Yesterday afternoon, details came out of a proposal that the White House had made to House Republicans over the so-called “fiscal cliff.” In the proposal, President Obama asked for $1.6 trillion in tax hikes. As you might imagine, that was far too high a price:
The White House is seeking $1.6 trillion in tax increases up front, as well as $50 billion in additional stimulus spending, as part of any “fiscal cliff” deal, Republican aides said Thursday as talks aimed at averting the economy-rattling cliff turned testy.
President Barack Obama also wants a permanent increase in the federal debt ceiling, a one-year expansion of jobless benefits and an extension of the payroll tax credit, these aides said.
The latest proposals were presented by Treasury Secretary Timothy Geithner, who visited Capitol Hill Thursday to discuss the fiscal cliff with leaders of both parties.
After Geithner’s visit, Republican House Speaker John Boehner publicly lambasted the Obama administration, saying “the White House has to get serious.”
Some spending cuts were included in the proposal, about $400 billion over 10 years — ranging from farm subsidies to postal service costs. However, the White House wants an additional $50 billion for infrastructure spending.
None of this is going to happen; nor should it happen. House Speaker John Boehner, as well as some other Republicans in both chambers, have already signaled a willingness to bend on tax revenues, a prospect met with dismay and derision amongst conservatives and libertarians (myself included).
House Republicans have recently put forward a new bill, H.R. 6213, otherwise known as the “No More Solyndras Act.” It was passed by the House Energy & Commerce Committee on August 1st, and sounds quite promising when you consider the colossal mistake that Solyndra, supported by federal loans, was. It’s estimated that taxpayers will lose over half a billion dollars on Solyndra, which went bankrupt last year. Preventing that from happening again is a great idea.
Unfortunately, the Republicans backing this bill are not really saving you from another Solyndra, or Beacon Power, or Abound. For the “No More Solyndras Act” leaves a gaping hole—as in, everything before December 2011 is still totally cool.
See, it’s “No More Solyndras,” not “No Solyndras.” As the text of the bill makes plain, the Act only prevents new applications from new companies, not applications from ones “grandfathered” in:
Cuts to defense and military spending should reflect a principled commitment to reducing wasteful spending, crony capitalism, and the size and scope of the part of the federal government with all the bullets and bombs — it should not be a matter of political convenience.
When congressional leaders sparred over whether or not to raise the debt ceiling last year, the parties agreed that if Congress failed to come up with a deficit reduction plan, automatic triggers would kick in, and would sequester $1.2 trillion in spending across the federal budget (mandatory and discretionary; defense and non-defense). That agreement, which came to fruition almost exactly a year ago to the day, reflected a trade the president made with House Republicans: he gave up demanding revenue increases in exchange for an agreement to include defense spending in sequestration. Speaker of the House John Boehner reluctantly agreed, making sure no triggers would go into effect until January 2, 2013.
The Budget Control Act of 2011 created the Joint Select Committee on Deficit Reduction (a.k.a. The Supercommittee) on August 2nd, 2011. The panel of 12 members, 6 Democrats and 6 Republicans is tasked with closing the deficit between revenues and spending by $1.2 Trillion over 10 years, the standard CBO measuring stick. This could be achieved in several ways: Cut spending by $120 Billion in year one – leading to more than $120 Billion in deficit reductions. A combination of revenue increases and cuts to equal the total of $1.2 Trillion over 10 years, or by completely covering the deficit with new revenues. Keep in mind however, that reductions could include a reduction in CBO projected expense year over year. Meaning that instead of increasing the spending budget for a given arm of expenditure by say 5%, they only increase it by 3%.
Currently, some Presidential candidates have put some bold ideas on the table: Ron Paul has promised to cut $1 Trillion from the 2013 budget, and Gary Johnson has promised to submit a balanced budget for 2013. Making this deficit reduction solution seemingly small, a “five minute job” if you will. However, the liberty minded among us have searched deep to try to find some sort of sign that a panel of 12 would do anything other than promise fake cuts and increase taxes. Frankly, the Supercommittee seems more like a way to deny culpability than anything else. It seems designed to fail. It seems designed to keep the status quo rather than effect real change. A term familiar to those who elected Barack Obama.
Apparently, President Obama is a little pissed right now. After all, his partisanship was trumped by Speaker of the House John Boehner’s partisanship. For those who missed it, President Obama wanted to speak to a joint session of Congress. Per usual, the President asked the Speaker of the House if that was all cool. Boehner said no. That’s the Reader’s Digest version anyways.
Obama’s timing of his speech coincided with a debate between GOP candidates, a move many considered to have been strategic in nature rather than coincidence. I’m inclined to agree. Boehner, a Republican after all, said, “Nah. How about the next day?” The White House agreed.
However, all doesn’t seem to be puppies and daisies in the nation’s capital. Politico has learned from a White House source that apparently the President and his staff are more than a little upset.
“It is a big deal that the House said ‘no’ to the president from our end,” a White House source with intimate knowledge of what took place between the House and the president told me Thursday. “This confirms what we all know: They will do anything in the House to muck us up.”
Indeed. After all, a 24 hour delay will kill the whole deal, right? I mean, everything in his proposals was calculated to the exact position of the moon and the stars in relation to Jupiter or something, right? The source went on to comment about the debate conflict.
Yet the White House did not see this as an obstacle. “With all due respect, the POLITICO-MSNBC debate was one that was going on a cable station,” the White House source said. “It was not sacrosanct. We knew they would push it back and then there would be a GOP debate totally trashing the president. So it wasn’t all an upside for us.”
All of the Members of Congress that will serve on the so-called “Super Committee,” the group created as part of the debt deal between the White House and Congress to find $1.5 trillion in “deficit reduction” in the coming months, have been made public:
The top Republicans in the House and the Senate appointed six more lawmakers on Wednesday to the bipartisan committee that is supposed to recommend steps to reduce federal budget deficits by at least $1.5 trillion over 10 years.
Speaker John A. Boehner chose three senior Republican House members: Jeb Hensarling of Texas, and Dave Camp and Fred Upton, both of Michigan.
Mr. Hensarling, who is chairman of the House Republican Conference, will be co-chairman of the new panel, along with Senator Patty Murray, Democrat of Washington.
The Senate Republican leader, Mitch McConnell of Kentucky, chose Senators Jon Kyl of Arizona, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania for the 12-member panel.
As noted, Sen. Patty Murray (D-WA), who hasn’t been one to restrain spending, was named by Senate Majority Harry Reid. She will serve with Sens. John Kerry (D-MA) and Max Baucus (D-MT). House Minority Leader Nancy Pelosi named her picks today:
House Minority Leader Nancy Pelosi (D-Calif.) has selected Rep. Jim Clyburn (D-S.C.), Rep. Chris Van Hollen (D-Md.) and Rep. Xavier Becerra (D-Calif.) for the so-called “supercommittee” on Thursday.
With the August 2 deadline fast approaching, many people are getting more than a little anxious for some kind of deal on the debt ceiling. One of those is syndicated columnist Donna Brazile. In her column, she calls on Congress to “drop politics”. Unfortunately, like most any other person who calls for folks to drop politics, her motivations are political.
You see, any time anyone calls on the opposition group to drop politics, it’s really a call for that other side to shut up and do what the person wants. It’s no different than calls for bipartisanship. It doesn’t matter on political affiliation either, because both major parties do it pretty regularly.
However, if Brazile was serious about helping the nation, I would argue, then she would also beg for deep, deep spending cuts that exceed John Bohner and Harry Reid’s plans. She would be calling for a serious rollback on intrusive government and job hampering regulations that would, ultimately, lead to increased revenue for the federal government. She would call for a lot of things, but she isn’t.
Like so many others out there, Brazile is just wanting Republicans to shut up and do what she thinks they should be doing. Is she necessarily wrong? Well, that’s a topic for debate all on its own. I honestly don’t want to get into that one right now. But right or wrong doesn’t really matter, not for the purposes of this post as it applies to the debt ceiling.
Democratic Congressional Campaign Committee chair Debbie Wasserman Schultz recently claimed that GOP efforts to get what they want in the debt ceiling debate is akin to dictatorship in recent comments reported by Politico. I understand that tensions are high right now. The debt ceiling issue is dominating the political landscape right now and a lot of folks just want it over. I have little doubt that Wasserman Schultz is one of them. Unfortunately for her, she really needs to understand the difference between GOP efforts and dictatorship.
Her quote from Politico:
“This is not leadership. This is almost like dictatorship. I know they want to force the outcome that … their extremists would like to impose. But they are getting ready to spark panic and chaos, and they seem to be OK with that. And it’s just really disappointing, and potentially devastating.”
Please note the scare words, namely “dictatorship” and “extremists”. This is a usual tactic designed to paint your opponent as unreasonable, regardless of anything approaching a fact. Now, I’m not saying the GOP hasn’t be intransigent, because to an extent they have been. But dictatorship?
Here’s the definition of dictatorship, courtesy of dictionary.com.
In 2009, Democrats quietly issued the death certificate for the D.C. Opportunity Scholarship Program by slashing its budget on the way to phasing it out altogether. It is unheard of for Democrats to be so enthusiastic about cutting funding for anything other than the military, so this must have been a drastic case indeed to convince them that the program needed to go. So what was it that led to the decision to end the program? Was it because it was too expensive? Not by a long shot, and besides, when was the last time you’ve heard a Democrat argue for ending a program just because it costs too much? Was it because of underperformance? No, it actually performed quite well. If you guessed it was because Obama and the Democrats fell prostrate to their masters in the teachers unions, now you are making some progress.
The D.C. Opportunity Scholarship Program was founded in 2004 and became wildly successful. The program provided $7500 scholarships to students so that they could attend private schools. For students of the D.C. Public School system, which is at the very top of the national list of worst-performing public schools, and in one of the most violent districts in the nation, this was a lifeline out of poverty, and a path to a brighter future. The scholarships allowed students, nearly all from low-income families, and the vast majority of them being minority children, to escape the prison system for children known as the D.C. Public Schools. The fact that minority children could take these scholarships and go to private schools was quite a bargain, considering that the public school system in D.C. was spending $18,000 per child per year, and still managing to turn out some the worst academically achieving children in the country. To give you an idea of how bad it was in the DCPSS, only 14% of 8th-graders attain proficiency at reading on their grade level.
Chuck Schumer (D-NY), the second most powerful Democrat in the Senate, was exposed this week for engaging in a coordinated effort to paint Republicans, and especially those with ties to the TEA Party movement, as “extremists”. Speaking to fellow Senate Democrats (and not realizing that the media had already been connected in on the conference call), Schumer explained that he “always use[s] the word extreme”, because “that is what the caucus instructed me to use this week”. This intentional attempt at character assassination comes because House Speaker Boehner is getting pressure from freshmen Republicans and the conservative base to do something more than offer lip service to fiscal responsibility.
Indeed, the problem is not that Republicans are too extreme. The problem is that they are not extreme enough; the $61 billion in budget cuts, from a $3.78 trillion dollar budget which increases the deficit by about a trillion and a half dollars, is little more than a rounding error. Much deeper cuts to spending are necessary if we are to get our fiscal house in order, and Republicans had better show some spine and get serious if they expect to keep the support of conservatives and the majority of independents come November 2012.
To be sure though, any Republican with an ounce of intelligence and awareness knew these attacks would come. After all, this is an administration who refuses to acknowledge the radical Islamic roots of the terrorist attacks on American soil over the last few years, yet whose Department of Homeland Security two years ago published a report entitled “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment”. Obama himself has repeatedly refers to his political opposition as being extreme and dangerous.