Tuesday, October 11, 2022

Last Call For Shutdown Countdown, Con't

One thing Jon Chait can tell us about the effects of the House GOP winning in November is that they will almost certainly threaten a debt default crisis in order to force President Biden and the Democrats to make hundreds of billions of cuts to Social Security and Medicare.

Bloomberg’s Jack Fitzpatrick interviewed several Republican contenders to lead the House Budget Committee. They all said, with varying levels of specificity, that they plan to instigate a debt-ceiling standoff to force Biden to accept cuts to retirement and health-care programs. “Our main focus has got to be on nondiscretionary — it’s got to be on entitlements,” said Representative Buddy Carter. Representative Jodey Arrington said he wants “eligibility reforms,” which means raising the eligibility age and imposing a means test for Social Security and Medicare benefits. “We should ensure that we keep the promises that were made to the people who really need it, the people who are relying on it,” said Representative Lloyd Smucker. “So some sort of means-testing potentially would help to ensure that we can do that.”
It might seem strange that Republicans would be pivoting to a more aggressive agenda without holding the White House. But this is actually consistent with the strategy they have followed over the past three decades. Republicans are committed to scaling back the safety net. But they realize this agenda is toxically unpopular — even less popular than defunding the police, a policy Democrats have repudiated en masse.

They could try to accomplish this through compromise — the previous two Democratic presidents showed some willingness to trade social-spending cuts for higher taxes on the rich. But higher taxes on the rich are completely verboten in the GOP. And so their strategy is to force Democratic presidents to sign spending cuts into law against their will.

The 1995–96 Republican Congress instigated a series of government shutdowns in the belief they could force Bill Clinton to accept cuts to taxes and social programs. This crusade blew up in their faces and helped Clinton win reelection. But rather than abandon it, they tried it again under Barack Obama, this time using the debt ceiling as the hostage of choice. That, too, failed.

But the Republican plan is to try it again with Biden. They are already floating their message: The Republicans will insist they won’t raise the debt ceiling unless Biden agrees to Republican-designed spending cuts, and they will blame him for the global meltdown if he refuses their demands. “If Republicans are trying to cut spending, surely he wouldn’t try to default,” said Representative Jason Smith, the prospective chair of the House Ways and Means Committee.

And while this tactic has never worked before, it has the theoretical attraction of evading the public’s deep aversion to the GOP policy agenda by extorting the Democrats into endorsing it.

Last June, the Republican Study Committee, a conservative caucus that includes more than three-quarters of the House Republicans, released a sweeping domestic-budget plan. It received little attention in the mainstream media. The plan, notes Fitzpatrick, would

gradually raise the Medicare age of eligibility to 67 and the Social Security eligibility to 70 before indexing both to life expectancy. It backed withholding payments to those who retired early and had earnings over a certain limit. And it endorsed the consideration of options to reduce payroll taxes that fund Social Security and redirect them to private alternatives. It also urged lawmakers to “phase-in an increase in means testing” for Medicare.

On top of partially cutting Medicare and Social Security and partially privatizing the latter, the RSC plan would implement various regressive tax cuts favored by the GOP.

This House GOP, if they win in November, absolutely will burn the economy down and blame Biden for it, and the right-wing noise machine is already gearing up for the assault.

A House and/pr Senate controlled by Republicans would be an horrific nightmare, but that depends on us voting.

Saud Songs They Sing

With the US average of gas prices headed back for $4 per gallon after OPEC's production cut, both the Biden administration and high-ranking Democratic members of Congress suddenly, finally has a real appetite for cutting the Kingdom loose with potential significant effect.

President Biden is re-evaluating the relationship with Saudi Arabia after it teamed up with Russia to cut oil production in a move that bolstered President Vladimir V. Putin’s government and could raise American gasoline prices just before midterm elections, a White House official said on Tuesday.

“I think the president’s been very clear that this is a relationship that we need to continue to re-evaluate, that we need to be willing to revisit,” the official, John F. Kirby, the strategic communications coordinator for the National Security Council at the White House, said on CNN. “And certainly in light of the OPEC decision, I think that’s where he is.”

Mr. Kirby signaled openness to retaliatory measures proposed by Democratic congressional leaders outraged by the oil production cut announced last week by the international cartel known as OPEC Plus. Among other things, leading Democrats have proposed curbing American security cooperation with Saudi Arabia, including arms sales, and stripping OPEC members of their legal immunity so they can be sued for violations of American antitrust laws.

“The president’s obviously disappointed by the OPEC decision and is going to be willing to work with Congress as we think about what the right relationship with Saudi Arabia needs to be going forward,” Mr. Kirby said. He sounded a note of urgency. “The timeline’s now and I think he’s going to be willing to start to have those conversations right away,” he said. “I don’t think this is anything that’s going to have to wait or should wait quite frankly for much longer.”

The comments came just a day after Senator Bob Menendez, Democrat of New Jersey and chairman of the Senate Foreign Relations Committee, assailed Saudi Arabia for effectively backing Russia in its brutal invasion of Ukraine and called for an immediate freeze on “all aspects of our cooperation with Saudi Arabia,” vowing to use his power to block any future arms sales.

“There simply is no room to play both sides of this conflict — either you support the rest of the free world in trying to stop a war criminal from violently wiping off an entire country off of the map, or you support him,” Mr. Menendez said. “The Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest.”

Senator Dick Durbin of Illinois, the second-ranking Democrat in the Senate, said on Tuesday morning that Saudi Arabia clearly wanted Russia to win the war in Ukraine. “Let’s be very candid about this,” he said on CNN. “It’s Putin and Saudi Arabia against the United States.

If long-time Democratic foreign policy hands like Menendez and Durbin, and eve Biden himself, are tossing Prince Bonesaw McGraw and his merry band of sheiks  out of the tent, this is real. The question is how much damage Riyadh has done. It might be the first time I can remember where US foreign policy is about to take major steps back on Saudi Arabia.

Biden can't push them too far though. If Riyadh decides to start pricing oil in rubles instead of greenback, the dollar craters and everyone now it. They've subtly mentioned this earlier this year, not exactly correcting Russian Foreign Minister Sergei Lavrov when he said that the Saudis were invited to join the BRICS compact. Such a move really would be siding with Putin against the US.

We'll see, but the OPEC production cut is going to have consequences, and so will the US and European actions that follow.
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