November 17: Democrats Will Have to Fight Through More Government Shutdown Threats
Fortunately, the federal government will stay open through the holidays, but Democrats must stay vigilant, since the nihilist forces that keep bringing Congress to the brink have not gone away, as I explained at New York:
After his success in passing a two-tiered stopgap spending bill with a ton of Democratic votes and quiet concurrence from the Democratic-controlled Senate and the White House, freshly minted House Speaker Mike Johnson hastily retreated into a Thanksgiving recess with angry shouts from his erstwhile hard-core MAGA allies echoing in his ears, as Punchbowl News reports:
“Rep. Chip Roy (R-Texas), policy chair for the House Freedom Caucus, went to the House floor and angrily bashed the GOP leadership after members had bolted town on Wednesday, a bitter ending to a grueling 10-week marathon for the chamber.
“’I want my Republican colleagues to give me one thing — one — that I can go campaign on and say we did. One!’ Roy yelled during a speech in an otherwise empty House chamber.
“’Anybody sitting in the complex, you want to come down to the floor and come explain to me one material, meaningful, significant thing the Republican majority has done besides, well, I guess it’s not as bad as the Democrats.’”
Among the “material, significant things” Roy and others among the 93 House Republicans who voted against Johnson’s plan wanted were deep spending cuts in disfavored areas of the federal government and perhaps some symbolic policy shibboleths smiting abortion providers or transgender athletes or tax collectors. Such items would have been treated by Democrats and even some Republicans as poison pills, which is why Johnson’s “clean” stopgap bill didn’t include them. The new Speaker’s support for a “clean” bill and his reliance on Democratic voters are precisely the actions that got old Speaker Kevin McCarthy tossed out on his ear. Thanks to Johnson’s past record of rigorous right-wing orthodoxy (and perhaps exhaustion following the long fight over McCarthy’s successor), his rebellious friends appear to have given him a mulligan. But it probably won’t last.
A new government shutdown threat will likely appear once the first “tier” of the stopgap bill expires on January 19. Indeed, the hard-liners are already firing shots across Johnson’s bow, as Politico reports:
“Hardliners sunk any chances of passage for two additional funding bills this week — marking a major setback for Speaker Mike Johnson less than 24 hours after working with Democrats to pass a bill that would thwart a shutdown deadline Saturday …
“GOP leadership then canceled the rest of the votes for the week, with Republicans predicting that Johnson’s spending headache won’t get any easier once they return at the end of the month.
“Instead, members of the Freedom Caucus vowed to continue blocking House Republicans’ remaining five funding bills. They urged Johnson to come up with a plan that would cut spending for the fiscal year that began on Oct. 1, without any accounting tricks.”
What makes this revolt even more significant is that Freedom Caucus types are really obsessed with the need to enact individual appropriations bills instead of the catchall measures they believe endemic to out-of-control federal spending. A big part of the rationale for Johnson’s two-tiered stopgap was to provide enough time — and no more — for passage of these individual bills. But now HFC leaders are sabotaging that very possibility out of a fit of pique, in an exceptional example of what it means to cut off your nose to spite your face.
The thing is, Senate Democrats and the White House aren’t going to bend to Chip Roy’s definition of what the American people want or need between now and the time the next shutdown crisis arrives (indeed, a collision over aid to Ukraine and border policy contained in the president’s supplemental spending proposal will likely come to a head before Christmas). So the shutdown threat may have simply been deferred for a bit even as House GOP hard-liners flagellate themselves for letting Johnson off the hook for the exact sins that damned McCarthy. Enjoy the holidays, federal employees. But stash away some provisions for what could be a stormy winter.
My memory of Rubinomics associates it with bringing down the interest rate and reducing the deficit, rather than free trade. This apparently has changed in the post-election discussion.
The benefits of free trade have not been shared, no doubt. The “free” part has been taken by opportunists to mean free from the need to share gains or mitigate pains. Populists are right to shut down the store until accounts are set up correctly.
But the other side of Rubinomics is no less difficult. Getting the budget under control. Debt service and the retiring baby boomers are going to set up an impossible situation. Remember, off-the-books borrowing from Social Security and Medicare funds is not only going to stop, but will need to be reversed simultaneous with the ballooning debt service.
Clearly fiscal responsibility means revenue increases. Tax increases? Not on the middle class. That is the Democrats bargain with the voter in the past election. And we’d better not renege on that. The 1994 election, if you’ll recall, was demagogued by the Gingrich and the Republicans using very meagre tax increases.
Where then? I’d like to see somebody else’s ideas. I would first end the cap on payroll taxes. This would have the effect of increasing the top marginal rate by 16% or so for earned income, earmarked for the entitlements that will be needing it.
Symbolically, it might be neat to institute a new top marginal rate of 80 or 90 percent on income over $3 million.
An idea that is not mine, but I forget where I saw it, was to get rid of all the income tax deductions and credits and bells and whistles in favor of five: children, pensions, health care, education, mortgages. This might net the most, while holding the middle class harmless.
“Taxes” won’t be such a dirty word if it is applied to the other guy.
“Free” vs. “Fair” Trade
As the Rubinites and the economic populists square off on a number of issues which includes the free versus fair trade debate, the narrow use of the term “fair” trade by some Democrats borders on a disguised and thus disquieting form of rank economic nationalism.
Free trade is not fair trade when our government, thanks to powerful and well-heeled lobbies, refuses to couple “free” trade with the abolition of the patently inefficient subsidization of cotton, wheat, and sugar production in this country, among other such supports. These subsidies underwrite a monied elite while increasing the price of these products for consumers, not to mention the denial of economic opportunities for foreign workers. (Here in Florida, for example, we not only subsidize “big sugar” and thus pay more for our sugar, but we also subsidize their cost of doing business by using tax dollars to clean up their despoilment of the Everglades.)
An example of this “fairness” is reflected in the draft free trade agreement with Peru. As drafted, its implementation would demolish the Peruvian wheat, cotton, and sugar industries, for even with their lower wage rates, they cannot compete with the artificially supported low prices for these products.
Some Democrats are calling for better labor and environmental laws and their enforcement, which in Peru’s case could be strengthened, but this call is being made without any discussion whatsoever of the “unfair” destruction of three Peruvian industries.
The money we waste on welfare for industries that don’t need protection could be better spent on the social nets necessary for a fair trade driven economy.
In short, if the economic populists are going to argue for fair trade then they should use that term consistently to apply not only to our trading partners but to ourselves as well.