The Watering Hole, Saturday, December 1, 2012 – There Is No Fiscal Cliff

So what’s all this talk about a “fiscal cliff”? Who’s trying to scare us about what’s happening at the end of the year? Well, it turns out that the Fed Chairman, Ben Bernanke, first described the coming combination of tax hikes and spending cuts as a “fiscal cliff.” He didn’t coin the term, but he was the first to apply it to what may happen. And there isn’t universal agreement that it’s the best way to describe it. There are many who prefer “fiscal slope.” I like “fiscal downshift.” Still moving forward, just a little bit slower.

Despite Republican denials, the stumbling block is clearly the tax cuts for the top-most income earners. The GOP liked the Bush Tax Cuts because it meant their rich benefactors didn’t have to shoulder so much of the financial burden of running the country that made them so fabulously wealthy in the first place. As if the way of life we enjoy had nothing to do with the money the government spent. But after giving them their first round of tax cuts in 2001 (we were running a surplus at the time – which helps pay down the debt – and they felt “people ought to be able to keep more of their own money,” so they gave the wealthiest among us a tax cut that saved many of them more money in taxes than most of us make in a year, as if they really needed it), they started two wars in the Middle East. One of those wars did not require the full force of our military, and the other did not require our military at all as it was based on total lies. Then the Republican-controlled Congress, in their infinite “wisdom” (as in “we’s dumb”), did what no country in the history of Civilization has done. They cut taxes in a time of war. In other words, they started two wars and refused to pay for them.

This ran up our huge debt, of course, but the Republicans lied to the country and told us it wasn’t adding to the deficit. That’s because they were defining the deficit as only pertaining to the actual budget passed and not as the difference between the total amount of money the government took in versus how much it spent. They funded the wars through Emergency Supplemental bills, which is money not counted as part of the budget. The concept was intended to be used for unforeseen spending. The Republicans never intended for either war to ever end, so there was no excuse for calling them “emergency spending.” Yet this is how they were able to tell voters that the deficit wasn’t so bad and deflect their attention away from the ever-expanding debt. When Barack Obama came into office he put the wars on the budget, so they weren’t being funded by emergency supplemental bills that weren’t being paid for with tax revenues, and the Republicans immediately started talking about how much Obama had increased the deficit. You gotta admit, that takes balls.

The vast majority of the political hand-wringing seems centered on the tax cuts for the bottom 98% of income earners, the folks making less than about $250,000 per year. [For the record, I live in New York State, one of the most heavily taxed states in the country. The cost of living can be high here, especially in parts of New York City, but outside of there, $250,000 per year is pretty damn good. The only way those folks would be struggling is if they were trying to live beyond their actual means. It’s possible to live quite happily on that income.] The Congress can rectify that very easily. In fact, they should since it’s quite possible that close to 100% of the House Republicans want the “lower 98” to have their tax rates extended into the new year. A bill to do that has already passed in the Senate. [Yes, a bill for raising revenue must “originate in the House.” But since they’re amending the Tax Act of 1986, they are amending a bill that originated in the House. It just originated there almost three decade ago.] But Speaker John Boehner refuses to bring the bill to the floor for a vote. Why not? If you say you want the Bush Tax Cuts to continue but you won’t guarantee that they continue for the folks who aren’t in the top 2% of income earners, it’s pretty hard to say you aren’t trying to make sure the top 2% get their tax cuts extended, too. You can pass them for the rest of us and have a real public debate about whether or not the top 2% get to keep their tax cuts. But they don’t want to do that because the public knows that every one of their arguments in favor of doing so are bullshit. The rich are not “job creators,” and everybody with an IQ in the three-digit range knows that. But even Rick Santorum admitted they would never get the support of the smart people, and the people he said that to liked it. :lol:

But all is not lost. Famous rich people like Warren Buffett have said they want their taxes to be increased. They understand that in order to have the great country we have, you need to have a government that can sustain it. And that means paying for things like infrastructure, public schools, and police protection. Goods move to market on well-maintained roads. Businesses benefit from a well-educated work force. And people feel safer when they know there are police (and other emergency first responders) nearby to assist in an emergency. And many of us on the Left have said we’re willing to let our taxes go up if it will help the economy and the nation. So House Democratic Party Leader Nancy Pelosi has announced that if the Republicans don’t act by Tuesday, she will file a discharge petition. If 218 House members (and that number would have to include those Republicans we’re so sure want the Middle Class Tax Cuts to continue) sign the discharge petition, the bill automatically comes to the floor for a vote. And remember, there’s no such thing as a filibuster in the House. The Republicans can’t delay and stall the bill by threatening to filibuster it, the way they do in the Senate.

But is it really such a bad thing if the deal isn’t reached and the sequestration kicks in? Not if they work out a deal right away. You see, it’s not as though all of the spending cuts happen in the first few days or weeks. They could always suspend the rules and pass a bill without it going through all the committees and pass it in January when the 113th Congress convenes. The tax hikes on the lower and middle income earners would be temporary, and the hit on our wallets not so severe. They could even make it retroactive to the beginning of the year and we’d all get that money back. And remember, no Congress can ever tie the hands of a future Congress. They can always repeal or waive existing law and do whatever they want as long as the president signs it (and it doesn’t violate the Constitution, of course.) When the Democrats had the Congress, they instituted PAYGO (Pay As You GO.) All spending had to be paid for, except in extreme emergencies. The Republicans did away with that, usually by using emergency spending bills to authorize spending that often didn’t qualify as an “emergency.” That’s how we got two unnecessary wars and an unfunded Medicare Prescription Drug Bill pass. By the way, another way to save taxpayers hundreds of millions of dollars is to allow Medicare to negotiate for lower drug prices, the way the Veterans Administration does. Right now Medicare is prohibited from doing so. (Thank former Congressman Billy Tauzin for that one.) It would just be nice if the Republicans would publicly admit that they are primarily responsible for this nation being in such deep debt. Then we can begin to have an honest discussion about what to do about it. Otherwise, the Republicans will pretend their fiscal policies work and have nothing to do with the situation.

This is our open thread. Feel free to discuss the fiscal downshift or any other topic you wish. But relax. It’s not as dire as they make it out to be.

NSA Wiretap: Rep. Harman Promising to Intervene for AIPAC

CQ Politics

Rep. Jane Harman , the California Democrat with a longtime involvement in intelligence issues, was overheard on an NSA wiretap telling a suspected Israeli agent that she would lobby the Justice Department reduce espionage-related charges against two officials of the American Israeli Public Affairs Committee, the most powerful pro-Israel organization in Washington.

Harman was recorded saying she would “waddle into” the AIPAC case “if you think it’ll make a difference,” according to two former senior national security officials familiar with the NSA transcript.

In exchange for Harman’s help, the sources said, the suspected Israeli agent pledged to help lobby Nancy Pelosi , D-Calif., then-House minority leader, to appoint Harman chair of the Intelligence Committee after the 2006 elections, which the Democrats were heavily favored to win.

For the full article use the link at the top of page.

Bailout follows the 10 Normal Principles for how our Government Functions

Salon

The word being used most frequently to describe the bailout package that is about to pass is “extraordinary.” That adjective may apply to the amounts of money being transferred from taxpayers to Wall Street, but the process by which this is all happening is anything but “extraordinary.” All of the “principles” that drive how our Government functions in general — what explain the last eight years at least — are perfectly evident in what has happened here:

(1) Incredibly complex and consequential new laws are negotiated in secret and then enacted immediately, with no hearings, no real debate, no transparency. Nancy Pelosi has praised herself for decreeing that the new law will be online for 24 hours before Congress votes on it — a full 24 hours for the American public to understand and assess a law that forces them to subsidize Wall St.’s losses in a way that may impact them for decades, if not generations. The most significant and consequential pieces of legislation over the last eight years — the Patriot Act, the various expanded surveillance laws, the Military Commissions Act — were the by-product of identical anti-democratic processes.

(2) Those who created the crisis, were wrong about everything, drive the process. Experts who dissent from the prevailing Washington orthodoxy, particularly ones who were presciently warning about what was happening, are simply ignored — systematically excluded from the process. Professor Nouriel Roubini:

It is pathetic that Congress did not consult any of the many professional economists that have presented — many on the RGE Monitor Finance blog forum — alternative plans that were more fair and efficient and less costly ways to resolve this crisis.

Last week, Hank Paulson — who bears responsibility for the crisis in numerous ways — demanded that $700 billion be transferred to him in order to purchase toxic assets from his Wall St. friends, and while there was much howling of outrage in many quarters, no other framework was ever considered.

(3) Public opinion is largely ignored, as always, and public anger is placated through illusory, symbolic and largely meaningless concessions. Much is being made over the allegedly strong oversight provisions to limit the Treasury Secretary’s power, accomplished through the creation of two oversight panels.

“During its weeklong deliberations, Congress made many changes to the Bush administration’s original proposal to bail out the financial industry, but one overarching aspect of the initial plan that remains is the vast discretion it gives to the Treasury secretary.”

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The larger possible consequences of impeachment being “off the table.”

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Truthout

When Nancy Pelosi became Speaker of the House in 2006, one of the first things out of her mouth was “impeachment is off the table.” With this sentence she betrayed the American people and her oath of office. But that’s only scratching the surface of the problem…

We have witnessed a staggering abuse of power by President Bush. Even former Bush Justice Department officials now charge him with trampling the Constitution. Bush has claimed the prerogative to declare an endless war without congressional approval, to designate someone an enemy without cause, to proceed to wiretap them without warrant, arrest or kidnap them at will, jail them without a hearing, hold them indefinitely, interrogate them intensively (read torture), bring them to trial outside the U.S. court system. He claims that executive privilege exempts his aides – even the aides of his aides and his vice president’s aides – from congressional investigation. He claims the right to amend or negate congressional laws with a statement upon signing them. And much more.

The possible consequences of Pelosi’s colossal failure…

According to the leading case on presidential powers, if Bush’s extreme assertions of power are not challenged by the Congress, they end up not simply creating new law, they could end up rewriting the Constitution itself. Inaction can alter the Constitutional division of powers by establishing the president’s claims as authority that the Congress or the courts may not infringe. (Emphasis added)

Read that again.

Yeah, you read it right…

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Do the Democrats really want to win the White House in November?

I’m starting to doubt it. The newest poll numbers give Hillary Clinton approval ratings, that are almost a match to President Bush’s. She is still head to head, however, when it comes to a match up with Barack Obama at 45% to 45%. But the damage to the prospects of either candidate is visible:

One thing about these head-to-head matchups: Our pollsters found that for the second poll in a row, more than 20 percent of Clinton and Obama supporters say they would support McCain when he’s matched up against the other Democrat. There is clearly some hardening of feelings among some of the most core supporters of both Democrats, though it may be Obama voters, who are more bitter in the long run.

Despite Obama’s lead in pledged delegates and the popular vote, the Democratic Party and the super delegates continue sitting on the fence, unable or unwilling to bring about a decision. If a leading Democrat dares to speak out on this issue, he or she better beware. Bill Richardson, who all but said outright that Hillary Clinton should give up when he endorsed Barack Obama, was called a “Judas”. Nancy Pelosi, must have missed the bigger picture, too. She said that it would be damaging for the party if the superdelegates overturned the popular vote or the count in pledged delegates. Subsequently she received a letter from Clinton campaign donors, who thinly veiled the threat to discontinue donations for the Democratic Party, the Washington Post quotes and reports:

“You suggested [in a recent television interview] superdelegates have an obligation to support the candidate who leads in the pledged delegate count as of June 3rd, whether that lead be by 500 delegates or 2,” the Clinton backers wrote. “This is an untenable position that runs counter to the party’s intent in establishing super-delegates in 1984.”

[…] But the letter made it clear that the fundraisers believe their voice should carry real weight with the speaker. Noting their past financial support, they wrote, “We . . . hope you will be responsive to some of your major enthusiastic supporters.” (emphasis added)

The party’s intent on establishing superdelegates can’t be voiced more clearly than the Economist did it in his story “Inside the minds of the superdelegates” :

[Superdelegates] are party bigwigs: members of Congress, sitting governors, former presidents and the like. There are some 800 of them—a fifth of the total number of delegates. Their role in the nomination process dates back to the 1980s, when party bosses decided that people such as themselves should be empowered to break a tie or stop the great unwashed from picking someone unsuitable.

In other words they are here to make sure an establishment candidate gets the nomination.

If you look at Barack Obama now, he did things that simply are not done, like publishing his tax records, publishing his earmarks, generally making good on his promise to work for more transparency in Washington. With all the skeletons in Washington’s closets, Hillary Clinton’s candidacy certainly looks really attractive to the establishment. And should she fail in getting the nomination, Barack Obama’s campaign can be damaged enough to not win against McCain. Obviously, four more years of Republican Presidency are the lesser evil to some.

That’s not possible? Well it has been done before. Seymour Hersh writes in his book “The Dark Side Of Camelot” (Backbay Books 1998, p.39):

[JFK’s grandfather] “Fitzgerald served Joe’s [Kennedy] needs by running as a spoiler in the Democratic senatorial primary in Massachussetts against an attractive New Deal Democrat named Joseph E. Casey, one of FDR’s favourites in the Congress. Fitzgerald, whose daily campaign activities were heavily subsidized by Kennedy – and carefully monitored by one of Joe’s high-powered and well-paid speechwriters – took 80’000 votes away from Casey in the primary, and inflicted so much damage that Republican Henry Cabot Lodge, Jr., won the general election easily.”(emphasis addded)

What will Hillary Clinton get out of this? Another chance in 2012?

Same old Same old

The Smirking Chimp has accompanied John Nirenberg to Nancy Pelosi’s office:

I had been to Nancy Pelosi’s office in the Cannon House Office Building before. In fact, I’d been there several times and usually had a pleasant stay, often very quick and efficient, other times prolonged by everyone’s enjoyment of the songs my friends in pink were singing, and as often as not resulting in new friendships with fine officers of the Capitol Police who accompanied us out. This time was going to be different.

Just a few of us went by there on Wednesday. No cameras. No songs. And no signs, since we’d already left those at the door with our Capitol Police friends, who continue to get the wrong impression about us. We walked in and said “Good afternoon,” which they apparently mistook for the voice of the Filipino Monkey saying “We are come to slaughter your children.”

It surely looks like citizens are the equivalent of midges to your Speaker. Shoo ’em off! They might ask uncomfortable questions, too.

Read the rest of the story, here: