The budget battles

[kenberg]

Perhaps "free lunch crowd" splits into two subgroups"

 

"Steve will pick up the check" and

"Check? What check?"

[luke warm]

no doubt they split into groups... it just depends on how one defines "free lunch" or what spending (without paying for it) for which one makes an exception

[awm]

There is one more issue that Zelandakh may have missed, which is the entitlement programs of social security, medicare, and medicaid. The first two provide financial and medical assistance to the elderly or disabled, whereas the last provides medical care for the poor. These programs are the US version of a safety net (much weaker than the welfare state in most european countries of course). They are funded for the most part by a special payroll tax (which is quite regressive, unlike the income tax code). Republicans have wanted for a long time to eliminate or privatize these programs, mostly as a part of their anti-government philosophy. Democrats have been very much opposed to any reductions in the programs, and for the most part the American people have been on the Democrats' side on this particular issue.

 

Anyway, the Republicans claim that any "serious" approach to the deficit must cut and/or substantially modify these entitlement programs. They very much want such cuts to be part of any deal struck. Many Democrats in Congress have claimed that they will not vote for any deal that cuts these programs. Obama has signaled willingness to make some cuts to entitlements (although not nearly as much as the Republicans want) but only in exchange for increased taxes (or eliminating loopholes) on the wealthiest 2%.

 

The recent plan from Reid (Democratic leader in the Senate) includes neither entitlement cuts nor tax increases. The recent plan from Boehner (Republican leader in the House) includes entitlement cuts in roughly the amounts that Obama said he would accept, but no tax increases. The plan Obama has been touting (which reduces the deficit by much more than either congressional plan) includes both.

[Winstonm]

It seems to me the way out of this mess is simply to pass a bill to eliminate the debt ceiling law entirely. The law is ridiculous - and potentially unconstitutional.

 

Or better yet get John Yoo to write a memo saying the President has the power to tell Congress to go ***** itself. ;)

[kenberg]

Short answer: No.

 

Perhaps I'll string this out later, but the "No" will do for the moment.

 

I'll get to Obama but I think his failures are of a different sort than some others. Patience, I will get to him.

 

I regard the evolving budget talks as a total disaster. We are now much more likely than not to actually default on our debts. We have embarrassed ourselves and made it clear to the world that we have no sense of financial responsibility. In the Post this morning, http://www.washingtonpost.com/, we see

House Republicans delayed a vote on Boehner’s bill, which had been set for Wednesday, after congressional budget analysts dealt the legislation a potentially devastating setback by saying it would save far less over the next decade than the $1.2 trillion advertised. The Congressional Budget Office projected that the spending cuts would save only about $850 billion over that period.

[/Quote]

 

With a week to go before deadline, there is a $350B difference of opinion with the CBO over how much would be saved???? "Head up his ass" barely begins to describe this.

 

But it's actually worse. I have felt from the beginning that we must all share in reducing the national debt. My finances can be described roughly like this: I drive a Honda, not a Porsche. I don't casually fly to Paris, but I don't carefully check prices at a restaurant before ordering. The upshot: I paid at a higher tax rate when Clinton was president, the budget balanced (at least in the last year or two) and I thought that was fine.

 

As any of the current plans go, we will NOT all be sharing in reducing the national debt. The rich will do nothing. Stepping up to do more, as they could easily afford, would be nice just as I think that I should do more than should the single mother struggling for survival. In fact the rich not only will not do more, they will do nothing.

 

How did this come about? I do think that the Republicans are the primary villains. And just why they have all this Tea Party support, often from people whose finances are definitely no better than mine, would make an interesting psychological study. But part of the job of a president is to keep the villains from succeeding so we must ask what went wrong.

 

I am a male and, for better or for worse, that plays a role in my thinking.

 

Most guys, growing up, learn that guys have a line. They learn to sense where that line is. You can say and do all sorts of obnoxious/stupid things, but if you cross over the line, there will be trouble.

 

It's getting really late in the game to not know where Obama's line is. I believe he recently said something like "Eric, don't call my bluff on this". Oh? And why should Eric not? At this stage of his presidency, he should not have to issue any such public statement. But much worse, it is ignored.

 

On the Bush tax cuts it has gone from "They should all expire" (fine with me) to "We will raise taxes only on the rich" to "Revenue increases of some sort or another should be part of the package" to something or other, who knows what.

 

 

When I speak of "the line" as a "guy thing" I don't mean that women don't have lines that are not to be crossed. Surely they do. But I do think that there is a sort of male intuition about how much another guy can be pushed around, and I think that Obama has failed badly in this area.

 

Or, more simply, it's hard to put up a defense of his core beliefs when you have no idea what they are.

[y66]

How did this come about? I do think that the Republicans are the primary villains. And just why they have all this Tea Party support, often from people whose finances are definitely no better than mine, would make an interesting psychological study.

 

This is one of the most fascinating questions for me. My golf guru, Pia Nilsson, has a chapter called Anger Makes Us Stupid in one of her tomes that may provide a clue.

[hrothgar]

in your opinion, would that pertain to the entire congress, dems and reps? how 'bout the prez, has he seemed willing to spend w/out paying? also, does it matter (to you) which program(s) are being spent on?

 

Sorry to interject facts into your snark

 

http://www.theatlantic.com/politics/archive/2011/07/another-chart-for-your-debt-ceiling-discussions/242604/

[luke warm]

Sorry to interject facts into your snark

 

http://www.theatlantic.com/politics/archive/2011/07/another-chart-for-your-debt-ceiling-discussions/242604/

i guess it depends on which article you read...

 

The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated. The Bureau of Public Debt reported today that the National Debt had hit an all time high of $13.665 trillion

 

The Debt increased $4.9 trillion during President Bush's two terms. The Administration has projected the National Debt will soar in Mr. Obama's fourth year in office to nearly $16.5-trillion in 2012. That's more than 100 percent of the value of the nation's economy and $5.9-trillion above what it was his first day on the job.

[hrothgar]

i guess it depends on which article you read...

 

The discrepancy comes about because of the FY2009 budget.

 

Mark Knoller's analysis attributes this portion of the debt to Obama because he was President during F2009

The Obama administration's numbers attribute this to Bush because he was President when the FY 2009 budget was signed.

 

(Given the magnitude of the financial crisis during 2009, a lot of money swings back and forth.

[Zelandakh]

Again, this is irrelevant from the basics of economics. Bush was president during the boom of the early 00s. This was the time to be cutting the deficit, at the very very least not to be raising it. Instead the National Debt rose 6.11 trillion dollars (according to wiki) an unprecedented amount in modern American history. Of course much of this was after the crisis and I do not know figures for before and after but 2001 - 2005 is listed at $2.14 trillion. That is alot of cash that could and should have being paying off debt together with the compounded interest that debt generates. The previous period where there was such an extended boom was the 80s. I find it interesting to note that during this period the National Debt rose $1.87 trillion, also at the time unprecedented. Who was the President? well Reagan, of course. These figures really surprised me since Republicans also portray themselves as fiscally responsible and lovers of small government.

 

The simple truth is that in times of boom spending should be cut back and debts paid off. However, doing that in times of bust is irresponsible and can do serious harm to an economy. So can higher taxation. This is why governments need to borrow more in such times and why the debt % of GDP is such a poor measurement of government performance. I understand you are a Republican luke, and perhaps you therefore have an interest in the American economy staying stagnant to the next election. Nonetheless I hope you are open-minded and objective enough to take on board some of this, or perhaps even to read up for yourself on macro economic theory rather than swallowing some of the more outrageous things that are said for political capital.

[kenberg]

These figures really surprised me since Republicans also portray themselves as fiscally responsible and lovers of small government.

 

Surely no one still believes this.

 

The Boehner plan is now scheduled for a vote on Tuesday, the day before the debt ceiling does its damage. The plan was unveiled a few days ago, it has some numbers in it that maybe add up to this or that and will effect a savings of something or other. We should not ask for time to look it over because it is the Republican strategy to give no time. Sign in haste, repent at leisure.

 

Winging it on financial matters was an approach much loved by the sub-prime mortgage industry. Once burned, twice shy comes to mind.

 

It has been the strategy of the Republicans to destroy the Obama presidency. In this they have been successful. Mr. Obama can sign or not sign on Tuesday. On Wednesday he should resign. Perhaps Mr. Biden can do better.

[PassedOut]

McCain erupts: Conservatives are lying to America

 

John McCain, who you may recall was the GOP’s 2008 standard bearer, is now openly accusing conservatives of actively misleading America with their completely unrealistic demands, which he labeled “deceiving” and “bizarro.”

McCain’s angry tirade on the Senate floor today perfectly captures the rising frustration, anger, and panic of more responsible Republicans and GOP establishment figures as they come to terms with the true depths of the delusion that is now afflicting some on the right — and the danger it is now posing to our economy and country.

The man can only take so much.

 

And those of us going about our regular business in a responsible way are at the mercy of a block of representatives with their heads so far up their asses you can't see their shoulders.

[akhare]

Very interesting graph:

 

http://www.nytimes.com/imagepages/2011/07/24/opinion/sunday/24editorial_graph2.html?ref=sunday

[kenberg]

There can be, and no doubt will continue to be, arguments about who is to blame for the fix we are in. There is, however, no question at all as to who will be responsible for the disaster that is about to take place. Whether they are motivated by ideological frenzy, or brain addlement from reading Atlas Shrugged, or an irresistible compulsion to humiliate the President, the Republican leadership is set to bring about default on our financial obligations.

 

Oh sure. If Obama is willing to do everything, that's absolutely everything, John Boehner requires (Boehner will let him know on Tuesday what exactly is demanded) then perhaps this can be avoided. Or postponed for a while. And that is only perhaps. A significant portion of the party regards such a concession as not nearly adequate.

 

I can be as cynical as the next guy but this is unreal. I never thought I would see such irresponsibility from either major party.

[y66]

Nice graph.

 

Can you imagine if a million people marched on Washington wearing tee shirts with that graph? Perhaps Debbie Rosenberg could lead the march if she still has that sign.

[PassedOut]

Very interesting graph:

 

http://www.nytimes.com/imagepages/2011/07/24/opinion/sunday/24editorial_graph2.html?ref=sunday

Interesting to see that the graph projects the Obama policies through 2017, and it lays out clearly the contrast between Bush and Obama.

[luke warm]

The Boehner plan is now scheduled for a vote on Tuesday, the day before the debt ceiling does its damage.

you don't really believe 8/2 is D day, do you?

 

We should not ask for time to look it over because it is the Republican strategy to give no time. Sign in haste, repent at leisure.

i seem to remember pelosi saying something eerily similar to that about the healt care bill... something like, "we'll read it later"

[kenberg]

Jimmy,

 

No, I do not expect the world to explode on Tuesday. I also do not expect to die on Tuesday if I do not lose some weight by then. But there has to be some date that is taken seriously. Originally it was July something or other. Then August 2. Sure, maybe we can wait for Aug 5. I don't think that we can wait until Christmas. Ask Boehner why Aug 2. Calculated disrespect, imo. Here it is, sign it.

 

As far as other things Nancy Pelosi may have said, it would not amaze me if I found some things that I did not like.

 

Here is where I think that we are:

 

Perhaps the debt ceiling will be raised as a stand alone. Of course this will not happen, but it is my preferred solution so I mention it.

 

Otherwise, a bill will (probably) arrive sometime Tuesday. There will be no negotiation, so waiting until, say, Aug 5 is pointless.

 

Option 1. Obama tears it up. I have no idea what happens next. If there was any hope of cooperation then maybe the fallout could be managed. But there is no such hope, so I think that it will be, immediately or soon thereafter, a disaster.

 

 

Option 2. Obama recognizes the dire consequences of option 1 and so he signs it. In this case his authority as a president is over. If any serious issues come up in the remaining months of his presidency, he can call John Boehner to get his instructions. No one, make that not a soul, will join his side to fight for anything. His presidency is over.

 

It's not a pretty picture. I don't celebrate the destruction of a presidency, no matter whose.

[luke warm]

i agree that there are some in congress who are only in this with the hopes of destroying obama... but where i differ from a lot of people posting here is that i also believe there are some who sincerely believe the u.s.a is spending beyond its means, that a balanced budget amendment is necessary, and that taxes should not be raised... i personally have a hard time taking anybody in congress seriously when they insist on rights and privileges over and above those enjoyed by the rest of us and when they purposely exempt themselves from following all laws they pass

 

this is one of those things that i'd handle differently as dictator than i would as a mere citizen... as dictator, you can bet that the central gov't would be supreme

[hrothgar]

i agree that there are some in congress who are only in this with the hopes of destroying obama... but where i differ from a lot of people posting here is that i also believe there are some who sincerely believe the u.s.a is spending beyond its means, that a balanced budget amendment is necessary, and that taxes should not be raised...

 

No disputes that the Republican Party doesn't make room for the the stupid as well as the venal...

[kenberg]

Obama is not apt to ask my advice, but here is a typical item that made me cringe a bit.

 

He spoke, and held a Town Hall, last Friday at the University of Maryland. I didn't go but I watched a good but of it on the web. It began with a prepared speech. He said "Default is not an option". Think about that. The Republican leadership obviously think it is an option. The logical conclusion is that if the Republicans threat to bring the country into default unless the President gives in to all of their demands then, if default is not an option, then he must give in to all their demands.

 

 

So my advice: He needs to say "I thought default was not an option because it is just so God awful stupid, but I really cannot be held hostage to someone who will use that as a weapon. So perhaps we will default. At any rate, I will not just be roboticly signing any fool thing that they put in front of me". No president can let himself be put in such a position. Basic Threatology 101 says you never issue a threat that you are not prepared to carry out so I suppose the Republicans will carry out their threat. OK. We will see where it goes. Maybe enough Congressmen and Congresswomen, Republican and Democrat, will come sufficiently to their senses to raise hell and raise the ceiling. Or maybe, more likely, they won't.

 

Obama needed to call them out long ago, it's too bad it has to be on this. But it has to be done.

[Winstonm]

I hope Obama can grow a pair before August 2. It seems to me there are at least a couple of stategies open to an aggressive President. He could simply claim that a default would affect national security and bypass Congress a la Bush/Cheney. He could claim Constitutional rights that don't exist - or maybe some that do.

 

The one thing I hope Obama learns quickly is that compromise with rabid dogs is an idiotic and naive strategy - you don't negotiate with rapid dogs, you just shoot them and move on.

 

Unfortunately, there are no statesmen nor spare balls left in Washington.

[kenberg]

I would be opposed to either of the two approaches that you mention (bypassing Congress or making up some rights), and I think it would be a great mistake.

[awm]

There are two houses in congress. The democratic majority in the senate has unanimously stated that Boehner's plan is a non-starter. That's even if he can get it past the house -- he is having some trouble within his own party. I wouldn't bet on a bill reaching Obama any time soon, and if one does it may be closer to Reid's bill.

 

As the establishment Republicans come under increasing pressure from the business community, they may buckle and agree to a compromise. Of course, such a split may end Boehner's speakership. But at this point the Democrats seem united for once, behind the principle that there will be no cuts to entitlements without substantive revenue increases.

[Winstonm]

I would be opposed to either of the two approaches that you mention (bypassing Congress or making up some rights), and I think it would be a great mistake.

 

Obama already bypassed Congress with his Libya adventure. I do not think it at all a stretch to declare a default as an assault on U.S. national security.

 

Mind you, I don't think these things should be done - but I think Obama should at least warn the right that a constitutional battle over national security will be the end result of their position, that extortion is not ever an acceptable method of governance.

 

Going on t.v. and saying we should all play nice and that it's "their" fault that we aren't won't convince stubborn mules to change their positions. It takes a little "incentive" to get their two or three brain cells to activate.

 

I am reminded of the story of the farmer who picked up the city slicker for a ride on his mule-drawn rig, and the first thing the farmer did was pick up a two-by-four and hit the mule in the head with as hard of swing as the farmer could muster. The city slicker, taken aback, gushed, "Why didn't you just yell giddyup?"

 

To which the farmer answered, "First I have to get his attention."