Tell the deficit super committee: Don't cut Medicare, Medicaid or Social Security benefits
http://act.credoaction.com/campaign/sc_dont_cut
Medicare, Medicaid and Social Security are in danger. But the biggest threat isn't driven by economics, it's driven by politics.
Twelve members of Congress from the House and Senate have been newly empowered to force both chambers of Congress to vote on a deficit reduction bill that can neither be amended nor filibustered.
Unfortunately many members of this new bipartisan, bicameral deficit super committee have Medicare, Medicaid and Social Security squarely in their sights.
In essence, they think it's better to let seniors fall into poverty, or deny needed health care to the poor and elderly, than to raise taxes on people who can comfortably afford to pay more.
Tell the members of the deficit super committee not to cut Medicare, Medicaid or Social Security benefits.
Cuts to Social Security, Medicare and Medicaid are deeply unpopular, even among Republican voters. But Congress isn't reflecting the values and priorities of most Americans.
It used to be that programs like Medicare and Social Security were considered a "third rail" in politics, and that neither Democrats nor Republicans wanted to face the wrath of voters should they try to roll back these wildly popular programs.
But today in Washington, the programs that keep millions of Americans from falling into poverty have taken a back seat to manufactured concerns about the long term implications of our national debt. Incredibly, some Democrats have bought into the Republican craze for cuts, even signaling that they would be willing to put Medicare benefits on the table!
Until our economy recovers, we should be spending money to take care of people and boost our economy, not fixating on deficit reduction.
Yet the concern about the debt has been used as a wedge to force deep cuts to important programs that help many Americans live a dignified life.
That doesn't mean that there shouldn't be vigilant efforts to root out fraud in government programs. But it does mean that we absolutely cannot afford the human or the economic effects of cuts to vital benefits.
We need to make sure that we speak out to put massive pressure on the members of the deficit committee not to agree to a plan that puts Medicare, Medicaid and Social Security benefits on the chopping block.
Let's be clear on some things. While there are progressive reforms to all these programs, that's not what's on the table.
Furthermore, Social Security has nothing to do with the debt and is projected to be fully solvent for over 25 years. And while Medicaid and Medicare costs are rising, that's because health care in this country is very expensive. Saving money by cutting benefits does nothing more than shift the cost of necessary medical care onto the backs of people who might not be able to pay for it.
Finally those who say we can't afford these hugely popular and successful programs are also happy to spend trillions of dollars on corporate welfare, needless military spending and tax cuts for the rich.
Government has a role in ensuring there's a social safety net, and democracy demands that everybody is asked to pay what they are able before we start cutting programs that all of us need.
Tell the members of the deficit super committee not to cut Medicare, Medicaid or Social Security benefits.
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Showing posts with label Medicare. Show all posts
Showing posts with label Medicare. Show all posts
Saturday, September 24, 2011
Thursday, August 18, 2011
The Market Has Spoken: Austerity Is Bad for Business
http://globalresearch.ca/index.php?context=va&aid=25916
Ellen Brown
Global Research, August 6, 2011
Web of Debt
It used to be that when the Fed Chairman spoke, the market listened; but the Chairman has lost his mystique. Now when the market speaks, politicians listen. Hopefully they heard what the market just said: government cutbacks are bad for business. The government needs to spend more, not less. Fortunately, there are viable ways to do this while still balancing the budget.
On Thursday, August 4, the Dow Jones Industrial Average fell 512 points, the biggest stock market drop since the collapse of September 2008.
Why? Weren't the markets supposed to rebound after the debt ceiling agreement was reached on Monday, avoiding U.S. default and a downgrade of U.S. debt?
So we were told, but the market apparently understands what politicians don't: the debt deal is a death deal for the economy.
Reducing government spending by $2.2 trillion over a decade, as Congress just agreed to do, will kill any hopes of economic recovery. We're looking at a double-dip recession.
The figure is actually more than $2.2 trillion. As Jack Rasmus pointed out on Truthout on August 4th:
Economists estimate the "multiplier" from government spending at about 1.5. That means for every $1 cut in government spending, about $1.5 dollars are taken out of the economy. The first year of cuts are therefore $375 billion to $400 billion in terms of their economic effect. Ironically, that's about equal to the spending increase from Obama's 2009 initial stimulus package. In other words, we are about to extract from the economy - now showing multiple signs of weakening badly - the original spending stimulus of 2009!
As others have pointed out, that magnitude of spending contraction will result in 1.5 million to 2 million more jobs lost. That's also about all the jobs created since the trough of the recession in June 2009. In other words, the job market will be thrown back two years as well.
We're not moving forward. We're moving backward. The hand-wringing is all about the "debt crisis," but the national debt is not what has stalled the economy, and the crisis was not created by Social Security or Medicare, which are being set up to take the fall. It was created by Wall Street, which has squeezed trillions in bailout money from the government and the taxpayers; and by the military, which has squeezed trillions more for an amorphous and unending "War on Terror." But the hits are slated to fall on the so-called "entitlements" - a social safety net that we the people are actually entitled to, because we paid for them with taxes.
The Problem Is Not Debt But a Shrinking Money Supply
The markets are not reacting to a "debt crisis." They do not look at charts ten years out. They look at present indicators of jobs and sales, which have turned persistently negative. Jobs and sales are both dependent on "demand," which means getting money into the pockets of consumers; and the money supply today has shrunk.
We don't see this shrinkage because it is primarily in the "shadow banking system," the thing that collapsed in 2008. The shadow banking system used to be reflected in M3, but the Fed no longer reports it. In July 2010, however, the New York Fed posted on its website a staff report titled "Shadow Banking." It said that the shadow banking system had shrunk by $5 trillion since its peak in March 2008, when it was valued at about $20 trillion - actually larger than the traditional banking system. In July 2010, the shadow system was down to about $15 trillion, compared to $13 trillion for the traditional banking system.
Only about $2 trillion of this shrinkage has been replaced with the Fed's quantitative easing programs, leaving a $3 trillion hole to be filled; and only the government is in a position to fill it. We have been sold the idea that there is a "debt crisis" when there is really a liquidity crisis. Paying down the federal debt when money is already scarce just makes matters worse. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.
Most of our money now comes into the world as debt, which is created on the books of banks and lent into the economy. If there were no debt, there would be no money to run the economy; and today, private debt has collapsed. Encouraged by Fed policy, banks have tightened up lending and are sitting on their money, shrinking the circulating money supply and the economy.
Creative Ways to Balance the Budget
The federal debt has not been paid off since the days of Andrew Jackson, and it does not need to be paid off. It is just rolled over from year to year. The only real danger posed by a growing federal debt is the interest burden, but that has not been a problem yet. The Congressional Budget Office reported in December 2010:
[A] sharp drop in interest rates has held down the amount of interest that the government pays on [the national] debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.
The interest burden will increase if the federal debt continues to grow, but that problem can be solved by mandating the Federal Reserve to buy the government's debt. The Fed rebates its profits to the government after deducting its costs, making the money nearly interest-free. The Fed is already doing this with its quantitative easing programs and now holds nearly $1.7 trillion in federal securities.
If Congress must maintain its debt ceiling, there are other ways to balance the budget and avoid a growing debt. Ron Paul has brought a creative bill that would eliminate the $1.7 trillion deficit simply by having the Fed tear up its federal securities. No creditors would be harmed, since the money was generated with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.
The Trillion Dollar Coin Alternative
The most direct solution to the debt problem is for the government to fund its budget with government-issued money. One alternative would be for the Treasury to issue U.S. Notes, as was done in the Civil War by President Lincoln.
Another alternative was suggested in my book Web of Debt in 2007: the government could simply mint some trillion dollar coins. Congress has the Constitutional power to "coin money," and no limit is put on the value of the coins it creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s.
This idea is now getting some attention from economists. According to a July 29th article in the Johnsville News titled "Coin Trick: The Trillion Dollar Coin":
The idea just started to get serious traction the last few days as the debt stalemate has grown more intense and partisan. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed yesterday (July 28th).
Today the idea has gone mainstream. It is covered by NY Magazine, CNBC, and The Economist. Even Nobel economist Paul Krugman of the NY Times has weighed in. Annie Lowrey of Slate discusses it as one of several gimmicks the government could use to resolve the debt-ceiling debacle. Krugman added:
These things [like coin seigniorage] sound ridiculous - but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?
The debt ceiling itself was a legal trick, a form of extortion based on a century-old statute that conflicts with the Constitution. However, said the Johnsville News article, "coin seigniorage is not a scam. It is legal . . . . This plan looks like it might be Obama's ace in the hole . . . ."
The article cites Warren Mosler, founder of MMT (Modern Monetary Theory), who reviewed the idea in a January 20th blog post and concluded it would work operationally.
Scott Fullwiler, associate professor of economics at Wartburg College, also did a comprehensive analysis and concluded that the trillion dollar coin alternative was unlikely to result in inflation. Comparing it to Ron Paul's plan, he wrote:
This option is much like Ron Paul's proposal-actually identical in terms of the effect on the debt ceiling and the Treasury-except that his proposal would destroy all of the Fed's capital (and then some), which is a potential problem politically . . . though not operationally, and which the Fed is therefore very unlikely to agree to.
On the inflation question, just because the Treasury has money in its account doesn't mean it can spend the funds. It needs the usual Congressional approval. To keep a lid on spending, Congress just needs to be instructed in basic economics. They can spend on goods and services up to full employment without creating price inflation (since supply and demand will rise together). After that, they need to tax -- not to fund the budget, but to pull excess money back in and avoid driving up prices.
Spending More While Borrowing Less
In an economic downturn, the government needs to spend more, not less, as history shows. This can be done while still balancing the budget, simply by taking back the government's Constitutional power to issue money.
The budget crisis is an artificial one, and the current "solution" will only guarantee a deeper recession and more widespread suffering. Rather than obsessing over deficits and debt, the government needs to turn its focus to jobs, sales and quality of life.
------------------------
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and "the money trust." Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.
Ellen Brown is a frequent contributor to Global Research.
Please support Global Research
Global Research relies on the financial support of its readers.
Your endorsement is greatly appreciated
Subscribe to the Global Research E-Newsletter Spread the word! Forward to a friend!
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: publications@globalresearch.ca
http://www.globalresearch.ca/ contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: media@globalresearch.ca
Copyright © Ellen Brown, Web of Debt, 2011
Ellen Brown
Global Research, August 6, 2011
Web of Debt
It used to be that when the Fed Chairman spoke, the market listened; but the Chairman has lost his mystique. Now when the market speaks, politicians listen. Hopefully they heard what the market just said: government cutbacks are bad for business. The government needs to spend more, not less. Fortunately, there are viable ways to do this while still balancing the budget.
On Thursday, August 4, the Dow Jones Industrial Average fell 512 points, the biggest stock market drop since the collapse of September 2008.
Why? Weren't the markets supposed to rebound after the debt ceiling agreement was reached on Monday, avoiding U.S. default and a downgrade of U.S. debt?
So we were told, but the market apparently understands what politicians don't: the debt deal is a death deal for the economy.
Reducing government spending by $2.2 trillion over a decade, as Congress just agreed to do, will kill any hopes of economic recovery. We're looking at a double-dip recession.
The figure is actually more than $2.2 trillion. As Jack Rasmus pointed out on Truthout on August 4th:
Economists estimate the "multiplier" from government spending at about 1.5. That means for every $1 cut in government spending, about $1.5 dollars are taken out of the economy. The first year of cuts are therefore $375 billion to $400 billion in terms of their economic effect. Ironically, that's about equal to the spending increase from Obama's 2009 initial stimulus package. In other words, we are about to extract from the economy - now showing multiple signs of weakening badly - the original spending stimulus of 2009!
As others have pointed out, that magnitude of spending contraction will result in 1.5 million to 2 million more jobs lost. That's also about all the jobs created since the trough of the recession in June 2009. In other words, the job market will be thrown back two years as well.
We're not moving forward. We're moving backward. The hand-wringing is all about the "debt crisis," but the national debt is not what has stalled the economy, and the crisis was not created by Social Security or Medicare, which are being set up to take the fall. It was created by Wall Street, which has squeezed trillions in bailout money from the government and the taxpayers; and by the military, which has squeezed trillions more for an amorphous and unending "War on Terror." But the hits are slated to fall on the so-called "entitlements" - a social safety net that we the people are actually entitled to, because we paid for them with taxes.
The Problem Is Not Debt But a Shrinking Money Supply
The markets are not reacting to a "debt crisis." They do not look at charts ten years out. They look at present indicators of jobs and sales, which have turned persistently negative. Jobs and sales are both dependent on "demand," which means getting money into the pockets of consumers; and the money supply today has shrunk.
We don't see this shrinkage because it is primarily in the "shadow banking system," the thing that collapsed in 2008. The shadow banking system used to be reflected in M3, but the Fed no longer reports it. In July 2010, however, the New York Fed posted on its website a staff report titled "Shadow Banking." It said that the shadow banking system had shrunk by $5 trillion since its peak in March 2008, when it was valued at about $20 trillion - actually larger than the traditional banking system. In July 2010, the shadow system was down to about $15 trillion, compared to $13 trillion for the traditional banking system.
Only about $2 trillion of this shrinkage has been replaced with the Fed's quantitative easing programs, leaving a $3 trillion hole to be filled; and only the government is in a position to fill it. We have been sold the idea that there is a "debt crisis" when there is really a liquidity crisis. Paying down the federal debt when money is already scarce just makes matters worse. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.
Most of our money now comes into the world as debt, which is created on the books of banks and lent into the economy. If there were no debt, there would be no money to run the economy; and today, private debt has collapsed. Encouraged by Fed policy, banks have tightened up lending and are sitting on their money, shrinking the circulating money supply and the economy.
Creative Ways to Balance the Budget
The federal debt has not been paid off since the days of Andrew Jackson, and it does not need to be paid off. It is just rolled over from year to year. The only real danger posed by a growing federal debt is the interest burden, but that has not been a problem yet. The Congressional Budget Office reported in December 2010:
[A] sharp drop in interest rates has held down the amount of interest that the government pays on [the national] debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.
The interest burden will increase if the federal debt continues to grow, but that problem can be solved by mandating the Federal Reserve to buy the government's debt. The Fed rebates its profits to the government after deducting its costs, making the money nearly interest-free. The Fed is already doing this with its quantitative easing programs and now holds nearly $1.7 trillion in federal securities.
If Congress must maintain its debt ceiling, there are other ways to balance the budget and avoid a growing debt. Ron Paul has brought a creative bill that would eliminate the $1.7 trillion deficit simply by having the Fed tear up its federal securities. No creditors would be harmed, since the money was generated with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.
The Trillion Dollar Coin Alternative
The most direct solution to the debt problem is for the government to fund its budget with government-issued money. One alternative would be for the Treasury to issue U.S. Notes, as was done in the Civil War by President Lincoln.
Another alternative was suggested in my book Web of Debt in 2007: the government could simply mint some trillion dollar coins. Congress has the Constitutional power to "coin money," and no limit is put on the value of the coins it creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s.
This idea is now getting some attention from economists. According to a July 29th article in the Johnsville News titled "Coin Trick: The Trillion Dollar Coin":
The idea just started to get serious traction the last few days as the debt stalemate has grown more intense and partisan. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed yesterday (July 28th).
Today the idea has gone mainstream. It is covered by NY Magazine, CNBC, and The Economist. Even Nobel economist Paul Krugman of the NY Times has weighed in. Annie Lowrey of Slate discusses it as one of several gimmicks the government could use to resolve the debt-ceiling debacle. Krugman added:
These things [like coin seigniorage] sound ridiculous - but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?
The debt ceiling itself was a legal trick, a form of extortion based on a century-old statute that conflicts with the Constitution. However, said the Johnsville News article, "coin seigniorage is not a scam. It is legal . . . . This plan looks like it might be Obama's ace in the hole . . . ."
The article cites Warren Mosler, founder of MMT (Modern Monetary Theory), who reviewed the idea in a January 20th blog post and concluded it would work operationally.
Scott Fullwiler, associate professor of economics at Wartburg College, also did a comprehensive analysis and concluded that the trillion dollar coin alternative was unlikely to result in inflation. Comparing it to Ron Paul's plan, he wrote:
This option is much like Ron Paul's proposal-actually identical in terms of the effect on the debt ceiling and the Treasury-except that his proposal would destroy all of the Fed's capital (and then some), which is a potential problem politically . . . though not operationally, and which the Fed is therefore very unlikely to agree to.
On the inflation question, just because the Treasury has money in its account doesn't mean it can spend the funds. It needs the usual Congressional approval. To keep a lid on spending, Congress just needs to be instructed in basic economics. They can spend on goods and services up to full employment without creating price inflation (since supply and demand will rise together). After that, they need to tax -- not to fund the budget, but to pull excess money back in and avoid driving up prices.
Spending More While Borrowing Less
In an economic downturn, the government needs to spend more, not less, as history shows. This can be done while still balancing the budget, simply by taking back the government's Constitutional power to issue money.
The budget crisis is an artificial one, and the current "solution" will only guarantee a deeper recession and more widespread suffering. Rather than obsessing over deficits and debt, the government needs to turn its focus to jobs, sales and quality of life.
------------------------
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and "the money trust." Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.
Ellen Brown is a frequent contributor to Global Research.
Please support Global Research
Global Research relies on the financial support of its readers.
Your endorsement is greatly appreciated
Subscribe to the Global Research E-Newsletter Spread the word! Forward to a friend!
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: publications@globalresearch.ca
http://www.globalresearch.ca/ contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: media@globalresearch.ca
Copyright © Ellen Brown, Web of Debt, 2011
Monday, August 15, 2011
Thoughts About the Catfood II Super Congress Appointments
Jane Hamsher
Wednesday August 10, 2011
http://fdlaction.firedoglake.com/2011/08/10/thoughts-about-the-catfood-ii-super-congress-appointments/
1. There are no good choices for this commission. It is designed to protect members of Congress from the electoral repercussions of cutting Social Security and Medicare benefits, something that 82% of the country vehemently opposes. A full 60% of the country think the wars are responsible for the deficit, but the money for war will not be touched. The committee exists solely to impose the will of a small minority of oligarchical elites on the nation, and rob millions of Americans of the retirement insurance they have been faithfully and honorably been paying into their entire adult lives. The fact that the committee exists at all represents the breakdown of the social contract.
2. The US government is the largest contractor in the world. Lockheed Martin: $16.7 billion in 2010. Boeing: $10.5 billion. Hewlett-Packard: $2.3 billion. IBM: $1.8 billion. These companies spend millions each year bribing elected officials for for pennies on the dollar in exchange for these contracts. They do not want to be the one on the chopping block. Appointing the Chair of the DSCC to the committee — whose job is collecting campaign contributions on behalf of Senate Democrats — is like putting up a “for sale” sign. Democrats would be screaming bloody murder if John Cornyn were appointed. Greenberg-Quinlan-Rossner polling finds that the only message polling well for Democrats right now is “reducing the influence of lobbyists and money in Congress.” Way to go with the optics, Harry Reid.
3. Jon Kyl is the Senate Minority Whip. Kyl walked out of the Biden talks with Eric Cantor in order to force Obama to take ownership of the deal. Toomey is a member of the Tea Party who authored a balanced budget amendment and will vote for increased revenues when hell freezes over. Rob Portman is a former budget director under George Bush. Dave Camp and Jeb Hensarling are Catfood Commission I retreads. Fred Upton’s niece is a Sports Illustrated swimsuit model.
4. The Democratic House appointees will be meaningless. With three Democratic “grand bargain” Senate appointees, there is already a strong majority in favor of cutting Social Security and Medicare benefits.
3. None of these 6 Senators is up for reelection soon (Kyl is retiring), and the House members are in safe districts (notice no Paul Ryan). That exacerbates the anti-democratic nature of (1) above.
The only thing these committee members are going to respond to is is their fellow members of Congress who are up for reelection. They need to start telling them that they will be the ones will who bear the burden of whatever decision the committee makes, but they’re all in the throes of an austerity fit. They need to hear from you.
We’re running a new round of online ads on Facebook and Google targeted to voters in ey 2012 swing states. Some of these ads are about opposing the coming benefit cuts from the Super Congress, and joining our pledge to oppose anyone who votes for them.
Others are focused on individual members of Congress to pressure them not to vote for the Super Congress’ final recommendations, and let them know members know what the consequence will be in 2012 if they do.
Wednesday August 10, 2011
http://fdlaction.firedoglake.com/2011/08/10/thoughts-about-the-catfood-ii-super-congress-appointments/
1. There are no good choices for this commission. It is designed to protect members of Congress from the electoral repercussions of cutting Social Security and Medicare benefits, something that 82% of the country vehemently opposes. A full 60% of the country think the wars are responsible for the deficit, but the money for war will not be touched. The committee exists solely to impose the will of a small minority of oligarchical elites on the nation, and rob millions of Americans of the retirement insurance they have been faithfully and honorably been paying into their entire adult lives. The fact that the committee exists at all represents the breakdown of the social contract.
2. The US government is the largest contractor in the world. Lockheed Martin: $16.7 billion in 2010. Boeing: $10.5 billion. Hewlett-Packard: $2.3 billion. IBM: $1.8 billion. These companies spend millions each year bribing elected officials for for pennies on the dollar in exchange for these contracts. They do not want to be the one on the chopping block. Appointing the Chair of the DSCC to the committee — whose job is collecting campaign contributions on behalf of Senate Democrats — is like putting up a “for sale” sign. Democrats would be screaming bloody murder if John Cornyn were appointed. Greenberg-Quinlan-Rossner polling finds that the only message polling well for Democrats right now is “reducing the influence of lobbyists and money in Congress.” Way to go with the optics, Harry Reid.
3. Jon Kyl is the Senate Minority Whip. Kyl walked out of the Biden talks with Eric Cantor in order to force Obama to take ownership of the deal. Toomey is a member of the Tea Party who authored a balanced budget amendment and will vote for increased revenues when hell freezes over. Rob Portman is a former budget director under George Bush. Dave Camp and Jeb Hensarling are Catfood Commission I retreads. Fred Upton’s niece is a Sports Illustrated swimsuit model.
4. The Democratic House appointees will be meaningless. With three Democratic “grand bargain” Senate appointees, there is already a strong majority in favor of cutting Social Security and Medicare benefits.
3. None of these 6 Senators is up for reelection soon (Kyl is retiring), and the House members are in safe districts (notice no Paul Ryan). That exacerbates the anti-democratic nature of (1) above.
The only thing these committee members are going to respond to is is their fellow members of Congress who are up for reelection. They need to start telling them that they will be the ones will who bear the burden of whatever decision the committee makes, but they’re all in the throes of an austerity fit. They need to hear from you.
We’re running a new round of online ads on Facebook and Google targeted to voters in ey 2012 swing states. Some of these ads are about opposing the coming benefit cuts from the Super Congress, and joining our pledge to oppose anyone who votes for them.
Others are focused on individual members of Congress to pressure them not to vote for the Super Congress’ final recommendations, and let them know members know what the consequence will be in 2012 if they do.
Tuesday, August 9, 2011
Rightward Tilt Leaves Obama With Party Rift
JACKIE CALMES
July 30, 2011
http://www.nytimes.com/2011/07/31/us/politics/31dems.html
WASHINGTON — However the debt limit showdown ends, one thing is clear: under pressure from Congressional Republicans, President Obama has moved rightward on budget policy, deepening a rift within his party heading into the next election.
Entering a campaign that is shaping up as an epic clash over the parties’ divergent views on the size and role of the federal government, Republicans have changed the terms of the national debate. Mr. Obama, seeking to appeal to the broad swath of independent voters, has adopted the Republicans’ language and in some cases their policies, while signaling a willingness to break with liberals on some issues.
That has some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Mr. Obama could be left with an economy still producing so few jobs by Election Day that his re-election could be threatened. Besides turning off independents, Mr. Obama risks alienating Democratic voters already disappointed by his escalation of the war in Afghanistan and his failure to close the Guantánamo Bay prison, end the Bush-era tax cuts and enact a government-run health insurance system.
“The activist liberal base will support Obama because they’re terrified of the right wing,” said Robert L. Borosage, co-director of the liberal group Campaign for America’s Future.
But he said, “I believe that the voting base of the Democratic Party — young people, single women, African-Americans, Latinos — are going to be so discouraged by this economy and so dismayed unless the president starts to champion a jobs program and take on the Republican Congress that the ability of labor to turn out its vote, the ability of activists to mobilize that vote, is going to be dramatically reduced.”
While Mr. Obama and Republicans have been unable to agree on a debt reduction plan for spending cuts and revenue increases to cut $4 trillion in the first decade, on Saturday they were negotiating a deal with fewer spending cuts that would ensure the government’s debt ceiling would be increased into 2013 to avoid another deadlock in the heat of campaign season.
No matter how the immediate issue is resolved, Mr. Obama, in his failed effort for greater deficit reduction, has put on the table far more in reductions for future years’ spending, including Medicare, Medicaid and Social Security, than he did in new revenue from the wealthy and corporations. He proposed fewer cuts in military spending and more in health care than a bipartisan Senate group that includes one of the chamber’s most conservative Republicans.
To win approval of the essential increase in the nation’s $14.3 trillion borrowing ceiling, Mr. Obama sought more in deficit reduction than Republicans did, and with fewer changes to the entitlement programs, because he was willing to raise additional revenue starting in 2013 and they were not. And despite unemployment lingering at its highest level in decades, Mr. Obama has not fought this year for a big jobs program with billions of dollars for public-works projects, which liberals in his party have clamored for. Instead, he wants to extend a temporary payroll tax cut for everyone, since Republicans will support tax cuts, despite studies showing that spending programs are generally the more effective stimulus.
Even before last November’s election gave the Republicans control of the House, Mr. Obama had said he would pivot to deficit reduction after two years of stimulus measures intended first to rescue the economy and then to spur a recovery from the near collapse of the financial system. With Republicans’ gains in the midterm elections, that pivot became a lurch. Yet Congressional Republicans say Mr. Obama seeks a debt limit increase as “a blank check” to keep spending.
“The Republicans won, and they don’t know how to accept victory,” said Robert D. Reischauer, a former director of the Congressional Budget Office.
In his budget proposal in January, Mr. Obama declined to suggest a plan along the lines proposed by a majority of his bipartisan fiscal commission, which in December recommended $4 trillion in savings over 10 years through cuts in military and domestic programs, including Medicare and Medicaid, and a tax code overhaul to lower rates while also raising more revenue.
Even though Mr. Obama was widely criticized, administration officials said at the time that to have embraced that approach then would have put him too far to the right — where he ultimately wanted to end up in any compromise with Republicans, not where he wanted to start.
But by this month, in ultimately unsuccessful talks with Speaker John A. Boehner, Mr. Obama tentatively agreed to a plan that was farther to the right than that of the majority of the fiscal commission and a bipartisan group of senators, the so-called Gang of Six. It also included a slow rise in the Medicare eligibility age to 67 from 65, and, after 2015, a change in the formula for Social Security cost-of-living adjustments long sought by economists.
“He’s accommodated himself to the new reality in Washington,” said Tom Davis, a former House Republican leader from Virginia. “That’s what leaders do.”
But Congressional Democrats and liberal groups objected.
“The president’s proposing cuts to Social Security and Medicare has the potential to sap the energy of the Democratic base — among older voters because of Medicare and Medicaid and younger voters because of the lack of jobs,” said Damon A. Silvers, policy director of the A.F.L.-C.I.O. “And second, all these fiscal austerity proposals on the table will make the economy worse.”
Mr. Obama’s situation has parallels with the mid-1990s, when President Bill Clinton shifted to the center after Republicans took Congress and battled them on deficit reduction and a welfare overhaul. Many Democrats were angered by his concessions, by a sense of being left out of negotiations and by a fear of alienating Democratic voters. Mr. Clinton was re-elected in 1996.
But Mr. Obama is likely to face the voters with a weaker economy and higher unemployment than during Mr. Clinton’s era. Still, his advisers express confidence that voters will reward Mr. Obama either for winning a bipartisan deal, if that were to happen, or for at least having a more balanced approach that does not remake Medicare and Medicaid and asks for more revenue from the wealthy. And they suggest another potential parallel with the Clinton years of divided government: that Republicans risk a voter backlash with their uncompromising stands.
“Democrats created Social Security and Medicare, and we have fought for decades against Republican attempts to end these programs,” said Dan Pfeiffer, Mr. Obama’s communications director. “And President Obama believes that now is the time for Democrats to be the ones to step up and save Social Security and Medicare.”
Mark Mellman, a Democratic pollster, said polling data showed that at this point in his term, Mr. Obama, compared with past Democratic presidents, was doing as well or better with Democratic voters. “Whatever qualms or questions they may have about this policy or that policy, at the end of the day the one thing they’re absolutely certain of — they’re going to hate these Republican candidates,” Mr. Mellman said. “So I’m not honestly all that worried about a solid or enthusiastic base.”
Binyamin Appelbaum contributed reporting.
A version of this article appeared in print on July 31, 2011, on page A1 of the New York edition with the headline: Rightward Tilt Leaves Obama With Party Rift.
July 30, 2011
http://www.nytimes.com/2011/07/31/us/politics/31dems.html
WASHINGTON — However the debt limit showdown ends, one thing is clear: under pressure from Congressional Republicans, President Obama has moved rightward on budget policy, deepening a rift within his party heading into the next election.
Entering a campaign that is shaping up as an epic clash over the parties’ divergent views on the size and role of the federal government, Republicans have changed the terms of the national debate. Mr. Obama, seeking to appeal to the broad swath of independent voters, has adopted the Republicans’ language and in some cases their policies, while signaling a willingness to break with liberals on some issues.
That has some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Mr. Obama could be left with an economy still producing so few jobs by Election Day that his re-election could be threatened. Besides turning off independents, Mr. Obama risks alienating Democratic voters already disappointed by his escalation of the war in Afghanistan and his failure to close the Guantánamo Bay prison, end the Bush-era tax cuts and enact a government-run health insurance system.
“The activist liberal base will support Obama because they’re terrified of the right wing,” said Robert L. Borosage, co-director of the liberal group Campaign for America’s Future.
But he said, “I believe that the voting base of the Democratic Party — young people, single women, African-Americans, Latinos — are going to be so discouraged by this economy and so dismayed unless the president starts to champion a jobs program and take on the Republican Congress that the ability of labor to turn out its vote, the ability of activists to mobilize that vote, is going to be dramatically reduced.”
While Mr. Obama and Republicans have been unable to agree on a debt reduction plan for spending cuts and revenue increases to cut $4 trillion in the first decade, on Saturday they were negotiating a deal with fewer spending cuts that would ensure the government’s debt ceiling would be increased into 2013 to avoid another deadlock in the heat of campaign season.
No matter how the immediate issue is resolved, Mr. Obama, in his failed effort for greater deficit reduction, has put on the table far more in reductions for future years’ spending, including Medicare, Medicaid and Social Security, than he did in new revenue from the wealthy and corporations. He proposed fewer cuts in military spending and more in health care than a bipartisan Senate group that includes one of the chamber’s most conservative Republicans.
To win approval of the essential increase in the nation’s $14.3 trillion borrowing ceiling, Mr. Obama sought more in deficit reduction than Republicans did, and with fewer changes to the entitlement programs, because he was willing to raise additional revenue starting in 2013 and they were not. And despite unemployment lingering at its highest level in decades, Mr. Obama has not fought this year for a big jobs program with billions of dollars for public-works projects, which liberals in his party have clamored for. Instead, he wants to extend a temporary payroll tax cut for everyone, since Republicans will support tax cuts, despite studies showing that spending programs are generally the more effective stimulus.
Even before last November’s election gave the Republicans control of the House, Mr. Obama had said he would pivot to deficit reduction after two years of stimulus measures intended first to rescue the economy and then to spur a recovery from the near collapse of the financial system. With Republicans’ gains in the midterm elections, that pivot became a lurch. Yet Congressional Republicans say Mr. Obama seeks a debt limit increase as “a blank check” to keep spending.
“The Republicans won, and they don’t know how to accept victory,” said Robert D. Reischauer, a former director of the Congressional Budget Office.
In his budget proposal in January, Mr. Obama declined to suggest a plan along the lines proposed by a majority of his bipartisan fiscal commission, which in December recommended $4 trillion in savings over 10 years through cuts in military and domestic programs, including Medicare and Medicaid, and a tax code overhaul to lower rates while also raising more revenue.
Even though Mr. Obama was widely criticized, administration officials said at the time that to have embraced that approach then would have put him too far to the right — where he ultimately wanted to end up in any compromise with Republicans, not where he wanted to start.
But by this month, in ultimately unsuccessful talks with Speaker John A. Boehner, Mr. Obama tentatively agreed to a plan that was farther to the right than that of the majority of the fiscal commission and a bipartisan group of senators, the so-called Gang of Six. It also included a slow rise in the Medicare eligibility age to 67 from 65, and, after 2015, a change in the formula for Social Security cost-of-living adjustments long sought by economists.
“He’s accommodated himself to the new reality in Washington,” said Tom Davis, a former House Republican leader from Virginia. “That’s what leaders do.”
But Congressional Democrats and liberal groups objected.
“The president’s proposing cuts to Social Security and Medicare has the potential to sap the energy of the Democratic base — among older voters because of Medicare and Medicaid and younger voters because of the lack of jobs,” said Damon A. Silvers, policy director of the A.F.L.-C.I.O. “And second, all these fiscal austerity proposals on the table will make the economy worse.”
Mr. Obama’s situation has parallels with the mid-1990s, when President Bill Clinton shifted to the center after Republicans took Congress and battled them on deficit reduction and a welfare overhaul. Many Democrats were angered by his concessions, by a sense of being left out of negotiations and by a fear of alienating Democratic voters. Mr. Clinton was re-elected in 1996.
But Mr. Obama is likely to face the voters with a weaker economy and higher unemployment than during Mr. Clinton’s era. Still, his advisers express confidence that voters will reward Mr. Obama either for winning a bipartisan deal, if that were to happen, or for at least having a more balanced approach that does not remake Medicare and Medicaid and asks for more revenue from the wealthy. And they suggest another potential parallel with the Clinton years of divided government: that Republicans risk a voter backlash with their uncompromising stands.
“Democrats created Social Security and Medicare, and we have fought for decades against Republican attempts to end these programs,” said Dan Pfeiffer, Mr. Obama’s communications director. “And President Obama believes that now is the time for Democrats to be the ones to step up and save Social Security and Medicare.”
Mark Mellman, a Democratic pollster, said polling data showed that at this point in his term, Mr. Obama, compared with past Democratic presidents, was doing as well or better with Democratic voters. “Whatever qualms or questions they may have about this policy or that policy, at the end of the day the one thing they’re absolutely certain of — they’re going to hate these Republican candidates,” Mr. Mellman said. “So I’m not honestly all that worried about a solid or enthusiastic base.”
Binyamin Appelbaum contributed reporting.
A version of this article appeared in print on July 31, 2011, on page A1 of the New York edition with the headline: Rightward Tilt Leaves Obama With Party Rift.
WSWS on Debt Deal
President Barack Obama made a brief White House appearance Sunday night to announce that an agreement had been reached with Republican and Democratic congressional leaders to raise the federal debt ceiling before Tuesday’s deadline set by the Treasury. Speaking in advance of the opening of financial markets in Asia, Obama thanked “the leaders of both parties” and said the deal would “allow us to avoid default.”
The agreement, which must still be voted on by the Senate and the House of Representatives, imposes unprecedented cuts on domestic social spending without a single dollar of increased taxes on the wealthy.
It calls for raising the debt limit by $2.7 trillion in two stages, $1 trillion immediately and $1.7 trillion in four months. The increase in the debt ceiling will be matched dollar-for-dollar by cuts in spending over the next ten years, as demanded by Boehner, the top congressional Republican. Reid admitted that the deal would “give the Republicans everything they’ve asked for.”
The first $1 trillion will comprise spending cuts already agreed upon in bipartisan talks headed by Vice President Joseph Biden, mainly in non-entitlement domestic programs including education, housing, transportation and the environment. The immediate effect of these cuts will be substantial—$25 billion in fiscal year 2012, which begins October 1, and $47 billion in fiscal year 2013—and escalating thereafter.
A new 12-member House-Senate committee, consisting of three Democrats and three Republicans from each body, will have until Thanksgiving to identify an additional $1.7 trillion to $1.8 trillion in spending cuts, including entitlement programs such as Medicare, Medicaid and Social Security. Theoretically, the committee could also mandate an end to certain tax breaks to increase government revenues, but Republican leaders are on record opposing even token tax increases on the wealthy, and Obama and the congressional Democratic leadership have dropped their previous demand that any deficit reduction package include some tax increases.
If the bipartisan committee fails to reach agreement, the equivalent reduction will be carried out through an across-the-board spending cut in both domestic social programs and the military, with tax increases ruled out. According to press reports, the automatic cuts triggered by a failure of the committee to agree on a package would include Medicare, but not Social Security. Exempting Social Security from cuts under this scenario was the bone thrown to House Democrats, whose votes will be required to offset the expected defection of some ultra-right Republicans linked to the Tea Party.
The outlines of the deal emerged after Saturday’s vote by the House of Representatives preemptively rejecting a plan proposed by Reid that called for spending cuts and a debt ceiling increase of the same amount, but included more than $1 trillion in reduced military spending from the winding down of the wars in Iraq and Afghanistan.
House Republicans wanted much greater cuts in social spending and they voted unanimously against the Reid bill. Nearly every liberal Democrat in the House, including former presidential candidate Dennis Kucinich, voted for the Reid bill and the massive domestic spending cuts it called for...
The media coverage of the debt ceiling crisis can no longer conceal the dramatic shift to the right in the Democratic Party and the Obama administration. The New York Times carried on the front page of its Sunday edition an account headlining the “rightward tilt” of the Obama White House and writing that Obama “has adopted the Republicans’ language and in some cases their policies…”
This observation, however, is itself duplicitous. It is not that Obama has gone over to the side of the Republicans. The budget-cutting agreement is the expression of the bipartisan consensus of both capitalist parties, the Democrats just as much as the Republicans. It was Obama who insisted on tying the debt ceiling increase to massive deficit reduction, dropping the initial position of the administration—following all its predecessors—that a debt ceiling increase should be considered separately from any social policy issue.
Appearing on several television interview programs Sunday, Senator Charles Schumer of New York, the third-ranking Democrat, boasted of his party’s embrace of drastic cuts in social spending, which he portrayed as “a willingness to compromise.” Schumer declared, “There are people on the left who would probably say ‘no cuts,’ but they haven’t been able to have their way within our caucuses.”
There is virtually no discussion in the media or from any of the representatives of big business, Democratic or Republican, of the actual human cost of the cuts that are being discussed. Three trillion dollars in domestic spending over ten years is a gargantuan sum—at $300 billion a year, it would cover the annual deficits of all 50 states, twice over. It is more than the combined annual budgets of the departments of Education, Housing and Urban Development, Labor, Transportation, Agriculture and Veterans Affairs.
The initial impact of the cuts will be on the social infrastructure of education, public housing, mass transportation and environmental protection, as well as the Medicaid program for the poor, disabled and blind. In the longer term—in other words, as soon as the 2012 elections are safely past—the cuts will begin to be felt by the more than 50 million elderly covered by Medicare.
And it must be clear: these cuts are only the beginning. Spokesmen for the financial elite, such as the Wall Street Journal editorial board, are pressing for trillions in additional cuts, including the outright destruction of Medicare and Social Security, which are to be privatized and effectively abolished. Obama and the Democrats differ only on the tactical means for carrying out this historic assault on the working class...
The US debt ceiling deal
Patrick Martin
1 August 2011
http://wsws.org/articles/2011/aug2011/pers-a01.shtml
The agreement, which must still be voted on by the Senate and the House of Representatives, imposes unprecedented cuts on domestic social spending without a single dollar of increased taxes on the wealthy.
It calls for raising the debt limit by $2.7 trillion in two stages, $1 trillion immediately and $1.7 trillion in four months. The increase in the debt ceiling will be matched dollar-for-dollar by cuts in spending over the next ten years, as demanded by Boehner, the top congressional Republican. Reid admitted that the deal would “give the Republicans everything they’ve asked for.”
The first $1 trillion will comprise spending cuts already agreed upon in bipartisan talks headed by Vice President Joseph Biden, mainly in non-entitlement domestic programs including education, housing, transportation and the environment. The immediate effect of these cuts will be substantial—$25 billion in fiscal year 2012, which begins October 1, and $47 billion in fiscal year 2013—and escalating thereafter.
A new 12-member House-Senate committee, consisting of three Democrats and three Republicans from each body, will have until Thanksgiving to identify an additional $1.7 trillion to $1.8 trillion in spending cuts, including entitlement programs such as Medicare, Medicaid and Social Security. Theoretically, the committee could also mandate an end to certain tax breaks to increase government revenues, but Republican leaders are on record opposing even token tax increases on the wealthy, and Obama and the congressional Democratic leadership have dropped their previous demand that any deficit reduction package include some tax increases.
If the bipartisan committee fails to reach agreement, the equivalent reduction will be carried out through an across-the-board spending cut in both domestic social programs and the military, with tax increases ruled out. According to press reports, the automatic cuts triggered by a failure of the committee to agree on a package would include Medicare, but not Social Security. Exempting Social Security from cuts under this scenario was the bone thrown to House Democrats, whose votes will be required to offset the expected defection of some ultra-right Republicans linked to the Tea Party.
The outlines of the deal emerged after Saturday’s vote by the House of Representatives preemptively rejecting a plan proposed by Reid that called for spending cuts and a debt ceiling increase of the same amount, but included more than $1 trillion in reduced military spending from the winding down of the wars in Iraq and Afghanistan.
House Republicans wanted much greater cuts in social spending and they voted unanimously against the Reid bill. Nearly every liberal Democrat in the House, including former presidential candidate Dennis Kucinich, voted for the Reid bill and the massive domestic spending cuts it called for...
The media coverage of the debt ceiling crisis can no longer conceal the dramatic shift to the right in the Democratic Party and the Obama administration. The New York Times carried on the front page of its Sunday edition an account headlining the “rightward tilt” of the Obama White House and writing that Obama “has adopted the Republicans’ language and in some cases their policies…”
This observation, however, is itself duplicitous. It is not that Obama has gone over to the side of the Republicans. The budget-cutting agreement is the expression of the bipartisan consensus of both capitalist parties, the Democrats just as much as the Republicans. It was Obama who insisted on tying the debt ceiling increase to massive deficit reduction, dropping the initial position of the administration—following all its predecessors—that a debt ceiling increase should be considered separately from any social policy issue.
Appearing on several television interview programs Sunday, Senator Charles Schumer of New York, the third-ranking Democrat, boasted of his party’s embrace of drastic cuts in social spending, which he portrayed as “a willingness to compromise.” Schumer declared, “There are people on the left who would probably say ‘no cuts,’ but they haven’t been able to have their way within our caucuses.”
There is virtually no discussion in the media or from any of the representatives of big business, Democratic or Republican, of the actual human cost of the cuts that are being discussed. Three trillion dollars in domestic spending over ten years is a gargantuan sum—at $300 billion a year, it would cover the annual deficits of all 50 states, twice over. It is more than the combined annual budgets of the departments of Education, Housing and Urban Development, Labor, Transportation, Agriculture and Veterans Affairs.
The initial impact of the cuts will be on the social infrastructure of education, public housing, mass transportation and environmental protection, as well as the Medicaid program for the poor, disabled and blind. In the longer term—in other words, as soon as the 2012 elections are safely past—the cuts will begin to be felt by the more than 50 million elderly covered by Medicare.
And it must be clear: these cuts are only the beginning. Spokesmen for the financial elite, such as the Wall Street Journal editorial board, are pressing for trillions in additional cuts, including the outright destruction of Medicare and Social Security, which are to be privatized and effectively abolished. Obama and the Democrats differ only on the tactical means for carrying out this historic assault on the working class...
The US debt ceiling deal
Patrick Martin
1 August 2011
http://wsws.org/articles/2011/aug2011/pers-a01.shtml
Debt Deal 2011
From the Associated Press:
Pending a perilous stalemate, President Barack Obama and congressional leaders announced agreement Sunday night on an emergency deal to avoid to avert the nation's first-ever financial default. The arrangement would cut more than $2 trillion from federal spending over a decade.
The dramatic agreement, with scant time remaining before Tuesday's deadline, "will allow us to avoid default and end the crisis that Washington imposed on the rest of America," Obama said. Default "would have had a devastating effect on our economy," the president said at the White House, relaying the news to the nation and to financial markets around the world. He thanked the leaders of both parties.
House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package.
But leaders in both parties were already beginning the work of rounding up votes.
In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."
Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago.
Senate Democratic leader Harry Reid provided the first word of the agreement.
"Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."
In his remarks, Obama said there will be no initial cuts to entitlement programs like Social Security and Medicare. But he said both could be on the table along with changes in tax law as part of future cuts.
That was a reference to a special joint committee of lawmakers that will be established to recommend a second round of deficit reductions, to be voted on by Congress before year's end as part of an arrangement to raise the debt ceiling yet again. That is expected to be necessary early next year.
Pending final passage, the agreement marked a dramatic reach across party lines that played out over six months and several rounds of negotiating, interspersed by periods of intense partisanship.
A final stick point had concerned possible cuts in the nation's defense budget in the next two years. Republicans wanted less. Democrats pressed for more in an attempt to shield domestic accounts from greater reductions.
Details apparently included in the agreement provide that the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.
Big cuts in government spending would be phased in over a decade. Thousands of programs -- the Park Service, Labor Department and housing among them -- could be trimmed to levels last seen years ago.
No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Taxes would be unlikely to rise...
In the first stage under the agreement, the nation's debt limit would rise immediately by nearly $1 trillion and spending would be cut by a slightly larger amount over a decade.
That would be followed by creation of the new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit.
If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment.
If that failed to pass, automatic spending cuts totaling $1.2 trillion would automatically take effect, and the debt limit would rise by an identical amount.
Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.
Officials describing those steps spoke on condition of anonymity, citing both the sensitivity of the talks and the potential that details could change.
The deal marked a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives.
As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections.
But it appeared Obama's proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor his call for extended unemployment benefits for victims of the recession.
Republicans would win spending cuts of slightly more than the increase in the debt limit, as they have demanded.
Additionally, tax increases would be off-limits unless recommended by the bipartisan committee that is expected to include six Republicans and six Democrats. The conservative campaign to force Congress to approve a balanced-budget amendment to the Constitution would be jettisoned.
Congressional Democrats have long insisted that Medicare and Social Security benefits not be cut, a victory for them in the proposal under discussion. Yet they would have to absorb even deeper cuts in hundreds of federal programs than were included in Reid's bill, which many Democrats supported in a symbolic vote on the House floor on Saturday.
As details began to emerge, one liberal organization, Progressive Change Campaign Committee, issued a statement that was harshly critical.
"Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare and Medicaid benefit cuts is like entering a bizarre parallel universe -- one with horrific consequences for middle-class families," it said...
It's a deal: Obama, Congress will avert default
Obama and congressional leaders are now all on the same page -- but many progressives are fuming
DAVID ESPO
Sunday, Jul 31, 2011
http://www.salon.com/news/feature/2011/07/31/us_debt_showdown_7
Pending a perilous stalemate, President Barack Obama and congressional leaders announced agreement Sunday night on an emergency deal to avoid to avert the nation's first-ever financial default. The arrangement would cut more than $2 trillion from federal spending over a decade.
The dramatic agreement, with scant time remaining before Tuesday's deadline, "will allow us to avoid default and end the crisis that Washington imposed on the rest of America," Obama said. Default "would have had a devastating effect on our economy," the president said at the White House, relaying the news to the nation and to financial markets around the world. He thanked the leaders of both parties.
House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package.
But leaders in both parties were already beginning the work of rounding up votes.
In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."
Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago.
Senate Democratic leader Harry Reid provided the first word of the agreement.
"Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."
In his remarks, Obama said there will be no initial cuts to entitlement programs like Social Security and Medicare. But he said both could be on the table along with changes in tax law as part of future cuts.
That was a reference to a special joint committee of lawmakers that will be established to recommend a second round of deficit reductions, to be voted on by Congress before year's end as part of an arrangement to raise the debt ceiling yet again. That is expected to be necessary early next year.
Pending final passage, the agreement marked a dramatic reach across party lines that played out over six months and several rounds of negotiating, interspersed by periods of intense partisanship.
A final stick point had concerned possible cuts in the nation's defense budget in the next two years. Republicans wanted less. Democrats pressed for more in an attempt to shield domestic accounts from greater reductions.
Details apparently included in the agreement provide that the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.
Big cuts in government spending would be phased in over a decade. Thousands of programs -- the Park Service, Labor Department and housing among them -- could be trimmed to levels last seen years ago.
No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Taxes would be unlikely to rise...
In the first stage under the agreement, the nation's debt limit would rise immediately by nearly $1 trillion and spending would be cut by a slightly larger amount over a decade.
That would be followed by creation of the new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit.
If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment.
If that failed to pass, automatic spending cuts totaling $1.2 trillion would automatically take effect, and the debt limit would rise by an identical amount.
Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.
Officials describing those steps spoke on condition of anonymity, citing both the sensitivity of the talks and the potential that details could change.
The deal marked a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives.
As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections.
But it appeared Obama's proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor his call for extended unemployment benefits for victims of the recession.
Republicans would win spending cuts of slightly more than the increase in the debt limit, as they have demanded.
Additionally, tax increases would be off-limits unless recommended by the bipartisan committee that is expected to include six Republicans and six Democrats. The conservative campaign to force Congress to approve a balanced-budget amendment to the Constitution would be jettisoned.
Congressional Democrats have long insisted that Medicare and Social Security benefits not be cut, a victory for them in the proposal under discussion. Yet they would have to absorb even deeper cuts in hundreds of federal programs than were included in Reid's bill, which many Democrats supported in a symbolic vote on the House floor on Saturday.
As details began to emerge, one liberal organization, Progressive Change Campaign Committee, issued a statement that was harshly critical.
"Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare and Medicaid benefit cuts is like entering a bizarre parallel universe -- one with horrific consequences for middle-class families," it said...
It's a deal: Obama, Congress will avert default
Obama and congressional leaders are now all on the same page -- but many progressives are fuming
DAVID ESPO
Sunday, Jul 31, 2011
http://www.salon.com/news/feature/2011/07/31/us_debt_showdown_7
Friday, July 29, 2011
"If you’re going to cave, tell us right now..."
From NYBooks.com:
In early July, when Obama suddenly injected Medicare, Social Security, and Medicaid into the deficit and debt negotiations, many, perhaps most, Democrats were dismayed. They believed that the President was offering up the poor and the needy as a negotiating gambit. (His position was that if the Republicans would give on taxes, he’d give on entitlements.) A bewildered Pelosi said after that meeting, “He calls this a Grand Bargain?” And she came down firmly against any changes in those programs that would hurt beneficiaries.
Moreover, the Democrats had their own political reasons for opposing reductions in Medicare benefits. They had had great success in campaigning against Paul Ryan’s bizarre proposal, adopted by the House (despite even Boehner’s expressed misgivings), that would turn Medicare into a voucher system. According to Ryan’s plan the government would give future eligible Medicare recipients $6,000 and let them shop for private insurance. (Good luck.)
Having made Ryan’s proposal the centerpiece of the campaign, the Democrats had recently won a special election in a New York district that had been held by the Republicans since the 1950s. The Democrats believed they were onto a good thing.
The question arises, aside from Obama’s chronically allowing the Republicans to define the agenda and even the terminology (the pejorative word “Obamacare” is now even used by news broadcasters), why did he so definitively place himself on the side of the deficit reducers at a time when growth and job creation were by far the country’s most urgent needs?
It all goes back to the “shellacking” Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less. This was an arguable interpretation. Nevertheless, the political advisers believed that elections are decided by middle-of-the-road independent voters, and this group became the target for determining the policies of the next two years.
That explains a lot about the course the President has been taking this year. The political team’s reading of these voters was that to them, a dollar spent by government to create a job is a dollar wasted. The only thing that carries weight with such swing voters, they decided—in another arguable proposition—is cutting spending. Moreover, like Democrats—and very unlike Republicans—these voters do not consider “compromise” a dirty word.
The President proposed at least two modest plans for stimulus spending, someone familiar with all these deliberations told me, “but he’s not as Keynesian as before.” This person said, “If the political advisers had told him in 2009 that the median voter didn’t like the stimulus, he’d have told them to get lost.” By 2011, in his State of the Union address in January he moved from jobs creation (such as the stimulus program) toward longer-term investment.
The speech Obama gave on April 13 marked his conversion to fiscal centrism; to being the fiscally responsible Democrat. In that speech he stated that he wanted to reduce the debt by $4 trillion—thus aligning himself with the Republicans—but also asked for revenues to partly offset that reduction. It was all about reelection politics, designed to appeal to this same group of independents. “And that’s why,” I was told by the person familiar with the White House deliberations, “he went bigger in the deficit reduction talks; bringing in Social Security is consistent with that slice of the electorate they’re trying to reach.” This person said, “There’s a bit of bass-ackwardness to this; the deficit spending you’d want to focus on right now is the jobs issue.”
This all fits with another development in the Obama White House. According to another close observer, David Plouffe, the manager of Obama’s 2008 presidential campaign, who officially joined the White House staff in January 2011, has taken over. “Everything is about the reelect,” this observer says—”where the President goes, what he does.”
Plouffe’s advice to the President defines not just Obama’s policies but also his behavior. Plouffe tells the President, according to this observer, that the target group wants him to seem the most reasonable man in the room. Plouffe is the conceptualizer, and Bill Daley, the chief of staff who shares Plouffe’s political outlook, makes things happen; Gene Sperling, the director of economic policy, and Tom Donilon, the national security adviser, are smart men but they come out of politics rather than academia or deep experience in their respective fields. Once Austan Goolsbee, chairman of the Council of Economic Advisers, departs later this summer, all of the President’s original economic advisers will be gone. Partly this is because the President’s emphasis on budget cutting didn’t leave them very much to do. One White House émigré told me, “It’s not a place that welcomes ideas.”
Because of the extent to which the President had allowed the Republicans to set the terms of the debate, the attitude of numerous congressional Democrats toward him became increasingly sour, even disrespectful. After Obama introduced popular entitlement programs into the budget fight, a Democratic senator described the attitude of a number of his colleagues as:
Resigned disgust at the White House: there they go again. “Mr. Halfway” keeps getting maneuvered around as Republicans move the goalposts on him.
According to a report in The Hill newspaper in late June, the tough-minded, experienced, and blunt Democratic Representative Henry Waxman of California told Obama in a White House meeting that he’d asked several Republicans about their meeting with him the day before, and, “To a person, they said the President’s going to cave.” Then the congressman said to the President of the United States, “And if you’re going to cave, tell us right now.” The President was reported to have been displeased, and responded, “I’m the President of the United States; my words carry weight.”
What Were They Thinking?
Elizabeth Drew
August 18, 2011
http://www.nybooks.com/articles/archives/2011/aug/18/what-were-they-thinking
In early July, when Obama suddenly injected Medicare, Social Security, and Medicaid into the deficit and debt negotiations, many, perhaps most, Democrats were dismayed. They believed that the President was offering up the poor and the needy as a negotiating gambit. (His position was that if the Republicans would give on taxes, he’d give on entitlements.) A bewildered Pelosi said after that meeting, “He calls this a Grand Bargain?” And she came down firmly against any changes in those programs that would hurt beneficiaries.
Moreover, the Democrats had their own political reasons for opposing reductions in Medicare benefits. They had had great success in campaigning against Paul Ryan’s bizarre proposal, adopted by the House (despite even Boehner’s expressed misgivings), that would turn Medicare into a voucher system. According to Ryan’s plan the government would give future eligible Medicare recipients $6,000 and let them shop for private insurance. (Good luck.)
Having made Ryan’s proposal the centerpiece of the campaign, the Democrats had recently won a special election in a New York district that had been held by the Republicans since the 1950s. The Democrats believed they were onto a good thing.
The question arises, aside from Obama’s chronically allowing the Republicans to define the agenda and even the terminology (the pejorative word “Obamacare” is now even used by news broadcasters), why did he so definitively place himself on the side of the deficit reducers at a time when growth and job creation were by far the country’s most urgent needs?
It all goes back to the “shellacking” Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less. This was an arguable interpretation. Nevertheless, the political advisers believed that elections are decided by middle-of-the-road independent voters, and this group became the target for determining the policies of the next two years.
That explains a lot about the course the President has been taking this year. The political team’s reading of these voters was that to them, a dollar spent by government to create a job is a dollar wasted. The only thing that carries weight with such swing voters, they decided—in another arguable proposition—is cutting spending. Moreover, like Democrats—and very unlike Republicans—these voters do not consider “compromise” a dirty word.
The President proposed at least two modest plans for stimulus spending, someone familiar with all these deliberations told me, “but he’s not as Keynesian as before.” This person said, “If the political advisers had told him in 2009 that the median voter didn’t like the stimulus, he’d have told them to get lost.” By 2011, in his State of the Union address in January he moved from jobs creation (such as the stimulus program) toward longer-term investment.
The speech Obama gave on April 13 marked his conversion to fiscal centrism; to being the fiscally responsible Democrat. In that speech he stated that he wanted to reduce the debt by $4 trillion—thus aligning himself with the Republicans—but also asked for revenues to partly offset that reduction. It was all about reelection politics, designed to appeal to this same group of independents. “And that’s why,” I was told by the person familiar with the White House deliberations, “he went bigger in the deficit reduction talks; bringing in Social Security is consistent with that slice of the electorate they’re trying to reach.” This person said, “There’s a bit of bass-ackwardness to this; the deficit spending you’d want to focus on right now is the jobs issue.”
This all fits with another development in the Obama White House. According to another close observer, David Plouffe, the manager of Obama’s 2008 presidential campaign, who officially joined the White House staff in January 2011, has taken over. “Everything is about the reelect,” this observer says—”where the President goes, what he does.”
Plouffe’s advice to the President defines not just Obama’s policies but also his behavior. Plouffe tells the President, according to this observer, that the target group wants him to seem the most reasonable man in the room. Plouffe is the conceptualizer, and Bill Daley, the chief of staff who shares Plouffe’s political outlook, makes things happen; Gene Sperling, the director of economic policy, and Tom Donilon, the national security adviser, are smart men but they come out of politics rather than academia or deep experience in their respective fields. Once Austan Goolsbee, chairman of the Council of Economic Advisers, departs later this summer, all of the President’s original economic advisers will be gone. Partly this is because the President’s emphasis on budget cutting didn’t leave them very much to do. One White House émigré told me, “It’s not a place that welcomes ideas.”
Because of the extent to which the President had allowed the Republicans to set the terms of the debate, the attitude of numerous congressional Democrats toward him became increasingly sour, even disrespectful. After Obama introduced popular entitlement programs into the budget fight, a Democratic senator described the attitude of a number of his colleagues as:
Resigned disgust at the White House: there they go again. “Mr. Halfway” keeps getting maneuvered around as Republicans move the goalposts on him.
According to a report in The Hill newspaper in late June, the tough-minded, experienced, and blunt Democratic Representative Henry Waxman of California told Obama in a White House meeting that he’d asked several Republicans about their meeting with him the day before, and, “To a person, they said the President’s going to cave.” Then the congressman said to the President of the United States, “And if you’re going to cave, tell us right now.” The President was reported to have been displeased, and responded, “I’m the President of the United States; my words carry weight.”
What Were They Thinking?
Elizabeth Drew
August 18, 2011
http://www.nybooks.com/articles/archives/2011/aug/18/what-were-they-thinking
Throwing the GOP a Medicare life-preserver
Democrats had a promising 2012 strategy -- and it was already working. Then Obama started talking "grand bargain"
Steve Kornacki
Monday, Jul 25, 2011
http://www.salon.com/news/politics/war_room/2011/07/25/obama_medicare_2012/index.html
When Barack Obama used a press conference late last Friday to once again embrace cuts to Medicare and Social Security as part of a debt ceiling deal, he noted that Nancy Pelosi "sure did not like the plan that we are proposing."
Can you blame her? Forget about whatever philosophical objections she might have to reducing entitlement spending: Obama's posture these past few weeks threatens to wipe out a 2012 campaign strategy that has the potential to deliver significant gains for Pelosi's House Democrats.
Let's remember how we got here. Three months ago, House Republicans handed Democrats a gift that seemed like it would keep on giving clear through the 2012 elections, lining up in near-unanimity behind a plan that would essentially reconfigure Medicare as a voucher program.
Speaker John Boehner, it was clear, embraced the Paul Ryan-authored plan not because he wanted to but because he believed he and his conference had to. Putting the House GOP on the record in support of a truly radical overhaul of Medicare and enduring the resulting abuse from Democrats and pundits, Boehner seemed to calculate, was necessary to show good faith to the GOP's Tea Party base. That base, after all, had revolted during the 2010 midterm primary season, knocking off seemingly entrenched GOP incumbents and candidates favored by the party establishment. And it would do so again in 2012 if Republicans on Capitol Hill didn't demonstrate that they had "purified" themselves ideologically.
So Boehner made the Ryan plan a major part of the GOP's agenda and when it came for a vote in mid-April, all but a few Republicans supported it -- and every Democrat voted no.
For Democrats, this offered a chance to recycle a game plan that worked well for them back in 1995 and 1996, the last time a new Republican majority took power in the House. Then, as now, the GOP targeted Medicare and Democrats made a show of fighting them, warning seniors about potentially catastrophic benefits reductions and using the issue to portray congressional Republicans as dangerously extreme ideologues. A variation of this ad was run by Democrats in virtually every competitive congressional district in the '96 campaign.
The result: Two years after the 1994 Republican revolution, 18 Republican incumbents were defeated for reelection. It wasn't enough to win back the chamber for Democrats, but it was clearly a successful strategy -- particularly in swing districts in the Northeast and the Rust Belt and along the Pacific Coast.
Not surprisingly, then, Democrats began dusting off that '96 playbook almost as soon as the Ryan plan cleared the House in April. And thanks to the unexpected resignation of Republican Rep. Chris Lee, they soon had an opportunity to test it out, in a special election in a GOP-friendly district in Western New York -- pretty much the kind of district that flipped to the Democrats back in '96. Kathy Hochul, the Democratic nominee, made Medicare the central issue of her campaign, with ads like this:
http://www.youtube.com/watch?v=EU2lHv8Jnwo
The result: A sizable victory for Hochul in the May 24 special election. Suddenly, the idea that Democrats might actually post the 25-seat gain needed to win back the House in 2012 didn't seem out of the question. At the very least, it seemed, they had found a winning issue sure to bring them within striking distance of control heading into the 2014 cycle.
But then came the "grand bargain." For the past several weeks, Obama has aggressively and publicly pursued a deficit-slashing deal with Boehner that, in exchange for relatively slight revenue increases, would make deep domestic spending cuts, even in Medicare and Social Security. The grand bargain now seems dead, but Obama has now provided an abundance of emphatic sound bites in which he makes it clear that he believes entitlement spending can and should be cut and that doing so would strengthen -- and not harm -- the programs. In other words, he has handed the GOP the tools to create the perfect response to ads like Hochul's during the '12 campaign.
The basic political logic behind Obama's move is obvious. As Ed Kilgore noted this morning, he is pursuing a reelection strategy that depends on convincing swing voters that he's a reasonable, compromise-friendly pragmatist -- and that the GOP is beholden to an irrationally ideological base. There are even those who believe Obama always knew the grand bargain wouldn't work, and that he pushed it so hard just to demonstrate how unwilling the GOP is to compromise.
Some liken this to the strategy Bill Clinton pursued in '95 and '96, making Newt Gingrich and the GOP Congress his enemy, but there's one key difference: Back then, Clinton and congressional Democrats were on the same page when it came to Medicare. Clinton refused to sign a GOP budget that cut Medicare spending by $270 billion, forcing a dramatic government shutdown instead. And congressional Democrats then used that showdown as the basis for their unrelenting Medicare attack ads. Obama, though, has now undermined his congressional party's Medicare message.
Does this mean he's destroyed his party's best chance of winning back the House next year? That's one possible interpretation. It's also possible that if Obama succeeds in defining the GOP as a fundamentally radical party and is able to win reelection on that basis that congressional Democrats will also benefit -- that an anti-GOP tide will lift in '12 even without the Ryan plan playing a big role. And, of course, it's also possible that, however the current standoff is ultimately resolved, the public's attention will quickly return to the weak economy and poor job growth and that voters in '12 won't end caring much about Medicare, the debt ceiling, or GOP extremism.
What is clear, though, is that Obama has made his party's strategy for next year's election a lot more complicated.
Steve Kornacki is Salon's news editor. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki More: Steve Kornacki
Steve Kornacki
Monday, Jul 25, 2011
http://www.salon.com/news/politics/war_room/2011/07/25/obama_medicare_2012/index.html
When Barack Obama used a press conference late last Friday to once again embrace cuts to Medicare and Social Security as part of a debt ceiling deal, he noted that Nancy Pelosi "sure did not like the plan that we are proposing."
Can you blame her? Forget about whatever philosophical objections she might have to reducing entitlement spending: Obama's posture these past few weeks threatens to wipe out a 2012 campaign strategy that has the potential to deliver significant gains for Pelosi's House Democrats.
Let's remember how we got here. Three months ago, House Republicans handed Democrats a gift that seemed like it would keep on giving clear through the 2012 elections, lining up in near-unanimity behind a plan that would essentially reconfigure Medicare as a voucher program.
Speaker John Boehner, it was clear, embraced the Paul Ryan-authored plan not because he wanted to but because he believed he and his conference had to. Putting the House GOP on the record in support of a truly radical overhaul of Medicare and enduring the resulting abuse from Democrats and pundits, Boehner seemed to calculate, was necessary to show good faith to the GOP's Tea Party base. That base, after all, had revolted during the 2010 midterm primary season, knocking off seemingly entrenched GOP incumbents and candidates favored by the party establishment. And it would do so again in 2012 if Republicans on Capitol Hill didn't demonstrate that they had "purified" themselves ideologically.
So Boehner made the Ryan plan a major part of the GOP's agenda and when it came for a vote in mid-April, all but a few Republicans supported it -- and every Democrat voted no.
For Democrats, this offered a chance to recycle a game plan that worked well for them back in 1995 and 1996, the last time a new Republican majority took power in the House. Then, as now, the GOP targeted Medicare and Democrats made a show of fighting them, warning seniors about potentially catastrophic benefits reductions and using the issue to portray congressional Republicans as dangerously extreme ideologues. A variation of this ad was run by Democrats in virtually every competitive congressional district in the '96 campaign.
The result: Two years after the 1994 Republican revolution, 18 Republican incumbents were defeated for reelection. It wasn't enough to win back the chamber for Democrats, but it was clearly a successful strategy -- particularly in swing districts in the Northeast and the Rust Belt and along the Pacific Coast.
Not surprisingly, then, Democrats began dusting off that '96 playbook almost as soon as the Ryan plan cleared the House in April. And thanks to the unexpected resignation of Republican Rep. Chris Lee, they soon had an opportunity to test it out, in a special election in a GOP-friendly district in Western New York -- pretty much the kind of district that flipped to the Democrats back in '96. Kathy Hochul, the Democratic nominee, made Medicare the central issue of her campaign, with ads like this:
http://www.youtube.com/watch?v=EU2lHv8Jnwo
The result: A sizable victory for Hochul in the May 24 special election. Suddenly, the idea that Democrats might actually post the 25-seat gain needed to win back the House in 2012 didn't seem out of the question. At the very least, it seemed, they had found a winning issue sure to bring them within striking distance of control heading into the 2014 cycle.
But then came the "grand bargain." For the past several weeks, Obama has aggressively and publicly pursued a deficit-slashing deal with Boehner that, in exchange for relatively slight revenue increases, would make deep domestic spending cuts, even in Medicare and Social Security. The grand bargain now seems dead, but Obama has now provided an abundance of emphatic sound bites in which he makes it clear that he believes entitlement spending can and should be cut and that doing so would strengthen -- and not harm -- the programs. In other words, he has handed the GOP the tools to create the perfect response to ads like Hochul's during the '12 campaign.
The basic political logic behind Obama's move is obvious. As Ed Kilgore noted this morning, he is pursuing a reelection strategy that depends on convincing swing voters that he's a reasonable, compromise-friendly pragmatist -- and that the GOP is beholden to an irrationally ideological base. There are even those who believe Obama always knew the grand bargain wouldn't work, and that he pushed it so hard just to demonstrate how unwilling the GOP is to compromise.
Some liken this to the strategy Bill Clinton pursued in '95 and '96, making Newt Gingrich and the GOP Congress his enemy, but there's one key difference: Back then, Clinton and congressional Democrats were on the same page when it came to Medicare. Clinton refused to sign a GOP budget that cut Medicare spending by $270 billion, forcing a dramatic government shutdown instead. And congressional Democrats then used that showdown as the basis for their unrelenting Medicare attack ads. Obama, though, has now undermined his congressional party's Medicare message.
Does this mean he's destroyed his party's best chance of winning back the House next year? That's one possible interpretation. It's also possible that if Obama succeeds in defining the GOP as a fundamentally radical party and is able to win reelection on that basis that congressional Democrats will also benefit -- that an anti-GOP tide will lift in '12 even without the Ryan plan playing a big role. And, of course, it's also possible that, however the current standoff is ultimately resolved, the public's attention will quickly return to the weak economy and poor job growth and that voters in '12 won't end caring much about Medicare, the debt ceiling, or GOP extremism.
What is clear, though, is that Obama has made his party's strategy for next year's election a lot more complicated.
Steve Kornacki is Salon's news editor. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki More: Steve Kornacki
The US Constitution Makes Default Illegal
The US Constitution Makes Default Illegal
What a Real President Would Do
August 1, 2011
Webster G. Tarpley, Ph.D.
TARPLEY.net
http://tarpley.net/2011/07/27/a-real-president-would-call-default-unconstitutional
My fellow Americans:
I speak to you tonight in an hour of grave danger to our nation. As you know, within the next few hours our government is in danger of failing to make payments of interest and principal which the United States Treasury has contracted to make. In technical terms, we are not far away from beginning to default on payments associated with those US Treasury securities which represent the public debt of the United States. As part of the same crisis, there is now a threat to over 70 million checks which your government issues every month — payments which go to recipients of Social Security, to providers of health services under the Medicare program, to Medicaid beneficiaries, to our active-duty and retired military personnel, to our defense contractors, to our government employees — in short, to everyone who receives a benefit from the federal government, who works for the federal government, or who does business with the federal government.
Default Means National Bankruptcy and World Chaos
A default of this kind means nothing less than national bankruptcy. Default is the essence of chaos and anarchy. It is a peril which we have successfully avoided during our entire existence as a nation, through a terrible civil war and the two world wars of the past century.
The United States dollar continues to play the role of the world reserve currency. This means that the central banks on every continent have chosen to maintain large portions of their reserves in the form of US Treasury securities. This role has been slightly diminished in recent years, but it is substantially intact. For the US government to default on payments through the US Treasury would therefore provoke a radical devaluation of the central bank reserves of the entire globe, wiping out some central banks and leaving others critically weakened. This might lead to massive dumping of US Treasury securities, leading to a general world panic to which no asset class would remain immune. We might see a dramatic decline of the dollar. This would represent the disintegration of the current world financial system, and a breakdown crisis of economic activity of unthinkable proportions. This might happen immediately, or it might require months or even years to explode in its full fury. In any case, it would put the United States on the road to national decline.
If you recall how financial markets seized up and ceased to function in the terrible days of September and October 2008, you have some inkling of the kind of catastrophic market climate that would be unleashed by the national bankruptcy of the United States. Borrowing, credit, mortgages, car financing, credit cards, and the like would not just require astronomical interest rates; many kinds of lending would disappear altogether. Millions more jobs would be lost.
The Public Credit is an Asset for All Americans and for the World
The United States Treasury securities market, with its $1 trillion per day of turnover, represents a unique national asset for our country. It is a signal achievement of the American System of Political Economy founded by Alexander Hamilton. It is the broadest, deepest, and most liquid market in the world. It is capable of absorbing trillions of dollars of securities and turning them into cash within a few hours – a capability unique on this planet. Despite how indignant we all are about the abuses of Wall Street, it would be extremely unwise to permit the Treasury securities market to be wrecked by ideological fanatics. All the more so since the Treasury market is unique in the world, and its extinction would leave no currency whatsoever in a position to function as the reserve medium of the world. This would have terrible implications for world trade and investment.
In short, our Treasury securities are the bedrock of all economic activity in this planet, and the common interest of humanity is well served by avoiding their chaotic insolvency.
The “Tea Party Caucus”: Right-wing Anarchists Funded by Malefactors of Great Wealth
Why, many Americans may wonder, should this crisis exist today? Here it is useless to talk in euphemisms in order to appear conciliatory; it is now necessary to call things by their names. As a result of the current world economic and financial depression which began in 2007-2008, the extreme right wing of the Republican Party, now calling itself the Tea Party, has been energized and revitalized. They have also begun to receive large amounts of political funding, including from a sinister individual who is reported to be the richest man in New York City. These are the malefactors of great wealth about whom presidents of both parties have been warning you for over a century. The goal of these opulent backers of the so-called Tea Party is to eliminate taxation and regulation upon themselves and their private business interests, many of which are in direct conflict with the public good. The impact of this Tea Party on public opinion has been magnified out of all proportion by the collusion of corrupt media cartels; in reality, the supporters of the so-called Tea Party do not exceed about 15% of our population.
Neo-Feudalism
Thanks to the economic royalists who support them, a Tea Party contingent numbering almost 90 members has entered the House of Representatives. Many are political novices. Many of them sincerely believe in the strange and un-American foreign doctrines of the Austrian school, according to which government is an unnecessary evil which needs to be abolished. It is entirely proper to see them as a species of right wing anarchist. The market, by contrast, they fetishize as infallible, and deserving of unbridled free reign over all the human affairs. They want a market without a government, something which has not existed in human affairs since the transition from the Old Stone Age to the Neolithic age, when the state emerged. The free market with no role whatsoever for government went out with Alley Oop the cave man, and it is not likely to return.
And all too often, the market of which they speak turns out not to be free, but rather dominated by predatory cartels, monopolies, and oligopolies. They are devoted to the causes of deregulation, privatization, the abolition of trade unions, more privileges for the wealthy, and a race to the bottom among the states. The world for which they are striving resembles perhaps nothing so much as feudalism as seen in Europe after the fall of the Roman Empire – and, like that anarchic chaos, it can only be described as A New Dark Age.
Most especially, these right wing anarchists of the Tea Party hate the social safety net which incorporates the precious economic rights for which the struggles of the American people won recognition during the New Deal and the Great Society. I am referring of course to Social Security, Medicare, Medicaid, unemployment insurance, the Head Start Program, the WIC program of high-protein meals for expectant mothers and infants, and many more. I am also referring to the right to collective bargaining for wage earners in the public and private sectors alike, and other features of a humane modern society.
Their reasons for this view read like a catalogue of the seven deadly sins, with pride, greed, rage, and envy in the lead. To these we must add class hatred, and also racism, since many of them are obsessed with the idea that their taxes are being spent to help minority groups.
New Deal America Repudiates the Tea Party
The problem faced by the Tea Party Republicans is that two thirds to three quarters of the American people warmly support the social safety net created by the New Deal and the Great Society. A recent poll has also shown that fully 80% of Americans want tax rates on the super-rich to be increased. Despite so many years of radio ranting, venal professors, and merciless sloganeering by politicians, the American people continue to repudiate the ideological platform of the so-called Tea Party. There is no hope their program could ever get passed.
Out of their despair that their ideological goals could ever be met through the democratic process, these wealthy individuals and their anarchist following have evolved a diabolical strategy. Their strategy is extortion. It is an attempt to place the United States government under duress. It is an attempt to mutilate, alter, and denature our Constitution through unconstitutional means.
It is nothing short of an illegal coup d’etat.
The Tea Party cloaks themselves in public as the greatest admirers of the U.S. Constitution. But in one concrete instance after another, we find that the Tea Party is at war with the Constitution.
The Tea Party Hates the Constitution in Practice
Our Constitution speaks not once but twice about the general welfare. To the Tea Party, this is anathema, since they believe that government should serve the wealthy few.
In terms of the issue at hand, Article I, Section 8 of the Constitution specifies that the Congress shall have the power “To borrow money on the credit of the United States.”
This is once again anathema to the Tea Party. In such a fundamental provision as this, enacted in response to the bitter lessons of ungovernability taught by the Articles of Confederation interlude, the Tea Party faction sets itself above the wisdom of the founders. The Tea Party would rewrite this provision to read that the Congress shall NOT have the power to borrow money on the credit of the United States, and the framers be damned.
This is what they admit when they demand their so-called balanced budget amendment. Such an amendment would destroy the finely wrought mechanism of the separation of powers and its accompanying checks and balances, which have served us so well over the centuries. But it is also a subterfuge, since the Tea Party knows very well that this amendment has no chance of being approved by the Congress, nor by the states. Rather, it has included in their litany of cut, cap, and balance purely as a deal-breaker, to make absolutely sure that no possible settlement can be forthcoming in the time available. They are determined to make all negotiations fail.
The Tea Party Goal is to Bankrupt the United States
The goal of the Tea Party faction of Congress is nothing less than the national bankruptcy of the United States, procured by forcing our default on the contractual and legal obligations of this government. They regard default and bankruptcy as positive goods, and indeed as indispensable steps on the path to the free market utopia they fondly imagine. Their reasoning is that, once the United States has gone bankrupt, it will henceforth be either prohibitively expensive or totally impossible for the Treasury to sell its bonds on the world financial markets. Therefore, payments on Social Security, Medicare, Medicaid, and other programs will have to be cut – not by law, but by the brute force of having no money.
This they do in wartime, with some 160,000 troops in the field, many of them fighting determined enemies on the other side of the world.
They claim they want predictabilty to allow businesses to create jobs, yet they court the greatest chaos and instability our nation has ever faced in our financial affairs – insolvency.
These same Tea Party ideologues, still feigning a concern about the American people, have already sponsored legislation which would give foreign creditors — the Chinese, the Japanese, the Saudis, and others — top priority in payments made by the federal government, ahead of our military personnel. According to these bills, we can be sure that Americans whose lives depend on Social Security, Medicare, and Medicaid will be dead last when disbursements are made. We can perhaps now see the real dimensions of the sinister plan with which we are confronted. By driving this government into bankruptcy, the Tea Party hopes to roll back the Constitution by wrecking the Congressional ability to borrow money as a practical matter, while at the same time destroying the entitlement programs which the most extreme Republicans have hated since the time of Franklin D. Roosevelt.
And not just Tea Party fanatics endorse this strategy. Indeed, it has the sympathy of rich elitists of all political stripes, including the academic and foundation left, who welcome the effort to strip away the economic rights of the American people.
Default Spells Genocide Against the American People
This is a policy which threatens the very lives of millions of Americans. It raises the specter of genocide against our own people. And I have not become President of the United States to preside over genocide against Americans.
I am not motivated by any ambition for the aggrandizement of the powers of the presidency. I have negotiated in good faith for months. The other side has not. I have offered reasonable concessions. Indeed, I have waited until now, when the clock reads five minutes to twelve, constantly hoping that the legislative process in Congress would yield an acceptable result. But now, with the specter of national bankruptcy in full view, and no reasonable outcome forthcoming, it is my responsibility to act. Since I sit in the seat that belonged to Washington and Lincoln and Roosevelt, it is my hope that my actions may be worthy of their heritage.
In a Conflict Among Statutes, the Constitution Decides
I am faced first of all with a conflict among statutes passed by Congress. On the one hand there is the debt ceiling law, which states that the Total Public Debt Outstanding of the United States of America shall not exceed $14.294 trillion. Since our public debt reached that level on May 16, this statute could be interpreted as barring any further auctions of United States treasury bills, notes, and bonds. And if we cannot borrow money in this way, since our current income is inadequate to meet all our obligations, we are headed for default, bankruptcy, and, worst of all, social chaos.
But this is not the only statute in the US Code. There are also other statutes to which I must pay attention. All public expenditure of the United States government, as you know, is carried out by law — by a law called the federal budget, which specifies what amounts are to be spent and on what. Every expenditure has to go through the Congress not once but twice — it must be authorized, and then it must be appropriated, and each of these requires the consent of the two houses of Congress and the signature of the president. I am now confronted with a series of expenditures which the current Fiscal Year 2011 budget, passed by Congress and signed into law by me, requires me to make. This includes the entire vast array of social safety net, defense, transportation, health, regulation, inspection, government employment, and other activities which I outlined above. I am under legal compulsion to make these expenditures.
Concerning Treasury securities outstanding, each one of these is an explicit contract that the United States government will pay specific sums of interest and principal at specified dates. Respect from the sanctity of contracts also requires me to make every one of these payments, without exception.
This is therefore my situation: on the one hand, the debt ceiling forbids me to borrow. On the other hand, the federal budget and the implied contracts represented by entitlements and Treasury securities require me to pay. Since tax revenue, partly because of recent and misguided legislation, is not adequate to make all of these payments, something has to give.
It is obvious that, when two or more statutes conflict, we need to look to the Constitution itself for guidance as to which one will apply. Given the extraordinary attention which the Constitution gives the concept of the general welfare, this guiding principle needs always to be kept in mind. Beyond this, our founding document contains two especially relevant provisions. On the one hand, we find that it is Congress which has the power to borrow money. But on the other hand we also have the 14th amendment, section 4 which states:
“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.”
In other words, this country is not allowed to default. Default is unconstitutional. Default is illegal. Default is a federal crime.
This is not an option which I can choose to exercise or ignore. It is not something I can invoke or not invoke. This is the Constitution talking. This provision binds me, and ought to bind the opposition in Congress, since they too have sworn to uphold the Constitution.
The Debt Ceiling is Unconstitutional and Must Be Disregarded
This provision places upon the President the responsibility to guarantee the timely payment of all United States debt obligations, regardless of attempts to the contrary that might come from other organs of government, including Congress or, for that matter, the courts. These words make me the ultimate guarantor of the solvency of the United States, especially under emergency conditions in which other branches of government have failed to do this. I am the last backstop. The buck stops here.
By contrast, the Constitution nowhere makes any reference to a debt limit. In fact, the first debt limit was instituted in 1917, less than a hundred years ago. Somehow we got through our first century and a quarter of national life, conquered the frontier, won the Civil War, and created the world’s greatest industrial power without any need for a debt ceiling.
In my considered judgment, and in the light of Amendment 14, Section 4, of the U.S. Constitution, a statutory debt ceiling is therefore unconstitutional. And all competent constitutional jurisprudence agrees that the president must not be bound by legislation which the courts are likely to find unconstitutional. This is all the more true in the present acute crisis.
Accordingly, I have issued an executive order directing the Secretary of the Treasury to resume Treasury auctions today, August 1, 2011, with a view to maintaining the uninterrupted ability of the United States to meet all of its financial obligations, budget and debt, foreign and domestic, without exception. The full faith and credit of our country will be maintained.
I cordially invite the Congress to approve and validate this decision ex post facto.
If your child is in Head Start, it will remain open. If you rely on Social Security, this means you will get your check. If your life depends on Medicare, you can rest assured that your doctors and hospitals will be paid on time so that they can continue their useful activity. If you are living in a nursing home and require Medicaid, those payments will also be available. If you are a member of the military, or a government employee of any kind, you will receive your salary on time. If you are a private firm doing business as a contractor with the government of the United States, you will be able to meet your payroll. If you are carrying out medical research or other scientific research funded by a US government grant, you can be assured that this support will not be interrupted. If you are a person or institution or government anywhere in the world who has purchased United States Treasury securities, you will be paid every penny, on time. If you want to buy a United States Savings Bond or cash one in, you can go ahead and do it.
Those intent on bankrupting the government of the United States and pitching our country into chaos may attempt to reverse this decision in the courts. I have directed the Solicitor General of the United States to prepare to refute their arguments. Since our constitutional position is strong, I have no doubt that we will prevail.
Some will say that the debt ceiling has been around for almost a century, and that so many precedents should not be overturned. That kind of thinking would leave us in bondage to judicial monstrosities like Plessy v. Ferguson, which validated racial segregation, or the infamous Dred Scott decision, which said that skin color was the basis for denying people rights given by God and natural law, and recognized by the Constitution. It will not be the first time we have fixed what turned out to be a terrible mistake.
Others in the House of Representatives bent on driving our nation into default have already announced their intention of impeaching me over this issue. I welcome their attack and the opportunity it will give to further clarify these great issues of the American public.
They will try to impeach me for what I am doing to save the public credit of the United States. In my view, I would truly deserve impeachment were I to refrain from taking this timely action. The President must take care that the laws be faithfully enforced, and this includes the federal budget and the commitments embodied in our entitlements programs and in the solvency of our Treasury securities.
I look forward to next year’s elections, which I expect will be largely fought over this issue and the larger questions which it raises.
Some have raised the question of the debt ratings agencies, and of their future evaluation of the United States public debt in the light of these events. I take this opportunity to announce that the Attorney General, the Department of Justice, and the FBI, acting under my direction, have initiated a comprehensive investigation of corruption and malfeasance which has been alleged against these ratings agencies in connection with their failure to provide timely warning to investors who had purchased certain toxic derivative securities in 2007-2008. We are also studying the legal means of depriving these ratings agencies of the extraordinary and quasi-governmental authority they exercise because of laws and regulations which limit certain forms of public and private investment to securities which have received favorable ratings from these agencies. To this end, we are cooperating with the authorities in Italy and other countries who have also undertaken aggressive investigations of the corruption of these ratings agencies.
The Department of Justice is also investigating reports that members of Congress have entered into criminal conspiracies with bankers and hedge fund operators for the purpose of selling Treasury securities short in the context of the current crisis, and linked this to the votes they cast. The Attorney General has promised to report on this issue at the earliest possible date.
For my part, I do not intend to sell America short. Historically, those who have bet against the United States have not prevailed, nor will they prevail today.
My great predecessor, Franklin D. Roosevelt, delivered his first inaugural address on a morning in March 1933 when every bank in our country had been forced to close its doors because of panic runs, and the economic heart of the nation had stopped beating. In the face of that emergency, the defiant rallying figure of FDR promised action with these words:
It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require.
Roosevelt spoke these words at a time when a new Congress had failed for almost three months to do anything meaningful to fight the Great Depression and the banking panic which were ravaging the land in those years. Some at that time had concluded that our form of government was unworkable in a modern crisis, and they were looking abroad for new models of totalitarianism. We must always realize that any system of government which cannot solve the most urgent, life and death problems of the everyday life of the people is not long for this world. It risks being swept aside. If democracy brings chaos, that may be the end of democracy. In this sense, the future our democratic representative government depends on our solvency.
It is in this spirit that I am dealing with the current crisis. I remind you all that, while avoiding national bankruptcy and default in the short-term is absolutely indispensable, this will not by itself solve the majority of our economic problems. The world will remain gripped by an economic and financial depression of incalculable proportions. We will still have some 30 million unemployed in our country. We will still witness American families thrown on the street by fraudulent foreclosures. We will require a comprehensive economic recovery program, supplemented by significant domestic reforms, and capped by a new world monetary system, to put the current world depression behind us.
It is, however, my hope that, by rebuffing those political forces seeking to drive our country into bankruptcy and chaos, we have gained the time necessary to address these issues of economic recovery and financial reform free from the climate of blackmail, extortion, and shakedown.
In the meantime, America will be open for business, today, tomorrow, and every day. Equally important, we can be confident in the ability of our constitutional system to protect the general welfare and the public interest from the machinations of small cliques of fanatics, wealthy though they may be.
I ask for your support. Thank you.
What a Real President Would Do
August 1, 2011
Webster G. Tarpley, Ph.D.
TARPLEY.net
http://tarpley.net/2011/07/27/a-real-president-would-call-default-unconstitutional
My fellow Americans:
I speak to you tonight in an hour of grave danger to our nation. As you know, within the next few hours our government is in danger of failing to make payments of interest and principal which the United States Treasury has contracted to make. In technical terms, we are not far away from beginning to default on payments associated with those US Treasury securities which represent the public debt of the United States. As part of the same crisis, there is now a threat to over 70 million checks which your government issues every month — payments which go to recipients of Social Security, to providers of health services under the Medicare program, to Medicaid beneficiaries, to our active-duty and retired military personnel, to our defense contractors, to our government employees — in short, to everyone who receives a benefit from the federal government, who works for the federal government, or who does business with the federal government.
Default Means National Bankruptcy and World Chaos
A default of this kind means nothing less than national bankruptcy. Default is the essence of chaos and anarchy. It is a peril which we have successfully avoided during our entire existence as a nation, through a terrible civil war and the two world wars of the past century.
The United States dollar continues to play the role of the world reserve currency. This means that the central banks on every continent have chosen to maintain large portions of their reserves in the form of US Treasury securities. This role has been slightly diminished in recent years, but it is substantially intact. For the US government to default on payments through the US Treasury would therefore provoke a radical devaluation of the central bank reserves of the entire globe, wiping out some central banks and leaving others critically weakened. This might lead to massive dumping of US Treasury securities, leading to a general world panic to which no asset class would remain immune. We might see a dramatic decline of the dollar. This would represent the disintegration of the current world financial system, and a breakdown crisis of economic activity of unthinkable proportions. This might happen immediately, or it might require months or even years to explode in its full fury. In any case, it would put the United States on the road to national decline.
If you recall how financial markets seized up and ceased to function in the terrible days of September and October 2008, you have some inkling of the kind of catastrophic market climate that would be unleashed by the national bankruptcy of the United States. Borrowing, credit, mortgages, car financing, credit cards, and the like would not just require astronomical interest rates; many kinds of lending would disappear altogether. Millions more jobs would be lost.
The Public Credit is an Asset for All Americans and for the World
The United States Treasury securities market, with its $1 trillion per day of turnover, represents a unique national asset for our country. It is a signal achievement of the American System of Political Economy founded by Alexander Hamilton. It is the broadest, deepest, and most liquid market in the world. It is capable of absorbing trillions of dollars of securities and turning them into cash within a few hours – a capability unique on this planet. Despite how indignant we all are about the abuses of Wall Street, it would be extremely unwise to permit the Treasury securities market to be wrecked by ideological fanatics. All the more so since the Treasury market is unique in the world, and its extinction would leave no currency whatsoever in a position to function as the reserve medium of the world. This would have terrible implications for world trade and investment.
In short, our Treasury securities are the bedrock of all economic activity in this planet, and the common interest of humanity is well served by avoiding their chaotic insolvency.
The “Tea Party Caucus”: Right-wing Anarchists Funded by Malefactors of Great Wealth
Why, many Americans may wonder, should this crisis exist today? Here it is useless to talk in euphemisms in order to appear conciliatory; it is now necessary to call things by their names. As a result of the current world economic and financial depression which began in 2007-2008, the extreme right wing of the Republican Party, now calling itself the Tea Party, has been energized and revitalized. They have also begun to receive large amounts of political funding, including from a sinister individual who is reported to be the richest man in New York City. These are the malefactors of great wealth about whom presidents of both parties have been warning you for over a century. The goal of these opulent backers of the so-called Tea Party is to eliminate taxation and regulation upon themselves and their private business interests, many of which are in direct conflict with the public good. The impact of this Tea Party on public opinion has been magnified out of all proportion by the collusion of corrupt media cartels; in reality, the supporters of the so-called Tea Party do not exceed about 15% of our population.
Neo-Feudalism
Thanks to the economic royalists who support them, a Tea Party contingent numbering almost 90 members has entered the House of Representatives. Many are political novices. Many of them sincerely believe in the strange and un-American foreign doctrines of the Austrian school, according to which government is an unnecessary evil which needs to be abolished. It is entirely proper to see them as a species of right wing anarchist. The market, by contrast, they fetishize as infallible, and deserving of unbridled free reign over all the human affairs. They want a market without a government, something which has not existed in human affairs since the transition from the Old Stone Age to the Neolithic age, when the state emerged. The free market with no role whatsoever for government went out with Alley Oop the cave man, and it is not likely to return.
And all too often, the market of which they speak turns out not to be free, but rather dominated by predatory cartels, monopolies, and oligopolies. They are devoted to the causes of deregulation, privatization, the abolition of trade unions, more privileges for the wealthy, and a race to the bottom among the states. The world for which they are striving resembles perhaps nothing so much as feudalism as seen in Europe after the fall of the Roman Empire – and, like that anarchic chaos, it can only be described as A New Dark Age.
Most especially, these right wing anarchists of the Tea Party hate the social safety net which incorporates the precious economic rights for which the struggles of the American people won recognition during the New Deal and the Great Society. I am referring of course to Social Security, Medicare, Medicaid, unemployment insurance, the Head Start Program, the WIC program of high-protein meals for expectant mothers and infants, and many more. I am also referring to the right to collective bargaining for wage earners in the public and private sectors alike, and other features of a humane modern society.
Their reasons for this view read like a catalogue of the seven deadly sins, with pride, greed, rage, and envy in the lead. To these we must add class hatred, and also racism, since many of them are obsessed with the idea that their taxes are being spent to help minority groups.
New Deal America Repudiates the Tea Party
The problem faced by the Tea Party Republicans is that two thirds to three quarters of the American people warmly support the social safety net created by the New Deal and the Great Society. A recent poll has also shown that fully 80% of Americans want tax rates on the super-rich to be increased. Despite so many years of radio ranting, venal professors, and merciless sloganeering by politicians, the American people continue to repudiate the ideological platform of the so-called Tea Party. There is no hope their program could ever get passed.
Out of their despair that their ideological goals could ever be met through the democratic process, these wealthy individuals and their anarchist following have evolved a diabolical strategy. Their strategy is extortion. It is an attempt to place the United States government under duress. It is an attempt to mutilate, alter, and denature our Constitution through unconstitutional means.
It is nothing short of an illegal coup d’etat.
The Tea Party cloaks themselves in public as the greatest admirers of the U.S. Constitution. But in one concrete instance after another, we find that the Tea Party is at war with the Constitution.
The Tea Party Hates the Constitution in Practice
Our Constitution speaks not once but twice about the general welfare. To the Tea Party, this is anathema, since they believe that government should serve the wealthy few.
In terms of the issue at hand, Article I, Section 8 of the Constitution specifies that the Congress shall have the power “To borrow money on the credit of the United States.”
This is once again anathema to the Tea Party. In such a fundamental provision as this, enacted in response to the bitter lessons of ungovernability taught by the Articles of Confederation interlude, the Tea Party faction sets itself above the wisdom of the founders. The Tea Party would rewrite this provision to read that the Congress shall NOT have the power to borrow money on the credit of the United States, and the framers be damned.
This is what they admit when they demand their so-called balanced budget amendment. Such an amendment would destroy the finely wrought mechanism of the separation of powers and its accompanying checks and balances, which have served us so well over the centuries. But it is also a subterfuge, since the Tea Party knows very well that this amendment has no chance of being approved by the Congress, nor by the states. Rather, it has included in their litany of cut, cap, and balance purely as a deal-breaker, to make absolutely sure that no possible settlement can be forthcoming in the time available. They are determined to make all negotiations fail.
The Tea Party Goal is to Bankrupt the United States
The goal of the Tea Party faction of Congress is nothing less than the national bankruptcy of the United States, procured by forcing our default on the contractual and legal obligations of this government. They regard default and bankruptcy as positive goods, and indeed as indispensable steps on the path to the free market utopia they fondly imagine. Their reasoning is that, once the United States has gone bankrupt, it will henceforth be either prohibitively expensive or totally impossible for the Treasury to sell its bonds on the world financial markets. Therefore, payments on Social Security, Medicare, Medicaid, and other programs will have to be cut – not by law, but by the brute force of having no money.
This they do in wartime, with some 160,000 troops in the field, many of them fighting determined enemies on the other side of the world.
They claim they want predictabilty to allow businesses to create jobs, yet they court the greatest chaos and instability our nation has ever faced in our financial affairs – insolvency.
These same Tea Party ideologues, still feigning a concern about the American people, have already sponsored legislation which would give foreign creditors — the Chinese, the Japanese, the Saudis, and others — top priority in payments made by the federal government, ahead of our military personnel. According to these bills, we can be sure that Americans whose lives depend on Social Security, Medicare, and Medicaid will be dead last when disbursements are made. We can perhaps now see the real dimensions of the sinister plan with which we are confronted. By driving this government into bankruptcy, the Tea Party hopes to roll back the Constitution by wrecking the Congressional ability to borrow money as a practical matter, while at the same time destroying the entitlement programs which the most extreme Republicans have hated since the time of Franklin D. Roosevelt.
And not just Tea Party fanatics endorse this strategy. Indeed, it has the sympathy of rich elitists of all political stripes, including the academic and foundation left, who welcome the effort to strip away the economic rights of the American people.
Default Spells Genocide Against the American People
This is a policy which threatens the very lives of millions of Americans. It raises the specter of genocide against our own people. And I have not become President of the United States to preside over genocide against Americans.
I am not motivated by any ambition for the aggrandizement of the powers of the presidency. I have negotiated in good faith for months. The other side has not. I have offered reasonable concessions. Indeed, I have waited until now, when the clock reads five minutes to twelve, constantly hoping that the legislative process in Congress would yield an acceptable result. But now, with the specter of national bankruptcy in full view, and no reasonable outcome forthcoming, it is my responsibility to act. Since I sit in the seat that belonged to Washington and Lincoln and Roosevelt, it is my hope that my actions may be worthy of their heritage.
In a Conflict Among Statutes, the Constitution Decides
I am faced first of all with a conflict among statutes passed by Congress. On the one hand there is the debt ceiling law, which states that the Total Public Debt Outstanding of the United States of America shall not exceed $14.294 trillion. Since our public debt reached that level on May 16, this statute could be interpreted as barring any further auctions of United States treasury bills, notes, and bonds. And if we cannot borrow money in this way, since our current income is inadequate to meet all our obligations, we are headed for default, bankruptcy, and, worst of all, social chaos.
But this is not the only statute in the US Code. There are also other statutes to which I must pay attention. All public expenditure of the United States government, as you know, is carried out by law — by a law called the federal budget, which specifies what amounts are to be spent and on what. Every expenditure has to go through the Congress not once but twice — it must be authorized, and then it must be appropriated, and each of these requires the consent of the two houses of Congress and the signature of the president. I am now confronted with a series of expenditures which the current Fiscal Year 2011 budget, passed by Congress and signed into law by me, requires me to make. This includes the entire vast array of social safety net, defense, transportation, health, regulation, inspection, government employment, and other activities which I outlined above. I am under legal compulsion to make these expenditures.
Concerning Treasury securities outstanding, each one of these is an explicit contract that the United States government will pay specific sums of interest and principal at specified dates. Respect from the sanctity of contracts also requires me to make every one of these payments, without exception.
This is therefore my situation: on the one hand, the debt ceiling forbids me to borrow. On the other hand, the federal budget and the implied contracts represented by entitlements and Treasury securities require me to pay. Since tax revenue, partly because of recent and misguided legislation, is not adequate to make all of these payments, something has to give.
It is obvious that, when two or more statutes conflict, we need to look to the Constitution itself for guidance as to which one will apply. Given the extraordinary attention which the Constitution gives the concept of the general welfare, this guiding principle needs always to be kept in mind. Beyond this, our founding document contains two especially relevant provisions. On the one hand, we find that it is Congress which has the power to borrow money. But on the other hand we also have the 14th amendment, section 4 which states:
“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.”
In other words, this country is not allowed to default. Default is unconstitutional. Default is illegal. Default is a federal crime.
This is not an option which I can choose to exercise or ignore. It is not something I can invoke or not invoke. This is the Constitution talking. This provision binds me, and ought to bind the opposition in Congress, since they too have sworn to uphold the Constitution.
The Debt Ceiling is Unconstitutional and Must Be Disregarded
This provision places upon the President the responsibility to guarantee the timely payment of all United States debt obligations, regardless of attempts to the contrary that might come from other organs of government, including Congress or, for that matter, the courts. These words make me the ultimate guarantor of the solvency of the United States, especially under emergency conditions in which other branches of government have failed to do this. I am the last backstop. The buck stops here.
By contrast, the Constitution nowhere makes any reference to a debt limit. In fact, the first debt limit was instituted in 1917, less than a hundred years ago. Somehow we got through our first century and a quarter of national life, conquered the frontier, won the Civil War, and created the world’s greatest industrial power without any need for a debt ceiling.
In my considered judgment, and in the light of Amendment 14, Section 4, of the U.S. Constitution, a statutory debt ceiling is therefore unconstitutional. And all competent constitutional jurisprudence agrees that the president must not be bound by legislation which the courts are likely to find unconstitutional. This is all the more true in the present acute crisis.
Accordingly, I have issued an executive order directing the Secretary of the Treasury to resume Treasury auctions today, August 1, 2011, with a view to maintaining the uninterrupted ability of the United States to meet all of its financial obligations, budget and debt, foreign and domestic, without exception. The full faith and credit of our country will be maintained.
I cordially invite the Congress to approve and validate this decision ex post facto.
If your child is in Head Start, it will remain open. If you rely on Social Security, this means you will get your check. If your life depends on Medicare, you can rest assured that your doctors and hospitals will be paid on time so that they can continue their useful activity. If you are living in a nursing home and require Medicaid, those payments will also be available. If you are a member of the military, or a government employee of any kind, you will receive your salary on time. If you are a private firm doing business as a contractor with the government of the United States, you will be able to meet your payroll. If you are carrying out medical research or other scientific research funded by a US government grant, you can be assured that this support will not be interrupted. If you are a person or institution or government anywhere in the world who has purchased United States Treasury securities, you will be paid every penny, on time. If you want to buy a United States Savings Bond or cash one in, you can go ahead and do it.
Those intent on bankrupting the government of the United States and pitching our country into chaos may attempt to reverse this decision in the courts. I have directed the Solicitor General of the United States to prepare to refute their arguments. Since our constitutional position is strong, I have no doubt that we will prevail.
Some will say that the debt ceiling has been around for almost a century, and that so many precedents should not be overturned. That kind of thinking would leave us in bondage to judicial monstrosities like Plessy v. Ferguson, which validated racial segregation, or the infamous Dred Scott decision, which said that skin color was the basis for denying people rights given by God and natural law, and recognized by the Constitution. It will not be the first time we have fixed what turned out to be a terrible mistake.
Others in the House of Representatives bent on driving our nation into default have already announced their intention of impeaching me over this issue. I welcome their attack and the opportunity it will give to further clarify these great issues of the American public.
They will try to impeach me for what I am doing to save the public credit of the United States. In my view, I would truly deserve impeachment were I to refrain from taking this timely action. The President must take care that the laws be faithfully enforced, and this includes the federal budget and the commitments embodied in our entitlements programs and in the solvency of our Treasury securities.
I look forward to next year’s elections, which I expect will be largely fought over this issue and the larger questions which it raises.
Some have raised the question of the debt ratings agencies, and of their future evaluation of the United States public debt in the light of these events. I take this opportunity to announce that the Attorney General, the Department of Justice, and the FBI, acting under my direction, have initiated a comprehensive investigation of corruption and malfeasance which has been alleged against these ratings agencies in connection with their failure to provide timely warning to investors who had purchased certain toxic derivative securities in 2007-2008. We are also studying the legal means of depriving these ratings agencies of the extraordinary and quasi-governmental authority they exercise because of laws and regulations which limit certain forms of public and private investment to securities which have received favorable ratings from these agencies. To this end, we are cooperating with the authorities in Italy and other countries who have also undertaken aggressive investigations of the corruption of these ratings agencies.
The Department of Justice is also investigating reports that members of Congress have entered into criminal conspiracies with bankers and hedge fund operators for the purpose of selling Treasury securities short in the context of the current crisis, and linked this to the votes they cast. The Attorney General has promised to report on this issue at the earliest possible date.
For my part, I do not intend to sell America short. Historically, those who have bet against the United States have not prevailed, nor will they prevail today.
My great predecessor, Franklin D. Roosevelt, delivered his first inaugural address on a morning in March 1933 when every bank in our country had been forced to close its doors because of panic runs, and the economic heart of the nation had stopped beating. In the face of that emergency, the defiant rallying figure of FDR promised action with these words:
It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require.
Roosevelt spoke these words at a time when a new Congress had failed for almost three months to do anything meaningful to fight the Great Depression and the banking panic which were ravaging the land in those years. Some at that time had concluded that our form of government was unworkable in a modern crisis, and they were looking abroad for new models of totalitarianism. We must always realize that any system of government which cannot solve the most urgent, life and death problems of the everyday life of the people is not long for this world. It risks being swept aside. If democracy brings chaos, that may be the end of democracy. In this sense, the future our democratic representative government depends on our solvency.
It is in this spirit that I am dealing with the current crisis. I remind you all that, while avoiding national bankruptcy and default in the short-term is absolutely indispensable, this will not by itself solve the majority of our economic problems. The world will remain gripped by an economic and financial depression of incalculable proportions. We will still have some 30 million unemployed in our country. We will still witness American families thrown on the street by fraudulent foreclosures. We will require a comprehensive economic recovery program, supplemented by significant domestic reforms, and capped by a new world monetary system, to put the current world depression behind us.
It is, however, my hope that, by rebuffing those political forces seeking to drive our country into bankruptcy and chaos, we have gained the time necessary to address these issues of economic recovery and financial reform free from the climate of blackmail, extortion, and shakedown.
In the meantime, America will be open for business, today, tomorrow, and every day. Equally important, we can be confident in the ability of our constitutional system to protect the general welfare and the public interest from the machinations of small cliques of fanatics, wealthy though they may be.
I ask for your support. Thank you.
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