Nutter's Washington

Debt Limit: What is the Big Deal, It Does Not Do Much.

The Federal Debt Limit increase is still in a state of uncertainty and maybe even chaos. The House Republicans have not yet rallied around the proposal of their Speaker. Votes on have been postponed. In the Senate, well, they are doing nothing but uttering banalities. The President has been publicly silent, watching from back the back row, probably best for the country he do so. He did not lead before, why think it is different now?

 There are some unexplainable conditions regarding the current fiscal crisis. However, first of all, it is important to understand what the current impasse is all about. Unless raised the Federal Government will no longer be able to take on debt that exceeds the current $14.29 trillion limit or ceiling as it is also called. Raising the limit has nothing to do with spending or which programs get what money. Expenditures by the Government are controlled by an annual appropriation process or controlled by pre-authorized and automatic funding (“entitlements”).

Debt Limit Pox: Enough to go Around

The Federal Debt Limit increase is pressing down on all the politicians in Washington this week. It is an ugly sight of finger pointing, competing unbending philosophies, and lost opportunities. I am feeling a bit snarky and sarcastic today so I will spare no one.

 None of three principal players in the drama-President Obama, House Republicans and Senate Democrats have distinguished themselves. Let’s examine the President first. Mr. Obama went on television last night to again berate the Republicans. He has become the most partisan President since Richard Nixon. It is never his fault. His actions never match his rhetoric. His sole intention is to blame others and do whatever it takes, say whatever it takes to preserve his political programs and promote his re-election. I doing so, he has become almost irreverent to the process now. He should have foreseen this situation after the fight on the 2011 Continuing Resolution last spring.

Senate Adjourns: A Mistake for Senator Reid and the Debt Limit.

The United States Senate has adjourned for the day. It is July 22, about 10 days or so before the Federal Debt Limit is hit, an unspeakable event according to Senate Majority Leader Harry Reid (D-NV). According to Senator Reid, it is all the fault of the House Republicans and probably President Bush too. In his opinion, if the newspaper is late, it is Bush’s fault. This was the day a few weeks ago accordingly to the White House that agreement had to be reached. It was the drop dead date. The next vote in the Senate will occur no sooner than 5pm Monday July 25.

Two weeks ago, Senator Reid made a grandstand play by announcing the Senate would not take its July 4^th break and indeed they did not.  He said, the Senate would stay to solve the debt crisis. They did not. The Senate was in session from Tuesday after the 4^th but ended up discussing Libya and other such important national matters. However, there was no such resolution or even a serious vote on any fiscal issues. Don’t you get tired of that kind of stuff?

 There is more. Today, the Senate convened at 9 am and resumed consideration of the motion to proceed to H.R.2560, the Cut, Cap, and Balance Act of 2011. This is the bill that passed the House of Representative a few days ago. The bill may be symbolic and one-sided but it is a legitimate piece of legislation passed by a majority of elected Representatives. Senator Reid called the bill, something to the effect, the worse piece of legislation to be ever considered by the Senate. I can think of others, many of them on his watch.

The Senate in a pure partisan fashion voted to table the House bill. What that means is that the bill was never even considered. Instead of amending it, debating it, voting on it. It was just not considered. So-Be-It. This is from a great legislative body that has not passed a budget in 2 years. A body that has not voted on any substantive fiscal plan much less put one forth. I suggest that instead of going away for the next 3 days, the Senate should be in session, considering something to address the Federal Debt Limit. The action taken by Senator Reid is irresponsible. In going home, he forfeits the right to call anything the worse of anything when he refuses to do anything at all.

Next week is an important week. I have been very optimistic for months the Congress will increase the Debt Limit. It probably will do so but without any meaningful, enforceable spending cuts. Things have gotten so muddled; the odds may not be much more than 50-50. 

 

Gang of Six Deficit Plan: Where is the Actual Plan?

The Congressional Budget Office issued a report last month entitled “CBO’s 2011 Long-Term Budget Outlook”. It is around 100 pages and chalked full of nice graphs, projections, analysis and alternative scenarios. It paints a bleak picture, a dismal portrait. It is a bit hard to understand because instead of putting the crux in nominal numbers, it uses a percent of Gross Domestic Product as a standard. So for example, health costs would in 10 years equal x percent of GNP as compared to Y percent now. All the projections of the different federal spending and taxing categories increase as a percent of GDP. 

 The Report is a useful tool but, of course, it is wrong and will be wrong. It makes, and has to make, certain economic assumptions for the future and policy projections based on events that have not happened. However, what struck me in the context of the current action or lack thereof on the Federal Deficit is just how large these numbers are and how puny the numbers are of any of the proposed solutions.

Balanced Budget Amendment, Cut, Cap and Balance and Where is Waldo Obama?

It is a hot and humid day in Washington and looks like the heat will continue for the next few weeks. The only real thing to do in town is to try to stay cool and watch the Federal debt limit extension negotiations, or lack thereof, proceed.

The Republicans in the House are preparing to vote on a proposal, which has been dubbed “ Cut, Cap and Balance”. I often wonder who comes up with these names. The “Balanced” part is a Constitutional Amendment to limit federal spending to eighteen percent of gross domestic product. (What, of course, is GDP?) It is utter nonsense and its mere presence does a disservice to conservative thought and fiscal restraint. It is not really worth the time to go into the policy flaws of such a proposal. It is being voted on as a symbol of frustration with the unbelievable deficits being run up by the Federal Government. These deficits are unsustainable and dangerous to the economic vitality of the country. To that fact, there can be no doubt. It makes the head explode to think a full forty percent of all Federal spending is on borrowed money.

Debt Limit Extension: Payroll Tax Cut Extension, Plan B and Plan C

The Federal Debt Limit Debacle continues on in Washington. Republicans and Democrats continue to eyeball each other and continue to get nothing done.  By political standards, there is plenty of time left but tick tock, tick tock.

Contributing to the melee, the President whines, wags his fingers, storms out the door and threatens to take his toys and go home. Now that is leadership. He indicated more of less that he is willing to take his Presidency down and the country with it if he does get his way. So-be it, Mr. President, that is reassuring to us all. Another bull head joins the fray. I can see the main event match now with House Majority Leader Eric Cantor (R-VA) and President Obama in the chicken wire-winner take all.

Republicans: Raise the Stakes and Call the Bluff on the Debt Limit

The Federal Debt Ceiling discussions become more and more interesting every day. Since yesterday, the participants in the so-called negotiations have held dueling press conferences, issued statements and huddled with supporters. The happy group will meet again today which is likely to be a daily occurrence. The impasse continues, no need to review positions here except to say, it appears that Republicans and Democrats are raising the barricades.

The President continues to say he is for a “grand bargain”, however that is defined.  He wants the big deal, all the peas in the pod. This is an interesting and barely defensible tact as the President had ample opportunity to put this issue aside when his party controlled both Houses of Congress last year, when he received his Debt Commission Report, when he submitted his budget, when he gave a major economic speech in April. He advocated passing a clean, almost blank check, increase in the debt limit by $ 3 trillion not all that long ago.

Not sure what has changed. Where did all the ole time religion come from?

Debt Limit Extension: Rules to Negotiate By

The Federal Debt extension talks, discussions, meetings and negotiations continue on. The President had another press conference today stating the obvious--that it is critical the $14.3 trillion debt ceiling (about $4 plus trillion so far has occurred on his watch) must be raised. No duh, Mr. President. Where have you been for the last 9 months?

 The events have become similar to those on a daytime soap opera. They are riveting and full of twists and turns. The viewer never knows which participant will come up with amnesia, huff away, or disappear for a fundraiser, go into a tizzy or use the double cross.  However, unlike the television version, this one is serious and real. This set of national leaders needs help. Maybe, just maybe they do not know how to negotiate? So, I want to pass along some rules I learned from my father. Maybe they will help.

Hypocrisy, Obama and the Corporate Jet Tax Deduction

There is considerable economic and political news out there today. The “jobs report” was again dismal and the debt ceiling negotiations continue to drone on, photo op after photo op. Did I mention the unemployment rate increased again this month? Plus there is the sideshow of the scandal in Great Britain involving News Corporation.

But what is bugging me is the corporate jet tax deduction and how it now represents political hypocrisy, deception, distortion or maybe even intentional misstatement. Maybe it also represents a lack of knowledge on the part of the President. None of these conditions are good, and I have seen this type of conduct at every level in Washington politics but for some reason this one bothers me more than most.

Obama New Debt Summit: Strategy for Both Sides

The President appears to be over his finger-pointing tizzy on the Federal debt extension. Last week in a sarcastic press conference, he railed against Republicans and held up the accelerated depreciation of the “corporate jet” as being the root of all the fiscal woes of the country. Now he has called for another debt summit at the White House, another opportunity to show his leadership. Of course, it is less than a month before the Visa card of the United States goes over its limit.

 The President has indicated the time is ripe for big deal and using my phase of last week not to” kick the can down the road.” (I swear someone at the White House is reading this blog) I agree, nothing is to be gained by delaying the real decisions, even though it is getting late for some grand bargain which may mean a short increase in the debt limit may be passed so the parties can work out details if, in fact, a deal is reach. However, on this matter, I agree with the President, nothing new will be learned or changed. Might as well decide now. It would be great to see his real plan, however.