Sunday, January 4, 2015

How Will We Know Who 'Wins' Under President Obama and the GOP Congress?



Well, if anything positive gets done on a bi-partisan basis, that would be a good first step.

We have long been concerned that American politics has been reduced to the ESPN level of 'who won/who lost'. If FSU goes undefeated for 2 whole years but gets whomped in the Sugar Bowl by 39 points (which didn't leave too many fans crying outside of Tallahassee, now did it?), does that mean they are 'terrible' or they got what they wanted 29 times out of 30 games over 2 full years of playing football: a victory?

Politics is not like sports in one crucial manner: You don't have to win the 'final' game each season to be victorious. You don't even really have to win 90% of the time or even 75% of the time to have a 'good year'.

You really only need to prevail 50%+1 of the time on each and every vote in both the House and the Senate and then get the President to agree with you. The calculus on each vote can be different with different votes in both the House and the Senate each time as long as it adds up to 50%+1 and is something the President can sign into law. Otherwise, the road to victory gets harder as Congress will have to find a 2/3rd's majority to override the Presidential veto.

That is the way the Founders set it up. So that is the way we have to play this game in Washington.

We bring this up because now that the Republicans have taken over the Senate by a 54-46 majority (Bernie Sanders is not truly a 'Independent' from Vermont; he is an avowed Socialist and we'll see if Independent Angus King of Maine ever votes with the Republicans on anything) and increased their majority in the House to historic highs not seen since President Truman days, we are probably going to see an avalanche of bills passed by Congress under normal order and sent to President Obama, perhaps even in the first 100 days as we saw under LBJ in 1965.

Will they ALL be vetoed by President Obama? Or will he take a page from Presidents Reagan and Clinton and learn to compromise along the way with the majorities in Congress? That is the key question the entire nation will face in the next 3 months for sure.

If you see the nightly news and cable shows start to report that President Obama is meeting regularly with the Republican leaders of the House and the Senate and his legislative liaison people are stampeding Capitol Hill for round-the-clock negotiations on everything from the budget reconciliation process to tax reform to repatriation of corporate profits overseas to modification of Obamacare, then you can start to let yourself be 'hopeful' that this could be one of the most productive sessions of Congress in the last 2 decades.

However, if you see a defensive posture on the part of President Obama in each and every press conference where he is wielding his veto pen, you can be assured of more of the same old, same old we have seen for the same two decades: lots of screaming and shouting about marginal issues and absolutely no progress on the issues of concern that affect us all, black and white, rich and poor, country and city, north and south and east and west.

What are some of those key issues and how can they be objectively measured?

  1. Balancing the federal budget and reducing the growth of national debt.

    This is such a basic core function of our elective leaders that you would think it would be easy to focus on and solve.

    It isn't. We heard one senior person close to the action comment that one basic test of whether a person could be considered 'eligible' to serve in Congress would be if he/she could read a simple balance sheet and explain what it means. Apparently, not many of them who have served for the past 20 years have any idea of what the federal balance sheet looks like or the income statement or the national debt statement.

    If you see an 'omnibus budget reconciliation' bill advancing through Congress that includes significant tax reform and simplification coupled with entitlement program spending reforms that reduce their rates of growth, that will be 'progress' this year.
  2. Getting More Americans Back To Work In Full-Time Employment

    There are over 2 million fewer Americans working in full-time employment positions today than there were in 2007 before the Great Economic Crash hit us all.

    Our population has grown by more than 16 million in those 7 short years. You can't say that the economy is terrific when so many adults and recent college grads are struggling to find gainful employment in fields where their expertise and interest lie.

    The workforce has not been reduced by that many Boomers officially retiring, although that is a contributing factor. 'Full employment' means everyone who wants to work can find a good job, not that they have left the workforce frustrated by not being able to find a job.

    According to the Bureau of Labor Statistics (BLS), we are just now approaching the same number of employed Americans in the work force, 147 million, in 2014 that existed in 2007 pre-crash. However, we now have over 2 million more Americans employed part-time due to economic reasons who want to find full-time work but can't.

    Millions of jobs have been destroyed in the student loan and secondary mortgage industries, for example, due to the nationalization, in effect, of both under President Obama. Never to return, unless, of course, these financial markets are allowed to return to the private sector.

    Ask members of your extended family, friends, church-goers and colleagues at work if they know of anyone who is working at a part-time job or one below their skills level just to make ends meet. That will give you a pretty good indication of the weakness of the jobs market today.
  3. Reform of Health Care Insurance and Cost Spiral

    Yeah, we know, we know: 'Obamacare was passed so now everything is hunky-dory in the world of health care insurance and costs'.

    Well, if our recent re-evaluation of our individual health care plan is any indication, health care insurance is FAR from being 'fixed' as any advocate of the ACA would try to say.

    We have a high-deductible HSA that basically covers nothing but catastrophic health care costs over a $11,000 annual family deductible. When we asked BCBSNC and 2 other agents if we could do better under the exchanges, all 3 put us on hold for 2 minutes exactly and came back to the line to say this:

    'Stay where you are. If you change your plans, you will get screwed. The next 'best' plan will cost over $1000/month and the deductible will be higher to boot'.

    This is 'health care reform' at its best?

    The best that can be hoped for in health care reform is that the Republicans will chisel away at the ACA with logical, level-headed reforms and present them to the President and dare him to veto each of them singularly in advance of the 2016 presidential election.

    Efforts should be made to get at the heart of the medical cost care explosion rate over the past 30 years. Inflation has been about 160% since 1980. Health care costs have gone up about 480% during the same time period. (College tuitions have exploded by 750% but that is another matter)

    Single-shot bills such as 'allowing everyone to keep their plans if they like them...forever' would be one start. Another would be to repeal the employer mandate that has already been delayed twice by President Obama in order to help the Democrats at the polls in 2014 which didn't work out as planned.

    The Supreme Court is hearing a case, King vs. Burwell, this spring which could further cripple the ACA. The issue at hand is whether federal tax credits can be issued to anyone buying an ACA plan in a state that has not set up its own state-run exchange as outlined in the specific legislation passed by Congress in 2010.

    If the Supreme Court rules against the ACA in this provision, that could effectively knock the props out from underneath the ACA in the 30 states that have not set up exchanges which would effectively strike a crushing blow to the fate of Obamacare perhaps by June of 2015.
We have long-said that perhaps the ideal political matrix is for one party to control the White House and the other Congress. No party can ever get 100% of what they want under this setup, therefore, to get anything they want done, they have to compromise their rear ends off.

2015 could be one of those years. Reagan and the Democratic Congress under Tip O'Neill got a lot done. Bill Clinton and the GOP House under Newt Gingrich and the GOP Senate got a lot of great things done from 1996-2000, namely 4 budget surpluses in case you have forgotten.

It can be done.

(click on the title link of the post to view the video at the top)

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