Borrow-and-spend Republicans in Congress holding nation hostage

Kevin Kamberg

By all accounts, imprudent borrowing and naked greed are at the root of what created the current financial crisis.

As the Senate panders to Congressional Republicans - hoping to entice a bare majority to vote for the bailout package - they have inevitably sought compromise.

The new approach, announced Tuesday night by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., would tack large and contentious tax measures to the bailout bill. Senate leaders figure the House will have to approve it because the tax cuts are too appealing to Republicans and the financial rescue plan will still seem essential to most Democrats.

As much as Republicans love tax cuts, that by itself just wasn't enough. Oh no! Republicans want the tax cuts but don't want to have to pay for them. So, provisions to pay for the bulk of the tax cuts with spending cut offsets were stripped out to please borrow-and-spend Republicans.

In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.

WTF???

How is borrow-and-spend politicking somehow fiscally conservative, much less fiscally responsible at a time when our children are facing record national deficits already?

And, not to let Dems completely off the hook here, how insulated from rank and file Americans must Senator Schumer (D NY) be to praise the compromise as "a brilliant move"? It may be politically brilliant but is it really in the nation's best interests? I don't see how.

Comments

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    Kevin, you're right. This is unacceptable.

    It's not just borrow-and-spend. It's also about running up the deficit and national debt in order to argue that "we can't afford" what ordinary Americans and the long term health of the nation (in a number of senses) need from the government. They're trying to lock this in as they are on their way out in the executive branch and facing big losses in the legislative.

    It is not even brilliant politics. It will hamstring Democrats who will end up losing politically as a result in 2010 or 2012. Unless it leads to another defeat in the House as some gains as a result are offset by other losses in the vote there.

  • Tom Civiletti (unverified)
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    I hate to inject reality so close to a presidential election, but...every chair and senior member of a congressional committee that oversees the economy and every presidential candidate who has a decent chance of winning his party's nomination has gained the approval of the FIRE [finance, insurance, real estate] lobby. They are quite unlikely to oppose what that lobby wants, even if they make populist rhetorical statements that scold the FIRE sector.

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    I was originally, reluctantly, for the bailout package. With this, I'm now firmly against it. And frankly, I don't understand why any Democrat should vote for it. The market dropped only by 5% through all of this; it's probably not that bad.

    But leave it to 'Surrender Nancy' to find yet another way to kow-tow to the worst of the GOP. My God, she's the weakest Speaker of the House in well over a century.

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    Ditto what Steven said!

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    This morning Rep Peter DeFazio called in to KPOJ Morning show and had several good suggestions on how to resolve the financial mess that would be at little or no cost to taxpayers, would provide relief to borrowers and also correct bad policies and practices and hold the perpetrators to account. He lamented that he had not yet been invited to discuss them with Committee Leadership and was uncertain if he would be. Listen here

  • Dave O'Dell (unverified)
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    The Paulson Bailout is a reverse Robin Hood. It is a scam to steal $700 billion or more from taxpayers and give it to Paulson's Wall Street fat cat buddies. Defazio's plan is much more reasonable.

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    The press is conveying incorrect information about the Wall Street bailout bill that the U.S. House of Representatives rejected Monday, as well as the bill being considered by the Senate today.

    The House bill was 110 pages. The current Senate bill is 451 pages. I have read them both. They both authorize the Secretary of the Treasury to spend $350 billion and then another $350 billion to buy "troubled assets" (which includes any type of financial instrument) he wants to buy at any prices he wants to pay. All of the other provisions are optional and need not be implemented to any specific extent. Those include the alleged limits on executive compensation and "golden parachutes," the alleged assistance to homeowners who cannot pay their mortgages, and the opportunity for the government to get partial ownership of the assisted corporations. The bill does not require Secretary Paulson to take any of those actions to any specified extent, and he has repeatedly stated that he opposes such actions.

    As for the "taxpayer protection" provision, it is truly absurd. The House bill stated only that, after 5 years, "the President shall submit a legislative proposal that recoups from the financial industry [undefined] an amount equal to the shortfall." Merely drafting a bill does not get back from the undefined "financial industry" the amounts paid by the taxpayers for the bailout. And even this provision is dropped from the Senate bill, which requires only that money market mutual fund industry repay the Treasury for the cost of guaranteeing money market funds.

    The Senate bill is supplemented with hundreds of pages of changes to tax law and tariffs, including numerous special deals for certain industries, such as these (selected at random):

    SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN RESERVATIONS.
    
    SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY REFUNDS
    
    SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.
    
    SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.
    

    The Senate bill also includes numerous provisions having nothing to do with financial services or even the economy, including permanent authority for the government to investigate possible terrorism:

    SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.
    
  • peter c (unverified)
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    kevin,

    there's and error in your post's title, it says "Borrow-and-spend Republicans", when the correct term is actually "Borrow-and-squander Republicans"

    please correct this. thanks

  • Tom Civiletti (unverified)
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    Ha ha! So much for economic reform! The US Senate reacts to peril in the markets with another pork-barrel festival.

    On the other hand, ahem, I import oriental rugs. That suspension of duties on wool products looks mighty good to me. Ha, maybe I should send Harry Reid a contribution.

    Campaign finance reform, anyone?

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    Campaign finance reform, anyone?

    With every passing year I am increasingly convinced that CFR or the lack thereof is at the root of the large majority of what is wrong with our government.

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    I don't know a single person (who isn't a Senator or a Congressperson) that is in favor of this bill. It seems incredibly unpopular to me. I've seen a tiny bit of polling which seems to indicate that the public is pretty divided on what to do.

    It feels like this is being shoved down our throats and we're supposed to like it or lump it.

    Iraq War redux.

  • Tom Civiletti (unverified)
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    Kevin,

    You made my day.

  • Eric Blair (unverified)
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    "Until they become conscious they will never rebel, and until after they they have rebelled they cannot become conscious."

    Welcome to the festivities, Kevin.

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    The House bill was 110 pages. The current Senate bill is 451 pages.

    I find this all just... incredible.

    Against the backdrop of what all the talking heads are characterizing as a pending catastrophe (if there is no bailout), instead of publically tarring and feathering borrow-and-spend Republicans who are holding us all hostage our leaders instead fall all over themselves to bribe them.

    WTF?

  • torridjoe (unverified)
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    Well, I think the "bailout", or "rescue" or whatever you want to call it is medicine that we have to take. Down the road we can work for reform so this won't happen again, but in the short term we have to maintain liquidity in the financial markets.

    Without credit, and access to money by borrowing, farmers will not be able to plant next year's crop, retailers will not be able to buy for the holiday season and restaurants will not be able to hire up for their peak times.

    The end result will be a terrific loss of jobs, which we can ill afford.

  • Crossposting? (unverified)
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    Sorry, but doesn't Blue Oregon have a rule against cross posting?

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    Well, I have to say I'm terribly proud of Jeff Merkley right now. He's standing up for his beliefs, even after the Senate voted 74-25 for this turkey.

    From his statement:

    The crisis on Wall Street and the need for a bailout is an indictment of the failed economic policies of Gordon Smith and George Bush. Their philosophy resulted in unimaginable abuses and excesses on Wall Street and now Washington is making taxpayers clean up the mess. Congress and the Administration should go back to the drawing board and come back with a proposal that prevents more economic pain for families and small businesses and meets some minimum standards to protect taxpayers and guarantee accountability on Wall Street.

    It's now being highlighted in http://www.mydd.com/. Gordon Smith thinks he's going to get some mileage from it. Good luck with that.

  • (Show?)

    Unfortunately TJ's correct on this one, IMO.

    Right now, the car dealer in Sandy cannot get credit to sell more Giant SUVs to Sandy residents. People with excellent credit rating are being be rejected more frequently (from 90% approval to 60% approval) and people with poor credit are suffering even more (from 60% approval to 10% approval).

    Since the whole world is in the same rotten mess that relies on loose credit and the selling of debt to Arab, Chinese, Swiss, and other central banks through bonds, they can't keep the thing operating without a bailout.

    I'm glad Jeff's taking the position he is right now as it bodes well for sane and thoughtful re-regulation going forward, but something will be approved, and the longer we wait, the more exemptions for manufacturers of wooden arrow shafts will be inserted into the steaming pile......

  • Dick G (unverified)
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    Its curious that all these years Dems have let the GOP "define" them as the "tax and spend party". From Reagan on, the Dems should have been able to define the GOP as the "borrow and spend party", but hasn't. The GOP has talked "balanced budget" for decades but never come even close to achieving one. The difference: the Dems try to pay their bills; the GOP leaves the bills to their kids and grandkids (& great grandkids?).
    Does GOP=Get Outta Payin?

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    Well said, Dick. I do believe that failure to frame themselves much less the opposition is an issue which Lakoff has been working very hard to rectify.

    Beyond that... I don't know whether it's relevant or not but I am a former Republican and a very long-time Independent/NAV. So perhaps I just come at it from a different perspective than many life-long Democrats. Not that there's anything wrong with being a life-long Dem! I just come at it from a different background.

    I suspect, but have no evidence to back it up, that many Democrats are reluctant to use "borrow-and-spend" because it makes them think of "tax-and-spend" and they don't want to frame discussions in a way that invites that comparison. But I think they're wrong to do so. Let the comparison be made! There is no doubt that of the two, only the later can honestly be called fiscally responsible.

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