Josh Marshall made an interesting point in passing yesterday, asking whether conservative Republicans could achieve massive spending cuts through “old-fashioned majority votes.” Josh answered his own question: “Of course not.” The cuts on the table were only made possible by Republicans “threatening the health” of the United States.
I think this arguably one of the more important realizations to take away from the current political landscape. Republicans aren’t just radicalized, aren’t just pursuing an extreme agenda, and aren’t just allergic to compromise. The congressional GOP is also changing the very nature of governing in ways with no modern precedent.
Welcome to the normalization of extortion politics.
Consider, for example, the Republican decision to reject any and all nominees to the Consumer Financial Protection Bureau, regardless of merit, unless and until Democrats accepted changes to the agency’s structure. Traditionally, if the GOP wanted to alter the powers of the CFPB, it would write legislation, send it to committee, bring it to the floor, send it to the other chamber, etc. But that takes time and effort, and in a divided government, this “old fashioned” approach to policymaking probably wouldn’t produce the desired result.
Instead, we see the latest in a series of extortion strategies: Republicans will force Democrats to accept changes to the agency, or Republicans won’t allow the agency to function. Jonathan Cohn wrote a good piece on this a couple of weeks ago, noting the frequency with which this strategy is utilized.
Republican threats to block nominees to the consumer board are at peace with their opposition to Don Berwick, Obama’s first choice to run the Center for Medicare and Medicaid Services; to Peter Diamond, whom Obama tapped to sit on the Federal Reserve Board; and most recently to John Bryson, Obama’s nominee to take over the Commerce Department. It’s nothing short of a power grab by the Republican Party — an effort to achieve, through the confirmation process, what they could not achieve through legislation. And it seems unprecedented, at least in modern times.
Republicans effectively tell the administration, over and over again, that the normal system of American governance can continue … just as soon as Democrats agree to policy changes the GOP can’t otherwise pass.
The traditional American model would tell Republicans to win an election. If that doesn’t work, Republicans should work with rivals to pass legislation that moves them closer to their goal. In 2011, the GOP has decided these old-school norms are of no value. Why bother with them when Republicans can force through policy changes by way of a series of hostage strategies? Why should the legislative branch use its powers through legislative action when extortion is more effective?
It’s offensive when it comes to nominees like CFPB nominee Richard Cordray, but using the full faith and credit of the United States to force through desired policy changes takes this dynamic to a very different level. And since it’s working, this will be repeated and establishes a new precedent.
Indeed, it’s a reminder that of all the qualities Republicans lack — wisdom, humility, shame, integrity — it’s their nonexistent appreciation for limits that’s arguably the scariest.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 31, 2011
August 1, 2011
Posted by raemd95 |
Class Warfare, Congress, Conservatives, Consumers, Democracy, Democrats, Elections, GOP, Government, Ideologues, Ideology, Lawmakers, Politics, Republicans, Right Wing, Teaparty, Voters | CMS, Commerce Department, Compromise, Debt Ceiling, Extortion, Federal Reserve Board, Governing, Hostages, Legislation, Radicals, Spending Cuts, Tax Revenue, Taxes |
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As we teeter closer to the edge of ” Debtmageddon,” it’s worth pausing to recall the “grand bargain” between Republicans and the White House—the Deal that Almost Was.
With no increases in individual tax rates and three dollars in cuts for every new dollar in revenue, could the House have swallowed it?
It’s a question that answers itself: If House leaders are having difficulty pressing through a standalone Republican bill, a “grand bargain” never had a snowball’s chance in the Sahara.
Sensing this, a new strategy unfolded: reframe the debt ceiling debate in terms of scoring a political victory against Democrats.
This had potent visceral appeal. It won over superstar pundits like Charles Krauthammer as well as rank midlevel propagandists such as Jennifer Rubin (“the left will be demoralized”), Pete Wehner (“Obama Will Be Biggest Loser”), and Marc Thiessen (“a modest victory for Republicans, but a major defeat for Obama”).
It almost worked—and it may yet.
But think of what might have been if commonsense prevailed over politics. What if these conservative commentators had spent this energy encouraging a compromise that would have benefited the White House, yes, but also would have gored the sacred cows of the left and yielded significant debt reduction as well as a relatively smaller government?
Instead, they’re left scrambling at the eleventh hour to isolate the “suicide bombers,” who now hold all the cards. They could have been isolated weeks ago.
It would’ve necessitated compromising with Democrats, to be sure. But we’re learning—the hard way—that this was always going to require compromise with Democrats.
By: Scott Galupo, U. S. News and World Report, July 29, 2011
July 29, 2011
Posted by raemd95 |
Budget, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Politics, Public Opinion, Right Wing, Teaparty | Charles Krauthammer, Default, Grand Bargain, House Freshmen, House Republicans, Jennifer Rubin, Spending Cuts, White House |
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Talk about cognitive dissonance. I went to a breakfast this morning with Alice Rivlin and lunch with Michele Bachmann. How to put this politely? If men are from Mars and women from Venus, Rivlin is from Earth, Bachmann is from Saturn. Someplace way out in the solar system and removed from reality.
Rivlin, a Democrat, is a former director of the Congressional Budget Office, former director of the Office of Management and Budget, and former vice chairman of the Federal Reserve. She is, in short, a Very Serious Person and, like every serious person around, finds herself somewhere between disbelieving and aghast at the current crisis over raising the debt ceiling.
“Putting a limit on the debt and saying, ‘Hey, we made these decisions but we didn’t really mean it, we’re not going to pay our bills,’ is just an unthinkable thing to do,” Rivlin said at an event sponsored by Atlantic Media.
“This is outrageous, folks,” she told interviewer Linda Douglass. “The greatest democracy, oldest democracy in the world should not be behaving this way.…It’s embarrassing for us to have a government that is so dysfunctional and that has created this artificial crisis.”
And the consequences could be catastrophic. “Suppose the world has decided that [debt ceiling crisis] might happen again and this democracy isn’t quite as solid or thoughtful as we thought it was, so we not going to stop lending to the United States but we’re going to charge more interest. As the interest bill goes up, two things happen. One is it’s must more expensive for the government to carry this large debt….But more seriously it means that everybody’s interest payment goes up….So we would be paying more on our mortgage, more on our car loans, more on our credit cards, more for business loans and that’s not good for the economy.
It takes nothing away from Rivlin’s considerable intelligence and insight to say that she is expressing the conventional wisdom.
Fast forward a few hours to Bachmann, a congresswoman from Minnesota and Republican presidential candidate, addressing the National Press Club. Bachmann’s position is two-fold:
First, the debt ceiling should not be raised, under any circumstances. No deal could be good enough, Bachmann said, to induce her to do so. “I won’t raise taxes. I will reduce spending and I won’t vote to raise the debt ceiling,” she said. “And I have the titanium spine to see it through.”
Second, the United States will not default. “I want to state unequivocally I think for the world as well as the markets as well as for the American people, I have no doubt that we will not lose the full faith and credit of the United States,” Bachmann said.
Huh? Bachmann accused President Obama of employing “scare tactics” in warning of “catastrophic results for our economy.” But what do she and others in the titanium spine caucus think is going to happen when the United States can’t pay its bills?
Sure, Treasury Secretary Tim Geithner could manage to pay off bondholders. But as Rivlin and others explained, it won’t be too long before the checks due exceed the amount in the coffers.
An analysis by former George W. Bush administration Treasury official Jay Powell by the Bipartisan Policy Center shows that if the administration prioritizes payments to bondholders, Social Security recipients, Medicare and Medicaid providers, defense contractors and unemployment benefits (total $172.7 billion for the month) then it wouldn’t be able to pay another $134 billion worth of bills, including military active duty pay, veterans affairs programs, federal salaries and benefits, food stamps and Pell grants. You can shift around the numbers all you want but the bottom line is that refusing to increase the debt ceiling is not a sustainable option.
Bachman said that “saying no” to an increase in the debt ceiling would be “saying yes to job creation and to the next generation.” Up is down in Bachmann-world. The credit rating agencies are already threatening a downgrade. The grave implications of that are clear, for jobs now and stretching into the next generation with the hangover of higher interest rates.
Bachmann spent a lot of time invoking Ronald Reagan, so here’s one from the Gipper back at her. “The full consequences of a default—or even the serious prospect of default—by the Untied States are impossible to predict and awesome to contemplate,” he wrote to then-Senate Majority Leader Howard Baker in November 1983. “Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The nation can ill afford to allow such a result.”
By: Ruth Marcus, The Washington Post, July 28, 2011
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July 29, 2011
Posted by raemd95 |
Budget, Conservatives, Consumer Credit, Consumers, Debt Ceiling, Debt Crisis, Deficits, Democracy, Economic Recovery, Economy, GOP, Government, Government Shut Down, Ideologues, Ideology, Jobs, Medicaid, Medicare, Politics, Public, Republicans, Right Wing, Social Security, Taxes, Teaparty | Alice Rivlin, Aliens, CBO, Credit Ratings, Debt, Default, Interest rates, Markets, Military, Mortgages, Rep Michele Bachmann, Ronald Reagan, Spending Cuts, Treasury |
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The run-up to the vote expected Thursday on House Speaker John A. Boehner’s proposal to provide a short-term increase in the national debt limit is quickly turning into a time of clarity for the chamber’s Republicans.
If GOP leaders are unable to muster enough support to get the plan out of the House, the only measure left would be a Democratic proposal by Senate Majority Leader Harry M. Reid (D-Nev.), and voting with Reid is not a concession many House Republicans are willing to make.
“There’s only three choices,” said Rep. Steve LaTourette (R-Ohio), a close Boehner ally. “One is to vote for Senator Reid’s plan. One is to default. And one choice is the Boehner bill. It should be pretty self-evident what the best choice is to someone who’s a Republican.”
Increasingly, the vote on Boehner’s proposal is shaping up not as a test of wills between moderates and conservatives, but as a face-off between political purists who scorn the bill and realists who prefer it to the alternative.
“We came here to reduce the size of government and reduce spending, and this bill, I think, begins to accomplish that goal,” said Rep. Sean P. Duffy (R-Wis.), who decided Wednesday that he will vote for the measure. “It’s by no means perfect. But it’s the best bill we have.”
At a closed-door meeting for House Republicans on Wednesday, where leaders tried to rally support for the measure, House Budget Committee Chairman Paul Ryan (Wis.) read from a blog post by conservative commentator Bill Kristol. “To vote against Boehner is to choose to support Barack Obama,” Kristol wrote.
But it is not an easy sale for a party that won back control of the House last year on promises to vote without regard to political consequences.
Boehner’s bill would postpone major entitlement reform and other deep cuts by passing such decisions to a new committee that would report its recommendations by year’s end. The proposal also would not require Congress to pass a balanced-budget amendment to the Constitution, but only that it vote on one.
Some Republicans have vowed that they will not raise the debt ceiling under any circumstances.
Others preferred a conservative bill dubbed “cut, cap and balance” that passed the House this month but was killed in the Senate. It would have required Congress to vote to send the amendment to the states for ratification.
“The credit rating agencies have been clear that no matter what happens with the debt limit, the U.S. will lose its AAA credit rating unless we produce a credible plan to reduce the debt by trillions of dollars,” said Rep. Jim Jordan (Ohio), chairman of the Republican Study Committee. The group comprises more than 170 House conservatives. “Cut, cap and balance is the only plan on the table that meets this standard,” he said.
House leaders expressed cautious optimism Wednesday that they were convincing members that the plan advanced by Boehner (R-Ohio) is the best that Republicans can hope to get.
It would avert a government default, take a bite out of the deficit and require Congress to adopt $1.8 trillion in additional cuts before the debt ceiling could be raised again next year.
Freshman Rep. Michael Grimm (R-N.Y.), whose district in Staten Island and Brooklyn is home to many Wall Street professionals, said he decided Wednesday that he will vote for the bill after he was convinced that its failure would hand Democrats control of the debate.
“I don’t think it’s perfect. I don’t think it’s close to perfect. I don’t think it’s in the realm of what I expected to get,” he said.
But, Grimm said, it would require deep spending reductions over the coming years. “That’s historic. And that’s a step in the right direction.”
The public infighting has served to rally some Republicans. Behind closed doors, members erupted Wednesday over an e-mail that a staff member of Jordan’s Republican Study Committee sent to outside conservative groups. It listed undecided members who could be pressured to vote against the Boehner plan.
“I think it’s offensive when a group that you’re a part of uses your bullets to shoot you,” said Rep. Bill Flores (Tex.). “So I have a problem with it.”
Those entreaties did not quiet conservatives who are urging that the plan be abandoned: On Wednesday, the head of the group Tea Party Nation accused Boehner of surrendering to Washington’s status quo and called for him to be replaced.
The House proposal was panned at a small rally held at the Capitol by the Tea Party Express and the American Grassroots Coalition. The GOP that rode tea party energy and activism is hoping that some of it members can look past that relationship.
“Some people are new here and this is part of the learning curve,” LaTourette said. “At times you have to say ‘no’ to people you represent who are yelling at you, if you’ve reached the conclusion that it’s in the best interests of the country.”
By: Rosalind Helderman and Felicia Sonmez with Contribution by David Fahrenthold, The Washington Post Politics, July 27, 2011
July 28, 2011
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Budget, Congress, Conservatives, Debt Ceiling, Deficits, Democrats, Economic Recovery, Economy, Elections, GOP, Government Shut Down, Ideology, Lawmakers, Politics, Republicans, Revolution, Right Wing, Teaparty, Voters | Balanced Budget Amendment, Bill Kristol, Cap and Balance, Credit Ratings, Cut, Default, Purists, Realists, Rep Bill Flores, Rep Jim Jordan, Rep John Boehnar, Rep Michael Grimm, Rep Paul Ryan, Rep Sean Duffy, Rep Steve LaToutette, Sen Harry Reid, Spending Cuts, Super Congress, Teaparty Express, Teaparty Nation, Wall Street |
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As the debt-ceiling talks tick down to the Aug. 2 deadline, leading the opposition to any deal that includes higher taxes is the new tribune of rank-and-file House Republicans: Majority Leader Eric Cantor of Virginia.
Cantor’s pivotal role marks a rapid rise for the 48-year-old from the Richmond suburbs. It also represents a major coup for sectors of the investment community that Cantor has been striving to assist for years — on the same tax issues that have been at stake this month. And so far, he has prevailed on those issues.
Among the White House’s top demands for new revenue are changes in the tax code affecting hedge funds, private equity firms and real estate partnerships, which would raise an estimated $20 billion over 10 years.
For the past four years, Cantor has taken the lead in the House on fighting the same changes. He also has been one of the top recipients of contributions from those industries — last year, his two fundraising committees took in nearly $2 million from securities and investment firms and real estate companies, more than double the figure for Boehner (R-Ohio).
The hedge fund and private equity proposals were at the center of Cantor’s decision to exit talks with Vice President Biden this month. Since then, the prospect for any immediate tax increases has declined, with the focus turning to spending cuts and broader tax reform postponed.
This dismays Democrats, in part because Cantor has cast his defense of the investment tax treatment as part of the broader tea party-fueled anti-tax orthodoxy. To Democrats, Cantor embodies the convergence of tea party and business interests, which is often obscured by the movement’s anti-Wall Street rhetoric.
“This [anti-tax stance] isn’t all coming up from the grass roots,” said Rep. Chris Van Hollen (D-Md.). “This goes to some longtime cozy relationships between House Republicans and hedge fund managers in the financial sector.”
A spokesman for Cantor noted that he always has opposed raising the investment taxes in question but declined to comment further.
Cantor has said repeatedly that Obama and other Democrats are exaggerating the value of closing tax loopholes for financiers. Although Cantor opposes closing them to raise revenue, he says he is open to doing so as part of broader tax reform that lowers overall rates.
“So I know it makes for good politics to throw the shiny ball out there . . . that somehow Republicans are wed to that kind of policy to sustain these preferences, when all along, in our budget and in our plan, we have said we’re for tax reform, we have said we’re for bringing down rates on everybody,” he said on the House floor last week.
Jennifer Thompson, a political science professor at Virginia Commonwealth University and former Republican campaign operative, said Cantor’s longtime opposition to the investment tax provisions is a sincere reflection of his conservatively inclined district.
“Eric Cantor is a Virginian and you can’t separate too much from that fact,” she said. “His constituents are very much aligned with the no taxes and being back in the black and that’s what Eric Cantor represents.”
Lawmakers from both parties have cultivated the investment community, but Cantor, whose wife is a former Goldman Sachs vice president, has had particularly strong connections. In 2006, his campaign committee and his leadership PAC, established to support other Republicans, collected $682,500 from securities and investment and real estate firms, far more than any other Republican on the Ways and Means Committee and nearly double the take of then-Chairman Charles B. Rangel (D-N.Y.).
Cantor sprang into action in 2007, when Democrats proposed the two major tax code changes that have been at the center of the debt talks. He formed the Coalition for the Freedom of American Investors and Retirees and invited several dozen industry groups to the opening meeting.
One of the changes revolves around “carried interest” — the pay managers receive for gains they produce for investors — which is taxed at the long-term capital gains rate of 15 percent. Many tax experts argue that it should be taxed at the 35 percent rate for ordinary income because it is the managers’ compensation for services performed, not the result of their own capital investment.
Another proposal would tax profits from the sale of hedge funds as ordinary income.
Since 2007, Cantor has railed against the proposals, saying that the carried interest proposal would “raise taxes on innovation and opportunity in America” and harm “mom and pop” businesses.
Democrats dismiss that argument. “There is virtually no evidence that having these people pay ordinary income would inhibit business development,” said Rep. Sander M. Levin (Mich.).
The proposals passed the House, which was then under Democratic control, but fell short of a filibuster-proof majority in the Senate last year.
Cantor’s support from the industries soared. Contributions to his two campaign committees from the real estate and securities and investment sectors jumped to $916,307 in 2008 and doubled to $1.85 million in 2010, according to the Center for Responsive Politics.
The top 10 contributors to Cantor’s two committees in 2010 included three investment firms: employees at SAC Capitol Advisers, the hedge fund founded by Steven Cohen, gave $64,964; those at the private equity firm KKR gave $52,600; and those at Elliott Management, the hedge fund founded by Paul Singer, gave $44,198. The Blackstone Group, the hedge fund run by Steve Schwarzman, and its employees gave $26,100.
The main private equity and hedge fund trade groups have ramped up their lobbying amid the debt talks, spending $4.2 million this year.
By: Alec MacGillis, The Washington Post, July 25, 2011
July 27, 2011
Posted by raemd95 |
Businesses, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democrats, Economic Recovery, Economy, Financial Institutions, GOP, Ideologues, Ideology, Politics, Republicans, Right Wing, Tax Loopholes, Taxes, Teaparty | Blackstone Group, Campaign Contributions, Carried Interest, Elliott Management, Equity Firms, Goldman Sachs, Hedge Funds, KKR, Real Estate, Rep Eric Cantor, Rep John Boehner, SAC Capitol Advisors, Securities Firms, Spending Cuts, Tax Code, Tax Rates, Tax Revenue |
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