It makes sense that the only way to solve an absurd problem like the debt ceiling crisis is with an equally absurd solution. This week that solution took shape in the form of a $1 trillion platinum coin. Neil Irwin at the Washington Post, explains the proposal:
“To avoid running into the debt ceiling in the next couple of months, the Treasury secretary could exploit a legal loophole, create a platinum coin, assign it a value of $1 trillion or some other very high number, and deposit it at the Fed, thus enabling the government to carry out its previously promised tax and spending policies without broaching the legal cap on debt issuance.”
Crazy right? Well maybe not. The blogosphere has spent this week coming to a consensus on some of the challenges to this proposal. First, the action seems to be within the legal rights of the Treasury secretary as explained by the law’s creator, Mike Castle former Senator from Delaware. It is clear, however, that this action would be exploiting a loophole on a bill that was passed to allow the treasury secretary to mint currency for collectors. For some reason it is important to explain, for the sake of Fox News among others, that a $1 trillion dollar platinum coin would not actually exist in the form of $1 trillion of platinum. A penny does not cost one cent to make and a ten-dollar bill is not made of more valuable material than a five-dollar bill. Finally, most have concluded that the production of a platinum coin would not affect inflation unless investors saw this move as an admission by the government that they it had defaulted on the debt. The platinum coin could hold the answer to an end to our short term problems.
To take a step back, it is important to remember that the only reason the platinum coin is being contemplated is because congressional Republicans have demanded that any increase to the debt ceiling be paired with decreases in spending, even though the two have nothing to do with each other. Even if the President raises the debt ceiling, Congress still has the power to authorize every dollar spent by the government. Republicans, for the last few years now, have manufactured the ideal hostage situation: they threaten major consequences to the economy if Democrats do not agree to cut spending immediately. The debt ceiling problem is not a spending or debt problem, but rather a political problem.
The platinum coin has the power to neutralize the Republican Party’s demands on the debt ceiling, but I don’t think this road leads the President to where he would like to end up. The debt ceiling must obviously be raised by the February deadline in order to prevent harmful effects to the economy, but more important, some consensus must be reached on what level of debt is sustainable to hold at this time. This debate over the debt may be the most prominent disagreement between today’s two parties. While this impasse may never be broken, there needs to be a willingness by politicians to listen to the other and compromise when possible, or parties will continue to resort to the scorched earth politics of default., government shutdown, and all of the other maneuvers.
While minting the coin may prevent the short-term effects of the debt ceiling and thus delay one crisis, it will force the President to admit that the only effective tools he has in his arsenal come from exploiting loopholes. If the president wants to lead, and remove this issue from his second term he must force the levers of power and convince Americans that Republicans are fighting a losing battle. He must argue that what America needs now is more stimulus, more jobs, and better infrastructure in order to build a society that is in a firm place to begin paying back its debt. This strategy should be paired with willingness to compromise with Republicans on cuts we are going to have to make anyway down the road. Entitlements are going to need to be reformed at some point, so why not take the lead instead of being forced to do it the Republican way later?
Public opinion polls are with the Democrats now. Now is not the time to give up and mint the coin. Now could be the best time to double down on message, while also engaging in modest entitlement reform. If Republicans still don’t budge, the President should just evoke the fourteenth amendment and ignore the debt ceiling. If he and Democrats do not engage in both of the crises head on, though, Republicans will continue to feel they have license to link spending cuts to the debt ceiling, and these self-imposed debt ceiling fights will dominate the President’s second term.
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The “fiscal cliff” bill passed by the House is really a stopgap measure that only prevents painful sequestration from taking affect for two months. Taxes will probably still go up for middle class Americans because of a failure to include a payroll tax extension in the final deal, and no debt reduction was including in this bill. The Congressional Budget Office estimates that the bill will add $4 trillion to the debt over the next ten years. All of this means that an almost identical debate will commence on Thursday at the open of the 113th Congress. Without minimizing the relief tonight’s vote will provide to most Americans, this vote was really about gaining the most leverage for upcoming votes on spending and revenue, and by failing to endorse the bill as a party, Republicans will lose leverage on these upcoming fights.
There is much that will be different during the upcoming debate over averting the sequester. Both chambers of congress will have more Democratic votes, a consequence of the decisive 2012 election. The President will also have the advantage of a State of the Union Address in January to communicate his position with the nation. For Republicans, Speaker Boehner will be reelected Speaker of the House and may be more willing than he was this last week to make bolder moves in negotiation. In the last few years Republicans have demanded spending cuts in exchange for an increase of the debt ceiling, and tying the debt ceiling fight to the sequester could also provide leverage for Republicans. It seems that both parties felt that all of these factors would provide them a better bargaining position in 2013 than they had in 2012, leading to passage of tonight’s deal.
The most substantial change in leverage may be based on the substance of tonight’s deal. The CBO has made clear that the cleared legislation does not cut spending in any substantial way. Republicans will say that this means the next deal must include spending cuts and serious entitlement reform. Speaker Boehner has already tweeted tonight, “Now the focus turns to cutting spending”. The President has, in turn, made it very clear that any further deal must also be balanced between revenue increases and spending cuts. This disagreement will be the basis of all debate over the next eight weeks. I think Democrats will win this argument, because of the failure of the Republican leadership to get a majority of their caucus to vote for tonight’s bill.
We saw Rep. Paul Ryan lose leverage in a similar way when running for Vice President. Rep. Ryan tried, in his convention speech, to use Simpson-Bowles grand bargain plan as an example of both parties coming together to make tough choices. What was most embarrassing for Ryan, however, was that he sat on the Simpson-Bowles commission and voted no on the proposal. Rep. Ryan had lost all credibility as an advocate for grand compromise. In a similar way, Republicans will not be able to use tonight’s bill as evidence that only spending cuts are still needed as part of a compromise. A future Republican bill that only cuts spending will look like a power grab and not the second half of a grand compromise, as the Speaker would like it to be.
Tonight the White House finds a minor victory in passing a bill that raises taxes on the wealthy, while still holding onto leverage they will need to finish averting the sequester. The main take away tonight, though, is that the work to avert both the self-imposed fiscal cliff and the self-imposed debt ceiling crisis is still to come. Unless the President is ready to propose concrete entitlement reforms, these debates will monopolize his entire second term, time he would like to devote to important legislation like Immigration reform and new energy policy. Also, if Republicans do not find ways to break their no tax pledge and raise rates, they will continue to lose the battle of public opinion and find themselves on the losing side of many future legislative fights.
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Most likely a newspaper near you will devote its top story tomorrow to a compromise made between Republicans and Democrats in an effort to avoid the effects of the “fiscal cliff”. Already the President and Senate Minority Leader Mitch McConnell have congratulated themselves on a compromise that has been made on taxes, extending the Bush tax cuts for roughly 98% of Americans when everything is finalized. Perhaps New Year’s Day will now be a break for members of congress and the President. Speaker Boehner, who emphatically removed himself from the negotiations, will be reelected speaker by his caucus despite his inability to unite them over the last few weeks. As markets close tomorrow and everyone takes a deep breath, one thing will be clear: while “A” deal may have been reached, “the” deal is still far away leaving dangerous austerity cuts in place all because no politician is willing to spend the political capital on a grand bargain proposal.
A little history: legislators invented the “fiscal cliff” as part of the Budget Control Act of 2011 to serve as a powerful mechanism requiring them to cut spending and raise revenue. The cliff would, in lieu of a compromise on spending and taxes, impose automatic sequestration, or spending cuts evenly divided between both defense and discretionary spending that both Democrats and Republicans value. Today with no deal beyond the compromise on taxes, these austerity cuts are still in place.
Furthermore, the extension of the Bush Tax cuts negotiated today, would not ensure that taxes will not rise for middle class Americans. Without an extension of the payroll tax credit, a tax that both parties have refused to include in their proposals, the payroll tax holiday will expire and the payroll tax will jump from 4.2% to 6.2% starting in January. To be clear, all negotiations have failed, and now dangerous austerity cuts will be implemented and taxes will be increased for 160 million Americans . Any politician celebrating the compromise made today is only trying to save face, preparing for the oncoming political backlash. A final deal will have to be crafted as soon as possible in the coming weeks to provide relief for Americans and to cut spending in a responsible way instead of through reckless sequestration.
Most troubling, is that leaders in both parties have already made public their concessions, but no one will provide these concessions in the context of a concrete deal. The President is ready to make large cuts to Social Security by adjusting the way inflation is calculating. Speaker Boehner and many other Republicans have made it clear that they are ready to break the Grover Norquest tax pledge they signed and will raise rates on Americans making over $1 million. The grand bargains that the President and Speaker Boehner proposed last week are very similar in structure, and any remaining questions are not about the structure of the deal but about the final numbers. Both parties know the harm caused by inaction, but no politician is ready to take responsibility of carrying the deal to the finish line.
The “Fiscal Cliff” talks have transformed from a negotiation over austerity to a negotiation over political capital. It is amazing that both parties will be able write identical advertisement about their opponents cutting social security if any politician takes ownership of this compromise deal. Perhaps this is a call for the electorate to remind their legislators that they want pragmatic leaders and not partisan ideologues, but that’s the long-term problem. In the short-term we need our legislators to “come together”, but not in the way that most pundits and CEOs have been writing about. I do believe that Democrats have showed much more willingness to compromise than Republicans who have not been able to unite their caucus behind any deal. Legislators must come together in sharing the political backlash that is inherent in making difficult concessions in a fiscal deal. The President’s “pep rally” press conferences, and the Speaker’s unwillingness to pass a deal with a fractured Republican caucus are tactics made not to get the best deal, but rather to save the most political capital. Maybe a bipartisan press conference would show that both sides are ready to accept the consequences of a tough deal. The real stakes on inaction seem high enough to spend that political capital this far away from any elections. There will be more fights to be won, more opportunities to beat the other side. It’s time to stop playing with this fire, and let everyone start the New Year with a sense of certainty.
In the aftermath of the mass shooting in Newtown, Connecticut last week, outrage toward the National Rifle Association has served as a rallying cry for pro-gun control advocates. This criticism is not completely justified in its current form. To be perfectly fair, a lobbying organization is only as powerful as its donors, members, and supporters. No one elected the NRA to best solve the country’s’ problems; their purpose is only to protect the rights of gun owners and the profits of gun manufacturers. Like many other lobbying organizations, the NRA has become instrumental in writing new state and federal laws and helping deregulate those that already exist. While there is national outrage over NRA Executive Vice President Wayne Lapierre’s remarks last week regarding school shootings, outrage should not be directed directly at Wayne Lapierre, but at a politics that centers public discourse influenced by legislation written by a lobbying organization. The NRA’s aggressive tactics and their unwillingness to engage in open problem solving prevent them from being respected as a major player in a conversation about preventing homicide.
Two aspects of the NRA’s approach are most objectionable. Amazingly, the NRA has the audacity to propose limiting first amendment freedoms while basing the crux of their pro-gun arguments on the second amendment. Lapierre explains:
“1,000 music videos…portray murder as a way of life. And then they all have the nerve to call it entertainment. But is that what it really is? Isn’t fantasizing about killing people as a way to get your kicks really the filthiest form of pornography? In a race to the bottom, many conglomerates compete with one another to shock, violate, and offend every standard of civilized society, by bringing an even more toxic mix of reckless behavior, and criminal cruelty right into our homes. Every minute, every day, every hour of every single year.”
Within Lapierre’s comments there is a serious societal question that should be addressed. Does the violent culture of mass media lead to increased violence in society? The American Psychological Association seems to say so here (see link), and American society has overwhelmingly agreed, placing restrictive ratings on movies, music, and video games that are deemed too violent for children. The courts have decided that governments have the right to limit first amendment freedoms in order to forward important societal interests. This legislative process should only be respected though, if it can apply to other amendments as well (not to mention the fact that there is no constitutional right to all kinds of arms). If state governments ban assault weapons and high capacity magazines does that really fully infringe on a citizen’s right to protect him or herself by other means? Organizations like the NRA are important in advocating for constitutional protections in their purest form, but if society and elected officials begin to adopt their talking points as policy solutions, we will never be able to secure the greater societal interests that we demand in the spirit of the Constitution as a whole.
Second, the NRA claims to be an organization that can work with government to provide school safety nationally, but it looses credibility by continuing to wage a campaign that puts a choke hold on gun research. Garry Gutting writes in the New York Times:
“It’s not that scientists are uninterested in gun research or don’t know how to study guns’ connection to violence. It’s rather that the N.R.A. has blocked most efforts at serious gun research, going so far as to restrict access to the highly informative data available from Justice Department traces of guns used in crimes. As The Times reported, “Scientists in the field and former officials with the government agency that used to finance the great bulk of this research say the influence of the National Rife Association has all but choked off money for such work.”
Knowledge will never infringe on citizen rights. The more we know, the better we can save lives and create sound policy. Any research that is released should be scrutinized in a most serious matter to ensure its objectivity and accuracy, but limiting funding for research prevents governments from making the the most informed choices. By limiting research the NRA says, we want you to support our position regardless of its basis in truth. This is a tactic of a ruthless advocate, not of a compassionate problem solver.
On gun control, the wrong discussion is being had. Gun control should not only be about taking away guns, which in most cases have not been responsible for the school shooting tragedies cited. The debate should be a comprehensive conversation that uses all possible information available to create a cocktail of public policies that best prevents homicide everywhere. Lobbying organizations that want to have a say in the crafting of these policies can’t put a stranglehold on the information necessary to begin the problem solving. Those who do peruse these tactics can have their national spotlight during a press conference, but should find themselves on the other side of the door when serious; life saving legislation is being crafted.
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There was something ominous about Tuesday’s vote to ratify the UN Convention on the Rights of Disabled People that may be telling about upcoming fiscal cliff legislation. The convention, which affirms principles of equality and makes international recommendations based on the United State’s Americans with Disabilities Act, failed to gain the 66 votes needed for ratification in the Senate. The convention received support from all Senate Democrats and a handful of notable Republicans including Sen. John McCain (R-AZ) , Sen. Dick Lugar (R-IN), and others but opposition by Conservative Republicans proved too substantial to overcome.
Opponents of the bill, who were lobbied by Conservatives including Former Senator Rick Santorum, claimed that the treaty infringed on the rights on parents who homeschool their children, infringed on rights to ban abortion, and threatened American sovereignty. These claims were all made despite the fact that the convention has no impact on United States law in any way. Sen. Chris Coons (D-CT) did explain on the Senate floor that many homeschooling families called his office to express opposition to the convention, a sign of a Conservative constituency that was able to galvanize around the issue. Despite the support by prominent Republican Senators including former Republican Majority leader Bob Dole, who sat in his wheelchair on the Senate floor, the convention to publically affirm America’s commitment to equality, was not ratified.
The defeat is not such a huge blow on its own. The convention will be reintroduced for ratification during the 113th Congress in January, and the influx of additional Democratic senators may provide the majority needed for passage. The vote does, however, provide insight into the state of the 112th Congress, which now must pass legislation to avert the fiscal cliff by December 31st. It is clear based on remarks by speaker Boehner and the president that any form of a deal will include raising revenue through taxes with perhaps an increase of tax rates, and serious cuts to entitlement spending. No senator is happy about the sacrifices that will need to be made. If conservatives like Rick Santorum are still influencing a large bloc of Republican senators, it seems unlikely that they will find the political courage to accept moderation and vote for a ‘grand bargain’ deal.
Furthermore, a vote like this only plays into the Democratic bargaining position. So far, President Obama has used the mandate provided by his reelection effectively, offering the first version of a deal and changing the public discourse to a conversation about taxes instead of spending cuts. Republicans lost an unexpected number of senate seats because their candidates were too Conservative, especially on social issues. Most notable were two republican candidates, Richard Murdoch and Todd Akin, who virtually gave away their races after comments made about the nature of rape and abortion. When Republicans talked about the economy and the President during the election, they gained ground. When the campaigns became dominated by social issues people began to see a side of the Republican Party they knew is no longer representative of America. To me a vote not to ratify a UN convention of this nature displays a party still catering to a shrinking faction of Conservatives while losing hold of a defendable economic message which a growing number of Americans support. The country already rejected Rick Santorum for President, why would the Senate now follow his lead?
This vote on the UN convention vote proves the lack of available moral courage to get a deal on the table. These distractions could also give the President the leverage he needs to push Speaker Boehner’s hand. Regardless of the votes ramifications for the fiscal cliff fight it is a sad day when the United States Senate can only provide a mixed message at best in support for equal rights for those with disabilities. If there is so much bad in the world we are unable prevent, why not put support something meaningful that spreads American ideals through the world and encourages equal rights for the marginalized. Can’t we all agree on that?
George Washington did not want Democracy to be facilitated by political parties. Washington believed that the President should be a man of exceptional character, who the electorate could trust would make the best decision for the general welfare. This view assumed that our President would somehow exist on an elevated ethical plane, making the difficult decisions society could not and maintaining peace through the authority of his exceptional moral standing. Washington did not have time to study behavioral economics between crossing the Delaware and creating his cabinet, but he felt that our President would need to be an anomaly to these rules, a person of strong courage and even stronger resolve.
Does Washington’s ideal still remain an essential factor in electing a President? Obviously, no one heeded his warning about political parties, but is the electorate still looking for the leader of their party to show an exceptional commitment to virtue? The current political landscape, where candidates have been calculating the political costs of being not virtuous seems to prove otherwise. The American electorate has abandoned the Washington ideal and has adopted a more Machiavellian creed, do what you must to maintain power: showcase the good and hide the bad.
We can admit that our politicians are not Marvel Superheroes .Our politicians are normal Joes (or Baracks) like us. I am OK with conceding this, since once we know what we can expect from our politicians, we will have a much easier time creating laws to make the system work best. For example, if we know that Democrats and Republicans can’t truly compromise on a mutually beneficial debt solution, we may need to create more commitment devices like the budget sequester to make the cost of inaction too high for them to resist. A good-government group called No Labels, which I will post about in the future, has been circulating a bill suggesting that members of Congress should not get paid unless they are able to pass the budget on time. These solutions might be the only way to make government work.
What is most frightening is that as an electorate we need to put a system like this in place, without fully understanding the ins and outs of government procedure. How can we create the mechanisms for our politicians to act honestly, if we are depending on these same politicians to explain their work to us? Systems to make politicians compromise and be productive will solve our legislative problem, but the system we must focus on most now is the communication of an honest public discourse by our politicians. If the electorate is being outright lied to, there is no hope that citizens will be able to support crucial ‘good-government solutions. With this need in mind, it has baffled me how the media continues to insist on polarizing the electorate in their headlines, rather than demanding honesty from our politicians’ public remarks.
Much of the media has spent a lot of time covering the potential ‘coded racism’ that may exist in Mitt Romney’s welfare issue ads last month. Perhaps by implicitly evoking the image of Regan’s “welfare queen”, or Newt Gingrich’s “food stamp President”, Romney is pitting a majority of the electorate against this constructed ‘lazy American who lives off the government’, and Romney will become President of the United States. This criticism while, perhaps true, does not matter to me so much in the grand narrative of the election. Is it not President Obama who implies in each of his speeches that the most successful among us are somehow cheating in the American game? A columnist could argue: perhaps President Obama is trying to pit poor Americans against the wealthy who create new consumer products, life-saving medication, and run the banks that finance our college educations, small businesses, and U.S. government. The notion that candidates are evoking class warfare to solidify support is true and tragic, but it is happening from both directions. Our candidates are human beings, and it will be difficult to end attacks like these without the ‘good government’ reforms I mentioned above. What should be addressed immediately, however, is the honesty of our candidate’s statements.
So this brings us to the biggest offense of the campaign so far. There is no less flagrant way to say this: the Romney campaign has been lying in its television ads about welfare. Politifact a trusted division of the Tampa Bay Times, and the fact checkers at the Washington Post have each given the statements made in these advertisements their highest rating of non-truth. Why are we still worried about the class warfare argument either of the candidates is making? The top headline of every newspaper should read: ‘AMERICA, YOU ARE BEING LIED TO’. This is not the explicit fault of the Romney campaign. They are some of the smartest people in the country, and they know what is true and what is not. They also know the difference between right and wrong. But as Americans, as the free press and the electorate, we have created a system where the cost of lying in a campaign is so low, that politicians in both parties will continue to commit the crime time after time. Maybe we don’t completely agree with President Washington’s analysis of how our candidates should behave, but do we really want to elect a liar?
How do we begin to fix these problems? It is going to take a two-tiered approach. First, we are going to need to continue to support organizations that are committed to independent fact checking. The electorate does not know all of the facts behind each statement candidates make, so we need to have someone we can trust to be our referee. News organizations that do not simply repeat what candidates say, but ensures that they are being truthful is a demand we must have of all 21st century media. Maybe the organization will not be able to get their story published first anymore, but they will get it right. What could be nobler in journalism? Second, we must stop covering our ears when we know politicians are not telling the truth. We must demand that our candidates trust us enough to paint an imperfect argument with accurate facts, rather than the facade of a perfect argument held together by faulty information. As both campaigns get desperate to squeak out this victory, let’s make sure we can be proud of the ticket we elect. If we can’t, how can we be proud of how they govern?
“Truth will ultimately prevail where there is pains taken to bring it to light.”
It becomes apparent that your free press is not covering policy this election cycle when the top headline of the week is “After Romney Is Booed, Biden Is Cheered At NAACP” (NPR), but It’s also difficult to blame the media for turning the election into an applause contest. In this week’s ABC/Washington Post News poll, the candidates are tied with 47% of the vote respectively, leaving only six percent of the electorate undecided. Furthermore, about 85% of Romney supporters and 93% of Obama supporters say it is very unlikely that they will change their vote. All this means for the campaigns, is that they no longer need to focus on the small portion of undecided voters, but rather should focus on turnout numbers among their highly partisan bases, especially in critical swing states.
With this in mind, both campaigns addressed the 103rd convention of the NAACP, in Houston, Teaxas. Obviously, Vice President Biden was cheered and Former Gov. Mitt Romney was booed. As Romney admitted at the top of his remarks, 90% of African Americans are registered as Democrats. Measuring the effectiveness of Romney’s rhetoric by the applause he received is fruitless. Romney should really be judged by his platform, a platform that contains a serious fallacy.
Though it came off as incredibly humorous to most observers, I will take Romney at his word when he explains,” if it were possible to fully communicate what I believe is in the real enduring best interest of African-American families, you would vote for me for president.” Biden’s alarmist remarks, that imply that Romney would be outright dangerous to the African American community, are not fully supported. Romney does not mean to say this, but when he says that he cannot communicate his plans for helping the African-American community, it is because if he truly did, it would undermine the central argument of his campaign.
Allow me to grossly oversimplify for a minute. Romney believes, on a most basic level, that providing tax cuts for the wealthy and the job creators among us will lead to a more certain economy and a quicker recovery. This will provide jobs for members of minority communities who are disproportionately unemployed. Romney’s problem, though, is that he is outlining a long-term economic plan, which will take more than one term to fundamentally change the long-term outlook of the economy. Logically, it is impossible for Romney to be able to declare President Obama’s short-term economic policy a failure, while replacing it with a long-term economic plan of his own. Romney must now pick a direction. Does he critique the President’s short-term actions and explain that his would have been much more effective, or does he criticize the overall direction of Obama’s long-term economic plan and explain that he can construct a more concrete plan for the future? Romney is choosing to argue both points, and together they are fallacious, and do not outline a plan that can help the African American community. How can you talk about repealing Affordable Care Act, which would make 9 million African Americans once again uninsured according to Biden, and in place propose tax cuts to the top 1% in society? Yes, Romney could argue that in the long term his plan will provide better health care for these Americans, but this has nothing to do with President Obama’s recovery now.
Biden cannot claim to be much more effective. President Obama’s record on helping the African American community is almost blank during this term. The White House has not been very loud on state’s voter disenfranchisement; it waited a very long time to put Richard Cordroy in charge of the Consumer Financial Protection Bureau; and it has already expanded the Bush tax cuts during this term. The Obama campaign’s best bet is to point to proposals like Obama’s American Jobs Act and blame the lack of progress on the Republican House of Representatives.
Biden was cheered. Romney was booed. Neither of them really deserved it. With the African American community hurting so disproportionately, the NAACP should demand a politician who will lay out a true plan for recovery. Most troubling though, is Romney’s inability to communicate his ideas to the NAACP without collapsing his entire campaign. If he can’t express these policies now, how could he ever enact them in his first term as President in this hyper partisan climate?