Super Committee Calvin Ball

Republicans are insistent that the Bush Tax cuts be made permanent.  With that stroke of lunacy, we have the imminent and predictable meltdown of the super committee. So, what happens when the minority party doesn’t get it’s way on everything?  It either holds the economy hostage or changes the rule.  Republicans in Congress are playing Calvin Ball to avoid the cuts that super committee failure is supposed to bring to the defense budget.  They’re changing their own rules, yet again.

Plus, we’re getting another contradictory argument on taxes.  Let the Bush tax cuts expire is “raising taxes”.  Letting the payroll tax holiday expire is not raising taxes.  How do these folks get through the day without a complete synaptic breakdown?  Here’s some details from Reuters.  The Murray quoted here  is Senator Patty Murray from Washington State.

Murray said Republicans want to extend tax cuts that lowered individual rates — reductions that originated under former Republican President George W. Bush. Those tax cuts run out at the end of 2012.

Republicans have pushed for a permanent extension. Democrats want the tax cuts for the rich to expire.

“In Washington, there are folks who will not cut a dollar unless we raise taxes,” said Kyl, sparking an exasperated reaction from Kerry who noted that Congress has cut about $1 trillion from the budget without any tax hikes.

Republicans want Democrats to agree to do more to find long-term savings in the growing costs of government retirement and healthcare programs.

If no deal is reached by a simple majority of the super committee, automatic spending cuts would start in 2013 — two months after presidential and congressional elections.

Those cuts would be evenly divided between domestic and defense programs. Some Republican members of Congress already are talking about dismantling the automatic cuts to protect the Defense Department from deep reductions.

No serious discussion on deficits can occur without ending the Bush Tax cuts and seriously putting the Pentagon budget on the table.  Representatives of the super committe were out full force on the Sunday Morning Talk Show.   John Avlon at The Daily Beast points to the political posturing that’s likely still the root of the entire problem.  No Republican is willing to compromise any more.  Democrats and the President continue to grant many concessions on social programs that leave little left for continuing battle.    No where is this more noticeable when the congress passed the old John Chaffee/Bob Dole Republican Health plan under the guise of ObamaCare.  The contentious mandate originally came from the Republican side of the aisle from the American Heritage Institute.  The twist of facts into partisan narratives has never been worse.

But pervasive hyperpartisan positional bargaining seems to have carried the day. Pessimism has clouded late-inning negotiations. Supercommittee Democrats have offered to put entitlement reforms on the table, but offered few specifics. Republicans have offered limited revenue increases, but tied those to the cutting the top tax rate to 28 percent from 35 percent and permanently extending the contentious Bush tax cuts. Distrust and brinksmanship pollutes the process.

Ironically, but perhaps appropriately, the dysfunctional debate seems to be based around what the term “fair and balanced” actually means.

For Democrats it means a 1-to-1 ratio of tax hikes to spending cuts. For bipartisan groups like the Gang of Six and Bowles Simpson, it means a 3-to-1 ratio. But for too many Republicans, “fair and balanced” means no tax revenues raised at all—a handful of loopholes closed as concessions, like $3 billion from private jets, and the rest collected from spending cuts. The basic dynamic of both sides being willing to slaughter sacred cows is missing despite an avalanche of “more bipartisan than thou” press releases.

The core problem comes from antitax pledges that have dislodged the basic nature of balance sheets in the collective conservative mind—it is all spending, no revenue. Fiscal responsibility has been replaced by fiscal conservatism. Reducing the deficits and debts is no longer the overriding goal, despite Tea Party rhetoric about generational theft or even the balanced-budget-amendment attempt this past week. Instead, keeping tax cuts in place is the one true grail—ignoring the overwhelming popularity of provisions like raising the top rate on people making more than a million dollars a year.

Sane people continue to ask what type of Svengali powers the insane Grover Norquist holds over Republicans? If you want to learn about “The Billionaire’s Best Friend” who “hijacked the Republican party on behalf of the rich”, go no further than TIm Dickinson’s article in this month’s Rolling Stone.  This man continues to hold sway over the Republican congress critterz despite overwhelming public polls that show even Republicans and Independent rank and file don’t support his agenda.  Norquest comes from two Republican institutions.  He was originally in the Chamber of Commerce which is one organization that has no problem seeing lies and half baked arguments printed in newspapers around the country.  Ronald Reagan used him to push his tax reform measures.  It’s been one power grab after another backed by nothing more than dogma and a huge budget since then.

Over the past 25 years, Norquist has received funding from many of America’s wealthiest corporations, including Philip Morris, Pfizer and Micro­soft. To build a farm team of anti-tax conservatives, Norquist shrewdly took the pledge to state legislatures across the country, pressuring up-and- coming Republicans to make it a core issue before they’re called up to the big leagues. “We’re branding the whole party that way,” Norquist says. “The people who are going to be running for Congress in 10 or 20 years are coming out of state legislatures with a history with the pledge.”

Norquist also built the anti-tax pledge into the DNA of the GOP by hosting weekly Wednesday meetings that enable activist groups representing everyone from gun nuts to home-schoolers to mix with top business lobbyists and conservative officials. The meetings, which began shortly after Bill Clinton was elected, turned Norquist into the Republican Party’s foremost power broker – and gave him a forum to enforce the no-new-taxes pledge as the centerpiece of the GOP’s strategy. “The tax issue,” he says, “is the one thing everyone agrees on.”

Norquist cemented his influence by forging an early alliance with Karl Rove and setting himself up as a gatekeeper to George W. Bush’s inner circle. Then, after Obama was elected, this ultimate Washington insider positioned himself as a leader of the anti-establishment Tea Party, complete with financial support from the billionaire Koch brothers. “These Tea Party people, in effect, take their orders from him,” says Bruce Bartlett, an architect of the Reagan tax cuts. “He decides: This is a permissible tax action, or this is not a permissible tax action. And of course, anything that cuts taxes is per se OK.”

Today, GOP politicians who have signed Norquist’s anti-tax pledge include every top Republican running for president, 13 governors, 1,300 state lawmakers, 40 of the 47 Republicans in the Senate, and 236 of the 242 Republicans in the House. What’s more, the GOP’s Tea Party foot soldiers are marshaled by House Majority Leader Eric Cantor – a veteran of Norquist’s farm team, who first signed the pledge as an ambitious member of the Virginia legislature. Under Cantor’s leadership, Norquist’s anti-tax pledge was directly responsible for last summer’s debt-ceiling standoff that wrecked the nation’s credit rating by leading the nation to the brink of default. “Congress was willing to cause severe economic damage to the entire population,” marvels Paul O’Neill, Bush’s former Treasury secretary, “simply because they were slaves to an idiot’s idea of how the world works.”

Yup.  Bush’s former Treasury secretary thinks Norquist has congress hostage to the point that they are “willing to cause severe economic damage to the entire population simply because they were slaves to an idiot’s idea of how the world works.”  The result of the work of Norquist and the Republican party has been staggering income inequality.

“The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility,” says David Stockman, who served as budget director under Reagan. “They’re on an anti-tax jihad – one that benefits the prosperous classes.”

Notice here that I’m quoting Republicans that have had extensive experience in economics, finance, and policy.  Funny thing is that the most of these folks aren’t really worried about tanking the economy.  What they are worried about is this.  If you haven’t read Cannonfire today, you should.  First, Cannon points to this.  MSNBC got a hold of a memo from a lobbying firm spelling out its plan to use any propaganda means necessary to destroy OWS.  The lobbying firm is associated with the American Banker’s Association.

CLGC’s memo proposes that the ABA pay CLGC $850,000 to conduct “opposition research” on Occupy Wall Street in order to construct “negative narratives” about the protests and allied politicians. The memo also asserts that Democratic victories in 2012 would be detrimental for Wall Street and targets specific races in which it says Wall Street would benefit by electing Republicans instead.

According to the memo, if Democrats embrace OWS, “This would mean more than just short-term political discomfort for Wall Street. … It has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the bullseye.”

The memo also suggests that Democratic victories in 2012 should not be the ABA’s biggest concern. “… (T)he bigger concern,” the memo says, “should be that Republicans will no longer defend Wall Street companies.”

Two of the memo’s authors, partners Sam Geduldig and Jay Cranford, previously worked for House Speaker John Boehner, R-Ohio. Geduldig joined CLGC before Boehner became speaker;  Cranford joined CLGC this year after serving as the speaker’s assistant for policy. A third partner, Steve Clark, is reportedly “tight” with Boehner, according to a story by Roll Call that CLGC features on its website.

Another interesting association is noted in the memo.

The CLGC memo raises another issue that it says should be of concern to the financial industry — that OWS might find common cause with the Tea Party. “Well-known Wall Street companies stand at the nexus of where OWS protestors and the Tea Party overlap on angered populism,” the memo says. “…This combination has the potential to be explosive later in the year when media reports cover the next round of bonuses and contrast it with stories of millions of Americans making do with less this holiday season.”

Yup, it’s the divide and conquer strategy again.  Since Wall Street can’t make the case, it’s going to use proxies like the Tea Party to do its dirty work.  This should be no problem given the astroturf leadership put in place by folks like Dick Armey and Matt Kibbe.  These guys are longstanding Republican Beltway insiders.   The interesting thing comes in some of the rumors coming out from the committee itself.  Supposedly, Boehner had actually agreed to put revenues on the table and provide cover to Republicans that feared Norquist and the Tea Party.   Some Democrats never really engaged, some republicans refused to even discuss anything that didn’t include making the Bush Tax cuts permanent for every one, and there was some feeling that the next election would give some indication of which way the wind blows.

A Democratic aide had this eulogy for the supercommittee: “The worm has turned a little bit. The national conversation now is about income inequality and about jobs, and it’s not really about cutting the size of government anymore or cutting spending. 2010 gave one answer to that question. But 2012 will give another, and we’ve got to see what it is.”

I still think economist Jeffrey Sachs has the best take on what the real role of Congress should be in an schizophrenic economy like ours.  This is what OWS is trying to point out but is getting blasted for by concentrated efforts in corporate media to publish propaganda.  (I have quoted this before, but I’m quoting Sachs again.)

The big political lie of the Super-Committee is that the deficit must be closed mainly by cutting government spending rather than by raising taxes on corporations and the super-rich. Both parties are complicit. The Republicans want to close the deficit entirely by cutting spending; Obama has brandished the formula of $3 of cuts for every $1 of tax revenues. On either approach, the poor and middle class would suffer grievously while the rich and powerful would win yet again (at least until the social pressures boil over).

The key to understanding the U.S. economy is to understand that we have two economies, not one. The economy of rich Americans is booming. Salaries are high. Profits are soaring. Luxury brands and upscale restaurants are packed. There is no recession.

The economy of the middle-class and poor is in crisis. Poverty and near-poverty are spreading. Unemployment is rampant. Household incomes have been falling sharply. Millions of discouraged workers have dropped out of the labor force entirely. The poor work at minimum wages to provide services for the rich.

Until we have some realization that laws put into place for the last 30 years have created markets that are distorted, functional only for a few, and not the least bit reflective of anything remotely “free market”, a portion of the public is going to be willing to vote for people that spread lies.  This is why the credibility of any one associated with OWS must be destroyed.  The minute a huge portion of us wake up to the lies–much like what happened after publication of the Pentagon Papers and the invasion of Cambodia after Nixonian promises of winding the Vietnam War down–we’re not going to get the policy we need to put things right again.   We desperately need to put things right again.

 

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15 Comments on “Super Committee Calvin Ball”

  1. Back Bay Style says:

    Thanks for the Sachs quote Kat. I’m not an economist but I think just saying “the rich” iis what’s confusing to a lot of us. Most of us don’t know any billionaires. But, at least here on the east coast, there are a LOT of people with household incomes of around @150K. And there are more with incomes in the $150-300K range. AND these people all consider themselves middle class. They have good jobs or professions, they have been in their houses for 20-30 yeara, did not spend all their equity, and they did not lose their income, even if their investments took a hit.

    I don’t know what percentage of the population falls into this household income over over $100k category but I would like to. Because there seem to be a lot of them and they simply don’t get what the problem is for everyone else.

    • dakinikat says:

      That would be the upper 2 percent, actually but there’s a big gap between the wealth of them and the upper 1 percent and a lot of their wealth actually comes from having degrees or a business or leaving in a place where the cost of living eats it all up. That’s why you see some people suggest the increased tax hits start at 250k.

    • bostonboomer says:

      The incomes you’re talking about don’t qualify as “rich.” If anything, they are upper middle class–depending on how they earn their money. But I’d say they’re just middle class. The average income is about $50,000. The top 400 families in the top 1% probably don’t have “jobs” as such. They earn most of their income from investments, and it’s in the billions, not piddling amounts like $300,000.

      Class isn’t totally based on income though–at least in the sociological sense. It’s based on how much influence you have in the society.

  2. bostonboomer says:

    Thanks for a great read, Dak. I’m just about to watch Grover Norquist get interviewed on 60 Minutes. I hope he gets some serious questions instead of suck up ones.

    I just wish Paul O’Neill and David Stockman could talk some sense into the Democrats. If there was an opposition party to the Republicans, we’d we in better shape. But they’re both corrupt and corporate owned.

    I think Chris Hayes is actually the one who managed to get that memo. He does have a show on MSNBC now, but he also writes for The Nation.

  3. Back Bay Style says:

    I just reread the quote and I think the real key is the “salaries are high” phrase. If the money is coming in regularly people are going to spend it. There is no recession as long as you are employed at one of these high salaried jobs. If you lose it, you are going to be in big trouble. But people don’t see that until it happens, and it twists the public perception.

    • bostonboomer says:

      If your entire income is based on a jobs (no matter how high paying) and you are in trouble if you lose the job, you’re not “rich.”

  4. Back Bay Style says:

    Thank you Kat. Then I guess 50% of the upper 2% live in greater Boston cause I sure see a lot of money being spent around here!

    Do you mean 2% over 100K or 2% over 150K?

  5. Back Bay Style says:

    BB, I agree with you about it you have to work for it, you are not really rich. “Rich” is being able to meet your necessities on passive income. But there is a lot if salaried income around major metropolitan areas, and people spending, and that is what fills the malls and restaurants and gives the illuson of “no recession”.

    • bostonboomer says:

      Massachusetts had more than 9% unemployment the last I heard. And the average salary in MA is $41,000. The state has screwed the public employees over their health insurance and collective bargaining. I’d say the recession is noticible here for some of us. I guess if you only talk to people who make that kind of money, you wouldn’t know it, but that’s the whole point. The wealthier people aren’t feeling it because of the vast income inequality in this country.

      But the stores aren’t mobbed everywhere in MA. Plenty of people are hurting, and there are already huge sales going on, because consumption isn’t up to par. It’s been that way for 3-4 years now.

  6. Back Bay Style says:

    That’s a great chart Kat, thank you. I am just trying to get my head around why there seems to be such a disconnect between appearances and these numbers. I wonder if it’s just that most people are raised to not talk about money, because it would seem that, taking these numbers and BB’s income figure of $41k most people must be really struggling with the cost of living so high.