Tuesday, August 02, 2011

Rep. Moran (D-VA) writes to me that Obama should have used the 14th Amendment, why he voted no

First, I want to recognized the moment created when Gabby Giffords appeared in Congress Monday, motivated in part by the possibility that her vote could make the difference on the Debt Extension. 

I do not show a lot of emotion over these matters, but I think her appearance helped change the mood of this whole episode, which is very disturbing in most ways. 

I got an email from Representative Jim Moran (D, 8th District, northern VA). He voted against the measure and says that the president had the right to invoke the Fourteenth Amendment, as suggested by former president Bill Clinton, and should have threatened to do so, taking out the "extortion" implied by the asymmetric behavior of some House Republicans. 

Since the email would be in public domain, I can reproduce it for visitors. Here it is:

"Thank you for contacting me with your concerns regarding the recent impasse over increasing the debt ceiling. I appreciate you taking the time to share your views with me.

"As you know, on Monday, August 1st, the House passed the “Budget Control Act of 2011,” legislation that raised the debt ceiling while cutting discretionary spending deeply. This bill was the product of a deal negotiated between President Obama and Congressional leadership. It was passed by the Senate and signed by the President the following day.

"Under the terms of the deal the President is authorized to raise the debt limit by at least $2.1 trillion. In exchange for that necessary increase, the bill immediately enacts nearly a trillion dollars in spending cuts by creating caps on federal discretionary spending which includes funding for education, transportation, health research and national defense. It further establishes a “Super Committee” made up of three representatives from each party in the House and three from each party in the Senate. This committee will be tasked with identifying an additional $1.5 trillion in deficit reduction. That Committee must report its plan to Congress by November 23rd and Congress must vote on the plan by the 23rd of December. Should the Committee fail to report a plan, or should Congress not pass it, the Budget Control Act contains a “trigger” through which automatic spending cuts, split between the already decimated domestic discretionary budget, Medicare provider payments and defense spending would be enacted.

"I could not support the bill. The debt ceiling has been raised cleanly 39 times over the last 30 years, 18 times by President Reagan alone. But for the first time ever, a deal has had to be negotiated to raise the debt ceiling and prevent a default that would have greatly damaged our economy. Given the circumstances, President Obama should have used invoking the 14th Amendment to raise the debt ceiling as leverage against those willing to force default, making it clear to America’s citizens and investors that the full faith and credit of the United States cannot be taken hostage.

"This deal was simply not representative of a balanced approach to long-term deficit reduction. By leaving revenue entirely off the table, the agreement severely restricts the government’s ability to make investments in the human and physical capital of this country – investments that created the strongest middle class in the world and made our country the most powerful. At a time of stagnant growth and high unemployment, the far-right of the Republican Party has been able to hold our economic security hostage in exchange for deep cuts that will reduce growth and employment and increase inequality in the short term, without properly addressing the structural causes behind our long-term deficits.

"Government spending currently equals roughly 25 percent of GDP, while revenues being collected are at a historically low 15 percent of GDP. This gap, which represents our yearly deficit, is unsustainable – and despite the rhetoric cannot be bridged by spending cuts alone. Under the Clinton tax rates that prevailed during the 1990s the economy created a record number of jobs and the government actually ran a surplus for over two years, leaving a projected surplus through 2011 of $2.3 trillion. These budget deals included spending cuts and new revenues and should be the model we follow today. Unfortunately, the balanced budgets and growing surplus that were paying down the debt were destroyed through the reckless mismanagement of the Bush Administration and a Republican controlled Congress that undertook two wars, two massive tax cuts, and a Medicare prescription drug program which pays retail rather than negotiated prices. None of these policies were paid for with either equivalent spending cuts or new sources of revenue. And following the Great Recession, caused in large part by deregulation and the lack of oversight of our banking system, we are where we are today.

"The agreement formalized by the Budget Control Act validates the political strategy of those Republican radicals who were willing to create default and economic chaos in order to avoid true compromise and a balanced approach to deficit reduction. This resolution has demonstrated the political benefits of hostage-taking and only makes it more likely that this ugly process will be repeated in the future. This brinksmanship has eroded the global confidence in our system of government, a confidence that made the dollar the global reserve currency and the Treasury bill the world’s safest investment. I believe that this process and its result will have a lasting negative effect on our economy, prevent investment in our infrastructure and weaken our economic competitiveness.

"Again, I appreciate your views on this issue as it will affect our economy for years to come."

Senate roll call vote is here (C-span).

House roll call here (NY Times).

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