Raincheck on the Fiscal Cliff

Article originally posted on Technorati as Raincheck on the Fiscal Cliff

If your thoughts have been occupied by the "fiscal cliff"  like a bad New Year's hangover there is some relief, at least for now.  Today's passage of HR-8 (The Tax relief Extension Act) provides among other things a 1 year extension to Federal emergency unemployment benefits as well as a permanent extension of tax cuts for those making less than $400,000.  Both measures that could keep the economy from slipping back into recession in the near term. 

Still, on both sides of the aisle this last minute bipartisan agreement comes up far short of the "Grand Bargain."  Spending cuts are only "deferred" for two months leaving plenty of debate for the incoming 113th congress.  It seems the only part of a comprehensive overhaul of government spending cuts and revenue increases that either side can agree on is the name.

To most Republicans on the hill, a "Grand Bargain" must include severe cuts in funding and tighter eligibility requirements for "entitlement" programs including Social security and Medicare.  Any new government program must have a corresponding funding source either from cuts in other entitlements or quantifiable revenue streams otherwise known as tax increases.  With most of the House Republicans still adhering to the Norquist pledge they're going to need different shorthand for "revenue." 

Republicans also chafe at the prospect of "overburdening" the well heeled with a bigger tax bill for fear of hurting job creation.  It is large, not small business that drives the economy in the conservative view.   Increasing taxes on them can only result in economic retaliation.  If it sounds familiar it is indeed the theory of trickledown economics from the Reagan era.

To most Democrats in congress, a "Grand Bargain" encourages investment in social programs, protection of entitlements and increased taxation on high earners.  Incidentally, what constitutes a "High earner" has been a major bone of contention during the haggling over the fiscal cliff.  Tax loopholes long employed by businesses to shelter income as well as subsidies to large corporations like big oil would also be eliminated under the "ideal" democratic plan.  

All of this under the banner of "tax fairness" which asks more of those who have "benefitted the most"  to help those who have not.  Of course bearing the label of "tax and spend" democrats makes their proposals subject to increased scrutiny from their Republican counterparts. A condemnation seemingly validated by funding sources that often look more like a sidewalk shell game than a legitimate revenue stream.  Republicans often cite President Obama's$700 billion Medicare savings plan as a revenue source as an example. 

Where republicans now argue the need for "fiscal responsibility" in funding social programs,  Democrats are quick to remind them of their lack of the virtue in recent history.   A 4trillion dollar price tag for the Iraq war and 1.2trillion for the Afghan war to date has only added to the balance on the national "credit card."  Numbers republicans refuse to address and democrats love to remind them of.

While disaster has been averted for now expect little in the way of increased cooperation going forward.  The deal passed Tuesday night by the House was born more of self-preservation than magnanimity.  None in congress wanted to bear the heat of a constituency thrown back into a crippling recession born out of legislative inaction. 

The logjam of the "Fiscal Cliff"  is born once again out of political dogma.  Where Democrats believe in government being a catalyst for economic growth Republicans see it as an impediment.  Not since the Civil war has a congressional body been so divided by ideology and put the fortunes of the country in such peril. 

If you require evidence, look no further than the close  of Tuesday night's House session.

Amidst impassioned pleas to act on a Senate bill that would authorize 60.4 billion in Sandy relief, the Republican leadership decided instead to end the session.  Cries of "Speaker!, Speaker!" left hanging in the air as the Speaker pro tempore Steve Womack (R-Ar) quickly left the chair, his only response a shrug and outstretched hands.

Fanatical ideology still holds the reigns of congress.  It remains to be seen if progress can replace it.  

State of the Union 2012 (Updated)

Funny how a year later almost nothing has changed...

Item's in parentheses are updated information.

Originally published on Technorati as State of the Union 2012.

At least nobody shouted "You Lie!" during the speech.  

Still, it wasn't difficult to distinguish party affiliation during the hour long oratory.  Most Republican's remained seated for most of it with politely folded hands and a 10000 yard stare.

With at least a cursory level of decorum on display in the House chambers last night we witnessed the 2012 edition of the State of The Union with President Barack Obama presiding.

The economy took precedence as the primary focus of the speech with new tax incentives for companies that create jobs domestically while removing them from those that create them elsewhere.    A new investigative unit called the Trade Enforcement Unit is charged with investigating unfair trade practices and monitoring the flow of counterfeit  and unsafe products into the U.S.

Free trade agreements between the U.S. and South Korea, Colombia and Panama were also touted as helping to increase trade and move American products into foreign markets.
(During the election these agreements that had bipartisan support in both houses were used as political barbs by the Republican party)

The president also encouraged private/public partnerships to retrain unemployed workers for technical jobs that otherwise remain unfilled.  He went on to cite the example of a single mother displaced from her job as a mechanic in North Carolina.

" Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant."

(This initiative has gone nowhere sacrificed on the altar of the year's budget wrangling)

The cost of higher education was also addressed with an admonition to post secondary institutions to keep tuition costs down or risk the loss of public funding. 
(A great idea but a toothless mandate although new Federal student loans are no longer administered by private servicers.  Pre-existing loans have seen little to no change)

There was also mention of the need to address immigration issues regarding foreign born students studying in the U.S. who are deported because of their technically illegal status.  The President used this as an example to highlight the need for immigration reform.  From the Speech,

 " The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan (It did) , let’s at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country"

The President also encouraged support for small businesses by allowing easier access to financing and tax incentives for providing better wages and job creation.  He went on to propose the elimination of unnecessary and cumbersome Federal regulations exemplified by the example of dairy farmer's requirement to comply with federal regulations regarding cleanup after a milk spillage because milk was classified as an oil. 

He went on to mention the need for investment in renewable energy and cited support of domestic exploration of energy resources.
(So long as oil, coal or natural gas is considered renewable, there isn't a problem for conservative lawmakers.  Public investment has been largely blocked by congressional deadlock)

The President also called for investigation of risky and abusive behavior of those in the financial industry by  a new Financial Crimes Unit under the supervision of the Attorney General of The U.S.

(Apart from heated questioning of mortgage bankers during Senate hearings, this too was largely a toothless mandate)

In his speech he highlighted the need for cooperation across party lines concerning budgetary and tax fairness issues.  The President also proposed a ban on insider trading for members of congress to curtail the influence of business lobbyists on politicians. 
("Fairness" is apparently an ambiguous term even a year later)

The measure would prevent members of congress from owning stocks in companies that they have a direct influence over or from.

(This did get through congress)

Recognition of the Military's success in eliminating Osama Bin Laden  was mentioned when the President said,

 "For the first time in two decades, Osama bin Laden is not a threat to this country."

(Even conservatives had to admit this fact but the political machine did its best to bury it)

The President also stressed  the need to support returning Veterans with funding for the VA and tax incentives to employers who hire veterans returning from service.

(Current budget negotiations still have VA funding on the chopping block.  A number of private funding organizations have sprang up to try to fill the gap)

As with any State of the Union we've come to expect a high level of political ideology and a wish list of associated ideals from the Executive branch.  Regardless of the motivations that craft the annual Presidential address it's understood that most of the admonitions will not come to pass. 

The Republican response to the speech from Indiana Governor Mitch Daniels, for example,  was either diametrically opposed to the majority of the content or focused on election year political rhetoric.   A notable quote from the governor, "  he cannot claim that the last three years have made things anything but worse:"

(Neither can you you governor)

For the previous 4 decades the ideologies of both political parties have prevented true bi-partisanship. The result had been either congressional deadlock or biased legislation in favor of the ideals of the party in power.  

Unfortunately we are a nation of strong ideologies with political parties locked in a battle between the 20th century's New Deal and the 19th Century's industrial expansion.  Both have their merits and deficiencies but neither  is compatible with the other.  Unfortunately, more often than not this makes for an environment hostile to compromise that no well crafted oratory can overcome.

If the State of the Union serves no other purpose it at least exemplifies the constituent components  of the ideologies that prevent progress.