Sunday, July 31, 2011

Debt Deal or No Deal...

**The post has been cross posted on DailyKos and Blue Mass Group.**

President Barack Obama has announced that a deal has been reached to raise the debt ceiling.  It is abysmal.  The unemployed, sick and poor are thrown under the bus.  That there can be no doubt.  However, for all that there are some bright spots to be pried out from under the rear bus wheel.

1. Congress cannot bind itself into the future.  There remains plenty of ammo for Democrats to hang onto as they venture forward into the 2012 Congressional races.  Although hits will probably be sustained in North Carolina new Congressional map and redistricting will protect Republicans elsewhere Democrats have some hope to hang onto in California and Illinois.  So recapturing the House remains possible and holding the Senate is not outside the realm of possibility.  Should both things happen and President Obama wins another term, though not a definite thing, the worst of this can be reversed.  Think reconciliation.

2. Although changes to the tax code are not included in the deal or seemingly allowed to raise revenue in the new Super Congress, the Bush tax cuts expire January 1 2013.  President Barack Obama has ZERO incentive to extend them again for the wealthiest before election day.  If Republicans want to protect the wealthy at the expense of the poor, let them.  Trying the opposite argument  bought Democrats nothing in 2010 and it will do the same in 2012.

3. The White House promises that most of the reduction will be done in the out years.  If true, see point number 1.

4.  Although the president consistently called for a balanced approach, it is worth noting that the tax revenue was really only ever an adamant requirement if the Big Three were cut.  Medicare risks knicking, but Medicaid and Social Security survive unscathed.

5. We finally make seriously cuts to our bloated Defence Establishment.

6. Although no unemployment or payroll deduction was included, we can now (hopefully) move onto job creation as our main conversation, even if this deal could weaken the economy.

7. All the details are not yet out.

Let me be clear once more.  The deal appears to be simply awful.  However, there is some wisdom, however disconcerting, to be taken from the New York Times editorial about the calculation of dealing with extortionists.  Unlike in years past, the extortionists were really willing to destroy the economy and frankly the longer term impact of that would have hurt Democrats and President Obama far more.  For whatever wrath some Republicans in moderate districts may fact, we need only remember that the GOP had higher unfavorables last year than Democrats and still won.  They would have destroyed the economy, but the Republicans that vote against this deal can and will have their irresponsibility shoved in their face either in primaries or generals (preferably the latter).

As many Democrats that can should vote against this deal.  However, the deal must still pass.  President Obama would be inviting political character assassination of an unprecedented degree if he exercised the Fourteenth Amendment option.  The White House could only have plausibly used this method if it lines up individuals affected by the debt ceiling to sue for it to be overturned.  By the time judges would get around to this, the damage may already have been done.

As liberals, it is always troubling to be shoved to the center when the leaders we have placed our hopes in fail to meet our expectations.  Arguably, we have experienced this for decades now.  However, uncomfortable fact though it may be, this situation would have been far worse if Republicans controlled the White House and none of the candidates on the GOP side could be trusted to do anything short of privatizing Medicare, "personalizing" Social Security and dumping the EPA, Medicaid, financial reform and education generally.  Some candidates, including several frontrunners, would even be a threat to the minimum wage, unemployment and virtually all assistance to the poor. 

It does not say much for our society when the alternative to what we have now is the destruction of our post-McKinley society.  Yet we, that is Democrats, liberals, leftists, progressives and indeed anybody who values fairness and compassion, have to keep fighting and NOT STOP fighting.  This time it was a bad budget deal, tomorrow if we give up, it can and will be far worse.

--Matt S, EIC WMassP&I


Anonymous said...

Can you explain what will happen if the top 2% where to take their tax money away(off -shore)like the Kennedys'After a while there will be nothing left so what do we do to keep going?
By the way there is no law saying that you cannot pay more than you owe so why not start a ne tax payment plan?
"Pay more now to insure your future."

Matt S. said...

Umm, I'm not against voluntary paydowns of the debt from taxpayers. However, as far as off-shoring things, if you write your tax code correctly, unless a person does not want to do business in the US, live in the US or own any money-collecting entity that exists in the US as well as its consumers, then they can be compelled to pay taxes.

If the Kennedys did as you said they did so because the law permitted them to so. Unless you want to divorce yourself fully from the US, the only thing that stops you from paying taxes is a friendly tax provision in your favor.