President Obama and others negotiating an end to the debt limit mess are searching for ways out of a political crisis of their own making and trying desperately to kick cans full of worms and of blame down the road to avoid losses during next year’s elections. Solving the underlying problems would have taken lots of unglamorous work rather than political pandering, so comforting during a political season which has neither a beginning nor an end. Now that it’s too late to do anything definitive, the rhetoric is full blown and occasionally rancorous while substance is lacking.
In his weekly speech on July 16th, President Obama called for shared sacrifice by big corporations and the rich. He said,
Simply put, it will take a balanced approach, shared sacrifice, and a willingness to make unpopular choices on all our parts. That means spending less on domestic programs. It means spending less on defense programs. It means reforming programs like Medicare to reduce costs and strengthen the program for future generations. And it means taking on the tax code, and cutting out certain tax breaks and deductions for the wealthiest Americans.
. . . .
The truth is, you can’t solve our deficit without cutting spending. But you also can’t solve it without asking the wealthiest Americans to pay their fair share — or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.
It’s pretty simple. I don’t think oil companies should keep getting special tax breaks when they’re making tens of billions in profits.
As was the case with President Obama’s address on July 15th, he failed to “name a single entitlement he is willing to cut. His sacred cows are still sacred, but yours are up for slaughter.” It may be true, as reported by CBS News, that
President Obama on Friday acknowledged for the first time that he was considering changes to the programs like raising the retirement age or applying means testing.
Additionally, an administration official tells CBS News political analyst John Dickerson that a deal based on Senate Republican Leader Mitch McConnell’s “back up plan” could include a binding commission charged with reviewing the entitlement programs.
President Obama did indeed put it “simply”; so simply that even a third grader could understand that he claims to want just good stuff and to kill the demons — even though the third grader couldn’t learn what the good stuff and demons are. Neither, most likely, does our Harvard Law School graduate and former “constitutional law professor” know.
Children too young to understand what’s happening are susceptible to demagoguery; so are too many chronological adults.
As to Social Security, President Obama spoke of raising the retirement age — to what, when, for whom and to produce what savings how and when he did not indicate. Means testing? What means that? He has yet even to touch upon the extent to which, if any, such tests may change or adapt existing means testing formulae with which the progressive Revenue Code and Treasury regulations already abound.
What “loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get”? Oil depletion allowances — obviously Harry Homeowner doesn’t get them and if he did wouldn’t have any use for them. Do the big bad corporations include Boeing Aircraft but not Government Motors? General Electric? Do the wicked special interests include domestic oil drilling, production, and refining companies but not unions, malpractice lawyers, and his other supporters? What “loopholes” are bad, which are good? Are they good or bad in terms of social fairness as perceived by President Obama or in terms of real economic impact? Demands for more good stuff and less bad may be sufficient for those who still hold him in absolute awe; they can’t be for the rest of us.
Everything has been so amorphous as to be meaningless. As Charles Krauthammer recently said on NPR,
[The President] talks a good game. “Oh, I’m prepared to do entitlements, I’m ready to do entitlements.” Not once has he ever enunciated in public — other than all these leaks which I don’t trust for half a second — one structural change in entitlements, and without that, everybody over the age of nine knows we are not going to get a handle on the debt. So let’s hear him say it in public once.
Rick Moran asks here whether the Republicans will “cave on taxes.” How does one cave on such things as unspecific as more taxes for fat cats, big corporations, and special interests? What’s to cave on? A marriage subsequently to be arranged with someone unknown?
President Obama to the contrary notwithstanding, it’s not “pretty simple” and anyone who claims that it is either does not himself understand “it” or has, at best, a very low opinion of the intelligence of his audience. There may be some specifics under discussion but if so the discussion has been behind closed doors; what little has leaked out under the transom has been no more solid than quicksand and no more reliable than Daily Kos.
These are complex matters. The Tax Code, Title 26 of the U.S. Code, enacted by the Congress, is voluminous. The Treasury regulations, Part 26 of the Code of Federal Regulations, promulgated by the Treasury Department, is far more voluminous. The Other Official Tax Guidance that interprets those is worse. Those are where the loopholes reside. Some probably made economic sense in the past but many no longer do. Changes will require massive rewrites of the entire tax code and of the Treasury regulations. That will take years of labor by our “hardworking” CongressCritters, their “expert” assistants and the geniuses at Treasury. Such things cannot be done comprehensively and soon. Doing it sensibly but even piecemeal now, in time to prevent a default in early August, is impossible. Campaigning and raising funds for the 2012 elections was easier and so that has been done instead. ObamaCare remains funded and so do most other problems created during the previous Congress because the current Congress didn’t do its job.
The backup plan that President Obama may or may not agree to seems far less specific than the McConnell “uber-clever” plan which, like it or hate it, provides a few bare specifics for “kicking the can” down the road till next year to avoid a default in August — now two weeks away. The backup plan may or may not include a “binding commission” to do something; we don’t know what. Nor do we know what “binding” may mean. If there is to be a commission, we don’t know how its members are to be chosen or by whom or what it is to review. Entitlement programs? Probably. Taxes? Probably.
Either the McConnell plan or the maybe-if-I-gotta-do-it Obama backup plan would open wide a big loophole for the negotiators to slip through to avoid making, and taking the blame for, “tough decisions” and doing the “tough work” to get a deal on spending — as they propose or reject ambiguous schemes to raise taxes by closing unspecified loopholes for those upon whose investments and entrepreneurship the economy depends.
Now that we have arrived at a crisis point and it’s impossible to deal with these matters as must eventually be done, why not focus immediately on whatever big stuff can be accomplished and leave the demagoguery about petty stuff for later? Adjusting depreciation schedules for corporate jets — apparently a biggie for President Obama — appeals to some but the beneficial impact on the national debt would be negligible. Even dealing with the big stuff immediately probably won’t happen in time.
Here are my thoughts on how to proceed:
Grant an immediate one trillion dollar debt limit extension valid only through August 1, 2012, on which date the debt limit will revert to the present one. Borrowed funds are to be used only
1. To pay interest on debt,
2. To redeem debt when due, and
3. To provide necessary funding for federal operations as authorized by previously enacted legislation but only, (a) until August 1, 2012, or (b) as hereafter authorized by the Congress.
Mere promises to maybe deal with substance won’t be kept. This suggestion does not rely on promises and will dump the problem back in the Congress where it belongs. Majorities of both houses will, as always, be needed to pass the necessary legislation appropriating funds for specific purposes and refusing to appropriate them for other specific purposes. Both will be necessary. It will give the Congress a year to get its act together and, with some luck, force the beginnings of a balanced budget; only with the consent of both houses can the budget remain unbalanced. That’s the purpose of paragraph 3. The suggestion will require action by our CongressCritters, mindful of the fast approaching November elections, the results of which seem more important to them than anything else.
There is a quote dubiously attributed to Otto von Bismark — “The lesser the people know about how sausages and laws are made, the better they sleep in the night.” Getting a good opiate-induced sleep is unappealing when the cost is a perpetually debilitating hangover as severe as that from which the economy now suffers, and not only due to the current debt limit fiasco. Until those who pay for and eat Bismark’s sausages — and President Obama’s peas — at least know what they contain and how they were made a persistent hangover is likely. “Trust me. I’m from the government” no longer works, even for some of those perpetually awed by President Obama.
Trust and simplicity can be glorious, but simplicity can come only if there is trust. Now, it is very scarce. The Simple Song is one of my favorites.
However, if forced to join in the “Simple Song” sung very differently by President Obama and the other parties to the negotiation, twist and turn as we may the chances of our coming down right are Zero. And if we put up with it, that’s what we deserve.
Perhaps the best thing to do at this point is to just not raise the debt limit and force, actually force, Obama and Congress to decide how to survive with the money that’s actually coming in. I just can’t believe that we can’t make ends meet with 14 trillion dollars. Obama wouldn’t be foolish enough NOT to pay Social Security, the Military, and Medicare, so he would be forced to close some departments that are a lot of dead weight anyway, such as the Department of Energy or the Department of Education. We should actually be ending stupid government agencies that have literally done nothing for years and force everybody else to live within the government’s means. NOBODY would ever have the actual courage to do this, so now we have a convenient excuse to do it because of the debt limit. So go ahead, cut away. It’s about time somebody pulled out the fiscal knife and used it.
As you probably know, the federal bureaucracy has grown exponentially (may be a slight exaggeration
) during Obama’s 2 1/2 year tenure.
In fact, I think it’s the most successful sector of the economy (cough) in terms of employment. Barack actually defended this cadre of largely worthless bureaucrats in a recent speech…words to the effect, “hey, federal government employees deserve respect, too !”)
Reportedly, salaries and benefits of federal employees surpass the private sector by quite a bit.
The scam is so entrenched, it’s worse than Bernie Madoff. And try eliminating a federal dept. (like Education) once it has been established and try firing federal employees.
My wife just retired after 32 years, masters degree Special Education. She and her friends cannot, cannot, cannot, tell me what the Dept. of Education does. It has/had no meaning in their careers.
Any thoughts?
One of my pet peeves in life has always been the Department of Education. For all the hundreds of billions of dollars this nation has dumped into that department, you would think we would have a first-class public school system in this country. So why then is the quality of the public school education actually going DOWN in America?
As usual, whenever the Federal government gets involved in anything, it simply creates a larger bureaucracy with very little return on the investment. Look at the Catholic school system. Dollar for dollar, they always get better results and usually for a lot less money. True, public schools can’t “pick and choose” the students they want like private schools, but still that is no excuse for the abysmal results we have been getting over the past few years. Just throwing money at something doesn’t always help, especially when it’s your money.
Yes, I have some thoughts.
The Department of Education, which we got along quite well without prior to its inception in 1979 towards the end of Jimmy Carter’s thankfully brief reign…the DOE these days mostly establishes bureaucratic guidelines and so called standards that have turned school districts across the nation into wimpy entities trying to look like they’re meeting those artificial standards in the name of not having their federal funding cut off.
Case in point, recently in Atlanta, where it came to light that a whole bunch of teachers and more than a few administrators have been busily changing answers on students’ standardized test scores in order that district performance will look better than it is. Of course, actual performance must be dismal if they felt they had to go to those lengths.
As a function of Atlanta’s “improvement”, some highly placed Atlanta administrator had actually gotten an award as Way Coolest Administrator on Planet Earth. Something like that.
Bureaucrats at the DOE dream up standards & protocols and set things they call benchmarks and really don’t know or give a rat’s bazooka if anything is achieved but are very happy to offer a stamp of approval and send some more cash if the paperwork looks good.
No Child Left Behind, well, we all know, plenty of children are left behind in the politically correct, “everybody gets a blue ribbon and no one fails” NEA dominated public schools in America.
Public education in America has shot craps at a steady pace since the inception of the dept. of education.
When Congress first passed IDEA (previously the Education for all Handicapped Children Act) in 1975, it was express that the federal government would pick up a 40% share. While that has never happened over the inflated times they have maintained 15% funding.
Just pulling up the most simple reference for you to see what the U.S. BOE funds do in K-12, you can take a look though its not current. Pretty hard to believe that a veteran educator doesn’t know where federal funds go and what for.
http://www2.ed.gov/about/overview/fed/10facts/edlite-chart.html
just one problem Ls46. no one in the whitehouse has balls enough nor the fortitudele integrity to do it,
…shared sacrifice, and a willingness to make unpopular choices on all our parts.
He needs to set an example stop jet setting about the country, raising cash, giving lavish White House parties and taking endless vacations. Two days after Timmy Geithner’s economic Armageddon sets in, Obama is off for his 50 B-day celebration in Chicago, August 4.
Parsing Obama’s words to look for meaning is a waste of time. On any given topic, he flips and flops as a function of what he thinks the moment may call for. There is only one bottom line, Obama’s intransigence on and obsession with “the rich paying their fair share”.
He yaks about fiscal sanity but declares, just today, he will veto any bill with spending cuts that makes it to his desk…(which it won’t make it to his desk if the not so Great Hair Reid has anything to say about it)
What is this shared sacrifice BS ?
Jimmy Carter, Barack Obama’s evil twin, gave that speech over 30 years ago
Shared sacrifice? Does that mean we get to throw BOTH Obama and Carter into the volcano at the same time?
Will it be on YouTube?
As a tax payer my part of the shared sacrifice of paying down the debt is about $77,000.00. No thank you, Mr. President, I have contributed enough already.
“Grant an immediate one trillion dollar debt limit extension valid only through August 1, 2012, on which date the debt limit will revert to the present one.”
I’m not in favor of providing more credit to the SWACS (super wild-assed crazy spenders) who are and have been running our country, but your proposal would be acceptable with this addition:
Make it one-time only, non-renewable and non-extendable. Perhaps this could be produced in neon light and hung in the Congress and Senate?
Our leaders of all stripes bring entire worlds of new meaning to that quaint acronym: FUBAR. (Perhaps that’s the neon sign to make and hang?)
To my surprise, I’m starting to think the McConnell proposal may be the best plan of action. It truly is impossible to ‘negotiate’ with BHO, let him take full responsibility for adding another 2.5 trillion to the debt. Make the rising debt his tar baby that goes everywhere the teleprompter goes. I’ve heard that peas and tar are a tasty combination and there are no trans fats so Michelle should be on board.
McConnell’s plan is a terrible idea. The media are going to pin any negative consequences on the Republicans for letting Obama raise the debt limit. Any positive consequences will be credited to Obama’s brilliant leadership.
One might as well be hung for a ewe as a lamb. The Republicans are going to get the blame anyway. By refusing to raise the debt limit they get their maximalist position. The budget will balance, and without any tax increases.
The simple fact is the Democrats need a deal more that the Republicans do. It’s why they’ve never offered a specific position.
When I first learned of McConnell’s idea I agreed with you but now I (respectfully) don’t buy your argument.
“Any positive consequences will be credited to Obama’s brilliant leadership.”
Seriously, what would be the positive consequences? More jobs saved/created?
A balanced 2012 budget? 
Another 1+ trillion deficit in the 2012 budget? 
Tell me the upside for BHO in real terms and tell me the “positives” to be found in bloating the debt by another 2+ trillion.
["Who’s ready to take the leap to get the president his second term?"]
The Tea Party folks with their demeanor! There’s one ‘possible’ exception at the momemt in my opinion and that is Dr. Michael Burgess. The Tea party folks and their following, like their GOP couterparts has yet to advance a ‘comprehensive plan’ and the plans they have advanced, further increases government spending and the debt over ten years with NO consideration of economic growth realities.
There’s not a token’s worth of difference between the Democrats and their Progressives and the GOP, with their Libertarians and the Tea Party folks in approaching the problems before Novemeber 2012.
The only exception to those in my opinion would be Dr. Coburn who has been working for sometime on an exhaustive ‘government wide’ study and analysis of potential and prudent cuts and consequences.
The government cannot run on any constitutional mandates for ‘caps’ anymore than we commoners can run our houshold and businesses on a cap mandate. The unpredictable happens and you either spend more of your cash reserves (which the government isn’t supposed to have in the general fund) or…. you borrow.
No nation and the fed reserve can manage its business with guaranteed zero inflation and they most often cannot do more than ‘predict’ its holding or increasing. Take a look at the historical inflation charts. Next, no political party can predict national disasters, war and global market conditions with any accuracy.
So, while everybody thinks they have some slick absolute plan…they don’t! The nations costs and liabilities are NOT going away! At best, they will only be shifted from one place to another and that means only two options…1) where it is with the federal government or 2) to the States who are already struggling as are many of their cities on the verge of bankruptcy. I guess there are other options such as letting classes of the population starve and die in the streets and let the nation and states infrastructures disintegrate since the Tea party folks don’t want to pay the taxes need.
Disregard the above! I just heard that starting tomorrow everybody who wants a job in the private sector will have one and all will be well. Not sure, but I thought I heard every job will start at $125 and hour.
I have a great idea for a shared sacrifice let’s have Obama and Biden as well as Michell and their two kids jump into Mount Saint Helens to stop the scourge that he and Biden have done to this country over the past 2 3/4 years! I think that should make God happy as well as myself and probably many others in this country!
Desperately seeking any way to blame the Republicans or the TEA Parties for their economic mismanagement, failure to produce budgets as required by law, and looting of the US treasury.
Call their bluff, pass the cut, cap, and balance debt limit increase, and put it on them if the government has to shut down.
There is plenty of income to pay the interest on the Debt, Defense, and Social Security, but not much more, so shut it down, it worked in Minnesota.
Here is something the likes of which I fear we shall never see in our
ParliamentCongress. Nor do I expect to see President Obama address our Congress like this. oh well.So, ten percent of the population pay seventy percent of the federal taxes. Simple. Do a cross the board thirty percent cut of the feds, and then ten percent of the population can pay one hundred percent of the federal taxes. That means the other ninety percent of us can consume and produce without paying any federal taxes–almost fifty percent don’t pay any taxes anyway. Now that’s the kind of sacrifice that should get the economy going again. It might even get the president re-elected. Where else could you find a more progressive tax system than that?
– “shared sacrifice” will be switched to “suffering is cleansing”. Obama, try sitting behind your desk in the Oval Office for several days — better still, weeks — in a row and do some work.
Obama’s sacrifice is giving up our Space Shuttle program in exchange for shutting down our missile defense systems to support Israel and Poland, and his sending our OIL rigs to Brazil…
This president sacrifices most the people he says he will help the most. Like most with a liberal slant, they are seasoned salespersons that are promoting proven unsustainable policies. The conservatives have time tested & fiscally strong solutions but rarely have the sales skills so bloated government is a thing of the past.
The Impending Debt Star
Thomas Carlyle characterized economics as “the dismal science” in the eighteenth century. It hasn’t changed much in the twentieth, particularly as it relates to our federal government’s handling of the economy and most particularly as it concerns the current debt crisis.
That “handling” has, in fact, gone beyond dismal and has breached the realm of the hopelessly bleak as a result the ongoing, contentious debate over the so-called “debt ceiling,” that is, to raise it for the umpteenth time and burden our children and grandchildren with even more debt or to stop the fiscal insanity of borrowing even more money from people like the Chinese to pay our bills.
Running our households like government runs our government would eventually bankrupt individuals just as the feds and local politicians are bankrupting the country and any number of states.
Washington, of course, has a unique advantage over places such as New Jersey and Wisconsin in that in D.C. they have an alternative to all that borrowing: They can simply print more dollars when they exhaust the national treasury or when China indicates it holds too much of our insecure notes.
If Joe Blow or Joe the Plumber had access to dollar printing presses, both Joes would be accused of counterfeiting yet politicians get away with it.
The issues most Americans understandably refuse to confront are unpalatable and painful.
After all, this is America, exceptional, invincible, wealthy, and wise. We can’t, we refuse to believe we can go bankrupt! We can’t undergo anything akin to post-World War I Germany when it took a wheelbarrow full of virtually worthless papiermarks to buy a loaf of bread! We refuse to accept that our paper bucks, the value of which is based not on anything with intrinsic value such as gold but on the full faith and credit of the United States of America, will succumb to hyper-inflation!
It simply can’t happen here!
To paraphrase the chief architect of our fiscal plight: Yes, it can.
Daniel J. Flynn in “Five Falsehoods of the Debt Debate” lists only the most recent “falsehoods,” a euphemism for lies, perpetrated by that architect.
They include . . .
(Read more at http://www.genelalor.com/blog1/?p=5037)
People get the governments they deserve. My God! Surely we don’t deserve this – do we?
OK shared sacrifice. No Corporate Jets? The President flies Southwest Airlines Tourist. President Carter could wear sweaters in a cold White House? So can President Obama. The “Poor” don’t get the tax refund for the taxes they don’t pay.The President gets to pay Washington property tax on the White House and the executive Office Building. He also pays taxes and insurance on the cars he rides in. He also pays for his meals. They can send out to Domino’s. Luncheons can be catered by Duncan Doughnuts…
Democrats need to go and review the facts! Historical evidence: Look at what happened when Republicans took over Congress in the late 90’s:
1994 290.576 Billion Deficit
1995 227.96 Billion Deficit
1996 145.125 Billion Deficit
1997 29.04 Billion Deficit
1998 89.96 Billion Surplus
1999 159.512 Billion Surplus
2000 290.772 Billion Surplus
2001 152.76 Billion Surplus
9/11 hits and two wars are being fought
So what happens when dems took back control in 2007. This is before the health care sham:
2002 158 Bilion Deficit
2003 378 Billion Deficit
2004 413 Billion Deficit
2005 318 Billion Deficit
2006 260.4 Billion Deficit
2007 165.24 Billion Deficit
2008 455 Billion Deficit
2009 1400 Billion Deficit–1.4 trillion
2010 1350 Billion Deficit-1.3 trillion
The Democrats controlled the House of Representatives until 1994 and then regained control in 2006, so the Republicans have had control of the purse strings for 12 years since the Great Depression. Presidents can propose all the budgets they want, they can only sign off on spending bills that are sent to them by the House of Representatives.
The Democrats were in control of Congress, the part of our government where spending bills come from, for 38 of the last 50 years. In the late nineties when we had a “surplus”, the Republicans were in control of Congress. While it is true that the President can veto budgets that spend too much, and thus should carry some of the blame, the majority of the blame should be placed squarely on the House.
According to the Washington Post, “a new bipartisan plan has emerged in the Senate and President Obama “praised . . . [it], calling it ‘broadly consistent’ with the White House’s approach to raising the debt limit and describing it as a ‘very significant step.’” The details are skimpy but
The programs facing the “$500 billion immediate spending cuts” are not identified, nor is it apparent whether the cuts are real or based on accounting fictions. Unidentified tax “loopholes” are to be closed to produce one trillion dollars in new tax revenues over ten years and the debt limit would be lifted in an unspecified amount.
The devil is always in the details, and without those it is impossible to evaluate the plan other than to suggest that if President Obama likes it it’s probably not a good one except from a political perspective of kicking the can down the road.
According to this Wall Street Journal article, the $500 billion in spending cuts means “immediate spending cuts and caps that reduce the deficit by $500 billion over 10 years.” That does not seem to mean that there would be any significant impact of the spending cuts anytime soon. Again, the devil is in the details; there’s room in the details here for lots and lots of devils.
Stop borrowing now and begin a shared recovery for us. This gives our children and their children a chance at a free and unencumbered country.
Those who can’t stop borrowing, go the nearest Sheriff’s office and sign up as child abuser.
This just in…Spineless Republicans cave in again… worried about being blamed by the MSM and Obama, they go along with a stupid tax increase… Soon they will be spanked anyway by a chortling Obama… Seems like they just can’t win and, even better for communism, the Democrats don’t even have to lay out a plan.
You know, most people vote for whomever they think will be the winner, so these Republicans needed to learn to be smart politicians before they became totally irrelevant. Our country is in grave peril right now. We have a one party system and that party wants to run everything in the world. And the spineless Republicans act like all they want is a chance to be seen approving the choir music.
Don’t ever let them take your guns (the next step, by the way) people. Without them you might as well be Republicans.