Much has been made of the split on the right, not only between the Senate which voted overwhelmingly for the compromise while the majority of House Republicans voted against it, but within the House, as there was the more pragmatic John Boehner opposed by the more ideological Eric Cantor.Truth is, I have always had a warm spot in my heart for Tom Harkin, as not only did he have the courage to call President Bush’s policies “bs” in more explicit terms during a Democratic Primary Debate in the early 1990s, but he once had a report I drafted read into the Congressional Record.
Senator Harkin ended up as one of only three Senate Democrats voting against the compromise.
In a statement, he said, “Tonight, at the 11th hour, we find ourselves considering legislation to address a manufactured ‘fiscal cliff.’ Much of this could have been avoided had the U.S. House taken up the Senate-passed legislation to avert tax hikes on 98 percent of Americans.”
“Instead, we find ourselves voting on an agreement that fails to address our number one priority – creating good, middle class jobs in Iowa and throughout the country. Further, it does not generate the revenue necessary for the country to meet its needs for everything from education for our children, to job training, to other critical supports for the middle class,” Senator Harkin continued.
“The deal also makes tax benefits for high income earners permanent, while tax benefits designed to help those of modest means and the middle class are only extended for five years,” the Senator argued. “In essence, this agreement locks in a tax structure that is grossly unfair to middle class Americans, one which provides permanent tax assistance to wealthy Americans, and only temporary relief to everyone else.”
“Every dollar that wealthy taxpayers do not pay under this deal, we will eventually ask Americans of modest means to forgo in Social Security, Medicare, or Medicaid benefits. It is shortsighted to look at these issues in isolation from one another, especially when Congressional Republicans have been crystal clear that they intend to seek spending cuts to programs like Social Security just two months from now, using the debt limit as leverage,” he said.
The Senator concluded: “I am all for compromise, but a compromise that sets a new tax threshold for the wealthiest Americans while neglecting the very backbone of our country – the middle class – is a compromise I simply cannot support. This is the wrong direction for Iowa and our country, and at a time when our fragile economy cannot sustain further damage.”
On the other hand, Bernie Sanders, Ohio Senator Sherrod Brown, and Congressional Progressive Caucus co-chairs Keith Ellison, D-Minnesota, and Raul Grijalva, D-Arizona, in the House ultimately voiced their concerns. In some cases, like Senator Jeff Merkley of Oregon, it was considerable concern, but they held their noses and voted for it.
“Although it does not do as much as I want, this bill does ensure that the wealthy will be contributing more as we work to bring our deficits under control. I far prefer that choice to further cuts to education, law enforcement, and investments in the infrastructure our economy depends on,” Senator Merkley said. “But let’s be clear: this deal carries great risks as well. This deal sets up more cliffs in the near future, including the expiring debt ceiling and the sequestration, pre-planned cuts to programs essential to working families. And as before, there will be some who use these cliffs to launch renewed attacks on Medicare and Social Security. We cannot let those attacks succeed.”
“Yesterday was a small step forward,” Senator Sanders said. “At a time when we have gross inequality, we can and should do a lot more in bringing more revenue into the government.”
Just 19 Democrats ended up opposing the bill – 16 of those were in the House. However, that number understates the concern among liberal activists, labor leaders and economists. The liberal Huffington Post had in bold headline print: “Caved.”
The New York Times this morning quoted former advisor Robert Gibbs, who embodied the White House’s frustration with the left. He said, “There’s some frustration that over time you would think everybody would have a better understanding of the parameters of this… But he understands now probably better than at any other point in his presidency what it means to be a leader, what it means to have to do things that are good not just for one party but good for the country.”
The Times reports, “The criticism from the left mirrors past complaints when Mr. Obama included tax cuts in his stimulus package, gave up on a government-run option in health care negotiations and temporarily extended Bush-era tax cuts for the wealthy two years ago. Liberals said Mr. Obama should have capitalized on his re-election victory and the expiration on New Year’s Day of all of the Bush tax cuts to force Republicans to accept his terms.”
“The president remains clueless about how to use leverage in a negotiation,” said Adam Green, a co-founder of the Progressive Change Campaign Committee, a liberal advocacy organization. “Republicans publicly admitted they lost the tax debate and would be forced to cave, yet the president just kept giving stuff away.”
Robert Reich, the former labor secretary, was quite critical as well. He said that while the President “has stiffened his tactical resolve… he’s still the same President Obama who wants a deal above all else and seems willing to compromise on even the most basic principle.”
The Times reported that in the end most Democrats accepted the compromise and noted that even many “liberals grew more comfortable once they learned more about the deal, and the revolt on Tuesday by House Republicans seemed to rally them behind the plan and against a common adversary.”
In the end, as the Times notes, the President succeeded “in forcing Senate Republicans to raise the top income tax rate to 39.6 percent from 35 percent despite their adamant opposition, although he agreed to apply that to household income above $450,000, instead of $250,000. He also won an increase in taxes on wealthy estates to 40 percent from 35 percent, though it was not as high as liberals wanted.”
Still, voices like that of Rosa DeLauro, a Connecticut Congressional Democrat, resonate.
“I was hopeful that we would be voting on legislation that prioritized working families and the middle class over the wealthiest Americans in taking a balanced approach to the challenges we face as a nation,” she explained. “However, the bill before the House of Representatives tonight is not that.”
As frustrating as this dissent might be, President Obama can use it both to articulate his message in the next fight and give himself cover as the more serious fight over the debt ceiling emerges. The stakes there are much higher.
—David M. Greenwald reporting
The credit for making the ‘deal’ should go to Nancy Pelosi, not Boehner. The blame for the lame attempt at obstruction goes to Cantor.
I see a cognitive dissonance in the series of budget articles here.
First there is a rather logical and well argued article demonstrating how overspending and promising of pensions and benefits beyond ability to pay led the city to what still appears to be a coming crisis. A crisis that will eviscerate the ability to spend on the City’s priorities.
Secondly there is an emotionally argued article arguing that overspending and promising of pensions and benefits beyond ability to pay is a good idea for the nation and we should cheer heroes like Tom Harkin who oppose the few meanie Republicans who still worry about long term fiscal health.
Putting aside the silly analysis that the fiscal cliff has been getting, the essential fact that everyone agrees on is the following: The revenue gained from added taxes on the rich will never close the deficit. The added annual revenue only raises 6% or of the current annual deficit.
My question: What is different between the national path of fiscal unsustainability in which Bush started us and Obama is now taking the nation and the unsustainability of the local path that past Davis city councils led us along?
I think Speaker Boehner deserves credit for getting the bill to the floor, and for the symbolic action of voting in favor of it himself. As CNN pointed out last night, the speaker usually doesn’t vote on bills. So he was actually taking a position that was unpopular with his own caucus, and doing it publicly. As did Paul Ryan, by the way. Eric Cantor deserves no credit for anything. Minority leader Pelosi also deserves credit for delivering an overwhelming majority of her caucus in favor of the bill, allowing Republicans to vote against it by a something like 2:1 margin.
[i]My question: What is different between the national path of fiscal unsustainability in which Bush started us and Obama is now taking the nation and the unsustainability of the local path that past Davis city councils led us along?[/i]
J.R., Well-done post at 9:15 AM. I completely agree.
My answer to your first question is that the difference is that Democrats used it against Bush, but refuse to accept the same criticism of Obama even as he doubles-down on the same.
The second question is that it appears this council is pretty much business as usual. The rhetoric has been more hopeful, but they appear either risk-averse, or disingenuous, about taking a hard stand bringing in our city employee pay and benefits to level of sustainability.
Essentially, it appears that can-kicking has become our local, state and national political game and the left has the best players and wins the championship every year.
I think from a practical standpoint, the biggest difference is that the national government doesn’t, by definition, go bankrupt. They can create money one way or another. Not that that’s a good thing to do over a long period of time, but the federal government can continue to function. So that gives policy-makers the option of taking a longer view, as with — for example — implementing the Bowles-Simpson commission recommendations or something similar. Stockton couldn’t do that, nor can other cities or states.
I consider both presidents, and multiple congresses under leadership of both parties, responsible for the debt and the current trajectory. Each had their reasons for increasing the debt. And it will take bipartisan action to reduce it. We all know that, and so do they. We all know what needs to be done, and so do they. The outline is simple, but implementation isn’t. I’m sure both of you have parts of the federal puzzle you don’t want touched. I’m sure Davis residents like their parks and street trees and want their potholes fixed. Sometimes what we’re demanding from our political leaders is that they commit political suicide. Funny, most aren’t willing to do that.
Ultimately, as almost everyone understands, we still have a very serious spending problem. And most of that spending problem, but not all*, is with Medicare, Medicaid and Social Security. The spending cliff has not been fixed with last night’s bill.
To some extent in both parties, seniors have a great amount of influence. And any changes (or fixes) to Social Security or Medicare and Medicaid** will harm them. I am not sure how this nut is going to be cracked.
It’s easy to say that we need to means-test these programs and to say that a person needs to be 70 before he gets Social Security. It’s quite a bit harder to pass a bill with those changes in the Congress.
It’s also possible to pass laws which cut the payments to hospitals and doctors who serve Medicare or Medicaid patients. But in fairly short order, doctors and hospitals will simply opt to not serve people if they are not making enough money from them.
If there is any silver lining to the medical expense issue, it is that the massive inflation of these costs has been coming down the last few years.
[img]http://1.bp.blogspot.com/-Y0i0gjaHcBU/UOSNOWE1PKI/AAAAAAAAAzA/I2HgBZaTz-I/s1600/medicare+cost.JPG[/img]
*We spend way too much on the Department of Defense and on farm subsidies, as well. Were it up to me, we would cut defense by 75% (over the next 10-15 years) and eliminate all farmer welfare payments today. You know defense spending is out of control when one country, the United States, spends more than 10 times as much per year on defense as any other country.
**The fastest growing expense for Medicaid is with poor seniors who are in convalescent hospitals and others who are in and out of them. Because the senior population is large, and will become much larger in the next 30 years, this is a very difficult problem.
By the way, I saw something in the news today ([url]http://lexicondaily.blogspot.com/2013/01/argentina-urges-britain-to-end.html[/url]) which reminded me that it is not just in the U.S. that policians, who are politically unpopular, will try to change the subject by playing up some jingoist theme in order to make people forget that their president or member of Congress is not doing his job.
Cut defense by 75%? I think that is reckless and wrong. I would prefer that we increase defense spending and increase the role of the US military doing more humanitarian work, and to protect those that do humanitarian work.
Again, the amount we spend on defense is not the issue. It has been consistently about $300 billion for the last 12 years. No argument that the money being spent on the two wars should go away.
[img]http://www.cscdc.org/miscjeff/defense1.jpg[/img]
It has significantly declined as a percentage of our total budget outlays over the last 60 years.
[img]http://www.cscdc.org/miscjeff/defense2.jpg[/img]
The Cold War is NOT over. Cyber war and industrial espionage are bigger problems now than when the USSR was making threats. Also, we didn’t have an explosion of Muslim extremist intent on wiping Israel off the map and killing every Westerner and Christian they can find. We also didn’t have a global economy where the US economic interests are spread throughout the globe.
Related to demands to cut the defense budget, this sums it up nicely…
[quote]U.S. Secretary of Defense Robert Gates wrote in January 2009 that the U.S. should adjust its priorities and spending to address the changing nature of threats in the world: “What all these potential adversaries—from terrorist cells to rogue nations to rising powers—have in common is that they have learned that it is unwise to confront the United States directly on conventional military terms. The United States cannot take its current dominance for granted and needs to invest in the programs, platforms, and personnel that will ensure that dominance’s persistence. But it is also important to keep some perspective. As much as the U.S. Navy has shrunk since the end of the Cold War, for example, in terms of tonnage, its battle fleet is still larger than the next 13 navies combined—and 11 of those 13 navies are U.S. allies or partners.”
In 2009, the US Department of Defense’s annual report to Congress on China’s military strength offered several estimates of actual 2008 Chinese military spending. In terms of the prevailing exchange rate, Pentagon estimates range between US$105 and US$150 billion, the second highest in the world after the US.[/quote]
Again, the real problem is entitlement spending…
[img]http://www.cscdc.org/miscjeff/entitlements.jpg[/img]
And when we remove the war-time spending from the defense piece of pie, it is only the second largest slice… soon to be made the smallest as our national debt interest continues to skyrocket.
[img]http://www.cscdc.org/miscjeff/budgetpie.jpg[/img]
So, let’s cut entitlements and also look at discretionary spending:
[img]http://www.cscdc.org/miscjeff/discretionary1.jpg[/img]
Cut the useless Department of Education and the useless Department of Energy, and force all other agencies to do more with less, and we can easily shave $150-$200 billion a year off the federal budget.
Reposting those messed up images…
[img]http://www.cscdc.org/miscjeff/entitlements.jpg[/img]
[img]http://www.cscdc.org/miscjeff/budgetpie.jpg[/img]
[img]http://www.cscdc.org/miscjeff/discretionary1.jpg[/img]