Posts Tagged George W. Bush

E.J. Dionne: The economic whodunit – The Washington Post

Posted by Michael B. Calyn in Opinion, Perspective on April 29, 2013


E.J. Dionne Jr.

E.J. Dionne Jr.

Opinion Writer

The economic whodunit

By E.J. Dionne Jr., Published: April 28

The policy mystery of our time is why politicians in the United States and across much of the democratic world are so obsessed with deficits, when their primary mission ought to be bringing down high and debilitating rates of unemployment. 

And since last week saw a cross-party celebration of the opening of George W. Bush’s presidential library, I’d add a second mystery: Why is it that conservative Republicans who freely cut taxes while backing two wars in the Bush years began preaching fire on deficits only after a Democrat entered the White House?

Here is a clue that helps unravel this whodunit: Many of the same conservatives who now say we have to cut Social Security to deal with the deficit supported Bush’s plan to privatize Social Security — even though the transition would have added $1 trillion to the deficit. The one thing the two positions have in common is that Bush’s proposal also would have reduced guaranteed Social Security benefits.

In other words, deficits don’t really matter to many of the ideological conservatives shouting so loudly about them now. Their central goal is to hack away at government.

This goes to the larger argument about jobs and deficits. For a brief time after the Great Recession hit, governments around the world, including President Obama’s administration, agreed that the immediate priority was restoring growth. Through deficit spending and other measures, the 20 leading economies agreed to pump about $5 trillion into the global economy.

Obama and Democrats in Congress enacted a substantial stimulus. The package should have been bigger, but Obama — thinking he would have another shot later at boosting the economy — kept its size down to win enough votes to get it through Congress.

The second chance didn’t come because conservatives stoked anti-government deficit mania — and never mind that the deficit ballooned because of the downturn itself, and that the stimulus needed to reverse it and those fiscally improvident Bush-era decisions.

Then along came academic economists to bless the anti-deficit fever with the authority of spreadsheets. In a 2010 paper cited over and over by pro-austerity politicians, Carmen Reinhart and Kenneth Rogoff argued that when countries reached a debt level above 90 percent of their gross domestic product, they almost always fell into slow growth or contraction.

Financial Times columnist Philip Stephens compactly takes the story from there: “The implication was that deep retrenchment was the only route back to prosperity. Now, economists at the University of Massachusetts Amherst say the results reflected a data ‘coding error’ and some questionable aggregation. The assumption that high debt always equals low growth is not sustained by the evidence.”

While Reinhart and Rogoff acknowledged their error, they dismissed the controversy in a New York Times op-ed as an “academic kerfuffle” and insisted that their findings had often been “exaggerated or misrepresented” by, among others, politicians. (They also complained about the “hate-filled, even threatening, email messages” they received. I’d be happy to share my e-mail with them. Friends, if you have the good fortune to be engaged in public debates, you get a lot of angry missives these days.)

The two economists would have added to their credibility by showing a bit more humility about their data problem. But the damage was done. Europe and the United States moved prematurely to austerity. Tens of millions of people have suffered from joblessness or lower real incomes. Reinhart and Rogoff didn’t force these decisions, but they abetted them.

Now, through the “sequester” cuts, we are compounding the problem. It’s outrageous that Congress and the administration are moving quickly to reduce the inconvenience to travelers — people fortunate enough to be able to buy plane tickets — by easing cuts in air traffic control while leaving the rest of the sequester in place. What about the harm being done to the economy as a whole? What about the sequester’s injuries to those who face lower unemployment benefits, who need Meals on Wheels or who attend Head Start programs?

Instead, we should be using this period of low interest rates to invest in our infrastructure. This would help relieve unemployment while laying a foundation for long-term growth. But anti-government slogans trump smart-government policies. For reasons rooted in both ideology and the system’s bias against the less privileged, we hear nothing but “deficits, deficits, deficits” and “cuts, cuts, cuts.”

To paraphrase a French statesman from long ago, this is worse than a crime. This is a mistake. Its costs are being borne by good people who ask only for the chance to do productive work.

 E.J. Dionne: The economic whodunit – The Washington Post.

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What Happens When Fracking Hits the Suburbs | Alternet

Posted by Michael B. Calyn in Big Oil, Debate, Fracking on January 8, 2013


What Happens When Fracking Hits the Suburbs

Residents of Gardendale, a suburb near the hub of the west Texas oil industry, face having up to 300 wells in their backyards.

January 2, 2013 

 

Photo Credit: Pincasso/ Shutterstock.com

The corner of Goldenrod and Western streets, with its grid of modest homes, could be almost any suburb that went up in a hurry – except of course for the giant screeching oil rig tearing up the earth and making the pavement shudder underfoot.

Fracking, the technology that opened up America’s vast deposits of unconventional oil and gas, has moved beyond remote locations and landed at the front door, with oil operations now planned or under way in suburbs, mid-sized towns and large metropolitan areas.

Some cities have moved to limit fracking or ban it outright – even in the heart of oil and gas country. Tulsa, Oklahoma, which once billed itself as the oil capital of the world, banned fracking inside city limits. The authorities in Dallas last week blocked what would have been the first natural gas well in town. The town of Longmont, just outside Denver, meanwhile, is fighting off attempts by industry groups to overturn a fracking ban.

But Gardendale, a suburb of 1,500 people near the hub of the west Texas oil industry, exists in a legal and political environment in which there are seemingly few restrictions on fracking, even inside city limits. For residents here, fracking is part of daily life.

“You can hear it, you can smell it, and you are always breathing it. It’s just like being behind a car exhaust,” said Debbie Leverett, during a tour of the area last October organised by the Society of Environmental Journalists. “All of your senses change.”

Over the last few years oil companies have drilled 51 wells in Gardendale, an area that covers about 11 square miles – and that’s just the start.

Berry Petroleum, the main oil developer, plans to drill as many as 300 wells in Gardendale. “Berry’s current plan is to drill approximately 140 wells on 40-acre spacing in and around the Gardendale area,” Jeff Coyle, a company spokesman, wrote in an email. “Additionally, we are preparing to conduct a pilot study on 20-acre spacing and, if those test results are encouraging and economic conditions warrant, we may drill up to 160 additional wells.”

Some of those wells will be drilled within 150ft of residents’ front doors – far closer than in other towns in Texas.

In the nearby city of Midland, the oil industry hub and childhood home of George W Bush, the city council capped the number of wells inside city limits at 30. The town requires oil companies to stay 500ft away from buildings and homes. In some circumstances oil companies may be required to landscape around a well.

“People are still not really happy when an oil well turns up in the backyard,” said Wes Perry, Midland’s mayor and an oil man himself. But he added: “We are an oil town. We can’t be hypocrites.”

However, Gardendale lacks the legal authority to keep fracking at a distance. The suburb, just outside Midland and Odessa, is unincorporated, so it does not have the legal authority to impose zoning restrictions. Residents voted down an attempt to incorporate last year, fearing it would lead to higher taxes.

Berry argues the close proximity serves to encourage industry and residents to co-exist. “What we have here is a situation where we have to find the best way to work together, where mineral rights owners and surface rights owners can co-exist,” Coyle said.

But co-existence does not work for Shane Leverett, Debbie’s husband. Leverett has worked in the oil industry, but he said the drilling plan for Gardendale was excessive. “This is a fantastic opportunity for oil and gas development, but it is coming at the expense of all of us,” he said.

The couple are suing the oil company to try to block drilling on their 130 acres on the edge of town. The land is staked with bright plastic strips marking potential oil wells.

Current plans call for seven wells on the property. “They’re talking about a well every 600 feet and a pad every 300 feet,” Shane Leverett said. “Do the math. There’s not much room left over for us.”

The suit seeks to challenge a pillar of Texas law: that property owners have no control over the extraction of the oil that lies beneath their land, unless they also own mineral rights. The Leveretts only own the surface rights to their land. The mineral rights were sold off decades ago – a fact the Leveretts were aware of when they bought their property, but they did not think there was a real prospect of drilling at the time.

Fracking changed that, however, making it profitable to drill on the Leveretts’ land.

“This case is of historic importance,” said Steve Hershberger, the Leveretts’ lawyer. “Now that the oil companies have found oil and gas through fracking and horizontal drilling they are going into residential areas and urban areas. This case is going to define the relationship between mineral owners and surface owners in a big way.”

The oil company argues the Leveretts got what they paid for. “Essentially, each Gardendale surface owner bought his or her surface property (at a discounted price without the minerals) betting, wrongfully as it turned out, on the proposition that oil and gas development would not occur in the area,” Coyle said.

Other residents complain the oil company dictates what property owners can do above ground, even without definitive drilling plans.

Hector Rodriguez said he was barred from expanding his trailer home or putting in a bigger dog house on his six acres because the oil company insisted on protecting access.

“They told me they might not ever drill there, but they put the stake there just in case,” he said. “They told me I could not do anything there. I have no rights.”

Coyle said the company believes the Rodriguez property sits atop a potential oil well – although it is not currently scheduled for drilling.

Rodriguez, back at home, is unimpressed. “We’re just talking about a dog house,” he said. “I should be able to decide about that.”

 What Happens When Fracking Hits the Suburbs | Alternet.

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The Tea Party Mindset Still Dominates the GOP | Alternet

Posted by Michael B. Calyn in GOP, Politics on December 28, 2012


The Tea Party Mindset Still Dominates the GOP

Don’t be fooled by those who say it’s dying: The fiscal cliff impasse proves the Tea Party way of looking at the world is alive and well among Republicans.

December 27, 2012

 

Two stories that might seem to contradict each other ran in the New York Times this week. One declared the Tea Party movement “significantly weakened” in the wake of November’s elections and on its way to becoming “just another political faction.” The other noted that Senate Minority Leader Mitch McConnell might be concerned about a potential 2014 primary challenge – enough to filibuster any fiscal cliff plan that President Obama and Democrats draw up, no matter how modest.

The problem, of course, is that the Tea Party’s power resides in Republican primaries, where conservative purists wreaked considerable havoc in the past two election cycles. This included, famously, McConnell’s home state of Kentucky, where the minority leader’s protégé was crushed in a 2010 GOP Senate primary by Rand Paul. Now McConnell has to worry about suffering a similar fate in two years, especially if his handling of the current fiscal impasse evokes cries of treason from the base. How could this square with claims of fading clout for the Tea Party?

Actually, there’s a way. It just depends on how you understand the Tea Party.

Defined as a literal movement, with an active membership pressing a specific set of demands, the Tea Party absolutely is in decline. Tea Party events have become less crowded, less visible and less relevant to the national political conversation. As the Times story notes, the movement’s die-hards are embracing increasingly niche pet issues. The term “Tea Party” has come to feel very 2010.

But if you think of the Tea Party less as a movement and more as a mindset, it’s as strong and relevant as ever. As I wrote back in ’10, the Tea Party essentially gave a name to a phenomenon we’ve seen before in American politics – fierce, over-the-top resentment of and resistance to Democratic presidents by the right. It happened when Bill Clinton was president, it happened when Lyndon Johnson was president, it happened when John F. Kennedy was president. When a Democrat claims the White House, conservatives invariably convince themselves that he is a dangerous radical intent on destroying the country they know and love and mobilize to thwart him.

The twist in the Obama-era is that some of the conservative backlash has been directed inward. This is because the right needed a way to explain how a far-left anti-American ideologue like Obama could have won 53 percent of the popular vote and 365 electoral votes in 2008. What they settled on was an indictment of George W. Bush’s big government conservatism; the idea, basically, was that Bush had given their movement a bad name with his big spending and massive deficits, angering the masses and rendering them vulnerable to Obama’s deceptive charms. And the problem hadn’t just been Bush – it had been every Republican in office who’d abided his expansion of government, his deals with Democrats, his Wall Street bailout and all the rest.

Thus did the Tea Party movement represent a two-front war – one a conventional one against the Democratic president, and the other a new one against any “impure” Republicans. Besides a far-right ideology, the trait shared by most of the Tea Party candidates who have won high-profile primaries these past few years has been distance from what is perceived as the GOP establishment. Whether they identify with the Tea Party or not, conservative leaders, activists and voters have placed a real premium on ideological rigidity and outsider status; there’s no bigger sin than going to Washington and giving ground, even just an inch, to the Democrats.

It’s hard to look around right now and not conclude that the Republican Party is still largely in the grip of this mindset. Yes, since the election, there have been GOP voices – some of them genuinely surprising – speaking out in favor of giving President Obama the income tax rate hike that he’s looking for. But the January 1 deadline is now just days after and, crucially, there’s been no action. And it’s looking more and more like there won’t be.

This is the case even though Obama apparently indicated that he’d settle for only raising rates on income over $400,000, that he’d dial back his new revenue request by $400 billion, that he’d be OK with not extending the payroll tax holiday, and that he’d sign on a form of chained-CPI for Social Security benefits. Oh, and despite the fact that if nothing happens, all of the Bush tax rates will expire on January 1, with no changes triggered for Social Security or any safety net program. Despite all of this, Republicans in the House still said no to Obama last week, and then wouldn’t even allow Speaker John Boehner to bring a bill to the floor to simply extend the Bush rates for income under $1 million. And McConnell and the Senate GOP still seem unwilling to go any farther than their House counterparts.

This is exactly what the Tea Party mindset produces. For one thing, the House GOP conference (and to a lesser extent, the Senate GOP) contains no shortage of Tea Party true-believers – men and women who embody the spirit of the movement and have no qualms about going to war with party leadership if they believe their principles are at risk. And they are backed by a conservative information complex – media outlets and personalities, commentators, activists and interest group leaders – ready to cast them as heroes in any fight with “the establishment.”

All of this is more than enough to instill real fear in Republicans on Capitol Hill who aren’t true believers – but who do like their jobs and want to keep them. McConnell falls in this category. Boehner evidently does too. And so do many, many other Republicans who don’t want to look back and regret the day they cast a vote that ended their careers. The fact that the Tea Party, as a literal entity, seems to be dying is actually a sign of how successful it’s been. Its spirit now rules the Republican Party.

 The Tea Party Mindset Still Dominates the GOP | Alternet.

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Cagle Post – Political Cartoons & Commentary – » Newtown A Microcosm Of Government Failure

Posted by Michael B. Calyn in Government on December 27, 2012


DOUG PATTON

Newtown A Microcosm Of Government Failure

It has become axiomatic that when seconds count, the police are only minutes away. In the case of the first responders to the horrific school shooting in Newtown, Connecticut, it was 20 minutes, to be exact.

 

Nate Beeler / Columbus Dispatch

That’s the picture that is emerging from the 911 calls from that terrible day. Twenty minutes. I have tried in vain to imagine my 7-year-old grandson, his defenseless classmates and their equally defenseless teacher being shot to death one by one while waiting 20 minutes for police to arrive. It is a scenario too terrible to conjure in my mind. To imagine local law enforcement personnel taking a full one-third of an hour to respond to such a monstrous event is infuriating. And yet, there it is. Those who wish to protect themselves and their loved ones in almost any situation should not depend on government. How many times have we seen it before?

On September 11, 2001, government failed to protect the unsuspecting victims on those four airplanes, as well as those on the ground. On Flight 93, it was courageous passengers, taking matters into their own hands, who stopped those Islamist monsters from making that day even more infamous.

In September 2005, government — federal, state and local — completely failed the people of New Orleans when Hurricane Katrina flooded the city’s poorest section. Those who were willing and able to take care of themselves and their families were spared. Many of those who counted on government simply perished.

Even the attack on the U.S. consulate in Benghazi, Libya, last September, was a case study in brave volunteers, not government — especially not this government — making a difference.

And in every mass shooting, in every school or other public place, in every corner of this country, government has betrayed the very people it is sworn to protect, usually by declaring a “gun-free zone” or some other absurd control on the right of private citizens to render protection for themselves, their families and their neighbors.

On October 16, 1991, in Killeen, Texas, an assailant drove his pickup truck through the front window of the Luby’s Cafeteria. He then shot 50 people, killing 23 of them, before turning the gun on himself. Two of those victims were the elderly parents of Suzanna Hupp, whose revolver was useless to her because it was 100 feet away in the glove compartment of her car. Hupp later was elected to the Texas Legislature on a platform of allowing Texans to carry concealed handguns, legislation she successfully pushed through and which then-Governor George W. Bush signed into law.

On April 20, 1999, in Littleton, Colorado, two misfit high school students decided to murder as many of their teachers and classmates as possible. Their subsequent rampage — again carried out in gun-free zone — left 13 innocent victims dead.

On April 16, 2007, at Virginia Polytechnic Institute (Virginia Tech), a lone gunman shot and killed 32 people, wounding 17 others. Another school, another gun-free zone.

A few months later, just before Christmas, on December 5, 2007, in Omaha, Nebraska, a 19-year-old loner walked into the Von Maur department store at the Westroads Shopping Center and murdered eight innocent shoppers. As I wrote in a column at the time, “This individual looked at the ‘no concealed weapons’ sign and read, ‘Murderers welcome here. Please come in and shoot as many people as you like. No one here is capable of stopping you. Even our mall security officers are not armed.’”

January 8, 2011, at a Tucson, Arizona, supermarket, 6 people were murdered and 13 others wounded, including Congresswoman Gabrielle Giffords, who miraculously survived a bullet through her brain.

July 20, 2012, Aurora, Colorado, in a movie theater that does not allow law-abiding citizens to carry their licensed, concealed firearms, 70 people were shot, 12 of them fatally, by a single shooter.

And now, most recently, we have Sandy Hook elementary school in Newtown, Connecticut, with its horrendous toll of 26 dead — 20 of them 6 and 7-year-old children. As usual, no one there was allowed the tools to protect them. One of the teachers reportedly huddled with her students in hiding and assured them, “The bad guys are here now. We just have to wait for the good guys to get here.”

Sadly, the good guys didn’t arrive for 20 minutes.

 Cagle Post – Political Cartoons & Commentary – » Newtown A Microcosm Of Government Failure.

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Search for Way Through Fiscal Impasse Turns to the Senate – NYTimes.com

Posted by Michael B. Calyn in GOP, Government, Politics on December 24, 2012


Search for Way Through Fiscal Impasse Turns to the Senate

Joshua Roberts/Reuters

Democratic leaders say they will move ahead on a bill only if the Senate Republican leader, Mitch McConnell, center, assures them that it will not be filibustered.

By JONATHAN WEISMAN

Published: December 23, 2012 

 

WASHINGTON — With little more than a week for lawmakers to avert huge tax increases and spending cuts, attention is turning from the gridlocked House to the Senate, where some Republicans on Sunday endorsed President Obama’s call for a partial deal to insulate most Americans from the tax increases but defer a resolution on spending.

Senators Kay Bailey Hutchison of Texas and Johnny Isakson of Georgia, both Republicans, implored Senate leaders to reach an accommodation with Mr. Obama when Congress returns on Thursday, even if that meant that taxes would go up for those with high incomes and that spending cuts would be put off.

Mrs. Hutchison, appearing on the CBS program “Face the Nation,” said the tax cuts signed into law by President George W. Bush should be extended “at a reasonable salary level.”

“We can’t let taxes go up on working people in this country,” she said, backing Mr. Obama’s calls for a stripped-down temporary measure. “It is going to be a patch because, in four days, we can’t solve everything.”

Speaker John A. Boehner’s failed attempt on Thursday to attract enough Republican support in the House for legislation that would have prevented tax increases on income below $1 million left little chance for a “grand bargain” on deficit reduction.

It also shifted the action to the Senate as the last hope to stop more than half a trillion dollars in tax increases and across-the-board spending cuts from kicking in on Jan. 1. The president urged senators to take up legislation extending the Bush-era tax cuts on income under $250,000 and preventing the expiration of unemployment benefits, while delaying the defense and domestic spending cuts to allow negotiations on a deficit deal continue.

“The fact that the House Republicans spent a week wasting time we didn’t have has greatly exacerbated the problem,” said Dan Pfeiffer, Mr. Obama’s communications director.

The hope is that the less polarized Senate will be different from the House. It is run by Democrats and includes several Republicans who are openly backing a deal.

“The president’s statement is right,” Mr. Isakson said Sunday on the ABC program “This Week.” “No one wants taxes to go up on the middle class. I don’t want them to go up on anybody, but I’m not in the majority in the United States Senate, and he’s the president of the United States.”

“The truth of the matter is, if we do fall off the cliff after the president is inaugurated, he’ll come back, propose just what he proposed yesterday in leaving Washington, and we’ll end up adopting it,” Mr. Isakson continued. “But why should we put the markets in such turmoil and the people in such misunderstanding or lack of confidence? Why not go ahead and act now?”

Democratic leaders say they will move forward on legislation this week only if Senator Mitch McConnell of Kentucky, the Republican leader, can assure them that it will not be filibustered and that once it is passed Mr. Boehner will bring it to a vote in the House.

Mr. McConnell has played the role of Congressional deal closer before. Last year, he engineered a way to raise the nation’s statutory borrowing limit that satisfied Republicans and Democrats alike. He also threw his weight behind an extension of the expiring two-percentage-point cut in the payroll tax, even after House Republicans tried to block it.

But in this case, neither he nor the junior members of his leadership have given any indication that they will intervene.

“It’s hard to overstate how little is going on,” said a senior Democratic leadership aide in the Senate, indicating what most lawmakers say in private: the country is likely to miss the Jan. 1 deadline.

Investors are anticipating a turbulent week in the markets if the White House and Congress continue their standoff. Last Friday, the Standard & Poor’s 500-stock index fell nearly 1 percent as pessimism mounted over the prospect of any deal being reached.

Republican leaders in both chambers of Congress appear stymied by a conservative wing that will not tolerate a vote on legislation that even tacitly allows taxes to rise. Don Stewart, a spokesman for Mr. McConnell, said the minority leader could not declare by fiat that a bill could be presented for a simple majority vote with no threat of a filibuster. That would require the consent of every Republican, and Mr. Stewart gave no indication that Mr. McConnell would seek it.

Asked if Republicans might filibuster the president’s backup plan, Senator John Barrasso of Wyoming, a member of the Republican leadership, said on “Fox News Sunday”: “I just don’t think this is going to solve the problems — it actually doesn’t solve the problems. We have a spending problem in this country.”

Besides, Mr. Stewart said, Democrats have yet to detail the legislation they want a vote on. The Senate passed legislation in July to extend expiring income tax rates on income under $250,000, but divided Democrats could not agree on a new level for the estate tax, which is also scheduled to rise in January, nor did they include a provision to stave off $100 billion in across-the-board cuts to defense and domestic programs next year.

Mr. Obama, speaking to reporters Friday, left critical details out of his description of the plan he wants Congress to pass. Although he favors allowing the estate tax rate of 35 percent on inheritances over $5 million to rise to 45 percent on estate values over $3.5 million, for example, he did not say how such taxes should be treated as part of his stopgap fiscal plan. If nothing is done, the estate tax will jump to the Clinton-era level, 55 percent, on estate values over $1 million.

Nor did the president say what he wanted to do about expired business tax provisions, like the research and development tax credit, which is scheduled to disappear on Jan. 1. He gave no instructions about a long-delayed law that, absent Congressional action this week, would sharply cut reimbursements for physicians treating Medicare patients, starting next month.

“What is it, exactly, that we’re supposed to respond to or work with?” Mr. Stewart said. Referring to the Senate majority leader, Harry Reid of Nevada, Mr. Stewart continued: “Reid is the majority leader. Maybe for once he could propose something that he actually thinks could pass.”

The impending cuts were set in motion last year when the Budget Control Act ended an impasse over raising the nation’s borrowing limit with a deal designed to hurt both parties if they did not strike an agreement later on. A committee came up with at least $1.2 trillion in cuts over 10 years that would come automatically, half to national security and half to domestic programs.

The measure that Mr. Obama and Democratic leaders are considering would contain all the provisions of a tax bill that the Senate passed in July, according to a Democrat familiar with the discussions. That bill included an adjustment to the alternative minimum tax — a parallel income tax that is designed to make sure the affluent do not escape taxation but that is increasingly hitting the middle class — as well as several tax credits for middle- and low-income workers that are also due to expire.

Both Mr. Boehner and Mr. McConnell are dealing with rising pressure from the right. The conservative Web site Breitbart.com stoked passions in conservative circles when it reported that a handful of Republicans were considering a challenge to Mr. Boehner’s speakership when the House votes on Jan. 3 to elect a speaker for the 113th Congress. Boehner critics took to Twitter to keep up the pressure on him not to return to negotiations with Mr. Obama.

With Mr. McConnell’s own re-election bid coming in 2014, Democrats are worried that he will do nothing to shift the anger onto himself — especially if the speaker has no intention of bringing a Senate-passed fiscal bill to the floor before the end of the year.

“The ball is not moving along,” said Senator Bob Corker, Republican of Tennessee.

 Search for Way Through Fiscal Impasse Turns to the Senate – NYTimes.com.

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Still Bitter About Election, Republican Opposition Unwilling to Compromise with President – NYTimes.com

Posted by Michael B. Calyn in GOP, Politics on December 22, 2012


In Taxes, Guns and Cabinet, Gridlock Grips the Capital

Luke Sharrett for The New York Times

President Obama issues a statement on the fiscal negotiations on Friday.

By MICHAEL D. SHEAR

Published: December 21, 2012

 

WASHINGTON — If Friday’s memorial service for one of this country’s long-serving senators was a somber recollection of a bipartisan era that once was, the rest of the day was a frenetic reminder of the political gridlock that now grips the capital.

At the National Cathedral, the nation’s political leaders eulogized Senator Daniel K. Inouye of Hawaii, who died this week at 88 after more than 50 years in Congress. President Obama said he learned from Mr. Inouye “how our democracy is supposed to work.”

Across town, democracy was, at best, showing its gritty side as it ground along angrily, noisily and slowly: A weary Speaker John A. Boehner admitted failure in his efforts to avert a fiscal crisis with a bill to increase taxes on millionaires but asserted that his job was not at risk; a top National Rifle Association official bluntly challenged Congress to embrace guns at schools, not control them; and Mr. Obama bowed to the reality that Republicans had blocked his first choice to be the next secretary of state.

Though it has been 45 days since voters emphatically reaffirmed their faith in Mr. Obama, the time since then has shown the president’s power to be severely constrained by a Republican opposition that is bitter about its losses, unmoved by Mr. Obama’s victory and unwilling to compromise on social policy, economics or foreign affairs.

“The stars are all aligning the wrong way in terms of working together,” said Peter Wehner, a former top White House aide to President George W. Bush. “Right now, the political system is not up to the moment and the challenges that we face.”

House Republicans argue that voters handed their members a mandate as well, granting the party control of the House for another two years and with it the right to stick to their own views, even when they clash strongly with the president’s.

And many Republicans remember well when the tables were turned. After Mr. Bush’s re-election in 2004, Democrats eagerly thwarted his push for privatization ofSocial Security, hobbling Mr. Bush’s domestic agenda in the first year of his second term.

New polls suggest that Mr. Obama’s popularity has surged to its highest point since he announced the killing of Osama bin Laden. In the latest CBS News survey, the president’s job approval rating was at 57 percent.

But taken together, events suggest that even that improvement in the polls has done little to deliver the president the kind of clear authority to enact his policies that voters seemed to say they wanted during the election.

Even some of the president’s closest advisers said they were surprised by the ferocity of the Republican opposition.

“It’s kind of a stunning thing to watch the way this has unfolded, at least to date,” said David Axelrod, one of Mr. Obama’s longtime advisers. “The question is, how do you break free from these strident voices?”

Friday’s wrangling crystalized the challenges that Mr. Obama faces as he prepares to begin a second term next month.

In Mr. Boehner, the president has a potential deal-making partner who is unable to rally House Republicans behind his own plans, much less any agreement he might cut with Mr. Obama. In a news conference on Friday morning, Mr. Boehner essentially admitted he was running out of ideas to avert big tax increases and spending cuts early next year.

“How we get there,” Mr. Boehner told reporters, “God only knows.”

Just minutes later, officials with the National Rifle Association made clear what House Republicans had been whispering all week: The president’s call for gun control in the wake of the Connecticut shooting is likely to run into tremendous opposition.

Wayne LaPierre, the executive vice president of the firearm group, made clear the N.R.A. would not support the president’s call for gun control, recommending instead a “school shield” program of armed security guards at the nation’s schools as well as a national database that could track the mentally ill.

At the same time, Mr. Obama officially named Senator John Kerry of Massachusetts as his choice to lead the State Department — a decision the president was forced to make after Republicans effectively blocked his preferred choice, Susan E. Rice, the ambassador to the United Nations.

Ms. Rice,  a longtime confidante of Mr. Obama’s, was never formally nominated, but it was no secret inside the White House that the president would have liked her to succeed Hillary Rodham Clinton early next year. But even on the heels of his electoral victory, Mr. Obama was unable to overcome Republican opposition — led by Senator John McCain, the man he defeated for the presidency in 2008 — to her nomination.

There are still 10 days left in which Mr. Obama might reach some sort of arrangement with Congress on averting a fiscal crisis that some predict could plunge the nation back into recession.

In an evening news briefing, Mr. Obama proposed a scaled-back deal that might avert fiscal crisis while putting off the major philosophical arguments for another day. He said he hoped lawmakers could cool off, “drink some eggnog, have some Christmas cookies and sing some Christmas carols” before coming back to Washington.

“Now is not the time for more self-inflicted wounds,” Mr. Obama pleaded as he left town for a Hawaii holiday vacation. “Certainly not those coming from Washington.”

In another 31 days, Mr. Obama will deliver his second Inaugural Address, providing him the opportunity to make his case to the American public on the direction he wants to take them in a second term. A few weeks after that, he will give his State of the Union address, which he has already promised to use in part as a call for new gun control laws.

Tom Daschle, a former Democratic majority leader in the Senate, said he feared Washington would remain paralyzed on taxes and other issues until the country truly faces a crisis.

“I worry that it’s going to take that kind of a condition to bring people to the reality that they can’t mess around here anymore,” Mr. Daschle said.

On Friday, Mr. Obama was more hopeful.

“This is something within our capacity to solve,” he insisted, even as he left Washington without even the outlines of a deal in place.

 Still Bitter About Election, Republican Opposition Unwilling to Compromise with President – NYTimes.com.

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The Liberation of General Motors – NYTimes.com

Posted by Michael B. Calyn in Economics, Government, Opinion, Perspective on December 21, 2012


The Liberation of General Motors

By STEVEN RATTNER

Steven Rattner

Steven Rattneron

 

Like Willy the whale, General Motors has finally been freed – or nearly so.

Today’s announcement that the Treasury Department had agreed on a process to extricate the government from its ownership stake in G.M., the world’s largest automaker, is welcome news.

For General Motors, the separation will conclusively remove the appellation of “government motors,” a stigma that the company had argued affected the buying decisions of a meaningful segment of consumers.

The divorce will ultimately also liberate G.M. from a number of government-imposed restrictions, importantly including those relating to executive compensation. These restrictions adversely affected G.M.’s ability to recruit and retain talent. Now, compensation decisions will be made by the company’s board of directors, just as they are in every other public company in America.

From Washington’s point of view, divesting its remaining shares will end an uncomfortable and distinctly un-American period of government ownership in a major industrial company.

The only alternative to government stepping in would have been for the companies to close their doors, terminate all their workers and liquidate.

Neither the George W. Bush nor the Obama administrations volunteered to bail out G.M., Chrysler and other parts of the auto sector. Both subscribed firmly to the longstanding American principle that government should resolutely avoid these kinds of interventions, particularly in the industrial sector.

However, in this case, that was simply not possible, as Mr. Bush and Mr. Obama both concluded. I and the other members of the Obama administration’s auto task force determined that the industry’s crisis was caused not only by the financial and economic meltdown but, equally, by poor management that had run these American icons into the ground and exhausted their cash resources.

We were faced with a classic market failure: Not a penny of private capital was willing to provide the financing essential for these companies to keep running. Those (like Mitt Romney) who contend that G.M. and Chrysler could have been restructured without government involvement simply don’t understand the facts.

The only alternative to government stepping in would have been for the companies to close their doors, terminate all their workers and liquidate. That would have led to huge failures and layoffs among the suppliers. Even Ford would have had to shut down, at least for a time, because of the unavailability of parts.

Here’s another important lesson of the auto rescue: It would not have been possible without the existence of the much-hated $700 billion Troubled Asset Relief Program.

Without TARP, we could not have provided the $82 billion to these companies without Congressional approval. And given the dysfunction of Congress, I don’t believe there was any chance that the legislature would have acted within the few weeks that we had before the companies would have collapsed.

In a perfect world, I would not be a seller of G.M. stock at this moment. For one thing, the company is still completing the reworking of its sluggish management processes in order to achieve faster and better decisions and lower costs.

For another, G.M.’s financial problems slowed its development of new products during 2008 and 2009. Now, a passel of shiny new models offering great promise is about to hit showrooms.

And in my view, G.M. stock remains undervalued, trading at about 7 times its projected 2013 earnings, compared with nearly 13 for the stock market as whole.

But as my former boss in the White House, Lawrence H. Summers, kept reminding us in 2009, this intervention needed to be the opposite of Vietnam: We wanted to have as small a footprint as possible while the government was a shareholder and to get out as quickly as practicable.

While the government still retains (temporarily) a majority stake in Ally, G.M.’s former finance arm (formerly known as GMAC), the scorecard for the auto rescue is nearly complete.

Of the $82 billion that the two administrations pumped into the auto sector, Treasury is likely to recover all but about $14 billion.

No doubt, bailout haters will focus on this loss of taxpayer money. But remember two key points:

First, the $17.4 billion initial round of bridge loans that was provided at the end of 2008 was necessary only because GM and Chrysler had been utterly derelict in not preparing for restructurings through bankruptcy that were clearly inevitable. G.M., in particular, wallowed in an irresponsible state of denial. Had the companies been properly prepared, the loss of that $17.4 billion could have been avoided.

Second, for $14 billion – 0.4 percent of the government’s annual expenditures – more than a million jobs were saved at a time when unemployment in the Midwest was well above 10 percent.

The auto industry has not only survived but it is flourishing. Car sales, which had sunk as low as 10.4 million in 2009, are now running at an annual rate of more than 15 million. As many as 250,000 new workers have been added. Disastrous past industry practices – from bloated inventories to excessive sales incentives – have been curbed. As a result, G.M. earn more in 2011 than in any year in its 104-year history.

Finally, let’s keep well in mind the most important lesson of the auto rescue: While government should stay away from the private sector as much as possible, markets do occasionally fail, and when they do government can play a constructive role, as it did in the case of the auto rescue.

 The Liberation of General Motors – NYTimes.com.

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Ruth Marcus: The shifting line on tax cuts – The Washington Post

Posted by Michael B. Calyn in Opinion, Perspective on December 8, 2012


Ruth Marcus

Ruth Marcus

Opinion Writer

Ruth Marcus: The shifting line on tax cuts

By Ruth Marcus, Published: December 4

Memories are short, which is lucky for politicians. Consider the current debate over letting the Bush tax cuts for the wealthy expire, and the largely forgotten rationale for cutting taxes in the first place. 

Hint: It wasn’t because rates were too high. It was because the surplus was too big.

Yes, too big.

President George W. Bush laid out this reasoning in his first address to Congress, in February 2001. “Many of you have talked about the need to pay down our national debt. I listened, and I agree,” he said, vowing to eliminate $2 trillion in debt over the next decade.

Likewise, he said, the nation, like “any prudent family,” should have a “contingency fund” for emergencies. And so, Bush assured the nation, he would set aside another sum, nearly $1 trillion over 10 years.

“That is 1 trillion additional reasons,” he said, “you can feel comfortable supporting this budget.”

Even with that rainy-day fund, and the budget growing at a comfortable 4 percent, Bush argued, “we still have money left over” for a tax cut.

“The people of America have been overcharged,” Bush proclaimed, “and on their behalf, I am here asking for a refund.”

Smart people in both parties understood, even then, that the projected surplus was uncertain; that the rosy estimates did not adequately account for the long-term needs of Medicare and Social Security; and that the true cost of the tax cut, obscured through budget gimmickry, was greater than advertised. They were right.

As it turned out, the people of America — in particular, the rich people of America — hadn’t been overcharged, they were undercharged. They received an unaffordable tax cut premised on the false notion of affordability.

Don’t take it from me, take it from Arizona Republican Sen. John McCain — that is, McCain circa 2001 and 2003.

“I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us,” McCain said in 2001.

Two years later, when the surplus had evaporated and Bush was pressing to accelerate and expand tax cuts to help the faltering economy, McCain said more benefits for the wealthy would be “irresponsible” at a time of “rising national debt.”

The deficit that year was $378 billion. What once sounded scary now seems quaint.

Today, the argument against raising top rates comes down to a tired and self-contradictory combination: First, rates can’t be allowed to rise now, with economic growth lagging. Second, rates can’t be allowed to rise ever, because of the supposed impact on — all together now — small-business job creators.

The first argument is not persuasive because the economic drag of higher rates on the wealthiest taxpayers is far less than the impact on the middle class. The Congressional Budget Office estimates that raising top tax brackets would lower growth next year by one-tenth of a percentage point, compared to a 1.3-percentage-point hit if middle-class taxes rose.

The second argument, about small business, is equally unconvincing. Despite the bipartisan idolizing of small business, it is not the engine of job creation. Start-up businesses are — at least the sliver of those that succeed.

Even if small businesses were the key to job growth, most — fewer than 3 percent — would be unaffected by an increase in top rates. Republicans respond that about half of income earned by small businesses goes to those in the top two brackets. But this is because the tax code’s strange notion of business income isn’t limited to your neighborhood dry cleaner.

Rather, it sweeps in all taxpayers with business income, no matter how small a share of earnings, along with lawyers or hedge fund managers whose firms are organized as partnerships.

Under this definition, according to the Center on Budget and Policy Priorities, 237 of the wealthiest 400 taxpayers, with incomes averaging more than $200 million, would be considered small-business owners. So would President Obama, because he receives book royalties.

These upper-bracket “small businesses” are not making hiring decisions based on tax rates. Most don’t employ anyone. According to the Treasury Department, less than 6 percent of income to taxpayers in the top two brackets went to small businesses that employ people.

Nearly a dozen years and trillions of dollars in debt since the Bush tax cuts, no one invokes the now-vanished surplus. But proponents argue with equal vigor that rates cannot be allowed to rise.

The justification shifts, yet the bottom line remains the same.

 Ruth Marcus: The shifting line on tax cuts – The Washington Post.

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Cagle Post – Political Cartoons & Commentary – » It’s Time to Upgrade Our Presidential Elections

Posted by Michael B. Calyn in Opinion, Perspective, Politics on November 24, 2012


TINA DUPUY

It’s Time to Upgrade Our Presidential Elections

 

 

On election night 2012 I was in DC doing the rounds of various media outlets. At one stop I found myself in a small cramped office of foreign journalists reporting to countries all over Europe and Asia, some as far as Korea. The conversations in the unventilated suite defaulted into election night chatter: “Two-seventy is impossible without Wisconsin.” “Florida has 29 electrical votes, but their demographics are changing.” “If Romney wins Ohio, he still needs Pennsylvania, but if Obama wins Ohio he doesn’t need Pennsylvania.”

Dave Granlund / PoliticalCartoons.com

At one point in the evening someone with a British accent turned to me and said: “Your elections are way too complicated.”

It occurred to me that I was in a room full of people reporting to countries far older than ours, all with far (far) younger democracies. The U.S. is still a young country with the oldest constitution still in use. And this juxtaposition is made painfully apparent on Election Night.

The U.S. Constitution specifies an indirect election of the president. This was a compromise between Congress electing the executive office-holder and direct popular vote. A popular vote would mean the sparsely populated (think slave states) wouldn’t get the same representation as all the white male land owners states. So the Electoral College was settled upon. Which is why today Alaska has three electoral votes even though it has less than the population of Staten Island’s – it’s because of slavery.

It’s also why you’ve been dutifully voting since the second you turned 18 (provided you’re under 54 years old) and you’ve never actually directly voted for the leader of the free world.

Does this now make sense some 200 years after ratification? Now that we no longer have a slave-based economy and the franchise has been extended to women, the answer is, “No.” It now means Ohio with its 18 electoral votes gets to be the belle of the ball every four years and states like California and New York with their combined 84 get largely ignored by the two national candidates. It means your vote in Florida has more value than your cousin’s vote in Wyoming.

But it really means our system is overly complicated, fragmented and largely viewed with suspicion by voters. Because the way we vote for a president is antiquated and convolution it leads to distrust. Local lawmakers can disenfranchise voters in national elections as we saw with the arbitrary voter ID laws in battleground states. There were concerns (think hysteria) that voting machines owned by Mitt Romney’s son in Ohio would deliver the election to the Republicans. The group Anonymous (or someone claiming to be Anonymous) took credit for thwarting Karl Rove’s alleged attempt at stealing the election. Then on Fox News the panic was over voter fraud.

There were long lines, lost ballots and chaos on Election Day. Different voting precincts with different rules and sometimes different philosophies on who should cast their ballots we’re highlighted in the national media. What it all leads to is a voting result which have a whisper of illegitimacy. There’s a lingering doubt as to if the elections were fair and therefore the result valid. And it’s partisan: The Left will say that of George Bush stole the election, the Right about Obama.

We could solve this issue by modernizing elections. Not only tossing out the Electoral College and letting Americans directly vote for a president, but making the requirements uniform (i.e. universal suffrage). This would make voting in Oregon just as relevant as a voting in Cuyahoga County.

A census is constitutionally required every ten years and we don’t leave it up to each state to compile it. But we leave our national elections up to (in some cases) the county officials?! Federalize federal elections. We have national standards for schools and milk safety but we can’t vote the same way in every state?

We can change this. And there’s no better time than three years and eleven months before the next presidential election begins.

 Cagle Post – Political Cartoons & Commentary – » It’s Time to Upgrade Our Presidential Elections.

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News from The Associated Press

Posted by Michael B. Calyn in Politics on November 18, 2012


DEMOCRATS TOUGHEN STANCE ON TRIMMING BENEFITS

BY ANDREW TAYLOR 
ASSOCIATED PRESS

AP Photo
AP Photo/Jacquelyn Martin

 

 


Just last year, Obama and top Democrats were willing during budget negotiations with Republicans to take politically risky steps such as reducing the annual inflation adjustment to Social Security and raising the eligibility age for Medicare.WASHINGTON (AP) — President Barack Obama’s re-election has stiffened Democrats’ spine against cutting popular benefit programs such as Medicare and Social Security. Their new resolve could become as big a hurdle to a deal that would skirt crippling tax increases and spending cuts in January as Republicans’ resistance to raising tax rates on the wealthy.

Now, with new leverage from Obama’s big election victory and a playing field for negotiations that is more favorable in other ways, too, Senate Majority Leader Harry Reid and other Democrats are taking a harder line.

“I’ve made it very clear. I’ve told anyone that will listen, including everyone in the White House, including the president, that I am not going to be part of having Social Security as part of these talks relating to this deficit,” Reid, D-Nev., told reporters.

Reid’s edict would appear to take a key proposal off the table as an ingredient for a deal on avoiding the “fiscal cliff,” the year-end combination of expiring President George W. Bush-era tax cuts and harsh across-the-board spending cuts.

At issue is the inflation adjustment used by the government to calculate cost-of-living adjustments for Social Security and other federal programs. A less generous inflation measure that takes into account consumers finding alternatives when prices go up could reduce deficits by more than $200 billion over the next decade.

It’s a no-brainer for many budget wonks because it means gradual, less noticeable curbs to the growth of benefits. It also means about $70 billion more tax revenues over 10 years because automatic rises in tax brackets to account for inflation would be smaller.

That new inflation index, known as chained Consumer Price Index, is a magic elixir for budget writers. But it’s anathema to many liberals, who say that moving to the new cost-of-living measure could cut average retiree benefits by about $600 a year a decade after taking effect and mean a cut of about $1,000 a year after 20 years.

“Think about it this way. You’re standing on the deck of a boat and you’re in very deep water and they want you to swim, but they’re going to put a log chain around your ankle,” Sen. Tom Harkin, D-Iowa, told a group of liberal activists assembled for a rally Thursday in a Senate hearing room. “That’s chained CPI.”

Sixteen months ago, Obama’s White House took a different view during talks with House Speaker John Boehner, R-Ohio, on a possible budget deal. A White House draft offer by top Obama aide Rob Nabors, made public by Washington Post author Bob Woodward, proposed several controversial changes to benefit programs, including the lower inflation adjustment, raising the eligibility age for Medicare and higher Medicare premiums.

Those negotiations, however, were conducted on a playing field that favored Republicans. It was less than a year after Obama’s self-described “shellacking” in the 2010 elections and the president was desperate to win an increase in the government’s borrowing cap and avoid a government default on its debt that should shatter financial markets. Also, Obama still faced re-election in 2012.

Now conditions favor Obama.

He decisively won re-election and Republicans seem fearful of being tagged with the blame if an impasse results in the government going over the fiscal cliff. Obama and Democrats already are portraying Republicans as hostage-takers willing let tax rates rise on everyone if the lower Bush-era tax rates are not also extended for the top 2 percent to 3 percent of earners – those with incomes above $200,000 for individuals and $250,000 for joint filers.

The new balance of power means that Democrats who once would have acquiesced reluctantly to GOP demands for stiff benefit cuts are now balking at ideas such as chained CPI or an increase in the Medicare retirement age, as well as demanding GOP concessions to higher taxes.

“The price for that kind of thing has gone up,” said a senior House Democrat who required anonymity to speak frankly on party strategy. “Negotiations depend on the situation. No one should expect to get the same kind of deal.”

Republicans have gotten the message, but insist that higher tax revenues be paired with cuts to rapidly growing programs such as Medicare and the Medicaid health care program for the poor and disabled. These programs are called “entitlements” because eligibility is based on meeting criteria such as age or income.

“Washington’s problem isn’t that it taxes too little, but that it spends too much,” said Senate Minority Leader Mitch McConnell, R-Ky. “But in a good-faith effort to make progress on boosting the economy and government’s long-term solvency, Republicans like me have said for more than a year now that we’re open to new revenue in exchange for meaningful reforms to the entitlement programs that are the primary drivers of our debt.”

New Hampshire Sen. Kelly Ayotte said in the GOP’s weekly radio address Saturday that “any effort to address our fiscal crisis without including entitlement reform can’t be taken seriously.”

No way, say many liberals.

“We’re going to send a loud message to the leadership in the House, in the Senate, and President Obama: `Do not cut Social Security, do not cut Medicare, do not cut Medicaid,’” said Vermont Sen. Bernie Sanders, a self-declared socialist who aligns with Democrats. “Every now and then elections have consequences. We won.”

Republicans and even some Obama allies worry that liberal demands will make it harder for the president to seal a bargain with the GOP.

Rep. Mike Quigley, D-Ill., said Obama has the same problem with his party’s liberal base that Boehner has with some conservative Republicans. “Boehner has a disproportionate group of his folks skewing things too far out,” Quigley said, “and the president has equally the same sort of problems with people who are horribly unreasonable.”

 News from The Associated Press.

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