So Mitch McConnell appears to be serious about his backstop plan to avoid economic catastrophe.
Senator Mitch McConnell of Kentucky, the Republican leader and procedural maestro, was pushing his plan that would allow a debt limit increase to clear Congress without Republican fingerprints — and without the guaranteed cuts many in his party are demanding. He would establish an elaborate process where Congress would vote to disapprove instead of approve a debt limit request. That would allow the president to raise the debt ceiling via a successful veto of the disapproval if it came to that.
Despite resistance from conservatives and the initial unease many lawmakers expressed at such a slippery approach, the McConnell gambit was gaining credence as the best escape hatch. Senate Democrats went virtually silent on the idea for fear of jinxing it. While the White House said it was not the preferable option, it was viewed inside the West Wing as a real option nonetheless, even if it would transfer to Mr. Obama and his party all the political responsibility for a debt limit increase.
Some of Mr. McConnell’s colleagues were coming around to it as the reality of a possible default began to sink in.
“I strongly support Senator McConnell’s efforts to avoid a default on our nation’s debt, and the last-case emergency proposal he outlined yesterday to ensure that Republicans aren’t unduly blamed for failure to raise the debt ceiling,” said Senator John McCain, Republican of Arizona.
In other words, the McConnell gambit can pass the Senate, because teabagging Republican Senators like Jim DeMint won’t have the votes to filibuster it. The White House is interested, because it’s better than nothing, and nothing is looking like what’s happening as far as an actual deal is concerned.
That, of course, leaves the House. And it sure looks like the only way for this thing to pass the House is if (almost) all the Democrats, plus a few hardy Republicans, vote for it.
And look at the nonsense that is coming from dipshits like Eric Cantor.
Representative Eric Cantor of Virginia, the House majority leader, said he raised the idea of taking what savings could be achieved now — roughly $1.4 trillion — and then having additional votes to raise the debt limit again before the elections in November 2012, with Republicans ultimately seeking a total of at least $2.4 trillion in cuts with no tax increases.
At this, Mr. Cantor said, the president “got very agitated, seemingly.” Mr. Cantor quoted the president as saying: “Eric, don’t call my bluff. I’m going to the American people with this.”
Then, Mr. Cantor said, “He shoved back and said, ‘I’ll see you tomorrow’ and walked out.”
“I was a little taken aback,” Mr. Cantor added.
“Taken aback.” Oh, PUH-LEEEZ. Spare us your tender sensibilities and grow a pair, Cantor. This is not a game.
All of this means that it’s moment-of-truth time for John Boehner. He knows, as everyone with any sense knows, that a failure to raise the debt ceiling is a very very bad idea that will hurt America now and in the future – and the extent of the hurt is not predictable. He also knows that if he goes along with McConnell’s gambit, he will forfeit the support of the teabaggers, and therefore that he cannot be reelected Speaker in the next Congress. And yet, the McConnell gambit appears to be the only plan with any realistic chance of avoiding pretty dire consequences.
So what’s it gonna be, John? Save your job? Or save the economy?
hoyapaul says
Of course, I have no sympathy for either of them — live by the Tea Party, die by the Tea Party. What we have here is rabid Tea Party ideology clashing with something called “governing”, which most Republicans have shown themselves incapable of doing in recent years. Cantor knows that he’s got Boehner on the ropes and is drooling over the chance to take over, damn what happens to America in the meantime. And Republicans keep insisting on massive (at least) $2.5+ trillion cuts coming completely from spending cuts — without ever offering a plan getting to this number because it would be politically unpalatable! What a bunch of buffoons.
As far as the McConnell plan goes, it shows yet again how weak-willed Republicans actually are. When push comes to shove, they aren’t willing to move beyond bumper-sticker rhetoric (Less Government! No New Taxes! Cut Wasteful Spending!) and actually risk taking the political heat themselves for actual, specific program cuts. They are willing to turn a great nation into a banana republic because their overheated rhetoric has boxed them into a position where they are damned if they raise the debt limit via the McConnell or similar plans (in primaries) but also damned if they actually come up with a 100% spending cut plan getting us to their preferred numbers (in the general election).
(And, since we’re on the subject, isn’t it at least arguable that the McConnell plan runs afoul of the Supreme Court’s prohibition on legislative vetoes…?)
petr says
… and I bet that’s exactly what McConnell is hoping for. That’s the only way he can save face for the party: give Obama the deal then complain that the Supreme Court hamstrung him… Things then go back to periodic, and pro forma, debt ceiling increases. And somewhere along the lines we go back to taxing the rich sanely and effectively.
jconway says
I think the President has brilliantly boxed them into a corner and I hope and pray he doesn’t cave, he gains a lot more fighting draconian cuts than agreeing to half of them to look ‘bipartisan’. This is partisan warfare at its finest and the President should try and win. Boehner is toast, his position was always precarious anyway and now at least a third of his own caucus will vote to remove him after this is all said and done. Cantor was just waiting for his moment to twist the knife in his colleagues back, the Gingrich to Boehner’s Jon Michel.
McConnell finally woke up and remembered how to govern and has come up with the most blatantly leadership averse solution I have seen come from a Washington politician. It makes him escape hard decisions in the short run but basically surrendering to the President and wiping your hands clean does not a true leader make.
Lastly, one of our greatest former local Congressmen, Joe Moakley, did a lot of great work preventing a legislative veto and this does seem to run afoul of it, not to mention arguably giving the President unconstitutional authority over the debt ceiling and US credit.
Not as good as what I originally hoped for, which was Obama making sensible entitlement reforms and using Boehner’s debt ceiling scare as cover from his left flank. That have been another grand policy triumph.
judy-meredith says
Politics and partisanship should be honored as a skillset.
hoyapaul says
Obama has played this well, especially recently. Praising Boehner and McConnell at every step is a great move, because it (1) makes Obama look reasonable; (2) seeds additional distrust of the leadership among the GOP caucus; and (3) marginalizes Cantor and his crowd by making them look like the unreasonable ones in this debate.
The Republicans thought they had huge leverage to extract major concessions with the debt limit fight, but the fact is it’s much less leverage than they thought (and that the Tea Party still thinks). The debt limit must be increased or the economy will collapse. Even Tom Donahue over at the U.S. Chamber of Commerce is putting pressure on the Republicans to pass the debt limit increase, and it’s the business community that really butters the bread in most of the GOP caucus.
In any case, this indicates again that modern-day Republicans are an excellent rhetoric/campaigning party, but a terrible governing party. The fact that they cannot even come up with a plan that doesn’t shift 100% of the governing burden to Obama shows this. If Republicans were serious about governing in a right-wing manner, they would put a plan on the table to cut Social Security, Medicare, and other social programs and would never dream about giving Obama significant additional powers over the budget. But they don’t want to do this because it would damage their brand. So they are left with words and words alone, and can only hope to shift actual governing authority to the President. It’s quite remarkable.
dhammer says
Sorry, I just don’t buy it. While the administration is busy negotiating whether the country should honor its debt, essentially nothing else is happening. In union negotiations, this is called walking the contract – let it expire and just keep working. Occupy all the bosses time negotiating and they can’t focus on growing the business, far more costly than a strike in many cases.
The same rules apply here, the cost to the administration is very high – unemployment remains high, months of essential staff and media time is squandered and the opposition party gets to set the terms of debate. The cost to the Republicans are less clear – maybe people remember they were obstructionist, or maybe they just vote against the democrats because unemployment is still above 9% and no jobs are being created. If I’m Michelle Bachmann or Mitt Romney, I’m thrilled. Will Boehner lose his job? Who really cares? The real question is will the Dems be able to take back the house because of this? Will Obama be able to show he’s a true leader? Will key entitlements survive? I think the answer to all three is no.
hlpeary says
Shame on the whole lot of them for letting their own political self- interests get in the way of doing the job they are paid to do for the American people. Take a dozen women who have to balance a household budget week-to-week and put them in a conference room in DC, and they will figure it out in short order…without game-playing, griping, pandering to special interests, mugging for cameras…just basic getting down to business and dealing with the facts…and you can bet these gals won’t be making the middle class, the elderly and the children carry the bulk of the sacrifice so that multimillionaires can keep their special tax cuts and write-offs… Congress has turned into Clown College, but no one watching is laughing!
seascraper says
The difference is that in DC the dozen women would be playing with other people’s money, not just their own.
stomv says
Investing in the health and well being of multiple generations of people across enormous diversity of education, faith, language, geography, values, priorities, and interests is not at all like “balanc[ing] a household budget week-to-week”.
Deciding on whether or not to keep Netflix isn’t comparable to deciding how much to fund the arts at a national level.
hlpeary says
In the end it is just a matter of scale.
Deciding what your needs and priorites are, dealing with how much money is incoming and how much money is needed to pay bills, deciding what is worth borrowing for (and when you borrow, not paying the debt off with credit cards)…it’s just the scale that changes dealing with the federal budget. Spending what you don’t have, borrowing excessively, not taking care of your children or your parents needs, not finding a way to create more revenue…will get you in deep trouble at home or at the federal level.
lightiris says
The women you are talking about are concerned about their own families, their own needs, their own children. They have a very clear focus on making the right decision for their own and are not at all invested in the needs of other families. They are not concerned about the needs of the family down the street and do not make their decisions based on needs–or, indeed, of the competing needs of families around the nation. Even in the wildest stretch of imagination, comparing the needs of three children and a husband and maybe a mother-in-law all from the same family, united in their love and affection for one another, to the needs of this diverse nation is actually kinda insulting.
seascraper says
Isn’t it amazing how a generation of people who demonstrate an ability to work and sacrifice for the future (as embodied in their children) are somehow portrayed as irresponsible layabouts and greedy spendthrifts because of the actions of their government.
The answer is that when you’re working with your own money, you’re responsible. When you’re working for government, and you’re playing with somebody else’s money, and you don’t care what happens to it, you spend it on dumber things.
Christopher says
Personally if I’m out to dinner and spending my own money I might splurge, but if the other party is picking up the tab I’m likely to be more frugal as a matter of courtesy.
centralmassdad says
the money of a stranger, who knows?
mizjones says
This statement seems counter-intuitive, but follow the logic here, for which exhibit A is the recovery of the US from the Great Depression. Excerpts:
One of the reasons for projected future deficits, second only to the continuation of the Bush tax cuts, is the continued effects of the economic downturn. High unemployment means less tax revenue coming in and more benefits (food stamps, etc) going out. Added government spending, in the form of a temporary, suitable stimulus (preferably a combination of infrastructure, education, and research) puts people to work and gets them consuming again. This prompts business to increase production, for which they must hire more people, hopefully in the US. The newly employed people pay taxes and require less government assistance, thereby reducing government debt.
That said, I agree with your priorities for the government budget. Where I disagree is the assumption that it is currently more urgent to address the long term deficit than to increase employment.
seascraper says
A family in trouble can do different things with its money. Some are more likely to pay off and others are less likely. Maybe they could buy guns and that would spur the economy. Or they could buy computer books and learn to program.
Under the Democratic orthodoxy, WW2 solved the Great Depression by buying guns.
Under the New Democrat Third Way, the government buys computer books for you, which is some improvement. However the government will always be years behind, and will buy the same books for the entire country. It will also tax the money away from people buying the right books to spend on people buying the wrong books.
Individuals and businesses make the wrong choices too, yes, but they are able to correct them much faster, whereas the government never feels the effects of bad choices, and just goes on and on.
mizjones says
Maybe like the Walton, Gates, or Koch households but not the average American’s. Consumption by a single household has a very small effect on the economy.
You can call Keynsian economics Democratic orthodoxy but it is a view that successfully explains real-world examples.
Perhaps you haven’t noticed that many individuals are currently hurting due to unaffordable medical bills, unemployment, or underemployment. Private enterprise is clearly not stepping up to addressing this problem. Government could, but is hampered by the flap over the deficit.
seascraper says
You can bet that the Walton Koch and Gates families are spending their money on things that will multiply their dollars. That is the difference between private decisions and public decisions.
Privately invested dollars are almost always directed towards multiplying themselves by seeking the best opportunities.
Public dollars could be invested this way, but in practice they never are, they are invested by whatever is hip in the liberal sector or who’s blackmailing who or who is getting a blowjob this week from who.
The multiplied dollar, invested and then turned into a profitable product intellectual or physical, is the basis of economic growth.
mizjones says
See the second chart here comparing the annual growth in GDP for post-war years excluding the Bush II tax cut years (appears to be around 4.5%) with the annual growth during the Bush tax cut years (around 2.75 %). Yes there was still growth during the Bush tax cut years, just not as much.
mizjones says
should be “that’s why the Bush tax cuts worked so well – NOT!”
SomervilleTom says
The only viable way to address the long term deficit is to increase employment. That’s because the only way the nation runs a surplus is if the economy recovers — really recovers — and the economy can really recover only when employment rises.
It simply isn’t possible to balance the budget by cutting ONLY spending. That’s because huge portions of federal spending come right back into the government as taxes, and when the government stops spending, those revenues immediately stop. When the government stops medicare, social security, and unemployment compensation, the recipients of those funds stop spending money. Clinics lay off workers and contractors. Seniors stop shopping. Unemployed workers stop buying everything. When those groups stop spending, the businesses that sell to those groups in turn lay off workers, stop making money, and stop paying taxes.
The reason why managing the federal budget is NOT a scaled-up version of managing a household is that a household cannot print money. Nobody will take currency, debt, or checks from Mr. and Mrs. Public based on the “full faith and credit” of Mr. and Mrs. Public. Macroeconomics is not microeconomics. The federal budget is macroeconomics. A household budget is microeconomics.
Governments must spend money during recessions, even if it means running a deficit, in order to keep enough money in circulation so that the economic engine doesn’t stall and freeze. Some of us learned that lesson in 1937. Some of us apparently did not.
JimC says
I think you overstate the risk to Boehner. The highest estimate I’ve heard of Tea Party membership is 24% of the Republicans (pretty high, really). So if the GOP holds the House (likely), he only needs a majority of that caucus to remain Speaker.
In theory, someone could pull a reverse Finneran and work with the Democrats to become Speaker, but I wouldn’t hold my breath on that one.
hoyapaul says
The official Tea Party Republicans may make up about a quarter of the current Republican caucus, but Boehner has a lot more than them to worry about. Republicans in safe GOP districts (say, R+8 or better, and there are a lot) are going to feel pressure to dump Boehner or face Tea Party challenges themselves in their primaries. So I can see many Republicans in very conservative seats running away from Boehner even if they are not in the Tea Party simply because they fear primary challenges.
Normally, Boehner’s best bet would be Republicans in swing districts, because these Republicans would normally be more willing to cultivate a more moderate profile. But many of these new Republicans are part of that 25% or so who are active members of the Tea Party. So Boehner has fewer allies in his caucus than formal Tea Party membership would indicate.
SomervilleTom says
This entire spectacle is the direct result of refusing to raise taxes on the very wealthy. President Obama caved too early and too easily when the Bush tax cuts were expiring, and we are all now paying the price.
The Democrats should aggressively push for an immediate and steep increase in:
1) Marginal tax rates for household income above $500K/year
2) Capital Gains tax rates for taxpayers whose net worth is in excess of, say, $10M (the amount of the threshold to be determined).
3) Estate and Gift Tax rates for households whose net worth is in excess of $10M
America is a wealthy nation. The top one percent of Americans, by wealth, has amassed an obscene amount of money — all taken from the rest of us. The mainstream media, owned by the wealthy elite, does a terrible job of informing the public and the voters just how extreme the disparity is.
Even in this crisis, the class that is being protected above all else is T-bill holders. That means “the wealthy” (the entry price is $10K a whack — how many working people have $10K in their hands at one time?). The people paying the price are the rest of us who are losing health care, transportation, education, retirement, and all the other “discretionary” spending in the federal government.
This is class warfare, and we have barely even admitted it.
centralmassdad says
The fixation on taxing the wealthy is as unrealistic as the notion that the problem can be addressed by spending cuts alone.
Yes, the wealthy will have to pay more in taxes. And so will the middle class, and the poor. And there will have to be spending cuts, among other things to defense spending and to cherished social welfare programs (medicare in particular).
I think Obama has to blink, and take the McConnell deal, even if it has no political advantage. He’ll get no credit for a disaster averted. (People didn’t get credit for averting the Y2K bug; rather it was just assumed to be hype. Nor did Obama get credit for avoiding a worse recession, but is instead blamed for the bad one we have.) He’ll continue to get pilloried for the bad economy AND for continued borrowing. But the alternative is to allow the economy to crater on his watch, and I don’t think he is going to do that.
hoyapaul says
But I think you’re employing a bit of a straw man here. There are few if any liberals/Democrats who claim that all of the deficits can be solved with tax hikes on the wealthy. Typically, the more liberal side of the Democratic caucus couples tax hikes on the rich with deep cuts to the military, closing corporate tax loopholes and subsidies, and the like. The center-left types couple these with various cuts to other programs, as Obama has already indicated are necessary.
Your last point is quite right, which is why it’s quite frustrating working in government. You get all of the blame (some deserved, much not) while getting very little of the credit. The intelligence community never gets credit for the many terrorist plots they investigate and stop, but they get blamed if even one gets through. The same is true with the economy — the stimulus bill (along with the bank “bailout”) was a great success in averting a much worse economic catastrophe, but the policymakers who stood up for these programs don’t get the credit for it.
SomervilleTom says
Our wealth concentration is at historic highs and our tax rates on that wealth are at historic lows. Our deficit is huge and growing, while our economy and society teeters at the brink of catastrophe.
It is, therefore, hardly a “fixation” to insist that increased taxes on the wealthy be part of the solution, especially while the very same individuals who created the problem through their insanely incompetent fiscal policies during the prior administration now stridently demand that new taxes be kept “off the table”.
This insanity must stop. New taxes are needed, and they are needed first and foremost from those who created this problem — the wealthiest one percent of our population.
seascraper says
How about limiting the charitable transfer of shares (the Warren Buffett route).
judy-meredith says
This woman might be able to.
farnkoff says
Throw some new taxes on the rich first, maybe raise the rate on the sorta rich, and then we can talk about reforming Medicare or whatever if it will make the McMansioners feel better. (Full disclosure: I make about $30,000 a year and I pay federal income taxes on that amount. I let my lady claim our daughter, so she gets a somewhat better deal). These are really tough times- the rich need to make some sacrifices just like the rest of us. 9/11, Iraq, Afghanistan, natural disasters- expensive things, in lives and treasure. We’re all in this together, though, right?
Nobody’s talking about cutting anybody’s heads off, so before we start with all that hyperbole, just relax. Worse comes to worst, you can sell a couple of the yachts (Bubbles and the S.S. Derivativia, maybe) to your friend in Dubai. We can get through this, together. E pluribus unum.
kbusch says
Budget and spending resolutions are when this is supposed to happen. Not now.
dave-from-hvad says
the Republicans would seem to be arguing in this analogy that the head of a household shouldn’t do anything to raise the income he or she earns, just find ways to cut expenses. Buy less groceries and eat less; don’t go out to the movies or travel anywhere anymore etc.
Above all, don’t ask your boss for a raise so that your family can eat a little better because it would have to come out of the company’s profit.
The fact is, though, that this particular company (i.e., the richest taxpayers) is making a profit and can afford to pay its employees a little more. If it were to do so, everyone would be better off.
In refusing to consider anything on the income side of the budget equation, the Republicans and their Tea Party handlers are keeping us all poor and hungry.
dave-from-hvad says
You’re not really asking for a raise from your boss; you’re asking for your money back that your boss took when he cut your salary to increase the company’s profit. In other words, the Dems are asking only to restore the taxes the rich used to pay to the level prior to the Bush tax cuts.
karenc says
If he allows the country to default because he insists that budget needs to be balanced (or at least be closer to balanced) with just tax cuts, the Republicans will likely be blamed.
He could then lose his speakership for any of three reasons.
– The Republicans lose the House
– The non-tea party Republicans unite behind someone else, disgusted with this action
or, after selling his soul to the tea party,
– The tea party STILL dumps him for a true believer like Cantor.
An interesting question is which Republican group would be hurt more by the Republicans causing the country to default. My best guess is that most of the relatively sane Republicans are from the purple or the red old money Main street Republican areas. These are districts that could reject their representative if he did not protect the country (and their portfolio’s) interests.
It may be that the tea party representatives are in districts where the people are seriously intoxicated by the RW Kool aid and they will survive.
If these possibilities are really likely, Boehner risks loosing his leadership role (I did not say speaker because under this scenario I can’t see them retaining the House) to a tea party as the party loses moderates while retaining the extremists.
It may well be that his best move for his own future and reputation is to take the closest thing left to the high road and do what is best for the country.
karenc says
If he allows the country to default because he insists that budget needs to be balanced (or at least be closer to balanced) with just tax cuts, the Republicans will likely be blamed.
– tax cuts should be spending cuts.
petr says
It really is as simple, and as messy, as all that. McConnell is gnawing feverishly, hoping not to wake Bachmann…
damnthetorpedos says
Mr. Boehner needs to prove his worthiness and get that intimidating Cantor out of his face. True leaders think for, yet, beyond themselves.
When howling about money, perhaps hard-line conservatives should reflect on their spending during G.W.’s watch, as a chunk of that debt has been carried into the present.
Insisting those most vulnerable in our society take a hit while the hoarders keep their tax loopholes…is just unconscionable. And abuse of the word, ‘entitlements’, like Social Security, really sticks in my craw. When the working citizenry pays into a program to help in their retirement, it does not behoove congressional leaders to make them feel like parasites.