It's Time to Break It Down!
During the recent Debt Ceiling debate, Congress and President Obama eventually cobbled together a near last-minute deal to avert a major National fiscal crisis. Had the matter not been resolved by August 2nd, the Country would have faced the prospect of default.
In practical terms, not only would the Country would have been taking in less money in receipts than it owed (we already do that), we would owe more than Congressionally allowed to spend...hence the Debt Ceiling. At a minimum, this would have resulted in the need for a kind of financial triage; a situation in which the Treasury Department would have prioritized debts, paid some bills, and left others in the queue.
Almost all analysts agree the debt owed to bond holders would have been on the “pay” side of the ledger, as would active duty pay to soldiers. Most likely, Social Security and Medicare payments would have been honored as well. Beyond that, however, a great deal was fuzzy.
In the final analysis, an agreement was reached; the worst did not occur. Still, one credit rating agency, Standard & Poor’s, downgraded America’s credit worthiness from Triple A to Double A+ in spite of the deal. The other two major Rating agencies, Moody’s Investor Service, and Fitch Ratings retained their Triple A Rating for the US. The downgrade fueled a week of wild volatility on Wall Street, which saw the Dow Jones Industrial Average move at least 400 points on 4 consecutive days; the first time ever. The week ended on a modest uptick, and two consecutive days of increases.
By the way, just a passing note. Make no mistake, it was critical to prevent the aforementioned crisis. Yet, be warned, we are still immeshed in catastrophic circumstances. The spending imbalance continues, despite the agreement. Entitlement Reform, a Revised Tax Code, and additional revenue (new taxes) must all be included as part of any real ultimate solution, GOP-T Party intransigence notwithstanding.
Polling data from 5 independent surveys taken in July showed the people agreed with President Obama’s assessment that Americans supported a combination of spending cuts and tax increases to be a part of any agreement to raise the debt ceiling. The data broke down this way:
· An ABC/Washington Post poll, released Tuesday, July 19th, indicated that more than six in ten Americans said any deficit agreement should include a combination of spending cuts and new taxes. Large majorities of Democrats and Independents supported this approach, but so did nearly half of Republicans.
· An NBC/Wall Street Journal poll, released Tuesday, July 19th, indicated 58% of Americans supported the President’s proposal which would have reduced the Federal deficit by $4 trillion over the next decade by cutting spending, increasing taxes on corporations and the wealthy, and reducing the level of spending on Medicare. In comparison, 36% said they supported the Republicans’ proposal which would have reduced the Federal deficit by $2.5 trillion over the next decade by cutting Federal spending, but not raise taxes on corporations or the wealthy.
· A CBS News poll, released Monday, July 18th, indicated that two-thirds of Americans said any agreement should include spending cuts and tax increases. Conversely, 28% said a deal should only include spending cuts; 3% said such a deal should consist of only tax increases. More than 70% of Democrats, over 67% of Independents, 55% of Republicans, and even 53% of self-described and Tea Party supporters agreed with this approach.
· A Quinnipiac University poll, released the week of July 11th, indicated two-thirds of the public supported a deal that included spending cuts as well as tax increases for wealthy Americans and corporations. Nearly 90% of Democrats and two-thirds of Independents supported the inclusion of tax increases. Republicans were split on the issue.
· A Gallup poll, released Monday, July 18th, indicated two-thirds of Americans believed Congress should agree to a compromise plan to raise the debt ceiling, even if it is a proposal with which they disagree. Only 27% said they would have liked for their representative to hold out for the basic plan they wanted, even if the debt ceiling was not raised by the deadline. In this poll, 72% of Independents, 69% of Democrats, and 57% of Republicans said their representative should agree to a compromise.
So in poll after poll, the people spoke. What they said they wanted, time after time, clearly, distinctly, consistently, and perhaps most importantly, across Party lines was, they believed in the balanced approach to solving the debt and deficit problem. So much for the marketplace of public opinion, at least as it relates to the never more rigid posture of the 8 Republican candidates for President who met for their most recent debate last Thursday at Iowa StateUniversity in Ames. There, all 8 Republican candidates struck a blow for the GOP-T Party litmus test. Those present included:
On that night, each and every candidate present proudly and emphatically raised their hand to affirm that even with a hypothetical proposal to tender $10 in debt reductions to every $1 in new revenue (taxes), that is a 10:1 ratio, they would say no! No! Where is the spirit of compromise? Where is the will of the people? Clearly, no where to be found!
After last weekend’s Iowa Straw Poll, the Big 3 in the Republican field appear to be shaping up as Mitt Romney, Michele Bachmann, and newly entered Rick Perry. Presidential campaigns are grand endeavors which frequently result in candidates making controversial statements. Each of these 3 candidates has put his or her stamp on that trend. Without examining the questionable statements of all the candidates, or all the statements made by these 3 candidates, here are a few examples of positions these individuals have espoused, one statement made by each candidate within the past week:
- Mitt Romney – “Corporations are people!” On the stump in Iowa this week, in response to a question, Governor Romney indicated that corporations are people. Of course, there is a Supreme Court Opinion and accompanying case law to validate this idea. Still, a more narrow and truthful response would have been, yes, corporations are people: “it is just that those people are the company’s shareholders and investors; not the people at-large (as his response seemed to imply). That is definitely a distinction worth making…and understanding.
- Michele Bachmann – Claimed during the Iowa Debate to have been “The leading voice against raising the debt ceiling.” Representative Bachmann noted with relish that she opposed raising the debt limit. She, like a number of ultra Conservatives, does not believe the Country was in danger of defaulting, and should, therefore, not have raised the ceiling. Most observers, fiscal experts, and members of Congress disagreed with the gentlewoman from Minnesota.
- Rick Perry – in a loaded and broadside attack against Federal Reserve Chairman, Ben Bernanke, on Monday, Governor Perry indicated that “If this guy prints more money between now and the election, I don’t know what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas,” Perry said. “Printing more money to play politics at this particular time in American history is almost . . . treasonous in my opinion.” It is instructive to note that Mr. Bernanke not only served in the Bush White House, but was appointed as Fed Chief by President George W. Bush. The idea that Mr. Bernanke will somehow suddenly mutate into a Left-leaning political operative, a tool of Democrats, intent on confounding GOP-T Party interests and candidates is far-fetched…at best...absurd at the far end of the spectrum. Remember, Governor Perry is the same guy who intimated at a Tea Party Rally some time ago that Texas might secede from the US. He and odd notions are not strangers.
The GOP has assembled an interesting array of candidates for President. It is possible for more to come. SarahPalin, Rudy Giuliani, and Donald Trump, to name a few, have all hinted at, or at least left the door open to pursuing a bid for Commander-in-Chief. Any or all of them may choose to get in between now and by the end of September, by which time Palin and Giuliani have said they would decide. The Donald may be using a different timetable.
But be that as it may; Romney, Bachmann, and Perry lead the field at the moment. Taken collectively, the 3 leaders, and the remaining other candidates (Tim Pawlenty dropped out after a disappointing finish in the Iowa Straw Poll), have all demonstrated a sharply defined and resolute commitment to the Norquist Pledge; no taxes, no how. To that end, on the question of “Compromise: Not If GOP Presidential Candidates Have Their Way!”
I’m done; holla back!
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