Pelosi to GOP: ‘Take Yes for an Answer’ (via AP Video)
House Minority Leader Rep. Nancy Pelosi and House Minority Whip Rep. Steny Hoyer were among a group of Democrats who met with President Barack Obama at the White House Wednesday, the ninth day of the government shutdown. (Oct. 9)
End Game: John Boehner Doesn’t Even Have to Cave (via Moyers & Company)
Seven days into a government shutdown, and 9 days away from a potentially catastrophic breach of the nation’s debt limit, and the question everyone is asking is: who will blink first? The White House says that it absolutely will not negotiate over…
Republican Shutdown: Time Magazine’s False Equivalency (via LA Progressive)
Time magazine’s current issue has nice cover art referencing the Republicans’ government shutdown and their threat of defaulting on the national debt, but the featured article by Michael Scherer and Alex Altman replicates the same false equivalency…
All weekend, the conservative pivot on the shutdown-debt-ceiling-spittlepalooza was consistent and obvious. This is now no longer entirely about the beastly tyranny of Obamacare. Oh, no. This is now about federal spending and about the deficit. Never mind that the deficit is dropping, and that the Democrats are now pleading to return to a level of federal spending below that which even Paul Ryan recommended. The old scarecrows are all coming out in time for Halloween. Poor, befuddled John Cornyn tried to make the case on CBS yesterday. And, on ABC, castrato Speaker Of The House John Boehner made it plain that there would be no movement on his side regarding the debt ceiling unless he gets what he wants in a further reduction of federal spending, and that there would be no tax increases of any kind from his side. He even trotted out the single most threadbare argument of all — that the government should run its books like “an American family” does. (Sadly, this is a misbegotten trope to which even the president has resorted from time to time.) I am increasingly coming to believe that, for all the talk of how the conservatives have hurtled into a box canyon, it is the administration, bright people all, that may have been euchred into a situation that will truly damage it. After all, if the shutdown ended tomorrow, the sequester would still be in place. Austerity still would be the tacitly agreed upon program for both parties, and Paul Krugman likely still would be drinking before noon. The administration’s brilliant eleventy-dimensional chess in 2010 looks more and more like a case of being too smart by half. It created a new reality in which both sides decided that what a country barely out of a devastating recession really needed was some belt-tightening and some fiscal discipline. If the administration really believed that the conservative monkeyhouse elected in 2010 wasn’t going to be completely at home in this new reality, then somebody over there needs to be fired.
In the current political context, there was no reason for Jack Lew to go on television yesterday and utter the words “entitlement reform.” There should be memos circulating throughout the Executive branch to the effect that, in the current circumstances, anyone who goes about with “entitlement reform” on his lips, should be boiled in his own pudding, and buried with a stake of holly through his heart. (Scrooge is very much on my mind these days. I’m getting a little worried.) Jesus God, entitlement reform? Now? Who is this man negotiating for? There also was no reason for him to talk about “tax reform, closing loopholes,” without mentioning that what we really need is a higher top rate, and a financial-transaction tax, and a lot of other things that will make the Wall Street side of the Republican party howl.
Continue reading “The great sucker play”
Sadly, it’s now a rule of thumb that if you see it on 60 Minutes, it’s probably not true.
We learned early on in this economic Depression that some contracts are more sacred than others. We learned, for instance, how important it was to honor the $165 million in bonuses promised to AIG employees. (You remember, the same guys who labeled junk mortgage securities as sound investments because they were paid so much money to lie? Good times!) It was all about the rule of law:
LARRY SUMMERS: We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.
The government cannot just abrogate contracts. Remember that.
Let’s look at the sanctity of contracts in New Jersey, since blowhard Chris Christie is a presidential hopeful. His administration used accounting tricks to cover a $168 billion pension shortfall.
Continue reading “The sanctity of contracts: A comedy in two acts”
As I’ve been predicting, talk of the chained CPI is rising again as part of a budget deal. Remember, this also means a major tax hike for the working poor! Michael Hiltzik of the LA Times:
The chained CPI has risen to walk among us again in the muttering and jawboning around the government shutdown/debt limit standoff and the search for an exit. We’re hearing again about a “grand bargain” on the government deficit — never mind that the deficit is falling, not rising — that would trade, say, cuts in Social Security and Medicare and some kind of tax reform for an end to the government shutdown and an increase in the debt limit.
In other words, the average person gets a kick in the slats, and the politicians in Washington get to deliver it. That’s some bargain.
A few things to remember about the chained CPI, which I’ve written about here, here, and here. (If you’re going to kill a zombie, you have to keep coming at it.)
First, its vaunted accuracy is a myth. An index like the CPI can’t be judged more or less accurate, because it measures only what it’s defined to measure. Does the market basket measured by the CPI accurately define what people spend money on? Yes, if they spend money on what’s in the basket. And we know that retirees don’t spend money the same way as young or middle-aged families; they spend disproportionately more on healthcare and housing.
The agency that produces the inflation index recognized that elderly consumers are a special case bydeveloping an experimental index, known as the CPI-E, for those 62 and older.
What really makes the chained CPI attractive to budget cutters is that it consistently comes in lower than the traditional CPI. For retirees, the gap builds over time; after 30 years, benefits would be 10% lower than under the traditional CPI. The CPI-E, however, rises slightly faster than the traditional index. That’s why you never hear pundits praising it for its “accuracy.”
The chained CPI also involves another nasty shock for average Americans. For the sake of fairness, using it as the Social Security cost of living measure would mean using it for other government calculations indexed to inflation, such as income tax brackets.
What would that mean? Well, according to the Tax Policy Center, it would hit low-income taxpayers especially hard. Someone earning $30,000 to $40,000 would get whacked three times as hard, measured by the tax increase as a share of total income, as someone earning more than $1 million.
Social Security advocates have always considered President Obama to be a little squishy when it comes to resisting Republican efforts to cut Social Security and Medicare and hit the middle class with higher taxes. Thus far, Democrats in Congress have held the line.
But every crisis brings yet another effort to preserve the prerogatives of the wealthy and take the cost out of middle- and working-class hides. On this occasion, when the costs of the shutdown have fallen on Head Start children, medical patients and middle-class workers, to slice away another portion of their safety net would be a truly unspeakable act.
I don’t know if Ian Welsh is completely right, but I think there’s a large element of truth:
I don’t know if there’ll be a debt default. What I do know is this: if Obama doesn’t want to default he has options. Forget the platinum coin nonsense (though he could if he wanted), Obama can just tell the Treasury to keep on keeping on, and continue selling treasuries. There isn’t anything Congress can do about that, they don’t have the votes to actually impeach him, they don’t have an army, they don’t have the balls to, say, lock up the Treasury Secretary. In short, they don’t have an army.
Now I assume Obama doesn’t want a default. But, to be sure, I could be wrong. Why? Because a default throws all the cards in the air. It lets you remake the country in your image. Obama has long wanted a “Grand Bargain” and the ultimate neo-liberal no-no is defaulting on bond-holders. Then, of course, there are all the SS checks…
If there is a default, whoever sets the terms of the new arrangement gets to remake America in their image. Obama might want a crack that that.
MoveOn polls show GOP could lose the House. Even before the shutdown, I thought 2014 might be a wave election.
