“Moving The Grenade To The Other Hand”: John Boehner Wants To Keep One Hostage, Briefly Let The Other Go
Have you looked at the major Wall Street indexes this morning? As I type, the Dow Jones Industrial Average is up over 200 points, and as a matter of percentage, the S&P and Nasdaq indexes are doing even better. After weeks in which stocks were on a downward trend, what caused the sudden spike?
Wall Street is now under the impression that congressional Republicans are not going to use the debt ceiling to crash the economy on purpose. This leads to a variety of questions, not the least of which is whether Wall Street’s exuberance is rational.
It may not be. Jane Timm reports from Capitol Hill:
On Thursday, House Speaker John Boehner proposed a short-term debt ceiling increase — if President Obama will negotiate on opening the government.
That plan may be presented to Obama this afternoon, when a delegation of Republican negotiators will meet at the White House.
And this is where things start to get messy.
We talked earlier about the subtle shifts in the Republicans’ posture, as it slowly dawns on them that they’re losing the public; they won’t achieve their goals through extortion; and they need to find a way out of the trap they set and then promptly fell into.
So, Boehner and his team came up with a plan. They’ll let the government shutdown continue, but raise the debt ceiling for six weeks. In exchange for not crashing the economy on purpose, Democrats will have to agree to participate in budget negotiations.
Will Republicans agree to let the government reopen during the budget talks? No.
Will Republicans take the prospect of a debt-ceiling crisis off the table? No.
Is there any chance in the world Democrats will consider this a credible solution? No.
Indeed, it’s already been rejected.
The White House indicated that while the president might sign a short-term bill to avert default, it rejected the proposal as insufficient to begin negotiations over his health care law or further long-term deficit reductions because the plan does not address the measure passed by the Senate to finance and reopen the government.
“The president has made clear that he will not pay a ransom for Congress doing its job and paying our bills,” said a White House official, speaking on the condition of anonymity.
The Democratic appeal to Republicans can basically be summarized in a few words: Just do your job. The government needs to be funded, so fund it — without strings attached or a series of demands. The debt ceiling needs to be raised, so raise it — without demanding treats or taking hostages. At that point, the parties can enter negotiations on just about anything and everything.
But the GOP’s new “offer” is predicated on the same assumptions as the other “offers”: Republicans won’t talk unless the threat of deliberate harm hangs over the discussion. It’s effectively become the GOP’s prerequisite to every process: only plans involving hostages will be considered.
Indeed, why raise the debt ceiling for just six weeks? Either Republicans are prepared to hurt Americans on purpose or they’re not. This is either a threat or it isn’t. Boehner is willing to put the pin back in the grenade, but he wants Democrats to know he’s prepared to pull it again around Thanksgiving?
I suppose it’s evidence of some modicum of progress that GOP officials are looking for a new way out of this mess, but this new “plan” is hardly any more credible than the others.
I wish I could share in Wall Street’s excitement, but I don’t.
By: Steve Benen, The Maddow Blog, October 10, 2013
“The Gumption Gap”: GOP Moderates Should Ditch Their Party
Over the next couple of weeks, the fate of, well, some pretty big things — the Republican Party, the American system of government, the global economy — rests with about 20 people: Republican members of the House who have said they favor a straight-up continuing resolution that funds the government. No re-litigating Obamacare, no scaling back Social Security — just a “clean” resolution that would leave those other conservative causes to be fought about on their merits some other day.
When those votes are added to those of the 200 House Democrats who have said they would support a clean resolution, that yields a narrow majority for ending the government shutdown. It is hard to believe that those GOP dissidents wouldn’t support raising the debt ceiling as well. If they’re not willing to hold the functioning of government hostage to the tea party’s demands, they’re not likely to hold the economy hostage, either.
But that’s a big “if.” While The Post counts 21 GOP House members who have declared themselves in favor of ending the shutdown by passing a clean resolution, most of them have done nothing to compel the House Republican leadership to allow such a vote.
They could, for example, publicly declare their intention to join House Democrats in signing a discharge petition that would eventually force such a vote. They could privately declare that intent to House Speaker John Boehner, leaving him either to accede to such a vote or have it forced upon him. These center-right Republicans, however, have not indicated that they are willing to cross that Rubicon.
There is a simple explanation for their reluctance: Such action would surely result in serious primary challenges in 2014, when all the internal dynamics of today’s Republican Party would be working against them. The gerrymandering of congressional districts has made them safe for radical conservatives. The rise of the right that has marginalized the party nationally and driven moderates from its ranks has made the remaining handful of center-right incumbents exquisitely vulnerable to tea party challengers.
That, in turn, has created a strategic asymmetry within the House Republican caucus. The tea party faction, which by most estimates includes about 40 members, wields vast power over the leadership and the caucus, while the center-right contingent wields zilch. Both factions have enough votes to block legislation backed by the House leadership if the Democrats also vote against it, but it has been tea partyers, not centrist-moderates, who have used that veto power. Unlike their tea party counterparts, the center-right members lack gumption and imagination.
The gumption gap is understandable;unlike the Republican radicals, the moderates fear primary challenges next year. But there is a way to avoid Republican primary challenges, though it would take a leap of political imagination. To vote his beliefs and duck that challenge, all a center-right Republican has to do is declare himself an independent.
This is hardly a course to be taken lightly. It entails the loss of congressional seniority and would cause rifts with friends and allies. It requires considerable explanation to one’s constituents. There is no guarantee of reelection.
But others have taken this course and survived — most recently, former senator Joseph Lieberman, who, when he lost Connecticut’s Democratic Senate primary in 2006, reconfigured himself an independent and won reelection. Many of the House members tagged as supporters of a clean resolution, such as New York’s Peter King and Pennsylvania’s Charlie Dent, come from districts in the Northeast that aren’t as rabidly right as some in the Sunbelt. Others, such as Virginia’s Scott Rigell and Frank Wolf, come from districts with large numbers of federal employees, who almost surely are not entranced by the tea party’s anti-government jihad.
Leaving Republican ranks would not mean joining the Democrats. The ideological gap between GOP dissidents and the Democratic Party is huge. But the center-right dissidents are being willfully blind if they can’t see that the ideological gap between them and the tea-party-dominated GOP is also vast.
If they truly believe that government by hostage-taking is no way to run a democracy, they shouldn’t have too much trouble defending their defection. They could argue that their party has been transformed into a closed sect that can never win a national majority, or that it has descended into a hysteria that has run roughshod over such conservative values as prudence and balance, not to mention a modicum of strategic sense.
They could dub themselves Independent Republicans or True Republicans. They could tell their constituents that they put the interests of the nation above those of their party. If that’s not a winning argument in a swing district, Lord only knows what is.
Of course, these dissident Republicans could always stay and fight. But by staying and not fighting — their current course of inaction — they abet the very tea party takeover they dread.
By: Harold Meyerson, Opinion Writer, The Washington Post, October 9, 2013
“There Are No Asterisks”: Those Who Wrap Themselves In The Constitution, Must Also Abide By The Constitution
Shortly after the 2010 midterms, as the newly elected House Republican majority was poised to start governing (I use the word loosely), the GOP officials had an idea for a symbolic gesture: they’d read the entire Constitution out loud. In January of this year, as the new Congress got underway, they did it again.
There wasn’t any harm in this, of course, but there wasn’t any point, either. It seemed to be the Republicans’ way of reminding the political world that they are the ones who truly love the Constitution. Sure, there are parts conservatives don’t like (the establishment clause, promoting the general welfare), and the right is eager to amend the document in a wide variety of ways, but for Tea Partiers and their allies, the Constitution has no greater champions than far-right congressional Republicans.
And if that’s still the case, Kristin Roberts has some bad news for them.
Have Republicans forgotten that they too must abide by the Constitution?
The document is explicit in its instruction to America’s federally elected officials — make good on the country’s debts. “The validity of the public debt of the United States,” the 14th Amendment states, “shall not be questioned.”
This is not some arcane biblical reference that needs to be translated from scraps of parchment. In fact, its purpose and intent are fairly well documented.
There’s been quite a bit of talk about exotic tactics President Obama may have to consider if congressional Republicans choose to push the United States into default on purpose. Maybe the White House can pursue a “14th Amendment option.” Maybe he can mint a “platinum $1 trillion coin.” Maybe the Treasury can create “Super Premium Bonds.” Maybe the president can do something to protect Americans from those who would do us deliberate harm, even if those people happen to be elected members of Congress. After all, if the validity of the public debt of the United States shall not be questioned, doesn’t Obama have a constitutional obligation to protect us from Republicans’ sociopathic tendencies?
Maybe it’s time to turn the question around on those who like to wrap themselves in the Constitution they claim to revere.
As this relates to Obama, there’s some disagreement among credible experts about whether the president can act unilaterally to circumvent the debt-ceiling law. Obama himself addressed the point yesterday, arguing that it really is up to Congress to complete this simple task and it wouldn’t do any good for him to experiment with creative alternatives.
But that only helps reinforce the importance of the question for congressional Republicans who swear to support the Constitution before they’re permitted to hold office. The document says, “The validity of the public debt of the United States shall not be questioned.” It doesn’t say anything about justifying extortion schemes, or holding the public debt hostage, or protecting the integrity of U.S. finances in exchange for right-wing goodies to satisfy U.S. House candidates who won fewer votes than their rivals.
Likewise, Article IV, Section 1 of the Constitution — known as the Full Faith and Credit Clause — doesn’t include any asterisks about what happens when one party really hates health care reform.
When the 14th Amendment was ratified, U.S. Sen. Benjamin Wade, an Ohio Republican, argued, “Every man who has property in the public funds will feel safer when he sees that the national debt is withdrawn from the power of a Congress to repudiate it and placed under the guardianship of the Constitution than he would feel if it were left at loose ends and subject to the varying majorities which may arise in Congress.”
Today’s congressional Republicans are prepared — some are eager — to betray this commitment, ignore their constitutional responsibilities, and put Americans’ wellbeing at risk for no particular reason.
Those who claim to cherish the Constitution have some explaining to do.
By: Steve Benen, The Maddow Blog, October 9, 2013
“The Boehner Bunglers”: The Truly Incompetent Can’t Even Recognize Their Own Incompetence
The federal government is shut down, we’re about to hit the debt ceiling (with disastrous economic consequences), and no resolution is in sight. How did this happen?
The main answer, which only the most pathologically “balanced” reporting can deny, is the radicalization of the Republican Party. As Thomas Mann and Norman Ornstein put it last year in their book, “It’s Even Worse Than It Looks,” the G.O.P. has become “an insurgent outlier — ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
But there’s one more important piece of the story. Conservative leaders are indeed ideologically extreme, but they’re also deeply incompetent. So much so, in fact, that the Dunning-Kruger effect — the truly incompetent can’t even recognize their own incompetence — reigns supreme.
To see what I’m talking about, consider the report in Sunday’s Times about the origins of the current crisis. Early this year, it turns out, some of the usual suspects — the Koch brothers, the political arm of the Heritage Foundation and others — plotted strategy in the wake of Republican electoral defeat. Did they talk about rethinking ideas that voters had soundly rejected? No, they talked extortion, insisting that the threat of a shutdown would induce President Obama to abandon health reform.
This was crazy talk. After all, health reform is Mr. Obama’s signature domestic achievement. You’d have to be completely clueless to believe that he could be bullied into giving up his entire legacy by a defeated, unpopular G.O.P. — as opposed to responding, as he has, by making resistance to blackmail an issue of principle. But the possibility that their strategy might backfire doesn’t seem to have occurred to the would-be extortionists.
Even more remarkable, in its way, was the response of House Republican leaders, who didn’t tell the activists they were being foolish. All they did was urge that the extortion attempt be made over the debt ceiling rather than a government shutdown. And as recently as last week Eric Cantor, the majority leader, was in effect assuring his colleagues that the president will, in fact, give in to blackmail. As far as anyone can tell, Republican leaders are just beginning to suspect that Mr. Obama really means what he has been saying all along.
Many people seem perplexed by the transformation of the G.O.P. into the political equivalent of the Keystone Kops — the Boehner Bunglers? Republican elders, many of whom have been in denial about their party’s radicalization, seem especially startled. But all of this was predictable.
It has been obvious for years that the modern Republican Party is no longer capable of thinking seriously about policy. Whether the issue is climate change or inflation, party members believe what they want to believe, and any contrary evidence is dismissed as a hoax, the product of vast liberal conspiracies.
For a while the party was able to compartmentalize, to remain savvy and realistic about politics even as it rejected objectivity everywhere else. But this wasn’t sustainable. Sooner or later, the party’s attitude toward policy — we listen only to people who tell us what we want to hear, and attack the bearers of uncomfortable news — was bound to infect political strategy, too.
Remember what happened in the 2012 election — not the fact that Mitt Romney lost, but the fact that all the political experts around him apparently had no inkling that he was likely to lose. Polls overwhelmingly pointed to an Obama victory, but Republican analysts denounced the polls as “skewed” and attacked the media outlets reporting those polls for their alleged liberal bias. These days Karl Rove is pleading with House Republicans to be reasonable and accept the results of the 2012 election. But on election night he tried to bully Fox News into retracting its correct call of Ohio — and hence, in effect, the election — for Mr. Obama.
Unfortunately for all of us, even the shock of electoral defeat wasn’t enough to burst the G.O.P. bubble; it’s still a party dominated by wishful thinking, and all but impervious to inconvenient facts. And now that party’s leaders have bungled themselves into a corner.
Everybody not inside the bubble realizes that Mr. Obama can’t and won’t negotiate under the threat that the House will blow up the economy if he doesn’t — any concession at all would legitimize extortion as a routine part of politics. Yet Republican leaders are just beginning to get a clue, and so far clearly have no idea how to back down. Meanwhile, the government is shut, and a debt crisis looms. Incompetence can be a terrible thing.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 6, 2013
“The Debt Ceiling Matters”: House Republicans Are Threatening To Unambiguously Violate The Constitution
The word we keep hearing is “catastrophe.”
“A U.S. Default Seen as Catastrophe, Dwarfing Lehman’s Fall,” screams the headline in Bloomberg Businessweek. “A default would be unprecedented and has the potential to be catastrophic,” says a Treasury Department report issued on Thursday — two weeks before the government is expected to begin running out of cash.
But what does “catastrophic” actually mean in this context? In the summer of 2011, when Republicans refused to raise the debt ceiling unless President Obama caved to their extortionist demands, the same word was bandied about. It scared the political class enough that they kicked the can and avoided a default.
This time around, the need to raise the debt ceiling doesn’t seem to be generating nearly the same concern. Indeed, Tea Party Republicans seem to be almost rooting for the government to default, as if that would somehow bring about the smaller government they so yearn for.
But this is incredibly wrongheaded. A failure to raise the debt ceiling, should it come to that, would likely inflict a different kind of pain than sequestration or even a shutdown of the federal government. It won’t make the government smaller. But it does have the potential to diminish the value of one of America’s greatest assets — the backing of its debt — while throwing the world economy into chaos.
The first point worth making is that the 14th Amendment to the Constitution, which declares that “the validity of the public debt of the United States . . . shall not be questioned,” was added precisely to avoid what is happening now: a faction of Congress using the debt ceiling as a bargaining chip. That basic truth, as Fortune’s Roger Parloff noted in a recent blog post, “ought to weigh very heavily in the minds — and on the consciences — of the House Republican faction that is now unambiguously violating its letter and spirit.”
The second point worth making is that U.S. government debt is the only risk-free asset in the world. That debt undergirds the entire world financial system — precisely because the whole world has such faith in it. There is always demand for U.S. government debt. Almost every other asset you can think of is in some way measured against it. A default would destabilize the market for Treasuries. And that, in turn, would likely destabilize every other asset.
The stock market would fall. Interest rates would rise — meaning, for instance, mortgages would become more expensive just as the housing market is starting to revive. Treasuries themselves would likely have to pay higher interest to investors, which would create a rather sad irony: a default would exacerbate the country’s long-term debt (the very problem the Republicans claim to care about).
Let’s move to the havoc a destabilized Treasury debt would have on the banking system. “The plumbing of the global financial system depends on Treasuries,” says Karen Petrou, a banking expert at Federal Financial Analytics. Remember what happened to Lehman Brothers? As the market lost faith in the company’s ability to meet its obligations, Lehman lost access to the “repo” market, which is the way banks are funded on a short-term basis. Treasuries make up a great deal of the collateral in the repo market. If a default were to cause the repo market to freeze, the entire banking system would find itself in crisis. Meanwhile — more shades of Lehman Brothers — the ratings agencies would likely downgrade Treasuries, forcing money market funds to start dumping government debt.
Painful choices would have to be made. Right now, the Treasury Department says it does not have the authority to pick and choose which creditors to pay. But, in the event of a default, it is hard to imagine that the government wouldn’t make some tough decisions about who should get paid in the short term — and who would have to wait. And, though this would infuriate millions of Americans, bondholders in China would likely get their money ahead of, say, Social Security recipients.
“From a purely cost-benefit analysis,” says Mark Zandi of Moody’s Analytics, “not paying bondholders would wind up costing the U.S. much more than not paying Social Security recipients” — because if bondholders lost faith in Treasuries, it would cost the government billions more in interest payments each year.
During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That’s how recessions — or depressions — begin, and that may be the most important consequence of all.
For as long as anyone can remember, the ability of the United States government to pay its bills on time has given the rest of world tremendous confidence. At the same time, to have the one asset everyone in the world trusts has given America great advantages.
Why on earth would we ever risk that? Why?
By: Joe Nocera, Op-Ed Columnist, The New York Times, October 8, 2013
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 