Entries Tagged as 'Boehner'

The Jerk Party

July 29th, 2011 at 3:26 pm 160 Comments

I’m not the first to make this comment, health but the current debt limit debate shows what the Tea Party movement (which I once basically supported) really values: being a jerk. Speaker Boehner has a close-to-perfect voting record on conservative issues, patient is not terribly warm in person (heck, Newt comes across better) and has proposed a good, tough spending cut plan. But he has also demonstrated a modicum of willingness to work with the president and appears to want to bring the debt ceiling crisis to a close.

Eric Cantor—who may well become speaker before the end of the year—does not disagree with Boehner on any major issue including the debt plan but, unlike Boehner, Cantor is basically a jerk who is willing to work against his own Speaker, the President, the financial interests that have traditionally supported his party and, indeed, just about everyone else so long as it keeps him in the media. I’m disgusted.

A Recovery Menaced By Dysfunctional Politics

July 29th, 2011 at 11:28 am 79 Comments

In a time of fundamental uncertainty, case what do we know for certain?

No, order that’s not a Yogi Berra kind of question.

Timing of passage of an increase of some size in the national debt ceiling remains uncertain.

Which side will blink first remains uncertain.

Final form of the legislation remains uncertain.

Market reaction remains uncertain.

But we do know some things for certain.

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Ratings Agencies Want to See Bush Tax Cuts Lapse

July 26th, 2011 at 11:58 pm 79 Comments

The suggestion that the US needs to cut $4 trillion in projected debt over the next ten years in order to avoid a downgrade in its debt rating, posed here in an S&P report, has gained significant traction among many on the right. Erick Erickson, when he’s not denying “absolution” to the falsely faithful in the GOP, has emphasized this cut of $4 trillion as crucial to avoid a downgrade.

However, digging into the S&P report reveals some details that might be more problematic for many seeming “deficit hawks.” Though this report does suggest that $4 trillion in cuts/increased revenue over the next ten years would be enough to keep an AAA rating, it also says that its baseline for savings assumes the expiration of the Bush tax cuts in 2012. Will many of these “deficit hawks” abandon those tax cuts in order to appease S&P and keep an AAA rating?

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Clear it with Rush

David Frum July 25th, 2011 at 3:29 pm 37 Comments

I heard Rush Limbaugh talk in his first hour today about the details of the Boehner plan. I was in the car returning from the gym, and I just assumed I’d missed the release of the plan earlier.

But no. Limbaugh indeed got the scoop.

It’s worth noting that for all the conservative obsession with the dreaded Mainstream Media, it is really the Republican party that is far more in thrall to its pet media organizations. A Democratic plan proposal can survive the disapproval of the New York Times. But Rush Limbaugh has veto power over the GOP as now constituted.

It’s incredible, it’s self-defeating, it’s absurd … but it’s the way it is.

Was GOP Fooled By Its Own Budget Numbers?

April 14th, 2011 at 3:07 pm 14 Comments

A substantial number of the House Republican caucus are now complaining loudly about the “bad deal” their leadership struck to pass the Continuing Resolution for FY11 last week.  That agreement kept the government open and many expect it will pass the House today only because enough Democrats cross the aisle and vote with Speaker Boehner.

The complaint centers on two realities.

First, help many of the new House Republicans pledged to voters last November that they would fight to the bitter end to get $100 billion in spending cuts in the FY11 budget.

Second, purchase as the “real” numbers begin to emerge, unhealthy many of these members now realize that the $38 billion in “cuts” could mean perhaps as little as $15 billion in true deficit reduction in FY11.

We touched on both these issues before.

To repeat—no way existed short of closing down most domestic government agencies to get $100 billion in real deficit reduction from the FY11 budget.

And, just because you “cut” appropriations bills by $100 billion doesn’t mean you have cut the deficit by $100 billion.

Things get a bit wonky here, but if one doesn’t know the budget process and the federal budget, both wonky things, one makes bad assumptions.  The conservative complaints now reveal how little too many incoming GOP members knew about either.

If you cut money from the president’s proposed budget for FY11, you have to make sure that you are cutting from already-authorized (enacted) programs, not from the president’s wish list of new spending.  Obviously, if you are rejecting additional money to already existing programs, or are refusing to fund new initiatives, you really aren’t cutting the Congressional Budget Office’s deficit baseline.  After all, you are cutting things that don’t yet exist.

If you refuse to spend monies that were appropriated, but now lie unused (as in the case of census expenditures) and will never be used for the purpose intended, you are cutting spending in some sense, but you surely cannot claim to be cutting deficits.  That money was never going to be spent any way.  You cannot restrain spending by restraining non-spending.

Finally, when you get down to the real meat of cutting presently-enacted programs in which money is being spent and will continue to be spent, you have the nasty little fact of something called “spend-out rates.”

This is where most folks go to sleep.  But, it’s also the most important part of understanding the appropriations and budget processes.  As senior budget staff in the Senate, we used to say that the most important thing we could teach new senators was the difference between budget authority and outlays.  Sometimes we succeeded.

If you want to cut $100 billion from spending in non-security, discretionary accounts—really cut monies that will be spent otherwise—you would probably have to cut about $250-$300 billion in budget authority.  Since the total budget authority for all those accounts amounts to less than $500 billion in FY11, and since the Fiscal Year is about half-over, that means to truly save $100 billion in outlays, about a third of the government agencies would be shuttered.

Most money that is destined to be spent in any fiscal year goes to salaries, expenses, medical benefit support, and entitlements.  Large construction projects, or defense projects like new ships or planes, spend out their budget authority over four, five, as much as seven years.  So eliminating all funding for a new ship channel might cut $500 million in budget authority, but would cut deficits only a small fraction of that in the first fiscal year.

The way to cut spending with any assurance is to change underlying authorizations.  You have to change the way we implement Medicare, Medicaid, Social Security, farm subsidies and other mandatories and entitlements.

And even if you fundamentally, radically reform entitlements, real deficit and debt savings won’t occur to any great degree within the next couple of fiscal years.

Let me guess: so, now you are bored out of your mind.  You wonder why you had to listen to all this gobbledy-gook.  You just want to cut spending and now some budget geek is telling you that when you cut spending you don’t cut spending?

That’s how many of the new House Republicans must feel about now.  They should have listened carefully when they discussed with their colleagues how to cut $100 billion or even $38 billion.  But too many of them didn’t and now they feel misled and embarrassed.

They weren’t misled.  Too many of them might have happened to sleep through that boring budget lecture that the House Republican leadership provided a couple of months ago at the “budget camp.”

Now comes the debt ceiling increase vote.  It will even more complicated.  And the scar tissue from the CR fight will be fresh.

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Boehner Faces GOP Budget Revolt

March 29th, 2011 at 5:06 pm 13 Comments

Today’s news that conservatives in the House Republican Study Committee will draft their own alternative Fiscal Year 2012 budget to challenge the GOP leadership highlights Speaker Boehner’s problems in keeping his caucus unified. But he’s not the only one. In the budget fight, cialis neither President Obama, capsule nor Speaker Boehner, nor Leader Reid can lead, because by and large their troops won’t follow.

So far in the spending fight, delay may have actually helped congressional leaders.  All the strum und drang has been about very tiny spending numbers and the CR.  The FY12 budget (and its five- and ten-year projections) will involve very big numbers and very basic fiscal policy.  And the debt ceiling will involve both.

Instead of trying to make a deal on FY 11, then another on the FY12 budget, and a third on the debt ceiling, the best strategy would be to make a “grand bargain” on all three at the same time.  If Ryan delays a couple of weeks, and Congress forges another CR until mid-April or so, then the debt ceiling may be nearly breached and a “global” discussion of all three could take place.

All of this complicated scenario-devising can’t hide the underlying problem.  Just ask yourself these three questions:

  • How can Chairman Ryan get the necessary votes either in committee or on the House floor when he will be asking his colleagues to vote for at least 2 years of trillion dollar deficits?
  • Who in either party will vote to radically change federal pensions, Medicare, Medicaid, and other entitlements with an aging voting population and no short term deficit reduction in the offing?
  • Why would the President begin public negotiations when it is clear that neither Boehner nor Reid have their own troops in line?

In short, none of the three principals can make a deal that they may be able to deliver on.

The revolution in the GOP ranks is dramatized by the announcement today that the Republican Study Committee within the House caucus will develop its own budget, countering what they perceive will be an insufficiently aggressive budget by Boehner and Ryan.  Since almost two-thirds of House Republicans belong to the RSC, their challenge cannot be ignored.

At the same time, House Democratic Minority Whip, Steny Hoyer, has repeated that once again it may be the House Democrats who come to Boehner’s aid and provide enough votes to pass the CR for FY11.  Recall that at the last vote, it was Democrats who voted in enough numbers to pass the CR, as 54 Republicans voted against it.  Whether Hoyer’s remarks help or hurt Boehner remains unclear.

One of the most famous verses in the Bible is 1 Corinthians 14:8.  It reads, “For if the trumpet give an uncertain sound, who shall prepare himself to the battle?”

The President has sounded the trumpet—we have unsustainable deficits and debt and we must take action.  Boehner and Reid agree resoundingly.  Every serious policymaker and economist concurs—America’s fiscal path will lead to fundamental damage to America’s economy and international standing in the future.

And yet, in his own way, each sounds an uncertain trumpet to the troops.  The president wants Congress to go first; Reid wants the House to act first; Boehner doesn’t know if he has the votes to go first.  The American people look on, confused and bemused, in a state of “buyer’s remorse” over the election of November 2010.

In such a melee, with no one blowing the trumpet and leading the charge, the troops haven’t even formed up yet.

The dust will clear one way or the other.  Congress will act in a convincing fashion to get projected deficits trending down or the bond traders in international markets will strike.  So we end with a final question:

“What happens when a 30-year-old bond trader in London all of a sudden wants 5.5 per cent on the American 10-year note, instead of the current 3.4 per cent?”

Stay tuned.

Boehner’s Budget Truce Averts Shutdown

March 2nd, 2011 at 12:00 am 17 Comments

As Congress dithers on the federal budget, the states have taken the bull by the horns.  Sometimes, as in the case of Wisconsin Gov. Scott, maybe too close to the horns.

Ironically, Wisconsin really does face a potential government shutdown; but the federal government doesn’t because the House and Senate leadership, along with President Obama, have concocted a two-week extension of the Continuing Resolution (CR) for Fiscal Year 2011 that has passed the House and awaits a Senate vote this week.

In one case, with Wisconsin Governor Scott Walker, overreach has led to a decline in support for his position.  Rather than take the givebacks that the public unions offered earlier in this chaos, Walker decided to take on the underlying proposition that these public unions should even exist.  Like the Allied army at Arnhem, he may find that he has tried to reach a bridge too far.

In the other case, with House Republicans. underreach has led to an uneasy truce that will allow the government to operate for another two weeks and, we are told, save $4 billion in spending that would otherwise have occurred.  I have written about the gimmicks in both presidential, Senate and House “cuts,” so I won’t belabor the point other than to say at some point that the eighty-seven new Republicans in the House will catch on to the act.

House Speaker John Boehner gained enough goodwill from his new caucus members by the open rule on the CR two weeks ago that, as we predicted, the House GOP went along with the two week extension.  But the next bite at that apple might prove very sour for the House leadership if no long-term CR with big cuts emerges. This play is still in Act 1.

The game cannot continue much longer when seven months of the fiscal year have passed; agency heads will simply not be able to sustain the kinds of savings envisioned by House Republicans.  At some point, the Congressional Budget Office will have to opine on the impact of $4 billion in “cuts” every two weeks on the federal workforce.  Already, a couple of analysts have predicted somewhere between 600,000 and 700,000 jobs lost.

Use the whole salt shaker when analyzing these predictions.  The assumptions underlying them are rarely fully revealed.  How long a shutdown? Of what kind? Which personnel?  They are all questions relevant to the answer. My own view is simple no federal personnel are going to lose their jobs and these estimates represent attack points for Democrats against Republicans.

One way to gauge how serious Congress is may be by comparing the crowds in Madison, Columbus, and Indianapolis protesting state government action, with the lack of any crowds, or even any perceived tension, among federal workers in Washington, D.C., or anywhere else in the nation.  Most feds have been through this before and may well look at a shutdown as three or four days of paid leave.

Hovering over all of this is the looming debt ceiling increase vote set for spring or summer.  I still forecast that the CR battle and the debt ceiling fight will merge in a couple of months.  Since real structural restraint continues to seem very unlikely in the 112th Congress, the best that debt hawks can expect are some minor appropriations restraint and a large “process” reform that promises cuts in the future.

Meanwhile, more and more House Republicans will hear from their friends and neighbors as the non-security discretionary cuts begin to hit home — cancer research, education assistance, infrastructure.

As I’ve noted before, the House GOP has taken the route of maximum political pain for minimal deficit restraint gain.  It won’t be fun to be in the House leadership when this becomes apparent to even the newest Members of Congress.