Levees Not War

Is This What “Winning the Future” Feels Like?

“Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.”

—Joe Nocera, “Tea Party’s War on America” (see below)

“With all this incessant emphasis on deficit reduction, it’s going to be extremely tough to convince people that we actually might need to spend some money right now, in the short run, to help get this economy out of neutral.”

—Jared Bernstein, former White House economic advisor (see below)

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Well, gentle readers, our weekend of faxing earnest, carefully crafted letters to Democrats in Congress (“Tell Obama to Use the Constitutional Option”) had the usual, predictable result.

Below are a few selections of choice commentary on the agreement reached Sunday by Senate leaders Reid and McConnell and Obama—but not yet voted on by Congress. The Senate is expected to pass it today. The House may vote by this evening, though large numbers of Pelosi’s and Boehner’s representatives may yet balk.

[ Timeline of debt ceiling negotiations ¶ How the plan would work ¶ Text of the bill ]

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New York Times editorial: “To Escape Chaos, a Terrible Deal”

. . . a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery.

. . . this episode demonstrates the effectiveness of extortion. Reasonable people are forced to give in to those willing to endanger the national interest.

Paul Krugman (NYT): “The President Surrenders”

. . . the deal itself . . . is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status. . . .

Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here.

. . . It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away. And the damage isn’t over: there will be more choke points where Republicans can threaten to create a crisis unless the president surrenders, and they can now act with the confident expectation that he will.

Joe Nocera (NYT): “Tea Party’s War on America”

America’s real crisis is not a debt crisis. It’s an unemployment crisis. Yet this agreement not only doesn’t address unemployment, it’s guaranteed to make it worse. (Incredibly, the Democrats even abandoned their demand for extended unemployment benefits as part of the deal.) . . . The spending cuts will shrink growth and raise the likelihood of pushing the country back into recession.

. . . What is astonishing is that both the president and House speaker are claiming that the deal will help the economy. . . . Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.

One thing Roosevelt did right during the Depression [as opposed to 1937 spending reductions] was legislate into being a social safety net to soften the blows that a free-market economy can mete out in tough times. During this recession, it’s as if the government is going out of its way to make sure the blows are even more severe than they have to be.

. . . Obama should have played the 14th Amendment card. . . . Yes, he would have infuriated the Republicans, but so what? They already view him as the Antichrist. . . . Inexplicably, he chose instead a course of action that maximized the leverage of the Republican extremists.

Steve Benen: “Don’t Call It a Compromise”

I’ve seen several reports on the debt-ceiling framework describe it as a “compromise” between Republicans and Democrats. That’s far too generous a term. Is this a deal? Sure. Is it an agreement? Absolutely. Can it fairly be characterized as a “compromise”? Not at all.

Republicans threatened to crash the economy, on purpose, unless a series of radical demands were met. Democrats made an effort to lessen those demands and make them less painful than intended. The result, not surprisingly, is rather ugly, which is to be expected.

The debt-reduction framework isn’t a compromise; it’s a ransom. . . . If you’re looking for good news in this agreement, you’ll be looking for a long time. Overall, what we’re left with is bad news and less-bad news.

(more…)

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It’s Time to End This Hostage Crisis

This has gone far enough. Whereas Speaker John Boehner has failed to persuade his own party in the House to support his proposed bill to lift the debt ceiling short-term—which the Senate and the President would have rejected anyway—and whereas there is no Senate bill that the House would pass, and whereas the U.S. is projected to begin defaulting on debt obligations on August 2, the time has come for President Obama to exercise the constitutional (or 14th Amendment) option to raise the debt ceiling by executive order. It is time to end this hostage crisis. Section 4 of Article XIV (14th amendment) of the Constitution reads in part:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

The 14th Amendment was passed in the wake of the Civil War to settle matters of wartime debt, while the debt ceiling itself dates back to 1917 when the U.S. was entering World War I. (See “Smash the Ceiling” by James Surowiecki in The New Yorker.)

Former President Clinton, who left office with a projected budget surplus and therefore has debt reduction credibility, has publicly said at least twice that the constitutional option should be used if nothing else works to avert default on federal debt obligations. The Democratic members of the House of Representatives, including minority leaders Steny Hoyer and James Clyburn, have urged the President to use this option to protect the nation’s economic stability and pledged that their members will stand behind him if he does.

Jack M. Balkin, a constitutional law professor at Yale University (and blogger at Balkinization) who has been cautious about the use of the 14th Amendment option, was quoted by the New York Times as saying, “You’re not supposed to hold the validity of the public debt hostage to achieve political ends.” He adds, “Section 4 is a fail-safe that only comes into operation when everything else is exhausted.” President Obama himself taught constitutional law at the University of Chicago, so he is familiar with the arguments for and against. Mostly his administration has stressed the arguments against, which in the opinion of many only weakened his bargaining position against the all-or-nothing Tea Party faction of the House Republicans.

(more…)

“Just supposing our national government . . . had fallen into the hands of men loyal to an alien power, then would the people yank the usurpers out of office at once?”

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In 2007 we asked, “Is the U.S. an Occupied Nation?” With the country exhausted by war and the Gulf Coast still struggling to recover from Hurricane Katrina, Bush-Cheney and other Conservatives in High Places regularly showed such indifference, at best, to the well-being of ordinary Americans that it really felt as though the government had been abducted.

Now, with America pushed to the brink of an abyss by an extremist few of those same so-called conservatives—the very ones who drove up the debt in the first place—is it possible that the greatest threats to America’s financial, social, and political security have offices in the U.S. Capitol and are paid $174,000 per year, with benefits?

New York Times columnist Nicholas Kristof thinks so, and in “Republicans, Zealots, and Our Security” he makes the case in convincing detail.

If China or Iran threatened our national credit rating and tried to drive up our interest rates, or if they sought to damage our education system, we would erupt in outrage. 

Well, wake up to the national security threat. Only it’s not coming from abroad, but from our own domestic extremists.

We tend to think of national security narrowly as the risk of a military or terrorist attack. But national security is about protecting our people and our national strength—and the blunt truth is that the biggest threat to America’s national security this summer . . . comes from budget machinations, and budget maniacs, at home.

House Republicans start from a legitimate concern about rising long-term debt. . . . But on this issue, many House Republicans aren’t serious, they’re just obsessive in a destructive way. . . . in their effort to protect the American economy from debt, some of them are willing to drag it over the cliff of default.

(Meanwhile, Huffington Post business editor Peter S. Goodman comes right out and says that the congressional Republicans “are acting like terrorists. . . . willfully and intentionally driving us to the edge of a cliff, using the national interest as a hostage.”)

What is it exactly that these so-called conservatives are conserving?

Nicholas Kristof warns that even the slightest, briefest default could drive interest rates higher—“on mortgages, car loans, business loans and credit cards”—leading to a deeper deficit, purportedly the very thing the House Republicans say they’re determined to reverse. The Congressional Budget Office projects that a 1% rise in interest rates could add more than $1 trillion to borrowing costs over the next 10 years.

Republican zeal to lower debts could result in increased interest expenses and higher debts. Their mania to save taxpayers could cost taxpayers. That suggests not governance so much as fanaticism.

(more…)

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While we’re either gnawing our knuckles or blissfully unaware there’s a debt ceiling hostage crisis now in its —th week . . . While the putatively Democratic President again invites the Republican House leaders to the White House over the weekend to discuss how the federal budget can be trimmed further to accommodate those gentlemen’s concerns while getting nothing in return for the revenue-starved U.S. Treasury, we thought some relevant amusement might be in order.

In this clip from the mid 1930s, Louisiana senator (and effectively still governor) Huey P. Long uses an old country anecdote about a drummer (salesman) of patent medicines called High Popalorum and Low Popahirum—depending on whether the tree’s bark is stripped from the top down or the bottom up—to describe the difference between “the Democratic leadership and the Republican leadership” in Congress.

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