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US Congress lacks political will to solve financial problems: professor

US Congress lacks political will to solve financial problems: professor

Wednesday, January 22, 2014, 17:00 GMT+7

Notes:

Terry F. Buss is a Distinguished Professor at Carnegie Mellon University.

* Headline and headings modified and written by Tuoitrenews

The US Congress, both the House and Senate, in a rare bipartisan coalition of Democrats and Republicans, last week approved a US$1.25 trillion government spending bill for the current fiscal year 2014-5, including $45 billion in additional spending over and above earlier spending caps.

On February 7, the US government is expected to reach its borrowing limit, requiring another vote to extend the ceiling. Congress will surely vote to pass an increase in borrowing limits to fund the programs it approved last week in the spending bill. The reason: the Republicans have not insisted that raising the debt limit be accompanied by a reduction in spending to offset it; something they had done throughout 2012-2013. So, the US government is good to go until October 2014 when spending and debt will once again become an issue during Congressional elections in November 2014. It is unlikely given Congressional and presidential politics over the past decade, that America’s long-term debt and deficit problems will be resolved either now or in November, and perhaps never the way things are going.

Why compromise?

So why has the American political system seemed to have suddenly become so cooperative and amicable compared to all of 2012-2013 when it was in total gridlock? [Recall in 2013 that Republicans forced the government to shut down and forced deep cuts in many programs.] Simply put: with the upcoming November 2014 mid-term Congressional polls in which all 435 members of the House and 33 Senators will be up for election, neither political party wants to risk losing power—Republicans control of the House and Democrats of the Senate—and both parties see opportunities for gain.

The stakes are high. If Republicans retain power in the House and recapture the Senate, then President Obama’s two remaining years in office will come to nothing and his 8 year legacy, including his massive $1 trillion health insurance plan—Obamacare, will be unravelled as much as possible. Republicans want a conservative agenda: much smaller government, less regulation, less market intervention, and less welfare. They also want to discredit Obama. By contrast, if the Democrats hold the Senate and retake the House, Obama’s progressive policy agenda including welfare, environmental regulation, financial system regulation, immigration, energy, not to mention Obamacare, will greatly improve his legacy, while ushering in a new era of progressivism.  In addition, because Obama cannot run again for president, both parties will want to capture control of Congress so they can have a president from their own party.

The American people, especially voters, are hopelessly fractured and confused about whether they want to see the conservative Republican or progressive Democratic vision sweep the country. Only one in ten Americans thinks Congress is doing a good job; less than half think Obama is doing well. Both parties, and Obama, are using the next few months to jockey for a takeover of Congress this November. But, Democrats appear to have the upper hand based on the government shutdown debacle last year. A vast majority of Americans blame Republicans for causing the shutdown and creating the crisis, hence their willingness to compromise on last week’s spending bill.

Last fall, led by a small minority of Republicans, The Tea Party, forced the US government to shut down from October 1-16, 2013 by blocking legislation to authorize government spending. In addition, based on an earlier agreement between Republicans and Democrats automatic, draconian spending cuts to reduce spending and the debt were applied because budget cuts could not be agreed on and the borrowing ceiling failed to be raised  [this was called the sequester]. [Recall that members of The Tea Party were elected expressly to downsize government and cut spending.] The Tea Party tried to turn the budget crisis into a referendum on defunding Obamacare as a way of solving the budget crisis, but they also saw it as flawed and even unconstitutional. In spite of The Tea Party’s efforts, the government reopened and funding was restored for the most part in late 2013 and again last week. The Tea Party strategy succeeded in calling attention to unbridled spending on an unprecedented scale, but it severely damaged the Republican Party as a whole, and emboldened Democrats and Obama in continuing to spend on their progressive policy agenda. Republicans became the party of “mean spiritedness” and “obstructionism.”

Avoidance of another crisis

To avoid another crisis with The Tea Party in last week’s spending bill legislation, Republican and Democratic leaders cooperated to produce a spending bill behind closed doors, that would keep extremists from unravelling deliberations and creating chaos as had been done so destructively in the past. Leaders presented the 1,600 page spending bill to the House last Monday, which was then put to a vote on Wednesday. Many in both parties complained that they had insufficient time to read the spending bill before they voted on it. House leaders also allowed no amendments to modify the bill, even those that might have improved it, and limited debate to one hour. Additionally, leaders collapsed the usual 12 spending bills that represent funding for different sectors of government into one Omnibus Bill forcing members into an all or nothing vote. A similar process was followed in the Senate. President Obama signed the bill into law this weekend. It generally takes many months to accomplish what was done in one week on this occasion.  Obama is pressuring Congress to pass the debt ceiling bill in the next few days without “drama.”

Scenarios

So what happens now? Both parties will behave as they have in the past few years. Democrats will go to the elections claiming that they were watching out for the interests of the American people, funding their favourite programs and pursing their progressive agenda. Republicans will face voters claiming that they have compromised in the interest of the country, and that they value much of the agenda that has been funded. Democrats in the coming election will try to add and expand programs to get votes. Republicans will argue to cut and shrink programs. Democrats will downplay long-term debt and deficit problems while Republicans will claim they are better at managing them. Both parties will say democracy and harmony have been restored. Whoever wins will claim a mandate for change, but only incremental changes will occur as gridlock settles in.

But many Republicans have a problem. They not only face Democratic candidates for election, but opposition from within their own ranks from The Tea Party. The Tea Party will try to replace more moderate Republicans with more extreme ones in an effort to gain control of the Republican Party and take it to the extreme right. This strategy will give Democrats the advantage as Republicans fight among themselves. This happened in the 2012 presidential election when a dozen Republican presidential candidates fought to the death among themselves for more than a year while Obama stood on the sidelines and watched the self-inflicted carnage. It is not clear whether the American voter has tired of The Tea Party or whether the collapse of the Republicans in last week’s legislative compromise will reactivate them and substantially change the balance of power. Because The Tea Party is such a small faction, it cannot gain control of Congress, so it is likely to cause much mischief in the legislative process.

In the end, all last week accomplished was to postpone yet again the inevitable show down over out of control spending and borrowing. The United States now has a debt of $18 trillion, or about 75% of Gross Domestic Product (GDP). In recent years both parties have put up a fight to reduce the debt and contain spending, then blithely go out and add to it. So, all of 2012 and 2013, and last week’s fight over budgets, debt ceilings and government shut downs was for naught. The US now has more debt, greater budget deficits and a highly expensive dysfunctional Obamacare. If the past is prologue, those who win control of the next Congress will engage in business as usual. For Congress, it is more important to gain and retain power than to solve the nation’s problems.

Terry F. Buss

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