Showing posts with label government shutdown. Show all posts
Showing posts with label government shutdown. Show all posts

Tuesday, October 8, 2013

Structural changes in both political parties causing dysfunction – moderate Republicans hold the key

Posted by Shyam Moondra

Dysfunction in the federal government began during the presidency of George W. Bush whose war in Iraq based on false intelligence led to distrust in the government among politicians as well as general public. The money spent on the war in Iraq, bank bailouts necessitated by Bush's lax regulations of the financial industry, and unnecessary tax cuts given to the rich at a time when the country was fighting two wars contributed to the huge budget deficit and national debt. Bush's successor, President Barack Obama, was forced to undertake large-scale stimulus spending to thwart severe recession caused by the financial crisis left behind by Bush, which led to even bigger increases in budget deficit and debt. Obama, at the urging of his liberal supporters, pushed through Affordable Care Act (or what is now termed as Obamacare) in both the House and Senate strictly on partisan basis. That gave birth to the Tea Party movement whose extremism worsened political polarization not just between Democrats and Republicans but also within the Republican Party. In 2011, House Speaker John Boehner, under intense pressure from Tea Party aligned conservatives, led the ugly debate on increasing debt ceiling, which crashed the financial markets, slowed economic recovery, and caused the first ever downgrade of the U.S. government debt from AAA to AA+ by the rating agency Standard & Poor. Subsequently, Republicans paid a price at the ballot box in 2012 when Obama easily won re-election and Republicans lost seats in the House and Senate. One would think that Republicans learned their lesson, but here we are, two years later, with Republicans playing the same game all over again with more serious implications than before - the government is currently shut down for eight days already and we are on the verge of first-ever default by the U.S. government on its debt. The Congress now has an approval rating of only 10%, which is a historic low, but that does not seem to bother Boehner and other Congressional Republicans at all.

In terms of the legislative agenda, the current 113th Congress is termed as the most unproductive Congress of modern times. The extent to which this Congress is polarized is summed up by the statement of Boehner in which he said that the success of the Republican-led House should be judged not based on how many new Bills they pass but based on how many existing Bills they repeal. With the emergence of Tea Party faction as a strong player among the conservative ranks of the Republican Party, Boehner has been forced to adopt their extreme ideologies to keep his job as the Speaker. The extremism propagated by Tea Party has become an obstacle in getting anything done in a split government that by necessity requires compromises. As a result, the Republican Party is badly divided between conservatives and moderates. Republican moderates, who fear reprisal in the form of primary challenges inspired by Tea Party if they oppose Tea Party's extreme ideologies, have chosen to remain silent and on the side-lines while Tea Party leaders such as Sen. Ted Cruz of Texas have taken on an oversize role in shaping the direction of the Republican Party. This has irked such iconic moderates as Sen. John McCain and others who have openly criticized the tactics advocated by Cruz. Nevertheless, to preserve unity, many moderate Republicans in the House and Senate have decided to grudgingly go along with the policies formulated by Cruz and other conservatives. These moderates have clearly been marginalized in this new political shuffle. A fractured Republican Party is not well positioned to win the Senate in 2014 or the White House in 2016. Cruz and others have openly advocated shutting down the government and even defaulting on government obligations as acceptable strategies to get what they want, namely, getting rid of Obamacare, reducing tax rates for businesses, and reforming the entitlement programs to reduce spending. They have gone even further by devising an unorthodox plan to get rid of Obamacare by de-funding it. Obamacare was approved by the Congress, signed into the law by Obama, and subsequently upheld by the U.S. Supreme Court as constitutional. Boehner tried over 40 times to repeal the law but failed. Obamacare was a major issue in the 2012 presidential and Congressional elections, but Obama and Democrats prevailed. Now Boehner, at the urging of Cruz and others, has chosen to shut down the government and is prepared to let the government default on its obligations unless Obama agrees to dismantle Obamacare, his signature program. This is, of course, an extreme tactic of blackmail, which Obama cannot and will not accept. The normal procedure for getting rid of a law is to have a new revised Bill passed by both the chambers and signed into law by the president; but Republicans are trying to kill the program by withholding funding for its implementation. This is certainly a novel approach but ultimately undemocratic and it cannot be allowed to succeed. Today, it's Obamacare, but tomorrow Republicans could try to de-fund other laws that they do not like, defying the checks and balances built into the constitution. Of course, not all Republicans subscribe to this extreme tactic.

On the other side of the isle, since the election of Obama as the president in 2008 and re-election for a second term in 2012, the Democratic Party has moved to the left of the political center. Obama strongly believed that Bush's pro-rich policies, especially his generous tax-cuts to the rich, widened the gap between the rich and poor and the middle class lost a lot of ground. Obama, with the help of ultra-liberal Nancy Pelosi, who was House Speaker at the time, moved the Democratic Party to the left, which was a sharp contrast to the previous Democratic President Bill Clinton, who ruled from the right of the center. Clinton dismantled the welfare programs and moved people from welfare rolls to work rolls, but Obama has consistently favored the poor and the middle class over the rich. Under Obama, there has been a huge growth in the food stamp program, disability benefits, and Medicaid expenditures. The liberal transformation of the Democratic Party under Obama has sidelined Clintonian conservatives and moderates within the Democratic Party that would have preferred to govern from the center on most economic issues. In spite of some disagreements between liberal and conservative Democrats, they have nevertheless steadfastly remained united in their opposition to Republican extremism.

While Republican Party has been radicalized by the Tea Partiers much to the discomfort of Republican moderates, Democratic Party has moved to the left much to the discomfort of Democratic conservatives and moderates. So, what we need is a rebalancing act in which moderate Republicans join forces with conservative and moderate Democrats to form a powerful block whose support would be essential to make progress on any particular issue. At least six moderate Republicans in the Senate would have to switch their Party affiliation and become Democrats; such a move will not only give Democrats a filibuster-proof majority, it will also keep liberal Democrats in check while rendering extremist Republicans such as Cruz powerless. There are many moderate senators such as John McCain, Susan Collins, Kelly Ayotte, Tom Coburn, Jim Inhofe, John Thune, Richard Burr, Ron Johnson, Rob Portman, and Lisa Murkowski, who could possibly become a part of this balancing act with an objective to move the country forward on important issues of tax reforms, entitlement reforms, infrastructure investment, education reforms, immigration, etc. In the House, 17 Republican moderates would need to switch to Democratic Party which would give the control of the House to Democrats while at the same time dilute the power of liberals within the Democratic Party. There are 23-26 House moderate Republicans who are willing to vote for clean CR and debt ceiling bills. Many of them also favor to proceed on immigration bill and some of them are even pro-choice, so they will fit right in within the Democratic Party. Obama and Democratic Congressional Leaders would need to make the case to the target Republicans for the switch by offering them prominent committee assignments and even leadership positions within the Democrat controlled House and Senate. These movements will instantly break the gridlock in Washington, DC and the Congress would finally resume its business of legislating and solving people's problems.

Sunday, September 22, 2013

Republican self-destruction, Part 2

Posted by Shyam Moondra

On Friday, under the leadership of Speaker John Boehner, the House passed the Continuing Resolution (CR) bill that will fund the government through November but, at the same time, de-fund Obamacare. The vote was largely on party lines. The Senate Majority Leader, Harry Reid, said that this CR bill is "dead, dead" in the Senate. President Barack Obama has said that even if the Senate miraculously passes this bill, he will veto it. So the question is why would House Republicans push this bill, knowing full well that it could never become the law, and unnecessarily risk a possible government shutdown in ten days. Also, the House Republicans are refusing to increase the debt ceiling unless Obama agrees to additional spending cuts, setting the stage for the government to default on its debt. Last time, when Republicans tried this approach in 2011, the government debt got downgraded from AAA to AA+. Now we are on the verge of another downgrade from AA+ to AA, which will dramatically increase the interest payments due on national debt, and thus sharply increase the budget deficit. It is clear that the House Republicans have no strategy beyond passing the CR bill or refusing to increase the debt ceiling; they have not really thought through the consequences of their actions or figured out the endgame.

The Republican approach is so wrong at so many different levels:

  • First, they want to reduce the budget deficit, but their actions would actually put upward pressure on interest rates and thus lead to higher deficit because of increased interest payments on debt. 
  • Second, de-funding a program, which was approved by the Congress, signed into law by the president, and subsequently upheld by the USSC, is not the proper way to get rid of that program. If they really think that Obamacare is a bad idea, then the correct way to get rid off it is to offer amendments or an alternative health care proposal, get it passed in the House and Senate, and have the president sign it. That's how democracy works. You cannot threaten to shut down the government (which means military personnel fighting in Afghanistan will not get their paychecks and elderly people will be denied their monthly Social Security checks) unless you get what you want. Republicans cannot use blackmail as a tool to achieve their political goals. If this blackmail worked, could Republicans use it again to de-fund other programs such as Medicaid, Medicare, or any other program that they didn't like? What we will have then is not democracy but chaos.
  • Third, the Congressional Republicans have an approval rating of only 12% compared with Obama's 45%; so the question is why would Republicans threaten to shut down the government and end up paying a huge price at the ballot box? Last time, when Republicans played this game in 2011, they failed to win the presidency and lost seats in House and Senate in the 2012 election - so why would Republicans play the same game and hope to achieve a different outcome in the 2014 election? The chances are that they will actually lose the control of the House in 2014.
  • Fourth, in 2011, Republicans' threat to shut down government crashed the stock markets and reduced business confidence, which led to corporations putting their capital expansion plans on hold. These ramifications led to reduced job prospects and slower economic growth. If Republicans shut down government this time, the people, with their decimated 401(K) and IRA accounts, will again blame the Republicans for their losses.

On the question of increasing the debt ceiling, Obama is right in saying that Congress passed the spending appropriation bills and they alone are responsible for making sure that the United States does not become a dead beat on its debt. The Congress must pass a clean bill increasing the debt ceiling so the government does not default on its debt and become a laughing stock around the world. However, in the long-term, reducing budget deficit and debt is of paramount importance to preserve and enhance our prosperity for the future generations. Therefore, Democrats and Republicans must urgently work together to address the dislocations caused by unwise across-the-board cuts under sequestration and hammer out a balanced plan that would increase revenues via tax reforms and also cut spending through meaningful reforms of the entitlement programs. The voters desperately want the Congress and Obama to work together and reach a compromise on the issues of budget deficit and national debt.