Thursday, April 28, 2011

Another Fake Debate: Raising the Debt Ceiling

Time Magazine used the word “zoom” with respect to the “public debt” in a 1941 article and said, “The President questioned the meaning of a legal debt limit, hinted that there should be no legal limit.” There were only newspapers, magazines, movie theatre newsreels and radio to report that the 1940 Democratic platform “made no mention of that fiscal dodo, that old museum piece: a balanced budget. Franklin Roosevelt held to precedent—he didn't mention it, either.”

Bear in mind that the idea of a federal budget was relatively new. Up until 1921, the president did not have much of anything to do with hashing out budget, other approving or disapproving it as the head of his political party. The Budget and Accounting Act of 1921 created the U.S. General Accounting Office (GAO) as part of the Legislative Branch. Its job was to audit federal books and prevent fraud. In the Executive Branch, the 1921 legislation created the Bureau of Budget to coordinate budget submissions by various departments and agencies.

Former Treasury Department economist Bruce Bartlett wrote in Forbes, “Deficits primarily resulted from wars, and strenuous efforts were always made to pay them off as soon as possible afterward. On those occasions when the Treasury needed to sell bonds, each individual bond issue had to be specifically authorized by Congress.”

The federal budget is actually on automatic pilot, anyway. The reality is that neither Congress nor the presidents have anything so say about it. “If you take all the earmarks, unnecessary weapons systems, waste, fraud and abuse and everything else you can think of that deserves to be cut, it still adds up to drops in the ocean compared to Social Security and Medicare,” Bartlett says. “As long as those programs are off limits the president's budget will continue to decline as a matter of political and economic importance.”

As to the meaning of the debt ceiling that President Roosevelt questioned, since March 1962 the debt ceiling has been raised 74 times. According to the Congressional Research Service, 10 of those times have occurred since 2001. Theoretically, the debt ceiling limit is supposed to help Congress control spending. However, in reality, the debt limit is ineffective in controlling spending and deficits. Politicians and reality continue to be strangers to one another.

Here is where the appearance of a showdown gets legs. “Administration officials say even GOP firebrands won’t risk a national default and an international financial meltdown,” according to Politico. “There is a growing sense among all parties that President Barack Obama won’t be able to extend the credit limit without making significant new concessions to congressional Republicans.”

Democrats have leverage, however. “There are obviously divisions in the GOP among the leaders and the people pursuing their dumb notions of linking [cuts] to the debt vote,” said Representative Barney Frank (D-MA). Speaker John Boehner (R-OH) has repeatedly said the limit needs to be raised. Representative Eric Cantor (R-VA), Boehner’s number 2 in the House, is keeping with his alliance with tea party conservatives and taking taken a tougher line. But that’s all it is – a line.

Conservative strategists are warning that the GOP should not push the debt ceiling debate too close to the breaking point. According to the Huffington Post, “If there is a vote on raising the debt ceiling and it fails, there will be a significant market reaction,” said Tony Fratto, a former Treasury and White House official in the Bush administration. “Investors already believe that Congress doesn’t understand the financial markets. A failure to raise the debt ceiling will confirm this to them."

The country is already sour on congress. Gallup reports, “Congress' approval is at 17%, essentially unchanged from last month's 18%, and identical to where it was just after last November's midterm congressional elections. The current rating is just four percentage points above the all-time low of 13% from December.”

Gallup also reports that neither the budget nor unemployment is Americans' top overall concern. “That distinction belongs to the economy, by a significant margin over any other issue. The economy has placed first or second on the list each month since February 2008.” Even so their polling shows that “Independents and Republicans are both twice as likely as Democrats to say the budget is the most important problem. In turn, Republicans are less likely than Democrats and independents to view unemployment as the top problem.”

Pew Research March survey found that 34% of Americans said the economic issue they found most worrisome was “the job situation,” followed by rising prices (28%) and then the budget deficit (24%). The survey also said, “The number citing the deficit as their top economy worry had increased from 19% in December. Concern over rising prices increased even more dramatically -- from 15% in December to 28% in March.”

Pew Research also found that with respect to Obama’s handling of the federal budget deficit, 33% approved and 59% disapproved. However, when asked whether the GOP or President Obama has the better approach on the deficit, “most Americans (52%) say there is not much difference between the two sides -- and Republicans have lost ground on this measure, among their own base, since November.”

Not surprisingly the New York Times/CBS poll finds pretty much the same results. Of Barack Obama’s handling the federal budget deficit, 33% approve and 59% disapprove. Of the way the Republicans in Congress are handling the federal budget deficit, 27% approve and 63% disapprove. As to the way Congress is handling its job, 16% approve and 75% disapprove. Congress beats the president in disapproval.

H.L. Menken said, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” The recent House Republican habit of creating fake debates and backing losing legislation would seem to confirm Menken’s observation. However, its Barney Frank who calls the raising the deficit ceiling debate best. “In the end, the Republicans are not going to be able to withstand the pressure from the business community, the guys who finance their campaigns. … In the end, they have to do this.” Posturing about the debt ceiling is another fake debate.

Article first published as Another Fake Debate: Raising the Debt Ceiling on Technorati.

Tuesday, April 19, 2011

Net Neutrality: Medium or Message

While everyone’s attention was focused on the potential for a government shutdown, House Republicans passed a bill to repeal federal rules barring Internet service providers from blocking or setting different prices for some uses of their networks. According to the Associated Press, in voting to repeal rules on “network neutrality” set down by the Federal Communications Commission, Republicans claimed that the FCC lacked the authority to impose such rules.

“The FCC power grab would allow it to regulate any interstate communication service on barely more than a whim and without any additional input from Congress,” said Rep. Greg Walden (R, OR), a sponsor of the legislation. The vote along party lines to pass the bill, H.J. Res. 37, was 240-179. This is the same House that voted 228-192 on a bill to defund National Public Radio last month. It is yet another bill unlikely to pass in the Senate and doomed to a presidential veto if it should.

The concept of “net neutrality", according to the New York Times, holds that companies providing Internet service should treat all sources of data equally. The debate centers on whether those companies can give preferential treatment to content providers who pay for faster transmission, or to their own content, “in effect creating a two-tier Web, and about whether they can block or impede content representing controversial points of view.”

Before the House took up a joint resolution condemning the new Internet access rules, Verizon and MetroPCS brought a lawsuit to court that challenged the FCC’s pending rules to keep Internet service providers from blocking access to certain Web sites or applications. The United States Court of Appeals for the District of Columbia circuit rejected the suit as “premature.” Although considered by some as a first-round victory for the F.C.C. and its chairman, Julius Genachowski, the real battle over the commission’s attempt to regulate broadband providers has only just begun.

In a recent meeting with Wall Street Journal reporters and editors, Genachowski said, “I don’t see any circumstances where we’d take steps to regulate the Internet itself.” He added, “I’ve been clear repeatedly that we’re not going to regulate the Internet.” In trying to craft new rules that would require phone and cable companies to treat all legal Internet traffic that flows over their lines equally, the FCC had proposed a draft of “net neutrality” rules last fall. “The communications line piece is something that we have historic responsibility for [in] promoting competition and promoting innovation. So that is the distinction,” Genachowski said.

Internet service providers, of course, say there’s no need for the government to step in, as do other opponents of the FCC.

Freedom Works called the FCC rules “job-killing regulations [that] would involve significant new controls on the Internet that would have significant implications for investing in innovation and broadband deployment.” In urging passage of HJR 37, it posted, “The FCC should respect this fact—and the careful separation of power laid out in the US Constitution—and not make such sweeping law where the legislature has not.” Naturally, anything that conservative organizations and Republicans don’t like, out comes the Constitution.

Another organization, Americans for Prosperity went as far to charge that “Chairman Genachowski, a long-time executive at Barry Diller’s IAC/InterActiveCorp, one of the leading corporate beneficiaries of net neutrality, is currently attempting FCC’s second foray into Internet regulations.” The fact is that no FCC commissioner may have a financial interest in any FCC-related business.

Consumers Union opposed the legislation. “Internet providers should not limit your choices to their preferred sites,” said Parul P. Desai, the organizations policy counsel. “Key stakeholders – from consumers, to small business, to civil rights groups and religious organizations – have overwhelmingly voiced support for Open Internet rules as well as the FCC’s authority to implement and enforce them.” Unfortunately, they did not refer to the Constitution in their opposition.

Democratic policymakers called free and open communications “a vital part of American democracy.” At the Free Press’s National Conference for Media Reform, House Minority Leader Nancy Pelosi (D, CA) said she was pleased by Democratic opposition to the GOP-backed resolution, which cleared the House under the cover of the looming shutdown. “No one should be guarding the gate on the Internet,” Pelosi said. She added that the resolution isn’t likely to gain support in the Senate. “I don’t think this bill is going anyplace.”

As I pointed out in Blogcritics two years ago, there is a difference between a regulation and a law. As an independent regulatory agency, the FCC has the power to impose regulations at any time without action by either the executive or legislative branches. The new regulations, which the FCC calls its Open Internet Order, are the rules that House Republicans attacked.

Once again House Republicans have backed a losing proposition as they did with their attempt to defund National Public Radio. The GOP opposition to Net Neutrality regulations favors corporations over consumers. At least we know where they are coming from. This time it is not about the message. This time it is about the medium and the corporations that own it. It is another win for losing.

Article first published as Net Neutrality: Message or Medium on Technorati.

Friday, April 8, 2011

House Crier: Faking a Shutdown

Hypocrisy is a pretense of having a virtuous character and principles that one does not really possess. Bare that in mind while I offer an observation that the threat of a government shutdown is just a threat. It is a bully’s threat that is about as credible as the tears of Speaker Boehner. The speaker’s tears demonstrate one of two things, that the shut-down threat is a fake or that the man is emotionally unbalanced. In either case, the threat will last until the very last minute, when it will be averted. Deals have already been cut.

Here is a quick example of this hypocrisy. Republicans especially are all about National Defense. They would sooner burn autographed pictures of Ronald Reagan than touch the Defense Budget, as they have demonstrated. However, as ABC News reports, if the government shuts down, US military personnel won’t get paid.

The Speaker is responsible for ensuring that the House passes legislation supported by the majority party, in this case the majority of the majority. Boehner’s freshmen are challenging his ability to do so. Representative Paul D. Ryan (R, WI), recently of Budget Committee fame, had very telling words about the tea party contingent who have propelled the threat of shutdown forward. “The new people did not come here for a political career,” he said. “They came here for a cause.”

Their “cause” is a risky government shutdown that they seem to think is alright. That opinion found voice in a former member of the House Budget Committee, Thad McCotter (R, MI), who says he thinks the “majority of the public would agree” that a partial shutdown of the federal government wouldn’t be that bad in their lives, according to ABC.

For Boehner the worse outcome is a split conference that pits the Republican establishment against the tea party contingency. Of course senior members of the Republican caucus like Mike Pence and Michele Bachmann, who seek to raise their profiles by establishing themselves as rebel leaders, make out but all future Republican progress would be undermined.

Republicans seem to intend to cut benefits and programs for the nation’s retirees and neediest citizens while protecting corporate America and the wealthiest people from paying their share of taxes. The ACLU opposes enacting their FY11 spending bill because it contains amendments that would eliminate funding for Planned Parenthood to legislation that would impose an “abortion tax” on small businesses who want to provide abortion coverage in their employees health plans.

The government did shut down in 1995 and 1996 under Newt Gingrich’s speakership. Two years later, voters sent 20 Republican members packing and the speaker took the blame. The hypocrisy of the tea party ideological “cause” begs the question that if the Republicans cannot govern themselves, how they are supposed to govern the country?

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originally published on Blogcritics, April 6, 2011 as House Crier: Faking a Shutdown

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A couple of notes, April 8, morning of the shutdown threat:

“It’s not realistic to shut down the government on a debate dealing with abortion,” Senator Harry Reid (D, NV) said. “It’s not fair to the American people. We haven’t solved the issue in 40 years. We’re not going to solve it in the next 38 hours. We should not be distracted by ideology. This is a bill that funds the government.” (see ACLU above)

Gallup reports "The American public has clearly and consistently expressed a desire for elected officials in Washington to pass a new fiscal year budget without bringing government operations to a halt."

The New York Times reports that it is “the policy riders that are the real holdup to a deal.” To Republicans it’s all about abortion, environmental protection and health care. The hold up has nothing to do with jobs or the economy. Negotiators at the White House say “the issue of the spending cuts barely even came up. All the talk was about the abortion demands and the other issues.”

The shutdown is a made for TV event. Neither the White House nor the Republican leadership will let it happen and, contrary to Dave’s right intentions, there is already a continuing resolution in the breach ready for the moment of truth.

Aaron Sorkin has written a better teleplay, but it was performed by real actors.