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Tag Archives | House Republicans

End of Government Shutdown highlights ‘ObamaCare’ Problems

By | October 19, 2013
Healthcare.gov

Republicans ended up giving the White House some unintended political cover over the past two weeks, as the government shutdown and threat of default overshadowed the deeply flawed rollout of ObamaCare’s new insurance marketplaces. But the shutdown is now in the rearview mirror, and healthcare.gov — the main portal for consumers to access ObamaCare’s exchanges — is still facing serious technical problems.

Congressional Republicans are eager to distance themselves from the failure of the shutdown — an effort to cripple ObamaCare that ended up backfiring, distracting the public from the law’s real problems. And they’re eager to push the focus back to the White House’s problems, rather than their own.

Read the rest at The Hill.

A Tale of Two Debt Ceilings

By | October 17, 2013
President Barack Obama speaking from the White House

With the House of Representatives approving a Senate bill to end the government shutdown and raise the debt ceiling, a dysfunctional 16 days has finally come to an end.

President Barack Obama speaking from the White House. Source: YouTube

Among the negative effects of the shutdown was the furloughing of hundreds of thousands of government workers, delayed hiring, temporary closure of federal landmarks and parks, and about 24 billion USD of lost economic activity according to the ratings agency, S&P. One effect, which is strangely missing is a negative impact on global stock markets. One would expect prices to have suffered as they did in the run up to the last debt ceiling deadline in the summer of 2011, but equity markets around the world rallied in the days leading up to the October 17th deadline.

The last two debt ceiling crises ended in similar ways; default was narrowly avoided at the last minute after weeks of partisan politics devoid of compromise. The market reactions however, were very different. The average performance of five major global stock indices (Dow Jones Industrial Average, FTSE 100 in London, CAC 40 in Paris, DAX in Frankfurt, and Honk Kong’s HSI) in the five trading days before a deal was announced yesterday was a 2.72% increase in value. The average movement for the same indices in the five days leading up to a 2011 deal was a 2.20% decrease in value. What conclusions can be drawn from the two market reactions to the debt ceiling crises?

Perhaps investors approved of part of the GOP’s tactic of using a government shut down and threat of a debt default as leverage to try and defund or significantly change the Affordable Care Act or ‘Obamacare’. Given the way the approval ratings of the GOP have plummeted as well as the economic effects, this seems about as likely as President Obama and Senator Ted Cruz vacationing together next summer.

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China Warns the U.S. over Default

By | October 8, 2013
Zhu Guangyao

Senior Chinese official has warned that the “clock is ticking” to avoid a US default that could hurt China’s interests and the global economy.  China, the US’s largest creditor, is “naturally concerned about developments in the US fiscal cliff”, vice finance minister Zhu Guangyao said.  Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.

He asked that “the US earnestly take steps to resolve” the issue.  US Treasury Secretary Jacob Lew has said that unless Congress agrees an increase in the debt ceiling by 17 October, Washington will be left with about $30bn (£18.6bn) in cash to meet its obligations - about half the $60bn-a-day needed.  For many governments and investors the approaching deadlock over the debt ceiling is far more critical than the current impasse over the federal shutdown caused by Congress’s failure to agree a new budget.  On Sunday Republican House Speaker John Boehner reiterated that Republican lawmakers would not agree to raise the debt ceiling unless it included measures to rein in public spending.

Mr. Zhu said that China and the US are “inseparable”. Beijing is a huge investor in US Treasury bonds. “The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds,” he said. “It is important for the US economy as well as the global economy.”

“We hope the United States fully understands the lessons of history,” Mr. Zhu said, referring to a similar deadlock in 2011 that led to a downgrade of the US “AAA” credit rating.  That deadlock ended with an eleventh-hour agreement.

On Monday, President Barack Obama said he would not negotiate with Republicans in the House of Representatives “under the threat of economic catastrophe”.  He said that he and the Democrats in Congress had already agreed to fund the US government at levels that were favourable to Republicans but lower than preferred by the Democrats.  There is little doubt that Mr. Boehner could whenever he wants gather enough votes from moderate Republicans and most all Democrats to reopen the government, says Dick Meyer, BBC executive producer, America.

Mr. Obama called on Mr. Boehner to allow his caucus to “vote their conscience” on a bill that would fund the government. “If Republicans and Speaker Boehner are saying there are not enough votes, then they should prove it,” he said, adding he had a “strong suspicion” there would be enough Republicans to join Democrats in the House of Representatives to pass the bill. “Let the bill go to the floor and let’s see what happens. Just vote.”

Washington Dysfunction: Everybody Will Leave the Budget Debate Blemished

By | October 7, 2013
President Barack Obama meets with the House and Senate Leadership in the Cabinet Room of the White House to discuss the budget. Pete Souza/White House

This budget stuff has me worried; uncertainty surrounding the debt ceiling has me even more worried.  President Obama deserves plenty of the blame.

President Barack Obama meets with the House and Senate Leadership in the Cabinet Room of the White House to discuss the budget. Pete Souza/White House

He came into office speaking about a post-partisan era, yet partisan gridlock and petty bickering in Washington are more commonplace than ever.  Obama’s presidency has been a major disappointment. Nothing can change that. He has never woken up to the fact that being president requires reaching across party lines and actually negotiating with people. He’s too busy thinking that he always knows what’s best and that he can charm his way through things. (Well, on both domestic and foreign policy, it appears that isn’t the case).

There is perhaps no other president in history with a greater aversion to talking with members of Congress.  Obama is the loner-in-chief, content to remain aloof while current events and debates pass him by for as long as possible.  Is he really saying that he won’t negotiate regarding the debt ceiling? What could be less presidential than refusing to even have a conversation?

Obama has thrown out red lines before and looked silly for not following through. Given the way he’s handled Syria, this time he might actually follow through on his commitment to not negotiate with Congress – just to demonstrate that he’s still “in charge.”

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Government Shutdown: Barack Obama Warns of Default Danger

By | October 2, 2013
President Barack Obama has been quick to blame the Republican Party for the government shutdown. Jim Lo Scalzo/EPA

President Barack Obama has been quick to blame the Republican Party for the government shutdown. Jim Lo Scalzo/EPA

US President Barack Obama has warned that Wall Street should be concerned that a conservative faction of Republicans is willing to allow the country to default on its debt.  The US government has partially closed after Congress failed to agree a budget and will run out of cash on 17 October unless its debt ceiling is raised.  In a TV interview on Wednesday, Mr. Obama said he was “exasperated”. He later held talks with Congressional leaders that ended without agreement.

The US government closed non-essential operations on Tuesday after Congress failed to strike a deal on a new budget.  Republicans and Democrats are blaming each other for the impasse.  The shutdown has left more than 700,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more.

However, as one budget crisis raged in Washington DC, another one - potentially more dangerous - loomed in the coming weeks.  On 17 October, the US government will run out of cash to pay its bills unless the debt ceiling is raised.

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Boehner Risks his Reputation in Obamacare Shutdown

By | October 1, 2013
Speaker of the House John Boehner walks into a meeting with House Republicans, on Capitol Hill in Washington DC, 28 September 2013. Michael Reynolds/EPA

Speaker of the House John Boehner walks into a meeting with House Republicans, on Capitol Hill in Washington DC, 28 September 2013. Michael Reynolds/EPA

Republican Speaker John Boehner faced a choice between two unappetising gambles on Monday night. One option was to cut a deal with Democrats to continue federal government spending at present levels, and in so doing trigger a revolt from the radical wing of his own party that might end his speakership. The other was to dig in, precipitate a partial shut-down of the government, and risk the public assigning the blame to congressional Republicans.

Caught between grim and grimmer as far as political prospects were concerned, he has gone for option two, and the government shutdown has begun.

While the sudden reality of the derailing of the US government may come as a surprise to some, for regular viewers this represents the feared collision at the end of a long series of games of chicken between the president Barack Obama (and the Democrat-controlled senate) on one side and the Republican House on the other. Since the Republican victory in the 2010 congressional elections, which gave them control of the House, power and influence has steadily accrued in the hands of the radical wing of the party, elected from safe Republican constituencies on the back of a wave of anti-tax, anti-government fundamentalism among the base of primary voters.

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U.S. Government Shutdown Begins amid Budget Row

By | September 30, 2013
U.S. Capitol

U.S. Capitol

The US government has begun a partial shutdown after the two houses of Congress failed to agree a budget. The Republican-led House of Representatives insisted on delaying Mr Obama’s healthcare reform - dubbed Obamacare - as a condition for passing a bill.

More than 800,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over. It is the first partial shutdown in 17 years.

The economic impact will depend on how long the deadlock lasts, but Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.  With less than one hour to go before midnight, the Republican-led House called for a conference - a bipartisan committee with the Senate - to try to thrash out a deal, but Democrats said it was too late to avoid a shutdown.

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Markets Uneasy over Government Shutdown and Crisis in Italy

By | September 30, 2013
Speaker of the House John Boehner during a press conference. Photo: Bryant Avondoglio

Speaker of the House John Boehner during a press conference. Photo: Bryant Avondoglio

Financial markets have been hit by the prospect of a US government shutdown and a crisis for Italy’s government. Italy’s stock market has fallen almost 2%, while shares in London, Frankfurt and Paris have dropped by about 1%.

The US needs to agree a new spending bill before the financial year ends at midnight on Monday. But political divisions have resulted in a stalemate. In Italy, Prime Minister Enrico Letta is to hold a confidence vote on Wednesday.

There are worries over the economic impact of a shutdown of the US government. If the government does shut down on 1 October, as many as a third of its 2.1 million employees are expected to stop work - with no guarantee of back pay once the deadlock is resolved.  National parks and Washington’s Smithsonian museums would close, pension and veterans’ benefit cheques would be delayed, and visa and passport applications would be stymied. Programmes deemed essential, such as air traffic control and food inspections, would continue.

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A Carbon Tax for Fiscal and Climate Stability

By | November 18, 2012
President Barack Obama and New Jersey Gov. Chris Christie look at Hurricane Sandy storm damage along the coast of New Jersey on Marine One, Oct. 31, 2012. Pete Souza/White House

President Barack Obama and New Jersey Gov. Chris Christie look at Hurricane Sandy storm damage along the coast of New Jersey on Marine One, Oct. 31, 2012. Pete Souza/White House

The White House currently confronts a rare coincidence of environmental and fiscal pressures. Hurricane Sandy has raised the visibility of climate change as a national issue; the storm was the latest in a series of extreme weather events over the past ten years. Ocean surface temperatures have increased over the past few decades, and this trend contributed to Sandy’s gargantuan size and strength. Many scientists attribute this ocean warming to global climate change abetted by human activities.

Meanwhile, the imminent “fiscal cliff” threatens to end the U.S. economy’s recovery. “It’s unambiguously the case that these measures will slow down growth,” said Joseph Stiglitz, a Nobel Prize winner in Economics, in reference to the provisions mandated by the year-end budget agreement. Congressional leaders are scrambling for stop-gap measures, but are hesitant to commit to any one solution. A carbon tax, proposed by the White House, would address these grave concerns—helping the nation avert the fiscal cliff and stabilize its climate at the same time.

The carbon tax’s potential benefit to the country’s fiscal health is considerable. It would raise new revenue by taxing capital rather than labor. Unlike an increase in the payroll tax or the income tax, a carbon tax would stimulate work by making labor cheaper relative to capital. Also, the options currently considered by the White House and Congress—income tax hikes, payroll tax hikes, and entitlement reform—will probably not raise enough total revenue to plug the deficit.

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In the Midst of Plenty: In Defense of American Workers

By , and | October 2, 2012
Union workers protesting in Madison, Wisconsin. Photo: Ryan O'Hara

Union workers protesting in Madison, Wisconsin. Photo: Ryan O’Hara

It has been over a half century since Jack Kerouac posited ‘whither goest thou, America?’ to a nation facing an uncertain future. Listening to the party platforms being created at both national political conventions it is apparent that the country is still trying to find its compass, and many issues have remained unresolved over the past fifty years. Progress made need not be diminished; however, the country must work harder to not only preserve what it has already achieved, but also engage more encompassing issues in a deliberate manner.

At a more fevered pitch than in previous decades, forces have been amassing along the country’s ideological divide and the U.S. middle- and working classes have firmly established themselves on both sides. Debating the country’s future has torn the population as it attempts to define the nation’s hierarchy of purpose: is it more important to defend the nation’s capitalistic expansion or preserve its programs for income security? The concepts seem diametrically opposed – the current debate has been structured as a capitalism v socialism argument – but they are more in line with each other then the political system’s fundamentalist factions would have the country believe. When corporations were first expanding in the 20th century, social-welfare capitalism was an important factor in their success.

Placed in the hands of ideologues, however, the debate creates rifts in America’s classes and creates a convoluted discussion about industrial relations in contemporary society. Criticisms against unions and social spending were once solely a reaction from the country’s rich, but in recent history these attacks have increasingly stemmed from middle- and working-class Americans. The people that have gained the most from union efforts and are more likely to need the support of social programs, at least once in their lives, have become the system’s loudest critics.

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Washington Politics: Possibility of a Government Shutdown Looms

By | April 6, 2011
President Barack Obama meets with Congressional leaders during debt limit and deficit reduction negotiations, July 13, 2011. Pete Souza/White House

President Barack Obama meets with Congressional leaders during debt limit and deficit reduction negotiations, July 13, 2011. Pete Souza/White House

Republicans and Democrats have forgotten the adage “politics is the art of compromise” or as Economist Donald Wittman observed, “That is what good politicians do: create coalitions and find acceptable compromises.” President Obama and his liberal base have refused to accept across the board cuts to Democratic policy priorities and the Tea Party Caucus in the House has refused or made it increasingly difficult for Speaker Boehner to compromise with Democrats. The middle ground has proven to be increasingly elusive.

Because President Obama, Senate Majority Leader Harry Reid and House Speaker John Boehner failed to reach a compromise during a White House meeting on March 5th over how to fund the government for the next six months, a government shutdown is likely. A shutdown means that except for essential services, government services will cease operations and/or face noticeable delays.  The current disagreement over funding the government for the next six months is an appetizer for the coming debate when an agreement will have to be reached in order to pass the FY2012 federal budget. However, Americans do not face an apocalyptic landscape if a shutdown occurs.

While rare and politically toxic a government shutdown has occurred sixteen times since 1977. It is likely that Social Security checks will be written and Medicare and Medicaid payments will be made.  The last shutdown under President Clinton and Speaker New Gingrich resulted in delayed GI Bill payments and new applications for Medicare and Medicaid were not processed.  Although shutdowns typically last only a few days, many remember the infamous shutdown that resulted over disagreements to balance the federal budget between Speaker Gingrich and President Clinton. That shutdown ran from December 16, 1995 to January 6, 1996 and resulted in a furlough of nearly one million federal workers, hundreds of national parks were closed along with museums and national monuments and other government functions were suspended or reduced significantly.

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Foreign Aid on the Budget Chopping Block

By | February 15, 2011
USAID aid in trucks to be distributed in and around Port-au-Prince, Haiti

In the past month there have been revolutions in Tunisia and Egypt, unrest in Yemen, Bahrain and Iran and historic elections have been held in Sudan and despite these seismic positive global shifts policymakers on Capitol Hill are calling into question the necessity of foreign aid.

USAID aid in trucks to be distributed in and around Port-au-Prince, Haiti

Contrary to conservative claims and popular perception foreign aid constitutes less than 1% of the federal budget. Yet policymakers argue that foreign aid and discretionary spending lie at the heart of the current and long-term fiscal health of the United States.

It is because of this misperception that policymakers are able to argue for the termination of foreign assistance. Counter arguments are less persuasive because when policymakers argue that if something is not done to fix the U.S. economy our streets will fill with Greek type protests.  Capitol Hill’s most ardent budget hawk, and critic of contemporary U.S. foreign policy, Rep. Ron Paul (R-TX), made the claim during his speech at CPAC in Washington “We need to do a lot less, a lot sooner, not only in Egypt but around the world.”

Policymakers in Washington will have to deal with the country’s massive budget deficit and make difficult choices. Foreign aid along and other programs are being considered before non-discretionary spending.  Foreign aid, spending on education, transportation and a whole host of domestic spending programs are being scaled back by Congressional Republicans in their continuing resolution (CR). While it is doubtful that Senate Democrats will agree to any of these budget-cutting mechanisms both political parties will have to come to some sort of agreement to avoid a government shutdown.

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