised it to an art form.
Take a look at the last two presidential administrations. Though Bill Clinton reigned over an era of peace, prosperity and a balanced budget, the GOP impeached him on charges that grew out of an adulterous affair. George W. Bush took the country to war on the wings of a lie, tortured detainees and wrecked the budget. Democrats pointed fingers and conducted investigations, but they did not impeach him.
The news media, meanwhile, breathlessly report every email, every accusation, every pointed finger. They parse political winners and losers. Will the Benghazi hearings damage Hillary Clinton’s chances for the presidency in 2016? Will the IRS controversy hurt immigration reform? Will the controversies heal Republicans’ internal divisions?
As much as it troubles me to say so, Washington journalists have cast aside their traditional roles as trumpets of a substantive truth. They rarely uncover genuine abuses of power, cast a skeptical eye on untoward developments (such as the warmongering that led to the invasion of Iraq) or even explain the nuances of policy. Heck, they barely bother to inform the public when yesterday’s huge scandal becomes suddenly less, well, scandalous.
Take the budget deficits. Wasn’t it just two months ago that Republicans were insisting that the Obama administration was sending the entire nation to the poorhouse? What happened to those deficits?
As it turns out, they are shrinking, just as many mainstream economists had predicted. As the economy recovers, the federal government pays out less in assistance and takes in more in taxes.
You haven’t heard a lot of chatter about that or about the people hurt by the continuing cuts that were supposedly made necessary by that looming deficit. Many struggling Americans are finding their childcare options limited, their community clinics closed, their assistance for housing and meals shrinking — with little notice from official Washington. That’s the real scandal.
By: Cynthia Tucker, The National Memo, May 18, 2013
“Extortion For The Sake Of Extortion: Republicans Taking The Politics Of Extortion Past The Breaking Point
With the House and Senate both having passed budget resolutions, the next step in the process should be a conference committee, which Republican leaders said they wanted. Recently, however, they changed their mind and now refuse to allow the process to proceed.
Why? I’ve worked under the assumption this is the result of GOP lawmakers feeling apprehension about their unpopular ideas and fearing a public backlash. But the Washington Post reports there may be a little more to it.
[The shrinking deficit] might seem like good news, but it is unraveling Republican plans to force a budget deal before Congress takes its August break. Instead, the fiscal fight appears certain to bleed into the fall, when policymakers will face another multi-pronged crisis that pairs the need for a higher debt limit and the fresh risk of default with the threat of a full-scale government shutdown, which is also looming Oct. 1.
In the meantime, Republicans face a listless summer, with little appetite for compromise but no leverage to shape an agreement. Without that leverage, House Budget Committee Chairman Paul Ryan (R-Wis.) said Tuesday, there is no point in opening formal budget negotiations between the House and the Senate, because Democrats have no reason to consider the kind of far-reaching changes to Medicare and the U.S. tax code that Republicans see as fundamental building blocks of a deal.
“The debt limit is the backstop,” Ryan said before taking the stage at a debt summit organized by the Peter G. Peterson Foundation in Washington.
I realize talking about budgets, conference committees, and debt ceilings is dry. This no doubt strikes some readers as inside baseball, of little interest to anyone other than political junkies and wonks.
But I hope folks will take a moment to consider what Ryan and his colleagues are saying here. They’re admitting, publicly and without shame, that they can’t engage in budget negotiations unless they can also threaten to deliberately crash the economy. GOP lawmakers want a “backstop” that will give them “leverage” in talks — whereas the conference committee is ostensibly about finding a bipartisan, bicameral compromise, Republicans need the possibility of a brutal self-inflicted crisis to hang over the process.
And if they can’t have it, they won’t engage in the budget process at all.
Wait, it gets worse.
Congressional Republicans made a series of assumptions, all of which have turned out to be wrong. They assumed Senate Democrats couldn’t pass a budget. They assumed Democrats wouldn’t want a budget process considered under regular order. And they assumed the budget talks, if they occurred, would happen around the same time as the need for a debt-ceiling increase.
GOP lawmakers were terribly disappointed, then, to see Senate Democrats do exactly what they were asked to do, and the economy improved quickly enough to push off the debt-limit deadline until fall.
But with their plans foiled, Republicans are stuck with no Plan B, no leverage, and no credible threat. Consider how remarkable this is:
[S]enior Senate Republicans, including several who recently dined with Obama and huddled with administration officials, conceded that it may be tough to bring their colleagues to the table too far ahead of the debt-ceiling deadline.
“I think there’s a better atmosphere for a solution than there’s been in the past, but I’m a little worried about people here in the Senate having fiscal fatigue. There isn’t any sense of urgency right now,” said Sen. Bob Corker (R-Tenn.), one of three senators who joined Obama on Monday for a round of golf.
“We need to realize this debt ceiling is out there. It’s inevitable. It’s coming. And [the later deadline] should not relieve pressure,” said Sen. Jeff Sessions (Ala.), the senior Republican on the Senate Budget Committee. But “sometimes we don’t want to act until a gun is at our heads.”
Think about that for a second. The ranking member of the Senate Budget Committee is willing to admit — out loud and on the record — that there can’t be a budget process unless he and his Republican colleagues can threaten to trash the full faith and credit of the United States on purpose.
And here’s the kicker: Republicans aren’t even asking for anything specific yet. They know they want to hold the nation hostage, but they’re not sure why, and haven’t figured out what their demands are. Jonathan Bernstein argued persuasively yesterday that we’re looking at “extortion for the sake of extortion.”
The House crazy caucus is demanding not debt reduction, not spending cuts, not budget balancing, but blackmail itself. That’s really the demand: The speaker and House Republican leaders absolutely must use the debt limit as extortion. What should they use it to get? Apparently, that’s pretty much up for grabs, as long as it seems really, really, big — which probably comes down to meaning that the Democrats really, really don’t like it.
It’s the extortion that’s the point. Not the policy.
I’ve run out of adjectives to describe how crazy this is, but I’ll just conclude with this: those pundits who assume Republicans are a mainstream political party, and it’s a mystery as to why President Obama hasn’t had more success negotiating with these folks, just aren’t paying close enough attention.
By: Steve Benen, The Maddow Blog, May 9, 2013
“The Story Of Our Time”: The Most Crucial Thing To Understand Is The Economy Is Not Like An Individual Family.
Those of us who have spent years arguing against premature fiscal austerity have just had a good two weeks. Academic studies that supposedly justified austerity have lost credibility; hard-liners in the European Commission and elsewhere have softened their rhetoric. The tone of the conversation has definitely changed.
My sense, however, is that many people still don’t understand what this is all about. So this seems like a good time to offer a sort of refresher on the nature of our economic woes, and why this remains a very bad time for spending cuts.
Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family.
Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too.
And that’s what happened after the financial crisis of 2008. Many people suddenly cut spending, either because they chose to or because their creditors forced them to; meanwhile, not many people were able or willing to spend more. The result was a plunge in incomes that also caused a plunge in employment, creating the depression that persists to this day.
Why did spending plunge? Mainly because of a burst housing bubble and an overhang of private-sector debt — but if you ask me, people talk too much about what went wrong during the boom years and not enough about what we should be doing now. For no matter how lurid the excesses of the past, there’s no good reason that we should pay for them with year after year of mass unemployment.
So what could we do to reduce unemployment? The answer is, this is a time for above-normal government spending, to sustain the economy until the private sector is willing to spend again. The crucial point is that under current conditions, the government is not, repeat not, in competition with the private sector. Government spending doesn’t divert resources away from private uses; it puts unemployed resources to work. Government borrowing doesn’t crowd out private investment; it mobilizes funds that would otherwise go unused.
Now, just to be clear, this is not a case for more government spending and larger budget deficits under all circumstances — and the claim that people like me always want bigger deficits is just false. For the economy isn’t always like this — in fact, situations like the one we’re in are fairly rare. By all means let’s try to reduce deficits and bring down government indebtedness once normal conditions return and the economy is no longer depressed. But right now we’re still dealing with the aftermath of a once-in-three-generations financial crisis. This is no time for austerity.
O.K., I’ve just given you a story, but why should you believe it? There are, after all, people who insist that the real problem is on the economy’s supply side: that workers lack the skills they need, or that unemployment insurance has destroyed the incentive to work, or that the looming menace of universal health care is preventing hiring, or whatever. How do we know that they’re wrong?
Well, I could go on at length on this topic, but just look at the predictions the two sides in this debate have made. People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out.
Is the story really that simple, and would it really be that easy to end the scourge of unemployment? Yes — but powerful people don’t want to believe it. Some of them have a visceral sense that suffering is good, that we must pay a price for past sins (even if the sinners then and the sufferers now are very different groups of people). Some of them see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain.
What has happened now, however, is that the drive for austerity has lost its intellectual fig leaf, and stands exposed as the expression of prejudice, opportunism and class interest it always was. And maybe, just maybe, that sudden exposure will give us a chance to start doing something about the depression we’re in.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 28, 2013
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