For the last 200 years, the United States Senate had been an institution governed by precedent, a mannerly chamber where members addressed each other as “gentlemen” and “gentleladies,” where traditions were preserved, and where freshmen serving alongside their octogenarian counterparts were expected to be seen and not heard.
One thing that came through in a discussion with senior Obama administration officials is that, whatever their view of the likelihood of striking a Grand Bargain with Republicans on the budget, Obama really sees this as the political keystone to his second term.
Gov. Christie has proposed a $1.6 million budget for New Jersey's three-year-old medical marijuana program - more than twice the current spending plan - in anticipation that more dispensaries will open this year.
Now that budget sequestration is under way, it looks less like the fiscal apocalypse that had been predicted and more like a long-overdue intervention with politicians who are addicted to borrowing and spending.I agree with President Obama that sequestration's across-the-board rather than specific cuts are a "dumb" way to reduce spending. That is why I voted against the plan two years ago. But if sequestration is dumb, it's even dumber not to cut spending at all.Cutting spending can be a powerful pro-growth strategy, but the outcome of sequestration depends on how the...
Paul Ryan’s budget will show how Republicans can balance a budget that’s trillions of dollars out of whack. But the most significant unresolved issue comes down to a minuscule number: one year.
While Washington was obsessing Wednesday over whether or not the oh-so-intimidating Gene Sperling had threatened Bob Woodward over his deeply misguided take on the budget sequester, another veteran Democratic number-cruncher skated by: The Senate confirmed Jack Lew to be secretary of the Treasury, by a vote of 71 to 26.
WASHINGTON -- How big is the national debt?You'd think this would be an easy question. Surely we know how much the government owes. Unfortunately, it's not that simple. The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning. The differences mostly reflect explicit and implicit "off-budget" federal loan guarantees. In another economic downturn, these could result in large losses that would be brought "on budget" and worsen already huge deficits. That's the danger.My purpose is not to scare...
Misunderstanding, misstatements and all the classic contortions of partisan message management surround the sequester, the term for the $85 billion in ugly and largely irrational federal spending cuts set by law to begin Friday.What is the non-budget wonk to make of this? Who is responsible? What really happened?
When it comes to the fiscal challenges facing our country, Republicans always insist on taking the hard road.They nearly set off a recession by waiting until just after New Year's Eve to agree to keep taxes from rising for millions of middle-class families. They caused the first credit downgrade in our country's history by threatening a catastrophic default. And now they seem ready -- even eager -- to let painful automatic spending cuts take effect, which would result in the loss of at least a million jobs.The good news is there's an easier path.
The private sector created 155,000 jobs in December, almost exactly the average for the 11 previous months of 2012 and for all of 2011. Once again, it is a record far too weak to produce real progress towards either an adequate recovery or decent growth in wages and salaries. At this rate of job creation, according to the Economic Policy Institute, it will take another decade to get back to the employment rate of early 2008.
According to the Labor Department, there were 7.5 million net jobs lost in the recession, and a gain of only 3.5 million net jobs so far in the recovery. We have 4 million fewer jobs now than five years ago, and a much larger labor force.
Consider the connection between these tepid job figures and the debate that still occupies center-stage in Washington -- deficit reduction. Supposedly, businesses are not creating enough jobs because business leaders are anxious about the Federal debt.
For months, we have been hearing that businesses have been putting off making new investments or hiring new workers for fear that Congress would fail to cut the federal deficit. The austerity lobby helpfully put reporters in touch with businessmen who claimed that the uncertainty about the budget was dampening their willingness to expand, producing stories like this one in the New York Times last August. The Times contended:
A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will force hundreds of billions in tax increases and budget cuts in January, undermining economic growth in the coming months.
But this turned out to be just about total baloney. During the months when the Congress and the press kept everyone on the edge of their seats wondering about the dreaded fiscal cliff, business behavior went on as normal -- and a mediocre normal at that. The lousy rate of job creation hardly changed. Detroit enjoyed a good fourth quarter as very low-interest rates stimulated auto sales. Christmas sales were about what was predicted, as consumers turned to their credit cards.
To the extent that the economy has remained stuck in first gear, it has everything to do with high unemployment and lagging wages, and just about nothing to do with the fiscal cliff or worries about the debt ratio 20 years down the road.
The sluggish recovery has intensified a power shift from working people to corporations that has eroded the standard assumptions about the nature of employment. What the Labor Department calls "payroll employment" -- the basis for both its statistics and assumptions -- is becoming every more scarce.
A generation ago, the norm was a salaried job with a paycheck, regular hours and benefits, and the assumption that you'd keep the job and maybe get a promotion of you performed well. This is a vanishing dream for those under 30.
Supposedly, the new flexible workforce loves not being chained to a single job or a single career, or to regular hours. But the reality is that the new labor market of temp, part-time, and contract employees exists for the convenience of the boss, not the workers. These shifts have little to do with the "new," computer-mediated economy and everything to do with changes in relative power.
The higher the unemployment rate, the weaker the bargaining power of employees. And it's very hard to unionize workers at even the relatively benign employers of the new economy like, say, Starbucks or Whole Foods, because workers in these places hope they won't be there forever -- they're all really doing something else.
I recently encountered the term, "slasher" -- meaning not a psychopath with a knife but a worker juggling three or four jobs. As in, I'm a slasher: barista-slash-web designer-slash research assistant-slash nanny. This is the increasing face of the new labor market, and it will remain so until we get a decent recovery and more bargaining power for workers.
Which brings me back to the fiscal cliff and the deficit. Remember, employers were supposedly holding back investing and hiring for fear that the economy would go off the cliff, meaning that automatic tax increases and spending cuts would contract the federal budget by $607 billion in 2013 -- so severe a contraction that the Congressional Budget Office projected it would kick the economy back into recession.
But the same economic charlatans who were warning about the impact of these cuts want us to leap off a much bigger cliff--of four or five trillion dollars in budget cuts over a decade. Either severe fiscal contraction is bad for a fragile economy or it is good for a fragile economy, but both things can't be true.
Psychologists who treat dysfunctional families use the term "identified patient" to describe a family member who is scapegoated for the ills of the whole family system or who bears symptoms such as depression that are really a reflection of family dynamics as a whole.
In the depression of our economy, the Federal budget deficit is the "identified patient." But real patient is the failure of the economy to create enough jobs that pay a living wage. The deficit is the scapegoat. None of the economic quacks who contend that budget cutting will produce more private sector jobs can tell a convincing story of cause and effect, on how cutting deficits will yield more or better jobs. In a weak economy, the opposite is true -- as the austerity hawks inadvertently confessed in their own hysteria about the fiscal cliff.
In sum, the mediocre job numbers are likely to continue, and budget cutting will only weaken a feeble recovery. President Obama did well at keeping cuts in Social Security, Medicare and other special spending out of last week's budget deal. But now Republicans are intent on demanding deep cuts as their price for avoiding the "sequester" of automatic spending reductions.
If Republicans succeed in extracting cuts, the unemployment numbers will only get worse. Then they can blame that worsening on President Obama.
The president needs to use his leadership skills to make clear that this is not about this cut versus that cut. Budget cuts do not belong in this argument at all. Government should be investing more, not less, to compensate for the weakness of the private economy.
Roger Hickey: GOP Threat: Cut Social Security and Medicare or We’ll Kill the Economy — Americans Say No to Both
Here we go again. Republicans are very clear about their latest extortion threat to the American people: Unless you cut Social Security and Medicare benefits, within the next two months we will throw the U.S. economy back into recession; by refusing to allow the U.S. raise the debt ceiling and pay our bills; or by pushing the economy over another fiscal cliff of deep spending cuts and tax increases; or by shutting down the government by refusing to pass a continuing budget resolution.
But it is very important for progressives and politicians to remember that most Americans hate what the Republicans are doing here. Who but the right-wing could support pushing the economy back into recession, throwing millions of Americans out of work? That's what Republicans are threatening. And huge majorities also hate the price Republicans are demanding to prevent their threat of manufactured chaos: the idea of cutting Social Security and Medicare benefits.
Republicans can get their way only if Democrats fail to realize they have the American people on their side. And once Republicans are clear about their proposals, Americans turn against them.
During the election, Paul Ryan's plan to turn Medicare into a voucher was so unpopular that candidate Mitt Romney ran away from his Vice Presidential nominee's proposal. Democrats won the election.
Now, Tennessee Republican Senators Bob Corker and Lamar Alexander have dared to unveil a proposal (called their "dollar-for-dollar plan") that would only allow the debt ceiling to be raised by the amount we allow them to cut what they term "entitlements." How many Americans would embrace these changes?:
- They would privatize Medicare by creating competing private options giving seniors greater choice of healthcare plans. Shades of the plan Mitt Romney endorsed and then ran from.
- They would also give states more flexibility to cut Medicaid programs.
- And they would gradually raise the Social Security retirement age and immediately impose the "chained CPI" formula to cost-of-living adjustments -- a cut to retirement benefits of today's seniors.
"Unfortunately for America, the next line in the sand is going to be the debt ceiling," Corker told The Hill, laying out his leverage strategy for negotiations with Democrats. These guys couldn't be more explicit
Over the next two months, everyone who loves our country must rise up and say 'no' to this Republican nihilistic extortion. We must isolate them, ridicule and shame them. And we must force the Democrats to have the backbone to stand with us and reject Republican extortion and economic terrorism.
President Obama campaigned for re-election on his pledge to repeal the Bush tax cuts for people making more than $250,000, but he backed down and agreed to raise taxes only on people making more than $400,000. In return, he got an extension of unemployment benefits and important low-income tax provisions. But he could only get Republicans to postpone for two months the fiscal cliff tax increases and spending cuts known as "sequestration." And he failed to get them to give up the threat to destroy the full faith and credit of the United States that their refusal to raise the debt limit ceiling would bring on. Their refusal to support the once-routine legislation insuring we can pay our debts is already causing the Treasury Department to juggle accounts and will reach crisis stage by the end of February.
President Obama has pledged that he will not bow to Republican extortion over the debt limit:
"I will not compromise over ... whether or not Congress should pay the tab for a bill they've already racked up. If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic. The last time Congress threatened this course of action, our entire economy suffered for it. Our families and our businesses cannot afford that dangerous game again."
But remember that President Obama did negotiate the last time Republicans threatened to crash the economy by refusing to raise the debt limit, in September 2011. Obama was willing to offer up Social Security benefit cuts (in the form of a new "chained CPI") and a change in the Medicare eligibility age (from 65, when many people are forcibly retired, to 67). It was only because Republicans refused to accept tax increases that Obama's dangerous offer was not accepted. Instead, in return for Republican votes to lift that last debt ceiling, the draconian fiscal cliff sequestration budget cuts scheme was created (now postponed until early March).
So while President Obama may refuse to negotiate with Republicans over their latest manufactured debt limit crisis, he could end up negotiating to avoid the threat of sequestration. And Social Security and Medicare cuts could be on that table.
A Powerful Coalition Reminding Democrats What Americans Want -- And Don't Want.
President Obama and other Democrats need to listen to the voices of the groups who helped get them elected in 2012 -- unions, community organizations, groups representing women, African Americans and Hispanics, and online activist groups like MoveOn and the Campaign for America's Future.
On November 8, many of these groups placed an ad in the Washington Post making a set of demands on the president and Congress. These demands have served as unifying principles for a powerful organizing and outreach coalition. Signed by organizations including the AFL-CIO, SEIU, Center for Community Change, Leadership Conference on Civil Rights, and the Campaign for America's Future, the ad was accompanied by an open letter to the White House and Congress signed by 146 national organizations.
If the president and the Democrats in Congress listen to these principles -- and to these groups who have been communicating with them before and after the election -- they will refuse to cut Medicare and Social Security in response to the Republicans' threat reject the debt ceiling and tank the economy. And they will discover they have the vast majority of Americans on their side.
Here what the ad said, in part:
To the President and The Congress.
As you face urgent budget decisions, you must keep the election results in mind and resist budget cuts that slow our economy and hurt families. The best way to reduce the deficit is to put people back to work and get our economy going again. That's why we are calling on national leaders from both parties to stand up for the middle class and demand that any budget agreement:
Asks all Americans to pay their fair share of taxes.
Prioritizes job creation first. It's time to grow -- not slow -- the economy.
Does not cut Medicare, Medicaid, or Social Security benefits and does not shift costs to beneficiaries or the states. Voters loudly and clearly spoke up for these programs.
Protects the safety net and vital services for low-income people.
Stops the sequester. The scheduled automatic budget cuts threaten our fragile recovery and put huge numbers of people out of work while cutting education, child care, job training and dozens of vital services people and communities need.
The groups involved have helped the American Majority of working families communicate these demands to the President and the Congress. So far, we have kept Social Security, Medicare and Medicaid off the chopping block. We are redoubling our efforts to prevent Democrats from capitulating to Republican hostage-taking. And we are turning our campaign to opposing conservative austerity -- and fighting for jobs and robust economic growth.
Fresh off this week’s last-minute “fiscal cliff” deal, President Obama on Saturday dug in as the prospect of another budget clash with congressional Republicans loomed, warning that he will not negotiate over raising the nation’s debt limit.“One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” Obama said in his weekly address. “If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire...
In 1990, 78% of Americans thought we needed stricter gun laws. Today, only 44% of Americans think so. What has caused this dramatic shift in public opinion?
It is not because more people now own guns. In 1990, 48% of Americans had guns in their homes. Today, 45% of Americans do.
It is not because gun deaths are no longer a problem. Since 1990, a quarter-of-a-million Americans have been killed by guns.
Why, then, has there been so precipitous a decline in the percentage of Americans who support stricter guns laws?
The answer lies largely in the democratic process. Those who oppose stricter gun laws have organized, they have aggressively promoted their positions, and they have been extraordinarily effective in electing candidates who support their policies and defeating those who oppose them.
The nation's largest and most potent anti-gun control organization, the National Rifle Association, increased its annual revenues from 1990 to the present by approximately 400%. It now has an annual operating budget approaching $300 million and 4.3 million dues-paying members.
The largest and most potent pro-gun control organization, the Brady Center to Prevent Gun Violence, has an annual budget of approximately $6 million and fewer than 30,000 dues-paying members.
The National Rifle Association spent more than $10 million in the 2012 election. The Brady Center spent less than $10,000.
These numbers bear repeating: The NRA has 140 times more dues-paying members than the Brady Center and it spent 1,000 times more money than the Brady Center in the 2012 election.
Is it any wonder, then, that those who support stricter gun laws are losing? This is, after all, a democracy. Advocacy, debate and politics matter. As Justice Louis Brandeis observed more than eighty-five years ago: "Those who won our independence believed" that the best "protection against the dissemination of noxious doctrine" is freedom of speech, that "the greatest menace to freedom is an inert people," and that "public discussion is a political duty."
That is why the NRA is winning. Their members are not "inert." They oppose and oppose and oppose what they deem to be "noxious doctrine."
Of course, the NRA does get a ton of money from gun manufacturers and vendors (including those who manufacture assault weapons and high-capacity magazines), such as Arsenal, Beretta, Browing, Brownells, DPMS Panther Arms, Glock, Remington Arms, Smith & Wesson, Sturm, Ruger & Co, and Winchester.
But the majority of the NRA's funds still come from ordinarily citizens - from its 4.3 million members.
Those who want to see more rational gun laws in the United States have to do more than complain about the NRA. We have to ask ourselves: Do we care enough about this issue to DO something about it? If we don't, then we can be sure there will be millions more needless and heartbreaking funerals in the decades to come.
I joined the Brady Center last week. If you are one of the 44% of Americans who want more reasonable gun laws, then you must DO something to make that happen. That is, after all, what our democracy is all about.
As President Obama said last week, "if we're going to change things, it's going to take a wave of Americans" who are truly committed to making change happen. It is time for that to begin. Or, . . . you should learn to duck.
SACRAMENTO, Calif. — Officials at the highest levels of the California Department of Parks and Recreation helped keep millions of dollars secret for more than a decade, the California attorney general's office said in a report released Friday.
The report said the "intentional non-disclosure" continued because employees feared the department's budget would be cut if lawmakers found out, and that they would be embarrassed about the years of covering it up.
"Throughout this period of intentional non-disclosure, some parks employees consistently requested, without success, that their superiors address the issue," Deputy Attorney General Thomas M. Patton wrote in the report.
Parks Director Ruth Coleman, who had been director since 2002, resigned and a senior parks official was fired last summer after $54 million was found hidden in two special funds as up to 70 parks were threatened with closure because of budget cuts.
The report said the actual amount intentionally hidden in the State Parks and Recreation Fund was $20 million, and the remaining $34 million discrepancy was due to differences in the timing of the fund reports to the state finance department and the controller's office. The amount of money kept hidden had grown as high as $29 million in 2003, the report said.
The parks fund generates about $100 million each year through visitor fees and rentals. The fund has become a more vital source for the department as lawmakers reduce general support in the face of budget deficits.
The state will review the findings and decide whether to forward materials to law enforcement for a possible criminal case, said Richard Stapler, spokesman for the California Natural Resources Agency, which oversees the parks department.
No employees were found to have stolen or wrongly spent any of the money, the report said, but senior officials made deliberate decisions not to report the additional funds to the state Department of Finance, which helps the governor establish the state's annual spending plan.
Because the state Legislature did not know about the money, which was generated from park fees and rentals, officials had no authority to spend it, making it "an essentially useless reserve," the report said.
Coleman has denied knowing about the hidden money. She was the only current or former employee who would not agree to be interviewed by the attorney general's office, the report said. The report is based upon interviews with 40 former and current employees.
The report said several senior officials "were all well aware of the discrepancy."
It said all indications were that Tom Domich, the department's assistant deputy director of administrative services from 1987 to 2004, likely made the initial decision to keep the money secret, but several successive staffers continued the effort.
"The facts show that former budget officer Becky Brown noticed the growing disparity as early as 1998," the report said. By late 2002, "the budget and accounting officers and their supervisor ... were all aware of the discrepancy. Thereafter, from 2002 to 2012, numerous individuals failed to take appropriate action to ensure the monies were revealed to the DOF."
The report said Coleman's second-in-command, Michael Harris, was the highest-ranking manager to order the continued secrecy of the funds. He was fired as chief deputy in July 2012 amid the parks scandal and now works at the California Department of Environmental Protection.
Parks officials' ability to keep the $20 million in special fund money secret was partly due to accounting discrepancies between the state Department of Finance and the controller's office, which rely on different calculations. A new law signed by Gov. Jerry Brown last year requires the departments to compare their annual reports detailing how much money is in the more than 500 special state funds.
At least two budget officials told investigators they reported the hidden money to Domich, but he "refuses to acknowledge these facts and unpersuasively denies all knowledge of the disparity and his role in the deception," the report said.
"Consequently, it also cannot be determined with certainty whether the matter was reported to Ruth Coleman, who became acting director in January 2002 and went on to serve as director until July 2012," the report said.
Messages left by The Associated Press at telephone listings for two people named Tom Domich and for Coleman were not immediately returned Friday. Coleman's attorney, Malcolm Segal of Sacramento, declined comment.
In her resignation letter, Coleman said she was "unaware of the excessive balance" in the parks fund but accepted responsibility for the problem.
Harris did not immediately respond to an email message on Friday.
Rob Boriskin, who was assistant deputy director of administrative services from February 2005 to April 2006, told investigators that he recalls bringing the matter to Coleman's attention, and she told him to focus on "the bigger overall pictures and not spending so much time doing spreadsheets."
Former deputy director of administrative services Manuel Lopez, who left the department in May after approving an unauthorized vacation buy-out scheme, told investigators he believed Coleman knew of the $20 million disparity.
Over five years, Lopez said, Coleman asked him each year why the parks fund failed to receive a financial performance award, and he would explain it was because there was extra money.
He told investigators the two even discussed asking finance officials for approval to spend it, "'so she knew that there was money available,'" the report states.
The report said claims that Coleman knew of the money were "unreliable."
So, did we all have fun over the holidays?
The fiscal cliff fight went right up to the last minute, then we all momentarily Thelma-and-Louised over the cliff, and then Congress actually voted on a federal holiday. This last bit was so stunning, Congress is now going to take a two-week vacation just to recover (you know, from actually having to do their jobs). We missed commenting on most of this because we were busy doing our two-part year-end awards show (while also taking time to note that your constitutional right to flip the bird to a police officer has just been reaffirmed).
If we had a "best quote" awards category, we'd certainly have to nominate what outgoing House Republican Steven La Tourette had to say about the whole situation, after the Senate had voted 89-8 to approve the fiscal cliff avoidance deal: "We should not take a package put together by a bunch of sleep-deprived octogenarians on New Year's Eve." Now that's funny!
Humor aside, though the deal went through and immediately a contest erupted between left and right to see who could denounce the deal in highest dudgeon possible. We are not going to join in this flagellatory orgy, however, and are going to use our Friday Talking Points this week to point out why this deal is not just a pretty darn good one, but actually downright historic.
For those who may not agree with the previous statement, here's something we can all agree upon, in the spirit of entering the new year cheerfully -- Congress is now 100 percent Lieberman-free! Woo hoo! Not so sorry to see you go, Joe. Now please get off my teevee screen on Sunday mornings, okay?
While Democrats in general were showing a surprising amount of backbone in the entire fiscal cliff negotiation process, including folks like Harry Reid and Barack Obama, the one man being given credit for actually cutting the deal is the one who deserves this week's award.
Vice President Joe Biden is our Most Impressive Democrat Of The Week this week, for hashing things out with Senate Minority Leader Mitch McConnell. Speaker of the House John Boehner pretty much threw up his hands and took himself out of the deal-making process when his own House Republicans wouldn't back him up, and Senate Majority Leader Harry Reid was likewise sidelined when McConnell got frustrated with him and called up Biden instead.
Biden, you'll recall, used to be in the Senate. He knows how the chamber operates, and he knows how to bargain. He also knows the value of an actual deal, as opposed to the value of partisan posturing for the base or the media. So he broke the logjam and cut a deal with McConnell that sailed through the Senate (a vote of 89-8 is pretty rare on substantive issues, these days), and was then rammed through John Boehner's House -- forcing him to break the "Hastert Rule" (which is a pretty silly "rule" to begin with).
Was the deal perfect? Well, no. Could it have been better? Yes. Could it have been more progressive? Oh, certainly. Nonetheless, it passed. What you and I might consider the "perfect" bill likely would not have made it through Congress.
Which is the whole point. Joe Biden got what he could, gave where he had to, and still produced a deal which passed into law. There's even now a petition to "authorize the production of a recurring television show featuring Joe Biden" up on the White House website (which you can vote for yourself, if this sort of thing would interest you).
For achieving an agreement with the congressional Republicans which avoided the fiscal cliff (if you don't count the few hours we walked off the cliff in true Wile E. Coyote fashion, looked around, looked down in shock, and then ran back to solid ground before falling), for sealing a deal when all other Democrats had failed, and for the possibility we'll be seeing him in a reality show soon (heh), Vice President Joe Biden is our Most Impressive Democrat Of The Week.
[Congratulate Vice President Joe Biden on his White House contact page, to let him know you appreciate his efforts.]
The news today that House Minority Leader Nancy Pelosi just inserted a few House members into a group photo who didn't actually show up on time for the photo shoot is a little disturbing, we have to admit, but doesn't even rise to the level of a (Dis-)Honorable Mention, sorry.
The fiscal cliff deal itself was disappointing in a number of ways, not least of which was the failure to extend the payroll tax holiday for another year (or, at the very least, step it back up only one percent more a year). This is going to be shocking news to many Americans as they listened to Democratic politicians and the media tell them that the deal "would not raise taxes on middle class Americans" -- even though it will do precisely that. Whether or not there's a backlash from this realization will take a few weeks to play out. And that's just one of the disappointments in the whole deal.
But our real Most Disappointing Democrat Of The Week this week is none other than President Barack Obama. While Obama is riding a huge wave of positivity in the job-approval polls at the moment, and while he's got a pretty favorable schedule to look forward to this month (what with his second inauguration and the upcoming State Of The Union address), we still have to single him out this week for some very quiet caving on national security issues.
Lost in the fiscal cliff media frenzy was something else Congress put on Obama's desk recently: the reauthorization of the Pentagon's budget, known as the National Defense Authorization Act (or "NDAA"). As usual, Congress included several things in this year's NDAA that Obama does not support, such as restrictions on closing the prison at Guantanamo Bay. Also included was the authorization to indefinitely detain American citizens, which is truly extra-constitutional tyranny of the first order. Obama had issued a veto threat to Congress on the NDAA, but he went ahead and signed it anyway. Obama also approved the massive continuation of warrantless wiretapping, another civil liberties fiasco.
Now, we realize that the Pentagon needs a budget and all of that, so we understand Obama was in a pinch with the bill Congress sent him. We are also (as are many, it's worth pointing out) feeling rather jaded on the entire subject of Obama seemingly channelling his inner George W. Bush on national security and civil liberties issues. It's not that we've given up on the issue, but we do see it as being firmly in the "beating a deceased equine" category, at this point. Obama doesn't seem willing to muster the political backbone to fight on any of these issues, and hasn't since his first days in office, so we're not expecting him to change any time soon.
But beyond this defeatism, we are awarding Obama the MDDOTW award this week not so much for signing a bill with bad things in it, but for issuing a toothless veto threat in the first place. The veto threat is arguably the president's strongest legislative weapon. It is only rarely used, and only rarely even threatened. But the rule of thumb should be that any time a president threatens a veto, he should be absolutely willing to follow through on that threat -- or else he loses respect and leverage with Congress for the future. Every time a president threatens a veto and then does not follow through, he is seen as weaker by his congressional opponents. It's just a fact of political life in Washington.
Which is why President Obama is our Most Disappointing Democrat Of The Week this week. Don't make threats you aren't going to follow through on, Mister President. You just weaken yourself by doing so. If you're going to cave in the end, then refrain from making the veto threat in the first place -- it's that simple.
[Contact President Barack Obama on the White House contact page, to let him know what you think of his actions.]
Volume 239 (1/4/13)
All week long, the punditocracy has been fulminating over the fiscal cliff deal. From the left and from the right, there has been much garment-rending and gnashing of teeth. But you know what? This isn't such a bad deal, when you put it into proper perspective.
Our talking points this week are all in support of the deal, so be warned. Politically, it is hard to see how this is anything but damaging for Republicans, since their factional civil war in the House broke out into the open for all to gawk at. In the end, the Tea Partiers and Norquistians very publicly lost the battle. Perhaps this will reduce their influence in future debates, who knows? Even if it doesn't, the left should be basking in the schadenfreude right about now, while casting their eyes over the wreckage of what used to be the lockstep-Republican House, and their now-weakened leader John Boehner.
Sure, the left didn't get everything it wanted. But it could have been one whale of a lot worse. Consider all the things that didn't make it into this deal, in other words. Oh, sure, things like slashing Social Security and Medicare will be fought over again inside of the next two months, but none of it happened in this deal. That's a political victory, right there. Obama -- before the deal was even finalized -- appeared in one of the most cheerful official announcements he's ever gotten, and tossed down the gauntlet for the next round of negotiations. Obama will be looking for more tax revenue in the next deal, and he (so he says) will not be held hostage by the debt ceiling battle. He may, in fact, have a trillion-dollar platinum coin or two up his sleeve in that fight.
But let's look at what happened, as we'll have plenty of time later to pick apart the next deal, when it comes down the pike. Here are some suggestions for Democrats to use in explaining why the fiscal cliff deal wasn't just a pretty good one, it was downright historic.
The first time in a generation
This is the main thing which truly puts the deal just cut into proper perspective.
"You know, you can pick nits all you want about the deal, but let's look at the larger picture instead. This deal is the first time in a generation that Congress has raised marginal tax rates. The last time Congress did so was in 1993 -- 20 years ago. The last time a tax hike passed with any Republican support at all was even further back -- a full 23 years ago. There are House members who have served ten full terms in office who have never seen this happen before, to put it in perspective. Did Democrats get everything they wanted? No, they did not. But they did manage to break the power of Grover Norquist and get an astounding number of Republicans on board with raising income tax rates on the wealthy. This was, in fact, a monumental achievement. Just look at the last two decades to see why."
Washington ends a Big Lie in the budget
I have to admit, I called this one wrong. To me, this was the most stunning part of the deal, although the media didn't really stress it at all (due to most in the media being absolutely incapable of performing basic math).
"I am encouraged that Congress showed some real honesty in this deal, by permanently fixing the Alternative Minimum Tax. For years, Congress has played 'make-believe' with the AMT numbers, even though every single one of them knew that it was nothing more than a Big Lie in the budget projections. Each and every year, Congress pretended that they were only going to 'fix' the AMT for a single year, and that for the nine years after, it would remain unfixed. But everyone knew that was nonsense, because the AMT was 'fixed' every single year, like clockwork. Nobody wanted to see the real numbers. But when you hear the scoring on the fiscal cliff deal that was just signed into law, please remember that almost $2 trillion of the costs of this bill are nothing more than finally admitting that that $2 trillion was nothing more than smoke and mirrors in the first place; money that was never actually going to appear in the federal government's coffers. I applaud Congress for finally biting this bullet and getting back to some honest accounting rather than including make-believe and fairy dust in the 10-year budget projections. It took political courage, and it deserves a lot more attention than the media has been giving it."
This is an important aspect of the deal that has been overlooked by the legion of critical voices out there.
"Yes, I would have preferred Obama had realized his campaign promise to raise tax rates on those making above $250,000 a year, but you never get everything you want in any particular bill. What Obama did hold firm on was another figure that had been rumored to be on the negotiating table. A few weeks before the deal was cut, the conventional wisdom in Washington was that the Republicans were going to get Obama to lower the highest tax rate from 39.6 percent to only 37 percent. I know it's tough for pundits to remember back that far, but this was indeed what everyone was saying inside the Beltway a few short weeks ago. The final deal that was cut did not lower this rate -- Obama got the full 39.6 percent for the upper tax bracket. So while he had to move on the $250K limit, he didn't budge on the tax rate itself -- something not many people have given him credit for."
Cutting loopholes for the wealthy
This is where Obama could indeed gain further concessions in the next round of budgetary deal-making, but again, it's been given short shrift so far by the talking heads.
"Another thing few have noticed is that Obama did indeed raise taxes on those making a quarter of a million dollars per year. Deductions and exemptions and other loopholes will be limited for taxpayers above this threshold. This is something I expect Obama to revisit in the next round of budget negotiations, now that the tax rates themselves have been raised. Cutting loopholes for wealthy taxpayers should be very much on the table next time around -- but any agreement should preserve tax benefits for the middle class below the $250,000 line, as the fiscal cliff deal does."
A step towards solving the Buffett problem
Lefties are complaining about the deal's treatment of capital gains and dividends, but once again, this should be seen as a step forward toward an ultimate goal.
"The fiscal cliff deal moves the tax system one step towards fairly treating all income the same, and solving the problem of Warren Buffett paying a lower tax rate than his secretary. Capital gains and dividends for upper-income taxpayers will now be taxed at a base rate of 20 percent rather than 15 percent. That's a rate hike of one-third, but it doesn't go nearly far enough. Remember, the Paul Ryan budget wanted to move this tax rate to zero, folks. So while Buffett may now pay only slightly more than half the rate than he would if it was regular income, this is still a big step in the right direction."
Estate tax hike
Once again, this is an area being widely criticized, but again, let's put it into some perspective.
"The fiscal cliff deal raises the estate tax from 35 to 40 percent on the wealth passed from generation to generation. Now, while I would have liked to see the rate even higher than that and the exemption limit lower, I still have to score this one as a minor victory for Democrats. Remember, the original Bush tax cuts reduced this tax rate to zero. So where we are today is a big step down the road to where we should be. And please don't bring up the mythical family farmer. Republicans have been searching high and low for a family farmer who lost his land due to having to pay the estate tax -- searching for over a decade -- and yet they've never managed to find a poster-child family farmer to trot out in front of the cameras. It's a myth -- the way the tax is structured allows family farmers to cope with it when passing their land on to their children, so please, let's not even go there. The estate tax not only survived the fiscal cliff deal, but it has been increased. I'd like to see it changed even further, but it's hard to see how that's a bad outcome, for now."
Ask an unemployed person
This one is for all those who aver that going over the fiscal cliff would somehow have been better than cutting a deal to avert the worst consequences of doing so.
"I know many Democrats were urging President Obama and congressional Democrats to just go over the cliff and be done with it. Obama, from new reports on the negotiations, actually used the threat of doing so quite effectively in the bargaining. But Obama doesn't have the luxury of treating the situation like a parlor game. Going over the cliff would have had some real-world consequences that were impossible for him to just ignore. So, to any Democrats grumbling that we should have Thelma-and-Louised right off the fiscal cliff, I have one thing to say: ask an unemployed person whose benefits were about to run out if they agree with you or not. Ask them whether they would have cheered Obama on while facing their own economic ruin. There were harsh realities involved in going over the cliff that have now been averted. While the deal certainly isn't what I would call perfect, it did save a lot of folks a lot of very real harm. Obama should be commended for his leadership in not allowing that to happen."
WASHINGTON — Legislation passed this week to avert the "fiscal cliff" could still leave in place deficits averaging more than $900 billion a year over the coming decade if Congress fails to follow its tax increases up with further spending cuts or tax hikes, the nonpartisan scorekeeper for Congress said Friday.
The Congressional Budget Office also says the measure should reduce the risk of recession this year by not slamming the economy with a huge tax increase.
The CBO issued a study in August predicting a $10 trillion deficit over the next 10 years if Congress simply followed existing tax and spending policies instead of following the laws that threatened a combination of automatic tax increases and spending cuts.
This weeks' cliff law would cut $700 billion to $800 billion from CBO's 10-year, $10 trillion deficit estimate. But it also leaves in place across-the-board spending cuts that would cut more than $1 trillion from the budget over that time.
The analysis also estimates that the new law will increase the size of the economy by 1.5 to 1.75 percentage points compared with what would have happened if the government went over the cliff. Using data from last summer, when the economy was still limping badly, CBO now estimates the economy will grow by just 1 percentage point next year.
An official CBO estimate of the nation's economic and budget outlook is due next month.
The CBO study also notes that Congress didn't avoid going over the cliff completely. The Social Security payroll tax jumped back to 6.2 percent this week after President Barack Obama failed to win renewal of the temporary 2 percentage point payroll tax cut that's been in place for two years.
And the CBO analysis assumes across-the-board cuts of 8 to 9 percent to many domestic programs and the Pentagon budget would stay in place, which would cost the economy almost 1 percentage point in growth.
Lawmakers promise to replace those across-the-board cuts with more targeted steps that could take longer to implement.
A thumb-nail assessment of the fiscal cliff bill: Much sound. Some fury. Simplifying nothing.
Nonetheless, those members of Congress who worked together in a bi-partisan fashion to construct and pass the "cliff deal" are to be commended. The major presenting short-term problem of the expiration of "middle class" tax cuts was addressed. Significantly and appropriately, tax rates for the "wealthy" were increased. In addition, the alternative minimum tax was corrected, expiring jobless benefits were extended, and cuts to Medicare reimbursements were prevented.
The congressional compromise pulled us back after we went over the cliff for a very short period of time. The sad truth, however, is that we are still cliff dwellers. Much more remains to be done than got done with this bill.
Consider the following: The sequestration process for automatic budget cuts to defense and domestic programs has been extended by only two months. Social Security, Medicaid and Medicare solvency and management remain wide open issues. The debt ceiling debate has raised its ugly head again. And, most importantly, job creation and economic growth do not appear to be central to the ongoing deficit and debt discussions.
Erskine Bowles and Alan Simpson, co-chairs of the Deficit Reduction Commission stated that the fiscal cliff bill was "truly a missed opportunity to do something big to reduce our fiscal problems." We agree with Bowles and Simpson that the bill was not "something big".
In no way could this be considered a grand bargain. On the other hand, given the composition of the 112th Congress and its track record over the past two years, a grand bargain in this constrained a time period was probably impossible because of the grand canyon - i.e., the ideological chasm - that separated the extreme tea party conservatives in the House from the Democrats and even their more moderate Republican brethren.
Looking at it objectively, the fiscal cliff bill contains elements and produces consequences that offend partisans on both sides of the aisle. While the middle class tax breaks were protected, the payroll tax break was eliminated. It is estimated that this will cost "an average of $1,000 for a household at the national median income." While "new taxes" were on the table, spending cuts were off. The bill generates $620 billion in new tax revenue which seems like a lot but pales in comparison to what is required. Moreover, the Congressional Budget Office estimates that the bill will reduce revenues over 10 years by $3.64 trillion and increase spending by $332 billion.
So, the bad news is that we are still cliff-dwellers. The good news is that the cliff is no longer the exclusive province of those within the Beltway. It is now occupied by the American public and voters as well.
The results of the national elections sent a loud and clear message that the public is expecting and demanding compromise. They also sent a message that it would be unacceptable to extend the Bush era tax cuts uniformly. Finally, they sent the message that the voters are and will pay close attention to the negotiation processes surrounding the cliff and the behavior of our elected officials in resolving the debt and deficit crisis.
The passage of the fiscal cliff bill with an overwhelming bi-partisan majority in the Senate and a sound bi-partisan majority in the House is a clear sign that many in Congress have gotten the message. Let us hope that this collaborative action by the departing 112th Congress is a harbinger for the 113th.
Right after the elections, the Pew Research Center conducted a survey that revealed that in general the voters were "pessimistic about partisan cooperation" in politics going forward. As we start this New Year, Congress has given the citizenry a small reason to replace this healthy skepticism with guarded optimism.
As it continues its cliff-work over the next 100 days, Congress will determine whether that optimism is warranted. It should be aware that the cliff dwellers will be watching. The dwellers will also be anxiously waiting for Congress to move off the cliff in order to scale the economic summit.
A year-end Washington Post-ABC poll showed that 75 percent of the registered voters responding felt that the "economy is still in a recession." If that is the perspective from those at the bottom and the middle of the cliff one to two years from now, all of the pick and shovel work done to try to address the debt and deficit crisis by only focusing on cost-cutting and shrinking government will have been in vain.
Congress needs to be about more than green eye shades and expense reduction. It also needs to be about investing and revenue generation. Congress needs to finish its fiscal work successfully and quickly and then pass legislation that will stimulate job creation and growth and development of the economy for the middle class and the working poor.
The American people deserve this. They should be given the opportunity to be mountain climbers rather than cliff dwellers.
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The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House. Paul Krugman For Op-Ed, follow @nytopinion and to hear from the editorial page editor, Andrew Rosenthal, follow @andyrNYT. For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal...
TAMPA -- Florida's congressional delegation split along political lines, but not strictly party lines, in the vote on the "fiscal cliff" budget compromise.
At least some Florida Republicans may have cast their votes with an eye to the 2014 election, hoping to avoid either a primary challenge from the right or a tough general election battle with a Democrat, political experts say.
All six Florida Democratic House members, including Kathy Castor of Tampa, voted for the deal backed by President Barack Obama and by Senate and House leaders of both parties.
They were joined by Democratic Sen. Bill Nelson and five House Republicans, including C.W. Bill Young of Indian Shores and Vern Buchanan of Sarasota.
Among Republicans, 14 Florida House members voted against the deal, bucking their party's leadership. So did GOP Sen. Marco Rubio. The House members included Gus Bilirakis of Palm Harbor, Richard Nugent of Brooksville and Dennis Ross of Lakeland.
Democrats and the yes-voting Republicans focused on tax fairness for the middle class, while no-voters focused on a need to cut government spending.
Young, in a statement, called the measure "a less than perfect solution," but said it "avoided a pending fiscal cliff that would have raised federal income taxes on millions of American families and small businesses," and "temporarily delays the across-the-board sequestration that would harm our national defense."
Castor called it "a balanced plan" and said, "Greater tax fairness is the hallmark of the bipartisan compromise."
Ross, on the other hand, said in a release, "Our country is going bankrupt ... This proposal does nothing to address our biggest problem, which is the out-of-control spending that runs rampant in Washington."
Bilirakis said the bill "did not include the spending reforms our country desperately needs" to fix a debt that "places a heavier burden on our children and grandchildren."
Retired University of South Florida political scientist Darryl Paulson, a Republican, said the legislators may also have been keeping an eye on demographics and the 2014 election.
The no-voting Republicans, he said, are more likely to be from rural or suburban districts, and could fear a primary challenge from a tea party-style conservative.
Outgoing Rep. Cliff Stearns of Ocala, with a rural-suburban district stretching north from Leesburg to Interstate 10, is leaving office because he lost such a challenge to tea party-backed challenger Ted Yoho in this year's primary, Paulson noted.
The yes-voting Republicans "all represent primarily big-city districts," Paulson said. "In the 2012 election, all the big urban counties voted for Obama."
They may have more to fear from a Democrat in the general election, Paulson said.
University of Florida political scientist Stephen Craig, who's politically neutral, said primary challenges pose the greatest threat to most Florida Republican legislators.
"Some (Congress members) might have been willing to support this deal," Craig said, "but the environment of Republican primaries has become frightening if you are not on board with the conservative wing of the party."
Craig said Rubio, who ran and won in 2010 as a tea party champion, has been taking "baby steps" toward moderation with an eye to a 2016 run for president, but probably viewed the debt ceiling vote with an eye to a Republican presidential primary.
"It's a balancing act for him -- maybe what it takes to win the nomination isn't what it takes to win in November," Craig said. "He may be willing to go so far toward moderation, but no further."
Here's how the vote went among Florida's 25 House members:
* Yes-voting Republicans: Ander Crenshaw of Jacksonville; Ileana Ros-Lehtinen and Mario Diaz-Balart of Miami; Buchanan and Young.
* No-voting Republicans: Sandy Adams of Orlando; Connie Mack IV of Fort Myers; Jeff Miller of Chumuckla; John Mica of Winter Park; Bill Posey of Rockledge; David Rivera of Miami; Tom Rooney of Tequesta; Steve Southerland of Panama City; Dan Webster of Winter Garden; Allen West of Palm Beach Gardens; Bilirakis, Nugent, Ross and Stearns.
* Democrats, all voting yes: Corinne Brown of Jacksonville, Ted Deutch of Boca Raton, Alcee Hastings of Miramar, Debbie Wasserman Schulz of Weston; Frederica Wilson of Miami; Castor. ___