Saturday, August 6, 2011

Will it merely be more of the "same old, same old"?

This super committee was designed to remove the deficit negotiations from politics a bit from the usual stuff that goes on in Congress -- because the two parties would be equally represented, and individual positions would be shielded a bit. Only a report of the proposal would be released, and Congress would have to vote it up or down, without amendments or procedural delays. Supposedly it would diminish opportunity for political posturing, and incentives for both sides to reach a compromise were built into the trigger.

Or so I thought. But with each day that passes it sounds more and more like the "same ole, same ole."

First, Republicans are calling for the committee to be completely transparent. Meaning everything will be public. Ordinarily, I would say that's a good thing; but in this case I think it simply means "subject to political pressure" -- from colleagues, from constituents, from lobbyists. Some negotiations need to go on in private to free the negotiators from external pressures.

Second, Republican leaders are saying that they will only appoint people to the committee who are committed to holding firm in opposition to any revenue increases.

Meanwhile, Nancy Pelosi says that the Democrats are "not going to draw a line in the sand." Meaning, they will approach it with an open negotiating attitude -- as it was intended to be.

So what do you do when you have a negotiating situation and one side plays by the rules and spirit of the process -- and the other side refuses to abide by rules, spirit, or simply decency?

I see doom ahead. I see the same old thing happening again.

So here are the questions: Who will the members be? Who will moderate/chair the committee? How open do their negotiations have to be? What do we do if the Republicans are just as recalcitrant as they have proven they will be?

The built in remedy -- if the committee can't agree, or if Congress votes down their plan -- is the automatic spending cuts set off by the trigger mechanism. That was really designed to put pressure on the committee to come to an agreement. It was not a solution to the deficit and budget questions.

Now it's not seeming like such a good idea after all -- except for the fact that it got the deficit fight out of the way long enough to raise the ceiling.

That's about it.

Meanwhile, now freed of that drama, more reasoned heads are saying what we should be focusing on is jobs, jobs, jobs -- exactly what Robert Reich, Paul Krugman and other economists have been saying all along. But that's where the clash comes: Repubs say we need to give business incentives to create jobs; Dems and reasonable economists say business has the money, we need to create a demand by first making jobs for people; then they will have money to buy and increase demand, and then business will resume production -- and create more jobs.

Meanwhile, Standard & Poor's Rating Service has downgraded U.S. credit from AAA to AA+. It remains to be seen what that will actually mean, if the other rating agencies hold us at AAA, as they have indicated they will do for now.

China is already chastizing us, and we should expect that they will use it as a bargaining chip the next time some financial matter is negotiated.

Ralph

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