Fruits of Republican Folly

The Republicans badly damaged themselves with their contrived government shutdown and debt crisis, but it remains for the Democrats to drive home their advantage. Will they?

Based on the cost to the Republican brand and the pressure from corporate elites not to harm the economy, the days of shutdowns and games with the debt are probably over for the foreseeable future. If the Tea Party faction tries to repeat these maneuvers, House Speaker John Boehner would likely permit a free vote again, and enough Republicans would vote with Democrats to keep the government open.

The Republicans seem hopelessly split between a Tea Party faction that relishes governing crises and a more mannered corporate faction that kills government softly. But the GOP is still one party when it comes to destroying government as a constructive force in the economy and society.

Since Barack Obama took office, the two Republican factions have complemented each other in a successful “good cop, bad cop” effort to ratchet down public spending. Wall Street creates one sort of crisis; the Tea Party creates another; government takes the hit. Except for the short-lived stimulus of the American Recovery and Reinvestment Act in 2009, this is the first prolonged slump of the postwar era in which government cut rather than expanded public spending.

President Obama’s pivot to deficit reduction in late 2009 was in response to the pressures of the corporate elite, while his several capitulations in the budget cuts since 2010 have been driven by the Tea Party. In effect, the Tea Party and corporate Republicans have executed a pincer movement. Domestic discretionary spending relative to gross domestic product is now below that of the Eisenhower era.

With everything else having been cut, the pressure has shifted to the big social-insurance programs—so-called entitlements—that have thus far been protected. Once again, the corporate right and Tea Party right have called for a grand bargain targeting Social Security and Medicare.

A bargain connotes giving something and getting something. Republicans are disinclined to give anything in exchange for cuts in social insurance, least of all tax increases. Their opening gambit was an improbable offer to shrink Social Security and Medicare in exchange for increases in defense spending.

The Democratic caucuses in both the House and Senate are resolute defenders of Social Security. Polls show that more than 80 percent of Republicans and Democrats alike don’t want Social Security reduced. With Republicans pressing for cuts, defense of Social Security is a clear, bright line that benefits Democrats.

Unless, that is, President Obama chooses to blur it. He has already proposed in his 2014 budget a change in the annual cost-of-living adjustment to Social Security (the chained Consumer Price Index). Although a grand bargain is unlikely, Republicans are pushing a mini-bargain of sequester relief in exchange for cuts in other domestic spending or in Social Security. The chained CPI would yield about $34 billion of deficit reduction per year. This disguised benefit cut would split the Democrats as badly as the government shutdown split the Republicans.

A better mini-bargain would be relief from the depressive impact of the sequester without any offsetting cuts. The Democrats have some leverage here, because the sequester mandates at least $23 billion of defense cuts to take effect in January, requiring cancellation of multiyear weapons contracts dear to key Republican legislators. In exchange for restored military spending, Democrats could demand, and get, $23 billion in social spending. That $46 billion would help stimulate a stagnant economy.

Looking forward to the 2014 midterm, pollsters discern a paradox. Support for the Republican Party is down sharply. In October, Gallup found that 28 percent of those polled approve of the Republicans, down from 38 percent in September and the lowest since Gallup began asking the question in 1992. Yet message testing also shows that large majorities of voters are still inclined to fault “partisan bickering”—blaming both parties—rather than Republican obstruction for the government’s failure to make substantive progress in improving a feeble recovery.

So the shutdown debacle helps the Democrats but only marginally, unless they maximize their moment. Midterm elections are notorious for low turnout. Democrats have a prayer of taking back the House only if they energize their core voters. If President Obama goes into the midterm bragging about how much progress has been made, that won’t resonate with Americans suffering from flat or declining incomes and job insecurity. The Democrats need to stand for restored, broadly shared prosperity, not tinkering, and brand Republicans as the party that would cut your benefits.

Senate Republican leader Mitch McConnell, of all people, has set a fine example. In the deal that opened the government, McConnell sneaked in the only earmark: $3 billion for a dam in Kentucky. If we ramped that up to the whole country based on Kentucky’s share of the economy, the outlay would translate to about $200 billion. Call it the Mitch McConnell Memorial Infrastructure Program—a nice down payment on the public investment America needs. 

Comments

Did the Democrats benefit from the shut down? Obama's approval was minus 7% on Oct. 1st; today it is minus 20%. Give me more shutdowns.

Politics is a zero-sum game. The shutdown didn't do wonders for anybody's approval rating, but it hit Republicans a lot harder.

Barry is tanking and Dems still think they are driving the bus.

Sorry folks no one around here remembers anything about any sequesters or shutdowns. But their brother is on the phone daily trying to get affordable health care insurance watching old Obama videoclips.

I HAVE AN IDEA WHAT DEMOCRATS CAN DO -- THEY CAN BE FOR SOMETHING:

I have been reading Richard Reeve’s President Kennedy: Profile of Power this week. JFK had not much faith in the progress of the civil rights movement because he was afraid opposition attitudes were too deep and too long ingrained.

He did not seem to grasp that things never would change if somebody did not finally dig in hard and fight. I’ve read elsewhere that he said supporting civil rights would gain him 5% and lose him 10% of the vote. To his credit he voiced willingness to take on civil rights after his reelection.

In comparison to Kennedy’s dog pile of disincentives to take on civil rights, what in the world is holding back Obama on the $15 an hour minimum wage (and re-unionizing America — legally mandated, sector wide labor agreements the only way to go as far as I can see)?

The great majority of the public supports a raise in the minimum wage (and half already support unionization) – even if the question is not presented to them in terms $15 an hour. Even if he could not sell $15 an hour (having said that, the arguments on the simple logical and eighth grade math level seem blow-away-the-opposition compelling), he would not burn up any political capital trying.

Some of the minority who pose minimum wage increases could actually be swung over to a lesser increase – no votes lost there. A minority of the great majority who might not want to go all the way to $15 would not by any stretch of the imagination become disenchanted Obama voters and switch to the Republicans.
All noble (desperate!) cause and all political plums: whoever peoples the planet that Obama is living on?
******************

Trickling down the trickle down -- US and California's very minimal minimum wage increases:

If Obama gets his (not very fervent) wish to raise he federal minimum wage by $2 an hour over two years that will shift all of ONE-THIRD OF ONE PERCENT of overall income in this country from the top 80 percentile who get about 95% of all income to the bottom 20% …

… as per capita income grows TWO PERCENT, P-E-R Y-E-A-R*. Talk about-trickling the down the trickle-down.
*http://money.cnn.com/2013/08/29/news/economy/gdp-report/

Which is exactly what California’s raise from $8 an hour to $10 an hour over two years has achieved. (California income number only 5% higher than national averages so comparisons should hold.)
http://www.cpec.ca.gov/FiscalData/50StateEconGraph.asp?Type=MedIncomeAverage&Gender=Total
**************

ASSUMPTIONS:
$9 an hour is about 15 percentile wage. 5% of work force at minimum wage. 20% of national workforce gets a raise to $9 an hour.

20% of the national workforce = 28 million people. Average pay raise $1 an hour. Assume 2000 hour work year. 28 million X $2,000 = $56 billion out of a $15.8 trillion dollar economy = .0033734 = one-third of one percent price rise or shift of income from top to bottom.
**************

I AM GETTING SO TICKED OFF AT PEOPLE WHO ARE SUPPOSED TO BE OUR FRIENDS ADVOCATING NOTHING BETTER THAN TRICKLING DOWN THE TRICKLE DOWN -- STEP BY STEP, BY STEP, SNEAKING UP ON 1956 ($8.50 AN HOUR MINIMUM WAGE) AND THEN MAYBE ON 1968 (ALMOST $11 AN HOUR MINIMUM WAGE) THAT I AM GOING TO START CALLING ANY ELECTED REPRESENTATIVE WHO DOES THAT GOVERNOR STEPIN FETCHIT (BROWN) OR PRESIDENT STEPIN FETCHIT (OBAMA). THEY MOVE STEP-BY-STEP-BY-STEP AND WE FETCH IT.

Republicans are desperate to force Obama and Democrats to cut spending to reduce the deficit so when Republicans win the White House and Congress again they can explode the debt and deficit like when Reagan, Bush, and Bush were president to buy votes for a permanent Republican control of Washington, but the only way to reduce the deficit is with tax hikes, and the conservatives refuse to be victims of Reagan and Bush seeing reality and hiking taxes. Reagan hiked the gas tax 125% in 1983 to increase government spending and to create the jobs needed to win reelection. HW Bush hiked taxes to get the economy growing out of recession from the real estate mortgage collapse, and would have easily won reelection except the anti-taxers voted for Ross Perot, who ironically called for tax hiked to pay off the debt, and thus Bill Clinton who was running on a tax cut platform was the least loser with 43% of the vote. He then looked at the budget and immediately pushed for tax hikes totally outraging the right-wing who pulled out all the stops. Since 1990, not a single Republican member of Congress has voted for a tax hike, except in the view of the right-wing, McConnell and Boehner tricked Republicans into voting for higher taxes to prevent the Bush tax cuts from expiring so they could hammer Obama and Democrats for massive tax hikes. Instead, Obama won by getting Republicans to hike taxes on the rich while Obama cut taxes on workers - Obama got the Republicans to throw the rich under the bus to deliver tax cuts to workers when the right wanted tax hikes on workers to punish them for voting for Democrats.

What Democrats need to do is keep pointing out the harm of the spending cuts and keep saying that spending cuts and tax hikes on the only people to do well in the 21st century, the rich, is only fair and the budget should not be balanced by making middle class workers the working poor.

I see lots of people asking "why isn't Obama helping the poor" but right now, the problem is preventing the middle class becoming poor - no one in the middle class wants to trade their middle class status for a better chance of a welfare system helping them when poor because Republicans will simply cut it and throw them into poverty.

mulp -- Huh? It's not possible to save (much less, rebuild) the middle class without shoring up the poor. We already know, from our own history, what works. When our social safety net was at its strongest, from FDR until the 1980s, the US achieved its height of shared wealth AND productivity. As we have began taking an ax to these programs, the nation's economy began its downhill slide. The middle class was at its strongest while those programs were in effect, protecting wages and workers' rights. Today, super-cheap, mandatory workfare labor steadily replaces workers who had been paid middle class wages, pulling wages down overall. Unrelieved poverty has soared as jobs continue to be shipped out (and the bulk of our manufacturing jobs are already gone). The desperately poor don't just vanish; they grow too ill to walk, they die or they get funneled into our massive prison system, at far greater cost than our former welfare programs. The fact that the poor and middle class are now so deeply divided, pitted against each other, ensures that this time, the "masses" can't push back, making govt get corporate powers back under control. That's why the middle class will continue to be phased out until its gone, but they'll at least be able to say that they "got tough on the poor."

You need to be logged in to comment.
(If there's one thing we know about comment trolls, it's that they're lazy)

Connect
, after login or registration your account will be connected.