Thursday, December 22, 2011

President Obama and the Congress of Doom

It is said that Steven Spielberg's model for Raiders of the Lost Ark was the short "serial" films of the 1930s and 1940s that always ended with a cliffhanger, often with the hero in peril.  Since President Obama's inauguration in 2009, and certainly since the House went back to Republican control in 2010, our federal government has run like those long ago serials, with this week's episode being the just completed payroll tax cut debate, which resulted in a two-month extension of that tax cut, along with an extension of unemployment insurance and relief for doctors who treat patients on Medicare.  

While many pundits are lining up to laud the President for standing up to Republican intransigence and calling this a victory for him, consider what was won, at what cost and what the future holds.  The President won a 60 day reprieve to try and negotiate a year-long extension to a tax cut that Republicans mandate be fully paid for (unlike the trillions in tax cuts that were signed into law in 2001 and 2003 by President Bush) and inserted specious requirements like the Keystone XL pipeline decision for no other reasons than that they can effectuate policy by other means.  Keep in mind that the only reason the payroll tax cut was even up for renewal this year is because in one of the prior episodes of government by cliffhanger (Bush Tax Cut Episode - December 2010), the President signed off on a two-year extension for all the Bush tax cuts while accepting a one year time horizon for the payroll tax cut.  

Of course, Republicans have learned that government by cliffhanger is a very effective strategy to amplify the narrative that Washington is "broken."  After all, "ordinary" Americans see a big food fight going on, often without taking time to understand who is at fault or who started the argument.  Further, each time one of these crises erupts, Republicans are able to extract enormous concessions from the President.  The only difference this time was that Senate Republicans voted overwhelmingly for something they could not turn around and repudiate.  Even so, the "pay for" to offset the cost of these extensions will (ironically) fall on home purchasers, who will pay additional fees to have Fannie Mae and Freddie Mac back the mortgages they take out to buy their homes.  

Already forgotten in the tax cut debate is the fact that Congress just last week passed the budget for this fiscal year, which started on October 1st.  Even with the total overall discretionary spending capped (thanks to yet another concession the President made in the government by cliffhanger episode "debt ceiling debate") it still took Congress almost 3 months into the fiscal year to get a budget passed.  Not only do these cliffhangers dominate the news cycle and grind everything in Washington to a policy halt, but the side effects are to slow the gears of government and punish organizations that cannot plan, hire or fund programs because of fiscal uncertainty.  Also unmentioned in these debates is that the concessions given by Democrats result in things like reducing funding to the new Consumer Financial Protection Bureau, lowering funding to the EPA and, in myriad other small ways, make it harder for things like regulation and oversight to take place.  People tend not to notice these things until a listeria outbreak takes place or a levee fails in New Orleans.  

As Charles Pierce noted on, at best, this agreement deserves a "golf clap" for saving par.  There's nothing stopping Republicans from pulling the same shenanigans in 60 days when the two-month extension expires, or when the budget for Fiscal Year 2013 is being debated.  In the meantime, it is quickly forgotten that the suddenly reasonable looking Mitch McConnell filibustered the nomination of Richard Cordray to head the CFPB and, in what appears to be a violation of the vaunted Gang of 14 agreement on blocking federal judges, stopped the appointment of Caitlin Halligan to the D.C. Circuit Court of Appeals (20 other nominees, yes, 20, are being held up for reasons unclear).  The knee jerk use of the filibuster, or more specifically, the threat of one (ironically, the only person who was actually forced to take the floor and not leave was Senator Bernie Sanders when Congress was debating the Bush tax cut extension) continues apace and in numbers unprecedented in the modern Senate.  

Obama's "victory" was on a policy issue that is at the core of Republican philosophy and only made possible because of the enormous political cover the huge majority of Republicans in the Senate offered.  No movement on the American Jobs Act has taken place, the centerpiece of financial reform, the CFPB, is still without an appointed leader and little if anything is being done to help ordinary Americans or encouraging stimulative growth.  Make no mistake, when this tax cut is debated over the next 60 days, that combination of factors will not be in effect.  Indeed, the holiday break will undoubtedly allow Republicans to regroup and return to Congress with a more unified position.  

Further, the episodic nature of government will continue apace.  In addition to next year's budget, the Bush tax cuts are set to expire (again) at the end of 2012 and the debt ceiling will again raise its head in 2013 and on and on.  At some point, the President needs to draw a line in the sand.  This was not that fight.  The two-month payroll tax cut was a quirk and a one off, where everyone thought an agreement had been reached until a revolt of back bench House Republicans blew it up.  The President should not be sanguine about this victory, but rather, thinking about where and when he is going to show legitimate spine - be it recess appointing Mr. Cordray, fighting for the "millionaire's tax" to fund the remaining 10 months of the payroll tax cut (or better yet, extending it even longer), coordinating with Senator Reid to do nothing but focus on the movement of nominees through the Senate process, refuse to sign further extensions of the Bush tax cuts (or put forth true progressive tax reform) and continue to pound away, daily, on the need for infrastructure investment, aid to states and other measures that will reinforce the modest job recovery that is being seen in the private sector.  Today is not a time to celebrate, it is a time to, as Sarah Palin might say, reload.

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