“I respectfully submit that it is time for you to engage directly with congressional Democrats on this matter,” McConnell told Biden in his letter, a copy of which POLITICO obtained. “Your lieutenants in Congress must understand that you do not want your unified Democratic government to sleepwalk toward an avoidable catastrophe when they have had nearly three months’ notice to do their job.”
The letter, delivered to the White House on Monday, also cites Biden’s past opposition to debt increases while in the minority. McConnell summarized it this way: “The president’s party had to take responsibility for a policy agenda which you opposed. Your view then is our view now.”
Monday Reads: Hidden Loot in today’s Treasure Islands
Posted: October 4, 2021 Filed under: Afternoon Reads, Fiscal Cliff, Tax Evasion and offshore banking, The Bonus Class, U.S. Economy 10 Comments
The Opening up of Pandora’s box, Frederick Stuart Church, 1885
Good Day Sky Dancers!
I’m going to go down a rabbit hole today on findings by journalists on a trove of leaked financial information that shows the financial dealings of current and former world leaders in terms of hiding the loot in the world’s Treasure Islands.
Offshore banking has always frustrated many governments in trying to deal with how the rich and powerful hide wealth. This is from The Guardian on what’s being called the Pandora Papers. There’s an accompanying podcast if you’d rather learn about this important trove of leaked offshore papers. These leaks follow the Panama and Paradise papers leaks.
The financial secrets of some of the world’s most rich and powerful people are revealed following one of the biggest leaks of offshore data. The Pandora papers include 35 current and former world leaders and more than 300 public officials.
The Guardian’s Paul Lewis tells Michael Safi how the project came about and the months of work his investigations team has put into the publication. It is the latest offshore leak following previous global journalistic collaborations on the Panama papers and the Paradise papers.
The Guardian’s deputy business editor, Juliette Garside,explains how former British colonial territories have in recent decades used their legal jurisdictions to attract companies and wealthy individuals to register with them as tax havens.
The editor-in-chief, Katharine Viner, tells Michael that there is a clear public interest in publishing this latest investigation and revealing the secrets of prominent politicians at a time when many governments are raising taxes to fund pandemic recovery efforts.
‘Pandora’s Box’ by Rene Magritte 1951
The Washington Post reports the names and country affiliations of those caught in the leak. It includes Putin and many of his minions, the President of Kenya, and the King of Jordan. Czech Prime Minister Andrej Babis was also caught up in the investigations. This is the lede: “Governments launch investigations after secret papers show how elite shield riches.” The link is constantly updated with new revelations and responses.
Here’s what we know from our collective reporting
Pandora, c. 1914 (Metropolitan Museum of Art), Odilon Redon
There are short profiles of many of the leaders/elite and their offshore financial activities at the WAPO link. There are also several good links to basics on offshore banking and the small countries around the world that sponsor this very dark corner of the financial sector.
I’ve written about offshore “treasure islands” before as it tickles just about all my Nancy Drew and Financial Economist/Banker fancies. My last post came in 2016 when the Panama Papers were leaked. These leaks do pop up but the dynamics of the system are linked to political and political funding elites. It’s hard to get countries to move on the tax evaders and the public treasury looters. As you can see from the names, many are either doing this or getting money from those who use offshore banking.
CNN analysts believe the Jordan, Pakistan and, Russia releases are most significant. Former UK PM Tony Blair has also been named in the release.
Former UK Prime Minister Tony Blair and his wife, Cherie Blair, avoided paying £312,000 ($423,000) in stamp duty — a tax on property purchases — when they bought a townhouse in London, the BBC reported. The building now houses Cherie Blair’s law firm.
The Blairs purchased the townhouse in 2017 by buying the offshore firm that owned the property. When the property was put up for sale, its ultimate owners were a family with political connections in Bahrain, according to the BBC.
The Blairs set up a UK company to purchase the offshore firm. Doing so was legal, but it allowed them to avoid paying stamp duty, according to the BBC, because the tax is not charged when a company owning a property is acquired.
“It is not unusual for a commercial office building to be held in a corporate vehicle or for vendors of such property not to want to dispose of the property separately,” Cherie Blair told the BBC.
Cherie Blair also said her husband’s only involvement in the transaction was that the mortgage for the property used their joint income and capital, according to the BBC.
“All the arrangements were made for the express purpose of bringing the company and the building back into the UK tax and regulatory regime, where it has remained ever since. All taxes have been paid ever since and all accounts openly filed in accordance with the law,” Cherie Blair said, according to The Guardian.
It may not be illegal but it certainly sounds and appears dodgy. The real shocking thing is that these kinds of enterprises are setting up in the United States. Notice this little financial firm harkens from South Dakota a state that lured Citibank with its lax banking laws back in the good ol’ days. WAPO has just put up a more current analysis of the overall use of offshore banking. “FOREIGN MONEY SECRETLY FLOODS U.S. TAX-HAVENS. SOME OF IT IS TAINTED.”
SIOUX FALLS, S.D. — Across from a Holiday Inn, in a red-brick building with a welcome sign that reads “The Heart of America,” a little-known financial firm set up shop seven years ago and extended an invitation to the world’s elite.
Trident Trust promised to protect the fortunes and privacy of its new customers by relying on the laws of a state that had become a global destination for wealth. The company called it “The South Dakota Advantage.”
Among those who answered the call: a Colombian textile magnate caught in a scheme to launder the proceeds of an international drug ring, an orange juice mogul who settled with authorities in Brazil for allegedly colluding to underpay local farmers, and family members of the former president of a sugar producer in the Dominican Republic that has been accused of exploiting laborers and forcibly evicting families from their homes.
The U.S. government has long condemned prominent offshore financial centers, where liberal rules and guarantees of discretion have drawn oligarchs, business tycoons and politicians.
But a burgeoning American trust industry is increasingly sheltering the assets of international millionaires and billionaires by promising levels of protection and secrecy that rival or surpass those offered in overseas tax havens. That shield, which is near-absolute, has insulated the industry from meaningful oversight and allowed it to forge new footholds in U.S. states.
Paging Senator Elizabeth Warren! Clean-up in Aisle South Dakota! And of course, Delaware is also one of the usual suspects too. Just ask Senator MBNA (aka President Joe Biden).
The trust documents come mostly from the Sioux Falls office of Trident Trust, a global provider of offshore services. In a written statement, Trident said it is committed to compliance with all applicable regulations and routinely cooperates with authorities. The company declined to answer questions about its clients.
Other states competing to lure wealth include Alaska, Delaware, Nevada and New Hampshire. In South Dakota, assets in trusts more than quadrupled over the past decade to $360 billion. One of the largest trust companies in the state, the South Dakota Trust Co., boasts a roster of international clients from 54 countries.
The industry’s rapid expansion was led by a group of trust company insiders, who year after year pitched legislative proposals that were highly appealing to customers in the United States and abroad: protecting trusts from creditors, from taxing authorities, from foreign governments.
With little opposition, state legislators turned the proposals into laws — dozens since the late 1990s.
So, not only are we giving these folks lower tax bills than their house staff and employees, we’re letting them dodge even more tax liabilities by just traveling to the usual suspect states.
You may read the original work in the tweet directly above. It’s going to be a week of global intrigue! So, hang on to your best James Bond Villian impression. Mine will continue to be Vladimir Putin who set up a mistress and child to live like Marie Antoinette.
The Debt Ceiling is still in the news too!
Either of these stories could rock the US and Global financial markets! So, I’ll be watching! C’mon Joe! Don’t make me sell the US short to finance my senior days!
Pandora and the Flying Dutchman (1951) This painting was featured in the movie of that name. It plagiarizes the early metaphysical style of Giorgio de Chirico (1888–1978)
Biden did take McConnell to school today. This is from the LA Times.
President Biden on Monday criticized Republicans for not voting to raise the debt ceiling, accusing them of being “reckless and dangerous” in a way that could harm the economy.
“Not only are Republicans refusing to do their job, they’re threatening to use [the filibuster] to prevent us from doing our job — saving the economy from a catastrophic event,” Biden said during a speech at the White House.
The Democrat-controlled House last week passed legislation that temporarily suspends the debt ceiling. Senate Republicans, however, have said they will not vote to approve such a measure. Biden said the Republicans’ stance is “hypocritical, dangerous and disgraceful.”
“Especially as we’re clawing our way out of this pandemic,” Biden said.
…
Once the Treasury Department runs out of cash, payments to government workers, including military personnel, veterans and Social Security recipients would likely be delayed. A default would also affect taxpayers.
“Savings in your pocketbook could be directly impacted by this Republican stunt,” Biden said.
Treasury Secretary Janet Yellen previously said the department would run out of “emergency measures” to pay the nation’s debts on Oct. 18. The limit on federal borrowing is currently $28.4 trillion.
McConnell told Biden to find a Democratic Party-based solution in a Dear Joe letter. So, there’s your countdown to doomsday. This is from Politico.
So, Republicans continue to obfuscate the debt ceiling. It’s basically got to be increased because of the last 4 years and all years before. There’s very little Biden spending to this point and his budget is not even in effect at this point.
Don’t let your eyes glaze over on this stuff! This is a shit list of how they’re stealing from us!
What’s on your reading and global intrigue list today?
Slash and Burn Republicanism is not Good for the Country, our Children, and other Living Things
Posted: September 18, 2013 Filed under: Fiscal Cliff, right wing hate grouups, Rush Limbaugh, The Bonus Class, U.S. Economy, U.S. Politics | Tags: budget woes, fiscal cliff, SNAP 12 Comments
Some time during the Reagan campaign, our government became the enemy of a huge number of people in this country. Paranoia over a democratically elected government enshrined by voters and a sophisticated legal and political system is usually confined to a groups of paramilitary paranoids that call themselves preppers, read too much Ayn Rand, and never emotionally develop beyond, say high school. Through the money of the Koch Brothers, the pulpit connivings of Pat Robertson and the paranoid shrieking of folks like Glenn Beck and Rush Limbaugh that have failed at every endeavor but snake oil peddling on the radio, we now have entire sections of the country that gerrymander legislators to send these freaks to Congress.
Perry and like-minded Republican governors subscribe to the slash-and-burn economic philosophy — a belief that “less” will somehow become “more.” In Texas, he has implemented this vision with gusto, cutting taxes and slashing funding for critical middle-class priorities such as public schools, higher education, health care and infrastructure. The results? Texas ranks 49th in high school graduation, 10th in the rate of poverty and 50th in the percent of residents with even basic health insurance.
And while Perry likes to promote the job creation in Texas during his time in office, he leaves out a critical point: The jobs “miracle” he touts is driven by low-paying, non-sustainable jobs. This year, Texas — tied with Mississippi — leads the nation for the percentage of hourly paid workers earning equal to or less than the minimum wage. More than one in 10 workers nationwide earning at or below the minimum wage works in Texas.
Let’s not even go into the social costs of letting Texas businesses operate however they want to. Just ask the towns and farms that no longer have water and are nsubjected to earthquakes due to fracking. We can also mention the town that mostly disappeared from a fertilizer plant explosion that killed 14 people. Wait until Texas property owners and taxpayers get the bills for those kinds of preventable disasters. I’m fairly certain that northern Texas will soon be paying more for water than the world will pay for its oil. In fact, I’ll stake all my years drawing supply and demand graph on it.
Then, there is a new kick-the-can down the road effort on the 2013 Farm Bill that’s going to leave a lot of American children starving. Republican members of Congress appear to still think that folks live large off of Food Stamps. It’s the old untrue Welfare Queen canard peddled by Reagan back in the 1980s come back to haunt us.
An extension does not solve problems. Congress is currently engaged in a philosophical debate about federal nutrition programs, namely, the farm bill’s Supplemental Nutrition Assistance Program (SNAP). Some members of Congress believe the program and its current level of benefits and eligibility requirements are appropriate, particularly in this challenging economic time. Others erroneously believe the program is fraught with waste, fraud and abuse and want to cut funding and benefits to vulnerable families.
Regardless of where one falls on this issue, it is clear that an extension of the current farm bill is inadequate from both perspectives. Members wanting to preserve existing funding for this vital safety net program should welcome the long-term policy certainty provided by a five-year comprehensive bill, rather than leaving SNAP vulnerable to cuts year after year. And members interested in cutting funding from SNAP won’t achieve any of the so-called reforms they desire without the passage of a new five-year bill; an extension merely perpetuates the status quo.
Rather than waste time on a nutrition-only bill to be brought up in the House next week that would leave between 4 and 6 million Americans ineligible for full SNAP benefits, according to an analysis by the Center on Budget and Policy Priorities, or pass an extension that merely kicks the can down the road, Congress must instead preserve the historic coalition between farmers and consumers in need and pass a comprehensive five-year farm bill that includes both farm and nutrition programs.
Then, here we go again on shutting down the budget process, a debt ceiling increase, and vital services over providing more health care to individuals through the Affordable Health Care Act. Once again, I remind every one that this act is basically the Heritage Institute Plan of the 1990s. It was the Republican answer to “HillaryCare”. How far down the path of slash and burn have we gone that today’s Republican’s reject their “conservative” plan of less than 20 years ago? Here’s an argument for a shutdown.
I’m quickly coming to the conclusion that a government shutdown may be the only way to deal with the coming budget bedlam and #cliffgate.
Let’s start by reviewing the situation.
- As of today there are less than two weeks before fiscal 2014 begins.
- None of the FY14 appropriations have been enacted; none have any chance of being enacted.
- There are no formal negotiations going on between Congress and the White House, between the House and Senate or between Democrats and Republicans.
- The only discussions that seem to be taking place are between the two main factions in the House GOP…and the best thing that can be said about them is that they appear to be going nowhere.
- The original plan suggested by the House Republican leadership was flatly rejected by the tea partiers in the House GOP caucus. The tea partiers were energized by their success.
- House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) haven’t put a new plan on the table since their last plan was rejected by members of their own party a week ago. Boehner has even indicated publicly that he’s not sure whether there is a plan than is acceptable to his caucus.
- Meanwhile, in keeping with the tradition that the House goes first on CRs, Senate Majority Leader Harry Reid (D-NV) has said he is going to wait for the House to act before moving forward. What happens when/if he moves forward is anyone’s guess
- Senate Minority Leader Mitch McConnell (R-KY) has far less room to maneuver compared to previous budget fights because he is being challenged in the GOP Kentucky primary by a tea partier.
- House Democrats, who in the past have provided the votes to help the House GOP pass budget-related bills when the Republican caucus couldn’t decide what to do, this time seem hell bent on not doing it again.
- The White House has far less sway over congressional Democrats now than it did before the 2012 election. Needless to say, it has almost none over congressional Republicans.
- The extremely negative political impact of the 1995-96 shutdowns is such a distant (or nonexistent) memory for so many House Republicans that it’s not at all clear they have any fear of it happening again in 2013.
- To top it all off, this year’s budget debate is less about the budget than it is about defunding Obamacare and that makes a compromise far harder on the budget issues.
Two things usually help with a political stalemate like this (although I’m not really sure there ever has been a situation exactly like this one):
- A charismatic leader who can overcome the partisan warfare
- A crisis that substantially changes the politics
It’s hard to see any leader emerging in the short-term In the current hyper partisan environment. And while there are many charismatic politicians, at least right now none have the stature with both parties to negotiate a budget peace plan.
That leaves a crisis, and baring a military or foreign policy disaster, the only one with the potential to create enough political pain in a relatively short period of time is a federal shutdown.
That makes a shutdown a better option for Boehner, Cantor, McConnell and Reid than it might otherwise seem.
A shutdown also may work for Boehner because (1) it will show his tea partiers that he was willing to allow it to happen as they wanted, (2) it will change the politics as many voters go from being amused to being furious and (3) the tea partiers may be able to use the shutdown with their own voters to prove their political testosterone.
As usual, there’s a group of greedy billionaires behind the shutdown mentality. It seems they all make lots of money just from all the hooplah.
Club for Growth and other extremist groups consider a record like his an unforgivable failure, and they are raising and spending millions to make sure that no Republicans will take similar positions in the next few weeks when the fiscal year ends and the debt limit expires.
If you’re wondering why so many House Republicans seem to believe they can force President Obama to accept a “defunding” of the health care reform law by threatening a government shutdown or a default, it’s because these groups have promised to inflict political pain on any Republican official who doesn’t go along.
Heritage Action and the Senate Conservatives Fund have each released scorecards showing which lawmakers have pledged to “defund Obamacare.” When a senator like Tom Coburn of Oklahoma refuses to pledge, right-wing activists are told: “Please contact Senator Coburn and tell him it’s dishonest to say you oppose Obamacare, but then vote to fund it. Tell him he swore an oath to support and defend the Constitution.”
Mr. Schock and 10 other lawmakers considered suspiciously squishy by the Club for Growth were designated as RINO’s (Republicans in name only), and the club has vowed to find primary opponents and support them with cash — a formidable threat considering that it spent $18 million backing conservative candidates in the 2012 cycle. Americans for Prosperity, a Koch brothers group that has already spent millions on ads fighting health reform, is beginning a new campaign to delay the law’s effects.
These groups, all financed with secret and unlimited money, feed on chaos and would like nothing better than to claim credit for pushing Washington into another crisis. Winning an ideological victory is far more important to them than the severe economic effects of a shutdown or, worse, a default, which could shatter the credit markets.
They also have another reason for their attacks: fund-raising. All their Web sites pushing the defunding scheme include a big “donate” button for the faithful to push. “With your donation, you will be sending a strong message: Obamacare must be defunded now,” saysthe Web site of the National Liberty Federation, another “social welfare” group that sees dollar signs in shutting down the government.
Brian Walsh, a longtime Republican operative, recently noted in U.S. News and World Report that the right is now spending more money attacking Republicans than the Democrats are. “Money begets TV ads, which begets even more money for these groups’ personal coffers,” he wrote. “Pointing fingers and attacking Republicans is apparently a very profitable fund-raising business.”
What always seems odd in all of this is the number of people that fall for these rich, ideological loudmouths whose slash and burn policy is killing every one. It seems to me that it’s an offshoot of xenophobia, misogyny and racism. It appears easier for some folks to believe that women, minorities, and other ethnic groups are more responsible for their economic demise than their bosses and overlords in the pulpits, in elected office, and the bosses chair. Why some one doesn’t question the patriotism and birth certificate of the likes of Ted Cruz is beyond me. He’s really the poster boy for everything that’s removing the greatness from our country imho.
Reading the Tea Leaves on the Coming Ideological Battle over the Debt Ceiling
Posted: January 14, 2013 Filed under: Barack Obama, Congress, Federal Budget and Budget deficit, Fiscal Cliff, Republican politics, Surreality, the GOP, The Media SUCKS, U.S. Economy, U.S. Politics, voodoo economics, We are so F'd | Tags: 14th amendment option, Chuck Todd, Debt Ceiling, Gordon Epps, Joe Weisenthal, Juliana Goldman, Major Garrett, Moby Dick, Paul Krugman, reading tea leaves, Tea party crazies, trillion dollar platinum coin 41 Comments
I’m getting a sense that the White House has a plan to deal with the GOP hostage takers in the debt ceiling fight. The plan involves eliminating every possible alternative to Congress allowing the Treasury to pay the nation’s bills, while calmly but forcefully explaining to the American people how the U.S. government works. Obama apparently understands that the media will not help him educate the American people; therefore he will work around them.
Whether this plan is going work is anyone’s guess, but it seems pretty clear that Obama plans to pin the full responsibility for action on Congress.
On Friday, the administration eliminated the most recent suggestion for a “plan B,” the so-called “trillion dollar platinum coin.” They also reiterated the decision not to use the 14th Amendment option, which Obama first announced during the 2011 debt ceiling fight.
With this, the White House has now ruled out the two best options for preventing a default in the event that the House GOP refused to life the debt ceiling. The White House has been quite adamant that the other alternative (invoking the 14th Amendment) is not acceptable.
So now the stakes are high, as The White House has refused to negotiate with the GOP on a debt ceiling hike.What bargaining chips does The White House hold? Unclear.
Paul Krugman was characteristically shrill.
If I’d spent the past five years living in a monastery or something, I would take the Treasury Department’s declaration that the coin option is out as a sign that there’s some other plan ready to go. Maybe 14th Amendment, maybe moral obligation coupons or some other form of scrip, something.
And maybe there is a plan.
But as we all know, the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies? [….]
…if we didn’t have some history here I might be confident that the administration knows what it’s doing. But we do have that history, and you have to fear the worst.
On Saturday, Krugman reported that he had gotten “calls” about Friday’s post from the powers that be:
The White House insists that it is absolutely, positively not going to cave or indeed even negotiate over the debt ceiling — that it rejected the coin option as a gesture of strength, as a way to put the onus for avoiding default entirely on the GOP.
Truth or famous last words? I guess we’ll find out.
I honestly can’t blame the White House for not wanting to use the 14th amendment or “platinum coin” options. Both would undoubtedly lead to wrangling in the courts and, in the case of the 14 amendment choice, a possible Constitutional crisis. But still, was it wise to publicly eliminate the only possible leverage the White House has to force the House GOP to get over their tantrums and allow the Treasury to pay the bills that Congress has already run up? I simply don’t know.
In the President’s press conference this morning, he appeared to confirm that my sense of the “plan” is accurate. He did a good job of spelling out what the consequences will be for the nation and the world if the U.S. defaults on its debts.
The debt ceiling is not a question of authorizing more spending. Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to.
These are bills that have already been racked up, and we need to pay them. So, while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up. If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed.
We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money. Every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire.
It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession. And ironically it would probably increase our deficit. So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the speaker said two years ago, it would be, and I’m quoting Speaker Boehner now, “a financial disaster, not only for us, but for the worldwide economy.”
So we’ve got to pay our bills. And Republicans in Congress have two choices here. They can act responsibly, and pay America’s bills, or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy. The financial wellbeing of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip. And they better choose quickly, because time is running short.
He also took opportunities to continue patiently explaining, in response to questions from obtuse members of the press corps such as Chuck Todd and Major Garrett.
Despite the efforts of Todd and Garrett to get Obama to say he’ll have to give in to Republican demands, the president repeatedly said he isn’t going to negotiate with GOP terrorists.
Will it work? And more importantly, will Obama really refuse to cave this time? As I noted earlier, Krugman has his doubts. One reporter, Juliana Goldman, even asked the president why anyone should believe him this time when he has always caved in the past. Obama’s response:
Well, first of all, Julianna, let’s take the example of this year and the fiscal cliff. I didn’t say that I would not have any conversations at all about extending the Bush tax cuts. What I said was, we weren’t going to extend Bush tax cuts for the wealthy. And we didn’t.
Now, you can argue that during the campaign, I said — I set the criteria for wealthy at $250,000, and we ended up being at $400,000, but the fact of the matter is, millionaires, billionaires are paying significantly more in taxes, just as I said.
So from — you know, from the start, my concern was making sure that we had a tax code that was fair and that protected the middle class. And my biggest priority was making sure that middle class taxes did not go up. You know, the difference between this year and 2011 is the fact that we’ve already made $1.2 trillion in cuts. And at — at the time, I indicated that there were cuts that we could sensibly make that would not damage our economy, would not impede growth.
I said at the time, I think we should pair it up with revenue in order to have an overall balanced package, but my own budget reflected cuts in discretionary spending. My own budget reflected the cuts that needed to be made. And we’ve made those cuts. Now, the challenge going forward is that we’ve now made some big cuts. And if we’re going to do further deficit reduction, the only way to do it is in a balanced and responsible way.
It’s all very calm and reasonable-sounding; and, as I said, I think Obama did a good job in today’s press conference. He has two more high-profile opportunities to get his message out–the Inaugural Address next Monday and the State of the Union Address on February 12. He could also make campaign-style appearances around the country as he did before the “fiscal cliff” battle.
Now let’s look at what the Republicans are planning. This morning we got the inside dirt from the usual suspects at Politico, Jim Vandehei, Mike Allen, and Jake Sherman. According to the Politico guys, the GOP is getting ready to go on the warpath.
The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.
“I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers of Washington state told us. “We always talk about whether or not we’re going to kick the can down the road. I think the mood is that we’ve come to the end of the road.”
Republican leadership officials, in a series of private meetings and conversations this past week, warned that the White House, much less the broader public, doesn’t understand how hard it will be to talk restive conservatives off the fiscal ledge. To the vast majority of House Republicans, it is far riskier long term to pile up new debt than it is to test the market and economic reaction of default or closing down the government.
GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts he has repeatedly said he opposes. Many more members, including some party leaders, are prepared to shut down the government to make their point. House Speaker John Boehner “may need a shutdown just to get it out of their system,” said a top GOP leadership adviser. “We might need to do that for member-management purposes — so they have an endgame and can show their constituents they’re fighting.”
Basically, the whole world is supposed to stand back and let the Tea Party wackos in the House have an extended, violent temper tantrum to “get it out of their system.” Or else.
According the Politico piece, Speaker Boehner will be meeting with GOP members most of the week to discuss strategy and then on Thursday and Friday House GOP members will meet in Williamsburg, VA. During the two-day meeting Boehner and presumably some of the saner House Republican leaders will try to explain to the Tea Party crazies why forcing the U.S. into default is not a very smart idea. I wonder if there will be visual aids?
So that’s where we are for now. At least Obama has stated his case clearly. However, at some point he is going to have to do something dramatic if the Republicans won’t budge. And why should the Republicans or anyone else believe Obama will stick to his guns this time? Only time will tell. I thought this piece by Garrett Epps at The Atlantic (published on Saturday) summed up the situation very well: Does Obama Actually Have a Debt-Ceiling Plan, or Is He Bluffing?
In Melville’s Moby Dick, the whaling ship Pequod crosses the equator on its quest for the White Whale, and in that instant, Captain Ahab smashes his quadrant to the deck and crushes it underfoot.
No more careful navigation. It is, we understand, Moby Dick or die.
As we hurtle toward the new debt-limit crisis, President Obama has done much the same. He says he won’t negotiate spending cuts with a gun to his head. He’s also said that he won’t invoke § 4 of the Fourteenth Amendment, with its provision that “the public debt of the United States . . . shall not be questioned,” to give him authority to continue borrowing once the debt limit has been reached. The Senate Democratic leadership Friday urged him to prepare to raise the ceiling unilaterally; so far, he has remained mum.
Yet Obama, to all appearances, is the calmest man in this overheated capital as the doomsday clock counts down toward a first-ever U.S. default, and the almost certain global depression that would follow.
We can only wait and see what will happen, but as Epps writes, in the end, the onus will be on Obama.
The moment may be coming when wishing and faith do not suffice. Those are the moments when presidents earn their pay. If that requires reversing course on the Fourteenth Amendment, so be it; if it impels a stupid coin trick, then so it does; and if it imposes a political cost on the president, then he must pay it.
After Ahab smashes the Pequod’s quadrant, second-mate Stubb muses to himself, “Well, well; I heard Ahab mutter, ‘Here some one thrusts these cards into these old hands of mine; swears that I must play by them, and no others.’ And damn me, Ahab, but thou actest right; live in the game, and die in it!”
And that’s just the debt ceiling. Obama will also have to deal with fights over the sequester and the federal budget.
Thursday Reads: War on Women, the Fiscal Cliff, and Austerity Arriving in the USA
Posted: January 3, 2013 Filed under: Fiscal Cliff, morning reads, Psychopaths in charge, Reproductive Rights, Republican politics, Social Security, U.S. Economy, U.S. Politics, War on Women, Women's Rights | Tags: abortion restrictions, austerity, Catfood Commission, Greece, Simpson-Bowles 42 Comments
Good Morning!!
Brrrrrrrrrr! All of a sudden winter has arrived! Can you believe it’s 4 degrees outside my house? With a wind chill factor of 6 below 0. My furnace can’t keep up in this kind of weather, so I have to bundle up. So what else is in the news this morning? Let’s see….
Today the new Congress gets sworn in and there are a record number of women in the new Senate. From ABC News: Meet the New Class: The Senate Swears in a Historic 20 Female Senators
Today the Senate will make history, swearing in a record-breaking 20 female senators – 4 Republicans and 16 Democrats – in office….
“I can’t tell you the joy that I feel in my heart to look at these 20 gifted and talented women from two different parties, different zip codes to fill this room,” Sen. Barbara Mikulksi, D-Md., said while surrounded by the group of women senators. “In all of American history only 16 women had served. Now there are 20 of us.”
Senator-elect Deb Fischer, R-Neb., becomes today the first women to be elected as a senator in Nebraska.
“It was an historic election,” Fischer said, “But what was really fun about it were the number of mothers and fathers who brought their daughters up to me during the campaign and said, “Can we get a picture? Can we get a picture?’ Because people realize it and — things do change, things do change.”
There’s a group photo at the link.
Still, the war on women continues. HuffPo reports: House GOP Lets Violence Against Women Act Passed By Senate Die Without A Vote.
Despite a late-stage intervention by Vice President Joe Biden, House Republican leaders failed to advance the Senate’s 2012 reauthorization of the Violence Against Women Act, an embattled bill that would have extended domestic violence protections to 30 million LGBT individuals, undocumented immigrants and Native American women.
“The House leadership would not bring it up, just like they wouldn’t bring up funding for Sandy [hurricane damage] last night,” said Sen. Patty Murray (D-Wash.), a key backer of the Senate version of the bill, in an interview with HuffPost. “I think they are still so kowtowing to the extreme on the right that they’re not even listening to the moderates, and particularly the women, in their caucus who are saying they support this.”
The Senate bill passed way back in April.
In April, the Senate with bipartisan support passed a version of VAWA that extended protections to three groups of domestic violence victims who had not been covered by the original law, but House Republicans refused to support the legislation with those provisions, saying the measures were politically driven. Instead, they passed their own VAWA bill without the additional protections. In recent weeks, however, even some House Republicans who voted for the pared-down House bill have said they would now support the broader Senate bill — and predicted it would pass if Republican leaders let it come to the floor for a vote.
“I absolutely would support the Senate bill,” Rep. Tom Cole (R-Okla.) told HuffPost in late December, speculating that other House Republicans, namely GOP congresswomen, “are very supportive of that.”
Asked if he thought the Senate bill would pass in the House if it came up for a vote, Cole replied, “My judgment is yes.”
Too little, too late, Congressman. So Boehner managed to screw women yesterday too though it was the refusal to vote on Sandy relief that got all the media attention.
In India police have filed murder charges against five men in the horrific gang rape in New Delhi.
Authorities filed rape and murder charges Thursday against five men accused of the gang rape of a 23-year-old university student on a New Delhi bus, a crime that horrified Indians and provoked a national debate about the treatment of women.
Police said they plan to push for the death penalty in the case, as government officials promised new measures to protect women in the nation’s capital.
Prosecutor Rajiv Mohan filed a case of rape, tampering with evidence, kidnapping, murder and other charges against the men in a new fast-track court in south Delhi inaugurated only the day before to deal specifically with crimes against women. Mohan asked for a closed trial and a hearing was set for Saturday.
The men charged are Ram Singh, 33, the bus driver; his brother Mukesh Singh, 26, who cleans buses for the same company; Pavan Gupta, 19, a fruit vendor; Akshay Singh, 24, a bus washer; and Vinay Sharma, 20, a fitness trainer.
A sixth suspect was listed as 17 and was expected to be tried in a juvenile court, where the maximum sentence would be three years in a reform facility.
Read more at the link. The New Yorker has a good article on the New Delhi story by Basharat Peer: After a Rape and Murder, Fury in Delhi. Please go read the whole thing if you can.
Back in the USA, Republican state legislatures are up to their old tricks. Irin Carmon reports in Salon: Michigan, Virginia pass backdoor abortion restrictions.
In Michigan, Rick Snyder signed a bill passed by the lame-duck Senate — the same one whose anti-union legislating dominated headlines in recent weeks — requiring clinics that perform more than 120 abortions a year to become surgical outpatient facilities, a level of licensing intended to be onerous and put clinics out of business. He also approved a bill that purports to screen for women being coerced into abortions.
Snyder did veto another bill limiting insurance coverage in private employee plans, which would have required purchase of a separate abortion rider. He objected to that on the grounds that rape victims would have to pay out of pocket if they didn’t buy the rider, and because, “As a practical matter, I believe this type of policy is an overreach of government into the private market.” Overreach of government into other realms, of course, is another matter entirely. (According to Michigan resident Emily Magner, one legislator interrupted her to cry, “THIS ISN’T ABOUT WOMEN! THIS IS ABOUT PROTECTING FETUSES!”)
Virginia’s similar, hospital-level restrictions on clinics were somewhat overshadowed by the ultrasound requirements for women seeking abortions. Under threat of forever having the word “transvaginal” attached to his name, Gov. Bob McDonnell tried to split the difference on the ultrasound legislation, but in the final days of the year signed off on the clinic regulations. This followed months of conflict between the Board of Health and Virginia Attorney General Ken Cuccinelli over whether existing clinics would be grandfathered into the legislation. The governor’s office called the regulations “common-sense”; NARAL Pro-Choice Virginia said in a statement, “After two years of shocking backroom deals and bullying public health servants, Governor Bob McDonnell is clearly proving his disregard of Virginians’ opinions about women’s health care.”
Clinic regulations are the most insidious of abortion restrictions, because they’re harder for the layperson to understand and tend to incite less outrage as a result. And opposition to them tends to fall into antiabortion narratives about back-alley butchers resisting safety standards. But research has suggested that they also tend to be the most effective: It’s difficult to talk a woman out of having an abortion, but if you make access near impossible, you might take the choice off the table altogether.
On the “Fiscal Bunny Slope,” as Dakinikat refers to it, TPM reports that Simpson and Bowles of the famous Catfood Commission didn’t like the deal hammered out by the Senate and passed by the House. It seems it doesn’t cause enough suffering for the poor and elderly to satisfy them. Here’s their statement:
“The deal approved today is truly a missed opportunity to do something big to reduce our long term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit. It follows on the $1 trillion reduction in spending that was done in last year’s Budget Control Act. While both steps advance the efforts to put our fiscal house in order, neither one nor the combination of the two come close to solving our Nation’s debt and deficit problems. Our leaders must now have the courage to reform our tax code and entitlement programs such that we stabilize our debt and put it on a downward path as a percent of the economy.
Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs. We have all known for over a year that this fiscal cliff was coming. In fact Washington politicians set it up to force themselves to seriously deal with our Nation’s long term fiscal problems. Yet even after taking the Country to the brink of economic disaster, Washington still could not forge a common sense bipartisan consensus on a plan that stabilizes the debt.
It is now more critical than ever that policymakers return to negotiations that will build on the terms of this agreement and the spending cuts in the Budget Control Act. These future negotiations will need to make the far more difficult reforms that bring spending further under control, make our entitlement programs sustainable and solvent, and reform our tax code to both promote growth and produce revenue. We take some encouragement from the statements by the President and leaders in Congress that they recognize more work needs to be done. In order to reach an agreement, it will be absolutely necessary for both sides to move beyond their comfort zone and reach a principled agreement on a comprehensive plan which puts the debt on a clear downward path relative to the economy.”
Don’t you love the way they call for “courage” from rich Congresspeople and then tell them to cut the sole income of millions of elderly and disabled people? What about calling for the real courage it would take for them to raise the cap on Social Security contributions so that rich people could pay a little more into the system? I doubt if many of them turn down the paltry extra income they get from it.
I’m running out of space, but I have some more fiscal cliff reads for you that I’ll pass on in link dump fashion.
Paul Krugman: That Bad Ceiling Feeling
Noam Scheiber: The House Comes Around on the Cliff. Why Am I Not Reassured?
Washington Post: U.S. markets surge after Congress approves ‘cliff’ deal
George Zornick at The Nation: While Congress Plays Deficit Games, Jobs Crisis Goes Unaddressed
Joan Walsh: Biggest Fiscal Cliff Lessions
Jonathan Chait: The Big Lebowski Explains the Fiscal Cliff
Truthout: Debt Versus Democracy: A Battle for the Future
Joe Conason: The GOP Clown Car Crashes, Again
I’ll end with a couple of articles on the European-style austerity that we’re heading for right now.
Brad Plummer at the Washington Post: U.S. now on pace for European levels of austerity in 2013
For years now, economists like Paul Krugman have been criticizing countries in Europe for engaging in too much austerity during the downturn — that is, enacting tax increases and spending cuts while their economies were still weak.
But after this week’s fiscal cliff deal, the United States is now on pace to engage in about as much fiscal consolidation in 2013 as many European nations have been doing in recent years — and more than countries like Britain and Spain.
A back-of-the-envelope calculation suggests Congress has enacted around $336 billion in tax hikes and spending cuts for the coming year, an austerity package whose total size comes to about 2.1 percent of GDP. (That’s merely the size of the cuts and taxes; it’s not necessarily the effect on growth.)
This includes the expiration of the payroll tax cut, which will raise about $125 billion this year. It includes $68 billion in scheduled cuts to discretionary spending from the 2011 Budget Control Act. It includes $24 billion in new Obamacare taxes and $27 billion in new high-income taxes. And it includes about $92 billion from the now-delayed sequester cuts — assuming that these either take effect or are swapped with other cuts.
Check out the graph at the link. And in Greece, the Guardian reports: Euros discarded as impoverished Greeks resort to bartering
It’s been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.
But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.
“It’s all about exchange and solidarity, helping one another out in these very hard times,” enthused Ioanitou, her hair tucked under a floppy felt cap. “You could say a lot of us have dreams of a utopia without the euro.”
In this bustling port city at the foot of Mount Pelion, in the heart of Greece’s most fertile plain, locals have come up with a novel way of dealing with austerity – adopting their own alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40% of their disposable income as a result of policies imposed in exchange for international aid, the system has been a huge success. Organisers say some 1,300 people have signed up to the informal bartering network.
For users such as Ioanitou, the currency – a form of community banking monitored exclusively online – is not only an effective antidote to wage cuts and soaring taxes but the “best kind of shopping therapy”. “One Tem is the equivalent of one euro. My oil and soap came to 70 Tem and with that I bought oranges, pies, napkins, cleaning products and Christmas decorations,” said the mother-of-five. “I’ve got 30 Tem left over. For women, who are worst affected by unemployment, and don’t have kafeneia [coffeehouses] to go to like men, it’s like belonging to a hugely supportive association.”
Much more at the link.
So….what’s on your reading and blogging list today. I look forward to clicking on your links.
Maybe the deal isn’t as bad as I thought.
Posted: January 1, 2013 Filed under: 2012 presidential campaign, Barack Obama, Congress, Fiscal Cliff, Medicaid, Medicare, Mitt Romney, Social Security, U.S. Economy, U.S. Politics | Tags: "please proceed governor", 2012 presidential debates, Chained CPI 47 Comments
Chess Master or Pawn?
So I went and watched a silly movie (and thoroughly enjoyed it). I calmed down and decided to get back online for a bit. I read some reactions to the fiscal cliff deal from a different perspective, and now I think maybe I was wrong. Sure it’s a lousy deal, but it’s not over yet and at Obama did manage to preserve the social safety net programs, extend unemployment benefits, hold onto the earned income tax credit and child credits, and got some minimal revenue increases.
Look, I’m poor, but I’m not on unemployment. I was willing to go “off the cliff” in order to force the Republicans’ hand. But there are millions of poor and working class people out there would would really suffer if they lose their unemployment and those tax givebacks. Now those have been extended for a year at least. Yes, there will be another fight in two months, but there was going to be a battle royal in two months anyway. Now they will kill two birds with one stone–the debt limit and the sequester will be wrapped up in one fight.
Have I drunk the Koolaid? No, but I admit I really do want to hang onto some hope for the future. So beat me up in the comments all you want. I’m going to hold off judging this deal for two more months. Then if Obama completely sells out the poor and elderly, I’ll admit I made a big mistake. But for now, I’m willing to give Obama a chance.
My changed perspective came from reading a couple of diaries at DailyKos (so shoot me!) and then rereading pieces by Paul Krugman and Noam Scheiber. First up, a Kos diary by ban nock: “Obama’s Deal From a poor Person’s Perspective.”
As usual Obama looked out for us fairly well. All you folks in the financial industry who are weeping and wailing can just pound sand, cash in some stock options, sell your Lincoln, cry me a river.
The biggest thing is earned income tax credit and medicaid, neither of which were touched. Looks like we lost 2% on Social Security contributions but that is more than made up by the earned income credit (EIC)
I should do more to define poor. By poor I mean lower than median income down to, well, to really really poor. Median is around 40K.
The earned income credit is the thing that pulls the greatest number of people out of poverty in the USA. It’s an alternative to raising minimum wages.
You take your adjusted gross income and if you’re a family with a coupla kids making between $13K and $22K Uncle Sam is going to either reduce your taxes by around $5K or reduce them as much as possible and send you a fat check for the remainder. How cool is that? Chart to figure what you get here. http://www.irs.gov/… What is Adjusted Gross Income? That’s how much money you make, but it could come down for things like IRA contributions.
And then, as ban nock points out, there’s unemployment, which is the only thing between millions of Americans and abject poverty.
Now when I first read ban nock’s diary, I was somewhat skeptical. My point of view was that Obama is just warming up for the big kill, “entitlement reform.” But wait a minute. The Republicans were screaming for that in 2011 and again in this last fight. But they didn’t get it. In fact Harry Reid even took the Chained CPI off the table and Obama and Biden didn’t put it back on.
Then I moved on to this diary by Alexander Dukes AKA “Game Guru”: “Umm… We’re playing chess, not checkers. And we’re winning.” You really need to read the whole thing, but the gist is that Obama has been dealing with people who are utterly intractable–they’re actually buttfuck crazy!–so what Obama has done is to keep kicking the can down the road while each time getting something for nothing and at the same time preserving the social programs most needed by the poor and unemployed. Here’s an
First off, lets establish that we’re playing chess, not checkers. Our objective is not to win more battles than the Republicans, its to win the war. In this case its a war against the Republican objective to effectively dismantle Medicare, Social Security, Obamacare, the EPA and every other part of the government that doesn’t leave the people to the whims of the 1 percent. This is chess, so we can afford to lose a few pieces so that we draw our opponent in for the final blow. With every turn we attempt to move toward our ultimate goal, even if that means we take some blows along the way. Chess is a thinking man’s game, it takes a long time to play. Similarly, in these budget fights, Obama’s thinking about the long haul.
Lets examine the President’s strategy: In the first budget fight, Republicans wanted to extend the Bush tax cuts for everyone. The Democrats wanted to extend unemployment benefits and renew the START treaty. There was a great deal of debate… and something happened. What did we end up with? We got START, the unemployment extension, and what else…. what else… oh yeah, DADT was repealed! All for maintaining the tax status quo at the time. Essentially, we offered nothing, and the Republicans got nothing.
Okay, so we gave up the hope for more revenue from taxing the rich, but as Republicans keep pointing out, that new revenue won’t even keep the government going for very long. It’s mostly a symbolic effort to restore some fairness to the tax system.
After that was the debt ceiling fight. Well, Obama almost got to a deal back in 2011, but to no avail. So to raise the debt ceiling congress created the sequester. Nothing for nothing there. Not a bad or good deal, because there wasn’t really a deal at all. But in the sense that there was a deal, both sides agreed to a lame duck rematch, betting that their side would win the election and have the leverage in the sequester fight. Obama won the election, so he had the leverage.
Again, Republicans basically got nothing–just a fake deadline that everyone knew all along was just kicking the can down the road.
Lets discuss what happened (and is still happening) today. Yesterday, Mitch McConnell and Obama reached a deal that did 3 main things: It ends the Bush tax cuts for those making over $400K, it raised the estate tax for those with estates greater than 5 million, and extends unemployment benefits for another year. For this, the Republicans gained… nothing.
That’s right, nothing. Yes, the sequester is extended for only 60 days, but that bumps right up against the debt ceiling… something the Republicans were going to fight over anyway. The media common wisdom is that the Republicans gained “leverage” in this deal. How so? Obama just combined two potential clusterf*cks into one! He gained a years worth of unemployment benefits, tax hikes on the 1%, and an estate tax hike; all for making his job easier in the long term.
Next time Obama may have to cave on the Chained CPI, which would be horrible, but better than privatization of Social Security. But maybe he won’t have to give that up, who knows? All we know for now is that Social Security hasn’t been changed yet.
Obama wanted the debt limited to be raised with the elimination of the sequester. This is essentially raising the limit along with eliminating the sequester, only now he’s getting more of what he wants when the debate starts because he’s already got the tax hikes and the unemployment extension!
Not only that, but now he has two major speeches between now and then to set the debate squarely in his favor.
It makes sense to me. Frankly, I buy it for now. And you know why I’m willing to string Obama along for another two months? Because of what happened in his second debate with Mitt Romney:
Please proceed, Governor.
Please proceed, Speaker.
Maybe I’m nuts, but maybe I’m not. I’m going to wait two months and find out. Now let’s look at what Krugman had to say about the upside of the deal:
To make sense of what just happened, we need to ask what is really at stake, and how much difference the budget deal makes in the larger picture.
So, what are the two sides really fighting about? Surely the answer is, the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also implement and improve Obamacare so that we become a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.
There are two ways progressives can lose this fight. One is direct defeat on the question of social insurance, with Congress actually voting to privatize and eventually phase out key programs — or with Democratic politicians themselves giving away their political birthright in the name of a mess of pottage Grand Bargain. The other is for conservatives to successfully starve the beast — to drive revenue so low through tax cuts that the social insurance programs can’t be sustained.
The good news for progressives is that danger #1 has been averted, at least so far — and not without a lot of anxiety first.
Romney lost, so nothing like the Ryan plan is on the table until President Santorum takes office, or something. Meanwhile, in 2011 Obama was willing to raise the Medicare age, in 2012 to cut Social Security benefits; but luckily the extremists of the right scuttled both deals. There are no cuts in benefits in this deal.
And Scheiber’s take on the upside:
I think a reasonable person can defend the bill on its own terms. The fact is that nudging up the tax threshold to $450,000 only sacrifices $100-200 billion in revenue over the next decade (against the $700-800 billion the administration would have secured with its original threshold), while allowing unemployment benefits to lapse would cause real pain to both the 2 million people directly affected and, indirectly, to the economy. Yes, Obama could have gotten the latter without giving up the former had he just waited another few days—at which point what the GOP considers a tax increase suddenly becomes a tax cut. But these things are always easier to pull the trigger on when you, er, don’t actually have to pull the trigger. I can’t begrudge Obama his wanting to avoid some downside risk for only a marginally better deal.
In other words, we are dealing with insane people–the Republicans in the House and Senate–and so far we haven’t given away the real farm, the social safety net. Unfortunately we don’t have enough revenue for a real stimulus either, but we go back to the table in two months and the Republicans are scoring that as a win for them.
But what if it’s not? What if dealing both issues at once–the debt ceiling and the sequester–and sooner, is an advantage for Democrats and the White House? We can’t know for sure until the next fight. But Obama did get a year of unemployment, those tax givebacks, and some symbolic concessions from the super-rich. And he does have the State of the Union and Inauguration speeches to call out the Republicans and make his case.
So that’s why I’m going to give this deal a chance for now. It’s not a great deal, but the important stuff has been protected for the time being. Now go ahead and hammer me in the comments, I don’t mind.
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