When I combine the news over the weekend that Minority Leader Pelosi has insisted on a seat at the budget negotiations’ table with the following from her Washington Post profile, I get a comforting picture:
Instead of having to defend Democratic seats in Republican territory, her party will be playing offense, Pelosi argued, zeroing in on the 60 GOP members who represent districts that Obama carried in 2008.
And in the GOP efforts to revamp the program that provides health benefits to the elderly, Pelosi thinks she has been handed a gift. “Our three most important issues: Medicare, Medicare and Medicare,” she said.
It doesn’t seem to me like Pelosi is going to allow any weakening of Medicare because she plans to use the issue to win back the Speakership. Now, it’s true that the Minority Leader of the House has little power. That’s why John Boehner couldn’t prevent passage of the Affordable Care Act or much of anything else in the last Congress. But Pelosi has leverage because Speaker Boehner cannot round up enough votes to raise the debt ceiling without counting on Democrats.
As frustrating as this whole process is, it’s really Boehner who has painted himself into a box. I don’t know how he gets out of it with his leadership job, frankly. The president has vowed not to extend the Bush tax cuts again. And Pelosi is fairly clear:
On Sunday, Pelosi indicated in an appearance on CNN’s “State of the Union” that Republicans shouldn’t count on support from her caucus for the legislation — which must pass by early August to avoid a default on the nation’s debt — unless they are willing to consider boosting taxes as well as cutting spending.
“We’ve all said we would vote for the full faith and credit of the United States to be honored by voting for this increase in the debt ceiling,” the Democratic leader said. “If they don’t want to do taxes, maybe they don’t want to do anything.”
So, where does that leave Boehner? If he caves on taxes, even a little, he’ll probably have to rely almost exclusively on Democratic votes to raise the ceiling. And if he does that, he probably won’t be Speaker for very long. So, maybe he just lets us default?
So, maybe he just lets us default?
Listen to the Pukes. It’s what they really want. Why? Because who does it screw the most? The poor and the middle class!! And look who shorted T-bills? The guy who wants to become Speaker!!
Their problem is that it doesn’t actually screw the little guy the most when the stock market plummets, or credit becomes unavailable. Or, it only screws the little guy downstream when he loses his job. But in absolute dollars, it’s unsavvy rich people who get clobbered when the country loses trillions in value. Poor people never had that money to begin with.
The worst case for the short-sellers is that the debt ceiling blows by and the country doesn’t default because (a) it pays its debt service and (b) expenditures match or run below revenues in the short term. In that case the short-sellers are left holding the bag when their contract comes due. And the contrarians cash in.
Obama just stuck it to oil speculators. Think he can do the same with those folks who sell America short?
What screws the poor and the middle class is the size of the debt. Interest on the national debt is a large transfer of wealth from the poor who pay taxes and the middle class to the rich–roughly $300 billion a year, $3 trillion over ten years if it is not compounded.
Here’s the real contradiction. Deficits in liquidity-trapped economic moments spur growth and jobs and increases in real income. Debt transfers income from the working folks to the rich. Without taxes that kick in and capture back that transferred income, wealth accumulates in a compounded fashion. Deficits in boom times just contribute to debt and put on inflationary pressures. Without taxes to dampen inflation and take away the frothy Wall Street punch bowl, booms turn into bubbles that burst. There’s a lot of policy balancing that has to go on there.
The threat of dealing with the deficit has keep interest rates on government issues lower than they might have been otherwise, reducing the take of the rich in the future (absent another war).
I trust Nancy Pelosi more than I trust just about any lawmaker at the national level. The immediate obstacle for Republicans was always going to be the House and Senate; I’m glad that’s clear now.
What’s amazing is that she’s both trustworthy and effective. What a rare combination!
Meanwhile, Boehner is just not very good at his job. He brings votes to the floor he can’t win, he can’t keep the Republican caucus – the lockstep Republicans! – in line…he really doesn’t belong above middle management.
Tom Delay – now that was an effective Republican Speaker. Newt was an effective Speaker, too. Boehner and Cantor are a couple of no-talent clowns.
And so is Pelosi, because Obama is doing the negotiating again. Whenever he gets a deal, he’ll get Pelosi to herd the Dems into voting for whatever shit deal he got.
You’ll be glad to hear, then, that Pelosi is demanding to be involved in the debt ceiling negotiations herself:
http://lonelyconservative.com/2011/06/oh-great-nancy-pelosi-demands-seat-at-debt-negotiations-table/
Cantor threw Orange Julius’ ass under the bus last week.
No doubt when Pelosi walks into the room she will bring an intelligent fight; one that Cantor has now set up Boehner to fail arguing with. Once Cantor walked out he was allowing Boehner to make a deal with the most powerful Speaker in my lifetime, because a deal has to be made; but Cantor will be able to crow after the fact that Boehner cut the deal, not him and the Teabaggers will have their scapegoat in Boehner.
Strange to think that the heroes for the Teabaggers may become the people who didn’t even get in the negotiation room.
I think it’s important to remember, the Tea Baggers aren’t rich, it’s just the people who sponsor them. An element of their coalition is populism and they’re stupid enough to want this. So basically I don’t see how Boehner can possibly go against them on this unless he believes he’ll be personally endangered by default.
On the other hand, even if he does, can he? Are there enough Republicans with minimal brains to join with the Dems in passing a debt ceiling increase?
If default means they don’t get paid, perhaps some Repubs will go with the Dems.