Tea party fights “socialism” against weak opposition

The political battles over the role of government continue.

The U.S. House of Representatives, where conservative Republicans set the agenda, voted for a farm bill that dropped the food stamp program.

And the House voted for the fortieth time to repeal the Affordable Care Act – Obamacare.

Soaring Medicare and Social Security costs brought calls for cutting back on these programs.

On these assistance programs, affecting the elderly, the poor and the uninsured, the battles have heated up, heading toward the 2014 elections.

The conflict has been caused by the strong and cohesive tea party movement.  Though only about a quarter of voters say they support the tea party and its demands for less government, it exercises great influence.

In Republican contests across the country, especially in GOP areas, tea party candidates either win party primaries or force more traditional Republicans to adopt their positions to avoid defeat.

The result is that the tea party view dominates the U.S. House and strongly influences what happens in the Senate, thanks to the GOP filibuster.

Obamacare could obviously stand some improvement before it goes into full effect. But any bill to make changes to the program would lead to an effort to repeal it.  So nothing happens, and the complex new program lumbers forward.

Because some focus on its imperfections or simply because some believe that government should back out of health insurance, opposition persists.  And it is far easier to oppose Obamacare than to propose an alternative that will cover almost everybody.

Much the same is true of Medicare.  The Affordable Care Act included some limits on its escalating costs, but the combination of an aging population and weak cost controls keeps pushing up its demands on the federal budget.

Food stamps were devised by farm-state legislators as a way of disposing of government financed surpluses while helping the less fortunate to have decent diets.  That’s why they have been part of the agriculture bill.

The tea party movement wants to cut government spending, so the House of Representatives voted to reduce farm supports and to eliminate the food stamp program. 

Then, there’s Social Security.  Right now, there are sufficient funds from previous contributions and current workers to finance the benefits.  But we can readily foresee that the program will run short of money during the first half of this century.

To keep Social Security going as long as possible without general tax dollars, there’s increasing talk about cutting benefits to current recipients.  The first step would be reducing annual inflation increases.

The opponents of these so-called entitlement programs say that by government providing such assistance, the country is moving toward “European socialism.”

In Europe, where such programs have long existed, they have been strongly supported by conservative governments that clearly oppose socialist objectives like nationalization of some industries.

The issue between the European (and Canadian) approach and the American view, pushed to its extreme by the tea party movement, relates to the proper role of a democracy.

In the European view, the people expect the political system to address the needs of the community as a whole.  They accept a role for government to provide or assure certain services – old-age support, universal health coverage, and help for the poor.

They do not see this role for government as “socialism,” but rather as the best practical way to ensure the welfare of the entire community.

In the American view, the purpose of the political system is to protect individual freedom.  One major way to achieve that goal is to limit government’s involvement in the lives of the people.

In the image of the free society, the non-governmental sector should be able to provide many essential services, possibly with government incentives.  It leaves open the question of what happens to vulnerable people if those services are not provided.

The European system may lack the efficiency and economy that is supposed to result from competition, while the American system may lack the compassion and inclusiveness that is supposed to result from government assistance.

In the United States, the costs of assistance programs have risen as benefits have been added.  Reform has been blocked by the threat that changing any existing program may lead to its abolition.

Instead of a piecemeal legislative approach, perhaps the country needs a full-scale debate on the appropriate role of government in assisting the old, the ill and the poor.

It takes courage to engage in such a debate, and right now only the tea party seems to have it.  There’s a need for the alternate case to be made.

The filibuster survives, recess appointments may be dead

The filibuster – the tool used by a minority in the U.S. Senate to block action – lives on, despite having had a close shave last month.  
 

And the deal by which it survived may have quietly undermined President Obama’s effort to get around the Republicans’ tactics to block his appointments to federal office.

This story shows why the Senate frequently is unable to function. National polls now give Congress its lowest favorable rating ever.

The top federal posts are filled by the president with the “advice and consent” of a simple majority of the Senate’s 100 members.  But the Senate must first agree to end debate and vote, and under its rules, that takes 60 senators.

That means a Senate minority can prevent presidential nominees from taking office.  In recent years, the minority Republicans have used the filibuster threat to deny confirmation of Obama’s appointees.

The White House thought it had found a loophole to get around the Senate filibuster.  The Constitution allows the president to make temporary appointments without confirmation when the Senate is in recess.

In earlier times, the Senate took lengthy recesses, usually trying to escape Washington’s summer heat.  Recess appointments were necessary if the government was not to grind to a halt when senators were away.

Obama thought he could make recess appointments when the Senate was out of town for a few days, the usual lengthy recess having almost disappeared in the era of air conditioning.  But the GOP took to having one senator hang around to hold a five-minute session each day to prevent any recess and, as a result, any recess appointments.

Thinking that ploy was transparently phony, Obama went ahead making what he considered recess appointments, while the Senate was holding these non-business sessions.   

Eventually, however, these temporary appointments would have to gain Senate approval or the nominee would have to leave office. 

Senate Republicans refused to lift the filibuster threat.  They would not approve Thomas Perez to be labor secretary because they disliked his views, and they blocked Richard Cordray as head of the new Consumer Financial Protection Bureau because they disliked the bureau itself.

Among Obama’s appointees held up by the filibuster were two people named to the National Labor Relations Board.  They held recess appointments, at least as Obama saw them.

Senate Democrats warned that unless confirmation votes were held, they would change the rules by a majority vote and eliminate the filibuster for presidential nominees.  This move is considered so powerful that it is called “the nuclear option.”

Faced with that threat, some Republicans backed down.  They agreed to permit a vote on seven pending nominees, provided Obama replaced the two NLRB people with other nominees.

But hammering this deal out took a lengthy, closed-door Senate meeting at which Maine GOP Sen. Susan Collins apparently had some effect, saying she “felt a great sense of sadness” about the affair.

The deal was that the Democrats would leave the filibuster in place for nominees, if the GOP would not use it for the seven currently waiting.  Both sides kept their options open for the future.

This relatively small agreement was heralded as if it were a historic compromise, one in which the Democrats had gotten the better of the bargain.  “No gloating, maximum dignity,” counseled Maryland Democratic Sen. Barbara Mikulski.

Many Republicans regretted the concessions their party seemed to have made.  “We basically rolled over,” said Sen. Richard Shelby, an Alabama Republican. 

Maybe they were being truthful or maybe not.  They preserved their filibuster for at least the time being. But there was something else that nobody has talked about.

After Obama made his appointments, the Republicans challenged him in court.  In three federal courts decisions, with judicial majorities composed of Republican appointees and minorities by Democratic appointees, Obama’s recess appointments were found not to be legal.

The courts said the short, formal sessions, designed to prevent a recess, had worked.

The labor board appointees were specifically targeted, and Obama appealed to the Supreme Court, which said it would take the case, agreeing to decide the political conflict between Obama and the GOP senators.

By getting the Democrats to agree to replace the two NLRB nominees, the Republicans may have succeeded in eliminating the issue before the Supreme Court, which could decide there no longer is a dispute.  That could leave the lower court rulings in place with Obama the loser, unable to get around the Senate minority.

The end of the story, for the time being at least, is that the filibuster survives, and recess appointments may be forever dead.

Economic recovery: slow for workers, better for big banks

When it comes to money, Americans live in two different countries.

Most people live in a country where they have jobs or seek work to pay their cost of living and put something away for retirement.  They put their money in banks.

Their country is slowly emerging from the worst economic slowdown in their lifetimes. 

While people in this country are regaining their optimism about the future, they are frustrated and unhappy because progress is so slow and the outlook uncertain.

In past slowdowns, these people have been helped by stepped-up government spending. 

Now, however, the government is shrinking, not only failing to help but in fact contributing to joblessness.

The other country is inhabited by major financial institutions.  While they are the banks where average people keep their money, they are also investors, sometimes taking big risks.

These financial institutions also suffered from the recession.  They bear much of the responsibility for it, because they endangered the deposits entrusted to them when they made unwise and risky investments.

In other words, their investment side endangered their banking side.

But the big banks are back, big time.  Not only have they fully recovered, but they are making record profits and have even begun once again to make massive investment mistakes.

Almost everybody knows the major financial institutions were bailed out by taxpayers.  That’s because they were “too big to fail,” meaning that allowing their collapse could have endangered the savings of millions of people.

And they repaid the bailout money.  But there was supposed to be something else in the deal.  To protect their depositors, they were supposed to be regulated more tightly so they could not again play dangerous financial games.

In 1999, President Bill Clinton and Congress had repealed a law dating from the Great Depression of the 1930s.   That law, called the Glass-Steagall Act, prevented banks taking deposits from getting into the investment business.

After that law was gone, it was easy for the major banks and investment companies to refashion themselves as hybrids, part banks and part investors.

Chase was a bank. J.P. Morgan handled investments. A year after the repeal, they became JP Morgan Chase, the nation’s biggest bank.

After the near collapse of the financial sector, Congress sought to impose some new controls on the major financial institutions. But it faced the strong lobbying effort of those institutions, which somehow had the money to use to block controls.

Paul Volcker, formerly the head of the Federal Reserve, the nation’s central bank, proposed a rule that would revive Glass-Steagall.  A watered-down version made it into the law in 2010, but the big banks have so far prevented the adoption of the rules needed to put it into effect.

Then, Elizabeth Warren, the new U.S. senator from Massachusetts and the former Harvard Law School finance professor, arrived on the scene.

She seems to have the knowledge to identify what’s wrong with the financial system and the nerve to try to fix it.  She has put together a bipartisan group of senators to try to restore Glass-Steagall. 

She sees the same problems as helped bring on the recession: JPMorgan Chase made an unwise investment that almost nobody understands and lost $6.2 billion. The only penalty was that the president’s $23 million pay was cut in half and a couple of people were forced out of the company.

But, in the face of industry lobbying, Warren’s chances of success are slim.  Still, unlike many in Washington who don’t try to set sound policy because of likely defeat, she deserves credit for the effort.

Volcker also wisely got the law to require that big players in the economy change their outside auditors every few years. The auditor’s job is to take an independent look at a company’s finances to inform investors and regulators.

When an auditor wants to hold onto a client, it may find a way to issue favorable reports.  That happened in some companies pre-recession.  That’s one reason the crisis snuck up on us.

A couple of weeks ago, the U.S. House of Representatives voted to repeal that requirement.  Apparently members of both parties were convinced either that the problem did not exist or that the law unduly restricted companies and auditors.

Do the big financial institutions need regulatory relief from government while average people get little help from Washington? 

Between 2007 and the middle of last year, U.S. household income fell by more than seven percent.

JP Morgan Chase just set a new record for profits in the first three months of this year.

Egypt Events Show Drawbacks of Political Purity

In Egypt, the army toppled a democratically elected government.

In a country like the United States, it may be shocking that, no matter what a government’s policies, the vote of a majority of the people should be overturned by force.

President Obama seemed to say that the military coup was acceptable, because of the way the Muslim Brotherhood government was running the country.

“Democracy is about more than elections,” Obama said.

A year ago, the Brotherhood had won elections for the Egyptian presidency and parliament. Based on its religious beliefs, it used its new-found power to change the nature of the country itself.

Obama said earlier that if he wanted government to ban some action, “I cannot simply point to the teachings of my church or evoke God's will. I have to explain why [it] violates some principle that is accessible to people of all faiths, including those with no faith at all.”

That was not the view of the Egyptian government, which seemed to believe that its political victory gave it a blank check to make fundamental changes.

Minority religious groups, including the Coptic Christians and Shia Muslims, and women found their rights were being reduced. President Mohammed Morsi declared himself above the law and rushed through a new constitution imposing the Brotherhood’s theology.

Of course, in a democracy, the majority rules, but there are acknowledged limits on what it can do with the power gained through elections. And a government should not be able to easily change a constitution.

In short, the limit on democracy is that it cannot be used to abolish itself. That’s what seemed to be happening in Egypt.

The American government tried to help Morsi stay in power by urging him to demand less political purity and to include in his government a variety of groups and interests. Morsi refused, apparently believing that his electoral victory constituted all the democracy his country needed.

Should that matter to Americans? In this country, we have repeatedly shown, sometimes under great stress, that our democratic system, with each person having an equal vote and the majority controlling, is remarkably strong.

While that’s certainly true, the American system is experiencing something similar to what happened in Egypt. Parties have become inflexible and unwilling to compromise.

The result of such rigidity was disastrous in Egypt, and it is causing problems here as well.

Formerly, the two major parties could compromise on policy questions. The result reflected mainly, but not exclusively, the views of the majority party.

For example, the Republicans might believe that competition among businesses offers sufficient consumer protection, while Democrats might argue for more regulation. The result could be a compromise law, leaning one way or the other, depending on which party is in the majority.

Now, many Republicans insist they will support only a pure version of their policies. For example, despite a strongly bipartisan Senate vote on immigration policy, the GOP Speaker of the House says his chamber will not even consider the Senate bill, seeking instead a purely Republican alternative.

In an extreme case, Wyoming GOP Sen. Mike Enzi, who has never supported any Obama proposal, is under attack and may be challenged in next year’s party primary simply because he was too polite and not stridently personal enough in his anti-Obama rhetoric.

In Maine, Gov. Paul LePage has attacked the character and intelligence of Democrats who oppose him, apparently because he believes his 2010 electoral victory meant that the Legislature should simply fall in line behind his policies.

Insistence on political purity and the related rejection or condemnation of opponents has produced undesirable results.

The parties are unable to find compromises, at least at the federal level, and policy-making has ground to a halt. There is no federal budget, and gridlock is the usual result of any attempt to pass needed legislation.

The Maine Legislature can still compromise, though the GOP members feel it necessary frequently to support their governor’s vetoes, even if they disagree with him.

And the reputations of both the United States and the State of Maine are tarnished.

Because of the inability of our federal government to function, the United States is losing respect elsewhere.

The loss of respect translates easily into a loss of influence in the world. People abroad may wonder if the United States is even capable of acting, when it is so deadlocked at home.

And when relations between Maine’s Republican governor and Democratic Legislature have reached the low point of name-calling, the sour political atmosphere may make the state look less attractive to out-of-state business.