Yet One More Way Republicans Are Sabotaging the Economy
If any of your friends or family think the Republicans' obstinate and irrational ways are not screwing up the economy, they should consider this. Morgan Stanley surveyed businesses in July and found that 40% of them are slowing their hiring and investments because of the uncertainty created by "the fiscal cliff." And, if you don't think that the fiscal cliff is a Republican creation, you need to find a neutral source of news.
In April 2010, the Nation Commission on Financial Responsibility and Reform held its first meeting. Better known as the Simpson-Bowles or Bowles-Simpson Committee, it was tasked with finding a bipartisan combination of spending cuts and new revenues sufficient to substantially reduce our structural deficit. However, in order to actually pass a proposal on to Congress, they needed a supermajority to agree to the plan. They failed to get a supermajority for a simple reason. The Republicans refused to consider a reasonable compromise that would involve a balanced approach. They would not agree to anything that violated their pledge to Grover Norquist not to ever raise taxes. As soon as the panel was announced, the left dubbed it the Catfood Commission. They dubbed it that because they assumed, correctly, that the Democrats would be willing to make cuts to Medicare and Social Security that would harm elderly people on fixed incomes. What the left didn't know is that the Republicans would never offer a deal fair enough to give the Democrats the cover they would need to sign off on cuts that hurt old people. People still talk about the Bowles-Simpson plan as something the president should have embraced, but they forget that the plan didn't actually pass.
That set up a new round of obstruction when the Republicans swept to big victories in the 2010 midterm elections. Speaker John Boehner began negotiating a "Grand Bargain" with the president that would do something similar to what the Bowles-Simpson plan envisioned. But Boehner soon discovered that he couldn't deliver the votes to make good on his compromises. He was undercut by his deputy, Eric Cantor, and he had to tell the president that the deal was off. The problem? The GOP would not compromise on revenues. As a result, the government was on the verge of defaulting on its debts.
This set up the third effort to tackle the budget deficit, this time also involving an effort to save our credit rating. Congress created a so-called supercommittee. Just setting the committee up involved a lot of negotiation. Speaker Boehner insisted that any new spending had to be more than offset by spending cuts. Partially to assure this outcome, the Speaker negotiated a process that Washington calls sequestration. The idea was that Congress would be forced to make cuts in excess of the increase in the debt ceiling even if they couldn't agree on how to fix the budget. Programs would be cut by a certain percentage without any discretion or logic. The Pentagon would take a huge haircut, but so would all other programs, many of them cherished by Democrats. Supposedly, the very stupidity of legislating this way (or failing to legislate) would force the two sides to make otherwise difficult compromises. But, once again, the Republicans refused to make any concessions on revenues or to risk violating their pledge to Grover Norquist. No deal was reached, and the sequester is due to kick in at the beginning of the year.
Running through this whole process was the knowledge that Bush's tax cuts are set to expire at midnight this New Year's Eve. The President campaigned on preserving those tax cuts for the first quarter million of annual income for all Americans. But the Republicans have insisted that the Bush tax cuts stay in place for people earning more. By refusing to compromise, they have now created a situation where everyone's taxes will go up on New Year's Day at the very same time that the government massively slashes federal spending.
Here's what I want people to consider. You might argue that the Democrats are equally guilty of refusing to compromise. You would be wrong for two reasons. The first is that the Democrats have all along been willing to anger their base by making changes to Social Security and Medicare that their base will absolutely hate, but only if the Republicans do something equally annoying to their base. The GOP never budged. Second, when this process started, the Democrats controlled the White House and both chambers of Congress. For the last two years, they've controlled the White House and the Senate. It is not reasonable for the party in the minority to insist on the total capitulation of the party in the majority. The minority has enough power in our system to demand concessions, but at some point they have to make a deal. If they don't, and they push the country into default and create an atmosphere where businesses won't make investments because of uncertainty, then that party is not acting in good faith. They are sabotaging both our political institutions and our economy. And they can only be doing it for political gain.
The Republicans have done everything they can think of to undermine the economy and people's opinion of government, and then they expect to be rewarded for it at the polls. It worked beautifully for them in 2010, but people seem to have realized what they're up to. At least, a lot of people have realized it. I hope it becomes common knowledge by Election Day.