While the RP is enjoying his week-long vacation from all things politics, there’s one group that he strongly believes should stay immersed in politics: the supercommittee designated to tackle the country’s debt problems.
Washington dysfunction and hyper-partisan politics have crippled Congress’s ability to meet the major challenges of our day. You need only to look at the S&P’s justification for our recent debt downgrade as case in point. As such, the 12 members of the “supercommittee” must forgo their annual August respite, come back to the table and begin the hard work to stave off what could potentially be a financial and budgetary catastrophe.
The financial unrest and subsequent Wall Street roller coaster created when intransigent Republicans and Democrats failed the American people was a preview of what we can expect if the supercommittee fails to reach consensus on a debt reduction package of at least $1.2 trillion, triggering abrupt and irresponsible across the board cuts to federal programs.
Economic decisions of this magnitude will require sacrifice from both sides. With divisive partisan politics in Washington at an all-time high and compromise viewed as a four-letter word, it is going to take time and sincere bipartisan cooperation for the members of the committee to put everything on the table and make the tough but necessary choices to restore our fiscal sanity.
Before we dive into a Politics Free Week (check out our cool new banner above), the RP got in a few last minute political interviews in the Northwest and Great White North media.
Oregon Live interviewed him about the super-committee tasked with helping to fix the country’s debt problems:
“There was an adult conversation missing” from the debt ceiling debate, said Jonathan Miller, a co-founder of the group No Labels, which wants to restore bipartisanship. The public agrees, according to polls. But with elections approaching and positions fixed, Miller asks, “Will the pressures be too great to present a bi-partisan agreement?”
And later, the RP engaged in his regular gig with CTV News, Canada’s CNN. This occasion, he commented on the weekend’s Iowa straw poll, and other developments in the GOP presidential primary.
By Patrick Derocher, on Thu Aug 11, 2011 at 9:30 AM ET
Following Senate Majority Leader Harry Reid’s selection of his delegates to the Joint Select Committee on Deficit Reduction, both Senate Minority Leader Mitch McConnell and Speaker of the House John Boehner have named their choices for the committee. From the Senate are Pat Toomey of Pennsylvania, Jon Kyl of Arizona, and Rob Portman of Ohio. The selection of Toomey, a one-time president of the Club for Growth, is likely a nod to his broad Tea Party support, and while Portman previously served as Director of the Office of Management and Budget under President George W. Bush, Kyl is notorious for walking out of budget talks with Vice President Joe Biden. On the House side are Jeb Hensarling of Texas, Dave Camp, and Fred Upton, both of Michigan. Hensarling, chairman of the House Republican Conference, will serve alongside Senator Patty Murray (D-WA) as co-chair of the committee. Camp served on the Simpson-Bowles Commission, although he voted against all his recommendations, and Upton serves as chairman on the Committee on Energy and Commerce. All six appointees have signed Americans for Tax Reform’s Taxpayer Protection Pledge. [National Journal]
Senator Olympia Snowe (R-ME) has come out strongly against the hyperpartisan environment that led to the debt ceiling debacle, saying she was embarrassed by lawmakers’ behavior and calling the current Congress “the worst” she’s ever seen in her political life. Snowe, a moderate Republican, is being targeted by multiple Tea Party challengers for the 2012 primary. [Huffington Post]
A group of moderate to conservative Democrats in the Blue Dog Caucus, including Jim Cooper of Tennessee, Henry Cuellar of Texas, Michael Michaud of Maine, and Mike McIntyre of North Carolina, have signed a letter urging Speaker Boehner to cancel the House of Representatives’s August recess so as to address the fiscal crisis currently facing the country. [The Hill]
For the third time in the last week, the Dow Jones Industrial Average plunged by more than 500 points Wednesday, falling 4.63% to 10,718 points, a drop of 520 from the previous day. This brings the total decline in the index to more than 2,000 points in the last three weeks. Other American indices performed similarly Wednesday, with the NASDAQ and S&P 500 both dropping by around 4%. [Huffington Post]
Standard & Poor’s has released some of its specific reasons for downgrading the United States to a AA+ bond rating, and it is more political than fiscal. Citing the political gridlock in Washington, and in particular the Republicans’ unwillingness to compromise on raising revenues, the report sends the message that S&P does not believe that any sort of meaningful debt-reduction compromise can come out of the current political environment in Washington. [Reuters]
Last month’s launched of the Consumer Financial Protection Bureau might never have happened were it not for the inspiration of contributing RP Andrei Cherny.
Read this excerpt from Politico‘s “On The Media”:
Elizabeth Warren first laid out the idea for the agency in an essay in the summer of 2007 in the journal “Democracy: A Journal of Ideas.” Jake Tapper flashed the issue during an interview with Warren earlier this week, during which Warren marveled at how far the idea had come in four years.
“Of all the ideas that get published in academic journals like that, not so many make it into law,” she said.
Andrei Cherny, now the journal’s president, was co-editor of the publication at the time, and had known Warren from his work with John Kerry’s campaign in 2003 and 2004.
“I was talking with her about some of the ideas that she had put forward, and this is something that was in its beginning stages, so we asked her to write it up for us as a proposal,” Cherny said.
Our second installment of RPTV’s Great Debates features a regular here at The Recovering Politician, former Atlanta Deputy Mayor and contributing RP Lisa Borders debating our newest team member, GOP pollster, rising political star and Friend of RP Kristen Soltis.
Speaking of music, below the debate video you can find links to the No Labels theme song that Lisa co-wrote with the rap star Akon, as well as the music video of “The Frustrations,” featuring Kristen on lead vocals.
(Oh, and by the way, since the RPettes weren’t around to help the RP figure out how to Skype properly, there’s no video of Lisa, only her disassembled voice. This is not a Newsweekian attempt to demean a powerful female leader, just simple incompetence on the RP’s part. We have provided a picture of Lisa below to allow you to pretend that you can watch her on the video.)
By Patrick Derocher, on Wed Aug 10, 2011 at 9:31 AM ET
Washington Democrat Patty Murray will likely be the Senate co-chair of the new bipartisan committee tasked with reducing the US deficit.
On a deadline to appoint members to the bipartisan Super Congress by next Tuesday, August 16, Senate Majority Leader Harry Reid appointed Patty Murray of Washington, Max Baucus of Montana, and John Kerry of Massachusetts to the panel, designating Murray as co-chair. Murray, currently head of the Democratic Senate Campaign Committee and a senior member of the Senate’s Budget Committee, is expected to chair the new committee, formally known as the Joint Select Committee on Deficit Reduction, alongside a yet-to-be-named House Republican. Baucus was selected for his position as chair of the Finance Committee (and he has been a member of several bipartisan coalitions, including the original Gang of Six in 2009), while John Kerry, who was the party’s 2004 Presidential nominee, was chosen because of his seniority within the caucus. [National Journal]
Following its near-catastrophic 634-point drop the day before, the Dow Jones Industrial Average rallied by 429 points (3.98%) on Tuesday. Mirroring its rise was a 4.7% increase in the S&P 500. Price levels had been inconsistent over the course of the day, with the final surge resulting from the Federal Reserve Bank’s mid-afternoon announcement that interest rates would remain very low through the middle of 2013. Early Wednesday trading saw increases in stock indices in Japan, South Korea, and Australia. [NY Times]
Following Standard & Poor’s decision to downgrade United States debt from AAA to AA+. the Securities and Exchange Commission has released, in part through an 84-page letter to S&P, guidelines on changing rating agencies’ reporting requirements; perhaps unsurprisingly, S&P has not reacted well to the proposal. Notably, the regulations would require such groups to state publicly and on their website when an error has been found in their calculations. This particular stipulation has been met with ire from Standard & Poor’s in large part because the US government has accused the agency of making a $2 trillion error in its calculations that the Treasury Department believes should have affected the decision to downgrade American debt. The entire set of regulations is 517 pages long and is more broadly aimed at reforming the ratings agencies that massively overestimated the dependability of certain loans in the months and years leading up to the 2008 fiscal crisis. [Reuters]
In a moment of stunning irony, the S&P downgrade may have brought some level of bipartisan agreement to the halls of Congress. Members from both sides of the aisle, including some with ideologies as disparate as those of Darrell Issa (R-CA) and Dennis Kucinich (D-OH) are calling on investigations as to the why and wherefores of the downgrade decision, including whether or not S&P may have benefited from it. Overall, the consensus seems to be that ratings agencies should play a smaller role in the United States’s government and economy. [Wall Street Journal]
In other government dysfunction news, the results of the Wisconsin State Senate recall elections are in, and though Republicans will maintain control of that body, Democrats have picked up two seats in that body, though they may lose more as two Democratic senators are up for recall elections on August 16. Although the results are, on the surface, a loss for Wisconsin Democrats, there has been speculation that the close results of some races may bode well for an effort to recall Republican governor Scott Walker [MSNBC]
Yesterday, the RP appeared as a guest again on “The Daily Wrap” with Michael Castner on Wall Street Journal radio. The RP shared his insights on the market crash that was transpiring in real time, talked about his Huffington Post piece, “Credit Downgrade for Dummies,” and bemoaned the state of American politics.
By Patrick Derocher, on Tue Aug 9, 2011 at 11:00 AM ET
Monday saw historical drops in stock indices around the world, in many cases a direct impact of S&P's downgrade of American credit from AAA to AA+.
With the passage of a debt ceiling agreement a week ago, the country has (at least for the time being) averted a short-term debt and default crisis. This has not, however, stopped our budget and debt woes. And so, with a credit downgrade, stock market slides, and the ongoing formation of the budget Super Congress comes a new Budget Crisis Update from The Recovering Politician.
The Dow Jones Industrial Average, as all reader are probably aware, experienced a gigantic 6% drop on Monday of 634 points. Here is what six economists from across the country have to say about it. [Daily Beast]
Reaction to the American debt crisis is global. Here is a look at how the world is responding. [Washington Post]
Accusations have flown that Standar & Poor’s, in downgrading the United States’s credit rating, has made major errors, with Treasury Secretary Tim Geithner claiming that the ratings agency made a $2 trillion error and other Obama administration officials echoing the belief that the downgrade was made in error. As a result, the Senate Banking Commission, chaired by Tim Johnson (D-SD), is considering making an official investigation. This maneuver has been considered before in the House of Representatives, as House Republicans have, before the credit downgrade, taken issue with the Obama administration’s efforts at averting the downgrade. [Politico]
The mechanisms behind decisions made at Standard & Poor’s is not widely known and highly secretive. The New York Times has provided as good a look as any inside the organization, in particular the deeply-hidden committee that decides which countries deserve which credit ratings. [NY Times]
The most recent stock market declines are but the most recent in a long series of falls that has defined the 2011 bear market: world markets are down by 20% since this May. Even developing countries, which are usually something of a bulwark against market slumps, are down by 16% in that same period of time. [Reuters]
With an air of uncertainty, conflict, and general pessimism surrounding the United States economy, businesses across the country are hesitant to expand in any meaningful way, even in a year that was initially expected to see 4% economic growth. In addition to the widely-publicized (and often weak) job numbers, wages are remaining stagnant, as a 9.1% rate of unemployment gives employers little incentive to pay their workers better than they absolutely must. [NY Times]
As speculation swirls in the public and private spheres in Washington as to who will be selected for the Super Congress tasked with tasked with making further cuts to the US budget and deficit, The Hill has assembled a list of possible candidates, ranging from likely picks Chuck Schumer and Paul Ryan to longshots Jim Cooper and John Thune. [The Hill]
Blame for the S&P downgrade and pursuant stock slides is rampant in Washington, and no one seems to be assigning blame to his or her own party. House Majority Leader Eric Cantor has instructed Republicans not to compromise on debt negotiations, Republican presidential candidates are calling for Tim Geithner to reign or be fired, and President Obama continues to lay blame solely at the foot of Congressional Republicans. [Washington Post]
