Category: Divided Government

Trump Could Be President Even While Serving Time

The Daily Escape:

First fall foliage, Cox Brook, Northfield Falls, VT – September 2023 photo by John H. Knox

First, although we may know if Trump has been convicted prior to the 2024 election, it’s highly unlikely that he would be serving time by then, because his convictions (if any) will be appealed. The appeal process will take us well beyond when the Electoral College votes are counted in DC.

Second, The Constitution (before it was amended) contains just three requirements to become president: the person must be a natural-born citizen of the US, 35 years or older and a resident of the US for at least 14 years. That’s it.

In 1868, the 14th Amendment added Section 3 of the Fourteenth Amendment to the original text that:

“no person shall 
 hold any office, civil or military, under the United States 
 who, having previously taken an oath 
 to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.”

UCLA law professor Richard L. Hasen, a leading expert on election law, told CNN that Trump has a path to serving as president if he wins the election in 2024: (emphasis by Wrongo)

“The Constitution has very few requirements to serve as President….It does not bar anyone indicted, or convicted, or even serving jail time, from running as president and winning the presidency,”

And while some states prohibit felons from running for state and local office, those laws do not apply to federal elections. More from Hasen, on whether a president may serve from prison.

“How someone would serve as president from prison is a happily untested question…”

If Trump were in jail and prevented by law from leaving jail while his sentence was carried out, that would make running the government impossible. It wouldn’t necessarily prohibit him from serving as president from a cell, at least until he could pardon himself, another untested loophole.

If he tried to pardon himself, or to commute his own sentence, we’d wind up at the Supreme Court. From the NYT:

“Either action would be an extraordinary assertion of presidential power, and the Supreme Court would be the final arbiter of whether a “self-pardon” was constitutional.”

Trump would certainly sue to be released from jail, saying (correctly) that imprisonment prevented him from fulfilling his Constitutional obligations as president. Trump’s lawyers would argue that keeping a duly elected president in prison would be an infringement by the judicial branch on the operations of the executive branch. Again off to the Supremes we’d go.

So time for a few brief reminders: Trump faces no significant opposition to winning the 2024 Republican presidential nomination. Plan A among those who really don’t want Trump to win is to say:

“…he will lose in the general election.”

And there’s no Plan B. So, what will your options be if he wins? In general, your options are: Knuckling under, taking part in political violence, or leaving the country. And understand that, regardless of how submissive you are, the number of people who will die in police custody or while “resisting” will go way up. Let’s take your options one at a time:

  1. Leaving the country is something only rich people can do and it wouldn’t dislodge Trump. It will make him more secure.
  2. Political violence is personally risky. It requires moral compromise that makes our regular politics look almost pristine. And unless it’s large and well organized, it will fail.
  3. Knuckling under to tyranny will probably be the response of most Americans, even though most would say that’s incompatible with their conscience.

But all that said, Ukraine’s limited success against a superpower shows that using today’s technology makes it relatively easy to hold large swaths of a country despite the other side’s having a much stronger military.

Wrongo thinks that after a Trump win in 2024, US citizens will have to think seriously about how to handle life under an authoritarian regime. Trump will start out with a soft form of authoritarianism. But later? Who knows what it becomes. A lot of people around the world live under authoritarian regimes, so while it’s awful, it’s also survivable for most people.

And think twice about resistance. As a thought experiment, list out the historical examples of a citizenry that  successfully resisted a fascist takeover once the fascists had a firm grip on the judiciary and half of the legislatures.

America has one great shining example of what not to do when Bush v. Gore was decided in 2000. No Democrat (looking at you Bill Clinton!) told the Supremes to fuck off. Even Gore didn’t say “just keep on counting” in Florida. Instead, he crumbled. In a democracy, no court should ever tell the political branch to stop counting votes.

That election was stolen, but Democrats collectively just let it happen. Worse, two years later almost all of the Democrats in Congress voted for Bush’s nasty authoritarian terror bills and a war to avenge 9/11.

Wouldn’t it be much better this time around to make sure Trump doesn’t get the votes of any of your friends, family or neighbors? And better yet, that you get most of them out to vote?

Please don’t plan on sitting back and waiting for a conviction to deliver us from Trump. Why is it in the DNA of Democrats to keep looking for some external solution to our political problem?

Wrongo is an elderly white, married, upper-middle class male living in a Blue state. He’s going to be fine no matter what. He’ll worry about his kids and grandkids, but personally, Wrongo has nothing to worry about. His taxes may even go down again.

But he plans to resist, no matter what.

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Two Writers Who Speak To What America Needs

The Daily Escape:

Wukoki, Wupatli National Monument, AZ – September 2023 photo by David Erickson

September is underway, and we’re about to have a negotiation about government spending. But that doesn’t mean that the news this month will be any less stupid than last month’s. Also, as the Republican presidential candidates demonstrate every day, we don’t actually know whether the GOP is a dying Party or, the rising single Party of an authoritarian state.

Unless and until the traditional press presents these as the stakes, it is very unclear which it’ll end up being. With this as an introduction, Wrongo wants to introduce two writers who are attempting to break through our chain of bad policies and the bad ideology that threatens our democracy.

First, from Wesley Lowery in the Columbia Journalism Review:

“We find ourselves in a perilous moment. Democracy is under withering assault. Technological advances have empowered propagandists to profit through discontent and disinformation. A coordinated, fifty-year campaign waged by one of our major political parties to denigrate the media and call objective reality into question has reached its logical conclusion: we occupy a nation in which a sizable portion of the public cannot reliably tell fact from fiction. The rise of a powerful nativist movement has provided a test not only of American multiracial democracy, but also of the institutions sworn to protect it.”

Lowery is a Pulitzer Prize-winning reporter. He goes on to say:

“In 2020, I argued that the press had often failed this test by engaging in performative neutrality, paint-by-the-numbers balance, and thoughtless deference to government officials. Too many news organizations were as concerned with projecting impartiality as they were with actually achieving it, prioritizing the perception of their virtue in the minds of a hopelessly polarized audience…”

Lowery also says that news organizations often rely on euphemisms instead of clarity in clear cases of racism (“racially charged,” “racially tinged”) and acts of government violence (“officer-involved shooting”). He says that these editorial decisions are not only journalistic failings, but also moral ones:

“…when the weight of the evidence is clear, it is wrong to conceal the truth. Justified as “objectivity,” they are in fact its distortion.”

Lowery concludes by saying:

“It’s time to set aside silly word games and to rise to the urgent test presented by this moment.”

Second, Bob Lord is a tax attorney and associate fellow at the Institute for Policy Studies. He also serves a senior advisor on tax policy for Patriotic Millionaires. At Inequality.org, he proposes a graduated wealth tax on the rich:

“The United States is experiencing a level of wealth inequality not seen since the original Gilded Age. This yawning gap between rich and poor has unfolded right out in the open, in full public view and with the support of both political parties.

A malignant class of modern robber barons has amassed unthinkably large fortunes. These wealthy have catastrophically impacted our politics. They have weaponized their wealth to co-opt, corrupt, and choke off representative democracy. They have purchased members of Congress and justices of the Supreme Court. They have manipulated their newfound political power to amass ever-larger fortunes.”

More from Lord:

“In well-functioning democracies, tax systems serve as a firewall against undue wealth accumulation. By that yardstick, our contemporary US tax system has failed spectacularly….Our nation’s current tax practices allow and even encourage obscene fortunes to metastasize while saddling working people with all the costs of that metastasizing.”

Lord along with the Patriotic Millionaires propose new legislation, called the Oligarch Act (Oppose Limitless Inequality Growth and Reverse Community Harms). It is being brought forward by Rep. Barbara Lee (D-CA) and Summer Lee (D-PA). The Lees have developed a graduated wealth tax tied directly to the highest wealth in America. The Oligarch Act propose a set of tax rates that escalate as a taxpayer’s wealth escalates:

  • A 2% annual tax on wealth between 1,000 and 10,000 times the median household wealth.
  • A 4% tax on wealth between 10,000 and 100,000 times the median household wealth.
  • A 6% tax on wealth between 100,000 and 1,000,000 times the median household wealth.
  • An 8% tax on wealth exceeding 1,000,000 times the median household wealth.

Per the US Census Bureau, the median household wealth in 2021 was $166,900. So the first tier 2% wealth tax would kick in at $166,900,000, and so on.

This would affect only very high levels of household wealth. To put that in perspective, according to the Federal Reserve, the wealth level that puts you into the top 0.1% of households in 2019 Q3 was $38,233,372. So if enacted, this Act would touch a really small number of outrageously wealthy households. Also, their taxable amount would be peanuts by their own standards.

The legislation would also require at least a 30% IRS audit rate on households affected by the new wealth tax. One recent estimate indicated that the richest Americans dodge taxes on more than 20% of their earnings, costing the federal government around $175 billion in revenue each year.

The immediate argument is that this tax will never pass as long as the filibuster is intact. And here’s how the work of both authors comes together. We see the “it will never pass” objection from journalists and pundits who try to appear savvy in the ways of DC. On any cable news show, someone is sure to jump up to say it.

The paradox is that if you look at the Congressional Record and flip to the special orders section and extensions of remarks, you’ll notice they’re filled with speeches and statements on behalf of recently introduced bills which the sponsors know will never pass as written. So why do they do it?

Because the point of introducing a bill is not just to pass it in the current session of Congress. It never has been. There is a tradition going back to the earliest days of Congress of introducing bills to make arguments and advance debate. Many famous members of Congress (think Ted Kennedy, Thaddeus Stevens, John Quincy Adams) sponsored or backed multiple bills they knew were not going to become laws.

They did it because they knew that debates over bills that will become laws don’t occur in a vacuum. They happen in the greater context of the debate in Congress over issues which are influenced by every other bill under consideration. And of course, you’ve gotta start somewhere.

Jumping to the conclusion “it will never pass” isn’t being savvy, it’s a sign you’ve missed the point. And it’s a sign of the vapidity of so many journalists and pundits that it’s the first thing out if their mouths. It’s never a good idea to take cues from the stuffed shirts on Fox, CNN and Meet The Press.

This graduated wealth tax is a good start and sets a precedent: There is an amount of wealth that is ruinous to democracy. Taxing it is a necessary condition for preserving democratic governance.

It is true that Congress, as it is presently constructed, will not pass this, or other badly needed legislation. A genuine revolution in thinking will be required. Both Wesley Lowery and Bob Love point us toward fresh thinking about how we start dealing with what we consider to be intractable problems.

Wrongo still has hope for the younger generations who are suffering the consequences of all this government sanctioned selfishness.

Change is coming.

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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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The Two-Edged Sword Of Federalism

The Daily Escape:

Mount Evans Road, 14,100′, Idaho Springs, CO – May 26, 2023 photo by Reid Neureiter

Here at the Wrongologist, we often talk about Constitutional rights, but we rarely talk about Federalism. So today, let’s lean into federal vs. states’ rights. We’ll start with the recent Supreme Court decision in Sackett vs. EPA, which concerned the power of the EPA to regulate wetlands. Last week, the Supreme Court concluded that the Clean Water Act only applies to wetlands with “a continuous surface connection” to bodies of water.

This defined what waterbodies are considered waters of the United States (WOTUS), an issue that has been in the courts for years. The ruling narrowed the scope of the Clean Water Act, and severely limits the federal government’s ability to regulate wetlands.

Justice Samuel Alito’s opinion affirmed the principle that bureaucrats cannot broadly define statutory language. Alito’s opinion struck a blow for federalism. Federalism is a system of government in which the same territory is controlled by two levels of government. The US Constitution originally divided the exercise of political power between one national and many state governments. The national government is given control over matters affecting the whole nation. All other issues were reserved to the states.

  • Article VI of the Constitution contains the Supremacy Clause, which says that when the laws of the federal government are in conflict with the laws of a state’s government, the federal law supersedes the state law.
  • Article I, Section 8 of the Constitution describes specific powers which belong to the federal government. These powers are referred to as enumerated powers.
  • The Tenth Amendment reserves to the states those powers that are not delegated to the federal government.

The Sackett vs. EPA decision is another step in the Right-wing program to move as much federal government rule-making authority as possible to the states. This is the continuation of Nixon’s efforts to shrink the federal government’s power by devolving decisions to state and local governments. The best recent example of this is the Supreme Court’s Dobbs decision on abortion that wiped out the precedent set in Roe v. Wade that guaranteed a national right to abortion and passed that responsibility back to the states.

At the same time, the Right is moving to nationalize policy on social issues, from what books to allow on library shelves to limits on transgender rights, a rollback of state environmental actions, and an attack on anything that can be labeled as “woke.”

So we’ve got Red states pushing to centralize decisions about social and cultural issues in Washington, while the Right-wing Supreme Court pushes devolution of voting rights, abortion rights, and indeed national agency rule-making (EPA) to the states.

This 2023 brand of two-way Republican federalism is upending the delicate balance of power between the federal government and state governments. It raises questions about the allocation of authority, cooperation, and the ability of the national government even to define what is a pressing national issue.

Today’s Washington gridlock makes policymaking nearly impossible. That has shifted much of today’s policymaking to the states, where the Parties often have comfortable majorities. Many states (39) have government trifectas, with one Party controlling the governorship while holding majorities in the legislature, making policymaking simpler than in a divided and polarized US Congress.

Interest group activists have followed this trend and focused their efforts on these 39 states. Much of a state’s policies – abortion, voting rights, gun control, immigration, LGBT rights, healthcare, or taxation – are on widely divergent paths. For example:

  • In Democratic states it is easy to vote; in Republican states there are many barriers to voting.
  • In Democratic states fewer people are medically uninsured; in Republican states there are more uninsured people.
  • In Democratic states access to abortion is easier; in Republican states it is harder, if not criminalized.

Although federalism (for now) seems to protect the country from presidents amassing power in dictatorial ways, anti-democratic figures (think DeSantis and Abbott) are able, because of the resurgence of state-level policymaking, to transform Republican states into laboratories against democracy.

The Covid pandemic also put federalism to the test. The response to the pandemic highlighted the tension between national coordination and state autonomy. While the federal government provided guidance and resources, the implementation of measures like lockdowns, mask mandates, and vaccination campaigns, was largely left to individual states. This decentralized approach led to significant variations in pandemic response across the country, creating challenges in coordinating efforts and potentially exacerbating the spread of the virus.

Federalism properly implemented, brings government closer to the people and holds it accountable. But when badly implemented, you get the USA in 2023: A country trending toward autocracy.

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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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America’s Playing Default Chicken

The Daily Escape:

Ice and clouds, Yellowstone Lake, Yellowstone NP, WY – May 2023 photo by Joethehiker

Wrongo doesn’t know about you, but he’s starting to think that the “bi-partisan” Debt Ceiling negotiations aren’t going to stave off a default on the US’ debt obligations.

Every talking head is still saying that at the last minute, Biden and McCarthy will agree to…something. Something that prevents a government shutdown, and a default on payments for the country’s outstanding debt.

But is that real or hopium? In any negotiation, the idea is to find a point (or multiple points) of leverage that bends the other side toward your viewpoint. That helps the two sides to meet at some place in the middle.

So who’s got the leverage in the current Debt Ceiling negotiation? No one. Biden surely has no leverage over the House Republicans. Republican Speaker McCarthy has some leverage over Biden but has little leverage with his own House members. The Senate leaders, Majority Leader Schumer and Minority Leader McConnell, who normally have leverage to help resolve Debt Ceiling standoffs, are bystanders in this game of Default Chicken.

We’re in a high stakes game of chicken because nobody can deliver their side to the table. Politico reports:

“White House aides privately estimate they may need to deliver as many as 100 Democratic votes to ensure an eventual debt limit deal can pass the narrowly divided House…”

But few Democrats will support the deep cuts to social programs that Biden might be forced to agree to. McCarthy knows that a portion of his GOP House members will vote against ANY compromise bill. House Republicans have already called the legislation they passed last month (lifting the Debt Ceiling in exchange for deep spending cuts) the floor, not the ceiling to the negotiation. Dan Pfeiffer quoted Rep. Matt Gaetz (R-FL):

“I think my conservative colleagues for the most part…don’t feel like we should negotiate with our hostage.”

So Gaetz thinks that Biden and the Democrats are his hostages. If they are, how do they negotiate with the terrorists on the other side?

The positions are clear. The White House is open to budget negotiations but opposed to debt ceiling brinkmanship. Republicans threaten default if their budget demands aren’t met. They’re planning to pull the pin on this grenade and then blame Democrats for making them do it.

Recent polling from ABC and The WaPo gives Democrats a narrow advantage: An equal number of voters from each party—78%—would blame the opposite party for default. While 37% of independents say they would blame Republicans and 29% would blame Biden, with 24% blaming both parties equally.

The Democrats’ negotiating position appears to put them in the worst of both worlds: If the Debt Ceiling is breached, the polls show that they will share the political fallout with Republicans. Otherwise, they may have to agree to significant cuts to crucial programs like welfare and food stamps, which will badly hurt them with their base.

Either way, the Dems will complain about the financial wreckage caused by Republican extremism, and hope voters agree with them. The simplest way out is to agree to a temporary debt ceiling increase as we have many times in the past, to allow both sides to continue negotiating.

Sadly, McCarthy and the House Republicans seem to prefer default to compromise. They’re using passing a new Debt Ceiling as leverage to cut spending for Social Security and Medicare while increasing the defense budget. That’s their idea of “fiscal responsibility”. Sure, our military budget is 10 times Russia’s and three times China’s, but Republicans want grandma to tighten her belt.

At the end of the day, we’re stuck playing Default Chicken: The US must pay the bills it has already incurred as they mature. McCarthy can’t be seen by House Republicans to be giving concessions to Biden. After all, they think their job is to save the country from excess spending, not from the consequences of default. Rep. Marjorie Taylor Greene (R-GA) said on Wednesday that no one in the House Republican conference is concerned about the potential of a US debt default:

“Regular Americans 
 don’t worry about the government shutting down.”

Negotiating with terrorists is very difficult. The pressure on Democrats to cave to Republican demands for massive spending cuts will become harder to resist. If somehow they do resist, chances are we’ll see America default on its debts.

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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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Tuesday Wake Up Call – May 9, 2023

The Daily Escape:

Wild Azaleas at sunrise, Blue Ridge Mountains, VA – May 7, 2023 photo by Susan Anton

Wrongo and Ms. Right spent most of the weekend in NYC where we saw two Broadway plays, “New York, New York” and “Fat Ham”.

New York, New York is set at the end of WWII. The story is about a down-on-their-luck cast of characters who have come to NYC to  chase their dreams. It has some really strong points: Loved the choreography, the highlight of which is seeing a group tap dancing on the steel girder of an unfinished skyscraper. There’s also a nighttime snowfall in Central Park, and multicolored umbrellas seemingly floating in a rainstorm. The dancing scenes reminded Wrongo of “An American in Paris” which he saw in London and loved.

The scenery, dominated by towering fire escapes is very interesting and evocative of NYC. However, the male lead Jimmy, played by Colton Ryan, doesn’t have a voice that’s up to the role, although he is a versatile musician and has a nice sense of physical comedy. The female lead, Francine, played by Anna Uzele who played Catherine Parr in “Six” has a very good voice and was truly the star of the show.

The play doesn’t meet musical expectations. Despite having songs written by the legendary John Kander (“Cabaret” and “Chicago”) and co-written with Lin Manuel Miranda (you know, “Hamilton” and “In the Heights”). The tunes simply don’t deliver any real emotion to the audience.

It finishes with a rousing big band version of the signature tune that has the audience singing along. Sadly, for Wrongo, that was the highlight of the show.

Fat Ham by comparison, is a winner. It’s a contemporary riff on “Hamlet” set in a backyard somewhere in an unidentified part of the American South. This Black family includes a gay young male college student who is unsettled by his mother’s decision to marry the brother of her recently deceased husband, who was murdered in jail.

Some of the themes in Shakespeare’s play are quickly evident. But the play uses comedy and a few plot twists to challenge the family’s history of violence. In winning the Pulitzer, Fat Ham was described as:

“…a funny, poignant play that deftly transposes ‘Hamlet’ to a family barbecue in the American South to grapple with questions of identity, kinship, responsibility and honesty.”

All of the above. The actors frequently break the fourth wall, letting the audience know how they feel about the drama being acted out on stage. Fat Ham refers to its main character: Juicy is queer, Black, and is taking online classes at the University of Phoenix.

Juicy’s father Pap appears as a ghost just before the cookout celebrating his mother’s marriage to the father’s brother Uncle Rev. Pap tells Juicy that he was killed in prison on the order of Uncle Rev and tells Juicy to kill Uncle Rev in revenge. Like Hamlet, Juicy is moody and sarcastic, but he isn’t particularly committed to murdering Rev. He acts like his father has asked him to do a chore he never plans to get around to.

Ultimately, Rev conveniently chokes to death on a pork rib, so Juicy didn’t have to lift a finger.

The play is about secrets that stay hidden because of guilt or shame. The ones that you keep for fear of ever being found out to be what you think is a more disgusting version of yourself.

It turns out that in the end, everyone acknowledges that several family members in addition to Juicy are gay. They come to terms with their failed expectations of each other as well. Ultimately they’re all liberated from the personal stories that keep them from being happy. The play ends with a splashy finale, including a confetti cannon, with one character channeling Rick James.

Wrongo recommends seeing Fat Ham if you are able to get to NYC.

One quibble is that all of these characters appear to have lived their whole lives with unfulfilled dreams that largely get fulfilled at the very end of the play.

Only on Broadway do we see people who can be released from their personal conflicts so easily.

Time to Wake Up America! We’re already a few days into what promises to be a difficult week. There’s a lot going on, and it can be hard to focus on just one thing. But Wrongo thinks we should be focusing on the Debt Ceiling and whether those bums we’ve elected have any interest in solving the problem.

As the clock ticks down to the moment when the US suffers a politically engineered default on its debt, let’s hope that the President and the Congress can defy partisanship and come up with something.

To help them wake up, here’s “Manic Monday”, written by Prince. It was a hit for the Bangles in 1984. Here they perform live in 2008:

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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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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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