Monday, April 04, 2011

Congressional Game Of Chicken Continues

With each passing day we come nearer to April 8th -- the day that the government will shut down if a new budget has not been approved. This shut-down has been avoided twice in the last month or so by the passing of a couple of short-term continuing resolutions, and it is still possible that could be done again (but time is running out).

The huge majority of Americans do not want a government shutdown. They have made this clear in poll after poll. They want to two parties to cooperate and compromise and get a budget passed. The Democrats seem to want to compromise. They came up with $20 billion in cuts they could agree to, and in a last ditch effort to solve the impasse, finally extended those cuts to around $33 billion in the last few days.

But that's not good enough for the Republicans -- especially the teabaggers in the party. They are demanding $61 billion in cuts and have been unwilling to agree to any kind of compromise. I think they have decided that a shut-down would be preferable to any compromise, and are actually trying to play to their teabagger base by forcing a government shut-down.

So the two parties are locked in a financial game of chicken. The Democrats have already blinked a couple of times (agreeing to $20 and then $33 billion cuts). I really don't see how they can go any further without angering their own base (which they may have already done). The Republicans have not given an inch.

I know that several people are predicting a shut-down won't happen. I think it probably will. I think the Republicans want it to happen. I hope I'm wrong, but I also hope the Democrats don't blink again (or fold entirely). While I don't want to see a shut-down, it would be better than to give in to the draconian cuts wanted by the Republicans.

It's time for the Democrats to finally take a stand. They have already moved halfway. It's time for the Republicans to do some moving -- or take the blame.

6 comments:

  1. Want jobs and stable economy?
    NO congressmen can have a salary greater then 2x the national average or mean (which ever is smaller). When they 'retire' (& the Prez too)they get only $25K for each year served.
    ANd they may not make huge profits in a single year but the stock holders of companies should make CEO bonuses match the companies long term stability rather then gross profits for a single year.

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  2. So the two parties are locked in a financial game of chicken. The Democrats have already blinked a couple of times (agreeing to $20 and then $33 billion cuts). I really don't see how they can go any further without angering their own base (which they may have already done).

    That's because their base has absolutely no concept of how little $33 billion really is in a multi-trillion dollar budget.

    According to Investors.com, $33 billion is a measly 0.89% of expected spending of $3.7 trillion this year.

    To put that in terms that make sense to the average American, let's say a family is spending $100 a week eating out at restaurants. It's really killing their budget. And because they don't have that kind of money, they're putting a big chunk of it on their credit card that they're paying the minimum on each month. So they have a family meeting.

    "We're going to have to cut back, or else the interest on our credit card alone is going to eat us alive!" says the wife. "What are we going to give up?"

    "Well," the husband says, "I suppose if I really have to, I could skip my Cinnamon Twists once a week when I go to Taco Bell. But I really don't see how we can go any further!"

    We need to cut out whole meals at sit-down restaurants; the Democrats think they're sacrificing all they can by cutting out Cinnamon Twists - once a week!

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  3. CT- It's not the cutting as much as what is cut. Democrats are willing to cut the deficit by much more than $33 billion -- a good start would be the elimination of the $400 billion a year tax cuts for the rich, elimination of unneeded corporate subsidies, stopping the wars that eat up $2 billion a week, and cuts to the Defense Department.
    But Republicans won't even talk about those things. They only want to talk about social programs that help hurting Americans, and that's what the talk is about. And among those programs $33 billion is a lot of money.

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  4. I agree that the Defense Department should be on the table, and that includes my own military retirement pay, if that's what it takes to fix this problem.

    As far as tax cuts for anyone, we don't need higher taxes right now - what we need is more revenue, and that can only be achieved by growing the economy. After the economy is rolling, tax levels could be an appropriate topic.

    John F. Kennedy saw this clearly in 1962 when he said, "It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now ... Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus."

    But if the Democrats today were really serious about fixing the economy, instead of merely demagoguing the issue, they would have passed a budget for FY2011 in 2010, when they had a majority in both houses. The fact that they kicked the can down the road this far (instead of fixing the problem when they could have) shows that it's all about political posturing, just like the Republicans.

    Paul Ryan (one of the few congressmen who's serious about all this) has proposed a budget that addresses defense spending as well as entitlement programs, but that wouldn't kick in until FY 2012, thanks to Democratic procrastination and heel dragging for this fiscal year.

    The fact of the matter is: $33 billion, no matter where it's cut, won't do anything to fix the problem.

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  5. The Dems didn't pass a budget last year because the Republicans (especially in the Senate blocked it (with the help of some blue dogs).
    As for tax cuts increasing revenue, that has been proved false many times (even Bush's budget director admits this). And it doesn't matter what President Kennedy said - he wasn't infallible.
    The rich are not just doing fine, they are doing better than ever. A tax increase is not going to hurt them or job creation (which is already almost non-existent).

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  6. Here's a pretty good history of the budget debacle last year, entitled The Long, Downhill Road to a 2011 Budget.

    It seems to me that the House (the chamber that holds the purse strings) was the most to blame, at least according to my reading of this account. And once the election was over, the Blue Dogs (even those who were defeated) no longer had the excuse that it was political suicide to support a Democratic plan. As either political dead men walking or having already been re-elected, they could have voted for a budget resolution during the lame duck session. Again, they kicked the can down the road. Now they're complaining about the GOP plan. Too bad - they had their chance and they blew it.

    If you can point me to anything that interprets these events in a different way, I'd be willing to consider it.

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