As of now, I am in control here, in the White House

The Costs of Republican Intransigence

The GOP is set to self-immolate. Which is fine for starting Arab Springs, but real bad for governing and gaining power in the United States.

Republicans have before them two options – one by House Speaker Boehner and the other by Senate Majority Leader Reid – that extend the debt ceiling without raising taxes.

Obama will sign either one in order to avoid a default, you can be sure. Republicans are in the drivers’ seat. And they’re going to throw it all away because the cuts aren’t enough.

Republicans are right to seek a deal that makes vast cuts in spending. President Obama has raised spending to a 25 percent of GDP, the highest ever.

But they are wrong to insist on their perfect world in which entitlement reform and discretionary spending cuts solve the deficit problem without any tax increases at all. Because unfortunately, the United States is part of the Real World.

Let me describe The Real World:

Republicans do not control the Senate or the presidency.

I have a plan. It's not a good plan, but it is a plan. Photo by Keith Koffler

This is not because God made Obama president and Harry Reid majority leader. The American people did. And God is not going to interfere and make Obama and Reid do serious entitlement reform and major cuts to spending. If Republicans want these changes, they need to elect Republicans to at least one of these positions in 2012.

In the real world, the amount of taxes currently collected by the federal government, at about 14.5 percent of GDP, is currently at its lowest level since the presidency of Harry Truman. The last year of the Reagan administration, it was just above 18 percent. Did you know that?

That’s not to say that taxes shouldn’t be right where they are, and that Obama isn’t seeking an increase in taxes so he can keep spending as high as possible on the health reform law and other “investments” – aka “spending” – that are the things that really get him out of bed in the morning.

But, given that we have a divided government, the low historic rate does mean that Obama was not being unreasonable when he insisted some tax increases be part of the deal, and Boehner was not being a fool by agreeing.

Of course, tax hikes take place immediately, while spending cuts are mostly promises that can be broken. So Boehner was right to walk away when Obama started putting more tax increases on the table.

The relentless GOP focus on not raising any taxes puts Obama in a position to make dangerously large cuts to defense, which is for some reason being gutted while we fight several wars and face mortal threats abroad. By creating the ruthless imperative to slash spending so no tax increases are needed, Republicans are complicit in gutting the military and increasing the burden on our soldiers, who will be asked to do more with less.

The other part of The Real World is that if something isn’t done immediately, an economic catastrophe may occur. Forget whether checks stop going out August 2 or August 8. The markets are going to tank soon. Fear will breed more fear, and the expectation that the markets will decline will ignite a selling stampede.

And Obama, with the bully pulpit mostly his own, will successfully blame Republicans, because he never even got a bill he could veto or sign. Even though ultimately this is Obama’s doing, since he never really lifted a finger to try to reduce the deficit until recently choosing to move on other priorities like the health law instead.

Now Republicans have before them legislation that includes no tax increases. And they won’t take it. They’d rather go down in flames than wait to fight on a more favorable battlefield.

But really, who cares who is to blame and who will flame out politically. If Republicans don’t pass something that can move through the Senate and be signed, they may burn down the nation as well.

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43 Responses to The Costs of Republican Intransigence

  1. Great analysis Keith and I agree. One of the problems is that the Freshman in Congress ran on the premise that they would cut spending. I’m sure they feel if they support anything less than “Cut, Cap,and balance” they’d be letting their constituents down. They’re between the proverbial rock and a hard place!

  2. I tried to write my Congressman (Jeff Flake) today–saying get it done or you are defaulting on the American people. It is crazy-hard–there is no email blank, you go to another site, put in your zip, nope..you need last four digits to get Jeffie, go to PO site, or call DC, that guy who answered did not know, he looked up last 4 digits…then I went back, did it over, wrote my little encouraging note…oh WHATEVER! I hope there are enough refirgerator boxes for me to get one.

      • Remember the horrible joke about voting rights–where the white guy had to spell dog and the black guy had to spell chrysanthemum…it does seem deliberately hard…I have written McCain before and didn’t have to do that…wonder if it’s on both sides.

    • Star, I called the main line (202-224-3121) this morning and was able to get right through to Rep Lamar Smith’s office. They were very polite. They took my name, zip code, and my position and said they would pass my message to him.

      • CongFlake is also my representative. I was able to e-mail my opinion on the debt discussion and received a response (boiler-plate response) thanking me for my interest and opinion.

        MrFlake is a fiscal conservative who has made himself and his office available to all of us though telephone-trunk town halls and regular updates on his and other’s activities in Congress.
        Barring unforeseen events, he will most likely be the front-runner for the soon to be retired SenatorKyl’s seat.

  3. After all the rhetoric, the accusations and pointing fingers of blame, all of our elected officals are responsible for our deficit and free-spending ways that have crippled our economy. Irresponsible politically correct legislation has created an unsustainable economy and a toxic cloud that suffocates our business community.

    “Washington” still doesn’t get it; we don’t want any more spending on special projects or bail-outs of industries that caused their own problems, or millions, billions and even trillions of our money that our elected officals pass out to foreign nations, foreign businesses and the downright ridiculous special projects.

    We have been kept in the dark, not only on the details of these budget discussions, but where our money actually goes and who gets it. If the Dems believe, truly, that Americans want to give up their hard-earned money in higher taxes so that Congress and/or the President can present themselves as bountiful philanthropists to their friends and our enemies, they are simply deluding themselves.
    Placing the blame for this made-up crisis on one political party is just wrong; both sides of the aisle are responsible for our massive debt and for not addressing this issue last year, or any of the years before.

    We’re fed up with the antics, politics of the men and women in Washinton who are putting their own political futures ahead of America’s.

      • Yes–changing this mindset will take a while—which is why revisiting it every six months might be good–but Himself can’t have that.

        • Maybe–just an idea–we could even go back to authorization/appropriation for each agency–with hearings, with discussion…I know…crazy talk.

    • Agreed srdem. Just think the White House should make this compromise. Carney took it upon himself to speak for Reid yesterday, which leads me to believe Obama is calling the shots in the Senate too. Harry Reid is just his puppet.

  4. Keith, respectfully disagree. Just b/c two plans are bad doesn’t mean you have to accept either. Compromise is overrated, settling for the lessor of evils means you still get evil. Boehner is turning out to be a RINO. Re: taxes being historically low. That doesn’t mean that they are too low. The fact of the matter is entitlements are sinking this country and the sooner they are addressed the better. As for your doomsday scenario, nonsense. We only default if we miss the payments and even if we do, it’s about time. The financial buck has to stop somewhere and the sooner our gov. learn to live within it’s means the better. This “crisis” mode is the same rhetoric we heard from 9/11, bailout, stimulus, GM etc etc. GM for example SHOULD have been allowed to go into bankruptsy. Same as our gov. if it can’t operate and need to be shrunk then lets get to it.

    • Sometimes I think some people in Congress or on this site just want to see what will happen…like in a Petri dish. They casually say, OK, pay SS and the interest and the soldiers, then some other people can just micturate up a rope. People like govt employees with jobs and families…contractors, same about the families, the unemployed, etc etc. This isn’t a HS science project. The members of Congress will probably still get paid and won’t “learn a lesson.” The president certainly will not see a cut in pay or benefits.

      • Well the difference between gov. workers and us in the real world is my job is not guaranteed. I have to scratch and claw. The fact of the matter is our country was made great because of free market capitalism NOT gov. provided benefits and jobs. Those gov. jobs come at the expense of my money and I will not support them.

        • I scratch and claw too–and darn ineffecitvely in this mess at the moment. But that doesn’t mean I think people who have legitmately gotten a job should just be shafted…. Also if that happens, more people compete with me…

  5. Tax collections are down because of Obama’s policies and the burdensome regulations his crony czars are spitting out by the reams. Business is either hunkering down or going John Galt and just giving up. The US has the second highest corporate tax in the world. Even Immelt who is on Obama’s job council is moving GE’s x-ray business to China because they can’t make money in the US.

    The Republicans did their job by passing Cut, Cap, and Balance. That is the only plan that is farther along than the Boehner, or Reid, or McConnell plan. It is the only plan that will save our credit rating. Reid only managed to table the bill in the Senate. It isn’t dead. Bring Cut, Cap, and Balance up for a vote in the Senate.

    If this country crashes and burns, the man sitting in the White House is the one who caused it.
    He is responsible for $5Trillion in spending over his 2 1/2 years in office.
    He is responsible for shutting down the coal mines and oil drilling.
    He is responsible for high energy prices …remember under his plan energy prices will necessarily skyrocket.
    He is the one who is allowing millions of illegal aliens to dilute the American economy and flood our social services.
    He is the one who refuses to cut the spending.
    He is the one who refuses to cap the spending.
    He is the one who refuses to balance the budget.

        • I guess you would call it attacking, but in my opinion, they better wise up, learn the art of the deal, take the battle, resume the war later, fight another day…. I don’t think most people sent them to Congress to hold their breath until they turned blue, throw clay,and eat paste. They sent them to be in the system, learn it, and bend it their way.

          • They were sent there to change the way D.C. works. The freshmen I supported promised to live up to some very basic principles. Surrendering to the corruptocrats in DC wasn’t one of those principles.

          • You both are correct. But, the real change won’t come until a conservative Congressional majority and the chief executive are in place. The majority in the House can’t do it by themselves. I agree with Star; they should be learning the system, provide serious conservative oversight and be ready to kick butt when they take the Senate!

    • Obama is ultimately responsible for this situation, yes. But what you’re suggesting Susan is like telling an arsonist he responsible for setting the fire, and then refusing out of principle to call the fire department.

      Cut Cap and Balance will not pass the Senate or by signed by the president. A party that controls only one House of Congress cannot just ram something down everyone’s throat and demand capitulation under threat to wreck the country.

      I do not think the freshman were sent here to make decisions that will destroy the country. They have power, and an obligation to govern like adults. That means not getting everything you want. Elect more Republicans, and get a lot more of what you want. It’s a democracy.

      Paul Ryan and Eric Cantor understand the House must pass the Boehner plan. These are not RINOs. Failure will have real and immediate bad consequences, and possibly catastrophic ones.

      • “It’s a democracy.”

        No it is not a democracy…America is a representative republic. John Boehner is not my representative. Our representatives were elected to represent us, not the leader of the pack. Otherwise it turns in to mob rule where one man determines the outcome of this country’s future. That is too much power in the hands of one man.

  6. How true I haven’t seen such childish behavior since grade school. This is
    serious and they keep playing a very dangerous game of chicken. The serious ramifications are numerous and devastating to all of us even the
    idiots in power who would rather see America downgraded to a third world
    country than seriously work together and get it done. We have no leadership
    Obama looks no further than 2012 and the Vineyard. We the people are smarter and more involved and have a genuine interest in saving our system
    as the ones making the decisions are looking to keep their jobs.

  7. Re: the photo of MrBoehner inserted into this opinion and the caption underneath:
    In the movie “Ocean’sThirteen”, Linus (played by MattDamon) says to his fellow conspiritors “I have a plan. It’s not a good plan, but it is a plan”. That “plan” is to go to their enemy and beg to borrow money to further their nefarious scam. Their ultimate goal in this movie sequel is to punish the thuggish, wealthy casino mogul by the use of a con called the “reverse store”, whereby they rig the games to steal money from the rich man and give it to the casino players.

      • Sometimes, I see things or events through the prism of my many observations of the politics of politics.
        So…
        When MrBoehner is quoted as repeating a piece of dialog from a movie about a scam or a con that took money from the ‘rich’ and gave it to the ‘players’, it reflects (to my understanding) the current thinking of some of our elected officials in DC.

  8. “This is not because God made Obama president and Harry Reid majority leader.”

    I’ll concede that my point of view offered below is outside your faith’s traditions, or at the very least outside of its canon of scripture, but with respect to your statement above, I would refer you to Romans 13: 1. I’ll grant you that this view of God’s sovereignty extending over this world’s leaders requires MUCH more study and discussion, in terms of its practical application and how we think about the political process. While you might have only meant it as a funny way to make your point, it is nevertheless, not true.

  9. If you are not familiar with baseline budgets, you shouldn’t be writing about raising the debt ceiling.

    So, here goes. Neither Boehner’s plan nor Reid’s plan will cut spending. Let me reapeat that: NEITHER BOEHNER’S PLAN NOR REID’S PLAN WILL CUT SPENDING.

    Both will cut the rate of spending increases; but both will mean a higher debt for the U.S,. Since Washington uses baseline budgets, the amount spent goes up about 7% each year no matter what. And both Boehner and Reid use baseline approach to come up with their numbers.

    In fact, consider this: If the spending were frozen from 2011 to 2012, that is, we spend the same amount in both years, the Congressional Budget Office which scores ( or comments) on various spending plans would say that spending had been cut several trillion dollars.

    How does this happen? CBO’s comments cover a 10 year period. And, if spending were the same for 2011 and 2012 that would mean that 7% increase wouldn’t be spent and add it up for 10 years and you get several trillion dollars.

    Don’t believe me, ask someone at CBO.

    Now, I know you are a smart guy and spent years in Washington and know what I am talking about.

    I just wish you would write about this. You would do yourself and the country and big service.

    • Thank you for posting this Pete. Reading up on the 1974 law Nixon signed that created CBO and the 1987 redefinition of baseline for discretionary appropriations. Pretty eye-opening stuff. Never realized our government automatically grows 7% each year. No wonder they have to keep raising the debt ceiling so often.

    • I understand this Pete. Even people talking about major entitlement reform are talking about slowing the rate of growth, not absolute cuts.

      But I don’t see how this affects my argument. I’m not saying that even $3 or $4 trillion is enough of a cut, let alone the $2 trillion plus we’re going to be talking about with Boehner. What I’m saying is that this is what Republicans can get now.

      If they insist on not passing anything realistic and get blamed for the catastrophe to follow, it will damage the prospects of getting a Republican president and a GOP Senate – not to mention destroy many people’s lives. They will be, like I wrote, self-immolating instead of living to fight when the battlefield is more to their favor.

      • I understand your point. And you are right.

        My point is that calling these plans cuts is just not accurate. And, until we start talking/writing about DC’s “funny” accounting practices many people will never understand the gravity of the situation.

        The spending is just not sustainable.

        Would be happy to see Conservative Republicans take Senate, Presidency, and hold House. But their job will be near impossible if public/press doesn’t understand Washington’s budget “madness.”