Republican representatives want to gut the way we collect national economic data.
Read the original post: Congress: No unemployment data for U.S.
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Republican representatives want to gut the way we collect national economic data.
Read the original post: Congress: No unemployment data for U.S.
A YouGov poll suggests the recession has made Britain ripe for polarisation. The US can teach us why it should be avoided
If we Britons want to know what truly polarised politics look like, we need only glance across the Atlantic. Recent polling in the US asked respondents what they thought about repealing the 1975 Public Affairs Act, entirely fictitious legislation that – in two versions of the same question – it was suggested that either President Obama or the Republicans wanted to axe.
As Mick Blumenthal explains, a small proportion of voters are always willing to offer their views on subjects that they cannot possibly have any real opinion on, but as soon as the hate name Obama was mentioned in connection with the proposed repeal a full 39% of Republicans rushed forward to denounce it. More than a quarter of Democrats, likewise, rush to defend the non-act when it is said to be under Republican threat.
This sort of polarisation in the electoral base discourages politicians from reaching out across the partisan aisle, and ultimately leads to the sort of ludicrous stand-offs that now routinely mark every negotiation over America’s federal budget. More fundamentally, it spells trouble for a democracy when it loses the ability to debate issues on their merits, instead of warring over tribal lines. Despite the adversarial traditions of Westminster – where the benches are set two swords’ length apart – we should be thankful that on some really big issues, the Iraq war being one powerful example, the big divides in the country cut across party lines.
But the intriguing question raised by research prepared for a YouGov conference on Wednesday, at which the Guardian is media partner, is whether the selective sweep of the great recession and the cuts that follow it are doing for British public opinion what the culture wars did for American – namely, dividing the country into two tribes. As I report for the Guardian’s Society section, YouGov’s trans-national data demonstrates that the “social recession” – that is the anxiety and dislocation that comes with the slump – is hitting much more unequally in the Anglo-Saxon economies than in France and Germany. Those who report losing out financially in Britain’s recession are, it seems, finding life tougher in other respects too – and they are also developing different opinions.
At the start of the week, I reported that YouGov’s numbers suggested Britons are less inclined overall than the Germans or the French to demand that the government cracks down on people on benefit. The small print reveals that this surprising finding comes about because 57%of the country that reports suffering substantially from the recession personally is inclined to regard the government as being too harsh on the workless, by an eight point margin. Britons who report having largely escaped the slump, by contrast, incline by a double-digit margin to the view that the government ought to crack down on scroungers.
Parallel differences are found on questions about the role of government – the slump’s victims want it to do more redistribution – in resentment towards top pay (it’s more marked among those feeling the pinch) and in the faith that hard work can take poor children to the top, a faith that is weaker among those experiencing hard times. In none of the other countries surveyed did individuals’ personal experience of the great recession appear to have such a consistent bearing on so many attitudes.
We decided to explore in more detail how feelings about the cuts in Britain vary across the divide that separates those who are bearing their brunt, and those who are escaping. Those affected, for example, believe the cuts to be unfair by a crushing margin of 71% to 19%, as against a much smaller gap of 49% to 35% among the unaffected who believe that retrenchment is being meted out fairly. In the blame game, those feeling the cuts point the finger the coalition’s way, by 36% to 28%, whereas those who have escaped the effects insist by a 53%-17% margin that the responsibility goes back to Labour.
Some of the politicking that we have witnessed in recent weeks has been designed to exploit a pre-existing cuts chasm, although the new polling suggests that it may instead serve to widen it further. A notable example was George Osborne’s decision to link the case of Mick Philpott to the debate about benefit cuts. Although inevitably divisive, this controversial move won the backing of the public as a whole by 48% to 41%. Underneath those headline figures, however, we find that those who are feeling the cuts themselves felt that the chancellor had got it wrong by 49% to 43%, whereas those who are escaping the pain judged his intervention right by an emphatic 58% to 35% margin.
YouGov’s trove of research for Wednesday’s conference strongly suggests that the great recession renders British opinion ripe for exploitation by divisive political strategists. My message to the likes of Osborne, however, is to pause and glance across the Atlantic at the result. What starts out as a clever partisan wheeze eventually produces a politics that cannot get anything done.
• YouGov interviews were conducted online between 11 and 12 April, 2013, and total sample size was 1,982 British adults. The data has been weighted and the results are representative of all British adults aged 18 or over.
US lawmakers on both sides show little room for negotiating way out of possibly devastating spending cuts that kicked in Friday
Billions of dollars in sequester-induced budget cuts appear set to stay for the time being, with leading political figures in Washington indicating no early resolution to the impasse, as they eye next year’s congressional elections.
John Boehner, the Republican speaker of the House of Representatives, said on Sunday he saw no path to agreement with the president over the $85bn in automatic cuts, about half to military spending, that kicked in on Friday after the two sides failed to agree a package of budget reductions and tax rises to tackle the deficit.
“I don’t think anyone quite understands how it gets resolved,” he said on NBC’s Meet the Press.
Pressed on why he does not agree to the president’s demand to increase revenues by closing tax loopholes, Boehner turned the question around and accused Barack Obama of failing to keep his side of the implicit bargain that higher taxes already agreed should be matched with spending cuts.
“The president got $650bn of higher taxes on the American people on January the first. How much more does he want? When is the president going to address the spending side of this?” said Boehner.
“You can’t tax our way out of this problem. We’ve got to deal with the spending side, just like every American family has to.”
Boehner said he made the same point at a “very frank” but polite meeting with the president on Friday.
Obama emerged from the encounter saying he saw little prospect of an agreement with Republicans in Congress in the near future. The president, apparently with one eye on the 2014 mid-term elections, predicted that it will take public opinion to shift the GOP.
“What I can’t do is force Congress to do the right thing,” he said after the meeting. “The American people may have the capacity to do that.”
Obama suggested that voters, sick of lurching from one financial crisis to another, will pressure their representatives.
“After some reflection, as members of Congress start hearing from constituents who are being negatively impacted … that they step back and say, all right, is there a way for us to move forward on a package of entitlement reforms, tax reform, not raising tax rates, identifying programmes that don’t work, coming up with a plan that’s comprehensive, and that makes sense,” he said.
“It’s going to mean hundreds of thousands of jobs lost. That is real. We’re not making that up. That’s not a scare tactic, that’s a fact.”
The president has said he did not know how long it will take for the cuts to shift the Republican position.
“It may take a couple of weeks. It may take a couple of months,” he said.
Gene Sperling, director of the White House National Economic Council, said Obama called a select group of Republican members of Congress on Saturday who may be more likely to consider “tax reform that raises revenues to lower the deficit”. The president also spoke to Democrats open to tackling entitlement spending long-term.
But the Republican leader in the Senate, Mitch McConnell, said his party will not be backing down and remains committed to $1.2tn in spending cuts over the next decade without increasing taxes.
“I’m absolutely confident we’re going to reduce spending the amount of money we promised the American people we would in a law the president signed a year and a half ago,” he told CNN.
“We said we’re open to discussing how to reconfigure those spending reductions without raising taxes … So far I haven’t heard a single Senate Republican say they would be willing to raise a dime in taxes to turn off the sequester.”
A report in the Washington Post on Sunday suggested that Obama had all but given up on attempts to push for bipartisan solutions to problems in Washington. Instead he was focusing on winning back the House in next year’s mid-term elections to force through his remaining agenda.
But McConnell said he does not think voters will be swayed against Republicans.
“The American people look at this and say: gee, I’ve had to cut my budget more than this – probably on numerous occasions over the last four years because we’ve had such a tepid economy now for four long years,” he said.
Boehner said he did not know what the long term effect of the sequester will be.
“I don’t know whether it’s going to hurt the economy or not. I don’t think anyone quite understands how the sequester is really going to work,” he said.
Still, the Republican leaders kept the door open to further negotiation at least on how the sequester cuts are distributed. They are keen to reduce the impact on the military and shift more of the burden to welfare spending which is already severely hit.
“We’re willing to talk to him (Obama) about reconfiguring the same amount of spending reduction over the next six months,” said McConnell.
Boehner said he did not think the spending crisis would reach the point of a government shutdown later this month, and that Congress will approve the funding to keep federal agencies open after March 27.
“We should not have any talk of a government shutdown so I’m hopeful that the House and Senate will be able to work through this,” he said.
Crowd’s concerns contradict polls that suggest little public interest in across-the-board cuts due to be imposed on Friday
Workers and management at one of the biggest naval shipyards in the US joined Tuesday to express concern over the potential damage from the latest budget standoff in Washington.
As Barack Obama used the Newport News yard in Virginia as a backdrop for his latest attempt to bounce Republicans in Congress into a deal over the sequester, employees said they were concerned that the failure to reach a deal would lead to layoffs.
The personal stories, detailing the consequences for families of unemployment or even a cut in hours, suggest the confrontation over the sequester – $86bn of budget cuts that kick in Friday if there is no deal in Congress – is already having an impact, creating fear among workers and uncertainty among businesses.
Obama, in his speech in front of thousands of shipyard workers, said the consequences of failing to agree a deal could be devastating. Republicans argue that Obama is exaggerating and is guilty of scare-mongering.
Workers in the crowd contradicted polls that suggest there is little public interest in the sequester row or that the Republicans are in line for the blame.
For these workers, the sequester is not academic. Christina Licano, a welder who came to Virgina from New Mexico two-and-a-half years ago for the work, said: “I am worried that if it does come to cuts, it will affect the navy. Our lives depend on these jobs.”
Mike Petters, chief executive officer of Huntington Ingalls Industries, which owns the Newport News yard, said the budget row has already had an effect. Speaking after Obama’s speech, he told the Guardian: “We are ready to make investments in our business and we are holding just now to see how this will play out.”
Newport News Shipbuilding employs about 22,000, mainly building nuclear submarines and carriers. The yard provided a striking backdrop for Obama’s speech, delivered to thousands of workers crowded onto the floor of a giant hangar usually reserved for submarine construction. Hundreds more lined the gangways above, many still wearing their hardhats.
The president warned that their jobs, and many others across the country, “are currently in jeopardy because of politics in Washington”. The impact of the sequester would not be felt overnight, he said, but it would be real. “You know that if Congress can’t get together and plan our nation’s finances for the long term, that over time some of your jobs and businesses could be at risk,” he said.
Obama said that at nearby Norfolk naval station: “the threat of these cuts has already forced the navy to cancel the deployment, or delay the repair of certain aircraft carriers. One that’s currently being built might not get finished. Another carrier might not get started at all. And that hurts your bottom line. That hurts this community”.
But workers in the audience refused to single out the Republicans for blame. Licano, the welder, was scathing of all politicians. “Why can’t they get together and sort it out? We have to work together [in the yard], different trades coming together. Why can’t they?”
As well as the 22,000 at the yard, there are another 70,000 in this corner of Virginia who are dependent on Defense Department contracts. The sequester puts them at risk from cuts in their hours, through to lay-off.
Beth Tilton, who instals insulation in submarines at the yard, said the economy is in the worst shape she has seen since childhood. “I am 46 years old and never seen it this bad,” she said.
Tilton, a single mother originally from Miami, said: “The work puts food on the table.” If there are layoffs, she said:”I would just have to survive on unemployment [benefit].”
Ricky Jordan, 54, a ship-fitter at the yard for 36 years, said there had been no layoffs in the time had been there, but he is worried now. “I am worried about layoffs. I have got a wife and four kids. One in college. I have got to see her through college,” Jordan said.
Leslie Smith, 38, a submarine designer, was more sanguine. “The effect of the sequester is not official yet.” But he acknowledged there is concern. “People are worried. Everyone is worried about jobs these days. On Friday, things will change, one way or another. I hope it does not effect me or the people here. No one wants layoffs.”
Obama was accompanied on the trip by a Republican congressman for the area, Scott Rigell. Asked by reporters aboard Air Force One what he would say to his Republican counterparts, Rigell said: “For those who believe that the sequester ought to be fully implemented, my response is this: even if you hold the view that defence spending should come down, this is not the right way to do it. There are better alternatives to this.”
Asked if he was worried about participating in what Republicans see as a campaign roadshow, Rigell said: “I boarded the plane knowing that some would potentially misinterpret this.” But he said the risk was worth it in order to be allowed to put his views directly to the president.
Barack Obama laid out a plan to restore growth and rescue the middle class, adopting a tougher approach for his second term
The presidency of Barack Obama has been a lesson in American civics for the rest of the world and perhaps for many Americans themselves. We have learned that the most powerful man in the world is not that powerful. We have learned that he can be frustrated on an almost daily basis, and that even his most heartfelt appeals for help can be, and have been, routinely spurned.
We have grasped that even the most effective rhetoric, words that sway the nation, may not sway a stubborn opposition. We have seen the inheritor of Lincoln’s office, at the very moment when a new and commanding film is reminding Americans of the achievements of one of their greatest presidents, struggling to craft compromises with grudging and ungiving opponents, and often failing to do so.
President Obama’s speeches were at first accorded a special deference, not because he is a gifted orator, although he is, but because they were seen as having a predictive quality. They were, it seemed, about what he was going to do for America and for the rest of us. But as time passed their wishful character became more apparent. The president got a number of important things done in his first term, notably in pulling America back from the brink of economic collapse, but much of his agenda languished. Will it be the same story with the two speeches, the inaugural last month and the state of the union this week, in which he sets out his ambitions for his final term?
He laid out a plan to restore growth and rescue the American middle class, by investing in education and in energy and other infrastructural programmes, and backing innovations in modernising technology. But he did not confine himself to the middle-class plight, also proposing measures, like an increase in the minimum wage, to help the underpaid and unemployed. This is the modestly interventionist programme on which he campaigned and one which he said would not increase “our deficit by a single dime”. Yet it was instantly denounced by Republicans as meaning more “big government” and more spending. In the same vein of renewal and long overdue reform, Obama called on lawmakers to overcome their differences to establish fairer and more realistic rules about immigration, to create a better voting system, to adopt a more active approach to climate change, and to bring in real gun controls. Republicans are open to progress on the first and opposed or ambivalent on all the others.
Obama’s overall strategy is clear: he seeks to crush Republican obstructionism between the hammer of his own renewed resolve and the anvil of a public opinion that he believes is on his side and can be further won over to it in the coming months. His programme is not radical. From a European point of view it looks more like common sense than socialism, even in the diminished meaning of that word today. His hope must be that most Americans will continue to see it that way, and that their views will eventually erode the position of the Republican hardliners in Congress.
After all, something happens to even obdurate politicians when they grasp that citizens are not going to vote for them. After the farce of the Republican presidential selection and the missteps that marked Mitt Romney’s campaign, the more intelligent men and women in the party know they are out of touch with key constituencies such as Hispanics, women, gay people, and many of the young.
They can fix on the objective of wrecking Obama’s second term and then hoping to obfuscate the reasons for it, perhaps repeating their midterm success last time. Or they can trim, offering Obama some support and retaining some themselves. But the remaking of America’s conservative party, captured as it has been by delusional and extreme views, is going to be a long business, if indeed it can be done at all. Obama cannot wait for a better American conservative party to emerge. He tried the bipartisan approach the first time round. This time he is taking a tougher approach. Let us hope it works.
President will also touch on immigration reform, withdrawal of troops from Afghanistan and North Korea’s nuclear tests
Barack Obama will use his state of the union address to paint his second presidential term as an opportunity to restore “the basic bargain” which built the US into the world’s greatest economic power by ensuring prosperity for the great bulk of Americans and not the privileged few.
The president will tell Congress that it is this generation’s task to return to a time when US governments represented all the people, according to extracts released by the White House. But he will also pledge that his proposals to bolster employment will not add to the deficit.
“It is our unfinished task to restore the basic bargain that built this country – the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, what you look like, or who you love,” the president will tell Congress. “It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation of ours.”
The key to that, the president will say, is a focus on the creation of “good middle-class jobs” – an acknowledgement that even though the economy has picked up over the past four years, many people were forced from well-paid work into minimum-wage jobs.
“That must be the North Star that guides our efforts. Every day, we should ask ourselves three questions as a nation: how do we attract more jobs to our shores? How do we equip our people with the skills needed to do those jobs? And how do we make sure that hard work leads to a decent living?” he will say.
“Tonight, I’ll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago. Let me repeat – nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.”
The Republican response to Obama is to be delivered by Florida senator Marco Rubio – a reflection of his party’s attempts to reposition itself as more moderate after its defeat in the presidential election and to win back Latino voters driven away by Republican legislation and rhetoric on immigration.
Rubio intends to challenge Obama’s assertion that it is government policies that decide the fate of America’s middle class.
“This opportunity – to make it to the middle class or beyond no matter where you start out in life – it isn’t bestowed on us from Washington. It comes from a vibrant free economy where people can risk their own money to open a business,” he will say, according to extracts released by Rubio’s office. “Presidents in both parties – from John F Kennedy to Ronald Reagan – have known that our free enterprise economy is the source of our middle class prosperity. But President Obama? He believes it’s the cause of our problems.”
Rubio will note that the economy shrank in the last quarter of 2012 and blame the president’s policies, including tax increases for the wealthy.
“If we can get the economy to grow at just 4% a year, it would create millions of middle class jobs. And it could reduce our deficits by almost $4tn dollars over the next decade. Tax increases can’t do this. Raising taxes won’t create private sector jobs. And there’s no realistic tax increase that could lower our deficits by almost $4tn. That’s why I hope the president will abandon his obsession with raising taxes and instead work with us to achieve real growth in our economy,” Rubio will say.
However, the senator’s remarks risk suggesting to Americans that the Republican party is not changing and remains primarily committed to protecting the rich.
The emphasis on jobs and the economy is expected to be central to Obama’s speech but the administration has indicated he will also touch on a wide range of other ambitions for his second term including comprehensive immigration reform. He intends to announce he will withdraw a little more than half the 66,000 troops the US has in Afghanistan by this time next year as the Pentagon prepares for the final pullout of combat forces by the end of 2014.
Obama is also likely to be pressed into addressing North Korea’s latest nuclear weapons test even as he calls for a sharp drawdown in the number of nuclear warheads, proposing to drop the US arsenal from about 1,700 to 1,000.
The president is also expected to call for a measure of gun control following the massacre of children in Newtown.
The White House and Democratic members of Congress have invited dozens of victims of gun crime or their relatives to attend the speech. Among Michelle Obama’s guests will be the parents of Hadiya Pendleton, 15, who participated in the president’s inaugural parade last month and was then killed in a shooting in Chicago.
Among others attending the speech will be former Arizona congresswoman Gabrielle Giffords, who was badly wounded in a shooting two years ago.
To counter the move by supporters of more gun control, a Texas congressman, Steve Stockman, has invited the rock musician Ted Nugent to attend. Nugent is an ardent supporter of the National Rifle Association who last year said he would either be “dead or in jail” if Obama were re-elected.
Obama is also expected to tick boxes on the need to combat climate change and speak in favour of clean energy, although there appears to be little chance of the president getting major environmental legislation through the Republican-controlled House of Representatives.
In surprise move, GOP lawmakers show first signs of backing down over debt crisis by giving Congress time to pass a budget
Republicans showed the first sign of backing down over the looming debt ceiling crisis on Friday, in the face of relentless pressure from President Barack Obama.
Congressional Republicans, who only last week had been threatening to close down the federal government, emerged from closed-door negotiations at a party retreat to announce they will present a bill next week to increase the debt limit by a further three months.
The White House gave the move a cautious welcome to the news.
It is an unexpected bonus for Obama just days before the start of his second presidential term, and gives him breathing space so that instead of another showdown between White House and Republicans in Congress at the end of next month or in March, the issue could be pushed back until summer.
Eric Cantor, the Republican majority leader in the House, said: “Next week, we will authorise a three-month temporary debt limit increase to give the Senate and House time to pass a budget.”
The GOP came close to closing down the federal government in 2011 when they initially refused to raise the debt ceiling.
A messy compromise was eventually worked out. But Obama said earlier this month, after yet another economic showdown, he would not negotiate with the Republicans over the debt limit.
Obama, ramping up pressure on opponents in Congress, held a press conference at the White House on Monday, warning them that if they were not prepared to raise the ceiling, then they would have to take the blame for government closing down.
Obama’s strategy appears to have worked, with the Republicans worried about the electoral consequences of government grinding to a halt, which would mean hundreds of thousands of people – from welfare recipients to veterans – no longer receiving their cheques, federal staff going on forced leave and agency after agency being shut down.
The Republican cave-in was announced from their retreat near Colonial Williamsburg, Virginia, where they have been discussing overall strategy in the wake of the November elections.
In what appears to be a political gimmick, the Republicans are to attach to the bill extending the debt limit for three months clauses that would see members of Congress have their pay withheld unless they can reach agreement on a separate issue: a budget that cuts spending.
The Republicans had been using the debt ceiling crisis as leverage to try to force Obama into accepting deep spending cuts, particularly in welfare.
Cantor, in a statement, said of the proviso in next week’s bill about the three-month extension: “If the Senate or House fails to pass a budget in that time, members of Congress will not be paid by the American people for failing to do their job. No budget, no pay.”
The Republicans are banking on the idea of members’ losing their pay being popular with voters.
But both the White House and the Democratic leadership in the Senate dismissed the idea, saying they wanted a “clean bill”, focused solely on raising the debt ceiling.
The White House, in a statement, said: “The president has made clear that Congress has only two options: pay the bills they have racked up, or fail to do so and put our nation into default.
“We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on. Congress must pay its bills and pass a clean debt limit increase without further delay. And as he has said, the president remains committed to further reducing the deficit in a balanced way.”
The Democratic leader in the Senate, Harry Reid, said if the House passes a clean bill raising the debt ceiling, even temporarily, the Senate would be happy to consider it.
A spokesman said Reid saw the move as the Republicans beginning to back off from their threat to “hold our economy hostage”.
Separate from the debt ceiling, a deal on spending is within reach. Obama has already agreed to consider changes to the index that determines welfare benefits, something the Republicans have been pushing for but Democrats have resisted, and to raise the age at which Medicare kicks in, another Republican proposal.
He and the Republican House speaker, John Boehner, are not too far apart either over a global figure for spending cuts.
Senior senator Jeff Sessions has accused treasury secretary nominee of dishonesty as Obama confirms appointment choice
The Obama administration’s hopes that the US Senate would swiftly confirm Jack Lew as treasury secretary were dealt a blow on Thursday when a senior Republican accused the president’s nominee of dishonesty.
In his formal nomination announcement, Barack Obama urged the Senate to confirm Lew quickly, describing him as a man capable of forging bipartisan, principled compromises.
But the overture was immediately rebuffed by the most senior Republican on the Senate budget committee, Jeff Sessions, who accused Lew of being dishonest and promised an “aggressive” campaign against his nomination.
Lew had been widely expected to sail through the nominating process but the warning Sessions reflects the deeply polarised nature of Washington, especially over budget and tax issues.
Obama formally announced at a press conference at the White House Thursday that Lew, his chief of staff, would be his nominee to replace Tim Geithner. Lew and Geithner flanked the president as he gave a statement praising both men.
Lew, a longtime Democrat, has been involved in budget battles going back to the early 1980s, through the Clinton years and in the Obama administration. In spite of Republicans having frequently emerged bruised from the encounters, describing him as uncompromising, the commonly held view in Washington was that he was well-enough liked to make it through the nomination process unscathed.
But Sessions appeared to dash hopes of an easy nomination process. “Jack Lew must never be secretary of treasury,” he said. Sessions said comments made by Lew two years ago, when he claimed that Obama’s budget plans would steer the US to a position where “we’re not adding to the debt anymore”, were “outrageous and false”.
Obama, in his statement, anticipated the coming battles with Republicans in Congress, beginning with a showdown over the $16.4tn debt ceiling late next month and further battles over deep spending cuts.
The president claimed Lew was well qualified for the job of balancing the budget. “Under President Clinton, he presided over three budget surpluses in a row.” In word aimed at Republicans in Congress, he added: “So for all the talk out there about deficit reduction, making sure our books are balanced, this is the guy who did it. Three times.”
He described Lew as a low-key, more interested in a discussion with other policy-makers than appearing on television. “Over the years he has built a reputation as a master of policy who can work with members of both parties and forge principled compromises.”
The Republicans want cuts in welfare programmes but the Obama administration wants to protect key elements, such as healthcare for the elderly, Medicare, and for the poor, Medicaid, and would rather cut defence spending. The Obama administration also wants tax revenue raising measures included in the mix.
With this in mind, Obama said of Lew: “Maybe most importantly, as the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on the page, every dollar we budget, every decision we make, has to be an expression of who we wish to be as a nation, our values, the values that says everyone gets a fair shot at opportunity and says we expect all of us to fulfill our obligations as citizens in return.”
Obama added: “Jack has my complete trust … So I hope the senate will confirm him as quickly as possible.”
This completes the top trio of cabinet appointments, Obama having already nominated John Kerry as secretary of state and Chuck Hagel as defence secretary.
Obama praised Geithner for helping to restore the economy after its collapse.
The Republicans want Obama to begin cutting federal spending in return for raising the $16.4tn borrowing limit, a potential re-run of a stand-off that almost saw the federal government close down in 2011. Obama said earlier this month that raising the debt ceiling should be routine for Congress and he will not engage with Congress this time.
As treasury secretary, Lew’s signature will appear on currency. His series of loops has started speculation over whether he will try for a more readable signature, as did Geithner.
Obama joked that if Lew did not make at least one of his loops legible, he wound rescind his nomination.
The world hasn’t ended, but global leaders will still have to work hard to manage economic trials and social tensions
The world did not end this year, as some people thought it would following a Mayan prophecy (well, at least one interpretation of it), but it seems pretty certain that next year is going to be tougher than this one.
We are entering 2013 as the Republican hardliners in the United States Congress does its utmost to weaken the federal government, using an anachronistic law on federal debt ceiling. Until the Republicans started abusing it recently, the law had been defunct in all but name. Since its enactment in 1917, the ceiling has been raised nearly a hundred times, as a ceiling set in nominal monetary terms becomes quickly obsolete in an ever-growing economy with inflation. Had the US stuck to the original ceiling of $11.5bn, its federal debt today would have been equivalent not even to 0.1% of GDP (about $15tn) – the current debt, which is supposed to hit the $16.3tn ceiling today, is about 110% of GDP.
A compromise will be struck in due course (as it was in 2011), but the debt ceiling will keep coming back to haunt the country because it is the best weapon with which the extremists in the Republican party can advance their anti-state ideology. This ideology has such a hold on American politics because it taps into the anxiety of the majority of the white population. Being squeezed from the top by greedy corporate elite and from the bottom by new immigrants, they seek solace in an ideology that harks back to the lost golden age of (idealised) 18th-century America, made up of self-defending (with guns), free-contracting (white) individuals who are independent of the central government. Unless mainstream American politicians can offer these people an alternative vision, backed up by more secure jobs and a better welfare system, they will keep voting for the extremists.
Meanwhile, on the other side of the Atlantic, the eurozone is entering a make or break year, with the social fabric of the periphery countries stretched to the limit. With its GDP 20% lower than in 2008, with 25% unemployment rate and with the wages of most of those still in work down by 40% to 50%, it is a real touch and go whether the current Greek government can survive another round of austerity. Spain and Portugal are not yet where Greece is, but
President Barack Obama warns Senate leaders to find compromise on taxation or lose input on rescue package
America teetered on the fiscal cliff on Saturday as Senate leaders continued to haggle over a tax deal to avert a looming US economic crisis.
Leaders from both sides huddled on Capitol Hill in a last-ditch effort to agree a bill by Sunday which could be sent to both chambers of Congress before the clock runs out on Monday night. With voters, stock markets and foreign governments holding their breath, willing Republicans and Democrats to compromise, Washington was in febrile mood and veered between despair, hope and fatalism.
President Barack Obama gave Senate leaders an ultimatum to make a bipartisan deal by Sunday or face a vote based solely on his own measures.
“The American people are watching what we do here. Obviously their patience is already thin,” he warned on Friday night after meeting Harry Reid, the Democrat majority leader, and Mitch McConnell, the Republican minority leader. “The hour for immediate action is here. It is now,” said the president, adding he was modestly optimistic about a deal.
The lower chamber, the House of Representatives, which has a Republican majority, was due to convene on Sunday. Speaker John Boehner told colleagues to be ready to work through the new year and signalled that the house would vote on a deal that emerged from the Senate.
If no deal is done, 88% of Americans will see their taxes rise on 1 January, when Bush-era tax cuts expire. In addition, deep spending cuts will bite and two million long-term unemployed people will lose their benefits.
The Congressional Budget Office has warned that tumbling over the cliff will push the US back into recession and drive unemployment up to 9.1% from its current rate of 7.9%. US stock markets fell for the fifth consecutive day on Friday as investors waited anxiously for a resolution to the slow-moving drama.
Consumer confidence deflated, with ordinary Americans expressing alarm and anger. “I hate you Congress, get your God damn act together,” seethed one typical tweet on #fiscalcliff.
Both sides are already preparing to deflect blame in the event of a debacle. Obama was due to make his case on NBC’s Meet the Press, a scoop for the host David Gregory who is under police investigation for showing an empty gun magazine clip on air during a recent interview about gun control.
Obama’s 11th-hour instruction to the Senate to seek a deal followed toxic rhetoric from both sides. Reid, the senate majority leader, accused Boehner of operating a “dictatorship” in the house and putting his job as speaker – which hangs in the balance – ahead of the national interest.
Ideological polarisation over how to tackle the federal deficit – Democrats wish to raise taxes, Republicans wish to cut spending – lies at the heart of Washington’s gridlock.
With its Tea Party faction opposing even Republican-sponsored compromises, the GOP fears it will receive the most blame if the US falls off the cliff. However, economic crisis could also wreck Obama’s second term and his quest for a legacy.
If no Senate deal is reached the president said he would propose a scaled-down package to cushion the fiscal fall by extending tax cuts for the middle-class and maintaining unemployment benefits. “If an agreement isn’t reached in time between Senator Reid and Senator McConnell, then I will urge Senator Reid to bring to the floor a basic package for an up-or-down vote,” he said.
Obama said his plan to let taxes rise for families who earn more than $250,000 would win a majority vote in both chambers, but that does not seem certain. Republicans wish to raise that ceiling to spare wealthier families tax rises.
Senate leaders pledged to try to hammer out a proposal to present to their caucuses by Sunday. “Whatever we come up with is going to be imperfect,” said Reid. “Some people aren’t going to like it, some people will like it less. But that’s where we are. We have an obligation to do the best we can.”
McConnell, speaking late on Friday, said a deal was feasible. “I am hopeful and optimistic,” he said. Senator Chuck Schumer, a Democrat from New York, echoed that to NBC. “Sometimes it’s darkest before the dawn,” he said.
However, Senator Bob Corker, a Republican from Tennessee, was bleaker in an interview with CBS, saying the last-minute talks were merely cosmetic ploys to give the impression politicians were doing something. “This is a total dereliction of duty at every level. I’ve been very surprised that the president has not laid out a very specific plan to deal with this, but candidly Congress could have done the same. And I think the American people should be disgusted,” he said.