The Debt Ceiling Debate reveals the Republican Party coming apart at the seams. A previous post looked at the many contradictions and conflicting issues among the Republican “bases” which are now coming to the fore. In the Debt Ceiling Debate the powerful Wall Street and Business base is pitted against the conservative small business, fundamentalist, retiree, gun control and other special interest bases – many of whom were and are still being savaged by Wall Street and/or Big Business[think credit cards, Healthcare, oil and gas prices, etc].
Now Wall Street and Big Business abhor a Default – they know full well it will set back US financial dominance while Hong Kong, Geneva, London, Singapore and Shanghai will be the big beneficiaries. Big Business sees a default not only tripping off a second recession but also making their global reach harder to achieve as China’s WTO defying tactics get adopted more globally. It is simple logic as the ultimate in unfair trade practices => a negligent, “unforced error” default then allows countries like China, South Korea, Brazil, Russia, India, the old Eastern European Bloc to push their protectionist and other monetray/financial manipulation agendas with greater impunity. Hence Wall Street and Co have their man Tim out shilling the “catastrophic effects of a default.”
But the Norquist[“My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.“] GOP-ers have been waiting 30 long years for the Ronald Reagan’s Starve-the-Beast policy [of raising spending with no offseting spending cuts or tax increases to pay for the new expenditures] – “to reach maturity”. As a result see here how Republican Presidents have amassed over 90% of the massive increases in the National Debt. Now the Norquist GOP-ers are turning on a dime and have suddenly become super deficit hawks with one slight difference.Now raising taxes are still forbidden. This includes closing loopholes that benefit mightily Wall Street Hedge funders or very specific industries like oil and gas or corn farmers – those loopholes are also off base too and must be preserved. So it is crippled budgeting. And Norquist has one of those poisonous litmus test-like signed pledges over 200House Republicans and over a dozen Republican Senators – do not raise taxes or do not get re-elected.
So the Norquist or Tea party GOPers [they largely overlap] don’t care if the US defaults. They don’t see it as a big deal and the equivalent of a tax increase of higher interest rates and a second recession. So they scuttled the first two Grand Bargain Debt celing settlements which would have seen $3 trillion in tax cuts and 1.2 billion in tax increases over 10 years[the biggest chunk coming in the removal of the Bush tax cuts for the rich]. No matter that in total taxation the US is third lowest among 35 OECD developed countries- having the lowest not tax rates but total taxes collected amonng developed countries.
So Default is one of the key issues that is splitting the GOP. For example, in the debate over the Debt Ceiling the Republican Presidential candidates have been notably mum – only Michelle Bachmann, an avid Tea Party advocate, has come out for no taxes or a default. It seems the only thing that the GOP factions can agree upon is “no second term for Obama” Hence they are united in ever more virulent attacks on his presidency – delaying appointment in the Senate where 60 votes are required to get even appointments passed. Even Chief Justice Roberts, a staunch Republican, has spoken out against the Senate delays on dozens of Obama judge appointments. In the House controlled by the GOP, hundreds of agencies are awaiting appropriations for work they have been mandated to do. They have neither staff nor budget to carry them out. So after 8 years of Bush dismantling of various regulatory agencies and now GOP delays in budgets and appointments, the GOP can cite “that regulation or the government does not work” when things go amiss.
But the divisiveness within the GOP is more widespread as factions seek to assert their power. For example the opponents of gay rights, seeing the repeal of don’t ask don’t tell and New York state approving gay marriages, have become more strident in their policies as lead by Michelle Bachmann. In general this divisiveness is reflected in the Republican Presidential candidates whose positions span the GOP “holy “spectrum. The result is that after the State of the Union Speech this January there were two Republican rebuttals. The fundamental problem is that one of the few things uniting Republicans,the universal cry for less goverment, is now dividing them. This is as the various GOP factions cannot agree on cuts unless they are across the board. And cuts to Medicare, Social Security, and some key social welfare payments hurt some of the GOP Base sharply. So the unifying cry is to make Obama a one term President. But so far the polls show no Republican close to the President in money and popular appeal.
So now the Republicans are trying to pin the default blame on the Donkey. But it appears that effort has gone badly awry as the President has painted the House GOP as divided against the the Senate GOP and the House Leadership [think John Boehner]. So pinning the blame currently goes on the GOP. This means there is likely to be a split in the GOP over who can best defeat Obama. Expect two “Republican” candidates to run for President next year as the party splinters on inherent contradictions.