WDEL Blog: Allan Loudell

Surprise! Fiscal cliff crisis averted (for now)! Are you ready for an encore (Debt ceiling)?

I must confess: I didn't expect the House to pass the fiscal cliff deal overnight.

Not after House Republicans - led by the second- and third-ranking G.O.P. House leaders (Eric Cantor & Kevin McCarthy) - expressed their bitter opposition.

But the House voted 257 to 167 to seal the deal. However, that still means more than half of the House majority Republicans voted against.

So get ready for another "Groundhog Day" Battle Royale in two months - over raising the nation's debt ceiling.

It's interesting to put this entire thing into context.



"Just a few years ago, the tax deal pushed through Congress Tuesday would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax-cuts, exempts almost all estates from taxation, and enshrines the former President's credo that dividends and capital gains should been taxed equally and gently.

But times have changed, President George W. Bush is gone, and before the bill's final passage late Tuesday, House Republican leaders struggled all day to quell a revolt among caucus members who threatened to blow up a hard-fought compromise that they could have easily framed as a victory. Many House Republicans seemed determined to put themselves in a position to be blamed for sending the nation's economy into a potential tailspin under the weight of automatic tax increases and spending cuts."

Yet, this deal doesn't exactly address this nation's expanding debt.



"The White House--Senate Republican tax compromise could add almost $4 trillion in debt over the next 10 years, according to Congressional Budget Office estimates, which attribute most of the cost to lost revenues or payments on refundable tax credits.

The three-page table was released Tuesday even as House Republicans were meeting behind closed doors on the deal. And while the numbers can be understood only with some context, they could also spook deficit-conscious conservatives into demanding more spending cuts..."

Interesting: Anti-tax crusader Grover Norquist said he was okay with the fiscal cliff deal (since the Bush tax-cuts had technically expired at the stroke of Midnight, New Year's Day), while conservative columnist Charles Krauthammer called the deal a "complete rout for Democrats" and a "complete surrender" by the G.O.P.

Such conservative groups as Freedom Works, the Club for Growth, & Heritage Action rejected the Biden---McConnell deal.



"Read their lips. Republicans just voted for higher taxes.

Granted, it was with a large helping of Democratic aid in the House, where Speaker John Boehner and his G.O.P. leadership spent a turbulent New Year's Day and night dealing with a near-insurrection by rank-and-file lawmakers. Many House Republicans loathed the bill passed in the wee hours of New Year's morning by the Senate, which raised taxes on Americans earning over $400,000 a year and lacked corresponding spending cuts.

But given the lopsided Senate vote in favor of the tax-hiking measure, as well as the 85 G.O.P. House members who voted yes (151 voted no), members of the G.O.P. have violated the party's no-new-taxes orthodoxy for the first time in two decades. It's a significant concession in the aftermath of Mitt Romney's November defeat and a potentially existential moment for a party that has prided itself on a defiant and dogmatic dislike of tax increases..."

Meanwhile, more has emerged about how Joe Biden began to play a pivotal role about one-and-half days before Congress was set to go over the fiscal cliff.


"The critical conversation between the offices of Harry Reid and Mitch McConnell came early Sunday afternoon, about 36 hours before Congress was set to teeter over the fiscal cliff.

Reid, the majority leader, had been negotiating and trading ideas with McConnell, his minority counterpart, since Friday evening. But the soft-spoken Nevada Democrat drew a bold line in the sand midday Sunday: He had no more counter-offers to give.

Suddenly and irreversibly, the talks veered into a new direction. Within minutes, the Kentucky Republican was dialing up Vice President Joe Biden, elevating his old colleague to the Democrats' new negotiator-in-chief. It was a fateful decision that put the Senate and White House on the pathway to the deal eventually approved by the Senate and the House, ending weeks of drama over the fiscal cliff. It also left Reid standing on the sideline stewing.

'We know that when McConnell has hit a wall with Reid, he calls Joe Biden to get some more candy', said a senior Democratic aide, who requested anonymity to speak candidly about the vice president."

You can hear my interview with NATIONAL JOURNAL's Shane Goldmacher, who wrote the above story about how Harry Reid and his people didn't necessarily welcome Joe Biden's involvement...

Audio Here

For an intriguing behind-the-scenes look at the tense dealings, check out this piece from POLITICO -- which includes House Speaker Boehner shouting a choice expletive at Senate Majority Leader Reid...


Posted at 9:11am on January 2, 2013 by Allan Loudell

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Comments on this post:

Wed, Jan 2, 2013 12:12pm
The GOP is finished...Will Boehner keep his spot after this latest failure?..and still no REAL budget.

I wonder who is going to be the nominee for the Third Party in 2016? Rand Paul, Marco Rubio, or one of the very few who voted against this deal?

Wed, Jan 2, 2013 1:05pm
It's very intriguing to see that Obama and members of Congress define "middle-class" as people making up to $450,000 per year.

Does that mean somebody making $300,000 per year is working class and not subject to higher taxes?

Their last-minute deal should've defined the tax-breaks for anybody making less than $100,000, the people who are TRULY working-class. By making the threshold lower, it would translate into more tax revenue and help close the gap on national debt.

I'd also be curious to see if Mr. Loudell or anybody else knows how much is spent on the military each year (i.e., locating bases in hundreds of sovereign countries)?

Wed, Jan 2, 2013 1:24pm

John Boehner tells Harry Reid to "go F-#$%$#@ yourself..."

Allan Loudell
Wed, Jan 2, 2013 1:34pm

That's actually in the Politico story to which I linked above. Politico broke that story, to my knowledge...

On military spending - as I've posted here before - around 20% of the U.S. budget, somewhere between 680-Billion and 718-Billion dollars, represents defense and security-related international exercises of all kinds.

But it gets confusing, when one considers - for example - the costs of caring for the Americans wounded in Iraq, Afghanistan, etc. Modern medicine has actually SAVED more American lives, but some of our military service members require long-term care, driving up costs.

The U.S. military budget typically represents about 40% of ALL global arms spending. Our 2012 military budget was up to seven times greater than China's (although this comparison could be deceiving, because military salaries and equipment would cost less in China!). The U.S. military budget typically is greater than the next twenty countries' military budgets combined.

During the Presidential campaign, the Obama--Biden campaign claimed a Romney--Ryan administration would increase U.S. military expenditures by two Trillion dollars over the next decade. That would be in the Pentagon's base budget, not counting fighting actual wars. As usual, it depends on how you look at the issue. The Obama Administration intended to direct the money now being spent in Afghanistan for reducing the deficit and/or non-defense spending. Romney wanted to maintain the total level of defense expenditures, but would shift war funding to the Pentagon's base budget. But Romney wouldn't hike TOTAL yearly defense spending as a percentage of GDP.

As Jim Hicks notes after me - and I have covered in this space before - corporations involved with the military have been bracing for cuts, and have already begun cutting.

By the way, considering we only have a little over 200 "sovereign" countries in the entire world (depending on how you count), the United States hardly has bases in "hundreds" of sovereign countries.

On a quick scan, I couldn't find a break-down of the costs of maintaining bases, but rather break-downs of different military programs, such as "F-35 Joint Strike Fighter" or "Ballistic Missile Defense"; break-downs of components, such as "Operations & maintenance" or "Military personnel", and break-downs by entity, such as "Army" (the largest), "Navy", "Air Force", etc. In any case, special ops forces in sub-Saharan Africa - for example - wouldn't necessarily work from fixed bases in the conventional sense.

Allan Loudell

Wed, Jan 2, 2013 1:50pm
Two points. First, in two income households, $450K is not an unrealistic amount. No, my household does not bring in that much. But $200K is not unusual for a two-earner family who have been in a job 10+ years.

Point number 2. There is some obsession here with the military. I work in the great "military industrial complex."

The major corporations began downsizing last summer, anticipating the "cliff". Military-related reductions will result in massive layoffs. Already, plants are closing and soon thousands of defense employees will be out of work (if this goes through - I don't expect it). Mutual defense treaties obligate us to bases overseas and ships in key locations. We are limited in curtailing overseas troop and defense contractor placement. So civilian defense workers such as mechanics, engineers, finance personnel will be the main ones hurt.

Wed, Jan 2, 2013 2:27pm

Three quick points:

1. As Mr. Loudell stated, our 'defense' budget is larger than the next 20 countries combined. It's obvious we don't need to spend $718-billion per year to occupy sovereign countries.

2. Defense contractors who are laid off can retrain for other industries, just like anybody else.

3. To Mr. Loudell's point about the cost of caring for wounded veterans from Iraq, we could have avoided that expense entirely by not invading Iraq in the first place!

Mike from Delaware
Wed, Jan 2, 2013 5:00pm
Easy to do, cut back the military spending to what the Pentagon has said they need, which apparently is less than what we now are spending. That's a great place to start. Then down the road, we can revisit it, but at least that would be a cut and based on what the generals recommend
(the folks who should know... not some right-wing talk-host or TEA party Senator/Congressperson)... not hurt our military and its mission.

Wed, Jan 2, 2013 10:02pm
I hope Cantor gets elected Speaker of the House. It's time we got somebody in there with some guts.

Wed, Jan 2, 2013 11:30pm
MFD: Watch what you say about right-wing talk show hosts and Tea partiers. Those are my friends, you know.

Thu, Jan 3, 2013 1:26am
Mr. Pizza! I guess everyone is allowed a few anchovies for friends every now and then.... lol.. (Couldn't pass up that one, for obvious reasons.)..

But tea time is right about cutting the military. Of all the discretionary spending that this country does, the military is the most bloated. Much was spent rebuilding our arsenals after we emptied them on Iraq. I believe we are no longer critically low.

The cutting of the military can most easily be achieved by bringing Afghanistan troops home... However, we need a roaring economy beforehand that is desperate for high-skilled laborers, so those coming back can re-enter a peace-time economy in a capacity that pays them well. After every major conflict in our history, there were peaks of unemployment as troops came home looking for work. It would be nice if we could be ready this time.

Likewise, if the economy roars, then unemployment benefits, food stamps, Medicaid, cut themselves as their recipients get jobs, and begin working.

As for the new Congress, I'm sure Cantor is making a push for the leadership role right now, and to be honest, I can't call it. From my perspective, it looks like he has the votes. But, Boehner has a lot of favors he can call in, and he did isolate the Tea Party out of all the committee chairs, which, may give him a few more friends in his party than had he capitulated to the dark side....

Like Carper said in Allan's interview yesterday, I'd have to say, wait till tomorrow and I'll comment on it...

Mike from Delaware
Thu, Jan 3, 2013 8:12am
Mrpizza: Everyone is entitled to choose their friends. My point was, those right-wing talk-show hosts and TEA Partiers in Congress don't necessarily know what they are talking about in terms of the military. THEY believe they have all the answers as to how much the military needs, and the Generals in the Pentagon don't??

By the way, heard an interesting statistic yesterday on an NPR show: Apparently now that the election is over, Sean Hannity's TV ratings have dropped 50%, and Bill O'Reillys have dropped by a third.

Fri, Jan 4, 2013 2:09am
MFD: Well, you may be right about that, but Obama also thinks he knows it all. I've always said the generals know best.

As for TV ratings, I'm not surprised. The talk show hosts were way overconfident about Romney. I doubt however, that they'll go out of business.

Fri, Jan 4, 2013 7:24am
MFD: Oh, just one more thing. Where's Irv Homer when you really need him?

Mike from Delaware
Fri, Jan 4, 2013 8:27am
Mrpizza: I do believe the President said he was basing his assessments of military spending needs on what the Generals told him.

Yes those shows were way over the top. The thing that folks forget is those shows and radio talk shows jobs are to bring in ratings, so they try to get folks worked up, because they'll listen more and call in more, etc. I agree they won't go out of business.

It's one thing to have a different opinion than the Prez, but it's something else when they paint him as Un-American, or trying to destroy America, or being the anti-Christ, etc. Just as it was wrong when MSNBC's stable of hosts used to say Bush Jr was Un-American, trying to destroy America, or the anti-Christ. Bush Jr may be a bit slow or ignorant, Obama may be a bit of an Elitist sort of like Romney, but none of these men want to destroy America, they just have different visions on how to get America's economy working.

Something for all of us who follow Christ to consider, we are to be praying for our leaders, even the one's we didn't vote for. It just may be that Obama winning a second term was what the Lord wanted, may not have been either, but in any case we should be praying FOR all those folks and our state leaders too. I wonder how many Evangelical conservative Christians are praying for Prez Obama and the DEMS?

I find it very offensive when knuckleheads like Rush say I hope Obama fails. I don't, I hope he succeeds, because IF he fails the nation fails. I'd rather his programs help the nation even though I may not agree with his plans than have them fail and even more people be out of work or in the streets homeless. Gee lets pray that he fails so more kids are starving in America so that we can then say, see we were right. Somehow, I don't believe Jesus would be praying for Obama and the DEMS to fail.

I agree, where is Irv Homer? He was opinionated to beat the band, very entertaining, and did make you think.

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