WASHINGTON, October 16, 2013 — Senate leaders announced last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after a partial, 16-day shutdown. Congress raced to pass the measure by day’s end, although the House will likely need Democrats to help out, putting John Boehner’s speakership in some peril.
After a meandering opening this morning, when the rumor of an impending deal leaked out, Wall Street took off like a rocket, with the Dow up roughly 200 points just prior to noon EDT. The Dow is currently at +184 nearing the 1:00 p.m. hour while the broader-based S&P 500 is up a whopping 20.93 points.
Even as optimism grew, Congress still bristled in its typical, black comedic vein. “This is a time for reconciliation,” said Senate Majority Leader Harry Reid of the agreement he had forged with the GOP leader, Sen. Mitch McConnell of Kentucky—after the magnanimous Senate Majority Leader had spent the better part of October pointedly reviling the Republican leadership of the House in the time-honored tradition of Saul Alinksy’s “Rules for Radicals.”
McConnell said that with the alleged agreement, Republicans had sealed a deal to have spending in one area of the budget decline for two years in a row, adding, “we’re not going back.” Brave words from the Senator from Kentucky. But only in the details will voters learn how the Republicans managed to snatch defeat from the jaws of victory once again.
One prominent Republican lawmaker, Sen. Ted Cruz of Texas, however, said he would oppose the plan, but not seek to delay its passage.
That was a key concession that signaled a strong possibility that both houses could act by day’s end. That, in turn, would likely motivate President and non-negotiator Barack Obama to sign the bill into law ahead of the Thursday deadline that Treasury Secretary Jacob Lew had set for action to raise the $16.7 trillion debt limit.
Officials said the proposal called for the Treasury to have authority to continue borrowing through Feb. 7, and the government would reopen through Jan. 15.
While the emerging deal could well meet resistance from conservatives in the Republican-controlled House, the Democratic Leader, Rep. Nancy Pelosi of California, has signaled she will support the plan and her rank and file is expected to vote for it in numbers sufficient to allow the measure to pass.
Boehner and the House Republican leadership met in a different part of the Capitol to plan their next move. A spokesman, Michael Steel, said afterward that no decision had been made “about how or when a potential Senate agreement could be voted on in the House.”
Is “default” actually possible, or just another deceptive use of terminology?
The developments came one day before the deadline Lew had set for Congress to raise the current $16.7 trillion debt limit. Without action by lawmakers, he said, Treasury could not be certain it had the ability to pay bills as they come due.
John Chambers, chairman of Standard & Poor’s Sovereign Debt Committee, told “CBS This Morning” on Wednesday that a U.S. government default on its debts would be “much worse than Lehman Brothers,” the investment firm whose 2008 collapse led to the global financial crisis.
Billionaire investor and lifelong Democrat supporter Warren Buffett told CNBC he doesn’t think the federal government will fail to pay its bills, but “if it does happen, it’s a pure act of idiocy.”
The “idiocy” of an alleged “default,” however, has been widely open to question, despite the media’s general refusal to honestly report stories contrary to the Democrat party line.
In interview comments appearing in Slate and cited at length by columnist John Hinderaker at the respected Powerline site, Republican Congressman David Schweikert of Arizona, a former Maricopa County Treasurer, had sharp words to describe Treasury Secretary Lew’s media-trumpeted scare tactics, noting, like many economists, that an actual “default” is actually a mathematical impossibility given that the government can always allocate and prioritize its spending to avoid “default” almost without limit:
Another reporter asked Schweikert to respond to some doom-saying quotes from Chinese bankers. “I lay this at the steps of the administration and Jack Lew,” said the congressman. “The unconscionable, unacceptable use of language, the word ‘default,’ when the borrowing we need for 2014 is we’re 16 percent short on revenue. To use the word ‘default,’ to scare the markets—are politics really that important to this administration that it ignores basic math?”
Schweikert ticked off ways that he, as a county treasurer, had sought balance. “The basic repo desk, running your ladders on your debt—it’s stunning that the politicians in the administration care more about keeping this as a wedge than the international markets. Even Geithner made it clear that he had the ability to prioritize…. [T]here is no such thing as default unless there is an actual evil attempt from the administration. When you have 18 percent of GDP coming in in cash, less than 2 percent going out in debt coverage—I’m stunned you all fall for it in the press. None of you were math majors, were you?”
Bold and italics via Powerline, which wrapped up its reportage with the following observation:
“Republicans perhaps could have exposed the great default hoax if the debt limit issue had not been intertwined with the government shutdown. Now the Republicans are not in much of a position to try to explain anything. Still, it is easy to see what they should have done, and perhaps should still do. The projected deficit for FY 2014 is, I believe, around $600 billion. So the Republican House should vote to increase the debt limit by, say, $300 billion. That will give the administration plenty of leeway to ‘pay our bills.’ There will be plenty of time to prioritize spending and decide what should be cut. The cut–some is just forgoing an increase, but some will be actual cuts–is the other $300 billion.”
Learning a little more about how socialist hegemony actually happened
Hinderaker’s suggestions, however, are likely already by the boards. Never fully grasping their rhetorical ineptitude and lack of media support, practically-minded Republicans of all stripes have failed to understand how, for over 70 years, the left, since the time of FDR, has cleverly and incrementally moved the United States from capitalism to socialism largely by means of a thousand gradual but telling linguistic cuts.
These range from the redefinition of “marriage” to the redefinition of the Founding Fathers as the “Framers,” to the cynical use of terms like “affirmative action” meant to perpetuate—not end—racism to keep the class struggle dialectic boiling. As the meaning of language is slowly altered to suit a socialistic, statist model, so too are the values of the country, and for the worse.
This transition from capitalist to socialist hegemony has been cleverly accomplished and buried almost entirely from public view until fairly recently.
It’s now actually hiding in plain sight. Now it’s going to be difficult to unwind. That’s because Republicans, who, in fact do actually “do the math,” insist on making the kind of grand ideological gestures—like “defunding Obamacare”—that are easily demagogued and are doomed to fail because they have lost control of the language, the media, and academia. So their logical and helpful arguments are simply never heard, save when they are mischaracterized and denounced by slick, accomplished political and media propagandists.
The Democrats over the decades bided their time, preparing the battlefield with dozens of small victories while packing the media, the courts, and academia with carefully vetted fellow travelers. These cells have all been activated to finish the job this decade with a flourish, again by controlling the language and its deployment and usage in these key social pillars and communications spheres.
Starting yesterday, the Republicans need to do likewise, starting at the humble bottom and working their way up. They need to resist the cheap thrill of righteousness even while going down to utter defeat each and every time they do it.
Regaining control of the social hegemon is a long, tedious, and often thankless game, but Republicans—or whatever effective new party might sprout from self-inflicted Republican mass-suicide—needs to start now. And step one is avoiding the kind of grandstanding that you simply can’t win with a demoralized electorate that’s always ready to swallow the Democrats’ bread and circuses without ever understanding the consequences.
The Republicans grandstand out of the sheer frustration that grows out of their collective inability to get their superior message out to the public. As long as they can’t control this near-fatal impulse, they will continue to pick the wrong battles and become the Chicago Cubs of politics—something this faltering, once-great country can ill afford at this time in history when the economy remains in ruins and everything is up for grabs.
—AP contributed to this report
Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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