A Politician-Created Crisis: Why Did Congress Waste Six Months?
The House Republican strategy to link a normally routine increase in the nation’s debt limit with a crusade to slash spending has already had a high cost, threatening the nation’s credit rating and making the United States look dysfunctional and incompetent to the rest of the world.
But that’s not the most awful thing about it.
What’s even worse is that this entirely artificial, politician-created crisis has kept government from doing what taxpayers expect it to do: Solve the problems citizens care about.
The most obvious problem is unemployment. The best way, short term, to drive the deficit down is to spur growth and get Americans back to work. Has anyone noticed that Americans with jobs can provide for their families, put money into the economy — and, oh yes, pay taxes that increase revenue and thus cut the deficit?
There is no mystery about the steps government could take. Ramping up public works spending is a twofer: It creates jobs upfront and provides the nation’s businesses and workers the ways and means to boost their own productivity down the road.
Wise infrastructure spending can save energy. And when public works investments are part of metropolitan plans for smarter growth, they can also ease congestion and reduce commuter times, giving our citizens back valuable minutes or hours they waste in traffic. If you want a pro-family policy, this is it.
State and local budgets all across the country are a shambles. Teachers, police, firefighters, librarians and other public servants are being laid off. As the New York Times’ David Leonhardt pointed out recently, even as the private economy has been adding jobs, if too slowly, state and local governments have hemorrhaged about half a million jobs in two years.
President Obama knows this. “As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector,” he said in his July 11 news conference. “So my strong preference would be for us to figure out ways that we can continue to provide help across the board.”
So why not do it? “I’m operating within some political constraints here,” Obama explained, “because whatever I do has to go through the House of Representatives.”
Excuse me, Mr. President, but if you believe in this policy, why not propose it and fight for it? Leadership on jobs is your central job right now. Let the Republicans explain why they want more cops and teachers let go, or local taxes to rise.
We should also extend the payroll tax reduction instituted last year and unemployment insurance. Why so little discussion of how balky Republicans have been on this Obama tax cut proposal, or how resistant they have been to further help those out of work? They won’t raise taxes on the rich to balance the budget but are utterly bored by relief for the middle class or the jobless. Isn’t that instructive?
And while we have been parsing the Rube Goldberg complexities of Senate Republican leader Mitch McConnell’s procedural contortions to get us out of a battle we should never have gotten into, we haven’t been discussing how to reform the No Child Left Behind law.
It’s true that some good people in Congress are trying to figure out a way forward on education reform. That’s a far more important national conversation than whether Tea Party Republicans understand the elementary laws of economics. But you wouldn’t know it because those who care about the substance of governing never get into the media. You get a lot of attention — and are sometimes proclaimed a hero — if you say something really dumb about the debt ceiling.
Then there is the coming debate over a “balanced budget” amendment to the Constitution that would limit government spending to 18 percent of gross domestic product and require a two-thirds vote to raise taxes. It’s an outrageous way for members of Congress to vote to slash Medicare, Medicaid, Social Security, aid to education and a slew of other things, to lock in low taxes on the rich — and never have to admit they’re doing it. It’s one of the most dishonest proposals ever to come before Congress, and I realize that’s saying something.
Every member of Congress who got us into this debt-ceiling fight should be docked six months’ pay. They wasted our time on political posturing instead of solving problems. Better yet, the voters might ponder firing them next year. This could do wonders for national productivity.
By: E. J. Dionne, Opinion Writer, The Washington Post, July 17, 2011
The Incredible Crazies: Finding Someone The House GOP Will Listen To
Negotiating with House Republicans isn’t just difficult because they refuse to compromise; it’s also because they don’t even appreciate the point of the exercise. Told, for example, that failure on the debt ceiling would lead to a disaster, the House GOP simply doesn’t believe the evidence.
It’s challenging enough trying to craft an agreement when the parties have the same goal. But what happens when the crew of the Titanic says, “The captain’s wrong; icebergs are no big deal”?
The trick is finding someone the crazies find credible. (thanks to T.K.)
Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation’s debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default. […]
At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling. […]
The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills. [emphasis added]
Right-wing freshman Rep. Steve Womack (R-Ark.) said he found the presentation, particularly the parts about skyrocketing interest rates, “sobering.”
Oh, now it’s “sobering”? We’re 17 days before the drop-dead crisis deadline, and now it’s dawning on some House Republicans that they’re not only playing with matches, but may actually torch the entire economy?
At this point, of course, I’ll take progress wherever I can find it. If some of the House GOP’s madness is “softening,” maybe they’ll be slightly more inclined to be responsible.
But I can’t help but find it interesting the limited pool of individuals Republicans are willing to listen to. The Treasury tells the House GOP caucus members they have to raise the debt ceiling, and Republicans don’t care. The Federal Reserve tells them, and they still don’t care. House Speaker John Boehner tells them, and that doesn’t work, either. Business leaders, governors, and economists tell them, and Republicans ignore all of them.
But Paul Ryan warns of a meltdown and all of a sudden, the House GOP is willing to pay attention.
I guess we should be thankful the radical House Budget Committee chairman is only wrong 90% of the time, and not 100%.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 16, 2011
Economic Illiteracy: GOP Catering To Tea Party Ignorance On Debt Ceiling
What happens when you take the certainty of an ideologue, mix in an unhealthy dose of economic illiteracy, shameless demagoguery, and bring the combustible mix to a boil on the national stage? Quite possibly national default and a new recession.
The nature of this mix—and the corner into which GOP leaders have painted themselves—is neatly illustrated in the latest poll numbers from The Washington Post and the Pew Research Center.
As the Post’s Chris Cillizza and Aaron Blake note today:
The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
…
The message from the numbers? Tea party backers simply don’t believe that not raising the debt limit by Aug. 2 is all that big a deal — and they feel that way because they believe they understand the issue inside and out.
…
If a significant chunk of his House members don’t fear the consequences of a default, it’s very difficult for Boehner to make the case for the fierce urgency of now in the debt debate.
While the overwhelming number of economists—and even prominent non-economists like John Boehner and Mitch McConnell, who have both stated that not raising the debt ceiling is unthinkable—say that failure to raise the debt ceiling could have a host of nasty consequences for the economy, like a global financial crisis, downgrading of the U.S. credit rating, and a second recession … the Tea Party crowd has anointed itself a group of experts who know better.
This is why Eric Cantor could with a (presumably) straight face argue yesterday that the GOP’s great concession in this debate was considering a debt ceiling increase at all. But sorry, our base is too wound up in its own misconceptions to allow us to do the slam dunk right thing for the county is the politics of cowardice. And it’s a brand that Cantor, who has referred to the debt ceiling crisis as a “leverage moment”—an opportunity for the GOP to extract concessions in order to be forced to do the right thing—has played with either cold cynicism or reckless stupidity.
Then there’s Boehner, who acknowledges the debt ceiling must be raised but cloaks it in the language of Obama getting “his” rise in the debt ceiling—as if keeping the country from an economic disaster is some parochial, partisan, hobby.
No less a publication than The Economist, hardly a hotbed of socialist foment, recently called the GOP position “economically illiterate and disgracefully cynical.” I think that’s about right.
By: Robert Schlesinger, U. S. News and World Report, July 12, 2011
Reckless And Scandalous: ‘A Gamble Where You Bet Your Country’s Good Name’
I can’t help but think the vast majority of the public just doesn’t fully appreciate what’s transpiring here.
We’re dealing, after all, with fairly obscure legal mechanisms. Most Americans don’t know what the federal debt ceiling is, and in fairness, they’ve never had to. It’s a law that was approved more than eight decades ago, and hasn’t been particularly controversial or even relevant since. Policymakers have always realized they have an obligation — legal, economic, moral, and otherwise — to do the right thing.
The United States is like the Lannisters: we always pay our debts. And in the case of the debt ceiling, we’re talking about money we’ve already spent — this is the equivalent of getting a credit card bill for charges we’ve already made. The entirety of the Republican Party — in the House, in the Senate, among its presidential candidates — has said it might pay the bill, but only if Democrats agree to take trillions of dollars out of a fragile economy.
And if Democrats don’t do enough to make Republicans happy, GOP officials will simply refuse to do their duty. They know the consequences would be severe for the nation and the world. They apparently don’t care.
Americans almost certainly can’t appreciate the extent to which they’ve made a tragic mistake. Voters perceived the Republican Party has a conservative governing party, capable of responsible center-right governance, and rewarded the GOP handsomely in 2010. What voters probably didn’t understand are the similarities between today’s Republican Party and a not-terribly-bright organized-crime family, run entirely by petulant children.
The Economist, a conservative publication, had a fascinating editorial this week, explaining that Republicans are creating a crisis, on purpose, for no reason. The United States has a manageable debt, low interest rates, low inflation, and the ability to borrow on the cheap. But because right-wing extremists are chiseling away at our political system, we’re quickly approaching a point of no return.
The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.
And the closer you look, the more unprincipled the Republicans look…. Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans.
The Economist added that this is “a gamble where you bet your country’s good name.”
I suspect there are many saying, “We get it; they’re reckless.” But that’s not enough — no one given this much power is supposed to be this reckless. Republicans gained power because voters were frustrated with high unemployment, and yet GOP leaders are threatening to deliberately create a crisis that would make unemployment much worse. And the breaking point is very soon.
All of this could go away in a heartbeat. Republicans could do, today, exactly what they did repeatedly during the Bush years: simply vote to raise the debt ceiling in a clean bill and move on. The entire process could take literally a few minutes.
But GOP officials don’t want to. They want to play a game in which the entire world could lose.
How is this not the biggest political scandal in modern American history? How is it that those who claim the high ground on patriotism could put our financial well being on the line, on purpose, when they don’t have to?
By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, July 10, 2011
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