Congress inches toward 
budget, debt solutions

Stock markets aren’t the primary indicator of whether legislative action is good or bad, but they can offer important signs. The fact that the Dow Jones Industrial average soared by more than 300 points Thursday, on the news that Republicans in the House had arrived at a plan to prevent a government debt default — at least temporarily — shows how concerned investors are about the possibility of default.

Prevent default, but reopen government

 

The House proposal is welcome, but no agreement was reached between the GOP and President Barack Obama late Thursday. Still, both sides said discussions are continuing and that is welcome news.

Obama wants Congress to also pass a continuing resolution to reopen the government, without defunding Obamacare.

There is evidence this week that some leading Republicans in the House are moving in that direction. House Majority Leader Eric Cantor and Rep. Paul Ryan, the chairman of the House Budget Committee, both wrote op-ed columns this week in which they discussed possible ways of ending the shutdown. Neither one mentioned defunding Obamacare.

Ryan’s plan drew the most initial support, although it’s still unclear whether the 40 or so members of the House tea party caucus will support it. But at least one member from Colorado, Rep. Mike Coffman, has said he is now willing to support a clean continuing resolution. We hope others will join him, including our own 3rd District Rep. Scott Tipton.

 

Which side caved?

 

There will be much spin from both parties and the media, arguing that either the Democrats or the Republicans won, and the other side surrendered in the default impasse.

It would be welcome if both sides considered the possibility that their political opponents agreed to a reasonable compromise, rather than that they caved in. After all, decisions about running our government are supposed to be determined through give and take by people with different political views. It is not to be the congressional equivalent of a WWE, winner-take-all wrestling match. Unfortunately, in our deeply divided society, accepting compromise no longer seems possible.

It’s clear from numerous polls that Americans are fed up with the antics of both parties, but they blame Republicans more than they blame Democrats for the impasse, even though a majority continues to oppose Obamacare.

Furthermore, an article in The New York Times Thursday said leaders of several important business groups that have long been GOP supporters — organizations such as the National Federation of Independent Businesses and the U.S. Chamber of Commerce — are becoming fed up with tea party obstinance that they believe is hurting the economy and businesses.

Some business leaders are even talking about funding business-friendly Republican candidates to run against tea party members of Congress in GOP primaries, the Times article said.

But Democrats are taking their share of heat, as well, some of it from within their own party. Democratic leaders of the District of Columbia have publicly complained about the shutdown hurting their federally funded city, and about Obama’s refusal to consider a bill just to fund the district.

Meanwhile, the Obama administration appears to be backing away from policies many believed were aimed at making the shutdown as painful as possible to Americans. On Thursday, it said it would allow states to use their own funds to reopen national parks within their boundaries.

 

Hope for an end to stalemate

We can’t say whether poll numbers, threats from business groups or bad publicity have prompted politicians to begin employing different tactics in this fight. We’re just glad they seem to be finally doing so. It’s true that the budget and debt fights will continue, but for the first time in several weeks there is at least reason to hope they can begin to move forward without crippling the U.S. economy.


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Kudos to the Sentinel for editorially (“Congress inches toward budget, debt solutions”) and graphically (“At issue is increasing the debt limit”) providing its readers with the objective facts underlying the still-unresolved “shutdown” and debt limit crises.

As the front-page graph shows, the twelve years of “VooDoo Economics” pursued by Republican “conservatives” Reagan and Bush, Sr. produced deficits every year (tripling the national debt), which then began falling during Democratic President Clinton’s tenure – producing surpluses throughout Clinton’s second term.

Republican “Compassionate Conservative” Bush, Jr. ran-up even larger deficits (which prompted Democrats – including then-Senator Obama—to object in 2006), doubling the national debt and bequeathing to Democratic President Obama the largest single-year deficit in our history. Thereafter, annual budget deficits have fallen throughout Obama’s presidency.  Thus, true “conservatives” and “independents” should have no doubts about which party is more fiscally responsible.

Of course, even our recently declining deficits are unsustainably massive – but isolating effective counter-measures first requires a non-ideological examination of the causes of the Bush deficits and recent reductions.

The best estimates are that President Obama’s own policies (including “ObamaCare”) are responsible for only 10% of current deficits, while Bush policies and the post-2008 near-Depression account for 90%.  Likewise, only 1/3 of recent deficit reduction is attributable to spending cuts (including the “sequester”), while 2/3 results from increasing revenues generated by the recovering economy and the partial roll-back of the “Bush Tax Cuts”.

Logically, those premises should lead to the conclusion that the most effective way to attack future deficits is to promote economic growth while raising revenues from those most able to pay – and continuing to control federal spending that does not contribute to sustained growth.  That is precisely the medicine President Obama has been prescribing and Republicans are obstructing—offering only more spending austerity and tax cuts.

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