Originally Published: 10/19/2013
More Spying Info: The Snowden documents have revealed that the NSA is “harvesting hundreds of millions of contact lists from personal e-mail and instant accounts around the world, many of them belonging to Americans.” (Washington Post)
Wisconsin: Governor Scott Walker - you know, the fiscal conservative who’s so desperate to save money for his state that he’s laid off police officers, fire fighters, and teachers? - has been found to be giving huge pay raises to his favorite staffers by promoting them into jobs that don’t exist. (Milwaukee Journal Sentinel)
Ending the Crises: Well, we avoided a default and re-opened the government. Not quite soon enough, though. President Obama signed the bill in the early hours on Thursday, about 12:30 a.m., 30 minutes past the deadline. (NY Times) So, who won, who lost, and what was the cost? Clearly the Republicans were the big political losers. Look at the graph by the ABC News/Washington Post poll. Not hard to figure out, is it? But what of the costs to us taxpayers? On Tuesday rating agency Fitch Ratings announced it was considering downgrading the AAA rating for the U.S. government. (McClatchy) Remember, in August 2011 - the last time we went through this debt ceiling fiasco - Standard & Poor’s downgraded us to AA. (TWW, Downgrade, The Problem with S&P, What Does it Cost You?, 8/13/11) “Containers of goods idling at ports. Reduced sales at sandwich shops in downtown Washington. Canceled vacations to national parks and to destinations abroad. Reduced corporate earnings forecasts. Higher interest payments on short-term debt.” The cost “will continue to grow even after the shutdown ends, partly because of the uncertainty about whether lawmakers might reach another deadlock early next year.” (NY Times) Economic growth this quarter “is likely to be less robust than forecast last month given the erosion of confidence in the wake of the nasty fight over fiscal policy.” (Reuters) Business Insider reported that S&P estimated the cost of the Republican temper tantrum was about $24 billion taken out of the economy. And Quartz says that’s just the beginning. A report from Macroeconomic Advisers says that the fiscal policy that has been in effect since 2010 has subtracted about 1% off the U.S. growth rate for the past 3 years. This has led to cumulative economic losses of about $700 billion. The report also estimated that unemployment is 1.4% higher than it would have been. Now that’s what I call a chaos deficit. So, a lot of people lost and no one won, except maybe our democracy which appears to be still intact. Paul Krugman wrote: “Congress has only voted in a temporary fix, and we could find ourselves going through it all over again in a few months. You may say that Republicans would be crazy to provoke another confrontation. But they were crazy to provoke this one, so why assume that they’ve learned their lesson?” I agree. This isn’t over.
The Debate: At first, Democrats agreed to House Republicans’ demands that the Continuing Resolution (CR) include the sequester cuts though they hated them. In fact, Senate Majority Leader Harry Reid (D, NV) announced that he had an agreement with House Speaker John Boehner (R, OH) that if they approved this he’d get it through the House. But Boehner reneged and wouldn’t send it to the floor for a vote. (The Hill) Then the Republicans started demanding defunding Obamacare and all kinds of things. (TWW, Negotiations, 10/5/13) As Republicans started getting hit in the polls they changed their demands again to budget cuts - more than the sequester cuts. (TWW, Negotiations, 10/12/13) The Senate Dems finally said “enough is enough” and wanted the sequester to last only through mid-November. “Republicans want them to last as long as possible.” (NY Times)
Suspending Democracy: House Republicans finally became aware that if Boehner succumbed and the Continuing Resolution got to the floor, it would pass. So, to avoid that happening, they changed the rules. On September 30th, as the government was getting ready to shut down (yes, they prepared for this crap), they passed House Resolution 368, sponsored by Rep. Pete Sessions (R, TX), a rule change that requires that no vote can be brought to the floor unless it is brought by the majority leader, currently Rep. Eric Cantor (R, VA), or his designee. This was to ensure that the government stays shut down until Eric Cantor is ready to let it open again. In other words, the Speaker of the House can’t bring a bill to the floor unless he can get the majority leader to do it or name him “designee.” Watch Rep. Chris Van Hollen (D, MD) as he exposes this. (You Tube) For an explanation of the technicality of the maneuver, see the International Business Times. The vote was 228 to 199. 7 Democrats voted with the Republicans: Ron Barber (AZ), John Barrow (GA), Daniel Maffel (NY), Sean Patrick Maloney (NY), Jim Matheson (UT), Mike McIntyre (NC), and Collin Peterson (MN). (Open Congress)
World Concern: Leaders from the World Bank and the International Monetary Fund (IMF) “pleaded, warned, and cajoled: the United States must raise its debt ceiling and reopen its government or risk ‘massive disruption the world over.’” (NY Times) IMF Director Christine Legarde warned that a default, along with the shutdown, would bring “massive disruption the world over.” (NBC) An editorial in Xinhua suggested that it may be “a good time for the befuddled world to start considering building a de-Americanized world.” Does this mean the world will no longer use the U.S. Dollar as the reserve currency of the world? Mother Jones had a list of the 6 ways the world was worried.
Negotiations: Last weekend all hopes were pinned on the Senate. Senator Susan Collins (R, ME) made a proposal that “would delay the medical device tax for 2 years” and would “extend the debt ceiling and government operations through January.” It was widely received as a solid offer. (NBC) Then negotiations began. By Monday it was: raise the debt limit until February 15th and fund government operations through January 15th. There would also be “minor tweaks” to the Affordable Care Act (ACA), “though nothing along the lines of what some conservative Republicans have been demanding.” Republicans want “additional safeguards” to ensure people who receive subsidies are eligible to receive them. By the way, income verification is already in the law. Democrats would agree to this but, in exchange, would get: delay until 2015 of the “belly button tax,” an additional charge of $63 per person to the cost of health insurance, excluding organized labor and major employers. They rejected Republicans’ demand to repeal the tax on medical devices. (Washington Post) Negotiations continued on Tuesday in the Senate (NY Times) and House Republicans came up with their own alternative plan - but couldn’t get the votes to pass it. (Politico) On Wednesday the Senate reached a bipartisan plan. The government would be funded through January 15th and the debt ceiling raised until February 7th. The sequester cuts have remained in place. The deal yielded virtually no concessions to the Republicans, other than some minor tightening of income verifications for people obtaining subsidized insurance under the new healthcare law. (NY Times) The Senate voted overwhelmingly for the bill - 81 to 18 - on Wednesday. The House approved the bill a few hours later - 285 to 144.
Final Deal: The final bill included a tightening of income verification for purposes of providing subsidies to citizens who meet the requirements for purchasing health insurance. Seems like a small concession but David Dayen at Salon writes that this may open the door for future sabotage of the law. Yes, there was trading involved in putting together a bill that could get enough Republicans on board to pass the thing. CNN has a good rundown on it. $2.2 billion for a dam project that runs through Senate Majority Leader Mitch McConnell’s (R, KY) district - dubbed the “Kentucky kickback.” $450 million for Colorado flooding repair projects. $174,000 to the widow of Frank Lautenberg (D, NJ) who served in the Senate for almost 30 years. She’s worth more than $59 million. And there was additional money for agencies that fight wildfires, the mine safety department, a “watchdog group meant to guard Americans’ right to privacy against overreach by government cyberintelligence.” There also will be no pay raise for Congress this year. Most interestingly is that the deal included a requirement that the House do its job. Yeah. Really. It mandates a conference committee to come up with a final budget. All of the members of the Senate Budget Committee were named as conferees. Chair Patty Murray (D, WA) will co-chair the conference committee with her House counterpart, Paul Ryan (R, WI). Other Senators appointed to the committee are: Ron Wyden (D, OR), Bill Nelson (D, FL), Debbie Stabenow (D, MI), Bernie Sanders (I, VT), Sheldon Whitehouse (D, RI), Mark Warner (D, VA), Jeff Merkley (D, OR), Chris Coons (D, DE), Tammy Baldwin (D, WI), Tim Kaine (D, VA), Angus King (I, ME), Jeff Sessions (R, AL), Chuck Grassley (R, IA), Mike Enzi (R, WY), Mike Crapo (R, ID), Lindsey Graham (R, SC), Pat Toomey (R, PA), Ron Johnson (R, WI), Kelly Ayotte (R, NH), and Roger Wicker (R, MS). (The Hill) Unfortunately, according to Robert Reich writing at AlterNet, this is only a cease-fire. The war isn’t over.
Berrinche: The Mexicans have a word for the debacle created by Republicans. It’s berrinche, which is defined as a tantrum. “Berrinches are also spoiled little rich kids, blind to their privilege and the effects of their misbehavior.” The world is reacting with disbelief “that the reigning superpower could fall into such dysfunction, worry over global suffering to come, and frustration that American lawmakers could let the problem reach this point.” (NY Times)
Fact Check: Just for the fun of it, let’s look at the facts. We’ve been over these before but, in view of the Republicans latest temper tantrum about Obama’s spending, I thought it would be a good time to review. In May 2012 Rex Nutting at MarketWatch analyzed the data. “Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.” Look at the chart. Also, “In the 2009 fiscal year - the last of George W. Bush’s presidency - the federal spending rose by 17.9%. . . Over Obama’s 4 budget years, federal spending is on track to rise . . . an annualized increase of just 0.4%.”
Austerity: Our austerity program, known as the sequester, is still our biggest problem regardless of avoiding a debt default and allowing our government to operate. Josh Bivens at the Economic Policy Institute demonstrated what austerity has done to us vis-à-vis other recessions. Austerity here, like in Europe, demands less government spending. But it has always been government spending that has nudged us out of recessions. His graph illustrates growth in inflation-adjusted spending by federal, state, and local governments in the years before and after recessions. “It shows clearly that public spending following the Great Recession is the slowest on record, and as the second quarter of 2013 stood roughly 15% below what it would have been had it simply matched historical averages.”
Drones: A report by the UN’s special rapporteur on human rights and counterterrorism, Ben Emmerson, has identified - so far - “33 drone strikes around the world that have resulted in civilian casualties and may have violated international humanitarian law.” (Guardian)
Education: According to a report released by the Southern Education Foundation, the percentage of low-income students in public schools has grown across the nation over the last 20 years. In fact, for the first time since the 1960s, a majority of children in public schools in the South and West come from families living below or not far above the poverty line.
Another Oil Spill: On September 29th a farmer in northwest North Dakota discovered crude oil “spewing and bubbling 6 inches high” out of his wheat field while he was harvesting. It came from a break in Tesoro Corporation’s underground pipeline which carries crude from the Bakken shale formation, which is a fracking operation, to Columbus, North Dakota. More than 20,000 barrels of oil were spilled. (AP) How bad is it? Check out the photos from Greenpeace.
Keystone XL Pipeline: A panel of the U.S. Court of Appeals for the 10th Circuit in Denver has declined the request of the Sierra Club and the Clean Energy Future Oklahoma for a temporary injunction on construction of the southern leg of the pipeline. (TWW, Tar Sands Pipeline, 3/3/12; 1/21/12) The court based it’s decision on the “injury” balancing test, which determines who would be hurt more. The 2 to 1 decision found that the appellants failed to show how the pipeline will have a significant environmental impact and that “the threatened environmental injuries were outweighed by the financial harm that the injunction would cause TransCanada.”
PetCoke: Chicago’s Southeast Side is now experiencing the dump of petcoke just like Detroit. (TWW, Petroleum Coke, 5/25/13; Petcoke, 8/3/13) It’s “lining the banks of the Calumet River.” These piles of petroleum coke are the byproduct of refining heavy tar sands oil. Residents are seeing the same kind of dark clouds as Detroit residents saw and, as in Detroit, the operations are run by the Koch Brothers. (Midwest Energy News)
Deepwater Horizon: Anthony Badalamenti, a former Halliburton manager, has pled guilty to destroying evidence in the aftermath of the oil rig explosion that caused the massive oil spill in the Gulf of Mexico. This is in addition to the plea made by the company last July. The company is paying a $200,000 fine and made a “voluntary” $55 million payment to the National Fish and Wildlife Foundation. (TWW, Deepwater Horizon, 7/27/13) Badalamenti faces a maximum sentence of a year in prison and a $100,000 fine. (Guardian) One wonders why Halliburton’s CEO wasn’t charge, too.