Washington's Debt Negotiations Debacle
http://thedianerehmshow.org/shows/2011-07-27/washingtons-debt-negotiations-debacle
The White House versus Republican leaders over the deficit and debt ceiling: the threat to America's standing in the world, what comes next and who voters will blame.
Guests
Stephanie Cutter
assistant to the president and deputy senior adviser in the Obama administration.
Norman Ornstein
resident scholar at the American Enterprise Institute and coauthor of "The Broken Branch: How Congress Is Failing America and How to Get It Back on Track."
Alice Rivlin
senior fellow, Brookings Institution, vice chair, Board of Governors, Federal Reserve System (1996-99); director, White House Office of Management and Budget (1994-96); and founding director, Congressional Budget Office (1975-83).
Sudeep Reddy
economics reporter, The Wall Street Journal.
Comments
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Dianne,
Please have your guests comment on the intense global competition for jobs. Inefficiencies in the US tax codes, medical costs, and entitlements are pushing away jobs and global employers like GE - not just in manufacturing - but also well paid white collor jobs such as Engineering and accounting.
The basic fact is we need more jobs to increase our tax revenue to get out of debt. We must compete. How can we compete as individuals if we dont compete as a country to attract job creation here?
Corporations will WANT to come back to take advantage of our excellent individual talent, education, work ethic, and ingenuity if we can increase government and medical efficiency to reduce costs per employee.
Why is no one talking about this?
Where is the presidents plan? Our president only offers vague solutions that he thinks will put off the real debate until after he is reelected. The country did a total crap shoot electing Mr. Obama, the country lost. To expect progress and prosperity from a man that never did anything in his past life to produce such results from anything he was previously involved with is ridiculous. This is the first time in Mr. Obama's life that he is under any pressure to produce, hell of a time to get experience. Mr. Obama has only buried us deeper in dept with "Obama Care" and has made all of our money worth less with the Federal Reserve printing money with reckless abandon, a tax that stole from everyone to prop up an out of control government. Stand firm Tea Party Congressional members, you are the only ones who speak to the real problems. Cut Cap and Balance.
In my lifetime, I can recall three occasions when conservatives have used their house majority to stage big showdowns with the president -- the Gingrich government shutdown, the Clinton impeachment, and now the debt ceiling. Time and again, they've proven to be both rash and inflexible, willing to drag the country into spectacles to satisfy their base, unwilling to take part in responsible governance that would actually solve problems. My question is: have liberals EVER proceeded in a similar manner--against Reagan, the Bushes, etc.? It irritates me when people say the "system is broken," as if that means both parties are doing the breaking.
Please point out that the US government is not a business. Boehner used that confounding belief as the foundation of his response to the president but it is not true. The government is also not a family sitting down to do their finances. True, people can relate to these things but it is at its core inaccurate and unhelpful in forwarding this discussion.
It is also important to point out the president is not responsible to come up with a debt reduction bill - that is the role of congress.
The president is not trying to scare the public. Most economists have said a default would be disastrous to our economy and the president is just repeating the warnings that he has been told. Moody's had said that a default would result in a downgrade of our credit rating so how is it that the president is accused of scaring instead of informing?
Can you point out that cutting spending means cutting jobs. There is a direct correlation between these two events and yet there is little said about this.
Lastly, default is being used as a bargaining chip by the conservatives because they understand that default would be the worst possible thing. They are the ones engaging in scare tactics and threats at the cost of everyone in this country. The vote to raise the debt ceiling was not to be a way for one party to coerce another to change a budget that was already ratified.
The press should point out these irresponsible statements and inaccuracies. It is not enough to report what was said but if it is honest and truthful. Where has the press been? There are so many stories out there that need to be told and yet all I hear is that both sides are unwilling to compromise. This debate was created by one side to hijack the discussion, create strife and anxiety in the system, and further an agenda that includes making the president look weak and ineffective.
To solve debt problems, one needs to know the cause of the debt. Did Obama as a senator support our ongoing wars? If he did, he can be held responsible for about one 600th (1/600) of it. Add the ongoing cost of care for vets. (and military)
To really face reality, look into a mirror. You may have been tricked and lied to, yet your vote has costs. How do you recognize truth? Do you trust the media? Will your conduct be your ticket to heaven? Or, will you join that guy in hell, who chose silence instead of responsibility? Pleading ignorance is automatic guilty.
monte, I have been following this debacle for several months, and it is clear to me that the President has offered up several plans. There must have been something otherwise what were they talking about in the secret meetings several weeks ago. Besides, doesn't the Constitution give the Congress have the Power of the Purse, not the President? Congress is solely responsible for this mess not the President, regardless if he is the leader of his party or not.
It seems to me that the resolution is pretty clear. If 40% of the government is run by borrowing, and if the debt ceiling is not raised, then 40% of the government needs to be shut down. Instead of not sending out Social Security checks or paying our soldiers risking their lives, we just place almost all funding for congressional activities, including the congress' salary, the salary & benefits for their legions of aides, no payments to the congressional health care plan, the climate control to their offices, access to government transportation in that 40%. Everything except the lights in the chamber so they can find their seats to vote from. Let's see how fast things get done under these circumstances.
Please ask your guests if there is an estamite of how many jobs will be lost if the Republican Party's attempt to cut spending by 1.2 trillon is adopted
Why is nobody using the word "gridlock"? That was the keyword of an earlier Congress, and all over the press coverage at the time. Did we learn any lessons from that difficult period?
Insightful comments, amagica. Your first point, that the government is NOT a business, is a very important one. I hope the guests can comment on the reasons for making that comparison.
I am sick of hearing how congresses fault in show after show. It does not matter if its Dianes show or someone elses everyone is focusing on how angry the American people are and ignoring the fact that we are congresses boss. This is OUR fault just as much if not more so then theirs.
We the American people are the boss of all elected officials. When we put them in office we hire an employee. As the boss it is our job to supervise the work of all our employees. So if instead of watching over our employees we go back to our office and surf news & celebrity gossip on the net, we cant then be surprised when we step back out of our office at the end of the day and find bickering employees and zero work being done.
I am indeed sick of congress....but I am equally sick of the American people who act EXACTLY like congress but then think they are somehow better. Washington does not need to run like the American family.....they need to STOP acting like the American family.
Whatever the deal will be. Make not mistake. The history of the Republic of Weimar tells us that inflationary policies do not erase sovereign debt.
Read more here:
http://brainmindinst.blogspot.com/2008/12/reichsmark-fiscus-exuberance.html
The world is getting very worried about the U.S. It seems the GOP's strategy to hurt President Obama has backfired on them and now could have serious repercussions for the country.
Has anyone talked about the number of jobs that will be lost when either the Republican or Democratic bills are past due to reducing spending in the short term as well as the long term? One noteable economist on Bloomberg guaranteed a loss of 1.8 million jobs if the Republican bill is past as it stands as of July 26.
Woody
The short term extension is not balanced: all cuts and no new revenue. It is a bald-faced attempt to move this crisis to election time. If this passes, I, for one, will be campaigning against those who voted for it, with the slogan: If they can't take YES for an answer, then they need to go!
Republicans who are playing to base and Grover Nordquist. Who made him as a non elected ideologue a basis for the running of the country. The Republicans are like the child who kills his parents and ask for sympathy as an orphan. The Republicans created the need for a deficit increase- 1.5 Trillion lost revenue from Bush tax cuts to date and 800
Billion from Iraq unecessary war to date- 2.5 Trillion rmoved from the
current Deficit would obviate any pressure to increase the limit.
If they truly believe in individual resposibility they should agree to increase deficit their party and President created.
VETO?
Obama's spokesperson did not say that OBAMA would veto the Speaker's proposal.
She ducked the question.
I expect Obama to cave - again.
Note also: the President's bipartisan Commission may have had a majority vote in favor, but it did NOT have the agreed upon super-majority to make a "binding" recommendation. History re-invented!
QUESTION: Who said the following?:
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
ANSWER: Senator Barrack Obama before he voted "NO" to raising the debt limit.
QUESTION: How many times did Senator Barack Obama vote to raise the debt limit?
ANSWER: ZERO. Obama voted against raising the debt limit once and then skipped the next two votes. He has never voted to raise the debt limit.
Thanks for having Norman Ornstein on. Illuminating as always.
It was not a secret when the debt ceiling would be reached, so Congress and the Administration have had lots of time to do something. Do your guests not understand the mathematics of the debt we're already in? It is unsustainable, so adding more debt (raising the ceiling) will just make it worse. The government has been engaged in deficit spending for decades. That and the inflationary Federal Reserve System have reduced the value of the dollar by 95% since the inception of the Fed. Pay now or pay much more later.
Ms. Cutter compared the effect of an interest rate increase on the American public to a general tax increase, but in fact it would be even worse. If the Congressional mismanagement of the debt ceiling causes interest rates to rise, the money taken out of people's pockets would go straight to the banks, and not invested in public services as taxes would be.
Ms. Rivlin said, "The President has presented a balanced plan". I have emailed the show and asked if Ms. Rivlin would say where we might read the details of that plan. Is it on the web somewhere? Is it visible only with special glasses? Is it in some other dimension?
The FACT is, the President has presented NO plan. Nothing that contains any specifics (that's what a plan is!) that we can read and consider.
Your panels desire to blame the parties equally is disengenious and alarming. The president is asking for token amounts of revenue, republicans are receiving large cuts to the government and threatening the entire world economy if they don't get it. This desire to act as if both parties are to blame is a deriliction of journalistic duty and is literally tearing the country apart. Does it require a full scale financial crisis for the entire world for american reporters to report accurately -- and place blame where blame is due? Apparently. Shame on you.
How many times do we have to go down the path of raise taxes now cut spending later. It does not work, it has never worked and it never will work. Most politicians will never have the courage to cut spending unless forced too. Better to address the problem now in an honest way. The president has nothing in writing, NOTHING, how can a debate between ideologies be waged if one side only has fancy speeches as a platform. Talk is all we get from Mr. Obama and the new party of no in the senate will not even allow debate on "cut cap and balance". What are the democrats afraid of? I think it's obvious, they only care about reelection.
I would like to know what are the new revenue sources being proposed in this posturing. I hear about potential cuts in spending programs, but have somehow missed the information about revenue creation, other than the pie in the sky jobs touted to be created by this protected/untouchable wealthy class. It seems they are not expected to contribute to fixing this problem. Many of these new super-rich can trace their current lifestyles to the huge CEO bonuses awarded during the recent Wall street Debacle.
Just my opinion...
Social Security Checks.
Ms Rivlin is engaging in a bit of fear mongering about the checks going out.
Each "payday" money goes into the trust funds. Between the money coming in and the money in the supposed :lock-box" the money for social security is there!
Note there would be more money "there" if Obama had not pushed for a 2% reduction in the payroll tax - create a greater illusion of social security shortfalls.
Why is nobody talking about the effects of all the talk about cuts, cuts are jobs
look at the teachers, do you think any teacher, well maybe a few are spending any money they have. Seniors which I'm one would not spend a penny and have not for the last two months. All my bill will get put off. This draw back has got to effect the economic situation.
Peter,
Inflation? Where's the full employment, rising wages and complete capacity utilization that would give rise to the inflation you refer to?
Wiemar and US - apples and oranges. Their reparations' debt was denominated in foreign currency, our obligations are denominated in dollars.
How does any sane person come to the idea that cutting the budget of the largest employer in the nation will not cause a crash of the national economy?
monte,
Here it is, in writing. I suspect this will not satisfy you because it is not written in his handwriting with a quorum of Republicans witnessing it but having endorsed the plan he makes it his. There it is, in writing, NEXT!
Unfortunately, a lot of the damage has already been done. I've lost confidence in our ability to govern ourselves, and so has the world. We look like a banana republic.