The Republicans are a bit like Thelma, her foot flooring the gas pedal as the global economy hurtles towards the precipice of the Grand Canyon, while Obama is a bit like Louise, her passivity effectively giving Thelma permission to drive off the cliff. Or maybe the movie is Rebel Without a Cause with the Republicans' James Dean engaging in a miscalculated game of chicken and Obama's Sal Mineo being killed by police gunfire after all the bullets have been removed from his own gun. Or maybe it's The Guns of August as the Germans and Western allies inadvertently, but inexorably, hurtle towards World War in the summer of 1914.
Pick your metaphor, but any way you look at it, America's political leaders are flirting with disaster, risking the first debt default in American history which would likely drag the American -- indeed the global -- economy into a new recession or even a depression and could dwarf the economic crisis of 2008.
The Republicans are acting as the aggressors, but Obama is acting as the enabler.
Here's how the political forces seem to be aligned less than a month away from an impending Federal debt default. First there's the truly extremist batsh*t crazy far, far right of the Republican Party led by the likes of Michele Bachmann, Rand Paul and their Tea Party supporters who are like climate change deniers (in fact they are also climate change deniers) claiming that a default wouldn't be such a bad thing. Bring it on, they say. It will just force the shrinkage the federal government to the size where it can be killed in the bath tub.
Then there's the only somewhat extremist, somewhat crazy, somewhat far right of the Republican Party -- now, in effect, the mainstream of the Republicans -- led by Eric Cantor, Mitch McConnell and John Boehner -- and backed by 230 House and Senate Republicans who have signed Grover Norquist's no new tax pledge promising never to vote for a single increase in taxes on anyone, no matter how wealthy, nor to remove even the most egregious tax loopholes for special interests. They say they're ready to strike a deal with Obama to raise the debt ceiling, but only 100% on their terms: $4 trillion dollars in spending cuts over the next 10 years and not a penny in taxes or revenue increases. They're willing to raise the debt ceiling and avoid financial Armageddon, but only if the result is unconditional surrender by Obama and the Democrats. Otherwise, they seem ready to take it to the brink.
And then you have President Obama who stands for... well what does he stand for? It's impossible to say. His opening bid in attempting to negotiate with Republicans was for $4 trillion dollars in savings over the next 10 years, consisting of 75% budget cuts and 25% "revenue enhancers" (but not, God forbid, tax increases). He rhetorically conceded to the Republicans' right-wing principles that what the country needs is sharp spending cuts, rather than more stimulus to increase demand and create jobs. Obama was already voluntarily fighting the battle on the Republican side of the field, accepting budget cuts so sharp that they would cut the heart out or programs vital to the middle class, senior citizens and the poor, and even indicating that cuts in Medicare, Medicaid and Social Security could be on the table.
When the Republicans stonewalled that proposal, and Eric Cantor walked out on the budget talks, last week Obama unilaterally lowered his bid. He now proposed "revenue enhancers" that only went after the lowest hanging fruit consisting of the most egregious tax breaks: depreciation schedules for corporate jets, capital gains taxes for hedge fund managers, and phasing out tax breaks for oil and gas companies. Shortening depreciation schedules for corporate jets would save an estimated $3 billion over 10 years; making hedge fund managers pay regular taxes instead of capital gains taxes on their incomes would save about $40 billion and phasing out oil and gas loopholes would save about another $40 billion over the next decade. So there you have Obama's latest bid which, despite the rhetorical flourishes about ending tax breaks for "millionaires and billionaires" consists of $83 billion in "revenue enhancers" out of $4 trillion in government savings over a decade or about 8.3% revenue enhancers to 91.7% spending cuts. And still Republican Congressional leaders rejected Obama's offer.
Attempting to speak as the voice of non-existent "reasonable conservatives", New York Times columnist David Brooks argued on Tuesday that accepting Obama's latest compromise proposal should be the "mother of all no-brainers" for Republicans: "trillions of dollars in spending cuts in exchange for a few hundred millions of revenue increases". And in some theoretical world that bears no resemblance to the real world of contemporary Washington politics, Brooks is of course right.
A "compromise" cutting the Federal budget by $4 trillion consisting of 91.7% spending cuts and 8.3% revenue enhancers would be a massive victory for Republicans and a massive defeat for Democrats. It would all but eliminate the rationale for there being a Democratic Party as the defender of programs benefiting the middle class, senior citizens, and the poor. If George W. Bush had proposed such a "compromise", Democrats and progressives would be taking to the barricades. But in the new normal of American politics, not a single "progressive" Democrat in Congress has stood up to suggest that a 91.7%/8.3% "compromise" by Obama is a bridge too far.
Nor has a single Congressional Republican taken up David Brooks challenge and suggested accepting Obama's deal. And when it comes down to it, why should they? With Obama constantly negotiating against himself, repeatedly lowering his bid without any corresponding concession from Republicans, whey should Republicans accept any proposed compromise, no matter how favorable to them? Obama's perpetually conciliatory approach only encourages and enables the Republican leaders' united front of intransigence and justifies the Tea Party threat to mount a primary challenge to any Republican who votes for a nickel in revenue enhancers.
If yesterday Obama was willing to accept 75% spending cuts to 25% revenue enhancers and last week he was willing to accept 91.7% tax cuts to 8.3% revenue enhancers, maybe next week he'll accept a ratio of 95/5 or 99/1, or as the clock ticks down to 11:59 PM before a default, 100% tax cuts and no revenue enhancers.
So the Republican Thelmas and the Obama-led Democratic Louises hurtle towards the edge of financial cliff, locked in a death embrace of Republican intransigence and Obama-led Democratic passivity. At this point, it seems that the best that can be hoped for is a last-minute compromise made up almost entirely of spending cuts, which would take so much demand out of the economy that it would plunge the economy back into recession and unemployment would increase. Or the Republicans and Obama could misjudge the distance to the cliff and the power of their breaks and go plunging over to cliff of debt default, with incalculable consequences.
I wish I could see an exit from this theater before the movie ends in disaster.
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