Deficit Disaster: Getting the Skunk Out of the Kitchen

Posted on July 14, 2011. Filed under: Uncategorized | Tags: , , , , , , , , , , |

“Rotten to the core! We are practical people in NZ, horse sense, you are not standing up in America and your government is having an orgy in front of the children.”

 Those are the words of a  New Zealand friend of friend (you know that FB stuff) who was asked what he thinks of the debt ceiling disaster in the US .

 If you want to VENT…. about our debt ceiling disaster…   Or if you have an idea to fix… we are here to listen..

PLEASE CALL 202 466 2511  !!

 or leave a comment on our blog…   We want to hear from you!

 (I hope the phones don’t crash!!! )  

-CZT 

 

UPDATE – GETTING THE SKUNK OUT OF THE KITCHEN – JULY 13, 2011

A very wise political maven once reminded me that it is always important to offer a skunk a way out of the kitchen. Enter the McConnell Plan B proposal. A brilliant, tactically stunning plan that allows negotiators a way to get out of the corner they’ve painted themselves into on the debt ceiling.

What is Plan B? – McConnell’s proposal would allow the President to unilaterally raise the debt ceiling in 3 steps: $700 billion now, $900 billion later this fall, and another $900 billion next year. The submittal of the President’s first notice to Congress of a debt ceiling increase would automatically increase the debt ceiling by $100 billion. The President would be required to forward to Congress a list of suggested spending cuts equivalent to the amount of each debt increase. However, neither Congress nor the President would be obligated to implement these, or any other specified amount, of spending cuts.

Veto? – Presumably, the President would veto any Congressional legislation to disapprove his requests. Therefore, Congress could prevent a requested debt ceiling increase only by passing a resolution of disapproval by a two-thirds vote of each chamber. A two-thirds majority in both House and Senate is very difficult to achieve.

McConnell’s plan would apply only through calendar year 2012. It would not apply to a new President who might unilaterally refuse to request a debt ceiling increase, and so precipitate an immediate 40% or greater cut in federal spending.

McConnell’s Plan B doesn’t solve the deficit problem. But in the face of the biggest, most predictable, and unnecessary fiscal crisis in memory, McConnell has offered an escape route for the skunk.

Will it work? – As of this writing, probably not. The mere thought of allowing a debt ceiling increase without a lockbox of spending cuts already has Tea Party and other fiscal conservatives in orbit. Referring to Plan B, redstate.com screamed, “Mitch McConnell Just Proposed the Pontius Pilate Pass the Buck Act of 2011”.

Translation: It can’t pass the House . . . unless we have default or near-default with a full scale financial meltdown and everyone, including the Tea Party and negotiators, see McConnell’s Plan B as the only exit. McConnell’s proposal does have the advantage of speed. It could be passed by both houses, signed into law, and raise the debt ceiling in a matter of hours.

Is it ugly? – Very. A massive transfer of authority to the Executive Branch that would change the balance of power in Washington. But the danger posed by the McConnell proposal is that it takes pressure off negotiators and Congress at a critical time. It can’t pass unless we find ourselves in the very crisis it is designed to prevent. But it is a new idea at a time when positions are hardening, tempers are flaring, and compromise has become a 4-letter word.

Why is it important? – McConnell’s Plan B has opened the small implosive box that negotiators are stuck in to a new option. This appears to be fostering other creative alternatives, including one being drafted by Reid. Hopefully, among these new proposals, negotiators and Congress will find a way to address the nation’s financial obligations, reduce spending, and salvage the full faith and credit of the U.S.

Silence tells – It speaks volumes that the Senate hasn’t stomped the McConnell proposal flat. Who would have guessed that such a transfer of power would be initiated by a member of the Senate, the legendary bastion of defense of legislative prerogative? The answer is McConnell’s appreciation for the potential disaster awaiting Republicans if they continue to thwart a debt ceiling increase. The silence of the Senate also indicates that grownups agree that default is not an option.

Boehner has not taken the McConnell Plan B off the table either, and seemed to reinforce its approach when he said yesterday, “This debt limit increase is Obama’s problem”. This statement left the White House dumbfounded, Democrats torn between amazement and bewilderment, and fellow House Republicans cheering.

The White House too is mum, at least so far. With the privilege of unilateral Presidential action comes voter backlash that could end a presidency.

The Wow Factor – McConnell’s proposal offers a way for Republicans to walk away from a crisis they played a major role in creating, while offloading all the responsibility for solving it onto the President – all without triggering a national economic catastrophe. A stroke of political genius that continues to pay off next year. It would allow Republicans to continue to vote against a debt ceiling increase by supporting resolutions of disapproval, without having to vote for corresponding cuts to discretionary and entitlement funding. It fills the vacuum left by Congressional Democrats’ failure to agree on a budget of their own amidst continued intraparty criticism of Obama’s proposals.

Plan B is based on McConnell’s astute reading of Obama. McConnell is convinced Obama would sacrifice his presidential future, if necessary, to avoid a national and/or international financial crisis. Plan B is a dazzling political stratagem that probably will die at the hands of the very “no debt ceiling increase, no way, no how” Republicans it is designed to protect.

What the Skunk Looked Like Yesterday – A sample of quotes from Tuesday’s action:

Obama continued to press for “the grand plan”, a $4 trillion 10-year deal, in talks with the eight Congressional negotiators. Cantor, who is advocating a much smaller spending-cut-only deal, demanded that Obama offer the details of his grand vision by demanding, “Where’s your paper?”

Obama snapped back, “Frankly, your Speaker has it. Am I dealing with him, or am I dealing with you?” Boehner’s office later indicated that the White House had not supplied Boehner with grand plan details. The White House indicated it had prepared such a plan, but kept it face down after Boehner pulled the plug on this option over the weekend.

Cantor later in the day confirmed that, “We are still at a point where nothing can pass the House”. This is a stunning admission. At this point, neither Boehner nor Cantor can “deliver” the House for any proposal discussed so far.

McConnell framed his proposal by stating, “As long as this president is in the Oval Office, a real solution is probably unattainable.” Despite this, Plan B was discussed briefly at yesterday’s talks.

Reid said “I will not touch Medicare and Medicaid for some simple little deal.” This is in response to Cantor proposals for a deal less than $2.4 trillion and House rumors of support for a much smaller short –term deal.

Balanced Budget Amendment – An old idea that would have to include exemptions for “emergencies”. It would require passage by two-thirds of both House and Senate, followed by ratification by three-fourths of the states. This process would take too long to have much real impact on the current debt ceiling crisis. While a balanced budget amendment may offer a bit of leverage to the House in debt ceiling negotiations, it isn’t being given much weight by negotiators, at least for now.

A balanced budget amendment to the Constitution is slated for House consideration next week. The Senate may also consider something similar, but the Senate bill is not expected to survive procedural hurdles.

Follow the bouncing ball – In conversations about yesterday’s negotiations at the White House, all parties started quoting $2.5 trillion or $2.7 trillion as the goal for the “medium-sized” deal that would keep the federal government financed through the end of calendar 2012. This is $100 billion to $200 billion more than the number referenced Monday. Are the estimates changing? Are negotiators building in some cushion to avoid a December 2012 lame duck debt ceiling morass? No answer yet, but it bears watching.

More White House meetings are scheduled for yesterday afternoon. The business community in the form of the U.S. Chamber of Commerce, Business Roundtable, and National Association of Manufacturers sent a letter to Congress yesterday imploring them to reach a deal that would avoid default. They didn’t include their usual “no tax increase” plea. About time they spoke up. Wall St. is said to be sending messages of alarm also.

However, Members who have decided not to increase the debt ceiling remain firm in their convictions. They do not believe the President, the U.S. Treasury, or concerned Republican Senators who insist that August 2nd is a real deadline and chaos is inevitable if the U.S. defaults.

They are sincere legislators who live in an echo chamber. Like many legislators, they spend inordinate amounts of time raising campaign funds. People willing to donate their money and time to such events are sure to be philosophically aligned to the same political magnetic poles. That, and carefully choreographed town hall meetings, assure these members hear from constituents that share their ideology and hardly anyone else.

The future of our nation, your retirement fund, and your kids’ college education plans are at stake. I urge you to share your views on fixing the deficit, integrating science into public policy decisions, and rebuilding infrastructure with your Representative and Senators.

Democracy is never tidy, often amazing, and sometimes really scary. Thanks for reading.

Turner GPA is one of the premier, highly respected government and public affairs firms in the nation.  Turner’s state-of-the-art advocacy has earned them respect and acclaim from the media, clients, policymakers and even their competitors!  Turner advocates on behalf of cutting edge businesses, municipalities, and non-profits that wish to ensure their perspectives and needs are taken into account in Washington, in state capitols and in City Hall, as well as in the media. The firm creates and implements intensely focused and targeted advocacy campaigns designed to meet and exceed its client’s expectations and goals.  For more information on Turner GPA, visit www.turnergpa.com.

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2 Responses to “Deficit Disaster: Getting the Skunk Out of the Kitchen”

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Take Obama’s bottom line proposal of spending cuts. Convert the Obama proposed tax increases into spending cuts as follows. Add to it additional spending cuts precisely equal to his bottom line proposal of tax increases, making sure that this latter group of spending cuts specifically targets the groups who benefit from the failure to make tax increases. So, spending cuts that target private plane owners, social security and medicare for the very wealthiest, etc. Then tell the Republicans: “OK, we can do this all as a spending cut–what’s your problem now?”

If you leave the clowns in charge, a circus is bound to break out.


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