GOP Welches on Budget Deal, But Why?

The GOP has decided to renege on one of the tenets of the budget agreement they made with the President.

Remember that whole debt ceiling fiasco last year? Right, the one in which a deal was struck that said that a small number of selected Rs and Ds (a "Super Committee") would work together to find $1.2 trillion in debt reduction by a certain deadline, and if they could not then automatic cuts would go into affect. Those automatic cuts would be big across many of the sectors of government spending - including the Department of Defense. This was the agreement. Predictably, the Super Committee failed to come to an agreement - primarily because the Rs refused to consider even one penny of tax increases to help balance the budget. Therefore, the consequential automatic cuts are now scheduled for January of next year.

But wait. This week, Republicans in the House decided that, you know, well...we're not going to go along with the defense part. In fact, we're going to introduce legislation to exempt defense spending from any cuts.
People, the defense budget is one of the biggest (and some estimate the single largest area) of spending the Federal government does. Any serious debt reduction would have to include some reductions to defense expenditures. It's that simple.

So, why would supposedly budget and debt conscious fiscal conservatives now want to now go back on their pledge and exempt one of the largest area of spending form any debt reduction?

I'll offer some ideas:

1. By exempting defense, that means cutting even more on domestic programs such as Social Security, Medicare, Medicaid and others - programs that Republicans have quite literally been trying to reduce or get rid of since the 1940s. A little "bait and switch" is no big deal to conservatives when they feel they have a substantial shot at realizing a generational goal. To me...this is the reason.
2. No politician, in particular conservatives, want to be on record as sanctioning defense cuts in an election year. Sure, the actual cuts wouldn't take place until Jan. 1, 2013, but they are being discussed now...during an election cycle.
3. Similarly, the GOP may want to try and paint Obama as "soft on defense," by being "in favor of defense cuts" during an election year - even though those cuts were part of the deal between Obama and the Rs.
4. While many Democrats are "in bed" with defense contractors (jobs in their districts, big campaign donations), Republicans tend to do better by the "military-industrial complex" and they may not want to be seen to be favoring cuts to the very companies that fund their campaigns.

Finally, I'll offer this as a criticism for the President:

In case you hadn't noticed over the last three years and three months you have been in office, the Republicans play HARD BALL. That means they will do anything to get what they want, including going back directly on something they said they would do. And they'll do it with a smile on their face and try to make it look like it's your fault. Hard ball. This is who you are dealing with. They are not a party of compromise or "working together" to do right by the American people. No, they are not. They want what they want and they will do what it takes to get it. The end.

And for all that, you sir, have by my estimation been extremely naive in your time in office. While you've been trying to forge coalitions, the GOP has been trying to find ways to proverbially "crack your skull" politically, damage you and make you unelectable in 2012. And they've been doing it since November 2008.

I'll put it one last way...you think LBJ or FDR would take the crap Boehner, McConnell and their buddies are doling out? Hell no they wouldn't and neither should you. That's why if you get a second term, you should definitely wake up to this so you can face reality and get some things done.

Rs Demonstrate Savvy Negotiating Tactics With Budget Proposal

With the short term Federal budget crisis averted last week, attention in DC will now turn to longer term solutions for the spectacular budget deficit this country has.

And as this debate starts, here's something to ponder...

While the proposal from the Republicans to cut out $6 trillion in spending, together with more tax breaks for the wealthy is WAY, WAY off the deep end of reasonable, it will accomplish one thing even if none of it is exactly adopted. And what is that? It moves the debate over what to cut, what not to cut and what to offer as tax policy radically to the right.

By staking out a position so far on one side, conservatives can "negotiate" away a lot of their official plan, but still end up with what they want - spending cuts or elimination of big domestic programs (but not defense) and big tax cuts for the wealth and corporations. I'll save judgement on how effective that economic recipe will be for the economy (although I think you already know), and just say that I think that's what's going on here. That's what the Rs are up to with this radical initial proposal.

What should the Democrats do? Well, with the White House and Senate in their control, my humble opinion is they should simply say, "No, we reject out of hand what you are proposing. It is a non-starter. The provisions you are proposing have been proven again and again as failures. Try again. And oh by the way, here is our plan." And that plan better be sound, good and promoted big time to the American public. That would at least attempt to cut off the "move the debate to the right" strategy of the Rs and re-establish the debate somewhere near the real middle of the political and economic spectrum.


What will the actually Democrats do? Well, if recent history is any guide, they'll play the game. They'll try to chisel away some of the elements of this Republican plan so they are not as bad as initially proposed, but in the end they'll sign off on legalisation that is very, very conservative.

What If You Paid Zero Taxes Annually? Well, You'd Be Just Like G.E.

Are you concerned about the budget deficit?

As with any financial ledger, the Federal budget is comprised of what's going out (spending) and what's coming in (revenue)...and that tells the tale of whether we're in the red or in the black. And when we're in the red there is indeed need to be concerned.

But before you pick up your pitch fork, light up the torches, put on your broad brimmed hat and gather your government-hating neighbors to march under moonlight up the castle of today's government to demand them from spending money, consider this...

...the largest company in the world - a U.S.-based company - pays no taxes annually. That's right. General Electric pays zero corporate taxes. That's $0.00. Nothing. Year in and year out. That is a HUGE hit to the revenue side of the Federal budget ledger, and GE is by no means the only company doing this.

You can read how GE is getting away with this in the New York Times article HERE. They also published a handy chart that illustrates HERE.

Hell, no wonder that elephant in those GE TV ads is dancing!

It's fitting that the GE mascot on their TV ads is an elephant. Why? Well, they're getting away with paying $0 taxes annually because of laws and deregulation ushered in by the Republican Party during its reign of power...and the symbol of the R Party is, indeed, the elephant.

Sadly, this makes sense in another way...because of course it's a fact that we have seen the creation of the two largest budget deficits in our nation's history under recent Republican leadership (the 1980s and the 2000s) through their aggressive tax cuts for corporations and the wealthy, as well as big time deregulation. 

Which is why I was so ticked off when President Obama appointed none other than GE CEO Jeff Immelt as his advisor on business and the economy. Post HERE.

To me this is just one more glaring proof point that...we are being USED people. Used. This is the reality of the the conservative economic agenda. 

And you know what? It might even be bearable if GE was creating lots of new jobs in the U.S. with all the money they're saving in non-payment of taxes...but they are not. No, they're laying off employees and outsourcing more and more jobs to cheaper labor markets around the globe and keeping windfalls as executive bonuses and payouts to shareholders. This lack of revenue is no laughing matter. Not to mention the layoffs. Not having the billions of dollars in tax revenue annually from companies like GE really hamstrings effective government and the erosion of jobs hurts bad too. 

Look, you work hard, you pay your bills, you pay your taxes. If you run a small business, you're paying taxes and dealing with regulations. Meanwhile, companies like GE are literally gaming the system. And we just let them get away with it. 

All of which is to say, sure, it's easy to get mad at the government for spending in a time of budget deficits, but you need to keep in mind that there is a HUGE stream of revenue that should be coming in that is not and you might want to focus on that...

...and target #1 should be GE. 

Target #2 are the laws and regulations (or lack of them) that allow a company like GE to skip out on paying any taxes while the rest of us are burdened with it.

How I Know Obama's Plan Will Work

I watched Obama's speech last night. I was impressed. Finally, someone with bold ideas and the brains to actually get them done. Oh, and the ability to speak in complete sentences.

Naturally, the media will dissect what Obama said, handicap the odds of it getting done and what it all may mean. And certainly, there will be things about what Obama and the Ds propose that probably won't work.

Fine. That's the media's job. However, I think it's actually very, very easy to figure out if what Obama is proposing will work.

You know how I know Obama's plan overall will work?

Republicans and conservatives are so uniformly against it.

That's it. It's that simple.

Why you may ask? To that I reply, know your history.

Conservatives and the Republican Party have been on the wrong side of virtually every attempt to bring the nation out of recession or depression.

Think about it. As evidence, you need not go further back than the 1990s.

Remember that when Clinton came into office, the nation was in a recession and for two years he had a D-controlled Congress. In that time they passed progressive legislation including the Omnibus Budget Reconciliation Act if 1993 to set us on the path to a balanced budget and more prosperous times. The bill contained a mix of tax increases and a reversal of the now-disproven "Reganomics" supply-side economic practices that had steered us into recession. As we now know, this bill and other progressive measures set the table for an impressive 1990s and creation of the nation's largest budget surplus ever. We also know that W and the Republicans went on to squander it all in a return to "feed the rich" policies, but that's another story.

But back to my main point...guess who unanimously voted against the 1993 bill? Guess who at the time called it a return to big government and moving us toward socialism? Guess who said that the bill would put us on the road to ruin? You got it. Republicans. Unanimously.

Sound familiar?

It's the same refrain that the Rs pull out any time their philosophy is challenged. You could look at what they said in the debates to address The Great Depression in the 1930s too and you'd see the same hollow claims.

In short, the Republicans (and conservatives generally) have a very poor track record of judging what will get the country out of economic hard times.

And therefore, I'm pleased that they are so unanimously against Obama's proposals today.