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Congress: Where Failure is Always an Option

November 21, 2011 Leave a comment

Chart courtesy of the office of Senator Michael Bennet


Already less popular than Venezuelan dictator, Hugo Chavez, BP during the oil spill, Nixon during Watergate, lawyers, the IRS and Paris Hilton, Congress seems intent on finding a new bottom in the hearts of the public. The so-called congressional Super Committee’s failure to find even modest savings and revenues to address the federal deficit is just one more example why people seem to really despise Congress.

There is plenty of blame to go around on both sides and this is not an opinion forged out of a need to sound non-partisan. The combination of cowardice and partisanship is very, very powerful and both Democrats and Republicans are proving that, in this Congress, playing politics trumps national interest every time.

Democrats have not been serious about addressing the cause of much of our deficit-spending- entitlement programs like Social Security and Medicare. Why? Because the choices are painful and politically unpopular. Republicans, to their credit, finally gave in a tiny little bit and for the first time in recent memory, agreed to a modest rise in tax revenues but then sabotaged the whole thing by demanding that the Bush tax cuts not be allowed to expire at the end of the year- without identifying ways to pay for them.

With this failure, Congress has now opened the door to more failures over the next couple of months. Extended unemployment benefits may not happen. Keeping payroll tax cuts going into next year are, inexplicably, at risk.

Worst of all, Congress is expected to debate over the weeks ahead, whether to water down, delay or eliminate the triggered cuts that were supposed to take place if the Super Committee failed to do its job. The idea was that these cuts, many of them amounting to deep slashes in Pentagon spending, would surely pressure lawmakers into making a deficit deal. After all, who wants to be blamed for weakening America’s military?

If they try to weasel out of those triggered cuts, you can kiss even our AA+ S&P rating goodbye.

Clearly, no one cares up there on Capitol Hill. They don’t care if America is downgraded by credit agencies. They don’t care about endangering national defense. They don’t care about the unemployed. They don’t really care about reducing deficits. They give all the above considerable lip service- but the results tell the real story about the priorities of our politicians. They care about only two things; immediate political survival and getting on the gravy train when they leave Congress so they can continue to enrich themselves.

Representatives from both sides took to the Sunday talking-head shows to blame each other and finger point. No last-minute emergency negotiations. No burning the midnight oil. No college try. Nothing.

They are, however, working on the statement expected today- describing their failure to reach a deal. Maybe they won’t find a way to agree on that either.

Social Programs: Disconnect Between Congress and the Public


As Democrats and Republicans go hurtling toward draconian deficit reduction with their hair on fire- new polling suggests they do so at their own risk. Solid majorities don’t want anyone messing with the grand social safety net.

Here are the major findings according to Andrew Kohut, President of the Pew Research Center:

On the broad question of whether it is more important to reduce the budget deficit or to maintain current Medicare and Social Security benefits, the public decisively supports maintaining the status quo. Six-in-ten (60%) say it is more important to keep Social Security and Medicare benefits as they are; only about half as many (32%) say it is more important to take steps to reduce the budget deficit.

Most Americans also oppose making Medicare recipients more responsible for their health care costs and allowing states to limit Medicaid eligibility. About six-in-ten (61%) say people on Medicare already pay enough of their own health care costs, while only 31% think recipients need to be responsible for more of the costs of their health care in order to make the system financially secure.

So where is this great clamoring for deficit reduction that both parties seem convinced is rampant? And where is the anti-government fever that is also seen as a given?

Republicans face far more serious internal divisions over entitlement reforms than do Democrats. Lower income Republicans are consistently more likely to oppose reductions in benefits – from Medicare, Social Security or Medicaid – than are more affluent Republicans.

Overwhelming numbers of Americans agree that, over the years, Social Security, Medicare and Medicaid have been good for the country. But these programs receive negative marks for current performance, and their finances are widely viewed as troubled.

The negative marks for current performance, by the way, come from those who haven’t actually been using these programs much. Those who do- the elderly- think they work just fine:

People ages 65 and older are the only age group in which majorities say the three major entitlement programs work well; seniors also overwhelmingly say it is more important to maintain Social Security and Medicare benefits than to reduce the budget deficit. Those 50 to 64 also broadly favor keeping benefits as they are. Younger Americans support maintaining Social Security and Medicare benefits, but by smaller margins than older age groups.

It’s ironic that most lawmakers seem to fear the wrath of the public if they don’t cut these entitlement programs. Based on these polling numbers anyway, what they may need to fear are the political consequences of creating gaping holes in the public safety net at a time of genuine economic uncertainty.

The Public and Deficit Spending

The last American President who paid off the national debt


Surprise, surprise.  A new survey finds Americans don’t like most of the remedies being proposed to deal with the nation’s $14.2 trillion deficit.  They strongly oppose any major changes to Medicare and don’t like big cuts in defense spending.  The only thing they do approve of in large numbers is increased taxes on rich folks.

The poll by the Washington Post and ABC News  seems to support the notion that Americans say they don’t like government all that much- until you start taking away the government goodies they like. 

So leading up to the high drama of the vote expected in July on raising the national debt ceiling, polls like these underscore the high risks politicians are facing- especially those on the cutting side of the equation.  As for higher taxes, the strong support for higher rates for those making over $250,000 a year is one thing.  Higher taxes across the board are very unpopular.

So how do you deal with a public that finds the deficit troubling but isn’t enamored with most of the proposed solutions?   Seems to me politicians are either going to pander which always seems to be their initial instinct- or you could split the differences- but that might involve both sides giving up their sacred cows.  In other words, they may have to act like adults.

But is the situation as dire as most are now painting?  Let’s put it this way, where was Standard and Poor’s in the late 1940’s when the percentage of the national debt compared to the Gross Domestic Product was around 40%?  Because right now, huge as it is, that $14.2 trillion represents only 11% of the GDP.  Standard and Poor’s says that’s enough to earn a “negative” rating on America’s future prospects as an investment.  But it’s been way worse.

History finds that deficits…not balanced budgets are the norm.  Posted on this couple of months ago.  According to NPR’s Planet Money team- the last time the United States actually paid off all its debt was during the administration of Andrew Jackson.  This would have been in the 1830’s.

Fact is, as much as the President and his political adversaries both pontificate about how government needs to balance its budget just as American families do- it’s a total crock.  Governments are not families.  Some argue a certain amount of deficit spending can actually be helpful.  Banks make money.  Government spending tends to keep the economic machine well greased.  Societal needs like spending on highways and infrastructure and even health care- get met.   Besides, even American families that balance their budgets think nothing of holding hundreds of thousands in debt on 50-year home mortgages.

The trick…as in just about everything in life…is doing things in moderation.  Don’t expect any politician to make that case.