So here we are, once again waging another political battle in Washington. Once more into the breach fellow voters as we prepare to fight Republicans on the debt ceiling and going to and fro on the same ideological fronts that seem to have no end in site. To what ends can we expect this conflict to continue and more importantly we must ask ourselves, “what is the measure of Republican resolve and just how far are they willing to go to garner political points?”
Like in Early 2011, President Obama is finding himself fighting the same battles yet again. As negotiations with Republicans seem to be going nowhere fast, we seem to be racing the deadline with no apparent solution. What disturbs me though, this is not a new fight...in fact, up until this month, the debt ceiling is an issue that has been resolved 72 times before so as to avoid American default on our loans and our responsibilities. Michelle Bachman has said that she will not vote no to raise the debt ceiling. Eric Cantor, the house Majority leader, recently walked out on talks with Vice President Biden and Speaker Beohner, stating that new taxes are off the table. What Leader Cantor was saying was that he will not participate in any discussions that include any new revenue. His actions may have proved to be a mistake and left the Democrats and the President in an advantageous position.
The question now is whether the Democrats and POTUS can use this to force a clean debt bill...answer NO!!!
Today the House and the Senate passed a bill that will raise the debt ceiling and create a congressional committee to evaluate and put forth a proposal to create balanced approach to reduce the deficit. To put in plainly, the Democrats were faced with holding our position on taxes and revenues and once again the Democrats flinched and lost another fight with the Republican party who seemed willing and able to let the economy crash and revert back into a recession to get their way. Now I don't know whether to see this as my party being unable to take a stand or if we, as Democrats, are just more reasonable and not willing to let the country crash and burn simply for our ideals that seem to be gaining more and more support from the American public. Looking into the past, the President has given the Republicans all the ammunition that they need to ensure that our Democratic President will essentially not put forth any Democratic proposals. Basically we will end President Obama's first term having not tired or passed one single Democratic idea.
Lets take a look at the bill, the new agreement stipulates that the treasury will be granted immediate powers to borrow an additional 400 billion to help pay back money that we have already spent and make over 1 trillion dollars in cuts to government spending over the next ten years. I bet your thinking, “where are the revenues?” Great question, well they are not there, the bill states the “Super Committee” will have this fight over the course of the next ten months. The ramifications of this bill go just a little deeper, please let me explain. As you may know the Dow Jones Industrial dropped another -266 points today in response to this bill. This loss is coming off eight straight sessions in which the market has recoded losses adding up to over 6% drop in stocks, just shy of the record free fall of 2008 when it crashed just over 7%. Taking an even closer look at this bill and looking at the cuts that Republicans forced today we can see why the market resulted in the worst single day in months:
With this battle the Democrats wanted to include provisions to extend unemployment benefits and continue the payroll tax cuts to the middle class but alas were not included in the final version of this bill.
According to the Economic Policy Institute this is what the congress is celebrating over the deal “achieved” today.
Discretionary Cuts: -43 billion or (-0.3% of GDP) costing the American Economy -323,000 jobs
Not Extending Unemployment -128 billion (-0.8% of GDP) costing the American Economy -972,000 jobs
Not extending Payroll tax cuts -70 billion (-0.4% of GDP) costing American Economy 528,000 jobs
to middle class Americans
What all this means is that in total we are facing with this deal,
-241 billion in cuts and lost Revenue
(-1.5% loss in GDP)
-1,822,000 jobs lost for Americans
having an economy growing at approximately 1.3% annually and cutting -1.5%, this new deal ensures that that we end our growth in the negative .2%, basically taking the economy in reverse, ergo the response from Wall Street today.
This what Republicans are celebrating in Washington today and it is becoming harder and harder not to draw the conclusion that a bad economy will lead to a Republican victory in November of 2012, but are the American people astute enough to see the political game being played here. Well that remains to be seen, but one thing is clear; we need to work hard to ensure this November sees some gain in the House of Representatives.
Republican resolve is quite clear, the economy and the American people seem to take second billing to political victories and ideology. It remains perfectly obvious in the behavior displayed by Republican leaders Mitch McConnell and Eric Cantor that they will not agree to any types of revenue by walking out of several negations through the process. What is more troublesome, however, is that Speaker Beohner is being held captive by the Tea Party and clearly has no control over his own caucus showing on numerous occasions he is unable to deliver votes to pass anything through house. The 112th Congress thus far has proven to be the most inept and unproductive legislative body to date, having passed only a handful of bills none of which are promoting job growth and now we find them in a one month recess with catastrophic unemployment. With all that's going on the most painful aspect of this grand mess we call congress is that a party that only holds a majority in the house while Democrats hold the Senate and and the White House, we continue to pass their policies and only their policies and its costing the American People. Obama needs to to stop bending over backwards and finally stand up for the people that voted for him.
The issues that we face in this country is that Americans more and more play into the hands of the conservative mindset not knowing they are supporting policies that in turn make it more difficult for themselves. These are what Bill Maher calls closet socialist. Its no surprise that polls find more Americans dislike the word socialist, while they themselves partake in programs like Medicare and Social Security. Its no surprise that we have protestors in Washington hold signs reading “keep your government hands of my Medicare!” When actors like Craig T. Nelson make statements like “when I was on welfare and food stamps no one helped me,” shows the level at which we have engrained ourselves to continually vote and support leaders and policies that that do more to kill jobs and backtrack the economy and we as Americans don't even know whats happening until its too late and we blame the Democrat whose trying to fix it.
If you take away anything from this is that tax cuts do not create jobs, proven by President Bush who was losing over 700,000 jobs per month at the end of his presidency. The wealthiest Americans are not the job creators, we are, the middle class. Working Americans are the what drive the economy, we are what create demand and with out the demand there is need for supply. A business owner called in to a media program and said “we do not need more money, we are not the job creators in this country, if we strengthen the middle class and we will see our economy grow and that is where we need to place our investments.”