Thursday Reads: Will Obama Pull off A Grand Betrayal? And Other News…Posted: March 7, 2013
We weren’t supposed to get any snow until late this afternoon, but it’s already coming down. The snow from the last two storms was just about gone and you could see the ground in places. Now they’re saying we may get up to a foot of snow. I’m hoping that’s not going to pan out.
Let’s see what’s happening out there in the world.
Call me paranoid, but I’m beginning to get the feeling that we’re being gamed by both Democrats and Republicans. Late last night, I was listening to a 24-hour politics station Sirius-XM radio, called POTUS radio.
Now I didn’t get the name of the man being interviewed, but he said that President Obama had asked Lindsey Graham to help him organize last night’s dinner with Republican Senators weeks ago! According to this guy, everything is coming together for Obama and for the Republicans–they are each getting what they wanted, which is serious austerity. Obama will get his “entitlement reforms” and the Republicans will get–what? Will there be any new revenue at all, or will the full burden for deficit cutting in the “grand bargain” fall on the social safety net?
For Washington-watchers looking for positive signs from President Obama’s unusual dinner with Republican senators on Wednesday night, there was this: Senators John McCain of Arizona and Tom Coburn of Oklahoma each gave waiting reporters a thumbs up as lawmakers exited the private dining room….
Besides Mr. McCain and Mr. Coburn, the diners were the Republican Senators Bob Corker of Tennessee, Lindsey Graham of South Carolina, Dan Coats of Indiana, Richard M. Burr of North Carolina, Mike Johanns of Nebraska, Patrick J. Toomey of Pennsylvania, Ron Johnson of Wisconsin, John Hoeven of North Dakota, Saxby Chambliss of Georgia and – the only woman – Kelly Ayotte of New Hampshire….
The president insists that any alternative package must combine a balance of spending cuts and new revenues, while Republicans generally oppose new taxes on the wealthy and corporations.
In the Senate…a number of Republicans are known to support higher tax revenues if Mr. Obama and Democrats agree to significant long-term reductions in future spending for the fast-growing entitlement programs, chiefly Medicare and Medicaid but also Social Security – just the trade-off Mr. Obama supports. Mr. Coburn and Mr. Chambliss, for example, are members of a bipartisan group that has supported a deficit-reduction plan with more additional revenues than the president has proposed.
I haven’t yet been able to find confirmation of the report I heard last night, but it would not surprise me. If Graham organized the dinner, it would also explain why the invitees included the three stooges, Graham and his pals John McCain, and Kelly Ayotte–who have been inseparable since they decided to raise hell over the attacks on the Benghzi consulate.
That the outcome described in the highlighted passage from the Caucus blog (see above) was either expected or deliberately planned would also explain why the latest meme in the media for the past week or so has been that Obama is suddenly weak and has no leverage and so much go hat in hand begging the Republicans for mercy.
For example, Ryan Lizza’s latest piece in The New Yorker: The Powerless Presidency.
A deal on the sequester was never really possible. Back in January, in return for agreeing to raise the debt ceiling for a few months, conservative House Republicans demanded that their leaders, John Boehner and Eric Cantor, allow the trillion dollars of cuts in the sequester to take effect. The White House, which wanted additional revenue as part of the replacement for the sequester, saw the G.O.P.’s all-cuts approach as a nonstarter, which means that sequestration is likely here to stay. (I wrote about the House G.O.P.’s road to the sequester in an article about Cantor last week.) When one considers that the alternative scenario was for House Republicans to precipitate a government default and a potential global financial crisis, the sequester cuts and the estimated three-quarters of a million jobs that they will cost this year are not so bad.
At Obama’s press conference, after he explained the negative effects of sequestration, he cast blame on the Republicans, and a reporter challenged his analysis. “It sounds like you’re saying that this is a Republican problem and not one that you bear any responsibility for,” she said to the President.
Obama seemed taken aback. “Well, Julie, give me an example of what I might do.”
Obama’s slightly testy response is worth considering. I don’t remember a President ever publicly expressing a similar sentiment. All Presidents come to appreciate the limits of the power of their office, and there are reams of quotes from Presidents privately expressing disdain for Congress’s unwillingness to bend to their will. But rarely do they ventilate such thoughts in public.
And from Roll Call: Obama’s Lost Leverage.
It wasn’t supposed to be like this for the White House and a re-elected president with political capital to spend.
But President Barack Obama is in a position of supplication to Hill Republicans, talking loudly and often about the harm of automatic budget cuts but lacking the leverage to get the GOP to buckle.
Senior administration officials had for months predicted that Republicans would cave on the sequester and agree to more taxes, even after agreeing to $600 billion in tax increases in the New Year’s Eve fiscal-cliff deal.
After all, aides noted, Republicans had caved again and again: on the 2012 payroll tax cut, on tax rate increases for the wealthy and on a debt ceiling extension.
Robert Kutner at The American Prospect:
President Obama gambled that the threat of the automatic sequester of $85 billion in domestic and defense cuts would force the Republicans to accept major tax increases, and so far he is losing the wager. The Republican leadership, which was badly divided over the New Years deal that delayed the fiscal cliff, is now re-united around the proposition that Republicans will accept no further tax increases.
So the president is left to court individual Republican House members to support loophole closures in exchange for the restoration of some popular domestic and military spending. But for the moment, Republicans got what they wanted—big spending cuts, party unity around no tax increases, and a weakening of a newly re-elected president.
For Obama and the Democrats, there are three big risks going forward. First, the sequester slows down economic growth—cutting it in half this year from about 3 percent to 1.5 percent, according to the Congressional Budget Office. Obama, more than the Republicans, will take the political blame.
Second, popular domestic spending programs that Democrats ordinarily defend will suffer deep cuts. And third, the politics of the situation pushes Obama further in the direction of the elusive “grand bargain” long sought by Wall Street, in which Democrats agree to cut Social Security and Medicare and Republicans agree to close some tax loopholes.
As Charlie Pierce wrote a few days ago, Obama’s “the grand bargain is neither grand nor a bargain.”
With all due respect to the president, his plan for “common sense” is a terrible idea. It was a terrible idea in 2009. It was a terrible idea in 2010. And it is a terrible idea now. I hope the progressives in the House shred this thing. I hope Bernie Sanders lights it on fire on the steps of the Capitol. I hope Lyndon Johnson comes back from the fking dead and drinks all the Scotch in the White House and keeps Gene Sperling up all night talking about his inseam and about how his pants are too tight in the crotch.
If you want to know why our fearless leaders are so desperate to cut Social Security, here are some clues from a diary at DailyKos posted yesterday: Why Social Security Must Be Reformed, by FishOutOfWater.
A raving leftist wrote that Ronald Reagan and Alan Greenspan pulled off the greatest fraud ever perpetrated against the American people but we know better. Yes, Social Security taxes were raised ostensibly to fund the retirements of the baby boomers but they would have wasted the surplus. Reagan and Greenspan gave it to the truly deserving, the job creators, to invest. And so they did. They created millions of jobs and economic growth at a rate that stunned the world.
Billions upon billions of dollars were made by stripping assets and pensions from corporations with uncompetitively high American labor costs and building new factories in China where labor was cheap. And the beauty of it all was that the capital gains from these investments was cut to 15%. Businesses in the U.S. could then pit laid off workers against their labor force to further cut costs! Then the job creators could build more factories in India, China and anywhere where cheap labor could be found, with the profits.
There was this little problem, the U.S. middle class consumer was getting squeezed, but Greenspan and the banks had the fix. Chinese companies and the job creators had trillions of excess dollars so they could lend it back to American consumers. What’s not to love? Money banks get for zero percent interest can get a fabulous return by charging 12%, 18% or 23% on consumer credit cards depending on how worthy the consumer is. Naturally the working stiff pays the most because working stiffs are not credit worthy.
You get the picture. So now what? I still say this may not happen, and I agree with Brian Beutler that a government shutdown is still possible. The reason I think this is that the Republicans hate Obama so much that they may not want to give in on revenue even for the chance to blame Democrats for shredding the safety net in the 2014 elections. Certainly that is likely to be true among House Republicans. And will the majority of Senate Democrats really go along with this grand betrayal? I guess we’re going to find out.
I have a few more links for you.
The New York Times: Nora Ephron’s Final Act
Business Insider —Niall Ferguson: Paul Krugman’s Style Of Debate Suggests He May Have Been Traumatized As A Child Seriously, this is for real.
Business Insider — Krugman: Niall Ferguson’s Response Is Pathetic, And Maybe He Should Go Find A New Profession
Business Insider — ACHUTHAN: Look At These Charts And Tell Me We’re Not In Recession
USA Today — Expand Social Security, by Duncan Black (Atrios)