Tag: Default in 2011

Shutdown Number One

jasencomstock:

Senate Majority Leader Harry Reid, D-Nev., said Thursday morning that he and House Speaker John Boehner, R-Ohio, have agreed on a deal to cut about $38 billion from current spending levels, but added that Republican insistence on including a policy rider blocking federal funding for Planned Parenthood, is the only stumbling block.

“We agreed on a number last night,” Reid told reporters in the Senate Press Gallery. He said he is “really upset that this government is going to shut down” because of GOP efforts to limit access to abortion.

A spokesman for Boehner has challenged Reid’s account, saying that continuing differences over spending cuts, not the abortion rider, remains the problem.

On the wager: Planned Parenthood will be the Newt Gingrich bad seat on Air Force One of this shutdown. Simple and easy to understand, and it pushes most of sensible America’s “that’s just rank insanity” button.

Unified Field Theory

First principles:

  1. The recently House-passed continuing resolution only makes a government shutdown more likely by both caving to perceived GOP demands to “cut” while also exhausting the supply of low hanging fruit that Obama has already come out in favor of cutting.
  2. The GOP has the media high-ground, as always, because serious people know that cuts must be necessary, and since the GOP is at dollar value X, and the Democrats are, for all intents and purposes, at dollar value $0 (spending freeze as opposed to new cuts), the serious person answer must be $X/2. That’s the “grand bargain” that Democrats wisely point out will still submarine the economy and the GOP flatly refuses to even discuss. See: shutdown and default in 2011.
  3. Serious People furthermore agitate for deep cuts to Social Security, despite its dedicated funding source and minimal deficit impact in the near future, because, well, because that’s what serious people do. Acceding to the demands for cuts to Social Secuirty is 2012 suicide for the Democrats. It just is.

With all that in mind, what the Democrats need is a concentrated, coordinated effort that steals this idiotic media high ground surrounding the (perceived) absolute necessity of “cuts and a lot of them.” Karl Rove taught us nothing if not the fact that making your enemies’ strengths into their weaknesses is a potent political tool. Think Swiftboating. That The Democrat assiduously avoids the use of this tool is why they fail.

Therefore: the GOP is talking at least $100B in cuts, and immediately. Right or wrong, that’s going to have to be your number too. However, and critically, the GOP wants those cuts to come entirely from the non-military discretionary budget, somewhere around 14% of the whole government budget. This, then, is where and how you attack them. And you’re going to do it specifically and with dollar amounts.

You go down the list of GOP hobby horses: faith-based initiatives, the military, oil subsidies, agribusiness subsidies, general corporate welfare, abstinence-based education, all of it; but you don’t stop with spending, you also target revenue: capital gains taxes, estate taxes, social security taxes (as in: uncapped), and ultimately the tax code itself, which could use a few new brackets up top.

Secretary Gates can likely provide you with a long list of outdated or otherwise no-longer-needed military programs. Lots of them will seem ridiculous or hopelessly out of touch. Mock them and mock the GOP for continuing to support them.
Same goes for oil subsidies. These are the richest companies on Earth and the GOP wants to give them corporate welfare while asking for “shared sacrifice” from the poorest of the poor?

When you’ve run out of spending to cut from GOP programs, you go to work on revenue. That’s right, I said it. You need to too. First: revenue is revenue. Capital gains, management fees, bonuses, and everything else falls under regular pay. Next, you set about raising effective rates on corporations and the rich. The corporate side can be most effectively done by eliminating shelters and loopholes. Any country in which ExxonMobil pays $0 in taxes needs, needs corporate tax reform. Period. Still haven’t hit the number? New tax brackets. Still haven’t hit the number? Uncap Social Security. And so on.

You then pack the whole thing together and unveil it as the “alternative” plan and hoist the GOP upon it each and every day, all day. Because they are guaranteed to hate it. But will have to explain why they prefer to make these cuts on the backs of the poorest instead of the richest and furthermore call it “shared sacrifice.”

You’ve got less than two weeks to put this together. Recent history with the tax cut extension “fight” suggests you haven’t even considered something along these lines yet. But it’s how to win. That’s why it looks so strange to you. Yes, it’s simple minded. But simple minded is what works. You are the last few hundred people in America to come to this realization.

I’m not saying this bill would be what was passed, or that it would even reach the floor in a serious way…but it would drive the conversation in a way that benefits you, The Democrat, and not so coincidentally us the American people.
Currently you’re battling over the 14% that contains the most painful cuts possible. You shouldn’t be. You furthermore don’t even need to be. Change the conversation to terms that have the potential to benefit you. Right now revenue doesn’t even come up. It needs to. It needs to be the first question off the lips of the serious people. Until it is, you will fail.

There are three things you need to know about the current budget debate. First, it’s essentially fraudulent. Second, most people posing as deficit hawks are faking it. Third, while President Obama hasn’t fully avoided the fraudulence, he’s less bad than his opponents — and he deserves much more credit for fiscal responsibility than he’s getting.

Paul Krugman, reminding us how to start a column. Later, he offers a solution in seven words: “health care, health care, health care, revenue.”
Yep.

Full Faith and Credit

John Chait sees some hope:

My guess is that Republicans are hearing from the business lobby that even risking a default would be totally unacceptable.

This because he notes Paul Ryan’s recent statement implicitly accepts that the debt ceiling will be raised (not can be, or might be):

“I want to make sure we get substantial spending cuts and controls in exchange for raising the debt ceiling”

Fair enough, Chait, and I’m sure they are already hearing it from the business lobby, but I think you’re forgetting the Tea Klanners in the back benches as well as the rump of the idiot Blue Dogs who all too often also think along similar, overly simplistic economic lines. We should never forget that a smaller and less organized contingent of these idiots managed to defeat the initial bailout, sending shockwaves through the markets that then and only then convinced them to do what was right (and not what played well with their foolish constituencies, most of whom want the US on a gold standard as soon as possible).

The problem with a similarly construed default bait-and-switch in which a symbolic first vote happens and then is undone some time later: the shockwaves in this case would be the end of the American economy as we know it. And there’d be no take-backs. It would simply be over. Once the genuine possibility of a default is even raised, you’ve basically defaulted. Why should anyone act otherwise in the aftermath of such a near-default? The thinking would immediately coalesce along the lines of: they didn’t actually pull the trigger this time, but we’re just one election away from something like that happening, and that’s more risk than we can bear. Get a few of these “I’m heading for the doors” mentalities together and our whole economic construct falls apart. Irrevocably.

They’re dumb enough, they’re bad enough, and dog gone it, people (will) hate them. But, rest assured, they’ll find a way to do it and will be laughing all the way to the gold deposit bank and calling it strict constructionism.

Milbank!

Well, I guess at least the GOP’s rampant and immediate hypocrisy is becoming something of a narrative over to the WaPo:

For two years, Cantor and his colleagues campaigned against high deficits. Now, in the new majority’s first major act, they plan to vote to increase the deficit by $143 billion as part of a repeal of health-care reform.

For two years, Cantor and his colleagues bemoaned the Democrats’ abuse of House rules to circumvent committees and to prevent Republicans from offering amendments. Now, Cantor confirmed on Tuesday, Republicans will employ the very same abuses as they attempt the repeal.

For two years, the Republicans complained about unrelenting Democratic partisanship. Now they’re planning no fewer than 10 investigations of the Obama administration, and the man leading most of those has already branded Obama’s “one of the most corrupt administrations” in history.

For two years, the Republican minority vowed to return power to the people. Now the House Republican majority is asking lobbyists which regulations to repeal, hiring lobbyists to key staff positions and hobnobbing with lobbyists at big-ticket Washington fundraisers.

Now, of course, Dana just can’t resist larding on a lot of straw man false-equivalency crap about being “just as arrogant and overreaching” as the recent Democrat Majority that was so clearly operated by and for Lord Satan. But I’ll take what I can get. The A|B comparison stuff runs first after all. And Lord Jesus and the MSM knows the innernets are making us stoopid and shortly as measured by span of attentions.

Milbank!

Shocking News, Everyone

The Washington Post Editorial Board is beginning, beginning mind-you, to think that maybe the GOP isn’t quite so serious about deficits after all:

Deficit financing is fine, it seems, when it comes to tax cuts. But that’s not all. Under the new rules, not only are tax cuts exempted from the pay-go concept, but the only way to pay for spending increases is with spending cuts elsewhere. No tax increases allowed – not even in the form of eliminating loopholes or cutting back on tax breaks. Of course, if you wanted to expand the loopholes, no problem. No need to pay for that.

Having made clear that no tax cuts need be paid for, the rules then take the extra step of specifying which deficit-busting tax cuts the new majority has in mind. They assume the continuation of all the Bush tax cuts; extension of the new version of the estate tax; and the creation of a big tax break to let “small businesses,” which can be expansively defined, take a deduction equal to 20 percent of their gross income.

Tax cuts for the wealthiest are fully protected. But tax help for those at the other end of the income spectrum? Forget it.

Shocking stuff. Can’t be right…Seems like I read something, somewhere about this, a while back…but that must have been all wrong.

At any rate, that $4T can easily be made up by trimming waste, fraud, and abuse inherent in the discretionary, non-defense budget…which totals around$1.4T for 2010. So, cutting four times that amount (over 10 years, solely to pay for new deficit spending to protect tax cuts for the richest 2%, and most definitely not current levels which would also require similarly scaled cuts in the very same time-frame) shouldn’t be any big deal. And, of course, Boehner’s ~$30M cuts in the House member’s own budgets gets us 0.75% of the way there already.

Shocking News, Everyone

Is Rahm Still Available?

Bill Daly, potential Obama Chief of Staff: [The Obama administration] miscalculated on health care. The election of ’08 sent a message that after 30 years of center-right governing, we had moved to center left — not left.
Ezra Klein: The health-care law the president signed was modeled off of the health-care law the Republican governor of Massachusetts had signed, which was in turn modeled off of the health-care law the Republicans in Congress had proposed in 1993. That’s “left”? And meanwhile, Daley thinks the country had moved substantially leftward over that period — “after 30 years of center-right governing, we had moved to center left” — but that even a compromise bill based on Republican ideas was too far left for the country, which would imply that the administration he served in the early-’90s, which pushed a more ambitious health-care bill when the country was further to the right, bordered on communist.
Lemkin: Yep, and do we really want anyone who has ever been quoted peddling that particular brand of horseshit running the President’s days in the inevitable “Eliminate ACA or we destroy the economy of the United States of America now and forever through default!” battle that will be coming on in, oh, five or six weeks? I say no, but then I’m less than skilled in multi-dimensional chess…

Rest Assured, Austan: It’s Just a Game

Michele Bachman (R, MN): at this point I am not in favor of raising the debt ceiling
Mike Kelly (freshman R, PA): [Raising the debt ceiling would be] absolutely irresponsible.
Lindsey Graham (R, SC): [Failing to raise the debt ceiling] would be very bad for the position of the United States in the world at large, [but I’ll gladly hold it hostage] until a plan is in place [for the nation’s long-term debt that satisfies whatever GOP hobbyhorses are in play on the day in question.]
Austan Goolsbee: This is not a game. The debt ceiling is not something to toy with. […] If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity…. There would be no reason for us to default, other than that would be some kind of game. […] We shouldn’t even be discussing [default]. People will get the wrong idea. The United States is not in danger of default…. We do not have problems such as that. This would be lumping us in with a series of countries through history that I don’t think we would want to be lumped in with.
Lemkin: Which of these do you suppose will hold the media and popular opinion in its sway? This is probably the purest expression of GOP nihilism there is. They will destroy the country’s economic footing, irrevocably, and turn us into a land of gentle skin and pelt traders clustered down by the river if they have their way. At least that model eliminates any potential for minor to moderate increases in Social Security taxes on the wealthiest 2% of all future skin and pelt traders clustered down by the river; plus trade at those stands will likely be entirely conducted through valuable metal transfer. And that’s another big big win for their side. And winning the day is what it’s all about.

…nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.

Paul Krugman, reacting to the shocking news that the rising GOP House Majority will be moving to change the rules in ways “clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall […] these new rules […] could have a substantial impact and risk making the nation’s fiscal problems significantly worse.”
As Krugman says: these guys don’t care about the deficit, now or ever. They simply use concern to whip up anger against then-as-now non-existent “Cadillac Queens of Welfare” and whatnot such that ever more wealth can be transferred to the richest of the rich. And rest assured: they won’t be satisfied until they have it all. It’s what is going on in corporate America, and it’s what is going in political America. Well, such as the two spheres are even distinguishable anymore it’s what’s going on…