Category: Congress

We’re In Hot Water

The Daily Escape:

Harbor Seals hauling out on a buoy in Petersburg, AK. Wrongo and Ms. Right were passing by in a zodiac – July 2023 photo via the cruise line

It seems like it’s going to stay hot for a long while, and nobody wants to do anything about it. Temperatures are rising both on land and at sea, with climate experts ringing alarm bells about unprecedented sea surface temperatures:

“The National Oceanic and Atmospheric Administration (NOAA) in late June warned that half of the world’s oceans may experience marine heat wave conditions by September.”

And it’s hitting close to home:

“Not only is Florida sizzling in record-crushing heat, but the ocean waters that surround it are scorching, as well. The unprecedented ocean warmth around the state — connected to historically warm oceans worldwide — is further intensifying its heat wave and stressing coral reefs, with conditions that could end up strengthening hurricanes.”

The NYT reported that the water temperature around Florida hit 90° yesterday.

And while it’s possible to score cheap political points on their governor DeSantis who would rather fight with Mickey Mouse and whatever “Woke” means this week while ignoring climate change, Wrongo won’t stoop to that. He’s sure that Floridians love their governor’s priorities. Just last week, as insurance companies were pulling out of Florida, DeSantis was saying not to worry, the insurers will return to Florida after the hurricane season.

As Pogo said many years ago: “We have met the enemy and he is us.”

Primarily, the enemy is the Republican politician who continues to vote against efforts to bring the world’s CO2 levels under some semblance of control. The fixes to climate change that will have the most impact involve changes in public policy that will never happen as long as Republicans hold enough votes to block them.

But the big idea is that we’re not going back to where we were heat-wise, no matter what we do to cut further CO2 emissions. As NYT journalist Jeff Goodell said on NPR: (brackets by Wrongo)

“We are moving into a different world, and we need to grasp that idea….the planet is heating up…because we’re putting CO2 into the atmosphere…..It is essentially permanent when we put it [CO2] up there….And the warming will not stop until we stop emitting CO2 and burning fossil fuels….And even if we stop [adding more] CO2, we are stuck with that warming planet for a very long time.”

So, even if at this moment we made huge changes, we would always be on this part of the temperature scale, unless we figure out how to take quite a bit of that CO2 out of the atmosphere.

A few red state legislatures are considering following South Carolina’s lead and simply banning all mention of global warming or climate change in official documents or state-funded research. They think the only real way to deal with the climate problem is to ignore it.

Worse, nobody has a good model for what happens when all that warm water sits and gets warmer. Some meteorologists have pointed out that if the Caribbean got hot enough, it could spawn a continuous series of Category 5 hurricanes, say, once a week from May to October.

Which would resolve the problem of insuring Florida’s oceanfront properties pretty quickly.

It’s becoming evident that we live in a world designed for a climate that no longer exists. What’s really sobering is that the climate that now exists won’t resemble the one that will exist a generation from now.

How our societies and political systems deal with this is the central question of the 21st century.

Wrongo and Ms. Right moved back to New England from California partly because of climate. We were concerned about how scarce water would become in Los Angeles, and we knew that Connecticut would have more water for longer. This week, several of our roads and bridges closed because we had too much rain, causing the Housatonic River to overflow its banks.

This shows that there are no longer any places that can be marked safe from climate change. It has become impossible to predict the future climate/weather anywhere based on the past. And we’re still not coming to terms with just how hot and dangerous things are becoming. Or how fast it’s happening.

Let’s close the week with a wake up tune. Here’s “The Effects of Climate Change on Densely Populated Areas” by People Under The Stairs, a hip hop group from LA formed in 1997:

Sample Lyric:

Hundred degrees at midnight for the third day in a row
Nobody sleepin’ well and I can feel the tension growin’
LA wth rollin’ brownouts, rollin’ papers and rollin’ sixties
Heat exhaustion increasing caution across the city
Some people hit the mall, they’re tryin’ to stay cool
Some people call the cops; “there’s black children in the pool”
Everybody’s lookin’ sideways, we’re ragin’ on the highways
I hate it, I’m tryin’ to stay hydrated and faded but my way Is blocked
By road construction like a scene from “Falling Down”
Cops, they tryin’ to function but it seems they takin’ down us
Brown people at will People get hot and then killed
As the sun begins to set it’s hotter, no-one can chill
Everybody’s windows open there’s not a moment of silence
Alcohol heatin’ frustration that’s increasing domestic violence
9-1-1 is overwhelmed, homie, guess you on your own
The hills are still on fire, I recommend you stay at home

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July 4, 2023

The Daily Escape:

Kilauea Caldera showing a blackened lava lake, Hawaii Volcanoes NP – June 2023 photo by J. Wei for the NPS

Kilauea stopped erupting on June 19, but the threat of another eruption is always present. That could be a metaphor for America in 2023: We could erupt at any moment.

The 1960s were an optimistic time. There were demonstrations for civil rights and against the Vietnam War. There was police violence against the demonstrators, and assassinations of JFK and MLK. But a throughline of those times was a belief that righteous change was possible.

Wrongo graduated from Georgetown in 1966. His specialty was American colonial history. Those also were times of optimism, and there also were factions and different priorities and beliefs throughout the land.

Back in the 18th century, we overcame our differences, declared our independence, and formed a nation.

Now, 247 years after our revolution, it seems that staying united is difficult, if not impossible. Today, facts are fungible, and so is the truth. As Wrongo stated in his last column, about one third of Americans fail to vote. They are apathetic because they can’t see what would change if they did vote.

Having one third of Americans regularly fail to vote has surrendered control over our politics and our courts to a minority, mostly a few at the top, supported by some people in the middle, and enabled by the apathy of most of the rest of us.

Worse, most of those in today’s controlling minority are extremists. They have exploited the imperfections in our system to impose a return to the social mores and politics of an earlier time.

The best example of this is the string of far-Right decisions handed down in 2022 by the Supreme (Extreme) Court. From Slate’s Mark Joseph Stern:

“Consider the issues that SCOTUS has resolved….The constitutional right to abortion: gone. States’ ability to limit guns in public: gone….Effective constraints around separation of church and state: gone. The bar on prayer in public schools: gone. Effective enforcement of Miranda warnings: gone. The ability to sue violent border agents: gone. The Environmental Protection Agency’s authority to regulate greenhouse gases at power plants: gone.”

Vast areas of law that took decades to establish were overturned in a year.

And in 2023, the Court’s reactionary majority has continued to overturn more of the American social order. Those rulings: ending affirmative action, preventing the forgiveness of student loans and an egregious decision on gay rights, show that the Court has lost any sense of judicial restraint.

The Court is no longer “calling balls and strikes” as Chief Justice John Roberts famously said. In fact, there could be a highlight reel of umpire John Roberts’ blown calls. It’s clear that the Extreme Court wants to go further, and given today’s politics, there’s zero risk of the other two branches of government agreeing to override their decisions.

So, on this Fourth of July weekend, let’s hit pause. Let’s take time to reflect on how our founders were able to weave a message that united many factions against a common enemy. It should be very clear that at this point that the common enemy to unite against is the partisan power of a partisan minority.

Real power no longer lies with the People or with their politicians, it resides in the Supreme Court. The antiquated and undemocratic elements of our government: the Electoral College, lifetime tenure for Supreme Court justices and the malapportionment of the Senate, would require Constitutional amendments to fix. But we’re too divided to amend the Constitution.

Imagine attempting to fix the Senate’s malapportionment by getting a Constitutional amendment through that same malapportioned Senate.

But there may be reason for optimism in the fact that the two of this term’s negative rulings related to college students (admissions and debt relief). Those issues will motivate young voters in 2024.

Here are some numbers that give some cause for optimism about younger voters helping to change our politics:

  • Voters 47 and younger will be in the majority beginning in 2028.
  • Younger voters have historically voted in significantly higher numbers for Democrats.
  • Young women, especially young Hispanics and young African Americans are substantially higher voters for Democrats.
  • Fifty-five percent of white male voters under 45 voted Democratic in 2022, as did 52% of younger white females.

Here are a few other facts that should make us optimistic going forward:

  • Abortion was youth’s #1 issue in 2022.
  • Mid-term voter turnout for people under 29 was 23%, lower than 2018 (28%), but much higher than in 2014 (13%).
  • Michigan had the highest youth turnout in the country (37%).
  • Two swing states, Michigan and Pennsylvania, were among the four states to have the highest youth turnout in 2022.

To help you reflect on how we might take back control, let’s listen to Neil Diamond’s “Coming to America” performed at the Greek Theater in Los Angles in 2012.

There are many versions of this tune on YouTube, but this one makes the point that virtually all of us are descended from immigrants, in this case, Diamond’s grandmother, who immigrated from Kyiv:

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Monday Wake Up Call – June 5, 2023

The Daily Escape:

Blue Ridge mountains, NC – June 2023 photo by Michele Schwartz

It’s getting to be long enough into our economic recovery that we’ve started to ignore the monthly jobs report by the Bureau of Labor Statistics (BLS). Luckily, Simon Rosenberg doesn’t let us forget: (brackets by Wrongo)

“The…BLS jobs report is out and it’s another good one – 339,000 net new jobs, [plus] 432,000…upward revisions from previous months. With this new data my monthly jobs tracker clocks in at:

-33.8m jobs – 16 years of Clinton, Obama

-13.1m jobs – 28 months of Biden

-1.9m jobs – 16 years of Bush, Bush and Trump

Biden’s 13.1m jobs is almost 7 times as many jobs as were created in the 16 years of the last 3 Republican Presidencies, combined.”

Since the end of the Cold War, the US has seen 49 million new jobs created. Remarkably, 47 million of those 49 million jobs were created under Democratic Presidents.

On the Democratic Party’s watch we’ve seen strong economic growth. OTOH, during the same time, Republican presidents have overseen three consecutive recessions. It’s not a stretch to say that the GOP’s economic track record over the past 30 years has been among the worst in US history.

Consider Biden’s record of economic growth:

  • GDP growth under Biden is 3+%, or 3 times what it was under Trump.
  • Almost 7 times as many Biden jobs as last 3 GOP Presidents combined.
  • Best post Covid economic recovery among the G7 countries.
  • Lowest unemployment rate in a peacetime economy since WWII.
  • Lowest poverty/uninsured rates ever.
  • Real corporate earnings up in 2022.

Despite what the GOP is saying to the press about their being deficit hawks, the federal deficit went up every year under Trump, and has come down every year under Biden. Rosenberg adds this helpful chart of GDP growth by president:

So why is it that Americans aren’t convinced that the economy has improved since the pandemic? In a new poll from the AP-NORC, asking if the nation’s economic conditions are in good shape, the percentage who agree is down from 30% last month to 24%. Only a third of Americans in the new survey approve of how Biden’s handling the economy, while two-thirds disapprove.

In the survey, Democrats were more likely than Republicans to view economic conditions favorably, but just 41% of them say the economy’s good and only 7% of Republicans agree. And both numbers are down from the previous month for both Parties.

Now this may be at least partially due to the Republicans scare tactics about the Debt Ceiling. The Hill reports that this AP-NORC poll is in line with other recent surveys that suggest most Americans think the country’s economy is in poor shape, Other polls also indicate low confidence in the economic leadership team.

Axios suggests a different way to view the economic issue. They looked at Federal Reserve survey data from 2017-2022, which shows that people think they’re personal economy is doing just fine, while they think the national economy is in terrible shape:

This is most likely because of the media’s awfulizing about our economy. Obviously, consumer prices are high, but inflation is coming down. But even if inflation went to zero, today’s prices will still be much higher than Americans were accustomed to pre-pandemic, so people will be complaining.

And we can’t discount the negative impact of Congressional dysfunction about the Debt Ceiling, or all the news bunnies crying about our unsustainable national debt.

Still, our economy continues to do better than even the economists think. The May employment report marked the 14th straight month that more jobs were created than economists expected. Our GDP continues to grow (it’s up more than 5% from its pre-pandemic peak), even after accounting for inflation.

The average US employee now makes $33.44 per hour, 17.5% more than before the pandemic. The stock market is up 10% so far this year, but still, Americans aren’t buying it. Axios’ Felix Salmon reports that while Americans say that they’re broadly happy with their personal finances (above chart), in other polls, a majority consistently think (erroneously) that we’re currently in a recession.

Time to wake up America! Things are rolling along reasonably well, even if they’re not fantastic. We have the best job market in 50 years, and there’s no recession on the horizon. As the Rolling Stones said: “You can’t always get what you want…”. Maybe it’s time to look at the glass as half full.

To help you wake up, watch and listen to Alan Jackson cover Eddie Cochran’s 1958 “Summertime Blues” in 1994. The Blue Cheer had the radio hit with it in 1968. Wrongo loves three versions of this song: Blue Cheer, the Who, and this Allen Jackson cover:

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Saturday Soother – June 3, 2023

The Daily Escape:

Shenandoah NP, VA – May 2023 photo by Lori May

You’re becoming dimly aware that the Republican Party is assembling a large field of candidates to be its nominee for the presidency in 2024. By Wrongo’s count, there are 14 individuals who have either formally announced a run or are signaling that they will soon announce.

In 2016, Trump won the Party’s nomination against a 17-candidate field. The commonly accepted logic was that the large field refused to take him seriously and failed to rally around a single alternative. This time around, the commonly accepted logic is again that the only way to stop Trump is for the anti-Trump Republicans to coalesce around a single alternative.

Sure, but it hasn’t happened. Why? Because there really aren’t many anti-Trump Republicans. If you look at the list of 14, most of them want to take over Trump’s cult rather than dismantle it.

These people all know what happened last time, and they aren’t dummies. They also know that since leaving office, Trump has gotten 10 more states to award their Republican delegates through winner-take-all primaries, even if the winner receives less than a majority of the votes. The number of winner-take-all Republican primary states has grown from seven to 17.

If the Republican candidate field remains crowded, and Trump gets the most votes (even if it’s only 30%), he’ll win those states.

So what are these other presidential candidates thinking? Some are auditioning for the VP slot. Others may be having a self-absorbed moment. Wrongo thinks there’s also something else going on: These otherwise savvy politicians, who can raise boatloads of campaign money, are betting that Trump will be indicted and most likely convicted by the Department of Justice.

The idea is that Trump will be either so weakened by the criminal indictments and/or convictions that his current base of loyal voters will shrink to the point that he either withdraws or loses the primary fight.

OTOH, the recent blockbuster news from CNN that federal prosecutors have an audio recording of a summer 2021 meeting in which Trump acknowledges he held onto a classified Pentagon document about a potential attack on Iran is very dangerous to him, if true. From CNN:

“The recording indicates Trump understood he retained classified material after leaving the White House, according to multiple sources familiar with the investigation. On the recording, Trump’s comments suggest he would like to share the information but he’s aware of limitations on his ability post-presidency to declassify records…”

The July 2021 meeting was held at Trump’s golf club in Bedminster, New Jersey. Trump met with two people working on the autobiography of his former chief of staff Mark Meadows, as well as aides he formerly employed. CNN offers this vaguely neutral comment:

“The revelation that the former president and commander-in-chief has been captured on tape discussing a classified document could raise his legal exposure as he continues his third bid for the White House.”

A conviction by DOJ would mean that Trump is barred from holding a national office.

Wrongo thinks that at least some of the Republicans in the presidential race are now starting to follow the Breadcrumbs to Indictmentville. With the Former Guy blabbing about war plans in his possession, this seems like a death blow to Trump’s viability as a presidential candidate.

Assuming that the tape is authentic, and that there’s a proper foundation for admissibility in court, Trump may be done for, as a national candidate. It’s hard to imagine that potential plans for a military attack on Iran (if that document exists), wouldn’t qualify as a stolen secret.

And that may be partially what’s driving DeSantis and the other serious Republican presidential candidates.

We’ve reached the weekend without the country defaulting on its debts! Default seemed all too real only a week or two ago. But now, we won’t have to worry about that for a couple of years.

It’s time for our Saturday Soother, where we take a break and consider how we are continually jerked around by the GOP. It will be summer-like in northwestern Connecticut this weekend, and we have a houseful of family.

So, grab a chair outside in the shade. Now, watch and listen to something Wrongo had left over from Memorial Day: There’s a cemetery outside the Dutch city of Maastricht that holds 8,301 American soldiers who died in “Operation Market Garden” in the winter of 1944–45. Every soldier has been adopted by a Dutch family who tends their grave. Annually on “Liberation Day”, memorial services are held for the men who died to liberate the Netherlands. The day concludes with a concert, and “Il Silenzio” is always the concluding piece. It was written in 1965 by trumpet player Nini Rosso and is an extension of the Italian Cavalry bugle call also used by Tchaikovsky to open his Capriccio Italien. (It contains a part of the US military bugle call “Taps“).

This 2008 performance of “Il Silenzio” features a 13-year-old Dutch girl, Melissa Venema on trumpet with AndrĂ© Rieu and the Royal Orchestra of the Netherlands:

You won’t be disappointed by the video. It’s ironic and sad that people in other countries remember our war dead better than most Americans do.

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Thoughts On The Debt Deal

The Daily Escape:

Rosa rugosa, Cape Cod, MA – May 2023 photo by Don Wilding

The holiday is over, and it brought an apparent deal between Biden and McCarthy. But was negotiating with the axe of a default on the national debt hanging over the country worth it? Sure, since it pulled the country back from the fiscal cliff.

But mostly, having to do it at all was stupid, and dangerous. And now, neither Party is completely happy, because both sides had to compromise. Wrongo recommends Noah Smith’s take:

“The recent fight over the debt ceiling, however, seems…like a return to the pointless obstructionism and grandstanding that characterized politics in the 2010s. There was absolutely zero reason for the House GOP leadership to use the debt ceiling — they could have just forced a deal through the normal appropriations process. Few people actually believed that the country’s leaders would let the US default on its sovereign debt due to a random minor budget fight…”

He’s correct, the House is controlled by Republicans. And the Senate also has enough Republicans to control the country’s fiscal budgeting process. They can ensure that what’s included and what’s cut would almost certainly be what Republicans wanted in the final package.

The Atlantic’s Ron Brownstein tweeted:

“It’s really something House GOP was willing to risk tanking global economy for such a tangential set of policy goals. Their plan threatened spending on young & low-income but by excluding revenue & entitlements had small impact on overall deficits. Means wildly excessive for ends.”

Despite all of the grandstanding by both Biden and the Republicans, the compromise deal looks like this:

  • A freeze on non-defense discretionary spending in 2024 and a 1% increase in 2025.
  • A 3% increase in defense spending.
  • Expanding work requirements by four years for SNAP (food stamps) and some smaller welfare programs.
  • Resumption of student debt payments (this isn’t a change to Biden’s student debt plan).
  • Reducing IRS funding by $20 billion.
  • Clawing back some unused Covid relief money.
  • Minor changes on permitting to streamline the process of environmental review.

House Republicans had initially demanded huge cuts in spending, which would have been pretty destabilizing to essential programs. These demands may have been simply an initial negotiating tactic. But not getting them in the final agreement might also speak to Biden’s negotiating ability.

Remember that the GOP’s threat to trigger sovereign default was because they think that the level of our national debt is an existential threat. But they wanted to include tax cuts in their original proposal. That would have been nuts since the purpose of their bill was to limit the growth in federal debt.

Remember too that only about 27% of our federal spending is classified as “discretionary”. About 65% is “mandatory” spending, which means that it doesn’t go through the appropriations process. (The remainder is interest on the debt.)

The spending restraint in this deal will affect only the “discretionary” portion, leaving the “mandatory” majority untouched. The “mandatory” portion includes Medicare, Medicaid, Social Security, EITC and SNAP.

More from Noah Smith:

“…what frustrates me about this nothingburger of a result is how incredibly costly it was to produce. The House GOP went through months of dramatic, high-stakes negotiations, forced the administration to consider the Fourteenth Amendment and the trillion dollar coin, got the media talking seriously about the prospect of a US sovereign default…. and all that for a little bit of discretionary spending restraint, a few added work requirements for food stamps, and a little defunding of the IRS?….It’s like…a guy walked into a restaurant with a ticking bomb demanding to blow everyone up if he didn’t get a free peppermint!”

We’re unsure if this compromise will actually pass both Houses of Congress. But if it does, it’s another piece of evidence that Republican politics is largely theater/spectacle. That’s why a reality TV star/performance artist like Trump was able to take over the Party.

OTOH, consider this quote from one of our founding fathers:

“Politics…Has Always Been the Systematic Organization of Hatreds” ̶  Henry Adams

Of course, Adams’ comment raises the question of whether politics has to be a systematic organization of hatreds, or if people could be politically active and committed, while in no way giving in to hatred of their opponents? Sounds utopian to Wrongo.

We have to give credit when credit is due. Politics is supposed to be about compromise. And Biden has accomplished a compromise in one of the most partisan, polarized times in our recent political history. If you’re arguing against what Biden did, remember that unless your Party controls every arm of the government, and in particular the Senate with a big majority, you either compromise or you get nothing done.

Want to get your way every time? Win more elections.

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Links You Can Use

The Daily Escape:

Santa Rita prickly pear in bloom, AZ – May 2023 photo by Wilson Goodrich

Today Wrongo returns to his “Links you can use” format from several years ago.

First up, Bloomberg reports that Trump’s takeover of the GOP helped him to rewrite the rules on how primary delegates to the GOP presidential convention will be awarded. Since leaving office, Trump has gotten 10 more states to award delegates through winner-take-all primaries, even if the winner receives fewer than a majority of the votes. The number of winner-take-all states has grown from seven to 17.

Needless to say, if it’s crowded field and he gets the most votes, even if it’s only 30%, he’ll win.

Second, Republican governors have discovered that they’re getting significant political mileage out of championing people who have engaged in vigilante violence that dovetails with the GOP’s culture wars. Brian Klaas writes about the Right’s open embrace of political violence. In Texas, Governor Abbott has said that he was “looking forward” to pardoning Daniel Perry, who murdered a Black Lives Matter protester. Perry was sentenced to 25 years in prison. He had previously texted a friend that he “might have to kill” some people on his way to work.

Over the weekend, Florida Governor DeSantis tweeted his support for Daniel Penny (Perry and Penny?) after Penny killed the homeless Black man Jordan Neely, on NYC’s subway. DeSantis didn’t hold back:

Lots of dog whistles right there from the governor. NBC 4New York reported that the legal defense fund had raised more than $2 million after DeSantis tweeted the link to Penny’s donation page. This shows MAGAs have found another way to wealth and fame as Daniel Penny now joins Kyle Rittenhouse as a violent millionaire funded by the Republican Right.

Brian Klaas wrote about a study that shows “Who Supports Political Violence?”, conducted by Miles T. Armaly, Assistant Professor of Political Science at the University of Mississippi and Adam M. Enders, an Assistant Professor of Political Science at the University of Louisville. Their findings show some key traits that predict support for political violence:

Perceived victimhood is highly correlated with support for political violence. This is different from actual victimhood. While previous research found that people who are actually being oppressed are more likely to turn to violence, this study shows that it doesn’t really matter whether someone is actually being oppressed; instead, the feeling of being oppressed is sufficient.

This was the strongest predictor of support for violence.

The next strongest correlate was a sense of “white identity.” And the two interact, as those who buy into the Right-wing narrative that white people are under attack in America (due to their loss of social dominance), are also likely to be the same individuals who feel perceived victimhood.

Also, past military service is correlated with a predisposition for vigilante violence. People who previously served in the American armed forces were more likely to express support for political violence than those who have not. None of this is good news for the US.

Third, the Debt Ceiling negotiations are resuming today in the White House after House, Senate and White House negotiators met for three hours Saturday, and then reconvened on Monday. Benjamin Studebaker worries that Biden may be about to repeat Obama’s errors in negotiations with Republicans in 2011:

“Back in 2011…Obama faced the same problem…Biden now faces. Congressional Republicans refused to raise the debt ceiling unless Obama agreed to budget cuts….Obama….Instead…cut a deal. He signed the Budget Control Act of 2011. It committed the federal government to…enormous cuts. Over the course of 2012, it became clear that these cuts would cause serious damage to the economy. So…Obama negotiated another deal that would save most of the cuts for 2013. Over the course of 2013, the same arguments were made again, but this time Obama was unable to secure another delay, and the cuts took effect.”

Sounds like what we’re going through right now. In 2013, we escaped the economic disaster, but at the price of the Fed adding several rounds of Quantitative Easing leading to our current economic situation. If Biden agrees to cut spending, the economy will again be damaged.

And the Federal Reserve will be pressured to limit the damage via lower rates or flooding the market with more dollars.

Republicans will, of course, oppose tax increases. That means the Biden administration won’t be able to raise taxes to help offset the growing deficit or pay for future expenses. Therefore it has to rely on the Federal Reserve’s monetary policies. The weaker economy created by rate hikes is an economy where the current tax rates will generate less tax revenue. That creates more political pressure to cut spending.

All of these stories look like rinse, lather, repeat. And not to the nation’s benefit.

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Is Default Preferable To Compromise?

The Daily Escape:

Wild Ocotillo blooms with Agave buds, Anza-Borrego Desert SP, CA – May 2023 photo by Paulette Donnellon

Yesterday, Biden met with the leadership of the Congress to discuss the debt ceiling and the dangers of default. Wrongo is writing this before we know what if anything concrete, comes out of that meeting.

This is the third time in twelve years that a Republican House majority has tried to use the debt limit to extort a Democratic president into adopting policies that the GOP failed to enact through normal political means. This time around, like the past two times, Republicans say they want spending cuts, but as Nate Cohn wrote in the NYT:

“The 2022 midterm campaign didn’t show evidence of a resurgent conservative passion for spending cuts either. The debt-deficit issue had such a low profile in the national conversation that a question about it wasn’t even asked in exit polling.”

But absent real news, let’s take a look at the Republican position as outlined in the bill McCarthy and the GOP passed in the House. They’re pushing to pair $4.5 trillion in spending cuts over a decade with a one year, one time, $1.5 trillion increase in the debt limit. Their plan achieves most of its savings with spending caps for discretionary spending — the part of the yearly budget that isn’t automatic (like Social Security payments) — but it doesn’t say which discretionary programs should be cut and which should be spared.

Their plan caps government spending at last year’s levels. This would be a decrease of ~ 9%. A yearly increase is capped at 1% annually for the next 10 years. This action would save approximately $3.2 trillion. They haven’t offered any detail about where the cuts would come from, and there is no inflation adjustment to the spending cap.

But since the GOP has said it plans zero cuts in the defense budget and that there will be no cuts for veterans or for border security, cutting everywhere else will be very deep. The NYT estimates that if those programs remained untouched, the GOP plan would cut the balance of federal spending by an amount of a 51% cut across the board.

Seems unrealistic.

Social Security checks could still be issued because a 1996 law provides a means of circumventing the debt limit. It allows the Treasury Department to pay Social Security benefits, along with Medicare payments, even if there is a delay in raising the debt ceiling. It allows for the Social Security and Medicare trust funds to be drawn down to keep those benefits flowing until the debt limit is raised, and the trust fund replenished. It also prohibits those funds from being used to pay for any other government programs.

In the past, the usual political rhythm of fiscal crises is that the GOP House stumbles around for a while, and then, right before the deadline, Senate Republicans and Mitch McConnell come off the sideline. They cut a deal with the Democratic president and pass the deal in the Senate with a big bipartisan majority. They then leave town with the hot potato squarely in the Speaker’s lap.

It’s questionable if this will happen in May, 2023.

Biden should address the nation after the Tuesday talks. How about an oval office address that lays out the facts, along with a call to action: Call your representatives and tell them to pass a clean debt limit bill. He could detail for the American people the cuts the GOP are demanding in return for raising the limit. He could also say that he is willing to negotiate in good faith on the budget with House Republicans as long as the debt ceiling is a separate matter.

The compromise might be to have a temporary debt ceiling increase to allow both to move forward together. Sadly, for McCarthy and the House Republicans, default seems to be preferable to compromise.

This is zero-sum politics with the highest stakes. At the end of the day, all paths lead to the same place: The US will need to find a way to pay the bills it has incurred as they mature.

The question is how much damage will have happened along the way.

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Sunday Cartoon Blogging – May 7, 2023

(The Monday Wake Up Call will be published on Tuesday this week.)

America has been waiting for more than a year for the Federal Reserve to get control over inflation. In that time, they’ve jacked up interest rates to over 5%. A year ago, raising rates that high seemed unthinkable, but here we are. Wages have also risen.

There was some damage: A few horribly managed banks collapsed. A couple of auto dealer-lender chains that specialized in selling overpriced used cars to subprime customers collapsed. And there were some fiascos in commercial real estate.

All of that has led the Fed to indicate that there could be a “soft landing” for our economy. But with the latest jobs growth numbers, maybe the Fed will have to keep circling the airport. In April, 253,000 jobs were created. There are now a record 155.7 million payroll jobs. Over the past 3 months on average, 222,000 jobs were created per month. So is a soft landing ahead?

Please raise your seat tables to the upright position and pass your trash to the attendant. On to cartoons.

Coronations aren’t just for the Brits:

(Wrongo watched the coronation of King Charles III yesterday. Seventy years ago, he also watched the coronation of Queen Elizabeth II  on a 9″ black & white Philco television. Yesterday’s was on a 55” Samsung.)

The reality about the GOP:

What to expect after the GOP talks with Biden about the Debt Ceiling:

Proud Boys found guilty, but who pulled the strings?

Kremlin complains:

Justice Thomas needs to be taller to take the ride:

Time to buy more cards:

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Prepaying Taxes? Don’t Be Stupid

The Daily Escape:

Saguaro in bloom, Gold Canyon, AZ – May 2023 photo by Karin Ingebrigtsen Hetsler

In the discussion about the Debt Ceiling, it’s become clear that America has a problem with tax collections, which are running behind what was forecast. While tax receipts were always expected to be below 2021’s robust levels, they are even weaker than forecast, down around 35% so far.

That means absent a deal between the Parties, we will hit the Debt Ceiling sooner than we thought. This is largely due to a weaker stock market and lower economic growth than the country had in 2021.

But it’s also true that America has an enormously complicated tax code, built by decades of lobbyists working with the Congress to carve loopholes into the Code to provide legal tax avoidance strategies to their corporate clients.

Imagine a world where corporations and individuals didn’t try to weasel out on their tax obligations to the government…Impossible, you say?

Well, consider Ukraine. We’ve been told that Ukraine is rank with corruption and a large informal economy. Both may be true but read what The Economist has to say about tax receipts during their war with Russia: (emphasis by Wrongo)

“After Russia invaded in February last year, Ukraine’s finance minister, Serhiy Marchenko, braced…for government revenues to “plummet”. He says he expected them to fall by roughly as much as economic activity. That did not happen. Although Ukraine’s GDP plunged by 29% in 2022, the state pulled in just 14% less than the year before.”

Of course the war led to drops in tax revenues from imports and tourism. Blackouts caused by Russian attacks on power plants and the grid disrupted automated reporting of taxable transactions. More from The Economist:

“What, then, is behind the state’s “unique results”, as an official puts it, in wartime revenue collection? One explanation is that firms and taxpayers, eager to support their country’s defense, are paying more tax than required.”

Still more: (brackets by Wrongo)

“According to Ukraine’s finance ministry, in March last year such donations came to 26b[illio]n hryvnias ($880m), rising to 28b[illio]n in May.”

Why are Ukrainian businesses and individuals motivated not to avoid taxes like in the US, but to make donations and pay taxes in advance? The Economist quotes a tax partner with Price Waterhouse Coopers, with responsibility for Ukraine:

“…if Ukraine wins, you’ve got your country; if Russia wins, thuggish authorities will take your money anyway, so why not help out now?”

A lawyer at a Ukraine law firm says that many of his corporate clients have asked for guidance on how to prepay taxes. And now a year later, the lawyer says that nearly all the 100-odd clients he serves have begun to prepay. According to the lawyer, efforts to seek loopholes to lower tax bills have decreased.

Finally, The Economist reports that Ukraine’s State Tax Service continues to receive payments, through its online portal, from the territories occupied by Russia (except for Crimea). Despite the pressure to pay Russian taxes, apparently, last year 2.3 million individuals and organizations in occupied areas paid $9.5 billion in taxes to Ukraine.

They are doing this despite the risk of retribution from their Russian overlords. Can you imagine anything like this happening in the shell of a country we call the United States?

There are other factors at work. Taxes on gas production were raised last year. The Economist quotes Danil Getmantsev, chair of the Ukrainian parliament’s Committee on Finance, Taxation and Customs Policy, who says that a crackdown on corruption also may have had something to do with it.

No one should think that Wrongo is saying that Ukraine is a better place to live and work than is the US. The key point is they are demonstrating that in a country that was thought to be barely unified before the war, it now acts as one. Try to imagine how, under similar circumstances what it would take for companies and citizens in the US to freely prepay their taxes. (Wrongo knows about the need in the US for some Americans to file quarterly returns, which is a form of prepayment).

Or imagine people willingly donating to the government in an effort to keep us free.

Nope. We’re addicted to fiscal gimmickry. Anything to pay less to the government. After all, Trump said not paying taxes showed that he was a smart guy.

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Immigration Reform Has To Happen

The Daily Escape:

Eastern Sequoia Canyon NP viewed from Mt. Whitney trail, CA – April 2017 photo by Peerman Craft Photography

The federal government is expecting a surge in migrants at the southern border after next week’s lifting of Title 42, a pandemic-era policy that has allowed the US to refuse to process asylum claims on public health grounds. In anticipation, the Biden administration is preparing to deploy an additional 1,500 troops to the southern border for 90 days.

Those troops are on top of about 2,500 who are serving there currently. None of the soldiers are armed. They are largely performing administrative tasks that free up Customs and Border Protection (CBP) staff to handle the anticipated surge of migrants.

This could be a critical political moment for Biden, who’s just launched his 2024 reelection bid. We seem to be on the verge of another potential border crisis, which brings the certainty of new attacks by Republicans. The GOP has been hammering the administration, saying Biden’s immigration plans are too little too late.

When Title 42 is lifted, CBP will rely on the existing Title 8 law, under which any individual who is deemed ineligible to be in the US faces a five-year ban on readmission – and criminal charges if found crossing illegally.

On Wednesday, US and Mexican officials agreed on new immigration policies. Under the agreement, Mexico will continue to accept up to 30,000 migrants from Venezuela, Haiti, Cuba and Nicaragua who are turned away at the US border; and up to 100,000 individuals from Honduras, Guatemala, and El Salvador who have family in the US will be eligible to live and work in Mexico.

The US is accepting 30,000 people per month from Cuba, Haiti, Nicaragua, and Venezuela for two years and offering them the ability to work legally, as long as they enter legally, have eligible sponsors and pass vetting and background checks. We’re continuing to turn away migrants from those four countries who cross the border illegally.

We’ve been following the same ad hoc approach to immigration for the past several administrations: We find a temporary solution that can handle a surge in migrants while not providing an open door for all who wish to enter the US.

We share this problem with most other rich countries. On Tuesday, the World Bank’s latest World Development Report said that about 184 million people across the world now live in countries where they’re not citizens. About 37 million of the total are refugees, a number that has tripled over the last decade.

Most of the transit happens through Central America before migrants reach the southern US border. Border security isn’t rigorous enough there to stem the northward flow. Recognizing that problem, the administration announced that it will set up regional processing centers for migrants to apply to come to the US. These centers will be located in Colombia and Guatemala, two countries migrants often pass through on their way to the US-Mexico border.

Deciding who gets to stay in the US is a bigger challenge when the migrants have few job skills and they’re not seeking asylum. We differentiate between asylum seekers and economic migrants. With a current backlog of 1.3 million asylum cases to be heard (equal to 4.25 years), the system is clearly broken.

The question is what should we do to stop/slow the flow of hundreds of thousands of migrants attempting to cross our southern border? Bloomberg shows the scale of the problem:

What’s the answer to this? Wrongo doubts that there is ONE answer.

Do we create a kind of reverse Berlin Wall like Trump tried to do? If it became a militarized border, we could surely cut down on the migration and the southern border would be controlled. This is the wet dream of the anti-immigration hawks. But the cost of building and manning the wall with soldiers would be ruinous, and to date, militarized borders aren’t who we are as a country.

Do we undertake nation building in Central and South America, hoping that those countries can become more attractive to their potential migrants? America’s track record with nation-building is terrible. And think about the cost, which could be far greater than the cost of a militarized wall. Think about how much money would be skimmed into the pockets of local politicians.

But we can’t just leave our borders open. Open borders are a sign of a government that has lost control of its geography. It would ultimately lead to a reality that no American wants. This is the specter that instills fear into most Americans about the growing migration problem.

It appears that we’re going to continue using an orderly throttling and vetting process at the southern border to decide who among this new surge of migrants is allowed into the country. The bigger question is what should our immigration policy be going forward?  We haven’t had immigration reform since the 1980s. We’re unlikely to have reform any time soon.

Biden and the Democrats are vulnerable if they can’t articulate a plan (that they can back with numbers) that shows the American people what we’re doing to control immigration. Developing a clear position on immigration could draw significant public majority support.

There are plenty of Democrats and Independents who are strongly against migration. So Biden needs to show progress soon by demonstrating that we’re controlling the problem.

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