by Joe Shea
July 16, 2011
INNOVATION IS THE ONE WAY OUT OF OUR DEBT CRISIS
DUMMERSTON, Vt. -- As the game of political chicken continues in Washington, it looks more and more like the rest of us will be plucked.
We can see the broad contours of the game.
The Republicans in Congress talk of the need to reduce the deficit, yet completely refuse to raise taxes on the wealthy, or close tax loopholes that benefit the wealthy.
President Obama counters with a plan that would reduce the deficit by $4 trillion over 10 years through major changes to Social Security and Medicare, in exchange for Republican support for ending the Bush tax cuts on the wealthy.
As David Brooks wrote in The New York Times last week, Republicans are "being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases."
Despite a deal that offers $6 in budget cuts for every $1 of new revenue, Republicans balked.
This is what happens when you try to negotiate with people who want to destroy you and do not have the best interests of the nation in mind when they are making policy. Yet President Obama still acts like he is dealing with rational and logical people, and still believes bipartisan compromise is possible.
This is but one reason why Obama's supporters are frustrated with him. As columnist David Sirota wrote last week, there is a huge gap between the Obama of 2008 and the Obama of 2011.
"Indeed, when a political candidate promises to try to pass a public option to compete with private insurers, attempts to crack down on Wall Street abuse, does what he can to stop unfair trade deals, opposes extending his predecessor's tax cuts and avoids initiating initiate costly new wars sans congressional approval, and then once in office works to kill a public option, refuses to prosecute Wall Street crimes, presses the rigged trade deals he opposed, supports the extension of his predecessor's tax cuts and starts a new war in Libya with no congressional authorization - whose fault is it that he ends up in re-election trouble?"
There is a way President Obama could redeem himself, starting with backing away from gutting the crown jewels of the Democratic Party - Social Security and Medicare. For a Democratic president to even consider massive reductions in benefits from programs is a disgrace. To use them as bargaining chips with Republicans who have longed to destroy these programs for decades is even worse.
As I have often written, Social Security is not broke. It is not contributing to the deficit. It is the most successful government program ever created. The only major change needed to ensure its solvency indefinitely would be to raise the limit on income subject to the payroll tax, so that the wealthy are paying their fair share into the program.
Unlike Social Security, Medicare is in financial trouble, mainly due to the runaway cost of health care in the United States. Cost control is necessary, something that President Obama's health-care legislation seeks to achieve. But the best way to control costs and salvage the goals of Obama's plan would be to turn Medicare into a program for all ages, and use the buying power of the government to achieve lower costs and better medical outcomes.
Most of all, he can avoid bargaining away social service programs in exchange for a vote on raising the government debt ceiling by doing one simple thing: using his constitutional authority to unilaterally raise the debt ceiling without congressional approval.
U.S. Sen. Charles Schumer, D-N.Y., brought this up last week, citing Section 4 of the 14th Amendment, which states that "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
This is not the best solution, for giving the executive branch even more power than it already has is not desirable. But it is better than what is likely to happen in the first week of August if the United States defaults on its debts for the first time in its history - serious, and possibly irreparable damage to our nation's credit, panic on the financial markets, and incalculable damage to the U.S. economy.
"If the Aug. 2 deadline arrives and no deal has been made, Obama could use a plain reading of that text to conclude - statutory debt ceiling or not - that he is constitutionally required to order the Treasury to continue paying America's bills," wrote Katrina vanden Heuvel, the editor of The Nation, in a column in The Washington Post last week. "In that sense, this is not just a constitutional option, it is a constitutional obligation, one even the Tea Party will have trouble denying."
Amazingly enough, Senate Minority Leader Mitch McConnell, R-Ky., is willing to give that authority to Obama. This week, he floated the idea that if the White House and Congress can't come to terms on a plan to raise the debt ceiling, President Obama would be authorized to raise the debt ceiling in increments between now and the end of 2012, subject to a two-thirds vote of disapproval by Congress.
In other words, Sen. McConnell is willing to let the Republicans roll the dice and empower the President to raise the debt ceiling to avoid a financial catastrophe - in exchange for a rolling political fight over the proper role of government, with the bonus of having this fight take place during a presidential election year.
This is a deal worth taking. As Robert Borosage wrote last month, "Let the American people decide if they want to elect more legislators committed to gutting Medicare or more committed to taxing millionaires."
Naturally, there are a lot of conservatives that do not want such a discussion to take place. The Republican leadership in Congress has made it very clear that they are willing to destroy the nation's economy if it means their party can return to having full control over the White House and Congress. They do not want to give Obama any victory that might help him get re-elected.
I don't have much faith that Obama and the Democrats will stand their ground and defend Social Security and Medicare. But they may not need to.
We are seeing the fruits of Republican overreach on the debt ceiling, and the discovery that they are in a politically and morally untenable position. They are caught between the nihilism of the Tea Party, who want them to blow up the economy, and the greed of Wall Street, who want their low taxes and perks preserved at all costs.
You might want to make a big bowl of popcorn for this show.
AR Chief of Correspondents Randolph T. Holhut has been a journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.