Sequestration and the Future of the GOP

Less than two days to go before the sequestration of $85 billion for fiscal year 2012-2013 kicks in and the weak-kneed Republicans are struggling to find a compromise that gives the President another victory. They fear another loss in public perception of their management of the American economy. This demonstrates on many levels why last November’s election gave split results.

Arguments from moderate Democrats and Republicans now emanate suggesting the need for flexibility in making these cuts. They want to give the President the authority to adjust these cuts. The President has continuously used Executive Orders to accomplish political aims beyond the intent of the Constitutional framers. Yet, curiously, he refuses to use that power in this case. This can only mean that he does not want to improve the situation. Maximal pain gives him the edge in growing the government and increasing spending despite the lack of revenue. Previously, he had to present the cuts that would result under this legislation; these could have been massaged for the benefit of the public, yet he chose to make them draconian.

In the end, he hopes to eliminate the GOP majority in the House in 2014, which would free him from lame-duck status for the last two years of his term. This is another issue given to him to demagogue. Why are we spending $2 billion in the Transportation Department to send employees to training conventions? Could this be more important than adequate numbers of traffic controllers? Does anyone expect legal challenges in this regard? So much for the argument he made on Monday.

Homeland Security Secretary Napolitano claimed that we will have less safe borders due to these cuts. They have threatened to release 10,000 illegal aliens held by ICE in Arizona due to lack of beds and manpower. This is unfortunate since these aliens have committed crimes necessitating the incarceration. Yet, the Department has started releasing some criminals ahead of the Sequester. Again, maximal pain and political punishment are meted out for a state that has opposed the President.

The Sequester has been delayed for two months which was to give both parties time to find a more reasonable and intelligent way to make the cuts to the growth in spending. Therefore, the real cuts will be about $68 billion. The Sequester was intended to be too onerous to ever occur. Yet, we are again at the last minute scarring the public. Never fail to use a crisis to get what you want. The President managed to take a rather expensive golfing trip only a week ago. No urgency then to sit down with the Congress.

The idea for this Sequester originated in the White House according to Bob Woodward. The President denied this during the election, but finally the White House Press Secretary admitted this fact. Why have the Republicans not constantly mentioned it and used it against the President as a flip-flop? The public relations disaster for the GOP is of their making. The general press will certainly support the President, but the GOP must adjust to this by creating new outlets for information

The total being saved for the entire year is less than the amount the Federal government borrows in one month to maintain the budgetary debt. This is the most important argument that the Republicans can make on the national level to gain back the White House. It robs our future generation’s wealth and threatens to bankrupt our nation. This is enough reason to make some cuts to spending. Weakened politicians see the polls holding them at fault for the Sequester, but the President ultimately will pay a price for lost jobs and weak economy.

Some Republicans are now calling for more taxes and loophole reductions. Can the Republican base ever trust these leaders if they falter on this issue. Some worry that giving the President more flexibility increases his power. Yet, the lack of an annual budget hides his already increased power through continuing resolutions. The President will never have enough taxes in place to satisfy his spending desires. Therefore, the budgetary gap will never be closed.

The national debt now approaches $17 trillion. Together with unfunded governmental liabilities at the state and federal levels, there is in excess of $70 trillion in future liabilities. There is insufficient money in the entire world to guarantee this debt. This Sequester does not reduce spending, but reduce the rate of growth. This fight will determine whether sanity ever returns to our national priorities.

On the political level, a loss for the President will embolden the opposition. This will strengthen them when they battle over the debt ceiling authorization in May. Recently, it was recognized by the CBO that over $100 billion in payments was made to people in error last year alone. This exceeds the amount of the Sequester. The federal spending has doubled since 2000. At this rate, we cannot hope to achieve a balanced budget.

The President has gotten Democrats to call for a “balanced approach” to the effort to reduce our federal budget deficit. Poll testing show this resonates with the public. It is time for the GOP to provide a definition for this term that truly is balanced. The future of the GOP as a dominant party requires this realignment. The President uses “fairness” as the mantra, but what is fair about robbing from your children and grandchildren?

Our capitalistic system will fall if private banking capital is crowded out by federal borrowing. This is the aim of our President: To weaken the system that fuels the private sector, thereby strengthening the government sector in our economy. He is already redefining the conception of “socialism” by growing the government influence over businesses rather than by direct ownership of those businesses. The regulatory control over health insurance and the banking system demonstrates this effort. Because the GOP and Mitt Romney did not make this the focus of the campaign, many stayed home and did not vote. Social issues are important, but this is the essential divide between the two national parties.


The Two Political Sides Could Not Be More Different: The Socialist Left Versus The Capitalist Right

This was originally written in July 2011 as the Congress and the President agreed to raise the debt ceiling and put in place the sequestration that presently contributes to our fiscal cliff dilemma.

As the debate over the budget and the national debt rages, it would be illustrative to understand how different the opposing sides are. Liberals/progressives see the government as the solution to all big problems. The argument given by the liberal/progressive side is that in times of economic downturns the government must inject a stimulus to counter the effect of diminished employment. This is the essence of the Keynesian counter-cyclic theory produced during the Great Depression of the 1930’s. Unfortunately, this misses the corollary part of the theory which states that during better times, the government should reduce spending. Therefore, though socialists often enlist Keynesian theory for their support, they miss that he was not a socialist and did not view government as an ever-growing entity. Keynes came to prominence after World War II when he warned against the onerous conditions imposed upon Germany by the Allies, which ultimately lead to the rise of power of Hitler and the Nazis. Few in the media remember that the Nazis were the Nationalist Socialist Party of Germany.
On the other hand, the conservatives/libertarians have developed their own dogma. Though they are closer to the essential Enlightenment era document which established our country, the Constitution, modern realities and Supreme Court rulings have complicated its observation. Most Americans would agree that they support the market principles of capitalism with government safeguards. Yet, conservatives, in the words of President Reagan, see the government as the problem. I would agree with this, but it limits our ability to resolve these issues. One can take Milton Freidman’s views to the extreme and seek individual freedom, at the expense of the national well-being. His “Capitalism and Freedom” sparked my rejection of socialism, which has been surreptitiously incorporated into the basic school curriculum over the past 100 years. However, we cannot undo every aspect of the entitlement culture that has resulted during this time-Social Security, Medicare, Anti-Trust legislation, government regulation of the environment, business, and social life, and the welfare state- because the general public is not ready to abandon all these programs.
Any deal that is reached by the two sides will not address the root problem-spending more than we can afford-while authorizing more debt. The national “AAA” bond rating may not be saved by these compromises. Divided government was the intent of our founders, but it is being used by the administration to continue spending beyond our means. The country must recognize that the only solution resides in growth of the economy in the private sector. If we taxed every one whose income exceeds $250,000 per year at a 100% rate, we only raise $900 billion per year at the expense of all the jobs they create. After all, have you ever gotten a job from a poor person? The only hope for our future is to encourage the private sector. The tentative plan reached on Sunday may not provide enough savings to satisfy the bond markets. (They wanted $4 trillion at Moody’s, while this plan is half that amount.) Of course in all this wrangling, it must be remembered that we are only discussing cuts in the rate of growth in spending that results from zero based budgeting with automatic increases.
The essential American cultural distinction from European nations which dates to our colonial period is the ability of our citizens to own land or property as a guaranteed right versus the grant of use that feudalism allowed previously. Socialists do not see this point as particularly American and do not value the final clause of the Fifth Amendment. This underlies their stark difference with the conservatives. This ownership right encourages entrepreneurial spirit and risk-taking that has created much of our national wealth.
Add this philosophical difference to the political difference and you can see a difficult compromise. The Democratic Party has managed coalitions of many different liberal groups (environmentalists, abortion rights advocates, civil rights activists), while the Republican Party is organized around many conservative social, religious, and financial issues. If the cuts are real, then the result will help our future. Unfortunately, the triggers might allow for tax increases or massive military cuts during a time of war. This is only the first salvo in the battle over spending. Our Representatives must keep up the fight even as they reach agreement on this issue.
The ideological difference between the Democrats and Republicans results in stalemate. Compromise is only possible when common ground is reached. The President and the Senate, controlled by the Democrats, see increased spending and increased taxation as the means to accomplish redistribution of income and wealth. The Republican House sees wealth, property, and income as an individual right under the Constitution. Demagoguery of these differences cannot close the gap, nor ensure any solution. It is only through honest negotiation that any compromise can be reached. Sadly, the gulf is too wide to accomplish this aim.