Tuesday, August 2, 2011

Debt Ceiling - Follow Up: Politicians Dodge the Issues, Leave Problems for the Future

What People Think

House Passes Debt deal

Yesterday, the House passed the compromise legislation to raise the debt limit.  ". . . scores of progressive Democrats and conservative Republicans voted against the legislation, which ultimately passed 269-161.  Democrats split evenly: 95-95.  The Republicans broke down 174-66.  Though House Minority Leader Nancy Pelosi (D-CA) and her Whip Steny Hoyer (D-MD) voted for the legislation, they did allow members to vote their conscience.  And in a sign of Pelosi's underlying disapproval of the measure, her top allies, including Reps George Miller (D-CA) and Henry Waxman (D-CA) ultimately voted no."  The US Senate will vote today.

Half the Democrats on each side of the vote; three-quarters of the Republicans in favor.  You and I will have to find out how our Congressman voted.  Then, we'll need to give them feedback on whether we agree or disagree.  Now is the time to let them know.

What's In the Deal

"Congressional leaders and President Obama on Sunday night announced they've cut a deal to avert a historic U.S. default, saying they have assembled a framework that cuts some spending immediately and uses a 'super Congress' to slash more in the future."  "Though none of the leaders sounded pleased about the deal, they said they were relieved it may present a chance to avert default.  President Obama seemed especially dissatisfied with the idea of the super committee, saying the leaders should have been able to accomplish all the cuts now."

When a good summary of the content of the new law (assuming it passes) is available, I will post it.  I have seen some articles that seem to say that Medicare, Medicaid, and Social Security are safe over the short term, but I'm not certain of this.

In the meantime, The Fine Print on the Debt Deal.  "If Democrats read the fine print on the debt deal struck by President Obama and Congressional leaders, they’ll find that it’s a little better than it appears at first glance.  That’s not to say that the deal is a good one for them.  It concedes a lot to Republicans, and Democrats may be wondering why any of this was necessary in the first place.  But the good news, relatively speaking, has to do with the timing and structure of the spending cuts contained in the deal."

Given that so many people (and politicians) are unhappy, this might be a good compromise from a political perspective.  Still, it's very difficult not to be disappointed, since the "balance" of closing loopholes and taxing the rich were not included.  GE and other mega-companies apparently will continue to pay no taxes at all.

Big Loss for Progressives and Democrats

From a progressive perspective, the deal looks like a big surrender from President Obama.  "If it [the deal] goes through, many commentators will declare that disaster was avoided.  But they will be wrong.   For the deal itself, given the available information, 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."

As often is the case, I'm inclined to agree with this author, Paul Klugman, and I strongly suggest you take a look at this item.  As I've said all along, the Republicans have lost their party and their way, captive --as they are -- to extreme and inflexible Conservative ideology.  Yet, this will look like a Republican victory to many people, and they certainly will say so.  Meanwhile, the Democrats and Progressives clearly are wounded -- as the rich and famous get off scot free.

Rise of the Backward Machines

While we once had hope that the Republicans ultimately would have to abandon the far right, it's now easy to image the fringe Conservatives becoming even more bold.  "Anyone who characterizes the deal between the President, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics.  The deal does not raise taxes on America’s wealthy and most fortunate -- who are now taking home a larger share of total income and wealth, and whose tax rates are already lower than they have been, in eighty years.  Yet it puts the nation’s most important safety nets and public investments on the chopping block."

Frankly, this fiasco has shaken my faith in President Obama and his advisors -- something that I haven't said before..

The Republican Reality-Free Zone


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