The ‘No Deal’ Congress

Liberals are alarmed at how far President Obama reportedly was willing to go in an attempt to reach a compromise with Republicans over extension of the debt ceiling. But moderates and conservatives ought to be outraged at how far Republican congressional leaders have strayed from true conservative principles as they work to bring Obama down.

After all, the debate is basically over whether the government will pay for the obligations that Congresses already have incurred. There is no compelling reason to put the faith and credit of the US Treasury in doubt. Among other things, the 14th Amendment plainly makes it unconstitutional to question the validity of the public debt. Paying legitimate bills should qualify as a basic conservative principle. Ronald Reagan certainly thought so when he asked for increases in the debt ceiling 17 times. But the right wing that rules the GOP sees political advantage in sabotaging the economy and harassing President Obama heading into an election year. So congressional Republicans have been threatening to force a default on the national debt.

It’s hard to tell how much Obama actually was willing to give up to House Speaker John Boehner over the past few weeks, but it appears Obama raised the possibility of increasing the Medicare eligibility age to 67 — a bad idea that would undermine the best solution to controlling health care costs. He also reportedly was open to changes in the way cost-of-living adjustments are figured, at the expense of beneficiaries. If those offers were made, Boehner could not accept them because he couldn’t get the teabaggers in his caucus to go along with modest tax increases on the rich and corporations that Obama insisted upon.

It may be that Obama was bluffing. If so, he proved that Republicans were unreasonably resistant to compromise. After Boehner walked out of a White House meeting July 22, claiming that Obama kept changing the terms of the deal, Obama urged Democratic and Republican congressional leaders to work out a deal. Senate Majority Leader Harry Reid called the GOP’s bluff July 25 when he offered to raise the debt ceiling by $2.4 trillion in exchange for $2.7 trillion in budget cuts, without any tax increases — as House Republicans originally had demanded. But Boehner appeared at a press conference with other GOP leaders to reject Reid’s plan, because it did not cut entitlement programs such as Social Security and Medicare.

Boehner put forward his own debt plan, which would limit the debt ceiling to an additional $1.2 trillion this year and set up another vote to lift the debt ceiling further next year. But Boehner would make next year’s debt ceiling vote contingent on approval of $1.8 trillion in cuts to Social Security, Medicare and Medicaid.

After Republicans in April went on the record voting for the Paul Ryan budget that would gut Medicare, they lost a special election in a solidly Republican district in upstate New York in which the Democrat campaigned against Medicare cuts. Now the GOP is desperate to get Democrats to agree to Medicare cuts, to defuse that volatile issue next year.

The evening of July 25, Obama took to the nation’s airwaves to decry the “partisan, three-ring circus” that had stymied compromise. He criticized Boehner’s plan to raise the debt limit in stages, which would set up another fight in six months. He appealed to the public to contact lawmakers and demand “a balanced approach” to reducing federal deficits — including tax increases for the wealthy as well as spending cuts.

Responding from the Capitol just a few minutes later, Boehner said the crisis was of the president’s making. At the same time, it was uncertain that Boehner could get the extremists in his caucus to support his own plan, because it didn’t go far enough.

As it happens, there is a proven plan for paying off the national debt. We could simply allow tax rates — which are at historic lows — to revert to the levels of the 1990s, when the Clinton administration managed to balance the budget without a constitutional amendment. Clinton and the Democrats balanced the federal books with a 1993 budget that increased taxes, mainly on the rich. Republicans predicted it would send the US into another recession. Instead, the economy boomed and Clinton’s budget set the federal government on the course to the $127 billion budget surplus that Clinton handed over to new President George W. Bush in 2001.

At that time, White House and congressional economists projected the national debt might be paid off by 2010. But Alan Greenspan, who was then chairman of the Federal Reserve, warned that paying off the national debt might lead to economic instability. That was one of the rationales for Bush’s tax cuts for the rich. Those tax cuts failed to produce the promised jobs — at least not in America. Instead, if anything, the tax breaks encouraged wealthy people to invest in multinational corporations that moved factories overseas to fatten their profts.

Now, with the jobless rate higher than 9% — and with some areas of the country well into double figures — House Republicans refuse to discuss job programs or extending assistance for the long-term unemployed. They still insist — against experience — that lower taxes and less regulations are the key to economic growth.

Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, recently told RootsAction.org: “Using trumped up crisis to raid the public purse and attack the basic rights and benefits is a very old trick — but rarely is the shock doctrine tactic wielded as brazenly as in the pseudo debate about the debt ceiling. This is naked class war, waged by the ultra rich against everyone else, and it’s well past time for Americans to draw the line.”

Sen. Bernie Sanders (I-Vt.) noted, “Poll after poll shows that the American people want Congress to focus on job creation and that they want deficit reduction to be done in a way which is fair and which requires shared sacrifice. They do not want the budget to be balanced on the backs of those people who are already hurting through massive cuts in Social Security, Medicare, Medicaid, education, child care, nutrition, affordable housing, fuel assistance and environmental protection. They want millionaires and billionaires to start paying their fair share in taxes, and they want the removal of massive loopholes which enable many large corporations to avoid taxes. They also want a significant reduction in military spending.”

But they won’t get it from this House. Instead, Republicans are still talking about requiring $4 trillion in spending cuts over the next 10 years, including cuts in Social Security, Medicare and Medicaid, with no new taxes on the wealthy and large corporations.

Whether or not you believe that Obama was willing to sell out the left on those entitlements, it is vitally important that progressives protect the Democratic majority in the Senate and regain the House next year. The unwillingness of House Dems to provide the votes to cut Social Security and Medicare and the unlikelihood that those cuts could get through the Democratic Senate may have scuttled that plan for now, but Republicans hope they will get another bite at dismantling Social Security, Medicare and Medicaid in 2013, particularly if economic havoc helps them defeat Obama, hold onto the House and gain a Senate majority.

Many progressives are hoping that Sen. Bernie Sanders will mount a left challenge to Obama. Sanders recently said it might be a “good idea” for a progressive candidate to challenge Obama in the Democratic primaries, but he is is keeping his focus on getting re-elected to the Senate from Vermont.

Of the 33 Senate seats up for election in 2012, 23 are now held by Democrats or independents and 10 are held by Republicans. A flip of four seats would transfer the Senate to the GOP. Whether or not progressives think they can trust President Obama, they should be alarmed at the prospect of having Obama negotiating in 2013 with Senate Majority Leader Mitch McConnell. Or God forbid, seeing President Rick Perry expanding the war on workers from Republican statehouses to Washington, D.C. with the cooperation of a Republican Congress. — JMC

From The Progressive Populist, August 15, 2011


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