Posted by Shyam Moondra
The negotiations on extending the debt limit have been going on between the Republicans and Democrats for weeks without any progress. The Republicans are behaving badly. They are not negotiating in good faith and they are being inconsistent in their approach. Here are some examples:
· The House Speaker Boehmer keeps saying that President Obama has not offered a plan. The Congress spent the money during the Bush presidency and it's their job to come up with a plan. Obama has made suggestions and told the Congress what he wants, but it's the Congress' job to come up with a plan on how to reduce the deficit.
· Republicans want to balance the budget as soon as possible. Obama offered his support for a big $4 trillion plan but Republicans are dragging their feet; now they say that they prefer a smaller plan which will take forever to balance the budget.
· Republicans want to talk about what they want but walk away when others want to talk about things Republicans don't like. In negotiations, one should expect give-and-take; we have a democracy not dictatorship. Republicans want 100% of what they want and 0% of what others want - how do you expect to make a deal?
· President Bush increased the budget deficit by over $4 trillion by going on a reckless spending spree supported by the Congressional Republicans. Bush spent $1 trillion on tax cuts to the rich, $1 trillion on the unnecessary Iraq war (no WMD found), $1 trillion on bank bailouts (if Bush hadn't relaxed regulations, may be the financial crisis wouldn't have happened), and $1 trillion on tax subsidies to oil companies, farmers, drug companies, etc. So, as a starting point, why not just "undo" what Bush did (of course, war money is gone, so nothing can be done about that).
· Republicans want to slash or get rid of Social Security and Medicare. These programs didn't create the deficit (in fact, Congress has been siphoning surplus funds from Social Security and spending that money on other things), so it makes no sense to make these programs a primary target for the cuts. Reforming these entitlement programs is a separate issue and it shouldn't be tied to the debt issue.
· Sen. Hatch and other Republicans voted seven times to increase the debt ceiling during the Bush presidency (and that is primarily responsible for our problems today) but now Hatch and others are so vocal about the dire consequences of increasing the debt limit. When Republicans talk from both ends of their mouths, it doesn't inspire confidence and it doesn't look like they are fighting for their principle as they claim.
· Republicans want to reduce the budget deficit. But many of them are saying that not increasing the debt limit is better because that will force the country to live within its means. However, a default will increase the interest rates (which will increase the cost of borrowing) and slowdown economy (which will reduce the tax revenues); so the budget deficit will actually get worse not better. It's like, to get rid of the disease, just kill the patient!
· Republicans are trying desperately to protect the interests of the rich people and corporations, who benefited the most during the Bush presidency. They are even willing to let the country default on its debt; however, a default will crash the markets and reduce corporate profits (because of the slowdown in economy burdened with higher interest rates), severely hurting the very people and businesses Republicans are trying to protect from the proposed tax reforms.
· Republicans argue that even a small tax increase will hurt the economy. However, the fact of the matter is that President Clinton did exactly that to balance the budget during his second term and we had the most prosperous four years in the modern history. Most economists dispute the claim of Republicans that small tax adjustments will have ruinous impact on economy - at the moment, not reducing deficit is more ruinous than a small increase in taxes. In fact, severe spending cuts, as advocated by the Republicans, will reduce consumer spending and thus slowdown the economy.
I think Republicans are handling the issue of debt limit in the worst possible way and they have lost the confidence of the American people, as is evident from the recent opinion polls that show that up to 80% of Americans like the balanced approach being pushed by Obama. The arguments offered by the Republicans are riddled with inconsistencies and, in most part, they are nonsensical. I think Obama's ten-year plan for a $4 trillion deficit reduction that incorporates spending cuts and tax reforms (such as closing certain tax loop-holes, eliminating unnecessary tax subsidies, and limiting deductions for millionaires/billionaires) is the preferred way to go. This plan is balanced and it's large enough to put us on a path of making a big dent in the budget deficit. If Republicans continue on their current inconsistent approach, they will pay a big price in the next round of elections.
