[Nesster]

Lawmakers? Ha! Debt Obsession Tables Urgent Action

Appropriations bills necessary for the orderly operation of the federal government are stalled. Nominations to key government posts are languishing. A partial shutdown of the Federal Aviation Administration forcing the furlough of more than 4,000 workers is costing the government $30 million a day in lost tax collections. And when’s the last time anyone heard anything about immigration reform?

The bitter fight between the White House and Republican lawmakers has sucked up all the air in Congress, for the most part leaving critical issues unaddressed. Just about any time a member of Congress meets with reporters, it’s to discuss the raging debt ceiling controversy, and nothing else.

Crucial trade agreements with South Korea, Colombia and Panama are unlikely to be ratified before Congress departs for its August recess (whenever that may be given the intractable debate over debt ceiling legislation). Even tweaks to the Dodd-Frank financial overhaul legislation approved last year have been put on the legislative back burner, though work may be going on behind the scenes.

The 112th Congress is on course to be one of the least productive in recent memory, as measured by votes taken, bills turned into laws and nominees approved. The Chicago Tribune reports that this Congress is underperforming even the “do-nothing” Congress of 1948, as President Harry Truman dubbed it.

Congress has sent President Obama just 23 bills so far this year, including three appointments to the Smithsonian Board of Regents and five bills to name courthouses and post offices. Almost all the others have been making “continuing appropriations” to keep agencies funded.

While Congress has been “working” five day weeks and some weekends lately, what that really means is that a handful of congressional leaders are negotiating deals to try to lift the $14.3 trillion debt ceiling and reduce the deficit before next Tuesday’s deadline. The rest of the members of the House and Senate have been reduced to twiddling their thumbs waiting for the group to come back to them and test the latest deficit/debt proposals. So far, there have been only thumbs down and a deluge of comments to the media – but all on one topic.

Can’t Congress walk and chew gum at the same time? Not really, says Julian Zelizer, a Princeton history and public affairs professor. “If Congress is handling anything of this significance, civil rights or the debt ceiling bill, it’s going to crowd out discussion of everything else,” Zelizer said.

Here are some of the most important things that aren’t getting done on Capitol Hill:


Ending a partial shutdown of the FAA. Controllers and air safety inspectors are still working but construction projects and even fee and tax collections are on hold. The dispute is over differing versions of House and Senate-passed legislation, but leaders have been unable to devote the time to untangling the differences or passing stopgap legislation – even though such stop gaps have been approved 20 times already.

Ratifying languishing treaties with South Korea, Colombia and Panama. These treaties, which were negotiated during the Bush administration, are considered essential by the business community now that the European Union has concluded its own deals, particularly with South Korea. Senate action on them likely will slip into September. That’s despite pressure for action from both the U.S. Chamber of Commerce and the White House.

Breaking logjam on key federal post nominations. President Obama has complained that Congress is slow to act on some of his nominees. Moreover, political and ideological differences have held up some fights, as was the case last week when Obama passed over Elizabeth Warren to head the new Consumer Financial Protection Bureau, and instead nominated former Ohio attorney general Richard Cordray. But even Cordray’s nomination isn’t safe because of Republican efforts to dilute the strength of the bureau.

Nobel laureate Peter Diamond, nominated three times by Obama to serve on the Federal Reserve's board of governors, last month asked the White House to withdraw his nomination in the face of Republican opposition.

Even routine appointments are having trouble. For example, The Senate Banking Committee was holding hearings on Marty Gruenberg to serve as chairman of the Federal Deposit Insurance Corp., Thomas Curry to serve as head of the Office of the Comptroller of the Currency, and Roy Woodall to serve as an insurance expert on the Financial Stability Oversight Council. Republicans are blocking the appointments in the continuing dispute over the consumer bureau.

Passing next year’s appropriations bills. The House has passed a handful of the 13 appropriations bills needed to fund the government in fiscal 2012, but the Senate has completed work on none of them. The House has allowed almost unlimited amendments to their appropriations bills in so-called “open rules.” This comports with the pledge of House leaders to allow more participation in House debates, which has made it harder to close a deal.

Doing something about immigration reform. Obama campaigned on it, but reform of the immigration laws have been put on the back burner. Republicans don’t seem anxious to tackle the issue, and have stood in the way of the proposed DREAM act, which would have allowed illegal immigrants who came to the United States before they turned 16 the chance to become citizens.

Much of the problem, obviously, results from a divided government in which conservative Republican activists in the House clash with liberal Democrats in the Senate and the White House. It could also be a reaction to the bill-passing spree of the last session, when Democrats controlled both chambers and the presidency. During that period, Congress approved major initiatives including the stimulus package, the children’s health program reauthorization, and the health care overhaul. But the lack of progress on pressing issues evokes baseball manager Casey Stengel about his 1962 Mets (record: 40-120): “Can’t anybody here play this game?”

[mikemike]

It is a symptom of a government which has grown too big. It is being paralyzed by its own weight. Everything has to go through these 535 people and we have reached the point where this bottleneck is clogged. If they took some of the issues that they need to addressed off of their plate and passed it down to the states, they could be much more effective and focused.

The FAA issue is an interesting one, its demonstrated to the press who was saying expect airfare to drop once the law expires that "the price the market will bear" is a tax inclusive price tag. This fact has implications which both conservatives and liberals can trumpet, but it is an interesting demonstration of the way the free market really works.

[shooz]

It's actually indicative of a government paralyzed by republicans and teabaggers that want to continue everything that was wrong in the 20 of the last 30 years we've spent under republican control.
I'm still waiting for my trickle down.
You?

PS. Don't overlook what media has become since Reagan dismantled the fairness act.

[stevewig]

It's actually indicative of a government paralyzed by republicans and teabaggers that want to continue everything that was wrong in the 20 of the last 30 years we've spent under republican control.
I'm still waiting for my trickle down.
You?

PS. Don't overlook what media has become since Reagan dismantled the fairness act.

+1

(Mike - taking your argument to the ultimate, all we need for the most efficient government is one person - the Dictator. We are after real life democracy, for all its imperfections, not Dictatorship!)

[Nesster]

It's actually indicative of a government paralyzed by republicans and teabaggers that want to continue everything that was wrong in the 20 of the last 30 years we've spent under republican control.
I'm still waiting for my trickle down.
You?

PS. Don't overlook what media has become since Reagan dismantled the fairness act.

However, from a less fundamentalist and rigid Republican view, we might say that everything that was wrong in the last 30 years includes bloated government spending... that did not match the Republican tax cuts. (never mind that it was the same Republicans who were too chicken to enact the government cuts, especially under a Republican President, for fear of losing the next elections)

[shooz]

There were also contracts with the military support corporations that are still in effect, even though at least one major one (Haliburton) is not even American.

The lions share of what we pay them is top secret.
Wars of all sort are VERY expensive, and that doesn't include the cost of life.

Bush did cut VA spending. How very kind of him. (sarc)

[GeneV]

It is a symptom of a government which has grown too big. It is being paralyzed by its own weight. Everything has to go through these 535 people and we have reached the point where this bottleneck is clogged. If they took some of the issues that they need to addressed off of their plate and passed it down to the states, they could be much more effective and focused.

I'm not sure where you support that generalization. They are not doing the same work they did when government was "smaller." If they spend all their time on one divisive issue, it doesn't matter whether there are 100 others or 1,000 others which need attention. Nothing will get done.

[mikemike]

I'm not sure where you support that generalization. They are not doing the same work they did when government was "smaller." If they spend all their time on one divisive issue, it doesn't matter whether there are 100 others or 1,000 others which need attention. Nothing will get done.

True, but the greater the backlog the greater the damage caused by impotence and inaction.

[shooz]

True, but the greater the backlog the greater the damage caused by impotence and inaction.

This is why rebliteabertarians became the party of NO.
This is also why they are damaging to America.

[jeffkrol]

Wednesday, April 6, 2011
The Depression Blues, sung by Randy Wray
Prof. L. Randall Wray is an original developer of MMT and professor at the University of Missouri at Kansas City, home of the Kansas City school of economics. He complains that Modern Budget Cutting Hooverians Want a Return to the 1930s.

"Our modern Hooverians would like to return to the “good old days” of President Hoover, when the government was smaller and both unwilling and unable to offset the swings of private investment spending. Back then, when investment collapsed unemployment did not go to 9 or 10 percent, it went all the way to 25 percent. Hooverian economics would turn back the clock to ring in another Great Depression with the same old pre-Keynesian ideas that failed us in the 1930s."

Wray tell us why:

"By framing their argument in terms of ratios to GDP, the authors provide a misleading characterization of cause and effect. It is true that high investment spending tends to increase GDP while lowering unemployment—that is the Keynesian “multiplier” at work. High growth of GDP, in turn, lowers the ratio of government spending to GDP so that we will observe a correlation between falling unemployment and a falling government share of GDP—but that is a correlation of no causal significance. When an investment boom collapses—as it did in 2006-2007—GDP growth then falls and the government share of a smaller GDP will rise. Our Hooverians interpret that as “proof” that a rising government share does not help to fight unemployment.

"In fact, however, relatively stable government spending over a cycle helps to cushion a private sector “bust”. While it is hard to prove the counterfactual—how bad would things have been without sustained government spending—it is hard to believe their argument that a loss of 8% of GDP due to reduction of private spending would not have led to a much deeper recession (or depression) without the stabilizing force of our government spending."

The argument of the Hooverians is that where there is a lot of crime, there are also a lot of police. So, to cut crime, reduce the number of police. Right.

Mike Norman Economics: The Depression Blues, sung by Randy Wray

This is clearly a manufactured crisis. There can be no doubt that it is being used to impose political and economic change that polls show the overwhelming majority opposes.

This is not going to change until the US gets the money out of politics and closes the revolving door. Money talks and politicians walk. The media is compromised, first because of ownership, and secondly, because reporter have to tred lightly to maintain access. The system is thoroughly corrupt to the core.

This is nothing new. The US has been a plutocratic oligarchy since the victory of Hamilton, representing Northern capital, over populists, Pennsylvania democrats, and Southern agriculturalists. In this scenario, it is not at all accidental that Hamilton was the first Treasury secretary.

As a matter of strategy, it seems to me to be necessary to show a significant number of people that MMT and allies provide the knowledge necessary for reversing this pernicious trend before overreach leads to GDII. I think this means being more frank in telling it like it is politically in addition to focusing on the economics — although I think that a global depression is very likely already baked in, and the best we can do is provide a plan that can be picked up when the smoke settles after Reagan-Thatcherism has finally run its course. But the last mile is closing fast, so there may yet be time.

http://mikenormaneconomics.blogspot.com/

Yea.. go Mikemike

[shooz]

Now, now, you know mike doesn't answer the hard questions.

[Nesster]

True, but the greater the backlog the greater the damage caused by impotence and inaction.

IMO the problem is the increasing polarization of Congress, to the highest level since Reconstruction:
https://www.pentaxforums.com/forums/political-religious-discussion/150066-pol...arization.html

The problem in part is that the public/voters are divided on many issues, while politicians feel beholden to the constituents who funded their campaign and voted them in. Thus we get grand statements about the "American People" want... whereas, the only sensible interpretation of polls and election results is that the "American People" want change, but in a balanced and measured way. Acting like your plurality in your district is a Mandate and No Compromise is Possible (or even desireable) is plain irresponsible. However, the polarizing positions win elections with our apathetic voters: the only way you can drag people to the polls is to alarm them (or bribe them with spending).

Parties and politicians who actually attempt to practice the art of governance, which means compromises and coalition building, have effectively been painted as wimps and corrupt deal makers. We've gone far too far in this: where are the values of parliamentary cooperation and co-existence?

[GeneV]

True, but the greater the backlog the greater the damage caused by impotence and inaction.

I agree, but IMO that part is a function of the complexity of our society. I also don't see the states as able to do it any better at this point. All of those levels of government (including corporate government) are at levels of complexity that strain capacity.