Fiscal Bunny Slope Updates

Good Evening!

I’m trying to get through a serious patch of the dread lazies.  All the rain and cold and glum has me in nap mode.  But, I thought I’d follow up a bit to BB’s morning post that had some more stupid congressional maneuvers on things that shouldn’t be happening with our fiscal situation.  I’m really getting tired of having Social Security tied in with deficit discussions for one since they are completely unrelated.  Second, it’s amazing to me that the Speaker of the House can be this close to letting chaos hit the markets and the economy over what is undoubtedly his concerns about holding on to the speakership.  So, here’s some this and that on the few things that are bad about the fiscal bunny slope and hooplah surrounding the rest.

The worst thing is the ending to extended unemployment benefits and the uncertainty surrounding the tax cuts for people that really need them.  My guess is that some of this will be renewed but only after the Republicans play the game of letting the rates go up so they can say the brought them down.  It’s inane, I know, but I’ve come to expect that of the party of jerks that have overtaken the Republicans.  Here’s an article from Salon by Steve Kornacki on the Tea Party Mindset and the destruction of our congressional functionality called the Triumph of the Tea Party Mind Set.

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.

These folks appear to be ready to bring down the economy and the country if they don’t get their way and frankly, I think it’s scary.  The danger in doing nothing about the slope doesn’t come immediately.  It will come from the compounding impact of doing nothing over time which is what characterizes this congress.  As an example, the IRS may not immediately change the withholding tables so the tax changes may not be felt immediately but it eventually will mean $100-200 a month to families already living on the edge.    Boehner is calling the House back into Session on Sunday.  I’m really not sure if he can actually knock some sense in to these folks or what he’s up to but I guess we’ll see.  Here’s information on that from NBC.

House Speaker John Boehner, R-Ohio, notified lawmakers that the House would come to order at 6:30 p.m. ET on Sunday in hopes of averting the end-of-year combination of tax hikes and spending cuts that constitute the fiscal cliff.

An anonymous source had this to say:

The lawmaker on Thursday’s call told NBC News that any Senate plan Boehner puts on the House floor (of which there is no guarantee) would only receive as few as 40 Republican votes, making Democratic help necessary.

“If the Senate will not approve these bills and send them to the president to be signed into law in their current form, they must be amended and returned to the House,” Boehner told Republicans Thursday, according to a source on the call. “Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass — but the Senate must act.”

Democrats are using some pretty harsh metaphors to describe Republican intransigence.  Steny Hoyer compared their behavior to a hostage taker threatening to shoot a child.

Less than two weeks after one of the nation’s deadliest school shootings, the No.2 Democrat in the U.S. House, Steny Hoyer, compared Republican tactics for dealing with the nation’s debt limit to someone threatening to shoot a child hostage. “It’s somewhat like taking your child hostage and saying to somebody else, ‘I’m going to shoot my child if you don’t do what I want done.’ You don’t want to shoot your child. There’s no Republican leader that wants to default on our debt, that I’ve talked to,” Hoyer said at a Capitol Hill press conference.

Hoyer’s comments came in response to a question about the Treasury Department’s notice that the nation was approaching its debt limit. He criticized Republicans for previous resistance to raising the debt ceiling and used the gun analogy to argue that the issue should not be part of the negotiations involving the fiscal cliff.

Meanwhile, Reid called Boehner’s speakership a “dictatorship” on the floor of the senate.  His statement sent the markets down.  The Republicans have spent the last year playing the confidence fairy card so it’s really odd to find them trying to assassinate said confidence fairy right now.

Senate Majority Leader Harry Reid said this morning that it “looks like” Congress will fail to come to a deal to avert the year-end fiscal cliff, blaming the failure on House Speaker John Boehner’s “dictatorship” running the lower chamber.

“It looks like that’s where we’re headed,” Reid said. “I don’t know, time-wise, how it can happen now.”

It’s not exactly a surprise — leaders left Washington last week without any imminent signs of a deal in the making. But it’s a grim warning just days before tax hikes and automatic spending cuts begin to take effect.

Markets tanked immediately in the aftermath of Reid’s floor speech, with the Dow off more than 110 shortly after noon.

Reid opened the Senate session by launching into a lengthy criticism of the House and Boehner, saying he “seems to care more about his Speakership” than making a deal on the cliff.

The House is being run “by a dictatorship of the Speaker,” Reid said. He accused Boehner of waiting until the election of the Speaker on Jan. 3 to get involved with negotiations. And he urged the lower chamber to pass the Middle Class Tax Cut Act, which the Senate narrowly passed in July. The bill made permanent all of the Bush-era tax cuts on incomes of less than $250,000 for couples and $200,000 for individuals.

Reid also slammed the House for not being in session on Thursday. He said that instead of being in Washington, Republicans are “out watching movies.”

 Yglesias–writing at Salon–chided the media for falling for Boehner’s “process games”.  Boehner keeps asking for more details and a plan when there are at least two different offers with details out there.

This is a transparent and silly negotiating ploy. Right now, Democrats have two different offers on the table. One is a narrow bill that’s already passed the Senate that would fully extend the Bush tax cuts for everyone with an AGI under $250,000 while letting the Bush rates expire for wealthier households. House Republicans could pass that bill, thus reducing taxes on rich and middle class Americans alike relative to current law. With that done, congress and the White House could start discussing other aspects of the fiscal cliff if they care to. Alternatively, the president has put an offer on the table that involves a more tax increases than that but also a 1:1 ratio of tax increases relative to current policy and spending cuts relative to current law. If John Boehner is willing and able to deliver even a relatively small number of House Republican votes for that plan, then it will clearly pass the Senate.

But Boehner doesn’t want to do either of those things. So fair enough.

But the thing that Boehner does want to do—his “Plan B” bill to extend Bush era rates for everyone earning under $1 million—doesn’t even have the votes to pass the House of Representatives. Given that reality, if Boehner wants an alternative to the Senate Democrats offer or the White House offer the onus on him is to abandon the (pointless) quest for 218 Republican votes and try to come up with something that he’ll agree to and that will attract enough votes from House Democrats to pass over the objections of the right wing of his caucus. If he doesn’t want to pass the senate bill and he doesn’t want to pass the White House bill and he doesn’t want to try to bargain with House Democrats, then going “over the cliff” is inevitable.

That’s fine if that’s what he wants. Personally, I think there’s a lot to be said in favor of negotiating from the 2013 baseline rather than the 2012 baseline. But the holdup is Boehner and Boehner’s caucus. Anything that both the White House and John Boehner agree to can pass the senate. Everyone knows that.

Anyway, if you’re not jaded about our political process, parties, and elected officials by now, I doubt that you’ll ever be be.  Is it to much to ask Republicans to put away their purity pledges, quit feigning ignorance and denying economic reality and get on with being a minority party in a governance crisis they created?  I don’t recall it being this bad since maybe the slavery debates back in the day.  Odd to see how the parties of switched sides however.   It’s hard to see how we’re going to rid ourselves of the teabot crazies however, given the gerrymandering. This brings me to one more suggested read and it’s a wonky one by Nate Silver.  Silver inkles a hypothesis and backs it up with tons of graphs and numbers at his FiveThirtyEight Blog in a post called: As Swing Districts Dwindle, Can a Divided House Stand?

In 1992, there were 103 members of the House of Representatives elected from what might be called swing districts: those in which the margin in the presidential race was within five percentage points of the national result. But based on an analysis of this year’s presidential returns, I estimate that there are only 35 such Congressional districts remaining, barely a third of the total 20 years ago.

Instead, the number of landslide districts — those in which the presidential vote margin deviated by at least 20 percentage points from the national result — has roughly doubled. In 1992, there were 123 such districts (65 of them strongly Democratic and 58 strongly Republican). Today, there are 242 of them (of these, 117 favor Democrats and 125 Republicans).

So why is compromise so hard in the House? Some commentators, especially liberals, attribute it to what they say is the irrationality of Republican members of Congress.

But the answer could be this instead: individual members of Congress are responding fairly rationally to their incentives. Most members of the House now come from hyperpartisan districts where they face essentially no threat of losing their seat to the other party. Instead, primary challenges, especially for Republicans, may be the more serious risk.

His analysis is based on some really great numbers so be sure to check it out.  Robert Reich put this on his face book status today about the nature of the real fiscal cliff.

Robert Reich
Here’s what really worries me. We’re heading off the cliff, but I don’t mean the fiscal one. I’m talking about the family one. According to the Center for Responsible Lending’s newest report, the typical household has just $100 left each month after paying for basic expenses and debt payments. After controlling for inflation, the typical household has less annual income now than it did at the beginning of the decade. And starting next week, with the beginning of 2013 — assuming there’s no deal on the fiscal cliff, because Republicans are unwilling to raise taxes on the richest in the land — payroll taxes and income taxes increase on the typical family. In other words, the typical American family is about to go off its own financial cliff, and no one seems to be paying any attention.

I couldn’t agree more.