Guest Column: Jess Joaquin Johnson on the Congressional Supercommittee and Political Discourse

It's hard to believe that I have not blogged in over a year. Quite a bit has happened in that time and this has taken a backseat to the rest of my activities. However, I couldn't think of a better way to relaunch than with a guest column from my good friend Jess Joaquin Johnson. Enjoy...

Many eyes are turned toward Washington this week as select members of the U.S. House and Senate attempt to reach a bargain on government spending, taxation policies, entitlement changes and other reforms designed to improve the economic fortunes of our nation and, God willing, restore our stability, long-term financial viability and the public’s faith in our system of government.

As I’ve followed the coverage, I’ve noticed how members of both parties and the media have discussed the proceedings of the so-called Super Committee as “negotiations.” I’m struck by the use of the term, because in my world, and in most usages of the word, negotiation connotes the strategy and tactics used by one or more parties to get what they want from another party, often through yielding on some issues in order to achieve greater value on issues held higher in importance. Negotiation implies that the parties of the negotiation want different things. In a simple example, my company represents entities that need real estate to support their delivery of services or goods while the landlords with whom (against whom?) we negotiate want a revenue stream for their investments. The parties in this case may need each other, but they are trying to achieve fundamentally different things.

In the case of Congress, I’d like to think all 535 members are trying to achieve the same things – a strong and united democracy, the preservation of freedom, a dynamic economy, and national security to name a few. Individuals and the two parties may have different views about how those goals are achieved, but the goals are shared. In this case, the more appropriate term would be “compromise.”

I can imagine a collective groan of the political pundits, politicians and other talking heads as I write the word. It seems this term has become… well, compromised… these days. A willingness to compromise is seen by some as a sign of weakness – weakness in heart, in conviction and in values.

Values. Now that’s ultimately what we’re talking about here, isn’t it? And is not effective compromise the balancing of what actions we can take, consistent with our values, that allow us to achieve shared goals? And, as we navigate those actions to ensure they are consistent with our values, are we not constantly having to weigh closely held values against each other? This happens all the time in our judicial system. In a simple example, a judge may weigh an individual’s right of privacy against national security interests or health, safety and welfare concerns when considering whether to issue a search warrant. In this case, the values aren’t weakened – they aren’t diminished in any way – they are just being weighed against each other as an acceptable and reasonable course of action is charted.

It seems that today’s political environment leaves little room for weighing values in the discussion of the nation’s prevailing economic challenges and the structure and size of government. It may be fair to say that Republicans value low taxes and limited government while Democrats value a stronger role for government in tackling societal challenges, for example, through entitlement programs. Indeed, members of both parties have been unwilling to “compromise” on either of these “values.”

But, is this really what we value? What values will the Super Committee, the Congress and the American people ultimately bring to this discussion? I hope that the balance will swing in favor of values that I believe are more weighty than party ideologies – even those ideas with which I strongly agree. For example, as strongly as I value limited government interaction in the private lives of citizens, I much more strongly value the American representative democracy – the ability of the American people to eventually “get it right” after all the wrangling, hand-wringing, and arguing.

Does it matter less what specific actions Congress ultimately decides to take and matter much, much more that it act at all, and act with boldness in the face of very serious challenges? Should the members of Congress compromise on taxes, compromise on spending, compromise on entitlement reform, compromise until there can be no more compromise? Would this demonstrate that, on balance, the value that we value the most is working together through a representative democracy?

Or would we consider our representatives weak if they were to reach agreement with the “opposing” side on any of these issues?

How to Pay Down the Debt

How do we pay down the public debt? "Economic growth, duh." is the conclusion of columnist James Pethokoukis. That's easier said than done and requires an ideal public and private economic environment. But his Weekly Standard article makes some valid points on why other solutions wouldn't work.

Obama Can Succeed

While I am greatly dismayed at how the actions of the Obama administration and the Democratic Congress have ballooned the federal deficit and expanded entitlements, I retain hope for the best results for our nation. The Democrats have at least another 9-10 months of control of Congress (assuming they lost the majority in the mid-terms) and Obama has another 3 years left in this term. The health care debate and passage was a waste of a year's worth of political capital and momentum. Whether or not it gets repealed is not my current concern.

I would like to see the Democrats use the rest of their period of guaranteed control to focus on things that really matter to the American people by taking measures to reduce the deficit, cut unnecessary spending programs, and help the private sector put the economy back on track. As a Republican, I could focus my energies on efforts parallel with the Republican leadership: trashing the Democrats, screaming "Repeal!", and embracing the difficult-to-define Tea Party movement. However, I will not. I want to encourage Red and Blue to work together to serve the interests of the greater American public. Don't forget: it's the economy, stupid.

Some others that haven't forgotten this include a few Democrats, who hope that Obama/Pelosi/Reid wisen up and use their current majorities to do something of real significance. Sure, effectively governing and enacting popular legislation would probably shift the tide of public support toward the Democrats and hand them the fall election. But I'm okay with that as long as whomever is in power delivers results that the country needs.

Common Since: Do I think the above prediction is a pipe-dream? You bet your ass I do. The Democrats are delusional with power as if they're on an all-you-can-drink whiskey & coke night at a college bar. Although you can't blame a guy for holding about a little hope, can you?

Warning: Graphic Images!

http://nationalaffairs.com/publications/detail/america-in-the-red

Let Mortgages Fail

Here is a convincing argument to let mortgages fail and foreclosures to continue: http://www.realclearmarkets.com/articles/2010/03/30/lower_prices_more_foreclosures_will_solve_housing_98397.html

You have to let market forces take effect. There is no possible way for the government to subsidize people to stay in homes long enough to recover the value they've lost in the recession. Lower home prices, lower property values, and a balancing of housing inventory is a good thing. Over-supply and inflated values need to be combated, but artificially propping them up with government spending will not help them permanently stabilize. Many families have been hit hard, and many have declared bankruptcy. But unless the market truly balances itself, these trends will continue.

There Are Alternatives...

We're all aware that the partisan circus in Washington is never-ending. Democrats constantly accuse the Republicans of standing in the way of their legislation without producing any alternatives; they are "The Party of No." That is true about certain conservative leaders and pundits, but the facts have been overlooked. Several Republican leaders have produced alternative legislation for everything from health care to environmental policy.

Rep. Paul Ryan (R - Wisconsin) drafted "A Roadmap for America's Future" back in January, but it has received little attention until the last few weeks. It is a fairly comprehensive plan aimed at reducing the deficit and controlling government spending, a rebuttal to the deficit-engorging Democratic bills currently working their way through Congress. Unfortunately, I don't have the time to analyze the Roadmap piece by piece, but I will give you the link so you can look it over for yourself. While it is most likely an imperfect plan (just like all other legislation), the Congressional Budget Office has checked the numbers and verified that it would actually do what it claims to do. That is a Washington miracle. Whether or not you agree with the hefty spending reductions and Reaganistic tax cuts is up to you. But you should know that there are alternatives...

http://www.roadmap.republicans.budget.house.gov/UploadedFiles/Roadmap2Final2.pdf

http://money.cnn.com/2010/03/04/news/economy/paul_ryan.fortune/index.htm

A Task Force Worth Forming

Today, President Obama issued an executive order creating a bipartisan fiscal reform commission. This is a step that Congress refused to take, but Obama has wisely embraced the idea first proposed by Senators Conrad and Gregg. The goal of the commission is to bring down the federal deficit to 3% of GDP. The recommendations of the commission are likely to include new taxes, spending cuts, and reforms to entitlement programs. Tax increases are obviously going to be unpopular, especially in an election year, and are unlikely to ever be enacted. But entitlement reform is sorely needed to ensure a sustainable fiscal future and spending cuts should be universally welcomed.

The possibility that tax increases may be recommended was the reason that Congressional Republicans refused to support a resolution creating the task force. Their stubbornness and inability to compromise have been duly noted for the record. Hopefully this commission can truly put aside the partisanship to find some common sense recommendations. And hopefully President Obama will follow through on his first serious attempt to control the deficit. We'll see...

http://thehill.com/homenews/administration/81863-obama-names-simpson-and-bowles-to-lead-fiscal-commission

National Fire Sale! For a Limited Time Only!

I have devised a simple and elegant way to lift America out of this recession by next week, or possibly sooner. I'm still working out the complicated policy language for the legislation, but I intend to have a draft bill ready to present to Congress and President Obama in about 15 minutes. Here's the gist of it:

Let's have a one week fire sale: a warehouse liquidation, you might say. Struggling corporations are laying off their employees, so why can't the federal government cut their dependent states? Think of it as "losing the dead weight". Here's how it goes: we give certain privileged nations a limited one day preferred purchase option. Precedence goes to the former colonizing owners of a given state. If they fail to meet our discounted minimum purchase price, then the states go into a one week-long auction. Now, we could hold that auction on Ebay, or at the steps of the U.S. Supreme Court. But I don't want to "cheapen" the experience for our potential buyers. Therefore the auction will be held at Christie's of London, and fine champagne and caviar will be provided. (Each bidder is limited to two food and beverage tickets.)

First on the chopping block is the doomed (I mean sunny and culturally significant) state of California. Spain will have the preferred purchase offer, but I have a feeling they will pass and Mexico will win it in the auction for 23 pesos (roughly $1.82). That's fine with us because that's $26.3 billion more than the state of California is currently worth.

Spain will also get an early chance to obtain New Mexico, Arizona, Colorado, and Texas, all a part of their former colonies.

Florida will be offered in a pre-auction auction between Spain and England (former colonizers) and Germany (whose citizens love to travel here). Puerto Rico will be tacked-on to sweeten the deal.

France will be given the opportunity to buy back the entire Louisiana Purchase. I believe they will hold out for a better price, but a bidding war will erupt between France and Canada, who is looking to expand into warmer climates. The two nations will eventually compromise and split it into north/south territories, but America will ultimately score a hefty sack of gold for the sale. Win-win-win situation.

I also predict Canada will gain North Dakota, Wisconsin, Minnesota, Michigan, and Illinois. It's a good fit because they all like hockey and talk funny.

Russia will have a solid shot at Alaska. They can enjoy being cold together and drinking excessively.

We'll hold out from auctioning off Nevada. The plan is to wager it all on the craps table at the Bellagio. C'mon lucky sevens.

The Mormons can simply have Utah, free of charge. Glenn Beck will hastily establish a dictatorship.

I will buy Wyoming and Montana (using my position as Auction Czar to gain insider trading) for $3 and an old fraternity t-shirt. It's so damn beautiful up there. And I'll take out a 99-year ground lease on Oregon. I've always wanted to own a wine-producing state.

That will leave roughly the original 13 colonies, plus a handful of assorted states, under the control of the U.S. government. The country will be in excellent fiscal standing and will once again have the strongest economy in the world. Wham, bam, thank you m'am.

Common Since: Sell it all. Get out while the gettin's good. I'm going to run to the print shop after work and have some flyers drawn up.

Is A Double-Dip Recession Imminent?

Benn Steil of the Council on Foreign Relations seems to think so, according to this WSJ article.

Time for a Debt Ceiling

Here is the newest reading material in my running commentary on the federal debt/deficit.

Also, a bill has been introduced to form a Bipartisan Task Force for Responsible Fiscal Action by Sens. Gregg and Conrad. Read about it here.

Health Care Reform: A Congressional Viewpoint

Rep. Jason Altmire, D-PA (and Blue Dog Democrat), gives his view of health care reform and his reasons for voting against the previous iteration of the bill in this article. It should be noted that Rep. Altmire has a Master's in Health Administration and worked for 7 years in the University of Pittsburgh Medical Center system. I'm having a hard time researching how many members of Congress have an MHA or health care administration experience, but only 17 Representatives and 3 Senators have medical degrees. I think it's safe to assume that Altmire knows what he is talking about, and only a handful of additional Congressmen. Sadly, his position is not on center stage in this debate.

I'll admit that I know next-to-nothing about health care administration nor the proper way to reform health care, but I can recognize that the bills that have been proposed will accomplish very little beyond raising our taxes and increasing the federal deficit. Many Americans are understandably scared to death about the "public option", so Congress is now debating dropping the idea and expanding the coverage of Medicare and Medicaid. What a brilliant idea. Let's expand two of our nation's largest entitlement programs that are already threatening to bankrupt our government before I hit the age of 40. Furthermore, the claim that health care reform is "deficit-neutral" hinges on cost-reducing reforms to Medicare and Medicaid. Exactly what those measures are, no one has been able to deduce. You can be sure that adding millions of Americans to those programs will not be "deficit-neutral".

Common Since: Where are the experts on this one? They are being drowned-out by partisan sound bytes. And how can we trust people with no health care administration experience at the forefront of this grand scheme? The goal stated at the beginning of this health care reform process was to reduce the cost of health care for every American, while providing a means to insure the majority of the uninsured (which would simultaneously bring down costs). I am of the opinion that this principle has been lost among the partisan bickering and backhanding. When this dog and pony show comes to a close, be prepared to bend over. 'Cause this is really gonna hurt.

Gen Y: Footing a Bill This Big Requires Massive Dr. Scholl's Insoles. Are You Gellin'?

Deficit-related health care article of the day, a few days late:

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/22/AR2009112201237.html

Entitlements are the main cause of inevitable future budgetary collapse. Politicians are afraid to touch these "third rails of politics" because of the voting and lobbying power of seniors. I wish I could say that the current health care reform bills under debate truly address reigning-in Medicare, Medicaid, and Social Security costs, but I have no idea whether they do. Congress isn't capable of presenting their intentions to the American public in a clear, concise way and I don't have time to read thousands of pages of legal babble. I suppose I am forced to trust in the White House, OMB, and CBO, but something tells me they aren't too reliable.

Today's Deficit Insight

Food for thought on this year's $1.4 trillion deficit, courtesy of Politics Daily.

I'm a Deficit Hawk

I am to deficits like Lou Dobbs is to immigration. I will belligerently address them until something substantial is done.

Check out this article from the Wall Street Journal. And this one from Roll Call, via Real Clear Politics.

We cannot wait for a severe deficit crisis to be our "come to Jesus." If other countries, namely China, were to feel less secure about the dollar and halt buying our debt, we would be stuck between a rock and a very, very hard place. That crisis would make this recession look like a pregame warm-up.

Some members of Congress seem to take the deficit seriously, but only a very small minority have committed themselves to doing something about it. Both parties are to blame for the rising deficit, and both are to blame for their inaction on reducing it.

Let's hope that changes soon.

Our Money, Our Choice: Vanishing Act or Balancing Act?

There exists one measure we can enact to transform the political culture of Washington, reduce our deficits, and ensure the wiser allocation of tax dollars: a Constitutional Amendment requiring the Federal Government to balance their budget.

Such Amendments have been proposed several times since 1982. In fact, the idea dates back to the founding of our republic. All attempts have failed to pass.

I am a believer in neither pure Keynesian theory nor pure supply-side theory. However, DC political hacks from both parties buy into one common tenet: deficit spending is OK. Not only only do they operate as if it is perfectly alright, but that it is acceptable all the time. This is even contrary to the basic Keynesian theory that deficit spending should be used only to lift the country out of a recession because it will balance itself out after the economy recovers. How can you pay back debt if you never cease deficit spending?

Nearly all local governments and States are required to balance their annual budgets. I'm having a hard time finding exact figures, but I believe at least 49 states must balance them by law. This is why states hit hardest by this recession/depression, such as California and Florida, are having such budget crises. They are cutting services and raising taxes and fees in order to bridge their budget shortfalls. While it is preposterous to say that anyone enjoys a chaotic budget crisis, it is the only way to deal with excessive outlays and stunted tax revenue forecasts. Reconciling with reality is far preferable to augmenting our public debt to unsustainable levels.

The most recent iteration of the proposed Balanced Budget Amendment would require that if Congress did not present a balanced budget bill to the President, he would have line item veto power to strike any appropriations in order to balance it. Raising taxes significantly would create a populist backlash, so the only reasonable solution would be to cut spending. This balanced budget requirement would therefore guarantee that the government reform healthcare, Medicare, Social Security, Defense spending, and any other bloated appropriation or entitlement. I'm not an economist, and I don't pretend to think I have all the answers, but this seems like a logical place to start.

One of the best political books I have read was "Running On Empty" by former Commerce Secretary Pete Peterson. This book was published in 2005, well before this recession started. But Peterson focused much deserved attention on the danger of our ballooning deficit. At the time, we were running a real $470 billion deficit simply on entitlements through 2014. This was before the final three years of excessive spending under W, TARP, and the $787 billion ARRA stimulus. If you want a clear picture of how serious our deficit was before the stimulus, read this book. It will scare your pants off.

Common Since: Extreme deficit spending is threatening to bankrupt this nation. Many people talk about it, but few act on it. Passing a Balanced Budget Amendment to the U.S. Constitution should be the first of several measures taken to secure our nation's finances and future.