Tuesday, August 9, 2011

The Truth about the Debt-Ceiling Compromise

by Richard Crews
In accordance with legislation just enacted, a powerful Super-Congressional Committee will be formed. They will either agree on enormous budget cuts by the end of the year--budget cuts that the Congress must then vote either up or down (not modify or filibuster). And if the Committee and Congress do not succeed in installing such cuts, then draconian reductions to the military (reductions which the Republicans staunchly oppose) and to Medicare (which Democrats staunchly oppose) will AUTOMATICALLY be enacted.

Sounds fierce and fair, right? Austere and inevitable?

In what world? That must be the world ruled by the Tooth Fairy and Santa Clause where all good Boy Scouts go to heaven. It sure isn't this world.

Congress has so many ways to modify, circumvent, delay, revise, ameliorate, or rescind any proposal of the Super-Congressional Committee--whether enacted or not, whether the draconian penalty is triggered or not--that the Compromise is, in fact, written in fairy dust on a cloudy sky.

And if you think that a balanced-budget amendment to the Constitution (due for debate this fall) would be effective, consider that the federal budget is another study in fairy dust. Recall that Bush never put trillions of dollars of expenses for the wars in Iraq and Afghanistan into the budget--they were extra add-ons. And that in this age of enormous natural disasters, from hurricanes and tornadoes to heat waves and dust bowls, federal expenditures for these can be extended by hundreds of billions of dollars quite outside of budgetary constraints.

The debt-ceiling "crisis" was artificial. The U.S. and Denmark are the only two advanced countries that even have debt ceilings at all. The "crisis" was concocted by hyper-political Republican obstructionists in an effort to emasculate and discredit President Obama. But it got away from senior Republicans and was transformed by Tea-Party terrorists willing to hold the good faith and credit of the country hostage to get their misguided demands met.

There will be some high-level debt and deficit shenanigans in Washington over the next fifteen months. Even if the Republicans succeed in passing legislation to extend the Bush tax cuts for the wealthy past the end of this year, President Obama will veto such legislation; that alone will produce $3.5 trillion in added federal revenue over the next ten years. A balanced-budget amendment to the Constitution may pass Congress and be sent to the states later this year; how much teeth that would have depends on the definition of "budget" written into the amendment, and Congress (politically cowardly as it is) is unlikely to write a strong definition.

But the real story about the U.S. long-term debt-deficit problems will be told at the presidential election in 2012. And the results of that election depend on three factors:

(1) The health of the U.S. economy; if the Republicans succeed in crippling the U.S. economy, President Obama will have an uphill battle to stay in the White House for another four years.

(2) The rapidly evolving use of information technology (IT) such as Twitter and YouTube. Twitter and the other social media are often wrong, often misinformed, often more histrionic entertainment than thoughtful wisdom, but they are powerful factors affecting the stormy flow of public opinion. The question is which of the political parties will be more adept at staying up to the minute in IT developments and in manipulating public opinion through them.

(3) Big bucks from secret corporate and private campaign donors--the result of the Supreme Court's decision in "Citizens United" which threw out decades of campaign finance reform. The question here is which of the political parties can summon more multi-million-dollar donations into their coffers.

Assuming the best--that the Republicans succeed in shooting themselves in the foot and President Obama is returned for a second term in office with strong Democratic support in both houses of Congress, we can expect the regenerated president--one of the most brilliant and charismatic men ever to hold the office--to come roaring out of the gates for his second term a new-made man. He will be armed with his original brilliance, humanitarian philosophy, and charisma, but now fortified with four years of horrendously difficult experience on the job. We can expect significant tax reform, entitlement reform, infrastructure refurbishing, and environment protection, and--most significantly--an education revolution, pre-school through graduate school, which can lead to a formidable partnership with China, India, Europe, Africa, and South America for a 21st century global civilization that is higher technologically and philosophically than the world has ever known.

Or . . . maybe not. There are a lot of places this idyllic resolution can go off the tracks.