A fun way to raise a ceiling




A fun way to raise a ceiling

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Remember when Rahm Emanuel made that line about never letting “a good crisis go to waste,” or whatever? Man, Republicans were livid! “What kind of opportunistic monster uses a national crisis to push a political agenda,” they cried.

It was a simpler time. These days, exploiting a good crisis for political gain is pretty much all Washington does.

In the aftermath of Congress’ last-minute, sorta-kinda fiscal cliff resolution — which is to say, a modest tax hike on the rich coupled with a two-month-kick-down-the-road of everything else — the capital has shifted its obsessive focus (once again) to the looming horror of the debt ceiling. Sometime “between the middle of February and early March,” Congress either has to authorize itself to incur more debt to fund its various expensive wars, workers, and social programs or force the United States to default, and, in the words of President Obama, become a “deadbeat nation.”

Woah, watch who you’re calling a deadbeat, respond the Congressional Republicans. Many of them outright reject the premise that America is anywhere close to defaulting, and merely see the country’s imminent collision with the debt ceiling, as (to quote Homer) a crisitunity to pursue spending cuts.

Oh sure, if Congress can’t borrow any more cash the federal government might have to shut down for a while and force the Treasury Department to redirect all revenue towards debt interest payments and nothing else, but that’s the good part! A shutdown would only make the need for prioritizing cuts that much more self-evident, what with all those unpaid vets and grannies suddenly banging down the door.

And if you genuinely believe, as Republican do, that the only reason America keeps having debt-related crises in the first place is because of unsustainable spending, then why is some manner of tough love shock therapy not the obvious, long-term fix?

It was a line of argument that worked quite well for the GOP in the debt ceiling crisis of ’011, when Republican indifference over the threat of default freaked Obama and the Democrats into approving $917 billion in budget cuts and the horrible sequestration thing. In the aftermath, Speaker Boehner gloated that his side had won “98 percent of what we wanted,” so there was really no consequence for the GOP’s bad behaviour, if you want to call it that. When it came to negotiating, the Republicans played extreme hardball — even “took the country hostage,” if you like — but still won.

Now, the Democrat position has long held that spending cuts are useless as a debt-fighting strategy without a compensating increase in revenue — which is to say, tax hikes. But since the White House already persuaded Congress to pass those fiscal cliff tax increases earlier this month, their bargaining hand suddenly looks pretty empty. In response, Obama’s now dropped any pretence of wanting to haggle over policy at all, and is instead simply demanding a so-called “clean” ceiling raise without preconditions or compromises.

In a terse press conference on Monday, the President asserted bluntly that Congress “will pay its bills” and that endless back-and-forth with Republicans over spending cuts and whatnot is “not how we’re going to do it this time.” A few days earlier, leading Congressional Democrats including Senate majority leader Harry Reid, authored a letter advising the Prez to consider unilateral executive action to avoid default.

This was where that recent bout of goofy stories about the 14th amendment and trillion-dollar coins came from. Though the White House tried to downplay such rumours, their growing currency (ha) among liberal intellectuals and partisan proxies eventually evolved into something of a de facto negotiating position, and certainly helped create an impression among the general public that the Dems were willing to play their own gimmicky games to end the latest partisan game of chicken on their own terms.

And it must have worked, on some level. As I write, Politico has just announced that Speaker Boehner and Majority Leader Cantor have emerged from a Williamsburg GOP huddle session promising to pass a clean debt ceiling raise just like the President asked, with no cuts, nothing. But here’s the kicker — it will only last three months.

“We will authorize a three month temporary debt limit increase to give the Senate and House time to pass a budget,” said Cantor. And if they don’t pass one by May — which is to say, if the Democrats in the Senate don’t offer a proposal to rijigger all federal spending priorities in a way that pleases the Republican House — we’ll start the whole ceiling fun over again!

This, I suppose, is what passes for leadership in Washington these days. Crises aren’t ever averted, they’re merely delayed, usually as part of some calculated scheme to swallow pride in the short term in order to extract greater blackmailing power in the long.

Thanks to clever Republican politicking, the once-modest debt ceiling dilemma of aught-11 is now set to be the considerably more grandiose debt ceiling/budget, passage/sequestration cuts triple-decker Armageddon sandwich of 2013.

Never let a good crisis go to waste, indeed. Not when it has the potential to be a great crisis.

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^ 35 Comments...

  1. Colin Minich

    God I miss the days of the Rube Goldberg contraption…and really it's scary how applicable it is to modern day D.C. (assuming it wasn't like that 100 years ago).

    The GOP is buying itself time to restructure itself and if anything this is to be expected. They suffered insurmountable blows to their prestige, leverage, and credibility in DC and amongst Americans, only the fringe really clinging to them with sharpened claws. It really shouldn't come as a surprise, JJ, that Obama and the Dems are using the same old song and dance to get what they want. They saw how reaching across the aisle worked…it gave them Norquist, Palin, and the most ideologically unsound opposition we've seen since…well since 1860s Southern politicians. Obama's rather stagnant stance gets to me sometimes, but maybe it's just a sliver of optimism telling me that a.) he's learning that you can't reach across the aisle with people like Mitch McConnel and b.) patience MIGHT be a virtue no matter the crisis. Gen. Patton said something once about how he'd prefer a halfway decent plan executed now than a perfect plan executed never…but I think in politics and economy, it doesn't always apply.

  2. MJA

    As far as I'm concerned, the best part of this entire situation is that Mitch McConnell is only dragging his feet because he's running against Ashley Judd in 2014.

    No, really. Ashley Judd. Yes, *that* Ashley Judd.

    And she's actually polling quite well. Which puts McConnell in a real bind: he needs to run to the centre in order to keep Ashley Judd at bay, but he can't run to the centre because then he'll get primaried from the right. ("A hypothetical more conservative Republican" is actually polling quite well in his primary. If the tea party can land an actual flesh-and-blood candidate…)

    In other words, he has to shore up his right-wing bona fides, but in a way that won't annoy too many moderates and independents. And he clearly thinks this is the way to do it.

    All because of Ashley Judd.

  3. Patrick

    This type of politiking and brinksmanship is what disgusts me about American politics. No one is interested in the greater good, they're only interested in their personal good. Many things are grey, but some things aren't. I think the way wall street handled the previous deadline (ie they kind of ignored it) gave congress leeway to continue playing these games without repercussions. Unfortunately, 'wall street' and 'main street' work on two different economies. The former being almost completely fictional, and the latter being actually impacted by gov't decisions. This whole situation makes me sick. Maybe we should go to a 100% democratic system. Hell, we have the technology. We can rebuild it– better, faster, and stronger!

  4. Jake_Ackers

    Depends on what people think is the greater good. They won't even up the retirement age by 2-3 years. Even though people are living a decade and a half longer since Social Security first got passed.

  5. Jake_Ackers

    She is polling quite close in the general though. And no one seems to step up in the primary versus McConnell yet. If they find someone more conservative they might pull an upset in the primary. With that said, it is Kentucky. The moment they find a sound bite with her (Ashley Judd) sounding elitist and BAM!!, They paint her as another Hollywood carpetbagger. Plus she studied French in U of Kentucky. Not going to fly well down there with them folks. Especially her spat with Governor Palin about the caribou/wolves population control aka aerial wolf hunting.

  6. SES

    But *retirees* aren't living 15 years longer. In 1940, the average 65 year old man had 12.7 years left. In 2008 he had 17.2 years left. More workers are living to collect Social Security, though. In 1940, only 54% of 21 year old men lived to age 65. By 2008 it was around 80%.
    http://www.ssa.gov/history/lifeexpect.html http://www.ssa.gov/oact/STATS/table4c6.html

  7. @TheInvisibleDan

    If Obama is actually serious about not wanting the debt ceiling raise to be held hostage by spending cuts, then maybe he should agree to make a deal on the spending cuts (i.e. pass a budget for the first time in four years) BEFORE getting the debt ceiling raise.

  8. Beppo

    Off topic, but I love your work, JJ. You're less crazy than Ted Rall and less obsessed with the DC subway system than Tom Toles. Sometimes you even educate my dumb Yankee hinder about the Canadian political system and, for that, I'm grateful.

  9. Jake_Ackers

    Yah either way the system is having to pay out more. When before it would collect and payout less. And no one is going to do anything about it until SS just becomes pretty much another income tax.

  10. Jake_Ackers

    Great, give me negative points. Seriously? Did I say anything wrong? How in the world do you people think a Hollywood personality will fair in KENTUCKY? She is going to get slammed as an elitist. Doesn't mean I agree with it but that is a simple fact of how the campaign is going to turn out.

  11. MJA

    Maybe it's because you're basically just riffing on things you think you understand, as if that contributes anything to the discussion?

  12. Jake_Ackers

    Fair enough. I'll explain then how this affects things. I wasn't disagreeing with what you said. I was noting how the campaign will play out.

    The attacking her as an elitist will be an easy way for McConnell to get the right wing vote in Kentucky. They might not be voting for McConnell but they will definitely end up voting against Judd. Plus I'm sure McConnell brings a ton of pork back to Kentucky. It would be rather difficult for a state like Kentucky to give it up.

    Does he have to shift to the center a bit? Yes, but as a result of her being a Hollywood personality, he might have an advantage once the general starts. Thus allowing him to shift to the center for policy shake and negotiations but slamming Judd into order to get the right wing vote. If he plays his cards right, Judd might actually be a good opportunity for McConnell. He can reshape himself in Washington by moving to the center without worrying that much about losing an election. He will be winning on perception/campaign style and not have to worry about policy as much as. He would have if he faced a strong moderate Democratic least say State Senator or something of the sort.

    Overall if he has a easy time during the primary, McConnell might be willing to negotiate much more in DC than he would have otherwise. Like if it was a Democratic State Senator in the general. Maybe even successfully pressuring Boehner and some others as well.

  13. Colin Minich

    I think there are a good lot of us less crazy than Ted Rall. Rall is basically the fringe cartoonist we have to stomach nowadays since to him no politician is good and we should usher in the new days of complete socialism.

  14. Jake_Ackers

    Going on with what Patrick, SES and myself were saying. Obama said there aren't going to be steep spending cuts in his inaugural address. So Republicans give into the taxes but there won't be any cuts. This is what I am saying. And the people will applaud. We will never make the sacrifices needed to do the right thing. I'm not saying services need to be cut, but spending has to. Both from defense and social.

  15. Jake_Ackers

    Tbh, I think this is from a lack of either side having enough power to do anything. Back with Reagan and the Dems there were enough moderates. Today we are becoming more parliamentarian. It's easier when you have a majority but it hurts in a divided government.

    I see the situation as more akin to Gingrich and Clinton. One said needs to force the other but neither said is clever enough or strong enough to do it. It can be done but the GOP leaders are weak. And Obama is no Bill Clinton.

    They do have the McCains and Hagel of the world. However, going across the aisle got us McCain-Feingold, McCain-Kennedy and No Child Left Behind. It 's seems the only time they reach across the aisle is for a piece of legislation no one wants.

  16. Ozius

    As much as I am frustrated by a lot of the Republican refusal to cooperate with anything, as much as I disapprove of everything that's happening, as much as I'm fairly certain that this fiscal restraint is a political ploy rather than a solemn conviction, I think that the Republicans are don't what needs to be done. We can't spend. We can't keep spending like we do. We need to make the budget a priority, and we need to show people that our way of life is unsustainable. If we don't fight now, when will we fight? If we don't have these battles now, when will we have them?

  17. Patrick

    I think the issue with social security is that its invested at the rate of treasuries (historically around 3% return), since all social security funds actually purchase t-notesbills. Pensions *should* work (and private pensions often do) but the recurring government shortfalls APPEARS (please contradict me- im not positive on this) to not be an issue if funds were invested at a market rate of return (9% compounded over 30 years). The more pressing issue in terms of debt though (i think) is medicare. Im not sure on the history of it, but social security i know was meant to be temporary during the great depression… It was never meant to be viable long term.

  18. Patrick

    Also, please excuse the grammer, Im not on my computer

  19. Patrick

    We can have them when we can afford to have them. Now is not the time. This is the longest economic slump since the great depression, and many economists ( and i know as a financier im just their bastard cousin, but me too) agree that one of the key reasons the economy is still sluggish is because no one in congress can take action because they are blocked by the others. It doesnt even matter what the plan is– any unified plan followed to its end would have a better outcome than no plan being followed nowhere. The people have said that the majority agree with obama. I voted Romney, but if obama is the will of the people then how about we give him a chance to do his thing instead of blocking everything?

  20. Patrick

    The national debt is not as big of a deal as it appears. The govt benefits by carrying a debt (100k borrow today is worth less than 100k tomorrow), and we benefit by the debt as well (minimum rates of return on our money), so its not a matter of bringing it to zero, its a matter of how much debt should we have? How much of our taxes should be paid to debt service? (which dictates our maximum amount of debt). Should we reduce spending? It helps add buoyancy to the economy. Should we increase taxes? It discourages growth. So how do we increase demand without creating disincentives? By borrowing, then paying back when we have the money to do so. The people need confidence, but no single organization can make macro promises now (in the past the robber barrons could… They no longer exist). In their place is the govt and we need their action years ago, but now will work better than nthing. The debt issue should br solved by allowing for a surplus i. Good times and friggin paying the deficit down instead of being an idiot like bush and cutting taxes when we could have paid it down. (frustrated).

  21. Jake_Ackers

    Thumbs up Pat. You are correct on all counts. However, the only problem is that
    1) Gov't takes money out of SS. And
    2) It was meant to temp but it stayed like all gov't programs.
    3) It also was meant to be 1/3 of your retirement. Savings, investment/retirement plan, and SS. But everyone just counts on gov't and then complains.
    4) The retirement age was 62. And so was the average life expectancy. So half of the people paid but never used it. While now you retire at 65 and live until 77 or so.

    I will note SES's point above though. But still even with those figures you can see the problem. The program worked when many paid but few used it. Now its pretty much impossible and too many people rely on it.

    And yah Medicare and Medicaid will probably be a growing problem. Growing because they just keep adding more people to it. At least with SS its a simpler problem. Money coming in and going out. The health programs, you get new problems all the time. Diseases, old age, more people being including, doctors and hospital payments, regulations, etc. etc.

    It is kind of funny though. The left is so against you investing part of your SS in the stock market (so much for being pro-choice). Yet that is pretty much what the gov't has been doing. Gov't is investing it. The only safety net for SS is other people's money.

  22. Jake_Ackers

    True. Thumbs up. Problem is when Obama starts by saying no to spending cuts and Republicans already gave into taxes and the debt ceiling temporarily. And the Dems haven't passed a budget since they took over. Now the ball is in Obama's court. He is refusing to do the next step, cut spending on ALL fronts.

    Plus we have a President who had 2 years to do w/e he wanted. He spent money and only passed bills that had nothing to do with the direct dealing of the economy. Obama has had his time. Four years. For better or for worst. He had time. Clinton was able to do more with less. And Reagan was able to do more with worst.

    TBH, yes Obama won. But so did those Congressmen. This fight is what politicians bank their entire lives on. To get to Congress and put their career on the line for that key vote. Put it this way. Would you vote for a bill just because its popular even though you know it is fundamentally bad for the country? We don't have the money to spend as Obama and the Reps want. Heck, we don't have to money to spend on what we currently are spending. Even less so if we keep spending going (cause of interest) or increase it.

  23. Patrick

    God Jake, i hate to say it but not only do i understand where youre coming from but i know id stick to what i "know" as true no matter what. Ugh, all thispsychology… I hate hearing/facing that people arent evil but they are at odds because they disagree about fundamentals that are rediculously grey. They dont want us to fail… In fact its the complete opposite. Both people want us to succeed but believe eachothers methods will force failure… In your opinion, how do you think we could at least make progress towards a unified eonomic plan?

  24. Eric Stimson

    Is this just an attempt to cram as many news stories into one cartoon as you can?

  25. drs

    Market rate of return means market levels of risk. The point of SS to be riskless retirement money.

  26. drs

    The real problem is that even if you "care about the greater good", you may have to play the exact same games in order to get things done.

  27. Jake_Ackers

    Yah but the problem is the gov't does invest your money. Where does the return come from? It's either from a direct gov't investment or pulling it in from some other tax source.

  28. Jake_Ackers

    Yah I think we could. At the end of the day, the pressure will be too much for the politicians.

  29. Jake_Ackers

    True that. Problem beings with that we can't spend or even borrow because of our debt. Can't cut because of our debt. Only hope is to grow out of it.

  30. patrick

    Govt puts ss money into us treasuries, so while I got 20% last year, while ss got (wait for it…) <1. If people are using it as a primary retirement fund then it needs to be invested for growth… Like every other pension plan. Blackstone, fidelity, boa and chase all manage pension funds (~10 Tn combined)… And most of them are funded. The ones that aren't are the ones that, like the govt, chose to comingle funds, expecting tax revenues to increase with the economy to cover future paymens… FOREVER ! We really need to stop electing drug addicts and alcoholics, cuz that's the only reason I can thing of for a good amount of their decisions

  31. Jake_Ackers

    Aka that is the definition of a ponzi scheme. Then Rick Perry gets attacked for it.

  32. Karamelo Macchiato

    Obama have patience? It seems he has so eloquently got us in deeper debt with putting more pressure on the congress to fix the deficit. In his four years as tenor with four more to go, we undoubtedly become a demographic of commonality in which people purport themselves as staunch to Obama's stagnation. I guess the senate really screwed themselves over by letting this change all president woo the nation with his political campaign. It still fascinates me that the house even let the Obama care become some fruition the country could live for. I guess maybe I am truly thinking in a manner outdated by the contemporary times which define issues of people's rebellion towards big government. I guess its this reason we our lost on the great american prairies just looking for a burrow to fall along in to. I presume what still makes America obtuse is our established way of capitalism and the free market for one and all to liberate themselves on the grand old dream we conceived as our democratic country. I guess with all this piled up, the plus side is Obama will be gone in four years, the down side is,we are in for what dirty little scandal next?

  33. karamelo Machiatto

    The validation is keen. For the approach the politicians have taken thus far only leads us to the same circle of the never ending tail or tale,dare I say for whatever reason may come to mind. And since its these assertions that make us all human faults of our own devices,then to what is any good come of it. I know they try to place emphasis on key points,but its the redundancy that eludes me still of our government. No matter how you propose things to the house, the congress seem to keep a division with the senate, which is old news to most. And if the repeat of such things continually falls on deaf ears,whats the point to an election of officials? I guess being a corporate official is more luxurious than hearing peoples nonsense that isn't going to bring any gain.

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