Archive for the ‘Federal Budget’ Category

What’s Wrong

Unless you hail from the great state of Mississippi there is a good chance you’ve never heard of Sen. Byron Patton Harrison. That’s him nearby in a 1940 photo. The current dysfunction in Washington, D.C. is cause enough to remember senators like Harrison. Unfortunately now days, like the dodo bird, senators like Pat Harrison are mostly extinct.

Harrison – everyone called him Pat – wouldn’t recognize the U.S. Senate today and I’m guessing he’d be appalled by the current leaders, Harry Reid and Mitch McConnell.

In the late 1930′s, Pat Harrison, who served in the U.S. House and Senate from 1919 to 1941, was arguably the most influential member of the U.S. Senate. Harrison was both Senate President Pro Tem and Chairman of the powerful tax writing Finance Committee. As Harrison’s biographer Martha H. Swain has written, by 1939 the wily Mississippian was at the height of his powers.

“That year [1939] Washington newspapers voted him the ‘most influential’ senator,” Swain said. “Turner Catledge, the Mississippi-born managing editor of the New York Times, had described the Mississippian as the best ‘horse-trader’ for his way of cajoling colleagues to pass his Finance Committee legislation. His influence, Catledge said, stemmed from the fact that Harrison never ‘welched’ on a promise: ‘If Harrison told you something you could take it to the bank.’”

Harrison was a loyal Democrat and pushed Franklin Roosevelt’s Social Security legislation through his committee and the Senate in 1935, but at the same time  refused to rubber stamp FDR’s “soak-the-rich” tax legislation. Unlike today’s Senators, Harrison believed he could be both a loyal Democrat and his own man. That view got his at cross purposes with Roosevelt who, unwisely it turned out, opposed Harrison’s effort to become Senate majority leader in 1937. Even though Harrison lost that contest by one vote, ironically, and this was a testament to his reputation for candor and independence, he became even more highly regarded in the Senate after his defeat.

Even Roosevelt eventually came to acknowledge that Harrison was the go-to guy in the Senate. Because his word was good, and without regard to their early disagreements, FDR entrusted to Harrison the delicate job of easing controversial Lend Lease legislation through the Senate in 1941.

Not quite 60 years old, Harrison died later in 1941 of colon cancer. His death brought an bipartisan outpouring of sadness and regard. Roosevelt said of the Senate power broker that he was “keen of intellect, sound in principle, shrewd in judgment [with] rare gifts of kindly wit, humor, and irony.”

A newspaper editor back in Mississippi said Harrison was “square, approachable, and intensely human.”

Over the past weekend talks to avoid the so called “fiscal cliff” broke down – again – in the Senate and Vice President Joe Biden stepped in to attempt to salvage some kind of deal with GOP leader McConnell. Biden was needed, in part its reported, because Democratic leader Reid and his Republican opposite number don’t trust each other. Put another way, Reid and McConnell are so busy jockeying to win partisan debating points that they have no time to be national lawmakers.

Lots of things are wrong with the way the D.C dysfunction has brought the country, still reeling from an economic collapse, to the edge of another disaster, but I’ll mention just two: trust and process.

No good deal – and all politics is about making a deal – ever gets done when leaks and dueling soundbites constantly trickle out from both sides. The fact that both sides in this manufactured crisis are “negotiating” on Twitter and cable news is all the evidence we need that they don’t fundamentally possess the basic ingredient needed to do a deal – trust. When is the last time you heard someone say about a current Senate leader, as they did in the 1930′s about the mostly forgotten Pat Harrison, he never “welched” on a deal?

Reid and McConnell are so focused on the tactical daily soundbite and gaining the tiniest sliver of advantage over the other that they can’t be, to borrow a phrase, “square, approachable and intensely human.”

A second issue with this “fiscal cliff” is one of process. The legislative process is supposed to involve committee work, hearings, drafting of proposals, amendments and debate. Pat Harrison did not pass Social Security in 1935 by getting together with a couple of other senators and presenting a bill on the floor as a take it, or leave it proposition. He did what legislators are supposed to do – legislate, work with his committee, try this and try that and produce a bill that is then voted upon.

If a fiscal cliff deal gets done it will end up being a cobbled together mess born in secret and presented as a done deal to the House and Senate. Most of the people in Congress who should be involved – the chairs of the Finance and House Ways and Means Committees, for example – will have been about as close to the action and you and me.

For weekend amusement I didn’t watch the endless talking heads on the fiscal cliff, but rather tuned into the NPR quiz show “Wait, Wait Don’t Tell Me” where a panel of smart and funny people crack wise about news and popular culture. The celebrity guest this past weekend was the current British ambassador to the United States Sir Peter Westmacott, a career foreign service officer with a wicked sense of humor.

At once point Sir Peter was asked a question about the differences in the British and American political “cultures.” It was the kind of question that most political people would have answered with a vague generality. Instead, Her Majesty’s ambassador said it seems to him that the U.S. system was designed [in colonial times] to – his word – avoid “tyranny” that might be imported from across the oceans and, as a result, the the U.S. set up a system “designed not to work.”

The quip from the witty Brit got a big laugh from the audience, a knowing laugh, the kind of laugh that says, “yup, he’s right…”

The Congress that will die along with the old year will go down in history as one of the most unproductive in recent history. First, the members of Congress and the president created the pending crisis of automatic tax increases and spending cuts because months ago they couldn’t agree on a a real legislative fix, the kind of fix that would have required the hard, bipartisan work of legislating. Then, knowing exactly what would happen if they behaved as they have, Congress diddled right up until the absolute last minute – and likely beyond – to come up with what will undoubtedly be a half-baked, non-solution.

Much kicking of cans down the road will follow.

The Senate of Pat Harrison’s day would have been embarrassed by such political amateurism, such willing abandonment of the basic responsibilities of governance. While the country shakes its collective head at its hyper-partisan, broken system and, while even the British ambassador feels compelled to joke about the yokels in the former colonies, the nation’s ruling class fiddles and fusses. They should be embarrassed, but most don’t seem to be. After all, you have to be aware that something is wrong in order to be embarrassed enough to try and fix it.

 

Nary a Word

Former Republican Sen. Alan Simpson has one message in his post-Senate life as a truth teller about the nation’s fiscal health. Simpson is preaching the gospel of budget and tax reform to anyone who will listen. Unfortunately the candidates for President of the United States, the men who will have to deal with the great unspoken issue of this election, the looming fiscal crisis, cannot seem to summon the political courage to level with the voters and talk as candidly as Al Simpson does about the stark choices facing the next president and the next Congress.

We’re left with Al Simpson and thank God we have him.

Simpson, as funny as he is pithy, complained in 2011 interview about the younger generation. “Grandchildren now don’t write a thank you for the Christmas presents,” he said. “They are walking on their pants with their cap on backward, listening to the Enema Man and Snoopy, Snoopy Poop Dog.” Funny stuff, but even more importantly, Simpson is speaking truth about the fiscal mess in America and the lack of political will to take it on.

“You can’t cut spending your way out of this hole,” Simpson, who was appointed as co-chair of President Obama’s Commission on Fiscal Responsibility and Reform in 2010, said. “You can’t grow your way out of this hole, and you can’t tax your way out of this hole. So put that in your pipe and smoke it, we tell these people. This is madness.”

The famously outspoken Simpson knows what needs to be done to get the nation’s fiscal house in order – everything. Raise taxes and reform the tax code, address entitlements, including Medicare and Social Security, cut defense spending and much else in the federal budget. The debt, fiscal, tax and budget problems are so profound and the medicine to fix the problems so Castor oil-like that only old fashioned political compromise – bipartisan compromise – can make it go down with the American public. Democrats will have to come to the party ready to get serious about Medicare and their pet programs. Republicans have to put on the shelf their time-tested mantra of tax cuts as the solution for every economic problem and address a defense budget bloated by two wars and the world-wide deployment of Americans on a scale that rivals the one-time British Empire. Everyone has to give – and soon.

As I have written in this space in the past, President Obama had his statesmanship moment on fiscal and budget policy some time back and he chose to punt. The politics of embracing the recommendations laid out by Simpson and his fiscal commission co-chair Erskine Bowles must have seemed too risky. Obama’s decision was both shortsighted and ultimately politically inept. Had he embraced the recommendations and spent the last few months campaigning on that basis he would have both a forward-looking message about the economy and, should he win re-election, a real mandate to do something with the debt and taxes. Instead we are left with a virtually insignificant fight between Obama’s plan to raise taxes on the  wealthiest Americans and Mitt Romney’s plan to further cut taxes in the face of mounting budget deficits. Romney says he would also cut federal spending, but beyond virtually insignificant cuts to tiny, ideologically-driven items like the Corporation for Public Broadcasting (CPB) and the National Endowments for the Arts and Humanities, he won’t get specific. (By the way, the combined budgets of CPB and the endowments would hardly cover a few hours of interest on the national debt.) Romney’s lack of specifics shows, as does the president’s fiscal posture, both a lack of policy seriousness and political courage.

Here is what’s at stake post-November. Because of the failure earlier this year by Congress, which deserves most of the blame, and the president to reach any kind of an accommodation on spending cuts and revenue increases automatic budget cuts will go into effect at the end of the year and Bush-era tax cuts, already extended by Obama, will expire. The country will be over the fiscal cliff you’ve been hearing about. The nation’s credit rating will be further downgraded and the economy will head back toward recession. I’m betting most Americans, be they Tea Partiers or far left progressives, don’t understand the extent of the mess that the next president will face. How could they when the two men contending to lead the country say nary a word about the problem.

So, to be clear, the year end problem will be, and this is no exaggeration, a fiscal crisis on par with the economic melt down in 2008. Fasten your seat belts.

It all could have been avoided – and still could – had a few key political players been more concerned about the future their kids will inherit than the outcome of the next election. Instead of a real debate about the nation’s fiscal future, Romney has relied on demonstrably false claims about Obama destroying the work requirement for Americans on public assistance. Rather than build understanding among confused Americans and create a mandate to govern in his second term, Obama has run a campaign of small ideas and puny aspirations. Neither man seems to have the courage of any convictions about what really has to be done, which brings us back to Al Simpson.

It would be easy to say that the lanky Cody, Wyoming lawyer, out of public office after three terms in the Senate, is a man liberated by not needing to worry about saying unpopular, but true things. But that’s not Simpson. He’s always been willing to shake things up with his candor, which made him the perfect man to join former Clinton Administration Chief of Staff Erskine Bowles as a co-chair of the National Fiscal Commission popularly called Simpson-Bowles. Still, it has taken real political courage for both men – and Idaho Sen. Mike Crapo, who served on the Commission – to call for real sacrifice and real bipartisan agreement about reform. (GOP vice presidential candidate Paul Ryan also served on the Simpson-Bowles Commission and, unlike Crapo, did not back the proposals the Commission developed. Still, Simpson said recently that Ryan knows his stuff and was a serious player on the Commission.)

No serious person in Washington, D.C. would tell you that the nation faces anything but huge and painful choices post-election, but the candidates essentially are ignoring the biggest issue of the year because they have made the political calculation that talking seriously about it is a political loser.

On September 18 in Boise, Al Simpson will receive a new award for political leadership created by The Andrus Center for Public Policy at Boise State University. The award has been created to recognize genuine accomplishment and a commitment to bipartisanship. Simpson deserves that kind of recognition. It’s a shame the two men running for president can’t summon up the same courage and commitment. One of them will have to find some political guts in mid-November. The fiscal cliff the current crowd in Washington created is looming.

 

No Surprise Here

Super Committee Fails, Country Burns

At its birthing the Super Committee seemed to have it all – bi-partisan endorsement from both houses of Congress, senior and generally respected bi-partisan leaders, a sense of urgency and a hopeful nation, if not exactly hanging on its every move, at least positioned to accept its verdict.

As was probably all too predictable, it came to ashes. No one – Democrat or Republican – was willing to risk the wrath of the most unreasonable in their party. The entire idea of a Super Committee was badly flawed, possibly even unconstitutional, but what to expect from a Congress that can only think as far ahead as the next CNN debate or next week’s Sunday talking head shows?

It hasn’t always been so. In the spring of 1964 it seemed to many observers utterly impossible that the United States Senate, still dominated by southern conservatives who held key committee positions, could possibly join the House of Representatives and pass a civil rights bill. But, in 1964, the U.S. Senate had real leaders: Mike Mansfield of Montana for the Democrats and Everett McKinley Dirksen of Illinois for the Republicans. Utilizing his mastery of Senate rules, Mansfield first prevented the civil rights bill, a legislative priority of President Lyndon Johnson, from being referred to the southern-dominated Judiciary Committee where the wily former copper mucker from Butte knew that it would die a quiet death.

With the bill on the Senate floor for consideration – and filibuster – Mansfield patiently puffed on his pipe, let the Senate work it’s will and effectively involved his Republican counterpart in every step of strategy. By the time the bill passed after a 54 day talkfest, Dirksen thought the whole thing had been his idea. Mansfield used quiet persuasion, senatorial courtesy, time and history to pass the bill with 73 “yes” votes.

Mansfield’s aides objected that their boss had let Dirksen have too much of the credit, even going so far as to – perish the thought in today’s Washington – walk to Dirksen’s office for meetings and press availabilities. Dirksen made the daily comments to the press. Dirksen was quoted. Dirksen was engineering the strategy. Or so it seemed. Mansfield even stood in the back when LBJ signed the landmark legislation in order to stay out of the celebratory photographs. The great Senate leader explained to his staff that he needed Dirksen more than he needed the publicity. That is how history used to be made, at least once in a while, in the United States Senate.

It has been the good fortune of the United States of America when faced with moments of great challenge, indeed even peril, to have emerge from our messy politics the right leader at the right time. Would independence have come in the first place without a Washington? Would the Union have survived without a Jackson and a Lincoln? Would a Great Depression and a world war been wiped without a Roosevelt? The times we face are hardly as tough as the Civil War or waging World War II, but the lack of real leadership -  leadership in the broad public interest –  has rarely seemed as lacking as it does today.

A real test of leadership – political or otherwise – is to have the courage to go against the dominate direction, especially the dominate direction of your friends. Some would argue that the folks on the Super Committee never had a chance since the Congress is such a toxic place and the influence of those with single and very special agendas so dominate our politics. Maybe. Then again, if you go back over the record of the last several months of effort to craft a budget and debt deal, you’ll find that neither side really tried to get a deal. The talking points were so predictable, so scripted, that this show might as well have followed the Kardashians on reality TV.

As Politico’s Mike Allen noted on Sunday, the last time the Supers met as a committee was on November 1st! Allen, who admits he was initially optimistic, as I was, that the group would find some common ground, now concludes the whole thing was a bit of a sham.

The deficit remains. The nation’s fiscal house is not only not in order, but remains in a seriously fragile state. All political eyes, meanwhile, are singlemindedly fixed on 2012 and how to carve the narrowest possible advantage from the politics of the moment. Yet a serious sense remains that the broad middle of the country is truly ready for serious leadership; leadership that takes risks, makes decisions, talks truth to the fringes of both parties and compromises with the other side.

Is that person – persons – out there? Let’s hope so. The nation yearns for the kind of leadership Mike Mansfield and Everett Dirksen once provided. We need it again.

 

Super Committee

Turkey and Dressing

You thought perhaps that Thanksgiving was all about Grandma’s cranberry relish, Aunt Mae’s pumpkin pie and a nap on the sofa while a football game hums in the background. Not this year. The Super Committee, the 12 Senators and Representatives charged with saving the Republic, may finally prove decisively that turkeys can’t fly. The Committee, ceded the authority of the rest of the Congress in order to come up with a deficit, budget and revenue deal, is due to report November 23 just in time to spoil the real turkey day. Gobble, gobble.

Senior lawmakers are already predicting failure for the scheme that was hatched as part of the dubious deal earlier this year to raise the debt ceiling. It looks like the Gang of Twelve won’t fare any better than the other 523 members of Congress in crafting a sensible, bipartisan plan to control federal spending without destroying the still fragile U.S. economy.

Give some serious credit to guys like Idaho’s Mike Simpson and North Carolina’s Heath Shuler for seeming to buck their leadership while calling for the Super Committee to “go big” with a plan that will actually accomplish something for the long term. Simpson and Shuler are signers, along with 98 other bipartisan House members, of a letter to the committee that urges them to be serious about finding middle ground, while leaving – Thanksgiving-style – nothing off the table. No sign the Super Dozen are listening.

As we edge closer to the actual Presidential Election Year, expect to hear more and more references to two other elections in the 20th Century – 1936 and 1984. In both those years, incumbent presidents – Franklin Roosevelt and Ronald Reagan – were facing re-election hampered by high unemployment  and a sluggish economy. Both won re-election with historic landslides. (The White House loves this history lesson, you can bet.)

In Roosevelt’s case he squandered his mandate with an ill-consider and historically awful idea about expanding the Supreme Court. Reagan turned his attention to foreign policy. Reagan did little, despite much revisionist history today, to control federal spending. FDR, pushed by his conservative Treasury Secretary Henry Morganthau, got nervous about the growing budget deficits spurred by New Deal spending and he quickly applied the brakes in 1937. The resulting Roosevelt Recession sent unemployment back up and the economy stalled. More agile than any politician today, Roosevelt quickly reversed course and start spending money again to create economic activity.

There is a school of economic thought that holds that the Super Committee would do the economy a favor by failing to concoct a grand plan since any grand plan will ultimately reduce federal spending – think defense – and eliminate many jobs. That may prove to be just the combination of policy solutions that the U.S. economy doesn’t need right now. I’d be happy with almost any plan the Supers deliver before turkey day, because no plan means no certainty, no political direction, more drift and more disillusionment for voters.

Even Greece – Greece? - has found a way to create a new coalition government aimed at addressing that country’s severe fiscal and budget challenges. Enjoy the turkey this year and be thankful for any abundance, but don’t look to Washington for sane and sober thoughts on the future of our economy. Maybe the Super Committee ought to spend Thanksgiving in Athens.

 

The Deal

The System Worked…Barely

I predicted a week ago that the “sensible center” would ultimately behave like adults and avoid a federal government default, but by last weekend I’d revised my personal odds to 50-50 and raised my blood pressure to “unhealthy.” I just didn’t think they’d get so close to messing it all up.

The more sensible member of my household flatly predicted a deal at 8:30 pm (EDT) on Sunday. She was right, missing the President’s announcement of a bipartisan cease fire by an insignificant 10 minutes. So, disaster averted, but now what?

With the deal passed, signed and delivered, the post mortems are rolling in and it’s not very pretty. Wall Street turned on a dime once the deal was done and decided the underlying economy is still a mess. Those nations with decent economies, the countries that once quaked at the thought of American economic power, now shake their heads in disbelief that our political system came so close to going over the cliff of disaster. The political left labels “the socialist” president a sellout. Needing Tea Party support many Republicans now head home to, most likely, face more venom from those who think we can fix a decade of fiscal foolishness in one hot summer in Washington.

Utah’s Orrin Hatch, having it both ways and facing a primary challenge back home, praised the deal and then voted against it. Just for good measure virtually all the GOP presidential candidates now oppose the deal proving, as always, that the safest territory in politics is to be opposed to something while standing on the sidelines without responsibility.

Already the pundits predict a second major political meltdown when the Gang of 12 fails in their task to recommend the next major steps just as the holiday season descends on battle weary Americans who don’t seem to trust anyone on anything, especially when it comes to the economy and fiscal policy.

A new CNN/Opinion Research Corporation survey finds broad support – as in 77 percent support – for the notion that Washington’s leaders “acted like spoiled children” in reaching the deal on debt and deficits.

Trying to explain American politics to a British audience, historian Robert Dallek writes in the Daily Telegraph that, “something is at work here that makes you wonder if rational discourse is beyond the capacity of many American voters to understand.”

Dallek accurately describes a Democratic Party increasingly unhappy with Barack Obama, a Republican Party in the death grip of what that old curmudgeon John McCain calls “the hobbits” of the Tea Party movement and a media environment that simplifies and sensationalizes to the point of anger.

“The public,” Dallek writes, “is deeply cynical about politics and politicians. The Congress holds only a 17 percent approval rating and the President now has the approval of less than 50 percent of the public. Moreover, the latest polls show little enthusiasm for any of the potential Republican challengers. Neither Mitt Romney nor Tim Pawlenty nor Newt Gingrich nor Michelle Bachman nor any of the lesser-known names in the mix generate much excitement.”

So, other than that Mrs. Lincoln, how did we like this play? The best that can be said is that we dodged a big one, but in the dodging we displayed all the dysfunction, distrust and denial that got us into this mess in the first place.

Makes one wonder what will happen next time.

 

Pat Moynihan

The Sensible Center

The late, great Senator from New York, Daniel Patrick Moynihan, was asked back in 1993, when Congress was debating an earlier federal budget deal, if there “would be a fight until death” over taxes.

Moynihan, intellect and wit in full flower, came back at NBC’s Tim Russert: “Fight until death over taxes? Oh no. Women, country, God, things like that. Taxes? No.”

We may see a grand deal struck this weekend in the long running Washington drama over taxes, spending and debt and it is a safe bet no one will fight until death, even if the rhetoric makes all of what has been going on in the nation’s capitol sound like Armageddon. A deal must be struck. The only Armageddon here would be the shape of national and world economy should the United States of America default on its debt, even for a little while.

No death, just some taxes.

The “big deal” in Washington has never been easy. Our tight system of checks and balances is designed to make it hard, messy and slow. In 1937, Franklin Roosevelt proposed enlarging the U.S. Supreme Court. The morning he rolled out his plan, and FDR was at the very zenith of his popularity at the time, many fellow Democrats declared the plan DOA. It took months of hearings, speeches, efforts at compromise, fights and feuds before Roosevelt’s blunder was disposed of by the Congress. These things take time.

I’m going to guess that the final features of the deal now being hammered out will strike most of the participants as vaguely surreal when the deal is done. They may well ask themselves and each other: how was this possible?

The Oregonian’s Steve Duin talked over a year ago to former Sen. Bob Packwood who had a major role in engineering the historic 1986 tax reform deal. Ronald Reagan was in the White House then, Republicans ran the Senate and the House was Democratic. It’s worth reading the piece to see how a deal got done back then, admittedly when the Senate was a decidedly more civil place, but also to appreciate that the Washington deal always involves a lot of sausage making.

As Duin wrote: “While those [Finance] committee meetings were high theater, the true wheeling and dealing occurred behind closed doors. The standard deduction was increased, preferential treatment for capital gains eliminated. The deduction for state and local taxes ended, the corporate tax rate lowered.

“All of this,” Packwood reminds Duin, “we’re doing in the back room. We’re not doing this in the daylight at all.

“People are willing to give things up for the good of the country if they’re not going to be hauled over the rack right away.”

The Washington deal, as the late Pat Moynihan knew, as Bob Packwood knows, takes time and doesn’t involve threats of death. It does involve at least a few good people willing to give things up for the good of the country.

I think – I fervently hope – the Congress and the President get a deal done that really is good for the country. I have a sneaking hunch the great majority of Americans will embrace such a deal. They want our leaders to lead the country forward not into a fight until death.