Friday, July 29, 2011

Debt Ceiling Thoughts II: It’s Crunch Time

As I type this the Republican House has passed speaker of the house John Boehner’s proposal on the deficit by a 218-210 margin about an hour or so ago with no Democrats voting for it and a number of Republicans opposing it. While plans for a vote yesterday on a deal were halted due to lack of support from the tea party newcomers, Boehner had to offer a number of compromises to appease the “tea party” wing and get their votes, including a balanced budget amendment and other tea party favored positions in order to get it passed by the minimum of votes.

The plan, which only extends the debt ceiling for six months ended up being yet another form of political theater. The Senate quickly shot it down by a 59-41 vote (thus guaranteeing it wouldn’t reach President Obama). As the standoff continues, a reported refusal of Senate minority leader Mitch McConnell to negotiate at this point means the current polarization will continue as the August 2nd deadline gets closer (at this point: Tuesday)

As I said in the previous post, I think odds are the debt ceiling will get raised. It’s been passed 90 times since 1940 and in the past it used to be considered a must pass bill (thus, usually done at the last minute). However, while there may be a last minute situation, things are in scary mode. The Republicans are quickly learning that their new enemy might not be the Dems or any liberal boogeyman but the newbies that got elected in 2010. As recently as the end of last year Boehner referred to the debt ceiling vote as “the first really big adult moment for the new Republican majority.” However, the mainstream in the GOP are currently learning that the danger of using a possible bully pulpit to force people to cave can backfire if they decide you’re not worth listening to.

So what will happen now? Who knows. There’s a chance that the debt ceiling will get a last minute vote and tragedy may or may not happen. There’s also an equally good chance that the far right in the GOP will let the country fall, hoping in some form of twisted glee that everyone will blame Obama for it. As for the possibility of invoking the 14th amendment and having Obama do it that way, the White House said they wouldn’t do that but at this rate there’s a chance he might have no other choice).

Why do I have a feeling that the tea party faction might end up having at least one weekend meeting similar to a pivotal scene from the movie Network? In the fight leading up to now, GOP attempts to have financial experts explain to the tea party types hasn't worked, but both parties are beholden to Wall Street in a lot of ways. And I have a feeling the party leaders may realize that if everything defaults the financial types will throw more cash to Obama and company.

However, at this point, everything seems to be conjecture. Previously it was a matter of course that the debt ceiling would be raised at the last minute but when you have people who are hell bent on making sure the President fails by any means necessary, under guidance from non elected power brokers (seriously, I don’t recall anyone electing either Karl Rove or Grover Norquist), it’s hard to say what will happen. At this point it’s a 55-45 chance that the debt ceiling will get raised but how we get there, and more importantly what gets sacrificed along the way, could lead us down the path for a far crueler future than anybody would’ve thought possible a year ago.

Thursday, July 21, 2011

Debt Ceiling Thoughts

As I type this President Obama and House Republicans are playing yet another round of the will they or won’t they make a deal talks in hopes of getting an agreement on raising the debt ceiling by the August 2nd deadline. In the past this has been one of those occasions where it passed without comment and most Americans had no clue whatsoever what a debt ceiling was. However, with the threat of both the tea party wing of the Republicans in the House to let the country default as well as credit rating firms like Fitch and Moody’s threatening to lower the U.S.A.’s AAA rating, the debate has become more known than anyone would want to admit.

Personally, I think it will have to be raised when all is said and done. Wall Street and the financial industry, as vicious as they are towards anyone not in the top one percent, realize that if the US defaults they may take a big hit and investors will lose money. In addition, these people have their tentacles in both sides of our one party state that pretends to be a two party state (not to say there aren’t differences between the GOP and the Democrats, especially these days – but that they often have the same backers). The party leaders get this, as well as the possibility that if they let this happen they bulk of the cash flow may head towards the Democrats (this hasn’t been covered at all but let’s get real, anyone who figures out how American politics works can likely se this writing on the wall).

As for Obama’s talks of cuts on the big three (Medicare, Social Security), this is either dangerous politics or delicious irony. The dangerous politics lies in possibly aiming for independent voters by possibly further throwing the base under the bus and starting from compromised positions. The ironic part may be that Obama finally gets that no matter how much he tries to offer the GOP what they want, they still refuse it. This refusal to support something they once advocated the moment Obama picks it up has been probably one of the more humorous (in a sick way) traits of the Republicans since he took office over two and a half years ago.

On the GOP’s end people like Boehner and McConnell are having to handle what happens when decades of appealing to the far right that has currently become their base mixes with the idea of permanent campaigning. While the tea party faction of the Republicans in Congress seem more and more hell bent on making sure nothing gets accomplished than on actually doing their jobs. Part of this is the differences between Democrats and Republicans in attitudes towards their base in that the Dems usually have a barely concealed hatred for their base that they almost blatantly show any time other than when they want money or votes while the GOP has grown to fear a base that has managed to increasingly drive moderate voices from the room. While the media push of the tea party types must’ve seemed like good politics to them up until the 2010 midterm elections, their increasingly bully pulpit is getting in the way.

So what’s up ahead? Some say the “gang of six” proposal is gaining steam and might be a good compromise. However, so far the House Republicans are worshipping a trinity of Reagan (while overlooking his tax increases), Grover Norquist (of Americans for Tax Reform) and the latest pundit of the moment. The idea that no taxes can be raised whatsoever is becoming a problem that could hinder us much more than anyone expects. Even with this proposal offering a three to one ratio in terms of cuts versus revenues isn’t making friends. Add to it the fact it might not be doable before August 2nd and its future seems uncertain.

But what about the latest GOP proposal of “Cut, cap, and balance” you may ask? It passed the House. However, the supermajority required in the Senate these days makes it unlikely to pass even before Obama vetoes it. It’s more of a middle finger to the President than anything else.

So what will happen here is anyone’s guess? I do think the debt ceiling will likely be raised (even if Obama has to go for broke and do some sort of executive order to do it). Since that is the worst case scenario, I have a feeling that somehow the GOP will have it explained to them what will go down if they don’t vote for it, since even the top one percent will feel some heat if the U.S. defaults). I wish I knew if it would be a clean vote (most of the time the damn bill is one sentence, for crying out loud) but at this point it’s hard to say what form it will take (though sacrificing Medicare and Social Security is the political equivalent of Russian Roulette in this country).

As for the reasons for why the GOP has been acting like some kid on a playground who always threatens to hold his breath until he turns blue unless he gets everything he wants, several posts can be written regarding that.