“Darrell Issa’s Misguided Priorities”: Desperate Even By GOP Standards
The Beltway’s interest in the role of sequestration cuts leading to canceled White House tours reached farcical heights last week, in large part because congressional Republicans are afraid the scrapped tourist opportunities will make them look bad.
But leave it to House Oversight Committee Chairman Darrell Issa (R-Calif.) to go completely over the top.
For those who can’t watch clips online, Issa released an attack video this morning, presumably paid for with our tax dollars, whining once more about the White House tours. The message of the attack itself is rather odd — Issa apparently believes the cancelation of tours will give the president more leisure time, though that really doesn’t make any sense — and comes across as rather desperate, even by House GOP standards.
But what’s especially amazing about this case is Issa’s bizarre priorities. For reasons I can’t understand, the far-right Republican is fascinated by White House tours, but seems entirely indifferent to the meaningful effects of sequestration in his own congressional district.
A Democratic source this morning alerted me to several recent headlines from the area Issa ostensibly represents:
* A rally was held in San Diego last week to “demonstrate the impact of sequestration on low income seniors.” An administrator at a local facility said, “[B]ack in D.C. what they’re talking about are cuts from White House tours and the president’s golf game but in the meantime real seniors who are hungry are not going to have food.”
* A major employer in San Diego announced a series of layoffs, effecting 185 workers, which became necessary “as a result of the cuts being brought about in the federal budget because of sequestration.”
* The sequester is set to shutter an air-control traffic tower in San Diego, which local officials believe will “jeopardize aerial firefighting in a region prone to wildfire.”
The list goes on. Sequestration is causing serious problems at San Diego’s ports, ship yards, and the local economy in general.
All of this is happening in Darrell Issa’s own hometown, and he’s focusing his attention on White House tours? I can’t remember the last time I saw a congressman so indifferent to the effects of a policy on his own community.
By: Steve Benen, The Maddow Blog, March 20, 2013
“Pernicious GOP Nonsense”: Spending Isn’t The Problem, Austerity Is
Don’t buy the budget hype. Sure it’s fun to ding Paul Ryan for his unrepentant (Election? What election?) budget plan and his Obamacare contortions. (He wants to repeal it, except for its Medicare savings and tax increases, which he was against, then for, then against, and now for again). But here’s the thing about budget resolutions: They’re not laws. They’re not binding. They are, for all intents and purposes glorified, congressionally sanctioned, party platforms.
The great budget debate, in other words, is a philosophical one. And while such arguments are important we shouldn’t let them distract from the real-world policy fights ongoing about how money is actually spent or not spent.
If you’ve paid any attention, for example, you know the GOP’s mantra, that the nation’s problem is spending, which is “out of control.” This is the basis for their entire policy agenda. It’s also pernicious, economically destructive nonsense.
Consider some data points:
Federal spending grew by 0.6 percent from 2009 to 2012, according to Bloomberg. That’s the slowest rate since the Eisenhower years. That’s a novel definition of “out of control.”
Austerity has been the single biggest drag on job growth, according to the Wall Street Journal. The paper notes that federal, state, and local governments have cut nearly 750,000 jobs since June 2009. “No other sector comes close to those job losses over the same period,” the Journal reported last week. “Construction is in second worst place, but its 225,000 cuts are less than a third of the government reductions.” The same article figured that without the public-sector job losses, the unemployment rate would be 7.1 percent instead of 7.7 percent. Remember that the next time Republicans react to improving job numbers with statements of yes, but it should be better.
And what good is all this austerity? “Here’s a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it’s falling now without a coincident recession,” Investor’s Business Daily reported last month. Assuming sequestration stays in place, the deficit is expected to shrink by 3.4 percent of the economy between fiscal year 2011 and 2013, and the only other times the budget deficit shrank that quickly—the start of Franklin Roosevelt’s second term, the post-World War II demobilization, 1960-61, and 1969-70—recessions quickly followed.
This isn’t an error; it’s a deliberate policy of austerity monomania, consequences be damned. Remember what John Boehner said weeks after he became speaker: “In the last two years, under President Obama, the federal government has added 200,000 new federal jobs,” Boehner said. “If some of those jobs are lost, so be it.” If anything is out of control, it’s the push for spending cuts, which, let’s not forget, is ongoing. The Congressional Budget Office has estimated that sequestration—the arbitrary, across-the-board spending cuts which started going into effect two weeks ago—will cost the economy another 750,000 jobs this year if left untouched.
The first couple of weeks of sequestration have produced a strange kind of euphoria on the right as lawmakers and activists alike preen over the cuts (“This was a necessary win for Republicans,” one anonymous GOP aide told National Review Online) while most of the inside-the-beltway attention has focused on whether President Obama oversold the effects of the cuts and criticism over White House tours having been canceled. Republicans run the risk, however, of becoming the proverbial frog in boiling water. At some point the real-world effects of the cuts, slowly building though they may be, will punch through their ideological bubble.
A week into sequestration, the Huffington Post surveyed how local television news reports have covered the cuts. Local stations “did tend to dig more deeply into the ramifications of the cuts, looking at how people around the country … will be affected in their daily lives,” the website reported. Those ramifications included Bell Helicopter in Fort Worth, Texas, trying to induce retirements in order to avoid having to fire people, while nearly two dozen county employees around Salt Lake City have been fired. It’s not hard to find other grim sequestration stories: Air Force civilian employee furloughs will cost Ohio $111.1 million in lost wages, according to the Dayton Daily News; Customs and Border Protection will start furloughing 60,000 employees in April; the Army, Marine Corps, and Coast Guard have suspended tuition assistance programs; control towers in more than 200 general aviation airports nationally are expected to be closed; dairy exports could fall by $500 million, according to Agriculture Secretary Tom Vilsack.
The list goes on—I know because Democrats have sent out regular roundups of such local news stories to demonstrate that the sequester has teeth. That’s also why Obama’s Organizing for Action grassroots group is collecting citizens’ sequestration stories.
And voters are taking notice, despite what much of Washington seems to think. A Washington Post-ABC News poll released Wednesday found 53 percent of Americans disapprove of sequestration while an amazing 72 percent disapprove of Republicans in Congress. And by a margin of 47-33, Americans hold that same congressional GOP responsible for the much-maligned spending cuts.
The question now is how long will it take for these feelings to gain discernible political traction. Specifically, will Republicans feel (dangerously) emboldened in August when the next debt ceiling showdown is expected, or will reality have chastened them?
By: Robert Schlesinger, U. S. News and World Report, March 15, 2013
“Fool Me Once”: The Sequester Is Proof That Washington Thinks We Are All Idiots
The tales of sequester woe are starting to mount. Congressmen are complaining about cancelled White House tours, freaking out over potential furloughs of meat inspectors, and fretting over budget cuts in Yellowstone National Park. Republican officeholders are starting to realize that the parochial government services that businesses and consumers in their districts need and care about are getting hit.
And for what? We’ve argued that the primary deficit—the mismatch between the amount of money the government collects each year and the amount of money it spends each year—is melting away. We received further confirmation of this melting trend Wednesday, with the release of the latest Treasury Monthly Statement. It was overlooked, as it dropped just a couple hours before the new pope was announced. But it’s worth examining.
The headline was that February wasn’t a great month for the profit-and-loss sheet of the federal government. It took in $122.8 billion and spent $326 billion, notching a $203.5 billion deficit. That’s pretty grim. But February is always a bad month for receipts. And when you dig into the number, it is possible to see significant improvement.
Compared with February 2012, revenues in February 2013 were up an impressive 18.8 percent. Meanwhile, spending was actually down 2.6 percent from February 2012. So the February 2013 monthly deficit was 12 percent smaller than the February 2012 monthly deficit. This is not an anomaly. For the first five months of fiscal 2013, which started in October, revenues were $1.01 trillion, up 13 percent from the first five months of fiscal 2012, while spending was up just 2.1 percent. The deficit in the first five months of fiscal 2013 is $494 billion, down nearly 15 percent from the first five months of fiscal 2012.
To what do we owe this? Revenue is tied to growth. When the economy grows consistently, more people go to work, more people earn higher wages, and they pay more income and payroll taxes. Companies tend to make more profits, and even though they spend lots of time and effort dodging taxes, they still wind up paying more corporate income taxes. Meanwhile, as we’ve pointed out before, when jobs increase and the economy grows, spending on programs like unemployment benefits fall. That helps narrow the deficit, too. In February, spending on unemployment benefits was off 25 percent from the year before.
There’s another factor at play. And Republicans might want to avert their eyes for this next paragraph. On January 1, the government raised taxes. The payroll tax, which had been cut temporarily to 4.2 percent from 6.2 percent, went back up—a 48 percent increase. And so the 130 million or so Americans with payroll jobs have been paying higher federal taxes for the past two months. Meanwhile, as part of the fiscal cliff deal, higher income taxes were also put in place for high earners. They’re now paying more, too.
A funny thing happens when you raise taxes—you get more tax revenue.
Since the higher tax rates kicked in on January 1, Americans haven’t Gone Galt. They haven’t stopped working in protest of higher taxes and companies haven’t stopped hiring. In fact, they’ve been working more. As a result, revenue has been flooding into Washington. In the two months of the new tax regimen (January and February 2013), receipts are up 17 percent from the comparable period in 2012. Meanwhile, for all the charges of socialism, spending remains muted. A look at the daily Treasury statement suggests the higher revenue trend has continued through the first half of March.
The sequester, universally derided as a stupid way to get deficit reduction, is designed to bring $84 billion in deficit reduction in this fiscal year. Well, in the first five months of fiscal 2013, the deficit is already, wait for it, $85.8 billion smaller than it was in the first five months of fiscal 2012. And that’s all before the sequester takes full effect.
Quiet as it is kept, we are living in a great age of deficit reduction. If we project the numbers from the first five months of this fiscal year into the rest of it, it’s quite likely that the deficit will come in under $900 billion—even without the sequester. That’s high, and it is still a lot of money. But it would represent a deduction of nearly 20 percent from fiscal 2012. And with the economy continuing to grow steadily, the deficit as a percentage of GDP would shrink by an even larger margin.
Washington told itself it needed the sequester in order to make a significant dent in the annual deficit. With each passing month, and with each passing Treasury Monthly Statement, we’re learning that’s not true.
By: Daniel Gross, The Daily Beast, March 14, 2013
“Congress Lacks Courage And Vision”: FDR Put Humanity First, The Sequester Puts It Last
FDR placed the needs of the American people above petty budgetary concerns, but today’s leaders lack his courage and vision.
In 1933 we reversed the policy of the previous Administration. For the first time since the depression you had a Congress and an Administration in Washington which had the courage to provide the necessary resources which private interests no longer had or no longer dared to risk.
This cost money. We knew, and you knew, in March, 1933, that it would cost money. We knew, and you knew, that it would cost money for several years to come. The people understood that in 1933. They understood it in 1934, when they gave the Administration a full endorsement of its policy. They knew in 1935, and they know in 1936, that the plan is working.—FDR, 1936
Eighty years ago this month, at the height of the worst economic crisis in our nation’s history, Franklin D. Roosevelt delivered on his promise to launch a New Deal for the American people. Not wedded to any one program, idea, or ideology, the New Deal was founded on the very simple premise that when the free market failed to provide basic economic security for the average American, government had a responsibility to provide that security. In Roosevelt’s day, this meant imposing the first-ever meaningful regulation of the stock market, shoring up the nation’s financial system by guaranteeing private deposits and separating commercial from investment banking, and providing jobs to the millions of unemployed through government expenditures on infrastructure. The Roosevelt administration also launched the country’s first nationwide program of unemployment insurance to help the unemployed bridge the gap between jobs as well as Social Security to ensure that the elderly, after years of work and toil, would not suddenly find themselves utterly destitute.
Conservative critics of FDR’s polices say that these programs did not work—that unemployment remained high throughout the 1930s and that it was only World War II that brought us out of the Great Depression. As such, these same critics continually argue that the deficit spending that fueled the New Deal was the root cause of its inability to bring the unemployment rate down to acceptable levels. In short, they argue that government spending and government programs do not work, and that only the free market can provide the economic stimulus necessary to get the economy back on its feet again.
But as is the case today with the naysayers on climate change, the empirical evidence suggests that nothing could be further from the truth. During FDR’s first term, for example, the average annual growth rate for the U.S. economy was 11 percent. Compare that to the paltry 0.8 percent we witnessed in the first term of the Obama administration. The nationwide unemployment rate also fell, from its all-time high of 25 percent in 1933 to 14 percent by 1935, which at the time represented the largest and fastest drop in unemployment in our nation’s history.
But far more damning to the conservative critique is the argument that tries to invalidate the New Deal by positing that it was World War II and not the relief programs of the 1930s that brought us out of the Great Depression. Conservatives love to trumpet this fact and often use it as part of their argument against deficit spending, never stopping for a moment to consider that government expenditures—and deficits—in World War II made the New Deal look like small potatoes. In fact, deficit spending in the New Deal never topped 6 percent of GNP, while in World War II it ran as high as 28 percent. In other words, World War II was the New Deal on steroids. Viewed from this perspective, it is FDR’s critics on the left—not the right—who possess the stronger argument. The problem with the New Deal was that it did not go far enough. In other words, the government should have spent more money, not less, if it was going to be successful in bringing the economic crisis to an end.
All this is not to say that free enterprise is incapable of producing economic growth—it most certainly is. But there are times when capitalism, left to its own devices, can fail. Franklin Roosevelt was willing to acknowledge this, and he spent the better part of his tenure in office trying to put in place programs that would make capitalism work for the average American, not just those at the top. Hence, his agenda was not to subvert or destroy the free market system, but rather to save it.
It took vision and courage to launch the New Deal—the vision to understand that when the free market systems falls short or fails, government has a responsibility to take direct measures to get the economy moving again, and the courage to engage in deficit spending at a time when orthodox economic theory argued that the only proper response to an economic recession or depression was to slash government spending and balance the budget.
Unfortunately, the leadership we possess in Washington today lacks the vision and the courage to follow FDR’s example and put in place the sort of common-sense programs that would stimulate the economy and put people back to work. Instead of providing jobs for millions by spending money on our failing infrastructure—now ranked 24th in the world—or investing in programs that would reverse the falling education rates of our children, or providing greater federal support for the basic scientific research that may unlock untold benefits for future generations, we instead speak of nothing but the deficit and the sequester, as if cutting spending in the midst of recession is the magic bullet that will lead us out of our economic malaise.
Franklin Roosevelt faced similar critics, who, much like today’s deficit hawks, insisted that he must cut spending and balance the budget no matter what the consequences for the average American. But FDR would have none of this. “To balance our budget in 1933 or 1934 or 1935,” he said,
would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.
As it turns out, FDR’s decision to put “humanity first” was not only the right moral decision, it was also the right economic decision. For the deficit spending that he finally unleashed in World War II, coupled with the social and economic reforms put in place during the New Deal, led to one of the longest periods of economic prosperity in America’s history and the birth of the modern American middle class.
Sadly, all of the evidence to date suggests that our leaders in Washington are quite happy “to pass by on the other side” and let the sequester proceed without so much as a fight. With roughly 16 million people across the country still unemployed, this is surely “a crime against the American people.”
By: David Woolner, The National Memo, March 3, 2013
“So Much For Economic Uncertainty”: Republicans Have Decided To Govern Through Series Of Self Imposed Crises
In 2009 and 2010, the single most common Republican talking point on economic policy included the word “uncertainty.” I did a search of House Speaker John Boehner’s (R-Ohio) site for the phrase “economic uncertainty” and found over 500 results, which shows, at a minimum, real message discipline.
The argument was never especially compelling from a substantive perspective. For Boehner and his party, President Obama was causing excessive “uncertainty” — through regulations, through the threat of tax increases, etc. — that held the recovery back. Investors were reluctant to invest, businesses were reluctant to hire, traders were reluctant to trade, all because the White House was creating conditions that made it hard for the private sector to plan ahead.
It was a dumb talking point borne of necessity — Republicans struggled to think of a way to blame Obama for a crisis that began long before the president took office — but the GOP stuck to it.
That is, Republican used to stick to it. Mysteriously, early in 2011, the “economic uncertainty” pitch slowly faded away without explanation. I have a hunch we know why: Republicans decided to govern through a series of self-imposed crises that have created more deliberate economic uncertainty than any conditions seen in the United States in recent memory.
E.J. Dionne Jr. had a great column on the larger pattern today.
Ever since they took control of the House of Representatives in 2011, Republicans have made journeys to the fiscal brink as commonplace as summertime visits to the beach or the ballpark. The country has been put through a series of destructive showdowns over budget issues we once resolved through the normal give-and-take of negotiations. […]
The nation is exhausted with fake crises that voters thought they ended with their verdict in the last election. Those responsible for the Washington horror show should be held accountable. And only one party is using shutdowns, cliffs and debt ceilings as routine political weapons.
Quite right. Looking back over the last two years — in fact, it’s closer to 22 months — Republicans have made three shutdown threats, forced two debt-ceiling standoffs, pushed the country towards a fiscal cliff, refused to compromise on a sequester, and have lined up even more related fiscal fights in the months ahead.
So, here’s the question for GOP leaders: where did your concern about “economic uncertainty” go? Here’s the follow-up: do you think a never-ending series of hostage standoffs inspire investors, reassure “job creators,” and improve consumer confidence?
Or is it more likely Republicans are doing the very thing they said they opposed in 2010?
By: Steve Benen, The Maddow Blog, February 28, 2013
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