Saturday, July 30, 2011

BREAKING: Divided Government to the rescue on the debt ceiling "crisis"

ABC's John Karl reports that a deal in principle has been struck between our Democratic President and Republican leadership in Congress:

"Here, according to Democratic and Republican sources, are the key elements:

  • A debt ceiling increase of up to $2.1 to $2.4 trillion (depending on the size of the spending cuts agreed to in the final deal).
  • They have now agreed to spending cuts of roughly $1.2 trillion over 10 years.
  • The formation of a special Congressional committee to recommend further deficit reduction of up to $1.6 trillion (whatever it takes to add up to the total of the debt ceiling increase). This deficit reduction could take the form of spending cuts, tax increases or both.
  • The special committee must make recommendations by late November (before Congress' Thanksgiving recess).
  • If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This "trigger" is designed to force action on the deficit reduction committee's recommendations by making the alternative painful to both Democrats and Republicans.
  • A vote, in both the House and Senate, on a balanced budget amendment."
Hmmm. Let's see - significant cuts across the board, cuts to the military, cuts in entitlements, a vehicle for revenue enhancement and even more cuts later, and all on the brink of default to the dissatisfaction of both the right and left.

This will pass on a narrow bipartisan vote over even narrower bipartisan opposition from the extremes of both parties. Just the way it is supposed to work.

The Dividist is not one to say "I told you so". But - just this once - He would like to take this opportunity to mention that - um - he told you so.

Divided and Balanced.™
Now that is fair.

Friday, July 29, 2011

They're B-a-a-a-a-ck!
Draft Bloomberg
Americans Elect
rises from the grave.

A "new" national organization focused on the 2012 presidential election uncloaked their semi-stealth operation over the weekend. After getting special access over the last few months, columnists Tom Friedman and John Avlon were released from their press embargo and obligingly wrote fawning reviews. Others were a bit more circumspect.

Americans Elect is a 501(c)4 corporation. This means they are not required to disclose donors. The reader may be more familiar with this particular corporate classification within the context of the Citizens United vs. Federal Election Commission Supreme Court decision. Citizens United was a 501(c)4 corporation.

Taken at face value, the objectives of the organization are novel, ambitious and exciting. They intend to qualify for the 2012 Presidential Ballot in all 50 states, then field a presidential slate that is nominated through an open process on the internet by means of a virtual on-line convention.

Getting on the ballot in fifty states for any third party is a Herculean task. Or Sisyphean. Or both. Given the legislative roadblocks and partisan landmines used by the the two party duopoly to ambush third party electoral efforts, it is easy to rationalize the need for well-heeled donors to kick start the effort. As it turns out, Americans Elect secured some well heeled New York donors to kick start the effort. We don't know who they all are because, you know, Americans Elect is 501(c)4 corporation and they are not telling us.

Taken at face value and considered in a vacuum, while looking at them sideways and squinting slightly, one could get excited about this new high-concept high-tech initiative to reinvent our political process. Problem being, this is really not a new organization, and we have some recent history to consider, and considering that recent history, we learn we cannot take what they say at face value.

Americans Elect is Unity08, or more precisely - they would have been Unity12 until they got the shiny new name. Unity08 started at about the same time as I started this blog. I subsequently burned a few posts chronicling the Unity08 journey through the '06 midterms and the run up to the 2008 presidential election. In early 2008, well before a promised internet convention to nominate a "unity ticket" for the presidential election, Unity08 suddenly went up in flames and shuttered their site. Miraculously, only days later, the site emerged phoenix-like from the ashes, using the same address, infrastructure, a domain purchased a year earlier by Unity08, and staffed by many of the same people. This led some to speculate that the entire enterprise was nothing more than a Bloomberg stalking horse from the beginning. Cynics. Anyway, after Unityo8's rather unseemly demise (chronicled here and on Donklephant - the comments were particularly entertaining), I considered them dead and buried. Certainly I did not expect to see or hear from them again.


Jim Cook of the Irregular Times has been obsessively stalking this particular white whale since it's inception, and brings us up to date:
  • The corporate address reported by Unity08 in the first half of 2009: 1775 Pennsylvania Avenue Suite 1212, Washington DC 20006
  • The corporate address reported by the Unity12 Task Force in the second quarter of 2010: 1775 Pennsylvania Avenue Suite 1212, Washington DC 20006
  • The corporate address reported by the renamed Americans Elect in the third quarter of 2010: 1775 Pennsylvania Avenue Suite 1212, Washington DC 20006
  • Americans Elect is the intentional extension of Unity08, as Americans Elect Chair and Unity08 Director Peter Ackerman made clear when sitting for a deposition in a lawsuit filed by Unity08: "If Unity08 is successful in this litigation, Unity08 has a clear and definite intent to resume its activities -- renamed 'Unity12' -- for the 2012 presidential election. The 'Unity' mission remains as critical today for the 2012 presidential election as it was in 2006 for the 2008 presidential election." The only matter Ackerman didn't anticipate was the name change from 'Unity12' to 'Americans Elect.'
So here we are. Americans Elect, backed by a bucketload of New York mystery money, is hiring petition gatherers, fighting expensive legal battles, and doing the hard grunt work necessary to get on the ballot in all fifty states. All in order to field a presidential candidate - To Be Named Later. So - if you are considering putting your idealistic heart and soul into this brave new political operation, make sure you understand exactly what you are getting into.

Americans Elect is the Mike Bloomberg for President campaign. They probably need to maintain the Americans Elect facade to keep their 501(c)4 status. But if Mike Bloomberg is not heading their ticket in 2012, Americans Elect will go the way of Unity08. Now, if you want to see Bloomberg run as a spoiler in 2013, by all means - sign up. As for me, my views about this organization has not changed since January, 2008:
"Unity08 had over 120,000 members and raised about a million dollars. Not much by presidential campaign standards, not as much as they wanted, but nothing to scoff at. Actually, I liked the idea of a Hagel/Bloomberg Unity08 candidacy, which is why, although dubious, I signed up as a “delegate”. I feel bad for those who put their heart and soul into the effort, as they have been treated rather shabbily by the organization. The whole thing smells so manipulative, so contrived and betrays such cynical contempt for the Unity08 supporters that I would find it difficult to support Bloomberg now."
Look - I like Mike Bloomberg. Under the right circumstances, I might even be tempted to vote for him for President. But not as a 3rd Party candidate in 2012. He could not win but he could garner significant support and, like all "successful" 3rd party presidential candidates, function as a spoiler.

My guess is that in 2012 he would be more likely to pull votes from Obama than the Republican candidate. I would not have minded that in 2008, as we might have avoided the subsequent disastrous 2 years of Democratic One Party Rule. However, I am also not interested in seeing a return to equally disastrous One Party Republican Rule. The GOP will probably take control of the Senate in 2012. Reelecting Obama is the only way to avoid that particular calamity and retain our happily divided government.

Sorry Mike. Let me know when you start hanging around with a better class of 501(c)4 corporations.

Divided and Balanced.™
Now that is fair.

Wednesday, July 27, 2011

SPOILER ALERT! How the debt ceiling "crisis" ends.

Well played gentlemen!

Kabuki Theater - a traditional form of Japanese drama characterized by highly stylized postures and exaggerated gestures accompanied by familiar songs and plots rooted in historical tragedy (or comedy). The audience knows the story and knows how it ends. The art is in the quality of the performance and not in the plot. In the United States, this art form is more easily recognizable as "The Debt Ceiling Crisis." A few weeks ago the Dividist commented on the Outside The Beltway blog, describing the show we were about to witness:
"The only thing that provides political cover for a compromise for both sides is the dire consequences of missing the deadline. So there will be a compromise. The compromise will include some formula for revenue increases, (probably in the form eliminating deductions while reducing rates), it will include cuts to the military, and it will include deep meaningful and substantial cuts in spending in the overall budget. And the compromise will be agreed on the brink of default to no one's satisfaction. In the meantime, we have six weeks of Kabuki theater to enjoy while the eventual compromise is hammered out. Both tribes will have ample opportunity to point at the feckless hypocrisy of the other. Enjoy the show."
While the Dividist is not ready to take a victory lap, he does not see any reason to change that prediction. The debt ceiling will be raised, because all leadership on both sides of the aisle say it will be raised. There is no politician of consequence in Washington who is saying otherwise. We know how this story ends. It is all about the performance that takes us there.

This is not to say that the performance is unimportant. Quite the contrary. The performance will determine public opinion and the final shape of the compromise. Whether looking at the more recent temporary measures proposed by Reid, McConnell and Boehner, or the "Grand Bargain" that was being negotiated between Obama and Boehner - the fact is that the two sides are very close, as Ezra Klein explains:

"Now, remember that the deal Obama offered Boehner about a week ago now, or maybe a little bit less than that was $1.2 trillion in tax increases for $4 trillion in deficit reduction total. Boehner walked from that. but Boehner did say he would be okay with an $800 billion tax increase if there were $4 trillion in debt reduction total. So in some strange way, the two aren't as far apart as you would think, but they can't bridge that final gap. so now Boehner's arguing for no tax increases at all, but Obama is sort of held to that same deal and is trying to continue to offer it to Boehner."
The "Grand Bargain" is still on the table. That became clear in the dueling press conference "arias" sung by the two principal actors Monday evening. Despite Harry Reid proposing a plan with no revenue increases earlier in the day, Obama ignored Reid's plan in his speech and continued to make the case for his version of the "Grand Bargain" - including revenue increases. Despite Boehner himself proposing a stop-gap measure earlier in the day - he spent most of his press conference arguing the case for his version of how the "Grand Bargain" negotiation broke down. Conclusion - they are still negotiating the big deal in earnest.

Boehner is playing his supporting role exceedingly well in the shadow of Obama's scene stealing dramatics. Still - the President has an edge, successfully portraying himself to the press and most of the public as the more reasonable party in the negotiation. Last week he attempted to press this advantage to push for full $1.2 trillion in revenue increases. That was when negotiations broke down. He pressed it again on Monday with a call for public support to apply pressure in the House. Boehner played his last best move, exiting stage right, proposing a stopgap, knowing that Obama really wants the "Grand Bargain". But Obama knows that Boehner wants it too. The plot thickens.

The simple fact is that the $400 billion difference is not all that significant in the context of the complete $4 trillion deficit reduction plan. These last few moves are about how that last $400 billion will be split. So far - advantage Obama - but it's not a big advantage. The Dividist predicts Boehner will move off of his $800 billion "revenue enhancement" cap, but it will stay under $1 trillion.

The problem - both now and throughout the process - is that this "blink contest" negotiation cannot be settled except on the brink of a looming disaster deadline. Neither side can satisfy their constituency with the inevitable compromise. Our representatives on both sides take considerable political risk if they compromise too early - i.e. before a doomsday deadline. We've seen this every time the sides get close. Liberals and Democrats are furious at Obama and Reid. Conservatives and Republicans are furious with Boehner and McConnell.

The compromise solution requires a hard deadline. The key variable determining when an agreement is reached will be when we - The People - agree whether the deadline is real and exactly when it takes place. This is part of what we heard last Friday, with both sides upping the rhetoric to make the case that the deadline was really on Monday. Nobody bought it. So we are back to the August 2 deadline, except that may not be a real deadline either. Boehner's stopgap plan moves the deadline ahead another six months. Nobody really wants that either. The Dividist continues to believe the most likely scenario is that we will get a real compromise by Monday.

A suggestion: Instead of assuming that one side or the other are intransigent hypocrites, consider the possibility that both sides are arguing from principle (i.e. sincerely believing they are fighting for a position that their constituency holds dear). If you accept this framing, then it follows that both sides must maintain the posture that they are willing to walk right up to the brink of a debt ceiling default rather than compromise their principles. To do otherwise would undermine their negotiating position and be a betrayal of the people who elected them.

Monday night the President said - "The American people may have voted for divided government, but they didn’t vote for a dysfunctional government." A good line, but it misses the mark. We have a divided government because we have a divided country.

There is a significant faction of the electorate who would like to see our country more closely emulate a European style social welfare democracy. There is an equally significant faction of the electorate who would like to see our country move back to the more limited government concepts on which it was founded. To a large extent the Democratic and Republican politicians we elected to represent us are doing exactly what we expect of them - representing our views - just the way we want them to. Our government is not dysfunctional, it is behaving as designed to resolve conflicts between large and opposed factions in the populace.

Oddly, The Dividist is filled with optimism and almost euphoric watching this peformance. It reinforces his belief that he does not need to put any faith in the motivations of the politicians of either party. It is enough to know that we have a system that was designed to anticipate this kind of political conflict - in fact - to insist on it and institutionalize it. As James Madison said in Federalist #51 when arguing for our constitutional division of power: "Ambition must be made to counteract ambition." Out of the conflict inherent in a government run by men and not angels we get better results than we would in the absence of the checks they put on each other. Madison again in Federalist #10:
"The influence of factious leaders may kindle a flame within their particular States, but will be unable to spread a general conflagration through the other States. A religious sect may degenerate into a political faction in a part of the Confederacy; but the variety of sects dispersed over the entire face of it must secure the national councils against any danger from that source. A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire State. In the extent and proper structure of the Union, therefore, we behold a republican remedy for the diseases most incident to republican government."
The time to worry is when the factions are not fighting each other to a standstill. That usually means the system is not working as it should and power is too concentrated. Or it means we are going to war.

The Dividist's primary rationale for supporting divided government is that it leads to more fiscal responsibility and spending restraint in our federal government. The Dividist is interested in the result, not the histrionics that are necessary to get there - no matter how entertaining. The kind of giant cuts envisioned in the "Grand Bargain" can only happen when we are teetering on the brink and can only happen with a divided government. Pay attention to the result - not the performance. Divided government may be winning and winning big.

Bravo, gentlemen. Play on.

Divided and Balanced.™
Now that is fair.