Eric Zuesse: Understanding President Obama’s Strategy to Force Cutting Social Security, Medicare, and Medicaid « naked capitalism

Eric Zuesse: Understanding President Obama’s Strategy to Force Cutting Social Security, Medicare, and Medicaid « naked capitalism

By Eric Zuesse, an investigative historian and the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

In order to be able to understand the current debt-limit battle in Washington, here is the essential historical background:

Although the U.S. Constitution’s 14th Amendment states very clearly that “the validity of the public debt of the United States, authorized by law, … shall not be questioned,” the so-called “debt limit,” as it’s currently known – which violates that Amendment boldly, by raising serious questions about “the validity of the public debt of the United States, authorized by law” – was instituted only in recent times. It was instituted in 1995, by the Republican-majority U.S. Congress, when Republican House Speaker Newt Gingrich tried to coerce President Bill Clinton to slash “entitlements”: Social Security, Medicare, and Medicaid. He especially wanted to slash Medicare. The solid-Republican Congressional votes against increasing the debt-limit in order to pay “the public debt of the United States, authorized by law” did actually shut down the Federal Government, for the first time in history, starting on 14 November 1995 for five days, and then yet again on 16 December 1995 for 21 days.

During those two periods, “non-essential” government services were suspended, while the “public debt of the United States, authorized by law” continued to be honored. The second federal shut-down ended on 6 January 1996, when the Republicans finally passed and the President signed “Public Law 104-94,” a Joint Resolution to raise the debt-limit. This action – which until then had always been treated in Congress as routine – enabled the U.S. Government to resume and continue to function, and the federal debt to continue to be paid.

Between that time and this, Congressional Republicans have insisted on their right to violate this provision of the 14th Amendment, and Democratic Presidents have not challenged that right. While Republicans have been determined to force cutting “entitlements,” Democratic Presidents have been ambivalent about it. That is: Presidents Clinton and Obama have shown by their actions that they didn’t/don’t want to use the force of Constitutional law to counter Republicans’ force of this new congressional precedent, of eliminating the previously routine nature of increasing the federal debt-limit. Clinton and Obama have accepted Republicans’ option to violate the Constitution’s provision that “the validity of the public debt of the United States, authorized by law, … shall not be questioned.”

During an early-December White House “Press Briefing by Press Secretary Jay Carney, 12/06/2012,” the President’s Press Secretary was asked “whether the President would invoke executive power and the 14th Amendment,” and Mr. Carney responded: “This administration does not believe that the 14th Amendment gives the President the power to ignore the debt ceiling – period.” In other words: Barack Obama was now officially on record as removing that weapon from the available arsenal in his negotiations with Congressional Republicans about the debt limit. They could now quote him as agreeing with them, that the change in Congressional custom that had taken place on this matter in 1995 was simply Congress’s assumption of a power that Congresses had always had – nothing violating the Constitution at all.

Barack Obama had previously caved to the Republicans without fighting, concerning his elimination of the public option from his “Obamacare,” and more recently breaking his long-made promise never to compromise on increasing taxes on the top 2%, $250,000+, and he had also chosen not to hold Republicans’ feet to the fire on the fiscal cliff; but now, the only thing that realistically remained in his arsenal of weaponry against Republicans’ forcing slashes in Social Security, Medicare, Medicaid, regulatory enforcement, and many other vital government programs, was simply handed away by him, even well before the fiscal cliff came on January 1st. Clearly, therefore, Mr. Obama is determined to give Republicans much of what they want on these matters. He evidently wants to find a way to allow that to happen. He wants House Republicans to be able to block the Federal Government from paying its previously contracted debts, so as to force him to cut “entitlements.”

On all prior occasions in which Obama has caved on vital details before even negotiating with Republicans about them, he had the public on his side but caved by his own choice. Polls showed about a 2-to-1 support for the availability of a public option; polls showed about a 2-to-1 support for the $250,000 benchmark for increasing tax-rates. But Obama conceded on those matters because he had lied to Democrats – and even to many moderate Republicans – about those claimed goals of his, and his actions showed that he actually agreed more with the goals of congressional Republicans on these issues than he did with Democrats and others who, in poll-after-poll on them, showed that they agreed with his stated (and even promised) positions on them.

Now he is repeating this same behavior, regarding cuts to “entitlements.” Yet again, polls show that the public rejects raising the retirement age, reducing the inflation-measure in calculating benefits, and the other Republican-pushed measures; but Obama is doing all he can to help Congressional Republicans get what they want on these issues.

Barack Obama had, even earlier, driven Nancy Pelosi and Harry Reid to fits with his back-door efforts to gut such “entitlements,” as when he had appointed the conservative Democrat Erskine Bowles to serve opposite the extremely conservative Republican Alan Simpson as being the two co-chairs on the White House’s “bi-partisan” federal debt commission concerning entitlement “reform.” (The Commission produced recommendations that Congressional Democrats roundly repudiated for slashing entitlements, and that Republicans condemned for increasing taxes.) Obama had set this Commission up to deal with the soaring federal deficits that had been caused by Bush’s 2008 economic collapse, by their using those federal deficits as an excuse to slash entitlements and thus produce even more suffering for the poor, at the same time as Wall Street was being bailed out. (Bowles was supported by the very Wall Street banks that were being bailed out by taxpayers. Simpson was a born conservative who followed in his father’s footsteps as Wyoming’s Republican U.S. Senator. His father had been quite extreme: “one of six Republican senators who voted against the Civil Rights Act of 1964.”) So, that was a wolf-in-charge-of-chicken-coop type of operation, which Congressional Democrats opposed. Republicans opposed it because it would have meant increasing taxes – it wasn’t conservative enough for them. Thus, on the very same day, 28 March 2012, when Bowles-Simpson was finally dashed in the House, the House passed instead the Paul Ryan budget, which Mitt Romney ended up running on, against Obama. The 2012 “election” was thus between two conservatives, one of whom pretended not to be.

Yet again, Pelosi and Reid are tearing their hair out about Obama’s deceits and his preemptory caves on vital issues. On January 4th, Pelosi in her weekly press briefing was asked about using the 14th Amendment to annihilate the Republicans’ threats to violate the 14th Amendment, and Pelosi said, “I’ve made my view very clear on that subject. But I’m not the president of the United States.” On the same day, Ryan Grim at Huffington Post bannered “Harry Reid Would Back Obama If He Bucks GOP On Debt Ceiling: Source.” Reid “has privately told other Democrats, including President Obama, that if the administration used its constitutional and executive authority to continue paying its debts in the face of House Republican opposition, he would support the approach.”

The way this would work is: Republicans would repeat the 1995 shut-down cliff-hanger, and President Obama would cite the 14th Amendment, and possibly also the trillion-dollar-coin tactic, to continue paying the U.S. Government’s debts; and the matter would then go to the Supreme Court to be adjudicated. But Obama has already, through his Press spokesperson, said that he won’t use the 14th Amendment. That will leave only the coin-tactic, which is less likely to succeed. He has already publicly trashed his biggest weapon.

Democrats in Congress cannot publicly say that they despise a Democrat in the White House, but the signs indicate that they do. On the other hand, what will be their response if the President continues along this path? Pursuing this trajectory would be far worse than anything that happened during the Clinton years. There is no way of knowing, ahead of time, what would happen if he does that.