Playing Political Games

I hope you’ve had your head in the sand for the last several weeks, but if you haven’t you’ve probably heard that congress hasn’t been able to raise the debt ceiling and the United States might default on its debt right around August 2nd. “As Washington scrambles Sunday to avert default, the deficit of trust among leaders in Congress is becoming almost more important than the debt numbers themselves.” Speaker John Boehner is now suggesting that the same $3 trillion dollar deal take place in two increments. His “goal is to show his conservative rank and file that he has locked in savings at each step, but the process is so tilted against Democrats it risks blowing up in the Republicans’ face — with huge unknown consequences for both parties and the nation.”

Both parties are playing political games, with Republicans trying to force a second raising of the debt limit – unpopular and suddenly akin to treason in the Republican base – before the 2012 election, while Democrats are pushing the next vote beyond 2012 and trying to run the government and economy in longer than a three-month vote cycle.

The dual-track approach is, in the end, a roll of the dice on Boehner’s part, primarily because it does not guarantee that the debt ceiling will be increased enough to last the government through the 2012 election cycle. Obama has said he won’t sign such a bill, and Democratic leadership affirmed on Saturday that they would not support it either….
Even Boehner’s own party seemed skeptical that his plan could work.

While both parties play political games, those in charge of the economy have an actual task to accomplish.

“It’s unthinkable that this country will not meet its obligations on time. It’s just unthinkable we’d ever do that. It’s not going to happen,” [Treasury Secretary] Geithner said on CNN’s “State of the Union.”

But the unthinkable is clearly being thought about. On Friday, Geithner met with Federal Reserve Chairman Ben Bernanke and Federal Reserve Bank of New York President William Dudley to discuss “the implications for the U.S. economy if Congress fails to act.“

Both parties are playing games, but last time I checked the plurality of people would blame Republicans if the debt ceiling is not increased; the result of which is that the economy would collapse. Some in congress – particularly the vocal Bernie Sanders – know that both parties are playing games, and are tired of it.

Some people think that’s not so good [that Pell Grants nutrition programs, and others may not be there. If you think it’s a good idea that we enforce clean air and clean water provisions so that our kids can be healthy, those provisions may not be there because there will be major cuts in environmental protection], but at least our Republican friends are saying we need revenue and we’re going to get $1 trillion in revenue. But wait a minute. If you read the proposal, there are very, very clear provisions making sure that we are going to make massive cuts in programs for working families, for the elderly, for the children. Those cuts are written in black and white. What about the revenue? Well, it’s kind of vague. The projection is that we would rise over a 10-year period $100 billion in revenue. Where is that going to come? Is it necessarily going to come from the wealthiest people in this economy? Is it going to come from large corporations who are enjoying huge tax breaks? That is not clear at all. I want middle-class families to understand that when we talk about increased revenues, do you know where that comes from? It may come from cutbacks in the home mortgage interest deduction program, which is so very important to millions and millions of families. It may mean that if you have a health care program today, that health care program may be taxed. That’s a way to raise revenue. It may be that there will be increased taxes on your retirement programs, your I.R.A.’s, your 401(k)’s. But we don’t have the details for that. All we have is some kind of vague promise that we’re going to raise $1 trillion over the next 10 years, no enforcement mechanism and no clarity as to where that revenue will come from.

Meanwhile, despite polls showing that Republicans are to blame in the negotiations and will be blamed if negotiations fail, Boehner is still pushing the short-term incremental deal Democrats have said they won’t accept. If it’s not possible for a bipartisan plan to work Boehner said “I and my Republican colleagues in the House are prepared to move on our own;” how he plans to do that when Democrats have a majority in the Senate and control the executive branch will be fascinating. At least he recognizes that “it may be pretty hard to put Humpty Dumpty back together again.” His “last offer is still out there,” which is the $800 billion in revenue and massive spending cuts that Bernie Sanders elaborated on.