This is no way to run a government…

You often hear, “this is no way to run…,” a business, a theater, a team, a school, and, yes, a government.

In today’s political mess in Washington, DC, this saying is most certainly true – this is no way to run a government!

Because of the scandalous inability of the political parties in the nation’s capital, from the White House to Congress, we don’t have a budget, we can’t agree on the simple and, yes, completely sensible notion, that the country’s economic problems after the worst economic recession since the Great Depression in the 1930s, need to be solved and that they can only be solved through savings, new revenues, and, very importantly, new investments to create jobs in order to make a substantial dent in unemployment, which, hovering around 8 percent, is still much too high.

We need a plan. We need action from Washington. But we have neither, because the White House, the Democratic Senate and the Republican House of Representatives cannot agree on anything.  There are many separate plans and the result is deadlock when we all seem to agree that the country needs to push forward, urgently.  Instead, we are standing still, waiting…for what? Godot?  He’ll never come, we know that.

And in these times of deadlock, and waiting, something happened that was never supposed to happen: sequestration. A strange word, which in this case means automatic budget cuts. It came out of the big debt ceiling crisis last year, agreed to by the White House and Congress, and its goal was to force a real budget agreement by way of the so called Super Committee – remember that one? – because sequestration — the automatic budget cuts — were so harsh that neither side wanted them.

But here they are — 85 billion dollars’ worth of cuts only this year — in health, transportation, social services, defense – starting this week, across the board, with no priorities. Unbelievable.

It is, indeed, a sad verdict of the state of affairs in today’s Washington, DC, where the ideological battle is fiercer than ever and where the word “bipartisanship” has become a dirty word.   There is blame to go around, for everyone.  Obviously, President Obama, who entered the White House four years ago with bipartisanship as a main message, has now given up on this. His message is now one of a “balanced approach” to the country’s economic woes, meaning cuts, but also new revenues.  He won the election on that message and he has continued to take it to the American people, who, according to the polls, support him, but not by much.

Meanwhile, the Republicans, who had to agree back in January on the first tax hikes in over two decades, are saying no to any new revenues.  No more. All they want to do now is to cut, cut, cut – the only thing they agree on. But it is strongly felt and the party seems united behind this main message.  So, even though the automatic budget cuts include serious cuts for Pentagon, which is ordinarily anathema to the Republicans, they have decided to accept them, all in the name of spending cuts and savings.

Their goal is to balance the budget by 2023 – without any new taxes.  That’s not economically realistic, and, on top of that, it’s politically risky, because it will mean cuts in extremely popular programs like Medicare and Social Security. Will the Republicans be able take the political heat that such proposals will bring? That’s highly unclear.

Now, the good thing here is that this will never happen, because the Senate, controlled by the Democrats, will never agree to it, and, even if they did, Obama would veto it. But where will this lead us? To one crisis deadline after another as the frustration in the nation grows and as the economy continues to limp along, when it could do so much better.

As I said, this is no way to run a government…


Growing dissatisfaction with Washington

The big losers in the current protracted battle over the U.S. debt ceiling and budget deficits are the politicians in Washington. Confidence in them drops drastically for each day that passes without the agreement and compromise that the overwhelming majority (two thirds) of the American public demands.

Congress has become a laughing stock, writes Charlie Cook, a most respected political commentator, in his latest “The Cook Report”.

“Right now, we are at a very, very low point–the worst I’ve seen since I moved to Washington in September 1972. Never in my memory have both parties and both ends of Pennsylvania Avenue appeared as dysfunctional as they do today. The stakes are so high and the performance is so utterly disappointing. “

They should be afraid of their jobs, Cook writes, and predicts that many of the current members of Congress will not be re-elected in next year. The only thing that could pave the way for a solution to the current crisis is that the stock market crashes and that interest rates rise sharply.

Then, perhaps, Washington’s politicians will wake up and come to their senses. But late today there were no such signs. On the contrary. The ideological battle seems to have hardened even more.

Whatever the outcome, all politicians, including Obama, have lost support, according to recent polls. Only 41 percent of all voters now prefer Obama to be re-elected while 40 percent prefer a Republican candidate, according to Pew Research Center’s latest figures. And according to the latest Gallup surveys, Obama’s support is at a record low, only 40 percent, while only 41 percent approve of how he has handled the debt ceiling crisis. The President’s only consolation may be that the congressional leaders receive even weaker support, Speaker John Boehner (31 percent) and Majority leader Harry Reid (23 percent).

To Obama: use the Constitution and raise the debt ceiling

As August 2 is fast approaching, more and more politicians, legal experts and commentators, are urging President Obama, as a last resort, to take matters into his own hands and with reference to the Constitution raise the debt ceiling unilaterally.

After all the negotiations and an intense week in Congress, we are no closer to the compromise that is required, and this weekend’s upcoming votes and continued negotiations do not in any way guarantee a positive outcome for America and the world.

It is at this point of great uncertainty that the possibility for Obama to refer to the constitution and unilaterally raise the debt ceiling surfaced in the debate. It is an interesting alternative, which Obama himself has admitted, but he and constitutional experts do not seem to be really sure if that this is possible way out and if this would be constitutional.

The debate centers on the Fourteenth Amendment’s fourth paragraph, which says:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pension and countries for service in suppressing insurrection or rebellion, shall not be questioned.”

In other words, U.S. government debt must not be questioned. The Amendment came about after the Civil War to prevent the South from cancelling the debt that the Union had incurred.

Jack Balkin, a law professor at Yale University, shows how the Amendment could be used by President Obama on his blog Balkinization, and Ronald Dworkin, a law professor at New York University, asks on the New York Review of Books blog if Congress would act unconstitutionally if it cannot decide to raise the debt ceiling.

This “last resort” has been advocated by a number of leading Democrats led by former President Bill Clinton. The consequences are uncertain but such a decision by Obama could lead to an impeachment process in the House of Representatives. Would Obama be prepared to wage such a fight only a year before the presidential election? That is the question.

Still, Professor Dworkin sees political benefits of such a decision.

“I doubt very many now uncommitted voters would disapprove of a President who acted under a reasonable interpretation of the law to allow the government payments on which they rely to continue, and to prevent damage to our international credit that would inevitably increase their taxes and might well eventually savage their standard of living. “

Michael Tomasky on the Daily Beast realizes the political risks, but adds:

“If Obama moved forcefully and said. ‘I am the president, and I met them here and here and here, and they wouldn’t budge, and I’m finished with them, and now is the time to act,’ I have little doubt that the markets—and the people—would react positively. That would prove that he’s a leader, and it would force him to choose sides. It’s high time he did both.”

Abolish the debt ceiling!

This is a great idea: abolish the debt ceiling!

Every other county, with the exception of Denmark, does fine without it. We don’t need it and shouldn’t have it. Instead of figuring out ways to raise the debt ceiling, we should simply go ahead and abolish it, writes James Surowiecki in his Financial Page column in the latest issue of The New Yorker.

Washington gets failing grade on debt ceiling

The ongoing negotiations to increase the U.S. debt ceiling by August 2 continue to dominate Washington, but the outcome is still uncertain and criticism towards the process is growing.

The warnings of a foreboding disaster if the deb at ceiling is not raised are frequent, as the Bipartisan Policy Center (BPC) in its recent report, which stated that federal spending would be reduced by 44 per cent after August 2.

But despite the warnings, the American public does not seem particularly worried about the future, judging by a poll from the Pew Research Center. It states that even though 40 percent anticipate major problems if the debt ceiling is not raised, nearly as many, 39 percent, predict no major problems at all. The survey also shows that Republicans are much less worried than Democrats. 53 percent of Republicans do not see any major problems if the debt ceiling is not raised, while that figure among the Democrats is 28 percent and among Independents 43 percent.

At the same time, a new CBS poll points to great dissatisfaction among the public for how both political parties, as well as President Obama, have handled the debt crisis. The Republicans in Congress are especially harshly criticized — 71 percent of all respondents disapprove of the way they have handled the matter.  58 percent say that the Democrats and 48 percent say that Obama have failed.

I think the figures in the latest polls indicate above all that people, outside of Washington, are tired of the whole issue and that the politicians cannot resolve the issue. I wonder if they even follow the negotiations in Washington longer, which EJ Dionne in the Washington Post today calls “wasted time” — Congress should instead have been discussing how to get the economy moving again, and how jobs could be created, he writes:

“This entirely artificial, politician-created crisis has kept the government from doing what taxpayers expect it to do: Solve the problems citizens care about.”

I agree.

A golden opportunity is wasted

What are they going to talk about now?

That’s the question before tonight’s talks at the White House after Republican Speaker John Boehner’s announcement last night that he cannot do a big deal on the debt ceiling and the deficit, citing White House insistence that a deal must also include tax increases, especially for the rich.

The truth behind Boehner’s retreat is that he could not get such a deal approved by his Republican colleagues in the House. The Tea Party members say no to everything, except cuts. They even say to raising the debt ceiling at all, as witnessed repeatedly out on the campaign trail by their foremost spokesperson, Michele Bachmann as well as by Tim Pawlenty, the former Minnesota governor.

What part of the word “catastrophe” for the country if the debt ceiling is not raised do they not understand? They are really playing with fire. It’s time for everyone to get serious, writes Charlie Cook at the National Journal.

A golden opportunity to come to grips with America’s deep economic crisis has been wasted.

Now or never negotiations given “50-50 chance”

Now-or-never negotiations on the debt ceiling, budget deficits, and, possibly, new taxes started today when President Obama received the leading congressional representatives from both parties at the White House.

The deadline is August 2, but the White House has said that a settlement must be in place by July 22 to meet the deadline.

American economic prosperity is at stake. The chances for a deal within the next 48 hours are 50-50, according to Speaker John Boehner in a report in the National Journal’s online edition.

Such a compromise is expected to be broad and comprehensive – perhaps budget cuts totaling four trillion dollars and include some kind of income enhancement measures, in spite of the repeated no’s from the Republicans to any talk of new taxes.

All talk of temporary solutions has been rejected by Obama and the Democrats. Now or never appears to be the motto. We’ll see.