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In the Debt Ceiling Machinations Democracy Is Also Up for Grabs

Carl Bloice: If the people who set the Tea Party in motion and sustain it want a mandatory “balanced budget” there is a democratic way of going about getting one; introduce specific legislation. They wouldn’t take that route.

It is tempting to describe last week’s Congressional battle over the budget as a spectacle with lots of theatrics reflecting little more that jockeying for political position. That would be a mistake. It was much more than that. It involved weighty substance bearing on the future economic well-being of millions of people, particularly working people. Perhaps even more importantly, the future of democracy was also at stake.

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And still is.

Someone on television said last week that the bill bearing the name of House Speaker John Boehner “gave” President Obama an increase in the debt ceiling. Actually, it was neither the House Republicans’ to give; nor was it Obama’s to receive. The ceiling has been lifted 77 times since 1917 and it was never a gift to anybody; it has been a normal process of government. Never before has the process been a successful tool for crude extortion.

If the people who set the Tea Party in motion and sustain it want a mandatory “balanced budget” there is a democratic way of going about getting one; introduce specific legislation. They wouldn’t take that route. Theirs is an awful idea, it would unlikely ever become law, and more people are coming to realize that what’s being proposed is just another slimy maneuver to go after – amongst other things - Medicare, Social Security and Medicaid.

Some polls do indicate popular support for a balanced budget amendment. A lot has to do with how the question is placed. Responses shift when people are asked whether they favor such a thing if it means slashing Medicare, Social Security and Medicaid, or reducing education funding or doing nothing to stimulate the economy and create jobs. Another part in this is the demagoguery about the Federal budget being the same as one’s household budget, a mythology the President himself has buttressed with his folksy kitchen table allegories.

“Countries' debts are not like individual households; they can be serviced over generations,” commented the British newspaper, The Guardian Sunday. “In the aftermath of a credit crunch, a country that tries simultaneously to cut public and private debt will suffer prolonged economic stagnation or depression. The cost in lost opportunity, broken lives and busted businesses is too high to slash public debt; indeed, the right action may be to increase it.”

In the end, the reactionaries didn’t get everything they longed for last week but the country got shafted nonetheless. And there’s more to come.

The economy is in dreadful shape – 14 million people are jobless - and there’s little hope for significant improvement any time soon. Indeed, many economists are saying there’s little more than darkness in the tunnel. This problem wasn’t addressed in Washington last week, it won’t be addressed next week as the politicians prepare for vacation, and there is every reason to believe what they just did is only going to make matters worse. “It also hobbles the capacity of the government to respond to the jobs and growth crisis,” economist Robert Reich wrote Monday in his blog. “Added to the cuts already underway by state and local governments, the deal’s spending cuts increase the odds of a double-dip recession. And the deal strengthens the political hand of the radical right.”

Last Saturday morning, the New York Times said editorially,

“Now the only hope left for avoiding default on Tuesday is for the Senate to piece together a compromise that can pass with bipartisan majorities in both chambers. It will undoubtedly cut far too much, at a time when the economy can’t afford it. It will contain no needed revenue increases and could still trigger a downgrade. But it would eliminate the imminent threat of financial chaos.” Then, in the afternoon, as it became clear during Senate debate what the price might be (and was, as it turned out) to avoid chaos, the paper posted the next day’s editorial online. It argued that there was no reason to believe that absent action by the government “conditions will turn around anytime soon.”

“Indeed, they are bound to worsen if Congress approves deep near-term spending cuts as part of a debt-limit deal while letting relief and recovery measures expire.”

“We will leave it to the historians to figure out how both political parties, and many Americans, became convinced that austerity is the road to recovery. History provides evidence that it is not, including the premature budget tightening of 1937 that reignited the Depression.”

No need to put the weight on historians. The warnings have been sounded over and over again, by some of the Times’ own political and economic commentators. But overall, the major media has been woefully derelict and dissenting voices from the left side of the aisle have been shut out almost completely.

“What is at stake is a radical Republican agenda to totally reverse the progress in economic justice that began with the great reforms of Franklin Roosevelt and his New Deal,” wrote Robert Scheer on July 27. “Consider the direct consequence of the economic crisis that unfettered Wall Street greed has wrought, particularly in reversing the gains made by the most underprivileged sectors of the population.” Scheer went on to reference the statistics released last week underscoring the devastation that the current economic crisis has visited upon working people and the disproportionate burden borne by the women, men and children in African America, Latino and Asian communities.

On July 27, Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), wrote on Al Jazeera:

“Policy debates in Washington are moving ever further from reality as a small elite is moving to strip benefits that the vast majority need and support. The battle over raising the debt ceiling is playing a central role in this effort.

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“The United States is currently running extraordinarily large budget deficits. The size of the annual deficit peaked at 10 percent of GDP in 2009, but it is still running at close to 9.0 percent of GDP in 2011. The reason for the large deficits is almost entirely the downturn caused by the collapse of the housing bubble. This can be easily seen by looking at the projections for these years from the beginning of 2008, before government agencies recognized the housing bubble and understood the impact that its collapse would have on the economy.

“…Remarkably, both Republicans in Congress and President Obama have sought to conceal this simple reality. The Republicans like to tell a story of out-of-control government spending. This is supposed to be a long-standing problem (in spite of the fact that Republicans have mostly controlled the government for the last two decades) that requires a major overhaul of the budget and the budgetary process. They are now pushing, as they have in the past, for a constitutional amendment requiring a balanced budget.

“It might be expected that President Obama would be anxious to correct the misconception about the budget, but this would not fit his agenda either. President Obama is relying on substantial campaign contributions from the business community to finance his re-election campaign.”

“In this respect, the crisis over the debt ceiling is the answer to the prayers of many people in the business community,” continued Baker. “They desperately want to roll back the size of the country’s welfare state, but they know that there is almost no political support for this position. The crisis over the debt ceiling gives them an opportunity to impose cutbacks in the welfare state by getting the leadership of both political parties to sign on to the deal, leaving the opponents of cuts with no plausible political options.

“To advance this agenda they will do everything in their power to advance the perception of crisis. This includes having the bond-rating agencies threaten to downgrade U.S. debt if there is not an agreement on major cuts to the welfare state.”

Baker described the battle over the debt ceiling as an “elaborate charade that is threatening the country’s most important social welfare programs.” “There is no real issue of the country’s creditworthiness of its ability to finance its debt and deficits any time in the foreseeable future,” he wrote. “Rather, this is about the business community in general, and the finance sector in particular, taking advantage of a crisis that they themselves created to scale back the country’s social welfare system. They may well succeed.”

Baker’s contention that both the Republicans and the Democrats were anxious to broker a deal that would slash (It’s called “reform”) Medicare, Social Security, Medicaid and the rest “leaving the opponents of cuts with no plausible political options,” goes right to the undemocratic nature of everything that occurred on Capitol Hill last week.

And, it didn’t end over the weekend. There’s the new bipartisan commission (or “Super Congress”) that is supposed to sort this all out behind closed doors and come up with new recommendations by Christmas, to be voted up or down with limited debate and no amendments allowed. This time, if the backroom plotters can’t agree, the cuts will occur automatically.

There is renewed talk of meeting the goal of the “the President’s deficit commission.” But there is no such commission goal. The National Commission on Fiscal Responsibility and Reform, headed by Alan Simpson and Erskine Bowles, failed at its task, its’ elite, handpicked 17 members couldn’t agree and they issued no report. But it won’t die. Give it a little jolt and it springs back to life, like Dr. Frankenstein’s monster.

Central to the defunct commission’s co-chair’s “goal” is the slashing of Medicare and Social Security. Not wanting to acknowledge that there is nothing close to a national consensus on doing such a thing, members of the Washington-Wall Street, elite who are hell-bent on eviscerating the post-war social compact, keep the myth of a commission report alive as a template for each of their efforts. And the major media, either out of collusion or ignorance, keeps the myth alive.

And now they are going to try again. calls the 12-member Super Congress a “ Catfood Commission on steroids - tasked specifically with cutting Social Security and Medicare benefits over the next few years” designed “to make it easier to fast-track wildly unpopular benefit cuts into law while shielding those who vote for cuts from accountability.”

As Robert Borosage of the Campaign for America’s Future warns, “The raw deal sets a precedent that Republican leaders are already celebrating: from now on, they boast, every debt ceiling vote will be the occasion for holding the economy hostage to more extreme demands. A balanced budget constitutional amendment. A two-thirds vote for any tax hike on the rich. Privatization of Social Security. The demands will get more extreme over time.”

One thing the past week’s events put to rest is any notion of transparency. It’s been all backroom shuffling by elite players. Even members of Congress have complained of being kept in the dark. It is therefore little wonder that, as Stanley Greenberg wrote in the Times Sunday, lots of voters tune out the politicians’ and express sentiments like these: “It’s just words” and say things like:

“There’s just such a control of government by the wealthy that whatever happens, it’s not working for all the people; it’s working for a few of the people.” “We don’t have a representative government anymore.”

The “bipartisan” measure cobbled together in Congress over the weekend did not, thank the lord – for now - do the dirty deed on Medicare, Social Security and Medicaid. Although you wouldn’t know it relying on the major media, much of the credit for that is due to grassroots action by senior advocacy groups, unions and others, and sustained resistance from parts of the Democratic Party leadership, especially members of the Congressional Black and Progressive caucuses. But the battle has only just begun; the slashers have set the stage for doing it later - by hook or by crook.

Carl Bloice

Carl Bloice
The BlackCommentator