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US debt: Obama threatens veto after supercommittee fails

Closed door supercommittees can now be thrown in the refuge pile of US democratic systems that, in today’s Washington, no longer function in the interests or will of the public. Or indeed function at all.

Earlier today the US debt supercommittee announced it had failed to reach an agreement, split hopelessly over whether the wealthiest Americans should pay more or less in taxes than they do now to reduce the country’s deficit.

As a consequence it couldn’t agree on the necessary US$1.2 trillion in cuts and an automatic trigger will kick in making those cuts equally between Defense and so-called discretionary spending that includes housing assistance, medical programs and highway repair.

Americans may be suffering now, with high unemployment and a still-recovering economy, but they would certainly have felt those cuts, impacting the most vulnerable and business certainty alike. They would have a right to be angry too, as there was already broad agreement how to cut most of the threshold in areas far less painful to the public, until the question came to whether those earning at least US$250,000 per year should contribute more. About two thirds of Americans think they should.

Reinforcing why Congress has an approval rating that sank to an all-time low of 9% this week, talk immediately shifted to how to avoid those automatic cuts, that a majority of both parties agreed to just a few months ago, with legislative tricks rather than simply coming to agreement.

President Barack Obama stepped back into the process a few hours ago, saying he would veto any attempt to undo the automatic cuts without an alternative.

“There will be no easy off ramps on this one,” he said in a televised statement. “We need to keep the pressure up to compromise — not turn off the pressure.  The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan to reduce the deficit by at least $1.2 trillion.  That’s exactly what they need to do.  That’s the job they promised to do.  And they’ve still got a year to figure it out.”

But there are very few options left on how to do that. The city’s blizzard weather predictions look more positive than this.

Washington’s refuge pit of dysfunction includes the up-or-down vote in the Senate (gone), filibusters as a safeguard for debate (how quaint), and the ability of the speaker of the House to pull together a majority caucus on any issue of magnitude (Bachmann and co.). Indeed, the era when Congress could tackle big challenges appears to be over.

The biggest obstacle to an agreement, if one is forced to choose just one, is that House Speaker John Boehner doesn’t have sufficient control of his caucus to pass a bill both he and the White House could tolerate.

Republicans could have won this contest of ideas, were they not split between two ideological factions: the anti-tax cult known as the Tea Party movement and the traditional politician Republican who get votes and campaign donations by pumping tax dollars into Defense and ensuring certainty for business.

There have been under-reported moments of compromise, of a sort, including a proposal two weeks ago by Tea Party-aligned Senator Pat Toomey that included a compromise of $300 billion in new tax revenue. That was rejected by Democrats in part because those increases fell upon the middle class and instead cut taxes on the wealthiest.

To make matters worse, the forthcoming year to solve this deficit problem will be sharing the airwaves and newspaper inches with a presidential election campaign.

Newt Gingrich was confirmed this week as the flavour of the month for GOP presidential primary voters. Both Gallup and CNN polls both put Newt and Mitt Romney as the #1 and #2. Both, unquestionably in the top 1%, are firmly opposed to any tax increases for the wealthy under any circumstances.

Away from Capitol Hill, the land of the free and the home of the brave has been brewing counter-establishment movements for some years now. First the Tea Party activists (at least those not directly funded by the Koch brothers), now on the other end the Occupy movements and online campaigns to protect Internet freedoms from efforts by Chamber of Commerce lobbyists towards blacklist filters.

These movements should be seen as evidence that Congress has not been doing its job. Instead, they continue to be relegated to the fringes of public debate and the impasse continues.

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  • 1
    michael r james
    Posted Tuesday, 22 November 2011 at 2:15 pm | Permalink

    As a consequence it couldn’t agree on the necessary US$1.2 trillion in cuts and an automatic trigger will kick in making those cuts equally between Defense and so-called discretionary spending that includes housing assistance, medical programs and highway repair.

    This seems to ignore one of the bigger “automatic cuts” which is the expiration of the Bush tax cuts (which Obama allowed to be extended for another year — that year is up in early 2012 I believe). This is probably the only thing that will bring the Republicans back to negotiations. Democrats also do not want full loss of the Bush tax cuts because some of it would indeed fall on the less-than-stinking-rich, namely small business owners and thus would not help the economy.

    Obama needs to hold his ground and allow the lapse of the full Bush tax cuts. This would repair his reputation as weakly and endlessly ceding ground to the Republicans in the name of now totally discredited “bipartisanship”, and any collateral damage would lay at the feet of those Republicans. His history of “compromise” does not bode well but 2012 should focus his mind.

  • 2
    zut alors
    Posted Tuesday, 22 November 2011 at 2:57 pm | Permalink

    You have to hand it to the Yanks, they know how to dress-up an entity to make it appear powerful. Hence they have a Congress debt SUPERcommittee. In the obvious interests of accuracy it should be rebranded a futilecommittee.

    They should amend the system to only allow adults to attend meetings.

  • 3
    Whistleblower
    Posted Tuesday, 22 November 2011 at 3:52 pm | Permalink

    It would appear that US politicians are no better than our own, with bloody-minded duplicity and wilful blindness being the order of the day. No country can run deficits of 10% of GDP indefinitely, but for politicians it is more important to score points and be “cock of the dung heap” than to work on constructive policy for the good of the country.

    And it should not be forgotten that Obama’s health reform programs are totally unfunded yet were pushed through in the absence of any funding assurance. The so-called Bush tax cuts were a complete and utter disgrace yet they have been allowed to continue.

    At the root of all these problems is the massive levels of political corruption in the US to whereby it appear that political representation there is contingent on what is essentially corrupt and mendacious behaviour, backscratching and in some cases outright fraud, in a similar situation to the preselection processes within the Labor Party.

    It is this behaviour combined with the essential ignorance of the majority of the electorate that allow this process to continue. Judging by activities such as the Tea Party movement, Creationism and Christian fundamentalism the US, the situation there in relation collective ignorance is even worse than in Australia.

  • 4
    Peter Hannigan
    Posted Tuesday, 22 November 2011 at 4:57 pm | Permalink

    I think there is a procedural solution.

    1. Select committee
    2. Lock them in a room with limited food and water.
    3. Release when agreement or no signs of life
    4. Repeat committee process until agreement is reached or they run out of members of Congress.

    I am confident of agreement - Congress is after all about self interest. I will admit there may be isolated instances of cannibalism given the personalities who seek political office.

  • 5
    Kennedy Mary
    Posted Tuesday, 22 November 2011 at 5:53 pm | Permalink

    I am an Australian living permanently in the USA - & let me tell you - Barack Obama is the only adult in the room !! The Republicans & a few bluedogs in Dems continue to be the stumbling blocks - understatement of the year !!!

  • 6
    Kennedy Mary
    Posted Tuesday, 22 November 2011 at 5:56 pm | Permalink

    Bigoted right wing FOX watching Americans - aka collective America - get the Congress they vote for …collective America needs to turn the mirror on itself …

  • 7
    Ravenred
    Posted Tuesday, 22 November 2011 at 6:25 pm | Permalink

    Peter Hannigan - I seem to recall they did that with the Conclave to elect the Pope once, things slowed down, so they took off the roof. I don’t know how many non-political storms later they elected a new one…

  • 8
    michael r james
    Posted Tuesday, 22 November 2011 at 7:53 pm | Permalink

    Oops, I got the expiry date early by a year:

    ((slate.com/articles/news_and_politics/politics/2011/11/supercommittee_and_bush_tax_cuts_a_10_year_old_blunder_doomed_deficit_reduction.single.html))
    Prisoners of Bush
    The Bush tax cuts: How a 10-year-old blunder haunted, then doomed, the supercommittee.
    .
    The tax cut deal of 2010 only extended the Bush rates to January 2013. Republicans wanted to rewrite the deal, extend the rates forever, and add an estimated $2 trillion to the debt in exchange for a smaller number of revenue-raisers and loophole-busters.
    .
    The “most significant block to our doing something right now, tomorrow,” said Kerry, “is their insistence, insistence, insistence on the Grover Norquist pledge and extending the Bush tax cuts. Now, we are not a tax-cutting committee. We’re a deficit-reduction committee.”

    .
    This is a bit scary because it means there is a chance for the conservatives to lock in these tax cuts forever — at untold damage to the USA — if they win the presidency at the end of next year. Mitt Romney will know how foolish this would be to the long term ability of the US government but he will be too enthralled to the anti-tax lobbyists, and too in love with a second term, to veto it.

  • 9
    AR
    Posted Tuesday, 22 November 2011 at 8:59 pm | Permalink

    I’m with PeteH - with any luck few would survive and they semi sentient. Then we could try the same in Senate Estimates and, wonder of wonders, extend it to the Reps?

  • 10
    Harley Dennett
    Posted Tuesday, 22 November 2011 at 9:00 pm | Permalink

    That’s the extra year that Obama was referring to, but few are looking that far ahead. The US government runs out of money again on 16 December this year, and with the failure of the ‘supercommittee’, will require another continuing resolution.

    I’ve yet to see signs that Harry Reid, leader of the Democrats in the Senate, has taken any steps to avoid that inevitable crisis. If recent history is any guide, he’ll take no steps in preparation of the 2013 showdown either.

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