By Roger Childs
Democracy gone wrong
Democracy is coming to the U S A. Leonard Cohen
The bad news is that it hasn’t arrived yet. The good news is that at least there are some talks going on. As you well know, the Americans are mired in a financial crisis which could spread to the rest of the world.
The current impasse is a reflection of their complicated political system. The founding fathers back in the late 18th century devised a constitution which was specifically designed to prevent the president ever becoming a dictator and/or a tyrant. The Americans had recently fought a War of Independence to break away from the tyranny of British rule.
Over 230 years later the US political system with its complex labyrinth of checks and balances is a key factor in the current crisis. In the past, the ability of politicians, whether Democrat or Republican, to compromise, has allowed the government to keep operating efficiently. But that spirit of cooperation no longer exists. The present crisis can be laid at the feet of the Tea Party.
The Tea Party: extremists on the right
In 1773 some American colonists disguised as Native Americans, boarded East India Company ships anchored in Boston harbour and dumped chests of tea overboard.
This was a protest against taxes which the colonies had to pay to import the tea and is remembered in history as The Boston Tea Party. Because Massachusetts and other colonies were not represented in parliament the protestors’ catch cry was ‘no taxation without representation.’
The modern Tea Party is hot on taxation and wants plenty of representation. It’s not a separate political party, but an ultra-conservative wing of the Republican Party.
It has emerged as a very noisy lobby group on the right of the political spectrum since 2009. The Tea Party basically wants less government in people’s lives and has a pathological hatred of Barack Obama.
Tea Party supporters believe that
- the size of the federal government should be reduced
- government spending should be reduced
- the national debt should be lowered
- there should be no tax increases
- banks and companies in trouble should not be bailed out by the government
- the expansion to the Medicare scheme (They call it Obamacare), which has brought about 30 million poorer people into the medical insurance scheme, should be scrapped
- there should be a white man in the White House. (They were bitterly disappointed that Mitt Romney didn’t make it last year)
The current crisis
The Government of the US is headed by Democrat President Obama but the federal budget must be approved by the two houses of Congress, which is the legislative (law making) branch of government. Currently the Senate is controlled by the Democrats and the House of Representatives (the House) by the Republicans.
Because of the huge debts the government has incurred in the past (the Iraq War for example cost over $US 800 billion!) more and more money has to be borrowed. To do this the debt ceiling (what Congress authorises the government to borrow), has to be raised.
The Senate is happy to see the ceiling raised, but the Republican dominated House will only do it if concessions are made by Obama’s government. The key concession they are demanding is to change the health care reforms.
Because a deadline for approving the budget passed in late September, the result has been a government shutdown, which among other things has
- put over 900,000 employees temporarily out of work
- closed national parks
- closed federal operated tourist attractions like the Statue of Liberty
If there is no agreement on the budget by October 17, the US government won’t be able to pay some of its bills.
The role of the Tea Party in the crisis
‘We’re very excited. It’s exactly what we wanted, and we got it,’ — Tea Party Congresswoman Michele Bachmann on the government shutdown.
A minority of Republicans in the two house of Congress are Tea Party people. They are at the forefront of the anti-Obama campaign and are pulling the rest of the party with them. The Tea Party tail is wagging the Republican Party elephant.
There are probably enough moderate Republicans in the House, along with Democrat representatives, to raise the debt ceiling without the concessions the Tea Party want. However, at the time of writing, House speaker, John Boehner, who is not a Tea Party man, currently won’t allow a vote and seems frightened by the possibility of a Tea Party backlash.
The critical issue: Obamacare
Tea Party members of Congress say they were elected in 2012 to bring an end to Obamacare. But the health reforms were passed in 2011 and have been declared constitutional by the Supreme Court. As John Boehner himself said in November 8, 2012: ‘It’s pretty clear that the President was elected, Obamacare is the law of the land.’
But now Boehner is also insisting that concessions be made on the health care laws.
Basically the House is holding the government to ransom. As the President puts it: “Republicans don’t get to demand ransom in exchange for doing their jobs. They don’t also get to say, ‘you know, unless you give me what the voters rejected in the last election, I’m going to cause a recession,'”
Any way out?
The health reforms are the law and should be changed only if a future president supports the principle. Obviously reducing government spending is desirable and maybe both parties could look at cutting back on the bloated American defence budget and the huge farm subsidies that are paid out.
It would also help if the big American corporations and a lot of rich people paid their taxes.
A protestor outside Congress summed up what needs to happen with his placard YOU DO YOUR JOB SO I CAN DO MINE.
There are now talks going on as a result of the public opinion polls savaging the Republicans. John Boehner and other GOP leaders are in discussion with the President and Secretary for the Treasury about extending the debt ceiling, at least until late November. But won’t this just postpone the crisis?
The Washington Post has suggested three ways the crisis could be ended.
- We could stop racking up any more debt.
- Or Obama could circumvent the debt ceiling.
- Or — easiest of all — Congress could just repeal the entire ceiling once and for all.
The last option would mean repealing an Act which goes back to 1917. There is no question that the Americans need to stop racking up more debt. A lot of the present debt dates back to Republican George W Bush’s two terms when there were tax cuts laid on for the top earners and the country became embroiled in two unnecessary wars which together cost over US$1 trillion!
Bush’s predecessor, Bill Clinton, actually has the government books in surplus.
Increasing the government’s income would help, but there is no way tax increases would be passed by Congress, even though the US has some of the lowest tax rates in the western world.
A better idea is to get the big corporations and wealthy Americans to actually pay the taxes they should. Too many companies and people are into tax avoidance and make use of tax shelters like Bermuda and the Cayman Islands.
As the documentary We’re Not Broke! spells out, if everyone in the States paid their due taxes the Treasury would benefit to the tune of billions.