The real battle for the soul of the GOP started Monday with a speech on Wall Street by Speaker of the House John Boehner.
Wall Street and big business fear Tea Partiers won't allow House Republicans to raise the debt ceiling without major spending cuts -- and without tax increases on the wealthy. Wall Street and big business know this would be unacceptable to the White House and congressional Democrats.
The Street and big business want to tame the budget deficit but they don't want to play games with the debt ceiling. Credit markets are fine at the moment, but if the debt ceiling isn't not raised within the month -- weeks before August 2, when the Treasury predicts the nation will run out of money to pay its creditors and its other bills -- credit markets could go into free fall. The full faith and credit of the United States would be jeopardized. Interest rates would skyrocket. The dollar could plummet.
The Tea Partiers don't care about the debt ceiling. To them, it's a giant bargaining chit to shrink government. Nor do they worry about credit markets. If the full faith and credit of the U.S. government is no longer honored, so much the better.
You see, Tea Partiers hate government more than they hate the national debt. They refuse to reduce that debt with tax increases, even with tax increases on the wealthy, because a tax increase doesn't reduce the size of government. The Tea Partiers' real aim is to shrink the government.
But the Street and big business dislike the national debt more than they dislike government. And they wouldn't even mind a small tax increase on wealthy people like themselves in order to cinch a deal on raising the national debt. They have so much money they'd scarcely notice.
In truth, government has been good to Wall Street and big business. It bailed out the Street. It saved GM, Chrysler, and AIG. And most government spending improves the profits of big businesses -- military contractors, big agriculture, giant health-care insurers, Big Pharma, large construction companies.
Tea Partiers have almost as much contempt for big business and the Street as they do for government. After all, the Tea Party was born in anger over the Wall Street bailout.
This is the heart of the civil war in the GOP.
House Speaker John Boehner, appearing Monday at the Economic Club of New York, tried to placate both wings, but he was far more in the Tea Party camp than with his audience. He said "everything is on the table" in order to reduce the nation's debt -- a bow to Wall Street and big business pragmatists. But in the next breath he ruled out tax increases.
Boehner says he won't allow the U.S. to default on its obligations -- exactly what the Street wants to hear. But then he insists on tying the debt-ceiling vote to a deficit-reduction deal. "The cuts should be greater than the accompanying increase in debt authority the president has given. We should be talking about cuts of trillions, not just millions."
Boehner knows the only way to get cuts of this magnitude without increasing taxes on the rich (or cutting defense -- something else the GOP wouldn't think of) is to make mincemeat out of Medicare and Medicaid, slash education and infrastructure, and kill off most of everything else people of moderate means depend on.
In other words, Boehner's conditions are just another version of the Paul Ryan plan House Republicans approved last month -- the same plan that brought howls at recent Republican town meetings. Democrats will never agree to it, nor should they. Nor will the rest of America.
And that means no agreement to increase the debt ceiling.
Boehner is siding with the Tea Partiers. Wall Street and big business hold the purse strings in the GOP but the Tea Partiers are now the ground troops. Boehner and his GOP colleagues figure Wall Street and big business will stake them in any event. They need Tea Partiers to get out the vote in 2012. And they're afraid angry Tea Partiers will get out the vote against them in their own primaries.
But Boehner is playing with fire. If the debt ceiling isn't raised and the financial system begins to collapse, the GOP loses not only Wall Street and big business. It loses everyone who's still sane.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
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| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
I don't know why we use such dainty language...the Tea Partiers' true goal - inspired by the propaganda of such as Grover Norquist and the Koch brothers - is the Balkanization of the United States of America and the elimination of the federal government as an effective force for good.
That is, the good of people.
The American people can't seem to grasp the fact that America isn't the physical land but rather they themselves; consequently, they do not understand that ensuring their "well-being" is in the hands of the federal government...the entity tasked at the creation of this nation by the Constitution with:
"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."
If the American people understand nothing else, they need to understand that the right interprets "individual liberty" to mean the ability to abuse whoever however and whenever they want to in their pursuit of power and wealth. Unless the American people come to understand that, the threat from the right will solidify and become...material.
The right attacks the federal government in order to abrogate its ability to defend the American people against them.
Their reps know it would be political suicide for the economy to cut spending on anywhere near the level they claim to support and in fact prefer a federal budget mined for profit.
The question is whether or not we'll have a government that works for the people, or a state apparatus used to coddle and shelter the privileged.
Here's one that does: http://www.youtube.com/watch?v=XuKBDHWDgBo
Neither, apparently, do the Democrats.
Obama and the Democrats could easily have cut military spending. That's one of the main issues that swept them into office in the first place. And the 'Tea Partiers' are nowhere near as warmongering as people like the neocon-sock-puppet Sarah Palin would make us believe.
Yet Obama has kept U.S. forces in Iraq and sent more to Afghanistan. Obama bombed Libya without even pretending to get congressional approval, never mind a proper declaration of war. Now we hear Pakistan is the real enemy. And Obama has not merely not cut military spending, he's raised it.
Reductions in military spending should be easy to achieve in today's political climate. The fact that the subject is banned from sanctioned political discourse is a reflection of the fact that the politicians honestly don't care about the budget or the economy. They serve the plutocracy and that's all there is to it. The budget debate is entirely for show.
Along comes Obama, who inherits an economic train wreck, and has to push 'all in' just to stay in the game. The GOP now cries over what a bad bet it is to lend money to anyone like Barack Obama; historically a common occurrannce when Black folks deal with the nations lending institutions. Now, with the ferver of the reformed, the GOP gets berzerk and bizzare over borrowing.
If anyone is still mistaken or confused, can there be any doubt that the US government will borrow what it must, print what it must, and spend what it must to be "exceptional"....and if you didn't get the memo, too bad for you.
The world wonders whether America is still credible when it behaves like Zimbabwe economically, but they simply do not understand what it means to be exceptional. They still don't see that it means never having to say your sorry, even after wasting blood and treasure to prosecute an illegal and immoral military adventure. The faces may change, but the rationality of exceptionalism now becomes the credibility and the credit-worthiness of the USA.
Does anyone remember that this was the GOP talking point when Clinton and Gingrich reformed welfare for the poor. Obviously that was not enough. How are decent capitalists supposed to make any money in such a socialist environment?
Record profits on Wall Street?...?! Just rewards for all the sacrifice and hard work going on in the corporate suites. You have no idea how difficult and dangerous it is to bribe foreign governments and corrupt American politicians. The people who take these risks should have 'all' the rewards. Why should they support those who couldn't get out of the way when the scam went sideways?
There is only one way to resolve the coflict, and that is at the ballot box. Unfortunately, now the GOP strategy is to depress the voter turnout....another conflict resurrected from past battles.
....and people wonder why America is failing to advance as a society. Money, technology, ingenuity, and power cannot substitute for common sense and the common good. For all that is good in America, there is a undercurrent of immoral ideology that is sucking the life out of this country....the sad part is that the proponents of this immorality have convinced ignorant people of the 'righteousness' of this behavior.
Greed is good, more greed is better, and only the greediest should have the ability to decide the fate of the world.