Popular Much?

Danny Zeng | October 10, 2013

The President and the Congressional Democrats’ most recent decision to shut down the government is reflected in their approval ratings.

AP released its most recent poll yesterday with a sample of 1,227 participants and +/- 3.4% of errors with a 95% confidence interval. The President’s approval rating slipped 13 percentage points since April, from 50% to 37%. A majority of Americans disprove how the President is handling federal deficit and managing the federal government.  Even a plurality of Americans seem to give the President a thumb down on issues such as the economy, unemployment, healthcare, immigration, and gun laws. There can be no doubt that constant news framing, acerbic opposition rhetoric, and late night talk shows are eroding politicians’ popularity among the people.

While the President’s rating slipped in the latest poll, Congress is diving off the rating cliff itself. Polling at a meager 5% approval, the lowest since summer of 2010, our nation’s legislative body is a non-legit slate of work – nay “work” would be too generous a usage in this context. Even though Congress has such a historic low approval, the structure of Congress, a body comprised of 535 elected members, make it nearly impossible for high ratings: any miscreant group of legislators could poison the well rending the body the least liked branch of government.

When asked about to what extent do people think the President or Republicans should negotiate to end the shutdown, a majority of Americans want to see politicians working harder to open up government for business. It is interesting to point out from the poll that a vast majority of Americans (lower 90s) do not feel the impact of the shutdown. It is similar to the popular demand for  PCL to open 24/7 here at the University, but yet such action has so little consequence for vast majority of students.

One question that is very telling about the public’s understanding of the current issue in Washington is “In general, do you support, oppose or neither support nor oppose raising the federal debt limit in order to avoid defaulting on U.S. government debts?” Almost half, 46%, of Americans neither support nor oppose raising the debt ceiling. I have zero idea what these folks have in mind in terms of options on the table.

News flash: the debt ceiling WILL be raised, like dozens of times in recent decades. The issue here is still long-term spending. The GOP in Washington recognize that the debt ceiling provides them with leverage to deal with deeper fiscal problems that this President and his party allies in Congress have refused to do. The market does not need to freak. The journalists need to stop writing doomsday stories on a U.S. default. This crescendo-like, crisis-driven, cliff-diving, who-blinks-first sort of high-stake game of chicken has unfortunately become the new normal of Washington politics. At the end of the day, average Americans suffer as result of campaign-oriented, chest-pumping posturing.

To be fair, the system incentives little negotiation, compromise, or working together as result of attractive political gains.

Political gains: constant news coverage a.k.a free PR, shifting public attention allows for unorthodox law making to grant favors to special interests a.k.a. long-time supporters in the interim, prime pump campaign chests for 2014 through a war of blames, activate and mobilize the base for future campaigns, Mr. Smith goes to Washington…to become filibuster YouTube stars, etc.

Public losses: civic dysfunction that breeds public cynicism, stress on our constitutional system, showmanship over statesmanship that provides marginally low entertainment values compared to the gravity of these issues (unless you are C-SPAN nut job), losing competitive edge to up-and-rising countries abroad, and ultimately affecting lots of people’s livelihoods.

Despite the perverse incentives in place, I strongly urge the President to come to the table and do the job he was elected to do – LEAD. The power of the purse has resided with Congress since its inception. No President should willy-nilly stonewall on the question of who gets the say on what government funds – that’s the primary responsibility of Congress. I urge the President to respect the demarcation of powers (and not listen to liberal columnist’s call to take the issue into his own hands), lead the conversation and cease to stifle sensible negotiation opportunities over his predictably-poor-performing pet policy project that a significant plurality of Americans don’t like and don’t want. 

Who Blinked First? Politics of the Fiscal Cliff

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Courtesy of humanevents.com

The talk about the fiscal cliff has confused many, and I would like to bring some clarification to this issue to my peers.

The Basics: the reason for the “fiscal cliff” talk is that on January 1st, Bush tax cuts (2001, 2003) will expire and revert back to Clinton-era rates on a wide ranging of taxes i.e. personal income tax, dividends tax, capital gains tax, estate tax. in addition to literally thousands of middle class Americans getting hit with something called the Alternative Minimum Tax, which was originally designed to capture the rich who don’t pay their fair share. In addition, about $100 billion of domestic spending, including defense, will be cut as a provision of the Budget Control Act of 2011. The totality of this “cliff” amounts to a fiscal impact of $500-600 billion on the economy, which economists of all stripes predict nothing short of another recession in 2013 if this so happens.

What does this mean to President Obama? President Obama’s re-election was threatened by the poor economic performance of his first term. Even though this time around, he doesn’t need to worry about re-election, presidents in their second term often crave for a credible legacy. With that said, it is in President Obama’s best interest to ensure that economic recovery remains strong. Looking at it from this vantage point, the threat of another recession is undesirable for the President, who has other priorities – domestic and foreign – for his second term i.e. immigration reform, education, energy, Iran, Middle East overall, China. He doesn’t want to spare his political capital dealing with an ailing economy for much of his remaining tenure. Plus, the botched debt ceiling talk from last year tarnished his image as a negotiator-in-chief. His political reputation is also on the line. Since the White House knows its limited ability to force the hands of progressive liberals in Congress, it is willing to compromise with Boehner beyond the baseline laid out by Reid-Pelosi (which is why Obama moved the goal post to $400,000)

What does this mean to Democrats? With a recalcitrant Tea Party wing within the Republican ranks, especially the Republican-controlled House, there seldom will be opportunities for more tax hikes than this in the years to come. The President’s re-election provided us with cover. We can claim mandate on taxing the rich. This is a golden opportunity not to be missed. Since revenue bills have to originate from the House, so the Republicans really control the purse string at least in the near future (save anything dramatic there’s fat chance that Democrats will re-capture the House in 2014). “Saving” Medicare and Social Security are huge priorities for us. We certainly don’t want to be painted as balancing the nation’s finances on the backs of minorities and the poor (wink wink our most loyal supporters) – let’s save that honor for the GOP, who already built a brand as the “Party of No,” let’s dump all that on them and force their “extremism” out on entitlements – I mean human rights to basic dignity in this world.

What does this mean to Republicans? The polls show that the public trusts the President more on the fiscal cliff issue, especially when the President’s approval rating is at all all-time high. However, is a deal possible with the fiscal hawks who want more spending cuts? Also considering that most of them ran on a no-tax-increase platform back home? I know at the core of our conviction that we spend too much in this country. We are marching towards a deeper welfare state. If Republicans run the White House, we’d have entitlement reforms come spring but… The reality is that we have stuck our neck out for a deal – we proposed tax increases on those making more than $1 million and the President still said “no.” The President wants to play hardball because we forced his hands two years ago. He now has the leverage, and we have the short end of things. So help us God.

What does it mean to average, non-Washington folks like you and I? 

One camp would argue that going off the cliff is not so bad. The middle class will pay more taxes, and they will be more conscious of how much the country’s really spending. In the long run, what’s not to love? The other camp would say that going off the cliff will disproportionately affect middle class – higher taxes AND cuts to certain public benefits. Either way, it’s bad news for regular people. Congressional Budget Office projected that unemployment will tick up to 9% nothing gets done to avert the fiscal cliff.

In retrospect, if Boehner and Reps postured the former position (jump the cliff) and maintained a consistent no-tax-increase position, then Republicans may have had greater leverage throughout the talk. However, Boehner blinked first. Now the President and Dems have successfully gained the leverage point, especially after Boehner pulled off the vote on his own proposed plan due to lack of support. Just to be clear, both Reps and Dems wanted to extend middle class tax cuts. Why? In American politics, raising taxes on middle class will be the ticket for your Party to be in the minority, assuming you survive your next election. Another recession means higher unemployment, potentially setting back our economy for a few more years, and leading to more government benefits for the unemployed (as long as Democrats have power in Washington). Sadly though, our nation’s finances really won’t be that much better. We are fast approaching $17 trillion in debt, and we will still have hundreds of billions of deficit annually for the remaining years in the decade, even after passing President Obama’s tax raise on those making more than $250,000. Nothing save major tax and entitlement reforms will put our country’s fiscal house in order. The President said that he’d work on tax reform in 2013. We will see. Right now, Boehner had tossed back the political football to Reid and Obama as result of his failure to whip enough votes for “Plan B,” and in the Speaker’s own words, what comes next, “God Only Knows.”  

 

Danny Zeng