Saturday, July 16, 2011

Debt Ceiling Questions

After back-to-back Friday and Monday prime time television appearances by President Obama and House Speaker Boehner, differences between the Democrat and Republican positions on the debt ceiling remain illusive -  while both agree on massive cuts and 'reform'  that would put Medicare, Medicaid and Social Security on the path to a marginal survival, the R's adamantly oppose (to the point of taking the economy over the cliff) any revenue generation while Dems would settle for moderate, back-door revenue increases like cutting subsidies for corporate jets. One sticking point looming large is that R's would like a two-step process continuing the debate into 2012 while the President, for obvious reasons, would prefer to nail the debt ceiling down until 2013. 

On Monday evening, the President, who we see is a friend of trickle-down economics, lost an opportunity to seize the debate which Republicans have effectively dominated for months.  Obama could have redefined the discussion with mention of Majority Leader Reid's proposal endorsed earlier that afternoon by the White House.  Reid's plan would give the R's exactly what they had originally demanded:  enough cuts to offset the debt ceiling increase of $2.5 Trillion and no new revenues (while taking the Big Three off the table).  But Obama, who has moved from requesting a 'clean' debt ceiling in April to capitulation to Republican demands and then sweetened the pot by volunteering the Big Three for cuts, bombed Monday evening with nothing new to say as he continued to tout his 'balanced' approach that is neither balanced nor fair.  It may be that Obama's unwillingness to reframe the discussion is indicative of his preference to hold out for the "Grand Bargain' approach.    

At this late date, the politically and artifically-charged deficit crisis which was caused by unfunded wars, Bush/Obama tax cuts, the 2008 financial crisis and a massive loss of jobs and revenue has raised a series of questions that remain unanswered:

Why are the American people expected to 'share the sacrifice' when it has been a dysfunctional, corrupt Congress and the greedy bastards on Wall Street that caused this economic catastrophe?  

If failure to increase a debt ceiling would create a fiscal Armaggedon, why have both Republicans and Democrats voted against its increase in recent years?  (see below) 

Regardless of which proposal is agreed to, how will raising the debt ceiling release trillions of corporate and bank dollars into the economy, create new jobs, stop housing foreclosures or reduce spending?

Did President Obama understand that debt ceiling problems were on the horizon when he continued Bush tax cuts for the country's wealthiest 2%?

Or is this entire exercise a misguided political game of oneupmanship designed to intimidate the population into conceding its favorite 'granma' programs?

We now know that electing competent people to take care of the country's business, to make the public interest their most important priority and to trust them to not line their pockets with corporate largesse was never a realistic expectation. Once the Tea Party took control of the Republican party with the 2010 elections (which was not difficult since the right wing religious fundamentalists had already done a terrific job at that), destroying the country's favored social safety net programs, under the guise of controlling the country's deficit,  became their number one target.  

The result of a calculated corporate effort headed by former Rep. Dick Armey's Freedom Works, a corporate lobbying firm, to create a 'spontaneous' uprising of discontent in opposition to government health care and 'big' government, the newly-elected 86 faith-based (rather than fact-based) Tea Party Members of Congress continue to control the debate as the Democrats fumble.  

In large part, the modern day Philistines were elected in refutation of President Obama who had already shown an unhealthy tendency for 'bipartisanship' as he rolled over easier than an Easter egg for Wall Street interests and backtracked on campaign promises.  The TPer's brought with them an anti-intellectual, reactionary mentality displaying a religious patriotic fervor that was frequently unaware of the differences between the Constitution and the Declaration of Independence.  When the R's took control in 2010, the House became less than full time job with two weeks in Session and one week off - nothing less than a  deliberate effort to make functioning of government difficult.   .

With the Speaker held hostage by his own TP caucus as the debt ceiling debate heated up, it has been clear that their side was winning.  Insistent, tenacious and rigid in their opinions as Goliath, the House Republicans make no bones about their sacred belief that a government default will not be as catastrophic as predicted.  Antagonistic to the values of a civil and representative government, the TPer's, limited by a parochial world view, have provided no creative ideas or suggested solutions to any of the country's many problems.           

Since the 1930's and FDR's New Deal, it has been the Democratic party which has assumed the role as protectors of the middle class just as it has been the Republican party's goal to destroy the government's social contract with the American people.  It is the Democrats who have been relied upon to hold corporate America and its Republican minions in check.  As the debt ceiling talks stalemate with one unacceptable option after another, it is no longer a guarantee that the American public can depend on Democrats to oppose their own President from initiating war or extensive spending cuts  to domestic programs.

Without regurgitating the last 50 years, it would be fair to say that with the 2008 election, Barack Obama came into office with a clean slate and an extraordinary amount of good will and anticipation by the American public that real Change was in the air.  Even with significant majorities in both the Senate and House but given the difficulty of the task ahead, it would take time and patience to see results, the American people were with him - until health care reform and the lack of a public option or meaningful cost containment revealed that the President was beholden to the medical insurance and pharmaceutical industries.  His efforts bogged down under the weight of an unwieldy complicated package when a simple Medicare for All plan would have been a sure winner and impossible for Republicans to defeat   A series of acquiescences (including financial 'reform') have contributed to a widespread belief that Obama can be rolled on anything.   

Fast forward to January 24, 2010 when the Senate, hardly a bastion of populist principles, defeated a resolution offered by Sen. Kent Conrad (ND) to establish a "Bipartisan Task Force for Responsible Fiscal Action to assure the long-term fiscal stability and economic security of the Federal Government and to expand future prosperity and growth for all Americans." Even as Conrad's amendment garnered more votes with 37 Democrats in support, it fell short of the necessary 60 votes to avoid a filibuster.  Despite President Obama's endorsement, 23 Democrats opposed the amendment with 18 still in the Senate (Sens. Akaka, Baucus, Brown, Cantwell, Cardin, Casey, Harkin, Inouye, Lautenberg, Merkley, Mikulski, Murray, Reed, Rockefeller, Sanders Stabenow, Udall (NM) and Whitehouse)   The President later signed an Executive Order creating the Task Force and appointing Erskine Bowles and Alan Simpson, both anti-Social Security, to chair the now-infamouis Deficit Commission.  Many Commission recommendations including a $4 trillion spending cut, a revenue cap at 21% of GDP and 'sharply reduce' tax rates are the basis for the current debt ceiling imbroglio.

Enshrined in law in 1917 when the national debt was 'limited' at $8 billion, some House Republicans may not be fully aware that the country has a statutory obligation to pay its bills. Congress has raised the government's debt ceiling 93 times; 11 times since 1996 - always as a formality totally unrelated to public policy.  It was not, however, until President Nixon's Order in 1971 removing gold as backing for the dollar that the U.S. debt began to explode.   Congress was no longer inhibited in its use of credit and borrowing escalated on the 'promise' of payment by the 'full faith and credit' of the U.S. government eliminating the previous pay-as-you-go concept.    

A review of debt ceiling votes shows that debt ceiling increases have been done mostly on a partisan basis depending on which party was in power and who was sitting in the White house. Here are a few examples:
Frequently buried in complicated parliamentary maneuvers to shield Members from unpopular votes, the House of Representatives voted on April 28, 2005 to approve HJR 47 on a voice voice to increase the US statutory limit of public debt from $8.1 trillion to $8.9 trillion under a 'special rule' which allowed for no roll call vote.
On March 16, 2006 with George Bush still in the White House, the Senate voted 48-52 to approve the same resolution with all Senate Democrats (including 44 still in the Senate and then Sens. Obama, Clinton and Sslazar) voting NO.
In September, 2007 with Bush still in office, the debt ceiling was raised to $9.8 trillion on a 53 - 42 vote with 26 Republicans and Democrats each voting YES and 20 R's and 21 Dems voting NO.   During Bush's tenure, there was no requirement for a 60 vote threshold to prevent a filibuster.  
On January 26, 2010 with Barack Obama in the White House, the Democratically-controlled Senate voted 60 - 39 on a party line vote to adopt HJR 45 which raised the debt to $14.3 trillion. On February 4, 2010, the Democratically controlled House voted 233 - 187 in favor of the debt increase.

As the debt ceiling debates dominate with predictions of an economic calamity of global proportions, US debt ratio to GDP at 65% is hardly the monster crisis that has been portrayed.  It does seem puzzling that with the aforementioned votes, there has never been such a storm of protest. What is different today is that manipulating the debt ceiling as a convenient crisis to implement Bowles-Simpson thus providing Republicans with an opportunity to gut the heart and soul out of social programs that would otherwise be untouchable through the regular legislative process - and apparently our Democratic President is a willing participant.. 

The most prevalent scenario supposes that the US must make its next interest payment on the debt and would therefore be forced to miss other mandated requirements such as Social Security payments as interest rates soared that would then put the country in default.  Once in default, with the dollar still the world's reserve currency,  the global economy could be plunged into another widespread economic disaster.  If the government defaults causing obvious damage to the economy, the government's ability to function is further decimated  - and therein lies the crux of the matter.  In the name of fiscal responsibility, the TPer's have made no secret of their desire to destroy government as we know it. .   

To no one's fault but his own, the President backed himself into a corner (and took obedient Democrats with him) by creating a climate of submission when he established a Deficit Commission and then again when he 'froze' Federal employee pay (a Republican initiative that most Democrats opposed) and then again when he assumed ownership of the Bush tax cuts for bazillionaires last December.  .    
By Friday evening, Boehner walked away from negotiations with the President who let slip that his latest offer to House Republicans was a more 'generous' package than the Gang of Six with $3 trillion cuts in discretionary spending and $650 billion of 'modifications' to the Big Three entitlements.  Over the weekend, the Democratic position had degenerated, in face of Tea Party obstinence, to complete elimination of any tax revenue raising measures thereby making the debt ceiling agreement an almost 100% Republican creation.   That reality, however, has not stopped Obama from assuming as if he were a working class hero fighting on behalf of the downtrodden  'working stiffs getting a raw deal...with somebody willing to look out for them" while out of the other side  he continues to favor a 'big' package to show, he says, that he's "serious about deficit reduction" as if his manhood will be somehow enhanced as he gives away trillion dollar cuts that will drive more middle class Americans deeper into a bottomless ditch. 

With the August 2nd date looming closer, the President has a last-ditch opportunity to assume the mantle of  leadership with the Amendment 14 option which offers a path to increasing a 'clean' debt ceiling without any bells or whistles - just as Obama first requested some months ago.  The President has rejected the idea, also suggested by President Clinton, citing White House legal opinion that he does not have the authority - but if the President can usurp Congressional authority to make war, surely he can do the same to save our crumbling country from becoming a third world banana republic.
As the economy teeters on a dangerous precipice, printing new paper money is not the answer.  No matter which debt ceiling version is adopted, the debate is a colossal waste of time as the cuts will do nothing to address the 'real' problems the country is facing.  Until Obama and all the sycophants responsible for this mess understand that a major, top to bottom restructuring of the country’s fiscal institutions is required, American citizens are at the mercy of a political system that rewards deception and fraud.

1 comment:

linmacd said...

Very thoughtful if depressing article. I don't see anything happening to restructure this country's institutions (including Congress) until I am old or in the grave. I hope today's young people won't be impaired by the 24/7 news machine that skews very much to the right. Maybe they can change things.