Original post made by Tom Cushing on Jan 16, 2013
But there's this semi-solid we've stepped-in, again, and once it's on your shoe, it demands attention.
The now-familiar pungency of the debt-ceiling mess has returned in earnest. To review, Congress votes to authorize payment of Past government spending, when those invoices take the total national debt above a set threshold. That threshold has been raised 74 times since 1962, including 18 times under President Reagan.
The first 73 of those times were completely uncontroversial -- for better or worse, We-the-People had incurred those debts; all that this vote meant was that we, via the federal government -- would continue to be good for them. To personalize the situation, remember that stupid boat you bought, or the time-share you never used? You still had to pay for them, even as you resolved to spend smarter in the future. Well, it's a lot like that here: invading that country might not have been the best idea, in retrospect, but when the trillion-dollar bills for it come due, they must be paid. Past bills you pay; future bills you may choose to avoid. To renounce those past bills would not make us Greece, but far worse: the Greeks, at least, are not dead-beat debtors.
The 74th ceiling increase authorization was in 2011, you may recall, and it was astonishing in its absurdist theatre. The House, led by Tea Party insurgents, demanded Future spending cuts in return for their acquiescence in paying our Past obligations, many of which, of course, they themselves had voted-for. Intrinsically meaningless, the "crisis" set the stage for the "fiscal cliff" calamity just witnessed, it cost $2 Billion in higher near-term borrowing costs (a non-partisan GAO number) and is projected to cost $20B by the time its effects work their way entirely through the system. All that unnecessary expense -- in the name of lowering the cost burden of the federal government? Congrats, gents and ladies.
So, since even flatworms learn from pain, surely we won't repeat such tomfoolery. Except that we are back, precisely where we were, with the GOP curiously demanding Future spending cuts in return for their agreement to allow us to pay our Past bills. They are again holding the full faith and credit of the United States hostage to their demands -- which is tantamount to holding a gun to their own heads. (Trigger, please?)
The President has said, sensibly, that the decision of whether to pay our Past bills is distinct from what we will choose to spend Next Year, and the outcome ought to be clear -- of course we should pay our bills. Everybody in Congress voted for something in the Past spending now due. Further, he has chosen the tack of attempting to shame The Shameless, saying this week that he will not ransom the nation's credit rating; rather that he expects the Congress to do the right thing, or face the wrath of We-the-People in 2014.
I think there's risk in that tack, as the Congressional districts have been gerrymandered to the point of being remarkably safe for incumbents, regardless of their sanity (Cf. Bachmann, Michele). Much of the heartland is as red as the coasts are blue, and it's not clear to me that there will be a tide in 2014 that sweeps out the recalcitrants. Expecting statesperson-like behavior from a group that has never so much as won a seat at the adult table is to court severe disappointment, and another gridlock. I fear this tack leads to the falls.
Put a kinder, gentler way, I think the Tea'd-up Republicans believe they were sent to Congress to upset the status quo; to borrow a phrase from strange bedfellow Malcolm X: "by any means necessary." If those means include taking every advantage, and making every element of the nation's economic life more austere, while holding center stage on its dog-with-a-bone issue, then those are good things that will eventually wean us away from the deficit-spending habit. If their heels are dug-in, we may be headed for another credit downgrade, and even a government shut-down before somebody blinks.
That means that social security checks, veterans' benefits, unemployment comp and food relief for the 20 million Americans who remain without work, and everything else the feds spend money on will be delayed. Millions of our fellow citizens will suffer in colder, hungrier circumstances. Will any of them think that's worth it, to make a point? If it comes to a government shutdown, I know precisely whose paychecks I want held-up first.
Of course, on a macro scale, a protracted stand-off also portends problems for the fragile recovery that so far continues a-shaky-pace. It is funded, in part, by government spending that makes-up for tepid private sector demand. If, indeed, the feds have to hold back or cancel spending for want of authority to undertake it, lay-offs will resume, and the ship of state will slide back toward recession. Will that be worth it, to make a point?
If the President is to succeed with his "let's be adults and do the nation's business" strategy, he will have to stay Way out in-front on this issue, maintaining its framing as above, and not allowing Messrs. McConnell and Boehner to conflate Past spending we owe and Future spending we don't owe in the public perception as they are busily trying to do. If it again descends into a mud bath, well, as my Mama used to say, "Son, never get in a fight with a pig. You'll both get equally dirty, and the pig is having fun."
I hate to write this, but I think we're in for a stupidly bumpy ride...again. If the flatworms ever organize a political party, I'm in.
on Jan 17, 2013 at 7:11 am
Carp -- the DX syntax doesn't like "number signs," apparently, as it deleted them from paragraph one, along with the number of each EO referred-to.
In case anyone is keeping score at home, No. 8802 desegregated the defense plants, No. 9066 authorized internment and No. 10340 nationalized the steel industry, very temporarily, as it turned-out (the case of Youngstown Sheet & Tube v. Sawyer overturned it in short-order).
on Jan 17, 2013 at 11:36 am
It's worth repeating (or recalling) that in the vast majority of cases, proposed spending cuts by Republicans (even the most "draconian" ones) aren't even true spending cuts. Instead they are reductions in budgeted spending increases. If we merely froze discretionary spending (ignoring for the moment social security and medicare), we could grow ourselves into lower annual deficits over time. But this is apparently too radical of an idea.
Obviously it is impossible to ignore social security and medicare, but the solutions to those programs are more complex than a simple spending freeze. (And also more subject to reasoned debate.)
Many libs are fond of pointing out that previous Republican presidents have had large annual deficits during their terms (especially the dreaded Ronald Reagan and even-more dreaded George W. Bush). But even in the fantasy world of politics, annual deficits that exceed $1 trillion ($1,000 billion), such as has happened in each of the past four years, are demonstrably worse than $500 million annual deficits, which was about as bad as it got under Bush (roughly speaking, twice as bad....).
The CA situation in the wake of the Prop 30 tax increase is illuminating. If the optimistic projections for increased tax revenue prove true, yes, we will come close to having a balanced budget over the next two years. (Jerry Brown says we actually WILL have a balanced budget next year, but has pulled some accounting tricks and deferred some things to make this "happen".) But what doesn't get much mention is that state spending is projected to increase by 22% over the next two years!
Basically, when tax revenues are down, we incur large debts. When tax revenues are up, we decide that this will continue forever, and spend every penny. Then we wonder "what happened?" when the next drop of revenue occurs (not just due to the next economic downturn, but due to the fact that the Prop 30 tax increases go away after 4 years). Under what dream-world rationale are we deciding to spend 22% more in 2014, than we spent in 2012? And this is before a super-majority of Dems in the state legislature, with no restraints, decides to go after a bunch of new pet projects and programs....
Reducing spending (which is really just limiting the increases) IS essential (at both the federal and state level). And to the extent that the debt ceiling provides a bit of leverage to achieve federal spending cuts, I applaud the effort. For ALL of our sakes, especially for the sake of our children and their children, who don't deserve to be saddled with the massive debt that the current generation of politicians is peddling.
on Jan 17, 2013 at 11:49 am
Added comment on my post above. Yes, I know I was mixing CA state-level issues with the federal debt ceiling. It was just as an example of a lack of fiscal responsibility, that seems relevant.
At the federal level, one of the points I was trying to make is that merely freezing discretionary spending would accomplish a significant amount of deficit reduction, independent of doing anything with respect to Social Security and Medicare.
If I were president (or "king"), I'd go deeper than that, and my "starting point" for negotiations would be across-the-board cuts of 1% annually in discretionary spending. Spending more than this slowly-declining discretionary budget level in any particular area would require an offsetting additional cut in another area. This would include the military. THEN we can have the debate about what's more important.
Does anyone really think that a 1% cut (2013 versus 2012) in real spending would be "the end of the world as we know it"? You could find this much waste in ANY federal government function just by throwing darts. BTW - this was the gist of the Connie Mack "penny plan".
But even the most aggressive spending "cuts" that are currently being proposed don't even come close to cutting as much. That's how bogus the "we can't cut that!" claims are.