At the top of today's program, Mr. Gregory reported that we are 'very close' to a deal to avoid default. The deal would consist of about $3 trillion in cuts over 10 years, no revenue increases, and a raising of the debt ceiling through 2012. There will also be the formation of a bipartisan super-committee that would make recommendations for further cutting of spending.
What is not in the agreement is a balanced budget amendment provision, which may be the sticking point for the Republican controlled House of Representatives and cause a collapse in any agreement because it is the House that has not been willing to compromise, even with its leader, John Boehner. Mr. Boehner to pass a bill in the House this week had to put in a balance budget amendment to placate Tea Party Republicans to get it passed.
During today's program, there was a lot of talk about leadership. David Plouffe, Senior Advisor to the President, has said that this debt crisis has harmed our economy, certainly an understatement and there really was much more that he could say. President Obama, for his leadership, has made concessions at every level to get the debt ceiling raised so when conservatives say that he's failed to lead, it's ridiculous because he's given Republicans more than he's given Democrats in these negotiations. It's Democrats who should be complaining that he hasn't lead because of these concessions, many of which go against the Democratic Party's core beliefs - such as cuts in Social Security and Medicare without raising any revenue.
During the round table, Congressman Raul Labrador (R-ID) commented that the media played a big part in this crisis, to which financial analyst Jim Cramer of CNBC took exception to this statement and explained that it was the President that caused the crisis saying that things may not get paid if we don't raise the debt ceiling. During the complete discussion, both of these individuals showed that they have little perspective on the various, realistic considerations that need to be taken into account when trying to solve the budget problems we face. Representative Labrador doesn't see any need for compromise as he believes that the 2010 mid-term election was a mandate for Republicans to enact legislation without it. As Repubican freshman should have learned, this is not the case. Mr. Cramer, for his two cents, is only loyal to the stock market. On his program leading up to the great recession of 2008, Mr. Cramer continually advocated the buying of toxic assets - he was never so wrong so frankly, his opinion carries little weight with this column. His comments about the President were spiteful and certainly not insightful. And when he says that if we don't act to resolve this, we'll (The U.S.) will lose huge. That's not insightful, it's banal.
Even with those huge concessions, there's no confidence that the House will vote and pass the bill that comes back from the Senate. When asked about invoking the 14th Amendment, which could be interpreted that the President can override all this and just raise the debt ceiling to get the bills paid, David Plouffe said that the Administration has looked at that and it will not go down that road. And he shouldn't because the language is vague enough that it could be interpreted in a number of ways. Some could argue that it would be an impeachable act, on which most certainly Republicans would start proceedings. Going into an election year under impeachment would be a heavy weight around the neck of his re-election campaign.
The credit rating is about confidence, confidence that the United States will pay it's bills. One way or another, the U.S. will pay it's bills but confidence has evaporated, no more clearly exemplified of the latest example that was noted on today's program (and before) that when asked by a soldier if the military would be paid on time, Admiral Mullen said that he didn't know. The reason that confidence is gone is because frankly, with one party unwilling to compromise on anything, a slash and burn approach, the American public has to wait until the very last minute for things to move forward. This debt ceiling debate is just the latest... Remember when there was a last minute deal to avoid a government shutdown? All of this last minute legislation has decimated the public's confidence in its government. Congress thinks they have until Tuesday to get this worked out, but the reality is that the market is dictating that today is, as Mr. Gregory said, the code-red day (before the markets open).
Given all this, and now with the repeated theme that government is broken, Mr. Gregory frivolously asked Mr. Plouffe if there would be a third political party, to which he couldn't comment. Presumably that third party would be the Tea Party so how would Mr. Plouffe know about that? A silly question by Mr. Gregory in that he asked the wrong person, who wouldn't be able to answer that.
In the joint interview with Senators Claire McCaskill (D-MO) and John Thune (R-SD), Mr. Thune said that he wasn't a fan of the super-committee idea, and we have to agree with him. For us, it creates a slippery slope to go down. Here's why. If for every crisis, fiscal or otherwise, you create a small super-committee (super meaning that it can not be questioned or that it's conclusions are fast-tracked) important decisions, it could theoretically do so without considering a differing majority view and then there's nothing you can do about it. That's the scary extreme, but in the mild reality, the idea of the super-committee shows everyone that Congress can not legislate properly. It's sad.
Mr. Thune, whose demeanor we appreciate, reinforced his party's standard talking points that, 'we spend too much, we need entitlement reform, broaden the tax base, etc.' As we've previously stated in this column, is that, yes maybe we spend too much, but we spend too much money on the wrong things. And broadening the tax base, making the tax system 'fair for everyone,' to use Congressman Labrador's words from today, means that people in this country who now make so little that they are unable to pay taxes, will have to pay taxes on what ever they make, "broadening the base." The basic takeaway from this is that it will, as with much of this economic policy, put more burden on the people who are least equipped to handle it.
Ms. McCaskill, on the other hand, reiterated the argument that we shouldn't give subsidies to oil corporations and then change Medicare in a voucher system. We would agree with this, but the problem with the Democrats isn't the more prudent position they take, it's the lack of political will and discipline to get their caucus on the same page in its entirety.
Overall, as long as we politically deny the fact that we need more tax revenue coming in to balance the budget, we'll never turn this around. Whether it be eliminating subsidies, broadening the base, increasing the rate for the top 1%, what ever it is - none of it is happening and something has to give. There is no way to cut enough money out of the budget to balance it. The compromise of spending cuts coupled with some increases in tax revenue is the essence of being American. If it seems reasonable, there's a pretty good chance that it is. Everyone can't eat all the steak, but we have to finish all the spinach.
Round Table: Former Governor of Michigan, Jennifer Granholm (D), Rep. Raul Labrador (R-ID), the host of CNBC's "Mad Money" Jim Cramer, and NBC's Tom Brokaw.
No comments:
Post a Comment