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budget deal
Pelosi Under Fire for Debt Ceiling Deal That Hands GOP Power to Kneecap Progressive Agenda
"It sets up a crisis of the first year of the next president's administration," said a former congressional staffer. "We're letting them light the fuse on another bomb and place it squarely in the middle of the next president's first year."
Jul 23, 2019
House Speaker Nancy Pelosi may have helped temporarily avert a looming fiscal crisis on Monday by striking a budget deal with the Trump administration, but progressives warned the agreement hands Republicans power to kneecap the next president's agenda by suspending the debt ceiling until after the 2020 elections.
"You can almost hear Ted Cruz yelling on the floor of the Senate that Congress shouldn't raise the debt limit by one more dollar unless President Bernie Sanders promises to drop his demand for Medicare for All."
--Paul Blest, Splinter
The debt ceiling is the legislative limit on how much the federal government can borrow. If the ceiling is not raised, the U.S. would risk defaulting on its debts and potentially sparking a global financial crisis.
Former congressional staffers and other critics said that by agreeing to suspend the debt ceiling until 2021, Pelosi gave Senate Majority Leader Mitch McConnell (R-Ky.) the ability to extract massive spending cuts and other concessions from a Democratic president in exchange for raising the debt limit.
Paul Blest of Splinterwrote Tuesday that "if the eventual Democratic presidential nominee defeats Trump in 2020, this will be one of the things they have to deal with in their first year in office."
"If you really listen," Blest wrote, "you can almost hear [Texas Sen.] Ted Cruz yelling on the floor of the Senate that Congress shouldn't raise the debt limit by one more dollar unless President Bernie Sanders promises to drop his demand for Medicare for All."
In the lead-up to Pelosi's agreement with Treasury Secretary Steve Mnuchin, a number of commentators called for abolition of the debt ceiling, arguing it is an arbitrary and "absolutely insane" restriction that serves no legitimate purpose.
Citing a Democratic source close to the negotiations, Blest reported that "the possibility of ending the debt ceiling came up and 'interest was expressed,' [but] it was decided that it was 'too difficult' to do in this particular agreement."
"The biggest win of Pelosi's second stint as Speaker so far was holding the line on the government shutdown earlier this year," Blest wrote. "So, Pelosi knows how to use leverage; she just didn't push hard enough this time, for whatever reason."
Adam Jentleson, who served as deputy chief of staff to former Senate Democratic Leader Harry Reid, echoed Blest's fears about the budget deal in an interview with Bloomberg, which reported Tuesday that 2020 Democratic presidential candidates are "quietly expressing consternation" that the agreement could set them up for a disastrous first year in the White House.
"The timing of it really bugs me," said Jentleson. "It sets up a crisis of the first year of the next president's administration. We're letting them light the fuse on another bomb and place it squarely in the middle of the next president's first year in office."
The Democratic leadership, said Jentleson, handed Republicans--who are favored to hold the Senate in 2020--"a major weapon" to completely derail progressive agenda items that 2020 Democrats have placed at the center of their White House bids.
As Jentleson pointed out on Twitter, Republicans weaponized the debt ceiling against former President Barack Obama in 2011:
\u201cIn 2011 Republicans used the debt ceiling to cripple Obama and impose trillions in cuts. Today, Dem leaders agreed to lift the debt ceiling for the remainder of Trump\u2019s presidency but reimpose it in 2021, when Republicans could again use it to cripple a Democratic president.\u201d— Adam Jentleson (@Adam Jentleson) 1563834151
\u201cI\u2019ve been asking around for defenses of this deal and the main rationale being offered is that top Democrats don\u2019t think McConnell will weaponize the debt ceiling against a Democratic president in 2021. \n\nWe saw him block Garland with our own eyes.\n\nIt\u2019s as bad as it looks.\u201d— Adam Jentleson (@Adam Jentleson) 1563834151
Pelosi's agreement with Mnuchin--which President Donald Trump applauded in a series of tweets Monday night--must be approved by the House and Senate. The deal would lift spending limits by $320 billion and hand the Pentagon a $738 billion budget, a $22 billion increase from the previous year.
In a joint statement, Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) hailed the agreement as a bipartisan compromise "that will enhance our national security and invest in middle class priorities that advance the health, financial security, and well-being of the American people."
Brian Fallon, executive director of progressive advocacy group Demand Justice and former aide to Schumer, was not as enthusiastic about the deal.
"It was fun for a while to debate whether the Democrat who beats Trump should focus on election reform or climate change in 2021," Fallon tweeted. "Now Republicans will make it a fight over lifting the debt ceiling."
"The negotiations over the debt ceiling clearly illustrate the asymmetry between the two parties," Fallon added. "GOP is happy to preserve the debt limit because they know Dems will never hang it over a GOP president's head. On other hand, GOP is happy to play chicken with it when a Dem is in office."
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Failing the Poor and the Economy, Kansas Gov Signs 'Regressive' Tax Deal
Law will impose $384 million tax hike on sales tax and items most often purchased by low-income earners
Jun 16, 2015
Following the end of the longest legislative session in state history, which dragged on an extra 23 days, Kansas Governor Sam Brownback on Tuesday signed a massive budget deal into law that includes a $384 million tax hike--mostly on the poor.
It's the largest tax increase ever introduced in the state, and more than half of it will come from sales tax and cigarette tax, which financial experts have long warned are regressive and punitive for low-income people as they force them to pay a larger percentage of their earnings than someone in a higher bracket.
The deal upholds many of the tax cuts Brownback introduced in 2012, which gave an annual $24,000 windfall to wealthy Kansans--which they will keep--but drove tax rates up for the poorest 20 percent of the state. It also cuts $50 million from the state budget.
Brownback went whole hog to convince lawmakers to pass the deal, including crying and calling legislators from his granddaughter's birth.
Kelly Davis, midwest regional director at the Institution on Taxation and Economic Policy, explained the deal thusly:
Early on in his tax-cutting frenzy, the Governor offered that Kansas was a "real live experiment" for other states in terms of showing the positive impact of supply-side economics. Those words have come back to haunt him and other supporters of trickle-down economic theories. If Kansas is an experiment, Friday's vote makes it clear that the experiment failed.
...Kansas's tax changes, even the provision that allegedly exempts 380,000 low-income people from income taxes, will do nothing to alter the fact that the Sunflower State earlier this year earned a spot on ITEP's "Terrible Ten" list because it has 9th most regressive tax structure in the country.
As the Kansas City Star points out, the higher sales taxes could backfire in border towns, as residents could simply cross state lines to do their shopping in neighboring Missouri, where the food tax will soon be five times lower.
The move is part of a trend of Republican-led states pushing tax schemes that exclusively benefit the rich and exclusively burden the poor.
The budget becomes law just months after Brownback signed into a law a controversial welfare bill that places strict limits on benefits and how they may be spent.
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'Dumb' & 'Cruel': Budget Deal Attacks America's Most Vulnerable
Lauded as a "step in the right direction" by high-level members from both parties, progressives--calling it both 'dumb' and 'cruel'--say that should be a warning to the nation
Dec 11, 2013
"Dumb."
That's what University of California, Berkely economist Robert Reich called the budget deal announced by Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan late Tuesday.
Why dumb? According to Reich, the "deal doesn't close tax loopholes for wealthy, restore food stamps to poor, or extend unemployment benefits for jobless."
In separate tweets, he added:
\u201cNew budget deal keeps awful sequester (just delays for 2 years), has no short-term stimulus, and does nothing about long-term deficit. Dumb.\u201d— Robert Reich (@Robert Reich) 1386724405
\u201cBudget deal doesn't extend emergency unemployment benefits for 1.3 million jobless. Bad for them, bad for economy. https://t.co/gza80LslCR\u201d— Robert Reich (@Robert Reich) 1386724117
And he's not alone in thinking the negotiated deal--designed to stave off another government shutdown threat by the Republican Party in the New Year--is another example where working people, those suffering unemployment, the poor, and public employees are asked to sacrifice as the nation's corporate barons and wealthiest individuals are once again insulated from scrutiny.
"This deal asks essentially nothing of the richest Americans while placing terrible burdens on the unemployed as well as new federal employees, and continuing the fiscal policy drag on our still-unfinished recovery."
-Lawrence Mishel, EPI
Though much of the reporting said that both parties were able to make the deal because their respective sacred cows--cuts to Medicare or Social Security for Democrats and tax increases for Republicans--were left off the table.
"I support reaching an agreement that will end the culture of periodic crises that has driven policy in recent years," said Lawrence Mishel, executive director of the Economic Policy Institute. "However, this deal addresses the wrong set of priorities: namely, deficit reduction ten years out rather than a stronger recovery now, and tweaking domestic spending for a few years as we continue to ignore the public investments our country needs."
He continued: "The worst part of the budget deal by far is what it doesn't address: unemployment insurance for America's four million long-term unemployed workers. This deal asks essentially nothing of the richest Americans while placing terrible burdens on the unemployed as well as new federal employees, and continuing the fiscal policy drag on our still-unfinished recovery."
And according to Michael McAuliff's reporting, the negotiated agreement is going to give Medicare a huge "whack" by increasing cuts to the program's providers.
The "mandatory budget resources" referred to in the deal, explains McAuliff, will focus mostly on Medicare providers, including doctors, clinics, and hospitals who serve the program.
Under the Budget Control Act of 2011, which set up the sequester, so-called discretionary programs were subject to 5.1 percent across-the-board cuts when the Congress' "supercommittee" failed to find targeted savings. Most "mandatory" programs, such as Social Security and Medicaid, were exempt. But Medicare was not, and was subject to a 2 percent cut aimed at providers, worth more than $120 billion over the 10 years of the sequester.
By extending the sequester for mandatory programs, Medicare providers -- including hospitals -- will have to take the hit for two more years.
The Nation's John Nichols describes the deal as "cruel, irresponsible, and dysfunctional" in his assessment, where he chastised lawmakers who said the deal was a "step in the right direction."
"[The deal is] mean-spirited toward people who are struggling through no fault of their own, people who have chosen a life of public service, and the middle class in general."
-Richard Eskow, CAF
What of the 1.3 million jobless Americans who -- with a fully Dickensian twist -- now stand to lose Federal unemployment benefits three days after Christmas?
The budget agreement does not look like a "step in the right direction" for them. And unless Democrats succeed in renewing benefits in a distinct piece of legislation that apparently must pass this week -- as Congress is moving rapidly toward recess -- many of the most economically-vulnerable Americans will be "lurching from crisis to crisis" very soon.
Calling it a "dirge for the unemployed" and a great modern example of the phrase "man's inhumanity to man," Campaign for America's Future senior fellow Richard Eskow slammed the deal and the Democrats who (once again) "seemed to go soft" against a dug-in GOP who, despite the mean-spirited nature of their proposals, stood firm.
Looking at the facts of the deal, says Eskow:
Federal workers will be expected to subsidize this deal with an increase in their out-of-pocket pension costs. There will be cuts to Medicare. Airline passengers will pay a new tax. Military retirees - military retirees - will see their benefits cut.
And the long-term unemployed, who have paid dearly for Wall Street's excesses, will receive no extension of benefits. The sequester's cuts were disastrous, but this deal is needlessly punitive. It's mean-spirited toward people who are struggling through no fault of their own, people who have chosen a life of public service, and the middle class in general.
Senator Bernie Sanders (I-Vt.) appeared on MSNBC's All In with Chris Hayes to respond to the deal:
Sanders Weighs in on Budget Dealwww.youtube.com
And the Huffington Post reports:
Progressives viewed the fact that the final arrangement did not include an extension of unemployment insurance as a major tactical defeat. Federal unemployment benefits are currently set to expire on Dec. 28, affecting an estimated 1.3 million jobless Americans. Democrats will now push to renew the benefits in a separate piece of legislation.
In addition, news of the pension provision angered federal workers even before the deal was announced, with dozens of federal unions signing on to a letter opposing it.
"Federal workers have sacrificed over $113 billion for deficit reduction since 2011, including a three-year pay freeze and increased pension contributions for newly hired employees. This figure does not include the up to eight furlough days caused by sequestration this summer and a 16-day shutdown in October which resulted in financial hardship and profound anxiety for half the government's workforce and their families," the coalition of labor groups wrote.
"Given these contributions, we are dismayed to learn that increasing the pension contributions and/or changing the retirement formula for current federal employees is on the table," they wrote. "This is simply unacceptable."
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