Blog Archives
All recent posts are available below. Author-specific archives are available via the links at right.
It now looks like the Senate on Wednesday will pass the "no budget no pay" version of the debt ceiling increase that has already been adopted by the House.
This will be the third GOP budget miscalculation, misstep and mistake in a row.
The first was the fiscal cliff, which turned out to be a political debacle for congressional Republicans in general and House Speaker John Boehner (OH) in particular. Boehner's Plan B disaster will go down in U.S. political history as one of the most ill-conceived efforts by any speaker on any issue. The ultimate result was that the House GOP was forced to do something it told its base it would never do -- allow an increase in taxes to be considered and enacted. It also had to kill the so-called Hastert rule (nothing comes to the House floor unless a majority of the majority are in favor of it) to do it.
The second was the empty GOP threat to use the federal debt ceiling to get the White House to agree to spending cuts. The dollar-for-dollar formula that for months Boehner had been saying was a nonnegotiable demand was completely dropped when the administration refused to negotiate.
CG&G alum Bruce Bartlett has an important column about federal spending in The Fiscal Times that does what Bruce does best: Say it straight with no BS.
What Bruce shows -- convincingly -- is that, contrary to those that say federal "spending" is the long-term problem, the real problem is spending in just one area -- interest payments on the national debt. Spending on virtually every other area of the budget is flat over the long term while interest starts to rise precipitously in 2020 and keeps rising over the next 60 years.
This isn't to say that interest payments on the national debt don't constitute federal spending because that obviously isn't true. But, as Bruce points out, the deficit for the non-interest part of the budget -- the "primary deficit" -- is only 1.7 percent of GDP over the long run and that makes it far less scary than the deficit scolds want us to believe.
Don't just take my word for it, take a look here.
I want to thank the academy, my agent, my high school dramatics teacher and, of course, my beautiful and talented Wife (The BTW) who has been there for me ...
Given what happened in July 2011 when they decided to do the opposite (you remember the anything-but-super committee, right?), we should all be happy House Republicans have agreed that this time they won't hold hostage the increase in the federal debt ceiling the Treasury says will be needed by the end of February.
We should also be grateful that legislation embodying the House GOP plan will be debated and presumably passed in the House today -- about a month before the deadline.
But it's important to note this moment in federal budget history: The House GOP plan is nothing less than total capitulation to the Obama administration and Senate Democrats.
How much of a surrender? In 2011 Senate Minority Leader Mitch McConnell (R-KY) was saying that a debt ceiling would never again get adopted unless the president agreed to concessions. Eighteen months later the debt ceiling effectively is being raised with no White House concessions and the GOP is struggling to come up with some kind of spin it can use to counteract what everyone can see...that it tucked its tail between its fiscal legs and rolled over.
Over at The Plum Line, Greg Sargent has an important post about the way the debt ceiling fight could end without triggering a cash-crunch crisis for the federal government. Greg thinks is could be one of two possibilities.
First, the House GOP could agree to a version of the plan first proposed by Senate Minority Leader Mitch McConnell (R-KY) that helped solve the last debt ceiling fight in August 2011. That plan effectively transfers the ability to raise the government's borrowing to the president. Greg notes that this time the plan would be approved over the legislative equivalent of McConnell's dead body, that is, over a filibuster McConnell himself would lead. Greg also notes, however, that there may well be enough Senate Republicans willing to join the 55 Democrats to make this happen.
Second, Greg says that the same combination of Democrats and some Republicans in the House that voted for the fiscal cliff deal would likely approve the McConnell plan or a clean debt ceiling increase if the GOP leadership allowed the vote to take place.
Politico had an outstanding but truly bone-chilling story yesterday about how appealing the prospects of a default and a government shutdown may be to House Republicans.
According to the piece by Jim VandeHei, Mike Allen and Jake Sherman, forcing a default by not raising the debt ceiling and shutting down the government by not passing a continuing resolution may be the preferred ways to go by a majority of the House GOP caucus no matter what that would mean to the U.S. economy, the Republican Party's overall approval rating, the GOP's prospects for a Senate majority in 2014 or a Republican winning the White House in 2016.
To those of us who have watched Washington operate for a while, this obviously sounds like totally insane, crazy self-destructive behavior by the House GOP.
But it would be wrong to dismiss it out of hand. From the conversations I've had with Republicans House members and staff since the 2012 election, the threats, are real and make a great deal of political sense no matter how obnoxious and damaging it otherwise would be.
The U.S. Treasury yesterday dashed the hopes and dreams of many in the blogosphere when it announced that neither it nor the Federal Reserve saw the idea of a $1 trillion platinum coin as a realistic alternative to raising the debt ceiling.
Actually, the Treasury statement was much stronger and more definitive than that. Treasury spokesperson Anthony Coley said "Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt ceiling." In other words, neither the Treasury, which would produce the coin, nor the Fed, which would exchange the coin for cash, are wiling to enter into the transaction. That means that, even if minting and selling the coin is legal, neither the buyer nor the seller are interested in doing the deal. That effectively eliminates the trillion dollar coin option from the debt ceiling debate.
Anyone who was surprised by yesterday's announcement that the president had nominated White House Chief of Staff Jack Lew to succeed Tim Geithner as Treasury secretary either hasn't been reading the tea leaves correctly or were too distracted by the fiscal cliff to notice that the stars were all aligned for this to happen.
The fact that Lew, who had taken the lead in many previous budget negotiations, was all-but-invisible during the recent fiscal cliff discussions was a sure sign that the White House wanted to protect him from any criticism over the results that might come back to bite during confirmation hearings. Lew was involved, but he wasn't out front.
The tea leaves have also pointed to Lew for some time because:
1. The usual background for a Treasury secretary -- deep Wall Street experience -- wasn't available to the White House this time because financial executives are still considered politically toxic inside the beltway.
2. The biggest fights for the next Treasury secretary will be over taxes, Medicare, Medicaid and Social Security. Lew knows more about those topics than anyone else in the administration.
Are we really counting on this U.S.. Senate to avoid the fiscal cliff?
The same U.S. Senate that hasn't been able to get 60 votes for much of anything the past four years?
The same U.S. Senate that with only four days left before the fiscal cliff hits would have to get unanimous consent to do anything?
The same U.S. Senate where only one senator can prevent something from happening?
The same U.S. Senate where Rand Paul (R-KY) and Marco Rubio (R-FL) have nothing to lose and much to gain by being the senator who stops anything that can be characterized as a tax increase from happening?
That U.S. Senate?
Really?
