From the Center

It’s hard to believe we are worrying about a default on the debt of the United States – again.  The markets and many pundits are – in my opinion – disturbingly sanguine about what is about to go down.  Evidently, they are confident that a deal will be inked before a default occurs.  I hope they are right, but I don’t think that outcome is certain.

The existing debt limit of $31.4 trillion was reached in January, which prevented the U.S. Treasury from issuing new debt.  Since then, Treasury Sec. Janet Yellen has been employing what are called “extraordinary measures” and using current tax receipts to pay the nation’s bills.  These short-term solutions will only suffice until sometime in early June, according to the Congressional Budget Office.

President Biden rolled out his fiscal year 2024 budget in March as required by law.  He challenged deficit hawk Republicans to produce their budget, which the House typically passes by April or May each year. The president wanted these two plans to form the basis for negotiations as part of the regular yearly appropriations process. He wanted to keep this separate from the debt limit increase legislation.

Republicans, however, either could not agree on their budget specifics or declined to do so because their proposals to slash spending from specific programs would be wildly unpopular with the electorate.  So, they barely passed the Limit, Save, Grow Act (LSGA) in April, a 300-page ultra-conservative wish list that proposes massive, unspecified spending cuts that would extend through FY 2033.  In fact, it would accomplish what most Republican politicians have wanted to do for decades, absolutely cripple the federal government.   

But here’s the thing.  I am confident that Republicans would be afraid to make this legislation the law, even if they had enough members in Congress to pass it and a Republican in the White House.  It is just that draconian.

As stated in my most recent blog, the LSGA would reduce spending for discretionary programs by 2033 to only 48% of fiscal year 2023 levels if defense and veteran’s care are not cut.  This would include funding for nutrition assistance for poor mothers and infants, air traffic control, the State Department, cancer research, the FBI and the Social Security Administration, to name a few.  Agriculture Department programs, which many Republicans strongly support because many of their constituents are farmers, could also be trimmed by over one half. 

In practice though, spending restrictions would not be applied equally across all departments.  Consequently, future appropriations hearings would result in vicious food fights that would include plates, pots, pans and knives. 

The LSGA, however, would do much than cut spending, most of which Biden could never accept, including:

• Repealing executive actions related to student loan forgiveness.

• Expanding work requirements significantly for Medicaid, food stamps and Temporary Assistance for Needy Families (TANF).

• Repealing climate change mitigation provisions of Biden’s Inflation Reduction Act.

• Rescinding additional funding for the IRS to improve service and enforcement.

• Requiring that major federal regulations be first approved by Congress.

• Raising the debt limit by only $1.5 trillion and for less than one year.

Neither Biden nor McCarthy can politically afford to give significantly on their positions, which are currently oceans apart.  That is why I believe default is more possible this year than ever before.  If McCarthy agrees to raise the debt limit without substantial concessions from Biden, many in his conference won’t vote for the resulting bill and he will likely lose his position as speaker.

If Biden gives in to Republican demands and significantly cuts spending and/or weakens the social safety net, his chances of winning the Democratic primary next year will be in jeopardy.  In fact, all Democrats running next year will be in serious trouble because many discouraged supporters simply won’t turn out to vote.

Of course, allowing a default will hurt both parties.  But most of the public simply won’t understand who is really at fault for the resulting catastrophe so a lot of blame will fall on the party in the White House. 

Former president Trump is seeking revenge by encouraging Republicans to force a default if they don’t get “massive” spending cuts in exchange for raising the debt limit.  To make matters worse, Republicans have rejected a White House offer to freeze domestic spending at FY2023 levels and have increased their original work requirements for food stamp recipients, according to a Politico Playbook article on Sunday.  And they are also demanding that new immigration provisions from their recently passed border bill be added to the LSGA.

Democrats have raised hopes by setting the stage for a discharge petition that would allow 218 House members to vote on a debt limit increase bill if McCarthy refuses to bring one to the House floor for a vote.  But they need five Republicans to join this effort.  And on Sunday, Biden stated that he believes he has the “authority” under the 14th Amendment to raise the debt limit without an act of Congress.  But these probably aren’t viable solutions.

McCarthy has rejected a short-term increase to allow more time for negotiations, but that doesn’t mean it won’t happen.  As June 1 approaches, however, the pressure to find some way to prevent an immediate fiscal disaster may become politically unbearable.  But perhaps it will take a steep decline in the stock markets to finally force a debt limit agreement.  Unfortunately, nothing is certain.

House Republicans narrowly passed the Limit, Save, Grow Act (LSGA) on April 26, as their plan to reduce federal deficits.  It would raise the debt ceiling [a.k.a. limit] by a small amount for only one year, depress the economy with dramatic spending cuts and eliminate many of the climate change measures in President Biden’s Inflation Reduction Act.  Still, some far-right members claimed it didn’t cut nearly enough. 

Although the text of this legislation does not reduce funding for any mandatory programs, like Social Security and Medicare, it would cut all discretionary program funding, almost half of which is for defense.  Speaker Kevin McCarthy (R-CA) and his conference, however, have made it clear that they won’t agree to cap spending for the military or veteran’s medical care, nor will they consider tax increases. 

The Center for American Progress, an independent, nonpartisan policy institute, calculates that if defense and veteran’s care are protected (not cut) over the next 10 years, funding for nondefense discretionary programs in 2033 would be reduced to only 48% of fiscal year 2023 levels, after adjusting for inflation and population growth.  This would literally gut the federal government and eliminate numerous programs on which the health, safety and welfare of the American public depend.  Although the LSGA would hurt almost every citizen, even some Democrats are urging the president to negotiate on spending cuts. 

Sadly, Americans seem to have very short memories about one significant reason why deficits are so large – Republican tax cuts.  President Reagan reduced income taxes twice in the 1980s, created huge federal deficits and increased the national debt by over 180%.  President Bill Clinton raised taxes significantly in 1993, cut spending and balanced the federal budget in the final four years of his presidency.  (In case you are wondering, Eisenhower was the last GOP president to balance a budget.)

After President George W. Bush inherited a balanced budget from Clinton, he cut taxes in 2001, created a large federal deficit in 2002 and cut taxes again in 2003.  He left President Obama with the Great Recession in 2009, along with massive unemployment and trillion-dollar deficits.  The 2012 fiscal cliff deal that Obama negotiated with the GOP-controlled Congress, however, helped reduce yearly deficits for several years. 

But just like two of his GOP predecessors, Donald Trump cut taxes in 2017, during his first year as president, which added around $2 trillion to the deficits over 10 years.  Contrary to the gas lighting that Trump and Republicans constantly try when they get power, their tax cuts do not pay for themselves or even grow the economy all that much.  They do, however, result in much larger federal deficits. 

So, now Republicans want to put the United States’ excellent credit rating on the line in order to cut spending and reduce federal deficits.  Yet, they absolutely refuse to raise taxes to help offset the trillions in red ink that their prior tax cuts and $7 trillion in Trump administration deficits helped create, which is simply absurd.

President Biden knows that if he yields to Republican demands now, in 12 months, they will insist on even more spending cuts before increasing the debt limit again and their blackmail will never end.  Democrats would be fools to put themselves in that position.

Certainly, Republicans picked a very bad time for a debt limit standoff.  Inflation is still high, interest rates are rising, three medium sized U.S. banks have failed since January and numerous regional banks remain under pressure from depositors and investors. 

On the world stage, China is challenging America economically and militarily like the old Soviet Union never could.  So, a U.S. debt default, or even a near default, would be a huge gift to Chinese President Xi Jinping and Russia’s Vladimir Putin, who would use either result to trumpet how American democracy is failing.

Make no mistake, there’s not much the Republicans are proposing that Biden can accept, and a compromise debt limit solution seems almost impossible.  Nobel laureate economist Paul Krugman advises the Biden administration to do whatever it takes to avoid giving in to GOP extortion and the president does have several unprecedented unilateral options to avoid a debt default:

• He can simply state that failing to pay U.S. bills is unconstitutional under the 14^th Amendment and have the Treasury keep issuing bonds for that purpose, or,

• The Treasury could mint a $1 trillion platinum coin, deposit it in the Treasury’s account with the Federal Reserve and draw on that account to pay the bills – without issuing new debt, or,

• As U.S. bonds mature and are redeemed, Treasury could issue new notes of equal par value but with a premium interest rate of say, 10%.  These new instruments would not technically increase the national debt but they could be sold for more than par value, thus giving Treasury added funds to pay the bills. 

I usually think about political maneuverings like the debt limit standoff as a game of vehicular chicken, where each side hopes the other will veer away before the crash (political fallout) occurs.  But put yourself in the car with Biden and the Democrats; they fear the drivers in the other vehicle may not care about the consequences of a head-on collision.  And I believe that is exactly where we are today.

So, friends, buckle up and get ready for a scary ride.  Oh, and watch this space.

A vague memory of a relevant Thomas Jefferson quote kept preying on my mind as I was reading about the Dominion v. Fox News litigation.  After some research and I found it on the Internet: “Whenever the people are well-informed, they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.” 

I do a lot of thinking about how well-informed Americans are these days and frequently wonder if they will be perceptive enough to recognize the “far wrong” things and diligent enough to correct them.  Well, many of these things are occurring this year, in Republican state governments, in Congress and in courts.  As a result, I believe the end of this year is almost certain to find us dealing with enormous change.  The extent to which Americans stay informed on critical issues – even though they may be depressing – could determine if America’s future will be brighter … or darker.

A critical step toward affirming the rule of law was taken in a Manhattan court room.

The allegations of criminal acts committed by former president Donald Trump are numerous and stunning: fraud in his business dealings, election interference in Georgia, obstruction of justice in the handling of classified government documents, seditious conspiracy related to the January 6 insurrection and more.  His status as a former president and his candidacy in 2024 have made indicting him politically challenging.  Fortunately, Manhattan district attorney Alvin Bragg took the first step by indicting Trump for falsifying business records to conceal criminal conduct.

House Republicans, however, are attempting to harass and intimidate Bragg and his staff, even holding a Judiciary Committee hearing in Manhattan near Bragg’s office.  How the public reacts to Republicans defending Trump will indicate if they believe the former president is above the law or not.  It could also influence other pending indictments and establish how strongly the rule of law is upheld in the United States, which is hugely important. 

How can Americans stay well-informed when continuously fed misinformation?

Shortly after the 2020 election, several Fox News hosts began supporting conspiracy theories that Dominion voting machines had rigged the election against then-president Trump.   Dominion sued the network for defamation, seeking damages of $1.6 billion.  Fox claimed that it was merely reporting newsworthy allegations by Trump and his supporters.  But their hosts’ nightly barrage of false and misleading support of Trump’s big lie caused millions of Fox viewers to be misinformed and angry, which probably helped incite the January 6 attack on the Capitol.

Dominion’s lawyers had a very high bar to clear in proving that Fox presented false information with “actual malice.”  But written exchanges among Fox executives and several primetime hosts that were made public in Dominion’s court filings, along with deposition testimony, provided strong evidence that Fox network employees acted with reckless disregard for the truth, which implies the requisite malice.

On the first day of trial, however, Fox settled the case for $787 million, almost half of Dominion’s alleged damages.  But that huge amount didn’t end Fox News’ potential liability for spreading misinformation.  Smartmatic, another voting machine company, also has a defamation suit against the network for $2.7 billion in damages and members of the Capitol police and others may add to Fox’s litigation woes.

I believe Fox News and right-wing media have been grossly misleading their audiences for decades.  Well, the Dominion case has dramatically revealed how the premier player in their mendacity echo chamber disseminates false messages while believing the opposite to be true.  And pending litigation against Fox should further educate the public and make them more discriminating viewers in the future.  That’s a very good thing.

Default on U.S. debt poses the greatest threat to America this year. 

President Trump authorized trillions in deficits but Democrats supported three debt limit increases during his term without demanding offsetting tax increases or causing a crisis.  House Republicans, however, eschew such reasonable accommodations; they want massive spending cuts as their condition for allowing the nation to pay its bills.  And if the limit is not raised before August, the United States could default on its debt obligations for the first time in history. 

A default will crash the stock markets, depress the U.S. and global economies, lower the U.S. credit rating, seriously weaken America’s status in the world and play into the hands of China and Russia.  It will also cast a pall on the dollar, which many nations have treated like gold for decades.  In short, a default will have catastrophic economic consequences,

I am certain that some Republican representatives favor a debt default.  And they won’t relent unless concerned Americans adamantly object to their dangerous antics.  If they persist, however, no one will win their horrendous political game, least of all Americans, including most Republican voters. 

Today, I’ve included only a few “far wrong” things that should be attracting the people’s notice; far-right conservatives are pushing many more, including on guns, abortions, books, transgender medical care and many more.  And the Fox News misinformation machine is backing all of them.

Fortunately, the many suits against Fox are providing a wakeup call, cautioning Americans to disregard what Republicans and Fox News’ commentators are saying and pay very close attention to what they are trying to do.  The nation’s future depends on it.

******

PS: I have become concerned that my blog emails may end up in spam because of pictures I include.  That’s why I didn’t add one for this post.  If you have found one of my blog emails in spam please click on “not spam” or the equivalent in your email service.   If you haven’t received my blog email for over 30 days, please let me know with an email (eeldavis@aol.com).  This is the sixth blog post this year.

Just for fun, I asked artificial intelligence chatbot ChatGPT to evaluate the GOP’s pro-tax cut, anti-regulation, anti-immigration and limited government policies in 200 words.  I added only the topic headings in bold type and the final sentence, the critiques are exactly how ChatGPT responded.

Do tax cuts for the rich grow the economy or the federal deficits?

U.S. federal income tax cuts can contribute to the growth of federal deficits rather than the nation’s economy. When taxes are cut, individuals and corporations have more money to spend or invest, which can stimulate economic growth. However, this growth may not always translate into increased government revenue, leading to a wider budget deficit.

First, tax cuts reduce government revenue, making it difficult to fund government programs and services. This can lead to the accumulation of debt and deficits, as the government must borrow more to finance its obligations. Additionally, tax cuts may not necessarily spur economic growth. If businesses and individuals use their additional income to save or pay down debt rather than spending it, the economic stimulus may be limited.

Furthermore, the benefits of tax cuts are often skewed towards the wealthy. When tax rates are reduced, the largest beneficiaries tend to be high-income earners who are more likely to save their extra income rather than spending it. This means that the economic benefits of tax cuts may not reach lower-income individuals and families who are more likely to spend their extra income and stimulate the economy.

Do federal regulations kill jobs or benefit workers?

U.S. federal regulations can benefit workers in several ways without significantly reducing employment. Regulations can create a level playing field for businesses, prevent exploitation, and ensure safe and healthy working conditions. These benefits can, in turn, lead to increased productivity, better morale, and reduced turnover rates among workers.

For example, regulations that require businesses to provide a safe working environment can reduce workplace accidents and injuries. This can lead to lower healthcare costs for workers and employers, as well as increased productivity due to reduced absenteeism and improved employee health. Similarly, regulations that require businesses to pay a fair wage and provide benefits such as healthcare and retirement savings can help reduce poverty and increase consumer spending, stimulating economic growth.

Furthermore, some regulations can actually create jobs rather than reducing them. For example, regulations that promote the development of clean energy sources can create new job opportunities in the renewable energy sector. Similarly, regulations that promote workplace diversity and inclusion can lead to a more diverse and inclusive workforce, which has been shown to improve productivity and innovation.

While it is true that some regulations may impose costs on businesses and potentially reduce employment, the benefits of regulations often outweigh the costs. Additionally, the effects of regulations on employment are often overstated, as businesses have the flexibility to adjust to changing regulations by shifting their resources or adopting new technologies.

Do immigrants take American jobs or help grow the economy?

Immigrants have been an integral part of the United States’ economy since its inception, providing a steady flow of labor, innovation, and entrepreneurship. With an aging population and declining birth rates, immigrants are becoming even more critical to sustaining the country’s economic growth.

As the baby boomer generation retires, there will be a significant gap in the labor force that must be filled by new workers. Immigrants, particularly those with high levels of education and specialized skills, are a crucial source of this labor force. Immigrants have been responsible for starting many of America’s most successful businesses, and many of these companies provide significant employment opportunities for US citizens.

Immigrants also bring with them new ideas, technologies, and ways of doing things that can help drive innovation and boost productivity. This innovation can come from their unique experiences and perspectives, as well as their willingness to take risks and try new things.

Moreover, immigrants often fill critical positions that are difficult to fill with domestic workers, such as in the healthcare industry. Many immigrants have skills in areas such as nursing, medicine, and home health care that are in high demand as the US population ages.

Without federal dollars how would state budgets fare?

U.S. federal transfer payments are a critical source of funding for state budgets and disaster relief efforts. Transfer payments are funds transferred from the federal government to state and local governments to support various programs, including healthcare, education, and social welfare.

One of the most significant forms of transfer payments is Medicaid, a joint federal and state program that provides healthcare coverage to low-income individuals. In 2021, Medicaid spending represented over 29% of total federal transfer payments, amounting to over $410 billion. This funding is crucial for states to provide necessary healthcare services to their residents, particularly those in need.

In times of disaster, federal transfer payments are also crucial for state budgets. The Federal Emergency Management Agency (FEMA) provides disaster relief funding to states and local governments affected by natural disasters. This funding helps cover the costs of emergency response efforts, rebuilding infrastructure, and providing aid to affected individuals and families. In 2020, FEMA provided over $39 billion in disaster relief funding, demonstrating its critical role in supporting state budgets during times of crisis.  Without these funds, state budgets would be severely strained, and disaster response efforts would be less effective.

I would add that red states rely on federal dollars much more than blue states.

The Medicare Hospital Insurance Trust Fund that American workers and employers pay into is projected to become insolvent in 2028, according to the latest Medicare trustees’ report.  President Biden has proposed some fixes in his budget for fiscal year 2024 that include higher payroll taxes for the wealthy and prescription drug reforms.  He claims his plan will keep the trust fund solvent until sometime in 2050.  Drug companies, of course, are pledging to fight efforts to lower drug prices, including those already passed in the Inflation Reduction Act. 

Not to worry though, even if the president’s proposals do not become law, Congress will find some way to keep Medicare solvent in the short term.  But our current health care system is not sustainable longer term and that will only delay the inevitable.  The best solution for the future is to significantly reduce health care costs – and not just for drugs.

Prescription drug costs are killing people, literally.

Mavenclad, a multiple sclerosis drug, has a list price of $194,000 a year, according to a February New York Times article.  One lady’s Medicare co-pay is $10,000, but she can’t afford that and neither can most families.  Biden’s Inflation Reduction Act will cap out-of-pocket costs for Medicare patients like her at $2,000 annually — but not until 2025.  Research suggests, however, that large numbers of patients abandon their prescriptions when faced with $2,000 in payments. 

The median annual price of a new drug was around $180,000, in 2021, according to researchers for Brigham and Women’s Hospital in Massachusetts.  Still, new drugs aren’t the only problem.  In the last few decades, drug companies have hiked the prices of many older medications like blood cancer drug Revlimid, which costs three times more today than when it was introduced in 2005. 

The prices for insulin, however, are even more shocking.  This drug has been around for over 100 years and, depending on the type, only costs between $2 and $10 to make per vial, according to Verywell Health.  But that vile can cost consumers between $50 and $1,000.  For all types of insulin, Americans pay 10 times more on average than all other countries.  Some diabetics rationing their insulin have died.

Ely Lilly projects that it will spend $8 billion on drug research in 2023.  I believe Congress must find a way to effectively reimburse companies like Lilly for research so they can’t use these costs to justify the exorbitant drug prices they charge to Medicare and consumers.

Why less costly and sustainable health care systems are desperately needed.

An estimated 98 million Americans cut spending on things like food and rent, or borrowed money, to cover healthcare costs, according to a West Health and Gallup 2022 survey report.  And high costs caused 26% of U.S. adults to either delay care or avoid purchasing prescribed medicine.

Other large, wealthy countries spent, on average, about half as much per person ($6,100) on health care in 2021 as the U.S. ($12,900), according to the Kaiser Family Foundation.  Yet, life expectancy is lower in the U.S. than other wealthy nations, while about 60% of American adults have a chronic disease and around 10% of the population doesn’t have health insurance. 

Health care costs are a factor causing gross inequality in medical outcomes.  The death rate of college-educated – and likely wealthier – Americans with cancer is 90.9 per 100,000 per year, according to Dr. Otis Brawley, a Johns Hopkins University professor of oncology and epidemiology.   The rate is 247.3 for patients with a high school education or less.  And I suspect this is also the case with other life-threatening diseases.

America’s population is aging and half of its current five-year-olds will likely live to be 100, according to a recent National Geographic article. 

Universal health care, like many other wealthy nations have, could have prevented an estimated 338,000 U.S. deaths and saved $105.6 billion in health-care costs during the first two years of the coronavirus pandemic, according to a June 2022 report by the National Academy of Sciences USA.

The possibilities for Artificial intelligence (AI) in health care are almost endless.

Radiologists will increasingly be examining x-ray, CT, MRI, and PET images in 2023 that have been first evaluated by AI machines, according to an article in Wired.  An exciting new capability of AI will allow untrained patients with a smart phone to acquire high-quality scans of their organs, which can be interpreted by AI algorithms.

Smart watches are already able to detect abnormal heart rhythms and this year these capabilities will be extended to preliminarily diagnose other conditions, like skin lesions and urinary tract infections.     

I am confident that AI can use a combination of patient’s medical history and various CT, MRI and/or other images to diagnose numerous health issues, effectively and safely prescribe drugs and so much more.    

Voters must support solutions to fix our health systems.

My first career in information technology helped me understand that AI machines will require large, accurate quantities of personal medical data in order to fully transform America’s health care system.  Personal data collection, however, creates significant privacy concerns that must be addressed.

I believe, however, that only dramatic, paradigm shift proposals – like those suggested above – can make America’s health care systems less costly, more effective and sustainable long-term.  I intend to support organizations that will help voters understand the need for these solutions and politicians who will vote for them.

Debit limit crisis?  We’ve been there, done that.

Tea Party Republicans took control of the U.S. House in January 2011, with a promise to dramatically cut government spending.  When U.S. Treasury Secretary Timothy Geithner announced that the federal debt had reached its statutory limit in May, their strategy became apparent.  House Republicans immediately refused to raise the debt limit unless President Obama agreed to dramatically trim the federal budget.  Negotiations went down to the wire and the nation came so close to default that the U.S. credit rating was lowered for the first time in history.

The result was the Budget Control Act of 2011, which would reduce government discretionary spending (more on this later) by around $1trillion over 10 years, half would come from defense spending and the other half from nondefense appropriations.  It became known as the “sequester.”  Without going into detail, neither party liked the results, particularly defense cuts; so, the sequester was modified by subsequent budget acts. 

2023 is déjà vu 2011 in so many ways.

The president is a Democrat, Democrats control the Senate, House Republicans won’t raise the debt limit unless spending is cut and the nation is recovering from a disastrous situation, just like in 2011.  Back then it was the Great Recession; today the coronavirus pandemic is still threatening.  The U.S. military, however, has much greater challenges in 2023, with Russia waging war on Ukraine and China becoming more aggressive.

There is also another interesting similarity, the George W. Bush tax cuts were set to expire in 2012; former president Trump’s tax cuts for individuals will terminate after 2025.  Remember the ominous “fiscal cliff” in 2012?  Another one is looming in 2025.

About the Congressional Budget Office’s Yearly Baseline Budget.

The following analysis uses projections from CBO’s yearly “baseline” report that was just published.  This document gives a detailed breakdown of federal revenues, spending and deficits over the 2023-2033 period.  These numbers help us better understand America’s fiscal situation, including the two main categories of federal government budget authorizations, mandatory and discretionary.

Mandatory – Automatic programs where most federal dollars are spent.

Mandatory spending is mainly for Social Security, Medicare and Medicaid but a very significant amount of it funds government pensions, veterans’ benefits, farm subsidies and much more.  These dollars touch every level of our society.  Congress legislates these programs that typically have no limits in time or dollars, which is why they’re called “automatic.”  Some of them, like Medicaid, are “means tested,” so that only lower income families can qualify for the benefits.

Discretionary – Programs funded by Congress each year.

Discretionary spending is further separated into two categories, defense and nondefense.  Nondefense is all other outlays to fund government operations and various activities, including K-12 education and highway programs.  The $1.7 trillion budget that President Biden signed in December is the discretionary spending authorized for fiscal year 2023 that ends on Sept. 30, 2023. 

Republicans and some Democrats refuse to cut defense spending significantly.  So, that leaves nondefense spending, which Congress has the most power to reduce.  Over the next 10 years, however, nondefense dollars will only be around 16% of the federal budget, not including interest on the debt; mandatory spending will be almost 70%.  The projected deficit over the upcoming decade, including interest on the debt, is $9+ trillion more than nondefense spending.

Republicans claim they will balance the federal budget, but how?

Well, it is obvious from the CBO numbers that cutting all nondefense spending would fall dramatically short of eliminating the deficits and balancing the budget.  That fact alone tells us that it will be impossible to balance the U.S. budget without large tax increases or massive cuts to mandatory programs, the largest of which are Social Security and Medicare. 

Would Republicans cut Social Security and Medicare?

When President Biden accused Republicans of wanting to cut Social Security and Medicare during his SOTU speech, some of them, like Ms. Greene, loudly called him a liar.  Last June, however, the House Republican Study Committee – which includes 70% of GOP House members – released its “Blueprint to Save America” budget for 2023-2032.  It would reduce mandatory spending over that period by almost $12 trillion, compared to last year’s CBO baseline, including $700+ billion from Social Security, almost $3 trillion from Medicare and more than $3.6 trillion from Obamacare, Medicaid and other mandatory spending.  The Blueprint would also cut taxes by over $1 trillion.

Don’t get me wrong, I am all for reducing federal deficits with tax increases and spending cuts.  Lots of waste in the federal budget can be eliminated, even in mandatory programs.

The catch is, Republicans adamantly refuse to increase taxes on anything; they only want to cut spending.  I believe their hard position prevents any meaningful compromise on reducing deficits.  But even when they control Congress and the White House, Republicans are loath to cut spending significantly, particularly from mandatory programs.  Why?  They fear getting wiped out in the next election.

So, do I believe that some of the more radical Republicans actually want to force a U.S. debt default?  Absolutely!  They won’t succeed, but in their addled minds, they believe that the resulting economic catastrophe would force Congress to make drastic cuts in the federal budget, including to Social Security and Medicare. 

Voters must never forget though – this has been the Republicans’ objective for several decades and it won’t end with this fiscal crisis. 

Long before the 13 colonies sought to break away from British rule and form the United States, slavery was well established in America.  Most of the 56 delegates to the Second Continental Congress who signed the Declaration of Independence in 1776 were slave owners, according to Politifact. 

The first governing document for this new nation was the Articles of Confederation, which was drafted in 1777 and ratified in in 1781.  It did not establish a federal government as such, with an executive branch or a president.  The central authority was the “United States, in Congress assembled,” where the vote of nine states was required to take most important actions. 

Under Article II, each sovereign state retained every power not expressly delegated to the Congress. The result was a weak central government with limited enforcement power, which was likely favored by states whose economies depended on slavery.   The Articles, however, proved to be inadequate to deal with foreign affairs, among many other shortcomings, so a Constitutional Convention was convened in 1787.

Of the 13 states that were represented at this assemblage, six were slave states and 25 of 55 delegates were slave owners, according to American history website gilderlehrman.org.  Most of the delegates did not support the practice of slavery, according to this site, but it was not abolished in the Constitution for fear that the slave states would not join the union.  According to a classroom.com article, “the issue of slavery was instrumental in the creation of distinct “states’ rights” and “federal rights” enumerated in the tenth amendment.”

All constitutional amendments have been proposed by a two-thirds vote in both chambers of Congress.  The original 1787 document and its first 12 amendments became the law before 1860 when slave states were quite powerful.  And recorded history makes it clear that these states still had significant influence on amendments ratified after the Civil War. 

In fact, all constitutional amendments but the 27th were passed by Congress before 1972 when the Senate still had some powerful conservative southern politicians who were adamant supporters of segregation and states’ rights.  Among the most influential of these were Senators James Eastland (Miss.) – sometimes called the “Voice of the White South” – and Strom Thurmond (S.C.) – who filibustered both the 1957 and 1964 civil rights acts.

The current Supreme Court’s majority of six conservative justices are committed states’ rights advocates too.  All were handpicked by the powerful Federalist Society and appointed by Republican presidents.  Members of Society are primarily wealthy conservatives and libertarians who chose these justices because they are “originalists” who believe the words of the Constitution should be interpreted for what they meant, or were intended to mean, at the time they were written.  

I submit that this theory of interpretation, which is called originalism, applies bygone – and yes, even segregationist – thinking to current issues.

For such a profound document, the Constitution is quite brief.  Including the Bill of Rights, it is 14 pages in pdf file format and only 21 pages with all 27 amendments.  I find it hard to believe that the Founding Fathers thought of this seminal document as static and inflexible like the originalist conservative justices are interpreting it.  Rather, I believe they drafted the Constitution to be both the letter and the spirit of the law of the United States and intended that it should be interpreted in a way that best promotes the democracy it established.

Like the English common law, the Constitution has expanded based on precedents.  Some of the more liberal Supreme Court decisions, however, are an anathema to conservatives and libertarians.  They want low taxes and minimal federal regulations so they can operate without federal government interference.  That’s why they lobby for a strict, originalist interpretation of the Constitution that favors states’ rights and limits the powers of the federal government – which is exactly what I believe the slave states demanded in 1787.

Well, conservative Supreme Court justices have evidently listened to them in making numerous decisions, many of which – according to critics – smack of partisanship, including:

• Citizens United v. FEC (2010), which opened the flood gates of corrosive corporate money in politics,

• Shelby County v. Holder (2013), that gutted parts of the federal Voting Rights Act,

• Rucho et al. v. Common Cause et al. (2019), which prevents federal courts from reviewing partisan gerrymandering by state legislatures,

• Dobbs v. Jackson Women’s Health Organization (2022), which eliminated the constitutional right to an abortion, giving legislative authority to the states.

After the Shelby decision, numerous Republican-controlled states immediately enacted strict voting laws designed to suppress minority voters, just like former slave states attempted with Jim Crow laws after the Civil War.  And, after the Dobbs decision they rushed to enacted laws to ban abortion.

Arguments for states’ rights have been ongoing since 1777.  I believe historical evidence shows, however, that they were codified in the Constitution at the insistence of slave states to shield their slavery practices from federal oversight and were used by segregationists after 1865 to disenfranchise Black citizens.

Certainly, the Constitution reserves certain rights to the states.  Still, I am convinced that decisions by the Supreme Court’s conservatives, like Shelby and Dobbs – that appear to be politically motivated and that allow states to weaken American democracy – are expanding rights for states that are deeply rooted in the practice of slavery. 

And in my view, these justices are dangerously undermining the Court’s legitimacy.

Republicans seem to doggedly follow their ideology no matter how many times it is proven to be wrong or rejected by voters.  Overall, conservative policies haven’t done well with the electorate since 2016.  Now that we have a clearer view of what Speaker Kevin McCarthy and the far-right members of the House want to do, it appears to be more of the same, except further to the right.

The slim GOP House majority is both good news and bad news.

The red wave Republicans were expecting in last November’s election fizzled out, giving House Republicans only 222 seats.  That’s the good news.  McCarthy needed 218 votes to become speaker – the same number needed to pass legislation in that chamber.  Consequently, it took only a hand full of his most extreme colleagues to demand concessions and block his quest to be speaker until the 15^th vote.  McCarthy readily cut deals with them in order to secure their support.  Some are written in the House rules that were adopted on January 9, others are apparently in a three-page side agreement.  Of course, the slim majority means that the same small number of ultra-conservative zealots can totally control the Speaker for the next two years.  And that’s the bad news.

McCarthy’s side agreements are a radical hidden agenda.

Reportedly, McCarthy’s secret agreement promises to cap spending at 2022 levels and block a debt limit increase unless Democrats agree to major cuts in future spending, perhaps even to Social Security and Medicare.  The government’s borrowing (debt) limit will be reached this month but the Treasury Department can use extraordinary measures to delay a showdown on increasing it until late summer.  What is likely to occur then, according to Goldman Sachs, will be the “scariest debt ceiling battle” since the 2011 fiasco that cost America its perfect AAA credit score. 

Another McCarthy capitulation gives ultra-conservative Freedom Caucus members three of the nine Republican seats on the powerful, 13-member House Rules Committee. Typically, the speaker retains control the majority’s seats by filling them with close allies.  This means McCarthy has surrendered a significant part of his leadership power with this concession. Why?  Well, the Rules Committee decides what bills and amendments are sent to the lower chamber for a vote and – equally important – which ones won’t be considered.  The Freedom Caucus members could influence this committee to block a debt limit bill from even coming to the House floor for a vote.  What could go wrong? 

The Republican House rules further empower the extremists.

If McCarthy fails to meet his obligations under whatever agreements he made, the rules allow a single representative to call for a vote to remove him as speaker, just like former Rep. Mark Meadows (R-N.C.) did to threaten Speaker John Boehner (R-Ohio) in 2015.

The rules emasculate the House Ethics Committee and specify that a federal income tax rate increase can only be passed with a three-fifths vote of the House members.

The previous rules on raising the debt limit – which simplified the process – have been eliminated, thereby requiring a politically fraught stand-alone vote to increase the nation’s borrowing authority. 

The first Republican bills passed show their intent.

Republicans have been putting funding shackles on the IRS for more than a decade, much to the joy of their wealthy, tax cheating donors.  Their first bill passed on Monday continues this abuse by eliminating most of the almost $80 billion that the IRS is to receive under Biden’s Inflation Reduction Act.  The Congressional Budget Office estimated that this legislation would decrease tax revenues and result in a net $114 billion increase in deficits over the next decade. 

Another quickly passed GOP bill sets up a Select Subcommittee on the Weaponization of the Federal Government with broad powers to delve into the operations of the intelligence agencies, the DOJ, the FBI and the Department of Homeland Security, including ongoing investigations.  The objective is obvious, this subcommittee, chaired by far-right Rep. Jim Jordan (R-Ohio), will attempt to prevent the DOJ from indicting Trump or any other Republicans who supported his attempts to overthrow the 2020 election, which could include some members of this committee.

What does this mean for the next two years?

No question, all eyes will be on raising the debt limit this summer.  Until that is done, nothing else matters.  Of course, a default on the U.S. debt would be catastrophic, not only for the United States, but for the entire world.  Even coming close to a default could send the stock and bond markets into freefall and further damage the U.S. credit rating. 

The battle to elect McCarthy as speaker last week severely weakened both the office and the man.  So, he will be virtually powerless to stop his radical colleagues from attempting significant Social Security and Medicare cuts or forcing a fiscal crisis, even if it hurts the GOP in 2024. 

But wait, perhaps they will listen to some of their biggest donors.  Yesterday, the U.S. Chamber of Commerce warned Congress: Businesses are “fed up” with gridlock.  The message from business leaders was clear, according to U.S. Chamber CEO Suzanne Clark.  Congress should “not default on our debt” and should “not play chicken with the true faith and credit of the United States.”

Still, the far-right ideological binge continues, and Republican obstruction is always a work-in-progress, so I’ll stop here for now.  But watch this space.

Our tender and a small pod of seals sunning at the end of the dock.

My previous blog ended with a rough sea sail from Ushuaia (End of the World) to the Falkland Islands, which is an archipelago about 300 miles from the coast of southern Argentinian Patagonia.  The population of this large group of small islands was 3,662 in 2021; most residents live in Stanley, where we landed in a tender (large, covered lifeboat) from our cruise ship.  Later we learned that the only trees on the island are those nurtured by residents in the city.  The following picture shows only half of the city.

Except for the brief war between the U.K. and Argentina in 1982, most people would have no clue as to where the Falkland Islands are.  I suspect that they are much like barren islands found in the North Sea off the coast of England or Scotland and the very friendly inhabitants do have British or Scottish accents.  Stanley is a small port and we were anchored outside the cove where the city docks are located.  Our tour there was to Bluff Cove for photo ops with the penguins.

Along our 45-minute ride in fifteen passenger vans, we looked out over vast rolling areas of brown grass and low brush where hundreds, perhaps thousands, of sheep were grazing with their spring lambs.  Most were scattered and not in herds.  Where we could see the soil, it was coal black and most is probably peat, which in the past was the main source of fuel for the residents.

The numerous penguins in this cove were organized into at least three rookeries.  Not far away, waves were crashing on the shore and there were a few penguins close to the water.  None of them seemed at all disturbed by the tourists eagerly taking pictures.  This picture also shows the surrounding landscape, quite barren.

And some were sheltering chicks, as in this photo, and others probably eggs.

The relatively small group of more colorful Emperor penguins was separate from two other groups of black and white penguins.  A don’t know what the hairy brown one is.

The winds were blow-you-down strong and before long it started to rain.  There were sheep pellets everywhere we stepped and some bird droppings too.  After we had taken a bunch of penguin pictures it started to hail so we hurriedly – but carefully – walked several hundred yards to where two, trailer-like buildings offered shelter from the elements. 

One was a café that served tea and coffee, plus various excellent sweet treats.  The other building was a gift shop with some nice products and many souvenirs, some of which we purchased.  We used credit cards but the prices were in Falkland pounds.

The squalls kept sweeping through, wind, rain and sometimes hail, with the occasional semi-dry spell so we stayed close to the buildings until time to leave around 1:30 PM.  We wanted to do some shopping in Stanley but it was still raining or hailing so we took the tender back to the ship.

Later in the afternoon, just before we sailed away, the weather cleared over parts of the island we could see.  We wished it had been like that for our tour, but such is life on the sea islands.  Still, this stop was one of the highlights of our cruise.

The next two days were over rough seas to Punta del Este, Uruguay, which is a very modern, very upscale city where many Argentinians and others come to vacation and retire.  It looked like a great place for Americans to retire too.  We had gone from cold and rainy to hot and sunny. 

Our tour there was by bus to a couple of art museums, one of which was huge and fabulous.  The beaches looked very nice too.  The huge fingers at one beach were popular for photo ops.

Next was Montevideo, Uruguay, which is a much older and larger city and probably not nearly as attractive to retirees.  We did a walking tour in the center of the city that included a beautiful old opera house, a lovely old church, a small, city palace and more.  There is something about an old city with its art, plazas, architecture and old-world restaurants that can’t be replaced by modern stuff.

We passed by one restaurant where I wish we could have stopped to eat.

Our last stop was Buenos Aries for a day of touring at a ranch 90 minutes from the city.  It was a full day of horses, gauchos doing their thing, a show with dancers doing an authentic tango and a fabulous lunch with plenty of wine.

Next morning, we said farewell to the ship and at 10 PM boarded the first of the three flights and 14 flying hours that brought us back home.  The business class seats on a 777 helped for the 8-hour flight to Miami.  It was a long cruise and while we were glad we were able to do it, we won’t likely take such a long cruise again.

Again, Happy New Year to all.

Don’t worry; this title doesn’t have religious or apocalyptic connotations; it actually refers to a city.  But I’ll get to that later.

My failure to post a blog for over a month hasn’t been for lack of important subjects to discuss.  Oh no – it’s because the 21-day, South America cruise (Lima to Buenos Aries) we booked for November 2020 finally sailed.  I’m very happy, however, that the somewhat upbeat closing about the survival of democracy in my November 6 blog was supported by the 2022 midterm elections.  I learned to have faith in Americans to eventually make the right decisions (on juries) during my years managing the defense of high potential liability litigation and I hope that I never lose it.

It would be impossible to share all the great experiences my wife and I enjoyed during our cruising adventure, but I thought my readers might find some of them interesting.  Please keep in mind, I am not a great photographer and my best camera is my phone, but the many scenes presented were not hard to capture.

One of our most memorable experiences sailing the Pacific Ocean down the coast of Chile was viewing the distant snowcapped volcanic mountains of the Andes from Puerto Montt. 

The following day in Patagonia, we hiked through a dense forest to a scenic waterfall.  After another 30 minutes we left the trail for a pisco – national drink – cocktail (or two) at a pavilion overlooking a beautiful lake.  A couple entertained us by doing traditional dances around a open pit wood fire where small goat carcasses were roasting.  We weren’t able to sample the results.

Next was the Amalia Glacier and other spectacular glaciers along the Chilian fiords.  There were so many that it was hard to decide which pictures to include.  First though, is a picture that doesn’t do justice to the rough seas and 50 MPH wind gusts we encountered before entering the relatively quiet waters of the fiords.

The Amalia glacier.  Too bad it was a cloudy day.

Flowing out of this glacier along the fiords was a water fall hundreds of feet high. 

The surrounding mountains with glacial runoff were spectacular too.

After a stop at Punta Arenas, Chile, which is on the strait of Magellan, the ship docked at Ushuaia, Argentina, the southernmost city on the planet and why it came to be called the, “End of the World.”  The cruise ship that was hit by a rogue wave in the ocean to the south of Cape Horn was already docked at Ushuaia when we arrived.  As you may have read, that resulted in the death of a 62-year-old woman and damage to the ship.  Ushuaia is at latitude -54.8 in the south.   By comparison, Anchorage, Alaska is at latitude 61.2 in the north.  This picture from gettyimages is better than I could take and shows a lot more snow on the mountains around Ushuaia than in the photos I took. 

We had to walk 500 yards down the pier in strong winds and heavy rain from where the ship was docked to a large 100+ person catamaran and the start of our tour.  We experienced rough seas over 45 minutes to reach some small rocky islands where there was a lighthouse, a pod of hundreds of seals and even more hundreds of nesting cormorants.  That was only the first part of our day.    The low clouds and rain early in the day made for poor quality photos.  The first is the other catamaran on this tour.

The bodies of the seals blend with the rocks they are laying on.

The birds were nesting in a small valley, perhaps for protection from the strong winds.

Next, we boarded buses and rode for almost two hours through the Tierra del Fuego National Park. 

We eventually boarded a very narrow train for the ride back down closer to the city and then rode another bus to the dock.  It was a long, but quite interesting day.

We didn’t actually sail around Cape Horn, the seas were too rough.  So, our ship took a route to the Atlantic Ocean (Beagle Channel) between the Argentine mainland and several islands north of the Cape and cruised for a day over quite rough seas to Stanley, Falkland Islands.  It occurred to me that cruising in this area near Cape Horn is almost as rough as the ups and downs of U.S. politics.

The Falkland Islands were well worth the visit, but I will cover that and the rest of our cruise with my next blog.  In case I don’t get this done during next week, I will take this opportunity to wish everyone a Merry Christmas, a Happy Hanukkah and a wonderful holiday whatever you are celebrating.  May all have a prosperous and productive New Year.