Category: Debt Ceiling Debate

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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Monday Wake Up Call – May 1, 2023

The Daily Escape:

The Schooner Surprise, built in 1918, is listed on the National Registry of Historic Places, Camden Harbor, ME – April 2023 photo by Daniel F. Dishner

A few words about Biden, McCarthy and the Debt Ceiling. We all know that the clock is ticking on a US default of our debt sometime in June. There are multiple opinions in DC about who has the leverage in the coming debate between the House GOP, Senate Dems and Biden.

The institutionalist view is that McCarthy and the House GOP have taken the Debt Ceiling hostage and they plan a hostage negotiation with Biden. Some think that McCarthy is doing it badly. Others take the darker view that the Republicans are actually trying to crash the economy so that America blames Biden and returns the GOP to power in 2024.

If you think, based on what we’ve seen so far, that the GOP doesn’t plan to negotiate, that like terrorists, they will kill as many hostages as possible until their terms are 100% met, what they’re doing makes sense.

The NYT reports that McCarthy has been open about the fact that this is not a real bill:

“This bill is to get us to the negotiations….It is not the final provisions, and there’s a number of members who will vote for it going forward…say there are some concerns they have with it. But they want to make sure the negotiation goes forward because we are sitting at $31 trillion of debt.”

For the umpteenth time, we’re watching a game of chicken about raising the debt limit. There are something like 45 days until the Debt Ceiling must be raised. You know the “or else” sentence that follows: Or else, the US will face potentially calamitous economic consequences.

McCarthy’s bill may get the Republicans a seat at the table in the negotiations over raising the debt limit, but Biden’s position remains: “Send a clean debt limit bill, or pound sand.”

Has McCarthy overplayed a bad hand? If he had failed to get anything passed he would have looked completely incompetent. Nevertheless, passing a bill filled with devastating cuts and manifestly unpopular positions that will be difficult to defend except to the Party faithful, it is arguably worse than getting nothing done at all.

If the Dems are smart they will take the GOP’s messaging bill and come up with a message that has broad appeal that can be used to hurt the GOP in swing districts for the next two years. McCarthy’s bill shows that Republicans’ ultimate goal is to gut health care, food stamps and education, and even veterans benefits. The Vote Vets organization is out with a message:

“And now, it is the fringe MAGA party that voted for a budget that would gut health care and support for our Veterans. 217 of them voted for it, and just 4 against. They talk tough when it comes to Military action, but go AWOL when it’s time to take care of those who served.”

This bill isn’t intended to pass. Republicans had an opportunity to aim a productive salvo at swing voters to convince them that GOP majorities can deliver normalcy, and give them some sign that the Party was tacking away from the extremist positions that alienated voters in the last midterm elections.

Instead, their message is that the Party is about owning the libs and slashing aid for veterans and the poor. The GOP can’t even fake being a Party interested in governing anymore. That’s bad news for McCarthy, the man chained to the GOP canoe that’s heading over the falls. As Succession’s the late Logan Roy would say “You are not serious people.”

Instead the GOP’s message to the world is that America’s commitment to paying its debts is contingent on an underlying political negotiation about the size of the budget deficit.

  • Republicans believe they can win the political standoff by making Biden and Democrats look petty by refusing a basic negotiation.
  • Democrats also seem to be betting that Senate Republicans will step in as more mature political actors and defuse this situation.

The NYT quotes Sen. Chuck Schumer, (D-NY) and majority leader:

“Discussion of spending cuts belongs in talks about the budget, not for bargaining chips on the debt ceiling….The speaker should drop the brinkmanship, drop the hostage taking, come to the table with Democrats to pass a clean bill to avoid default.”

Time to wake up America! This kabuki play will run through at least mid-June. It’s a DC big boy fight. And we the little people, will have no say until November 2024 when we can escort the GOP flame throwers out of the House. To help you wake up, watch Crowded House perform “Don’t Dream It’s Over” from their first (of three) farewell tours, played at the Sydney Opera House in November 1996:

One of the greatest songs of the 80s and it still hits hard today.

Sample Lyrics:

There is freedom within, there is freedom without
Try to catch a deluge in a paper cup
There’s a battle ahead, many battles are lost
But you’ll never see the end of the road
While you’re traveling with me

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Biden’s Speech Showed His 2024 Strategy

The Daily Escape:

Sea smoke at Portland Head Light – February 2023 photo by Rick Berk Photography

(The Wrongologist is taking a few days off. The next column will appear on Tuesday, 2/14. Enjoy your nachos and jalapeno dip on Sunday.)

Wrongo and Ms. Right watched the State of the Union (SOTU) extravaganza. You have already read many insightful observations, so Wrongo’s facing the daunting task to come up with something original for you. Let’s start with some data. CNN’s flash poll of SOTU viewers found that 72% had a positive reaction to Biden’s speech, while:

“71% said Biden’s policies will move the country in right direction — up 19 percentage points from before his speech.”

That’s a win. Politico reported that:

“…the White House is ecstatic that the GOP’s ‘boos, taunts, groans, and sarcastic chortles’ helped Biden paint them as ‘unreasonable and chaotic.’”

It was the most confrontational SOTU address ever, but Biden seemed up to handling the catcalls. Like CNN, most pundits gave Biden good marks for the speech. It ran from “best Biden speech ever!” to “Biden Kills It” to Kate Riga of Talking Points Memo tweeting:

Everyone’s talking about how House Republicans underestimated old man Biden. His speech was an early look at his 2024 general election strategy. Biden is a career politician. Maybe he learned somewhere along his way to the Oval Office that you are only as unpopular as your enemies are popular. In that case, he’s a winner.

Based on Sarah Huckabee Sanders’ GOP rebuttal, Trumpists and their ilk plan to treat 2024 as another braying appeal to their grievance-filled base. They’re adding a rich creamy layer of culture war to help spin up their base, along with their evergreen awfulizing about the national deficit.  From JV Last:

“Where Biden spent the majority of his speech talking about steel workers, bridge projects, insulin prices, and junk fees, Sanders insisted that Biden has surrendered to “a woke mob that can’t even tell you what a woman is.” And that “his administration has been completely hijacked by the radical left.”

OTOH, Biden’s 2024 strategy won’t be a re-run. It’s different and new. As Eugene Robinson says in the WaPo:

“The call to action during President Biden’s State of the Union address on Tuesday — “Let’s finish the job” — would never be mistaken for soaring poetry.”

That also resonated with Jon Last, who agrees that “Finish the Job” will be the campaign’s guiding theme. Here are the implied pillars of Biden 2024:

  • The economy has to keep growing and it must help everyone.
  • The deficit must be cut to the extent possible over the next six years.
  • Biden’s great accomplishments were achieved with bipartisan help of centrist Republicans.
  • The government needs to keep funneling money to small towns and rural areas, something that he started with the infrastructure bill.
  • The risky ideas of the MAGA Republicans who plan to torpedo Social Security and Medicare will be front and center in the campaign.

Instead of the Republicans’ embrace of the culture wars, here’s what Biden had to say: (emphasis by Wrongo)

“My economic plan is about investing in places and people that have been forgotten. Amid the economic upheaval of the past four decades too many people have been left behind or treated like they’re invisible.

Maybe that’s you watching at home.

You remember the jobs that went away. And you wonder whether a path even exists anymore for you and your children to get ahead without moving away. I get it.

That’s why we’re building an economy where no one is left behind. Jobs are coming back; pride is coming back because of the choices we made in the last two years.

This is a blue-collar blueprint to rebuild America and make a real difference in your lives.”

A “Blue-Collar Blueprint” is a smart way to brand your 2024 agenda, instead of some focus-group tested acronym or clever name. Sometimes it just makes sense to say what you mean. As Ron Brownstein wrote in The Atlantic: (brackets by Wrongo)

“He [Biden] repeatedly noted how many of the jobs created by his economic agenda are not expected to require a four-year college degree.”

Jon Last contrasts Biden’s strategy with the GOP strategy, which he thinks is doomed to failure:

“Republicans believe they can increase the number of votes from one group of Americans (their base) by….attacking another group (the coastal elites). Further, Republicans believe that the number of votes they will win through this use of negative polarization will be greater than the number of votes they might otherwise gain by trying to empathize with and persuade the out-group.”

That’s a re-run of Trump 2020.

Biden isn’t going to play defense in 2024. The GOP’s core strategy is always to sway working-class voters and use that political base to implement policies that enrich corporations and the wealthy at the expense of their base.

If Biden can find a way to drive a wedge into that Republican coalition, and peel off 3%-5% of their working-class supporters, it would translate into a big victory in 2024.

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Could A Discharge Petition Force The House To Vote On A Debt Ceiling?

The Daily Escape:

Cold morning on the Snake River, Grand Teton NP, WY – January 2023 photo by Laura Phelps Sundria

We haven’t written about discharge petitions in a few years. But with the likely control of much of the House’s agenda by the Freedom Caucus, they may become important. From the WSJ:

“Democrats and some centrist Republicans are in early, informal conversations about dusting off a rarely used parliamentary procedure that could force a vote to raise the nation’s borrowing limit, ahead of a showdown in coming months over government spending. The process, known as a discharge petition, requires 218 signatures, regardless of party—a majority of the House—to dislodge a bill from committee and move it to the floor.”

The tactic is seen as a way to potentially circumvent efforts by House GOP leadership and the Freedom Caucus to block a debt-ceiling increase. Congress must raise the debt ceiling to allow the Treasury Department to issue more debt to pay for existing US government financial obligations. At stake is the government’s creditworthiness, which also undergirds much of both the American and global financial system.

A default or even the expectation of a default on the US debt, could trigger a lowering of the US credit rating, raising our government’s borrowing costs for years. It could also bring financial panic or tip the economy into a recession. More from the WSJ:

“…McCarthy reiterated Tuesday he wants to use the debt ceiling as leverage to cut spending. ‘This is our moment to change the behavior to make sure, that hardworking taxpayer, that we’re not wasting their money,’ he said on Fox News.”

Playing politics with the debt limit is stupid. Hold that thought and read this from Ryan Grim at the Intercept: (brackets and emphasis by Wrongo)

“When the House Republicans enacted new rules for the 118th Congress on Monday [they included a rule] that preserves the traditional right of rank-and-file members of Congress to bypass House leadership and put legislation on the floor directly if they obtain the signatures of a majority of the chamber. This opens a handful of legislative opportunities for Democrats, despite Republican ideological cohesion.”

He means a discharge petition. Normally, the House Majority Leader sets the floor schedule, in collaboration with the House Rules Committee, but a discharge petition can automatically pull a bill from committee and move it to the floor. Since Democrats currently hold 212 seats in the 118th Congress (one is vacant), if they can find six Republican votes, they could bring a bill to the floor. For most of the Democrats’ agenda, six opposition votes might be a high hill to climb.

But a discharge petition to raise the debt ceiling is one tool that could work. It would give any like-minded Republicans a route around their own leadership and could be the way the House votes to avert a financial crisis (assuming Democrats could find six Republicans who are unwilling to risk a US government debt default).

That may be possible since there are 18 House Republicans who were elected last fall in districts Biden won in 2020.

If a discharge petition is to be used as a workaround for the looming debt crisis, Democrats would have to move fairly quickly. The rules to bring a bill to the floor of the House require that first, the bill would have to be introduced and referred to committee, according to House rules and precedents. Then 30 legislative days have to pass. A legislative day is one in which the House is in session and then adjourns.

If 218 signatures are collected, an additional seven legislative days need to pass, at which point a motion to discharge the bill would come to the floor on either the second or fourth Monday of the month.

Any motion to discharge filed in February or March ought to be ready for a floor vote by summer. Although the Treasury Department hasn’t given an exact date when default will occur, the expectation is that it will occur in the summer.

Discharge petitions have been successful in the past. It has played a role in shaking loose some historic pieces of legislation, including the Civil Rights Act of 1964 and Equal Rights Amendment in 1970. More recently, a successful petition in 2015 reauthorized the Export-Import Bank, which the Republican House majority adamantly opposed.

We’ll see if McCarthy will stand up to his cobbled together majority and bring a clean debt limit bill to the floor. If not, we’ll see if there are at least six Republicans in the House who have backbones and love their country.

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Monday Wake Up Call – December 12, 2022

The Daily Escape:

Oak Creek in snow, Sedona, AZ – November 2022 photo by Ray Redstone Photography

What is it with our national politicians? There are only a few days left for the House and Senate to increase the country’s debt limit, but both Parties have been screwing around, and now it looks like they may punt the problem to the incoming Congress.

From the NYT:

“Congressional leaders have all but abandoned the idea of acting to raise the debt ceiling this month before Democrats lose control of the House, punting the issue to a new Congress when Republicans have vowed to fight the move, and setting up a clash next year that could bring the American economy to the brink of crisis.”

The plan had been for Democrats to act during the lame-duck post-election session to increase the legal borrowing limit. That would take advantage of the Dems’ final month of control of both Houses of Congress. It would head off a pissing contest with Republicans when they take over the House in January. Republicans have threatened to block the increase once they are in charge of the House. They plan to hold it hostage until the Democrats agree to substantial cuts to domestic spending and Social Security, Medicare, and Medicaid.

There are several problems here. The debt ceiling which the US will reach sometime next year; the expiration of the last stopgap funding bill that expires on Dec. 16; and passing an overall budget for the current fiscal year.

The Dems had planned to attach a series of other priorities to the big funding package, including the reform of the Electoral Count Act (ECA), a critical reform that helps prevent election denier shenanigans in 2024. On December 3, Wrongo warned that this was a high risk gambit: (emphasis by Wrongo)

“…the Democrats need Mitch McConnell and other GOP Senate leaders to agree to attach ECA reform to a spending bill and enlist the 10 GOP Senators to support it. That means the GOP controls whether this bill is enacted.”

Now we’re hearing that the leadership of both Parties can’t get to an agreement on the big package. More from the NYT:

“Republicans and Democrats remain at odds over how to split funding between military and social programs. Talks are set to continue through the weekend ahead of the Dec. 16 deadline, though aides said lawmakers could pass a one-week stopgap bill to give negotiations additional time.”

So America’s Christmas present from Congress will be no Electoral Count Act reform and no new budget, and no debt ceiling increase. Instead, we’ll get another Continuing Resolution that will fund the government until early in 2023 when the Republicans will try once again to toss the US credit rating off a high cliff with their far Right ideological theories on US government debt.

Under the last debt limit increase passed late in 2021, the federal government can borrow $31.381 trillion. Total national debt has been slightly above that level, but since a small portion of the debt is exempt from the debt ceiling, we’ve stayed in compliance. As of last week, total debt subject to the debt limit got as close as $31.345 trillion.

The consequences of failing to extend the debt limit are immediate and bring great risk. For example, it could force the government to choose between paying Social Security checks or paying the interest due on the country’s debt. That happened in 2011, when Congressional Republicans pressured President Obama to accept similar spending cuts in exchange for raising the debt limit.

That standoff led to downgrading the credit rating of the US. It rattled American investors and the US economy. This time, it could have global economic implications, given that the world is facing a global recession.

Before you say: Well, these birds learned this lesson back then, so they surely will make a deal this time. Consider that Goldman Sachs reports that less than a quarter of Republicans and less than a third of Democrats who will serve in the House in 2023 served there in 2011.

Time to wake up, Congress! Sure, some of you are very old, and want to go home for the holidays. But we pay you to fix things, not to make them worse. Schumer and Pelosi should make them all stay in DC until they vote on what the country needs.

To help them wake up, watch, and listen to a live version of the Allman Brothers’ “Midnight Rider” with Vince Gill, Gregg Allman and Zac Brown from a 2014 performance at the Fox Theater in Atlanta. One of the wonders of live music is what happens when artists collaborate in a live setting:

We’re also seeing Chuck Leavell on keyboards and Kenny Aronoff on drums.

Sample Lyric:

And I don’t own the clothes I’m wearing
And the road goes on forever
And I’ve got one more silver dollar
But I’m not gonna let ’em catch me, no
Not gonna let ’em catch the midnight rider

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It’s a Big Week for Democrats

The Daily Escape:

Early fall foliage, Long Pond, Rutland, MA – September 2021 photo by Jurgen Roth Photography

Charlie Sykes, talking about what will be a jam-packed week in Washington DC:

“This is going to be a helluva week. Democrats in Congress may not be able to save the Biden presidency, but they can destroy it
”

There are clear differences among Democrats on social spending priorities and the correct size of the pending human infrastructure spending bill. Several Democratic House members have vowed not to support both of Biden’s bills, unless they get what they want included. Along with threats by Sens. Sinema and Manchin not to stand with Democrats in the Senate, both House Speaker Pelosi and Senate Majority Leader Schumer can’t be happy trying to lead their fractious caucuses.

And among these efforts to thread the needle, are the twin crises of a Thursday cut-off of federal spending and a subsequent (possible) default on the nation’s debt.

Funding for the federal government is set to run out on Thursday at midnight. Senate Democrats will move a stopgap spending measure forward to position for a vote on the House-passed short-term funding bill. That would keep federal agencies open until Dec. 3, while suspending the debt limit until Dec. 2022.

Suspending the debt limit for another year is a great idea, but Senate Republicans are certain to tank that proposal. The likely scenario is that Senate Dems will remove the debt-limit provision and pass the bill with bipartisan support. Then, the House passes the bill, Biden signs it, and a government shutdown is averted for another two months.

But that leaves the debt-limit problem unresolved. We will reach that in early-mid October.

Mitch McConnell and Senate Republicans won’t support an increase in the debt limit. They say that Democrats should lift the cap on government borrowing on their own, as a part of their reconciliation package. But that creates a political advantage for the Republicans. And besides, it could take weeks, enough time to bring the country close to defaulting on its obligations. And it isn’t certain that Schumer has the votes to pass it without Republican help.

Only one thing’s certain: No one knows what’s really going to happen.

On infrastructure, Pelosi announced that debate on the Senate-passed bipartisan infrastructure bill would start on Monday. A House vote on it is slated for Thursday. House Democrats are also trying to make progress on the big reconciliation package.

Pelosi’s challenge is to keep progressives from walking away from the big bill and tanking the infrastructure bill. Democratic leadership also must appease Senate centrists about the size of the big infrastructure bill, which they say is too large.

House Democrats will meet late on Monday, (shortly after Wrongo posts this). Pelosi wants the members who’ve drawn lines in the sand about the human infrastructure bill (and who haven’t shown up for caucus meetings lately) to be there. From Politico:

“I urge the fullest participation of Members and hope that as many of us can be there in person as possible…”

These are strange days for Democrats. As a Sunday WaPo article said, “Political Suicide is not a Strategy”. In addition to the obsessive focus on securing the necessary votes in the House and Senate, the focus on the human infrastructure’s price tag is the essence of bad political messaging. Few Democrats stand up to say that the $3.5 trillion will be spent over 10 years, amounting to only 1.2% of GDP over that period.

Worse, focusing on the dollar amount takes attention away from the value in the bill for children, families, education, health care, housing, and climate. From Rep. Jim Himes (D-CT):

“When Democrats allow a debate to be only about a number, it’s like talking about a Christmas party and only discussing the hangover.”

The WaPo quotes Sen. Chris Van Hollen (D-MD) as saying that the discussion is getting things exactly backward:

 “We should work from what policies we want to enact, rather than an arbitrary number.”

No one can forecast how this will all work out. It would be dandy if Republicans supported the debt ceiling increase.

It would also be dandy if they accepted the results of the 2020 election, got vaccinated and stopped passing voter suppression laws. A rational and patriotic Party would do those things. But those are a bridge too far for today’s Republican Party.

So, Democrats are on their own. We’ll soon see if they can stand together as a team to avoid disaster and deliver on Biden’s promises.

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Sunday Cartoon Blogging – September 26, 2021

Unexpectedly, Wrongo found the time to post a few cartoons. Yesterday, we saw the musical “Six” on Broadway, along with a very enthusiastic packed house. The audience had to show proof of vaccination, and wear masks for the performance.

The story is about the six wives of England’s King Henry VIII, if they had turned into pop stars, and were speaking today about their lives with fat Henry.

We saw it two years ago in London, arranged by Connecticut’s invaluable Goodspeed Musicals. It has made a fine relocation to New York. We thought the cast’s singing was better here, as was the all-woman backing band. The message, of a transition from female victimhood to female empowerment was very well received by the audience, which included many teen and pre-teen girls.

It appeared that most theater district restaurants were doing acceptable business, although some that we had frequented in the past had permanently closed. The parking lot we always use had fewer than half the cars we would normally see. This is probably explained by the fact that many of Broadway’s shows won’t reopen for a few more weeks. On to cartoons.

The Arizona recount didn’t go well for the GOP. And never call it an “audit”:

Republicans think blowing up America’s credit rating is hilarious:

This is who McConnell and GOP are. They’ve become terrorists, trying to kill us by blowing things up.

It’s the Republican playbook: Block everything no matter the consequences and then blame someone else:

Biden’s tough trick:

Biden said he knew how to forge consensus. We’ll soon see:

Border Patrol in Texas has additional duty:

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Don’t Forget the Debt Limit

The Daily Escape:

After Hurricane Ida, Grays Beach, Cape Cod MA – photo by Casey Chmieleki

With all the screaming headlines about Afghanistan, Texas anti-abortion laws and the march of the Delta variant, you probably missed that the US government is running out of money. Reuters explains it:

“Leaders of the Democratic-led Senate and House of Representatives are expected to force votes to lift the $28.4 trillion debt limit in late September. The limit was technically breached on July 31 but is being circumvented by Treasury Department “extraordinary” steps.”

This is an unavoidable political issue for both Parties, because while people dislike the idea of more government debt, they really like the goodies that come along with that debt.

This is happening while the Democrats are jousting with each other, trying to find 50 Dem votes for the bipartisan infrastructure bill, a budget resolution, and a budget reconciliation bill. But they also need to work on increasing the debt limit. From Ed Kilgore:

“The debt limit was suspended in 2019 as part of a two-year budget deal between Congress and the Trump administration intended to postpone major fiscal fights until after the 2020 elections. The deal expired on August 1, 2021, with the effect that the debt ceiling was adjusted upwards to the level of debt as it exists right now.”

Accruing debt above $28.43 trillion requires an increase in, or suspension of, the debt limit. At current levels of expenditure, the government’s checking account, called the Treasury General Account (TGA) at the Federal Reserve Bank of New York, will hit zero in mid-October. It can be extended by “extraordinary measures” into November, which is when the US government would begin defaulting on its bills.

The politics of government funding and increasing the debt limit are always a farce, and it’s no different this time. Republican Senate Minority Leader Mitch McConnell has already announced that Democrats cannot expect a single Republican vote for a debt limit measure right now.

That’s a political problem for Democrats, because a debt limit increase or suspension is subject to the Senate filibuster, requiring 60 Senate votes unless there’s some way around — like including it in a filibuster-proof budget reconciliation measure.

McConnell helpfully suggested that Democrats should just include a debt limit increase in the Fiscal Year 2022 budget-reconciliation bill. But that would guarantee Republicans could “blame” Democrats in the 2022 mid-term election for an increase in government debt.

The foul Republican tradition of trying to hold Democrats hostage when an increase in the debt limit is required, only goes back to the odious Newt Gingrich in 1996. We all know how the farce ends: Congress will avoid default at the last possible minute, just as it has done 78 times without fail since 1960, after concessions are extorted from the other side.

It’s a farce because Congress has already appropriated the funds to be spent and to be borrowed. It has told the Administration in detail how to spend those funds. Now Republicans in Congress want to say (again): “Nope, you can’t borrow the money to cover what we told you to spend”.

Republican Congress critters know we must pay our bills, but for myriad cynical reasons  ̶  or just plain political incompetence, they keep the issue alive budget year after budget year, and vote after vote.

The debt limit shouldn’t be increased; it should be repealed. The passage of a budget or any other legislation has an implicit expectation that the government will need to raise x and/or spend y. It’s really that simple. Congress should bite the bullet, and never again need to fight about it.

When they debate the debt ceiling, remember the only reason it’s happening is because one half of our government is good at politics but has no ethics, morals, or sense of patriotism, while the other half of our government is breathtakingly bad at politics.

Eventually, it will be obvious that the Republicans are really fighting about increasing taxes on corporations and the ultra-rich.

We all would be better off if this bullshit ended, and Congress got on with real work.

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Can Trump Legally Declare a National Emergency?

The Daily Escape:

Waterton NP Alberta, CN -2019 photo by lostcanuck. Wrongo and Ms. Right visited Waterton in 2016, it’s a very beautiful spot.

Wrongo watched part of the two NFL wild card games on Sunday. Vectoring away during commercials, he saw a 2020 campaign ad by Trump on CNN that said in part:

Drugs, terrorists, violent criminals and child traffickers trying to enter our country — but Nancy Pelosi and Chuck Schumer care more about the radical left than keeping us safe. The consequences? Drug deaths. Violent murder. Gang violence. We must not allow it


Wrongo thought, “Wait! What?” Then a “paid for by Trump 2020” note appeared at the bottom of the screen.

Trump is setting us up. He’s now made his shutdown part of the 2020 narrative. And, locking out federal employees is now the official position of the GOP, not simply that of his Trumpitude.

This is part of Trump’s plan to lay the groundwork for his “National Emergency” special powers. The NYT had an interesting article by Bruce Ackerman, a Yale law professor, about the legality of such an action:

While it is hard to know exactly what the president has in mind, or whether he has any conception about what it would entail, one thing is clear: Not only would such an action be illegal, but if members of the armed forces obeyed his command, they would be committing a federal crime.

Trump is again hyping the dangers at the border, as he did with the caravan in the weeks leading to the midterm election. Now, his spokespersons, notably Sarah Sanders on FOX and Homeland Security head Kristjen Nielsen, at her private meeting with the House Homeland Security Committee, have falsely claimed that more than 4,000 terrorists were apprehended in 2018 along the southern border.

According to FOX, all of these “terrorists” were apprehended at airports, not at border crossings.

Sanders, Nielsen and Trump are implying that a wall will stop terrorists. There’s no question we need to be vigilant about terrorists and illegal border crossings, but a wall is not going to stop them, or really even deter them. We still need to have to have advanced cameras, drones, and personnel patrolling because determined people will find ways around the wall.

To continue the hype, Trump announced that he will address the nation on Tuesday night before traveling later in the week to the U.S.-Mexico border. Trump plans to address the nation from the Oval Office, in a “first” for his presidency.

All of this would seem ridiculous if not for Trump’s desire to win at any cost.

There is a chilling article by Elizabeth Goitein of the Brennan Center in The Atlantic, in which she says that any president’s ability to evoke these sorts of emergency powers is practically unfettered:

The moment the president declares a “national emergency”—a decision that is entirely within his discretion—he is able to set aside many of the legal limits on his authority.

Goitein goes further:

The moment the president declares a “national emergency”—a decision that is entirely within his discretion—more than 100 special provisions become available to him. While many of these tee up reasonable responses to genuine emergencies, some appear dangerously suited to a leader bent on amassing or retaining power. For instance, the president can, with the flick of his pen, activate laws allowing him to shut down many kinds of electronic communications inside the United States or freeze Americans’ bank accounts.

As an example, Trump could seize control of US internet traffic, impeding access to certain websites and ensuring that internet searches return pro-Trump content as the top results.

It isn’t possible for Wrongo to resolve the viewpoints of Elizabeth Goitein and Bruce Ackerman. There is a long history of judicial deference to the executive branch on national security issues. It will ultimately come down to whether the five conservative Supreme Court Justices think they have the power to step in and overrule a president who clearly concocts a fraudulent emergency.

Sorry to scare everyone, but it is absolutely unclear how this will be hashed out by the Supreme Court.

Don’t bet the house on them making the right decision.

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Send Establishment Democrats to the Bench

The Daily Escape:

City Hall Subway Station, NYC – via @themindcircle

We live in disorienting times. Disorienting in that our society, and our values, are in motion. We are no longer anchored by social mores, beliefs, or any shared vision of the future. Our politics are evolving as well. We can’t simply blame Trump, or those who elected him for taking us to this scary place. The bipartisan consensus that’s ruled this country since the 1940s — neoliberal domestic policy, and neoconservative foreign policy ─ no longer produces the same results for our citizens that it has produced since the Eisenhower era.

Establishment Democrats bear some of the blame. And looking forward to the mid-terms and beyond, they have failed to do the simplest work — forming a worldview, then persuading others about their vision, and the steps to achieve it.

We can also blame establishment Republicans, but they have collapsed. The new right is much farther right, more authoritarian, and whiter. And who would have thought they would be the pro-Russia, anti-FBI, anti-DOJ, and (maybe not a complete surprise), the pro-police state party?

History shows that when society turns like this, the establishment parties can disappear, as did the Federalists and the Whig parties. And when one party changes, the other must as well. After Lincoln, neither the Republicans, nor the Democrats, were the same parties.

Perhaps it’s time to take these words in the Constitution to heart:

…to secure these rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed…

Therefore, if the Dems are to win back the hearts and minds of the people, regardless of what the banks and corporations want to do, Government must be the advocate for the People.

That requires that our political parties confront the banks, corporations, military contractors, and the other oversized creatures that feed at the government trough.

Is that something that the establishment Democrats (Wrongo likes calling them the “Caviar Dems”) are willing to do? They used to champion social and economic justice, but not so much today. Today, they follow the same neo-liberal economic policies that Republicans champion.

And with few exceptions, they are as neo-conservative on foreign policy as any Republican.

Republicans have undergone a different mutation. They celebrate the globalized economy, and support the domestic gig economy as a means of growing corporate profits. They still celebrate Christian values, so controlling Supreme Court appointments is their great achievement, along with ruinous tax cuts.

America’s corporate tax revenues are going down, while social and infrastructure costs keep rising. So far, under both parties, government has continued to spend money it doesn’t have. It borrows, and pretends that everything is under control.

Now, after 10 years of economic expansion, we continue to pile up deficits. What’s going to happen in the next recession? The truth is, we are poorer, and weaker, as a country than we think. But few politicians are willing to help us face reality.

We see both Bernie Sanders and Alexandria Ocasio-Cortez, the Democratic nominee for Congress in NY, describe themselves as socialists. But, in fact, that’s not what they are. Merriam-Webster defines socialism as:

Any of various economic and political theories advocating collective, or governmental ownership and administration of the means of production and distribution of goods.

Obviously, they hope to take over the corporate-friendly establishment Democratic Party, but if you call yourself a socialist, then, at a minimum, you need to advocate for government ownership of the means of production, i.e., industry. You’re only a socialist to the extent that you advocate that.

Will Bernie or Alexandria nationalize General Motors, Apple, or ExxonMobil? No.

Even advocating for “Medicare for all,” isn’t socialism. Neither Medicare, nor other single-payer programs like Medicaid, are really socialized medicine. No one is advocating for an actual government takeover of hospitals, or turning doctors into government employees. If they really wanted socialized medicine, their cry would be “VA for all,” not “Medicare for all.”

Sanders and Ocasio-Cortez are social democrats. In a social democracy, individuals and corporations continue to own the capital and the means of production. Wealth remains produced privately.

But taxation, government spending, and regulation of the private sector are much more muscular under social democracy than is the case under today’s neo-liberal economic system.

Joel Pett has a great illustration of the difference between Sanders/Ocasio-Cortez and Republicans:

It’s time for the Dems to change direction. Carry the “Medicare for all” banner proudly. Work to end income inequality. Work to add jobs for the middle class.

Send the establishment Democrats to the bench.

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