America’s economy is struggling. The jobs picture is bleak. The stock market is in chaos. What is Washington’s prescription: a vacation?
The House & Senate went on vacation shortly after the debt ceiling crisis was averted. Now, President Obama is taking some R&R. What the White House dubs as a “Working Vacation”, it appears that our elected officials have exhausted themselves so much that they are taking a break from work – until after Labor Day.
In the mean time, our Nation’s unemployment rate hovers around 9.2%. Economic output is down overall. European debt issues and uncertainty in the U.S. have caused wild gesticulations in the stock market. There is a lack of confidence in our elected officials. CNN’s latest polling shows that a majority of Americans will not re-elect their current congressional representatives – the first time that has happened since the question was first asked 20 years ago. I would guess that this extended vacation won’t help.
I do not want to complain too much about Congress and The White House taking a break. It is common for the legislature and executive branch to take vacations. If people recall the summer of 2009, when Congress took its vacation there were all those town hall meetings of people screaming about the President’s Health Care Plan. These vacations generally give our elected officials the chance to meet with their constituents at home. However, this doesn’t appear to be THAT type of vacation.
As the country teetered near the brink of default, Congress and the President battled it out over spending cuts. What emerged is a half-hearted plan that may help limit the growth of our debt, but won’t do ANYTHING to pay down the existing debt. Interest on our existing debt is the single largest expense of the Federal Government – more than defense, Social Security, Medicare/Medicaid, or anything else. Congress is taking a break because it achieved something that doesn’t solve the problem?
However, there appears to be some news from The White House. President Obama will be making a speech after Labor Day to unveil his plan for job creation and fixing the current economic picture. From the parts that have been leaked to the press, it appears to be a hodgepodge of things the President has already requested: an Infrastructure Bank, extensions of unemployment benefits, job-training assistance, payroll tax holidays for workers and businesses – things that were negotiated away in last minute budget deals with Republicans in the House.
While I applaud the President for not giving up on these ideas, it seems to me to be “Too Little, Too Late.” Not to mention, politically impossible.
An Infrastructure Bank is an idea that has been tossed around for a while. In theory, it would be an extension of what was started in the Stimulus bill – money set aside for rebuilding America’s infrastructure with an emphasis on things that can be started right away. The Bank would be funded by closing some loopholes in the Federal Tax Code, thus not adding to the deficit. An initial $50 Billion dollar investment would get the ball rolling, with continual funding of $30-70 Billion a year as the taxes collected from the loophole closures fluctuate over time.
Not a bad idea, but the political will to close enough loopholes to raise $50 Billion a year doesn’t exist on the Republican side of the aisle. This would amount to a 50 Billion dollar tax increase – something I believe will not garner ANY Republican support.
The President is also expected to push for another extension of unemployment benefits. The Republicans will only agree to an extension if it is accompanied by cuts of equal or greater value. Depending on how long of an extension the President pushes for, it could cost anywhere between $10-70 Billion. It isn’t clear where the Republicans would request the cuts to be made, but I would guess they would go after the budgets for the new Consumer Protections Bureau (which they openly hate) or Medicare and Medicaid (which they openly want to end).
A payroll tax holiday is something the Republicans would be willing to support. However, the President will more than likely request that the holiday be paid for by increasing revenues elsewhere in the tax code, specifically ending some corporate deductions that are wildly popular with the oil and natural gas industries. Republicans have and will continue to block any attempts at raising revenue through corporate taxes, and therefore this idea will likely be dead on arrival.
There may be more to the President’s plan than has currently come to light. However, given the current political climate, it is doubtful that the President’s plan will become law – at least not in its current form. The gridlock that plagues Washington is constant, but over the past few election cycles we’ve seen an almost cult-like atmosphere of ideological entrenchment.
I’m all for party loyalty, but not at the expense of the well-being of our Nation. Republicans are going to have to accept that taxes will have to go up. Democrats have to accept that entitlement programs need to be reformed. The two sides of our political spectrum need to meet in the middle, instead of pulling and pulling until the “middle” is closer to their side.
The random and unnecessary partisan bickering over false crises has distracted too long from our larger problems. People need jobs. We need to grow the economy. We need to deal with our long term structural debt. These are the issues we need to focus on as a Nation, and our leaders need to work diligently in order to address them.
After Labor Day, any additional vacation time will not be tolerated until we have a plan.
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