Sunday, July 31, 2011

What, Compromise?: As Speaker John Boehner Said, "It can Be Done!"

By Mary Claire Kendall

House Speaker John Boehner (R-OH)
Credit: Associated Press

There was a time, way back in 1995, when Congress actually cared about balancing its budget.

Remember the Gramm-Rudman-Hollings Balanced Budget Act?

It's what gave President Bill Clinton bragging rights to a surplus by the end of his term. That and President George H.W. "read my lips, no new taxes" Bush's tax increase, which paved the way to Clinton's growing economy and balanced budgets.

But, President Barack Obama doesn't have such a rich political inheritance. The missing "H" in his predecessor's name made all the difference in the world to Obama's success.

And, one thing Congress can do is read polls, especially the polls showing that since Obama's "Eat Your Peas" press conference on June 29, he's tanked in voter approval.

Having offered no real solutions or leadership, instead preferring to scold Congress—and sic the American public on Congressional switchboard operators—the President has basically painted himself into a corner, with a bowl of peas to eat all by himself.

As Frank Newport of Gallup reported this week:
    President Obama is in a somewhat more perilous situation now, based on his job approval ratings, than was President Clinton in late 1995, when Clinton faced off against Gingrich over similar budget issues. Clinton's job approval rating was above 50% during most of the shutdown, and continued at that level from February 1996 through the November election, which he won. Obama's job approval ratings in recent weeks have been significantly lower.

Look for further erosion in his polls given anemic economic growth the Commerce Department reported on July 29: the second quarter's 1.3% GDP growth, much less than expected; the first quarter revised down from 1.9% to .4%.

Of course, the Tea Party Caucus may yet revive Obama's sinking fortunes instead of the economy. Apparently the wisdom Republican leaders hoped The Town would impart, is still sinking in, namely: "… this not f#%*ing around thing is about to go both ways."

Is Washington a great place, or what?

But, presuming, in James Carville's words, the Tea Party Caucus finally "takes the white flag"—and House passage early Friday night of the Boehner plan is a hopeful sign—Obama will then perform one function: signing or vetoing the bill raising the debt ceiling.

Now, for the actual "solution":

Congress is apparently coalescing around some semblance of the plans offered by House Speaker John Boehner (R-OH) and Senator Majority Leader Harry Reid (D-NV), with a dash of McConnell and G-6 Plans—seasoned legislators' practical genius—added in for good measure, i.e., to help the measures pass!

The Boehner plan seems very reasonable—raising the debt ceiling by $900 billion until February 2012 for $917 billion in CBO-certified cuts; instituting budget caps to guard against budget creep; while, just like Reid's plan, a "committee" of six Democrat and six Republican Members of Congress sort out the other roughly $2 trillion in cuts and revenue increases, derived from a reformed tax code oriented toward job-creation. 

Remember The Gramm-Rudman-Hollings Balanced Budget Act?

Even the Missouri Compromise needed a committee to achieve its success!

Boehner is basically saying, let's come back in six months and see how the patient is doing. Maybe Uncle Sam's meds will need to be adjusted, but at least he'll be on the right track. Reid prefers raising the debt limit in one fell swoop by $2.5 trillion, for $2.4 trillion in CBO-certified cuts, lasting through the 2012 election.

The real sweetener will be achieved by focusing on "where the jobs are"—since job creation is what will ultimately dig us out of the hole.

Boehner argues jobs come predominantly from the private sector and excessive taxes kill jobs, which Reid apparently agrees with given his "no taxes" plan. As Boehner said in his concise remarks to the nation on Monday, July 25:

   These are difficult times… Millions are looking for work, have been for some time, and the spending binge going on in Washington is a big part of the reason why. Before I served in Congress, I ran a small business in Ohio. I was amazed at how different Washington, DC operated than every business in America. Where most American businesses make the hard choices to pay their bills and live within their means, in Washington more spending and more debt is business as usual. I've got news for Washington—those days are over.

Obama's "fair" and "balanced" approach, on the other hand, emphasizes government "investments" to help Americans get jobs, not create them.

Boehner's plan—what's "doable," in his opinion—is Reid's plan, but in two steps, lest the time-honored tradition of "Washington gimmicks" and "phony accounting" be allowed to overtake this mad dash to cobble together, at the 11th hour, a bill just to get the debt ceiling raised—conveniently through the 2012 election.

The six-month check up would focus sharply on what's at stake in the 2012 election—whether government should pick winners and losers; or give us the freedom to chart our own economic course—America's foundational principle.

The Tea Party's request, in the spirit of Gramm-Rudman-Hollings, that a balanced budget amendment be added to the bill, would help advance the latter vision.

But, most of all it's time for action and achieving what's possible—not the ideal.

As Speaker Boehner said in his remarks on the Floor of the U.S. House of Representatives Friday before the vote on his bill, quoting President Ronald Reagan (quoting Universal Pictures founder Carl Laemmle), "IT CAN BE DONE!"

Published for the first time on American Politics and Policy, Wednesday, September 28, 2011.

Originally published in AND Magazine on Saturday, July 30, 2011.

Saturday, July 30, 2011

Compromise: The "Genius" of America

By Mary Claire Kendall

Given the perspective of time, it's crystal clear that to compromise you need a partner who is dealing in good faith. Unfortunately President Obama continues to play games, today trotting out a Rose Garden tax increase, knowing it’s DOA, which actually makes Grover Norquist’s position, referenced herein, seem more reasonable and strategically wise.  As then Governor Ronald Reagan told Johnny Carson in 1975, when asked about how he would balance the federal budget, the same way you protect your virtue – by learning how to say “no.”  But, as Reagan also said, politics is the “art of the possible.”    
                                       - Mary Claire Kendall, September 19, 2011

Sketch of Bull Run battle by "Mr. Davenport." 

Washington, DC, July 21, 2011 – Echoing loudly, on this, the 150th anniversary of the First Battle of Bull Run—the Civil War’s first real battle—is a powerful lesson.

As Shelby Foote reflected in Ken Burns’ The Civil War, this “enormous catastrophe” erupted “because we failed to do the thing we really have a genius for, which is compromise.”

“Americans,” he continued in that soothing Mississippi drawl of his, “like to think of themselves as uncompromising. Our true genius is for compromise. Our whole government’s founded on it and it failed.”

Compromise founded our nation; wrote our Constitution; and defused the simmering conflict over slavery’s expansion, between pro-slavery and anti-slavery factions, every thirty years since George Washington's first inauguration—in 1790, 1820 and 1850.

The Missouri Compromise of 1820 prohibited slavery in the former Louisiana Territory north of the parallel 36°30’ north except within the boundaries of Missouri (proposed state). Prior to this agreement, the House of Representatives had steadfastly eschewed compromise. But, then a conference committee was appointed, paving the way to the solution.

Only when North and South factional leaders refused to budge off their ideological positions did their struggle boil over into Civil War.

Some Things Never Change.

Of course, the North had a point—as does Grover Norquist and Republican politicians he holds in check. Slavery was wrong and had to be eliminated. And, taxes to pay for excess spending are wrong, so excess spending must be eliminated. But, then so did the South—as does House Minority Leader Nancy Pelosi (D-CA) and her fellow progressives. While not a perfect analogy, the South was intent on maintaining states’ rights to run their affairs without federal interference. And, entitlements, bankrupting our country, must continue—without reality’s interference—no matter how much they shackle our future.

States’ rights is what motivated General Robert E. Lee, who owned no slaves himself, to accept command of the Confederate Army, instead of President Abraham Lincoln’s offer to command the Union Army. When faced with that decision, siding with Virginia, “my country,” as he called his beloved state, was his only choice.

Of course, it didn’t need to come to that.

And, neither does it today, figuratively-speaking, except for one troubling fact—the same troubling fact that existed in 1865: The political center—where compromise lives—is barely breathing.

As in 1861, today two great factions have commandeered the debate on the national stage and are talking past each other.

Civil War erupted "because we failed to do the thing we really have a genius for, which is compromise."   - Shelby Foote

The Tea Party, claiming a large stake in the Republican Party, given their House of Representative wins in the 2010 elections, insists cuts alone—no new taxes—must close the $2.5 trillion budget gap through roughly November 7, 2012, that, by an amazing coincidence, gets President Barack Obama past the next election.

The Progressives, who hold great sway over the Democratic Party, insist revenue increases, beyond closing loopholes for corporate jets, and cuts to Defense—definitely not entitlements or other favored social programs—solve the problem.

What a mess!

Fortunately, there are signs of compromise, including the “Gang of Six” plan for $4 trillion in cuts paired with revenue increases in a 4:1 ratio, albeit, there’s no way this plan can be “scored” in time; as well as “The McConnell Plan,” linked to doable cuts identified in the Biden talks.

But, will the entrenched factions budge? That's the $2.5 trillion question.

Ironically, like the Tea Partiers of today, Washingtonians who went out to watch the First Battle of Bull Run on a Sunday afternoon 150 years ago, in Manassas, near the muddy “Bull Run” stream, 30 miles south of Washington, thought it would be great fun. A regular tea party!

They brought their picnic baskets to watch the battle, thinking the Army of the Potomac would whip 'em, thus settling once and for all the decades-old conflict, making the federal government’s role in arbitrating slavery's future pre-eminent.  Instead they witnessed in horror as casualties mounted during the five-hour battle in which General Irvin McDowell’s 28,000-strong Army of the Potomac fought General Pierre Gustave Toutant (PGT) Beauregard's 33,000-strong Confederate States Army.

When all was said and done, 2,900 Northerners and 2,000 Southerners, respectively, were killed, wounded, captured, or missing. Hardly a tea party!

Thus, as we mark today’s anniversary, best to heed warnings regarding the August 2 deadline to raise the debt ceiling, which if disregarded, could result in the largest, fastest tax increase in American history, through steep interest rate hikes.

At which point, Grover, I would watch out for flying pies.

Published for the first time on American Politics and Policy, Wednesday, September 19, 2011.

Originally published in AND Magazine.

"Where Are The Jobs?"

By Mary Claire Kendall

Unemployed men queued outside a Depression soup kitchen opened in Chicago
by Al Capone, in an effort to clean up his public image.  The storefront sign
 reads: "Free Soup, Coffee and Doughnuts for the Unemployed."   
February 1931. 306-NT-165.319c. (american_cities_129.jpg
Credit: Unknown. Source: American Archives.

This column, originally published on July 16, is as relevant as ever.  The situation continues to deteriorate, with "zero" jobs reported in August, a number not seen since 1945; while Obama is still talking about infrastructure projects and job-creation tax credits as the road to recovery. Now packaged as "The American Jobs Act,"  he announced it to great fanfare at a Joint Session of Congress on September 8. Unfortunately, as employers, Americans at large, Republicans and even Democrats, are signaling, his vague plan, costing $447 billion - paid for by small-business-choking tax hikes - fails to revive the private sector's job creating engine. Mitt Romney, on the other hand, has a detailed plan, released September 6, which focuses squarely on the private sector's central role in creating jobs. House Speaker John Boehner (R-OH), likewise, spoke to Obama's government-as-prime-mover myopia in remarks to the Economic Club of Washington today. "The president's proposals," he said, "are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America."  

Washington, DC, July 16, 2011“Where are the jobs?,” House Speaker John Boehner tweeted in the recent “twitter town hall” hosted by President Barack Obama.

It's a fair question.

Two days later, the government reported the unemployment rate edged up to 9.2% in June, from 9.1%, while “real unemployment” was 16.2%. Just 18,000 jobs were added to the U.S. economy—far less than expected, dashing hopes of a fast rebound.

As George Will recently wrote, “Is this the best we can do?”

Obama, in typical fashion, answered Boehner by blaming Republicans—this time for not supporting big “infrastructure and public works programs” to create jobs, the need for which he reiterated in Rose Garden remarks following the dismal jobs report.

Of course, no one argues against the need for repair and construction of roads, railways, bridges, tunnels, sewers, etc.

But, clearly we can do better at reversing the downward trajectory in which over 40 million Americans don’t have a job (14.1 million) or sufficient employment (over 26 million), according to the Bureau of Labor Statistics—as housing gets weaker, Case Shiller Index recently confirming a double dip in prices.

Long line snaking around building for jobs fair in Atlanta in August 2011.
Credit: Bob Andres/Atlanta Journal & Constitution, via Associated Press.

The first order of business would be to realize that, in Calvin Coolidge’s famous words, “The business of America is business.”

Or, to put it in modern parlance, “It's the private sector, stupid!”

But, the overriding fact is Obama believes government, not the private sector, should be the main jobs engine and solution to the interlocking housing crisis. This, in spite of the fact that the private sector is generating what growth there is. The payroll processing firm ADP reported that 157,000 jobs were created in the private sector in June—still a long way to go before closing the yawning 40,000,000 jobs gap.

Admittedly, some of Obama’s rhetoric is starting to give the nod to the private sector:

“Government,” he said in last weekend’s radio address, “has to start living within its means, just like families do. We have to cut the spending we can't afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

Unfortunately for him and the rest of the country, it’s a little late; besides which, such rhetoric turns off his liberal base.

It’s an unenviable position to be in.

As Karl Rove summed it up in “Why Obama Is Likely to Lose in 2012”: “…he faces four serious threats. The economy is very weak and unlikely to experience a robust recovery by Election Day. Key voter groups have soured on him. He's defending unpopular policies. And he's made bad strategic decisions.”

A line outside the State Temporary Relief Administration in New York City
 on November 24, 1933.  Credit: Associated Press.
During the Great Depression, national unemployment rate reached 25 percent, 
13 million people were unemployed and 100,000 businesses failed.  
Now the effective unemployment rate is approaching 20% 
and some 40 million have insufficient or no employment.
Like Herbert Hoover, heedless of the Great Depression’s economic reality, Obama, until recently, was telling Americans prosperity is just around the corner; albeit now he’s signaling we've got a long way to go before we turn that corner. Indeed we do. As Martin Feldstein, Harvard Economics Professor, Chairman of President Ronald Reagan's Council of Economic Advisers and former President of National Bureau for Economic Research, recently wrote, the economy’s near-term outlook is “weak at best.” Yet, “fundamental policy changes will probably have to wait until after the presidential and congressional elections in November 2012.”

Ironically, Hoover could not see his way clearly to supporting direct cash assistance to starving, jobless Americans, when there was none; whereas, Obama cannot see his way clearly to unleashing definitively private sector job-creating energies, when there's an abundance—even though it would stimulate a tax revenue gusher to melt the debt and fund his cherished infrastructure projects.

One of the only small businesses in America
not burdened by the heavy hand of Washington regulation, 

albeit  Montgomery County, MD could be more biz-friendly.
Hoover was resoundingly defeated in 1932—one of 10 incumbents, out of 31, who have lost re-election since our nation's founding.

Obama is on track to become #11.

His only hope, it seems—absent a miracle—is that Republicans, like Democrats in 2008, will nominate someone who is charismatic and inexperienced. Unfortunately for him, however, the Obama “experiment,” as Republican presidential frontrunner Mitt Romney calls it, has inoculated even Republican primary voters against that possibility, as a recent Iowa poll demonstrated.

Voters clearly want out of this Great Recession.

"The line of 4,000 hopefuls stretched from a fifth-floor hotel ballroom
 to the cold street below, snaking around the block."
 New York Daily News,  March 6, 2009Credit: Watts/News.
 How many of these folks are still unemployed or underemployed,  
or, discouraged,  have simply dropped out of the labor market, their  
99 week unemployment benefits  having long ago run out?

"The number of U.S. workers filing new claims for unemployment 
benefits earlier this month jumped to a 26-year high.  And by the looks 
of these lines at job fairs  across the country, who knows when it will  get better."   
 New York Daily News,  March 6, 2009,  Credits: Sullivan/Getty.  
Of course, as we now know from the perspective of almost three years
 under Obama's leadership,  it's not gotten better, it's gotten worse - much worse.

Published for the first time on American Politics and Policy, Wednesday, September 15, 2011.

Hooverville, 1932.  Credit: Unknown.

Originally published in AND Magazine, 7/16/11.

Obama's All Nighters... and GOP Full Mooners

By Mary Claire Kendall

As I re-read this column, originally published on July 15, in retrospect, it seems so clear how politicizing the process is not the path to economic recovery, job creation and, fiscal and monetary stability - which Maureen Dowd reflected in her recent column, “Sleeping Barry Awakes.”  Leadership is what's needed!                                                                                                         - Mary Claire Kendall, September 13, 2011

Barack Obama and John Boehner
Washington, DC, July 15, 2011“If not now, when?” President Barack Obama asked in his press conference on Monday, July 11th —once again coming down from Mount Olympus to upbraid recalcitrant Republicans.

Just days before Congress needs a deal—so it can write and pass the bill approving an increase in the debt limit by August 2, lest America default—the President is insisting the time is now to get the “big deal” to ensure we spend within our means, the lack of which will mean no deal.

Do you get the feeling that instead of getting his homework in a day early—a failure for which he taunted Republicans in his June 29th press conference—Obama is pulling all-nighters, producing the predictable unsatisfactory results?

House Speaker John Boehner (R-OH) called the situation “urgent” and “dire” and said, “Mr. President, let’s forget about the next election… and let's get serious about doing what's right for the country.”

In this regard, Boehner, who had also wanted a “big deal,” issued a statement Saturday, July 9, that suggested the best course at this late hour is to focus on what is doable by Friday, July 22.

“Despite good-faith efforts to find common ground,” he said, “the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

The House Republican caucus simply has no appetite whatsoever for “job-killing” tax increases while the economy continues to limp along—a sentiment the chorus of commentators all echoed, predicting tax hikes were DOA, after the unexpected uptick in unemployment to 9.2% on Friday, July .
Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes.

Boehner is conceding political reality as is Senate Minority Leader Mitch McConnell who proclaimed on the Senate Floor: “A real deal is unattainable” as long as Obama is President. McConnell proposes a Senate-first solution that will, at least, raise the debt ceiling if no agreement on a glide path to a balanced budget is reached.

Yet, Obama is “prepared to take significant heat from my party to get things done.”

Implicit in that statement is, “What about you, Speaker Boehner? Or, is your caucus so extreme that they cannot govern?”

We’ll get to the full-mooners momentarily; first the all-nighters.

The time, Mr. President, to tackle budget bloat—to close the “big deal” — is during the annual budget process, beginning in February, not during July's heat wave—a process the President tees off with his budget proposal.

Instead, Obama has run roughly $1.5 trillion deficits his first two years in office; while the Democratic-controlled Senate has passed not one budget in that time, fearing voter retribution. 

Furthermore, Obama produced two irresponsible budgets this year. The February budget, actually increasing the deficit, was voted down by the Senate, 97-0. The April budget, submitted in response to House Budget Committee Chair Paul Ryan’s (R-WI) ambitious budget, was dismissed by the CBO since it was not tied to real numbers.

Given this reality, for months Obama was the one insisting that the vote to increase the debt ceiling be “clean”—without any spending cuts.

Now, for the GOP full-mooners: What on earth were you thinking when you didn’t call the President's bluff on his $4 trillion “deal”? Seeing Obama bring along his fellow Democrats —whose mantra for winning the 2012 election is “Medicare, Medicare, Medicare”—would have been a wonder to behold!

That wonder is, of course, only in Obama’s imagination, making the fruits of the Biden talks—i.e., smaller cuts in the $1-$2 trillion range—the homework Congress and the President should hand in to the American people ASAP.

Published for the first time on American Politics and Policy, Wednesday, September 13, 2011.

Originally published in AND MAgazine, July 15, 2011.