How much power should the ruling faction in a country / political system have? Should it be relatively unfettered, as it is NZ, or buffered by “checks and balances” as it is in the USA? Each approach has its risks. The risk of the former is that power will be used destructively (as was the case with the desolation of Rogernomics). The risk of the latter is that power may not be able to be used at all (political paralysis).
The problem with checks-and-balances is that it assumes rational agents. For generations such a system more-or-less worked in America. But now the Republican / Tea Party (faced with a black president and the realisation that demographics are against them) has gone so certifiably nuts that they are willing to paralyse the political process. They are so determined to deny Obama any kind of outcome that might be construed as positive for him that they no longer care what gets wrecked in the process.
Case in point – the “fiscal cliff“. Back in January the issue of controlling America’s deficit was never resolved, it was just punted out a couple of months. The deadline was Friday, and this time the two sides didn’t even reach a compromise on further postponing it, let alone resolving the deficit issue. And so “sequestration” (spending cuts), one of the major components of the fiscal cliff, is going to go ahead:
The sequester was enacted during the bitter 2011 debt ceiling negotiations and is a part of the Budget Control Act. The debt ceiling was raised in 2011 in exchange for 1.2 trillion in spending cuts, which were to be determined by a bipartisan group of senators and representatives, a ‘super committee’, in 2013. If no deal is reached by this committee then automatic, across the board cuts of 10% will go into effect.
The sequester was intended to be a ‘last resort’ to ensure spending cuts that would hurt Democrats and Republicans equally. The huge cuts in defense spending are supposed to hurt the more hawkish Republicans, while the cuts in other sectors of government spending like research, education, the EPA and a potential 2% cut to Medicare providers are supposed to be anathema to the Democrats.
What weakens the sequester as a ‘last resort’ tool are the exemptions built into it. War spending and entitlement spending on programs such as Social Security, Medicaid are exempt from the sequester, which could leave it toothless.
Given the exemptions, it is hard to predict what the actual effects of sequestration will be – commentary varies from “catastrophic” to “no big deal”. But President Obama is certainly not pleased:
Obama blames Republicans before signing ‘arbitrary’ sequester order
President warns US to prepare for drawn-out standoff after futile meeting with congressional leaders over scheduled cuts
Barack Obama signed an order on Friday night to implement $85bn in spending cuts, a move he described as “dumb” and “arbitrary” and that he blamed on the intransigence of Republicans in Congress.
Speaking at a White House press conference after a futile meeting with congressional leaders, Obama warned Americans to prepare for a drawn-out confrontation that could last for months and will be painful for working-class people.
“We will get through this. This is not going to be an apocalypse, I think as some people have said,” Obama said. “It’s just dumb. And it’s going to hurt. It’s going to hurt individual people and it’s going to hurt the economy overall,” he said.
Federal agencies will spend the weekend redrawing their budget plans and beginning the process of sending out letters to federal workers giving them 30 days notice of shorter hours, furloughs and even lay-offs. The White House budget office also has to inform Congress of where the spending cuts are to be made.
The hardest-hit department will be the Pentagon, which will have to find more than $40bn in savings between now and September, about 9% of its overall budget. But almost every government department, from aviation to the park service, will be hit, with cuts amounting to about 5% of their overall budgets. Only Medicaid and welfare benefits such as food stamps are exempted.
A forced austerity program is really not what the American economy needs right now. You’d think that the voters would be lining up to punish those responsible, yet the Republicans are still talking tough:
In the sequester crisis, the Republicans want only cuts, on welfare rather than defence, and no new taxes. Obama wants cuts accompanied by closing tax loophole for the wealthy, in effect new taxes. Boehner, at the end of the White House talks Friday, was adamant that he will not contemplate any new taxes. “The discussion about revenue is over,” Boehner said.
I think any rational evaluation would tell Republican politicians that it is them, rather than the President (newly re-elected and obviously willing to compromise) that is going to get the blame for the pain that will now follow. Unfortunately, however, it looks like rational evaluation and the Republican Party have permanently parted company.