The Sequester…the ultimate poker game…only the rich can win….
by : Jeanine Molloff
The President loves poker. In fact his days as an Illinois state senator were filled with backroom…poker games. Word was that Barack could bluff with the best of them–and never blink. These dubious talents have served him well during his meteoric rise …all the way to the Oval Office. Unfortunately, we now find ourselves as a nation stuck in a game of legislative ‘chicken,’ and the stakes couldn’t be higher.
The Sequester aka…Extreme Poker….
President Obama and Congress are both playing ‘extreme’ poker, (much like testosterone-driven teen-age boys playing ‘extreme’ skateboarding sans helmet)–only with the budget and our futures. They are using the nuclear option of the sequester as the ultimate test of their cahones– treating the US citizenry the same way a mangy dog lifts his leg to ‘water’ the plants.
Congressional leaders and Obama himself are quite aware of the savage economic violence the sequester or automatic spending cuts will cause–but this fight isn’t about responsible budgeting–it’s about raw, naked power more akin to an addiction than any legitimate concerns. The sequester’s origins trace back to the 1985 ‘Gramm-Rudman’ budget law, continue with Alan Simpson and Erskine Bowles of the Simpson-Bowles Commission all the way to the present day—while frantically maintaining the echo chamber from the Peterson Foundation funded astroturf front group–Fix the Debt–waiting in the wings with a ‘final solution.’
The history of the ‘sequester’ or automatic spending trigger…
The idea of the budgetary ‘sequester’ first surfaced during the Reagan administration in the form of the ‘Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985. It prescribed automatic spending cuts or ‘sequesters’ to kick in–if the deficit ever exceeded pre-ordained fixed targets. (Source : www.en.wikipedia.org/wiki/Gramm-Rudman-Hollings_Balanced_Budget_Act)
Bowsher v. Synar…
The ‘Gramm-Rudman-Hollings Act’ sequester power encountered its first Waterloo on a technicality via the Supreme Court in Bowsher v. Synar. 478 U.S. 714. The Bowsher case resulted in the Supreme Court striking down the ‘Gramm-Rudman-Hollings Act’ as an unconstitutional usurpation of executive powers. Below is the reasoning for this declaration.
…”Bowsher v. Synar, 478 U.S. 714 (1986) struck down the Gramm-Rudman-Hollings Act as an unconstitutional usurpation of executive power by Congress because the law empowered Congress to terminate the United States Comptroller General for certain specified reasons, including “inefficiency, ‘neglect of duty,’ or ‘malfeasance.'” The named defendant in the original case was Comptroller General Charles Arthur Bowsher and the constitutional challenge was brought forth by Oklahoma Congressman Mike Synar.” (Source : www.en.wikipedia.org/wiki/Bowsher_v._Synar)
The decision’s reasoning was as follows:
…”Congress cannot reserve removal power over executive officers to itself, except for impeachment. The Balanced Budget and Emergency Deficit Control Act of 1985 violates the separation of powers doctrine.” (Source : www.en.wikipedia.org/wiki/Bowsher_v._Synar)
So, the first round of ‘sequester’ attempts failed by a technicality in procedure, but was never denied as an illegitimate strategy in its own right.
Next, The Budget Enforcement Act of 1990…
The Budget Enforcement Act of 1990 or the Omnibus Budget Reconciliation Act of 1990 established two new budget control processes : annual spending caps and a PAYGO (ie. “pay-as-you-go”) procedure for entitlements (ie. Social Security), and taxes.
The Omnibus bill was extended multiple times with the latest incarnation in 1997, but expired in 2002. PAYGO was officially adapted by the 110th Congress when the Democratic majority passed H. RES. 6 on January 4th, 2007. (Source : www.en.wikipedia.org/wiki/Budget_Enforcement_Act_of_1990)
Obama, PAYGO—and the sequester…
Obama finalized the PAYGO concept by signing the “Statutory Pay-As-You-Go Act of 2010.” The ongoing premise and cover story for PAYGO sounded reasonable, and that is why the Obama administration is so very wily and dangerous–they excel in providing scenarios which at first blush seem reasonable–but the ‘devil is in the details.’ As a nation, we are ENTITLED to a full explanation of possible options–and not merely the junk-food version we are spoonfed by the Obama minions.
The ‘inconvenient truth’ left out of the PAYGO bill…
In terms of the 2010 PAYGO Act– what Obama failed to disclose was the ‘inconvenient truth’ that the sequester or automatic trigger budget cuts–were now rendered ‘constitutionally valid’ (at least procedurally), omitting any concern for the austerity such automatic cuts would produce. (Source : www.en.wikipedia.org/wiki/Budget_Enforcement_Act_of_1990 )
Any blame the president attributes solely to the GOP is not only disingenuous–it’s a downright lie. In fact, since then President Obama has gone on record unequivocally stating that the budget sequester/sequestration–was the GOP’s doing. During the third presidential debate on October 22, 2012, President Obama plainly stated that…
….”The sequester is not something that I’ve proposed. It is something that Congress has proposed.”
In any case, the 2010 bill set the stage for the more malignant version of the ‘sequester’, the congressional ‘Super-Committee’ and the legislative rule machinations necessary to render the majority of Congress–legislatively– impotent. Get ready for the budget bill of 2011.
The Budget Control Act of 2011…the Super-Committee and the sequester….
The Budget Control Act of 2011 dictated two major actions–the creation of the bipartisan, Joint Select Committee on Deficit Reduction (ie. the Supercommittee) and the sequester hammer as the enforcer of last resort. The Supercommittee was given full reign to make budget recommendations, mandating a simple up or down vote–with any amendments legally forbidden.
If the Supercommittee failed, then the sequestration or automatic austerity trigger would slice away, making savage across-the-board cuts,minus any right of appeal. Congress would have no power to stop the austerity–unless they acted to repeal the sequester. (Source : www.en.wikipedia.org/wiki/United_States_Congress_Joint_Select_Committee_on_Deficit_Reduction )
Criticisms of the Supercommittee included the most obvious–that it was a blatant usurpation of congressional authority to create and revise legislation. Congress as a whole would be potentially subservient to this appointed ‘gang of 12.’ A simple majority vote of 7 Supercommittee members could change the political landscape permanently. (Source : www.nytimes.com/2011/08/02/us/politics/02panel.html?pagewanted=all&_r=O)
Furthermore, this super-congress of appointees ostensibly would be even more beholden to majority and minority party bosses, than ever before. Congressional leaders in the Senate and House would potentially possess exponential power through the appointee process–opening the door for increased cronyism–while the remainder of congress is allowed a ‘Pontius Pilate’ moment–washing their hands of any culpability beyond the up and down vote.
On November 21, 2011 the Supercommittee concluded its attempts to create a bipartisan vote, and was formally terminated on January 31, 2012–triggering automatic ‘sequester’ cuts beginning in January of 2013. (Source : www.en.wikipedia.org/wiki/Budget_Sequestration)
Of course, the sequester hammer was scheduled to fall AFTER the 2012 POTUS elections. Obama cared more about his own reelection than the financial health of the country as evidenced by the deal he cut with senate republican leaders.
…”In fact, the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection.” (Source: www.articles.washingtonpost.com/2013-02-22/opinions/37238840__1_jack-lew-treasury-secretary-rob-nabors/2)
Sequester just a strategy to force cuts to social entitlements…
If you recall a bit of budget history; before the Budget Control Act of 2011 (backtracking a bit); the Simpson-Bowles Deficit Commission of 2010, was tasked with creating a budgetary template. Part of the Simpson-Bowles Commission plan involved a plan for an ‘automatic trigger’ mandating across the board spending cuts, if Congress failed to acquiesce. (Source : www.gpo.gov/fdsys/pkg/BILLS-112s365enr/pdf/BILLS-112s365enr.pdf)
Once again, to many civil libertarians the Simpson-Bowles super-committee of APPOINTED pols mandating cuts, seemed to override congressional authority.
Whether this sequestration issue is a strategy to force the GOP into negotiations designed to repeal the Bush tax cuts, or a clever prelude to push EU style ‘austerity’–remains to be seen. Is this sequestration device which was written into law requiring the ‘sequester’ if Congress fails to acquiesce– the Simpson-Bowles’s automatic trigger–in drag?
Keep in mind that the Simpson-Bowles commission, was the president’s sole creation, but the recommendations failed once the public realized that savage cuts to the social contract were planned– with Defense left unscathed.
Information then leaked out that the Bush tax cuts to the super-rich were to remain. The alternative press realized these cuts would result in many senior citizens reduced to either eating catfood or skipping needed medications. Thus the Simpson-Bowles commission was dubbed the ‘catfood commission.’ Needless to say–the president was irked, and now–some 2 1/2 years later–we are facing the sequester or mandatory ‘triggered’ cuts.
Simpson-Bowles Redux in 2013 to the rescue aka–‘Fix the Debt’ Scam Group…
Days before the March 1, 2013 deadline initiating the first round of mandatory sequester cuts; Reuters reported Tuesday, Feb. 19, 2013 that Alan Simpson and Erskine Bowles (ie. Simpson-Bowles Commission), were at it again, offering the ‘catfood commission’ redux. Offering some 2.4 trillion in ‘savings’ over a ten year period–the very gruesome twosome brought austerity back into the spotlight. How very convenient for the president that Simpson-Bowles has come to the budgetary rescue. (Source : www.reuters.com/article/2013/02/19/us-usa-obama-deficits-idUSBRE91I0P820130219)
In fact, according to the Reuters article, the Campaign to Fix the Debt issued the following praise from it’s titular head, Maya MacGuineas :
…”There approach has the potential to refocus the national discussion back where it should be.” (Source : www.reuters.com/article/2013/02/19/us-usa-obama-deficits-idUSBRE91l0P820130219)
What the Reuters piece fails to mention is the conflict of interest between Simpson-Bowles and Fix the Debt. According to watchdog group SourceWatch–both Alan Simpson and Erskine Bowles are co-founders of …Fix the Debt.
Furthermore, all of this appears very coincidental, but there are no coincidences in politics–just high stakes power brokers and this resurfacing of Simpson-Bowles (in a super-hero, Brooks Brothers suit), is no different–and it all points to mega-billionaire and social contract arch-villain–Pete Peterson of The Blackstone Group.
The Pete Peterson Connection to the ‘sequester’….via ‘Fix the Debt’…
Blackstone fund billionaire Pete Peterson has been linked to the front group ‘Fix the Debt’, using Erskine Bowles as the point spokesman. Furthermore the co-founders and the steering committee members of ‘Fix the Debt’ have intricate ties to the same corporations pushing to maintain multiple tax breaks for the ‘millionaire and billionaire class’, which are UNDISCLOSED on their listed bios. Here is a listing of these Fix the Debt steering committee members which corresponds to their direct conflict of interest.
UNDISCLOSED Conflicts of Interest…Fix the Debt & Corporate Interests….
Fix the Debt Corporate Conflicts
Erskine Bowles, Co-Founder Morgan-Stanley Board, Facebook
Board, Norfolk Southern Board
Sam Nunn, Member G.E. Board, Coca-Cola Board,
Hess Corporation Board
Maya MacGuineas, Member Husband Robin Brooks: Managing
Steering Committee Director & Currency Trading
Analyst with Goldman-Sachs
Sen. Judd Gregg, Co-Chair Goldman-Sachs Advisor
ICE, Inc. Board, Honeywell Board
Jim Nussle, Member Steering Committee President & COO of Growth
Energy, an ethanol industry lobby
Jim McCrery, Member Steering Committee Lobbyist with Capitol Counsel
for BLACKSTONE GROUP,
Blue Cross Blue Shield, GE,
Walmart, and PhRMA
Ed Rendell, Co-Chair Ballard Spahr, Special Counsel,
lobbied on Medicare
Greenhill & Co. Senior Advisor
Margaret Spellings, Member Lobbies for U.S. Chamber of
Steering Committee Commerce,
CEO, Margaret Spellings & Co.
Phil Bredesen, Member Steering Vanguard Health Board
Vic Fazio, Member Steering Committee Northrop Grumman Board,
Akin Gump Lobbyist
——————————————————————————————————(Source : www.sourcewatch.org/images/b/b5/ConflictsofInterest.pdf)
Closer look at Fix the Debt, banksters and dire austerity…
A closer look at the ‘Fix the Debt’ leadership reveals a blatantly incestuous conflict of interest between Pete Peterson, the corporate billionaire class and the push for the sequester.
Simpson-Bowles ties to Peterson, austerity and conflict of interest…
Not only are Alan Simpson and Erskie Bowles CO-FOUNDERS of Fix the Debt, but they are also board members of Fix the Debt’s ‘parent organization’ CRFD–which is funded by–Pete Peterson.
( A footnote includes the fact that Erskine Bowles is also a board member of Morgan Stanley and receives $375,000.00 annually for sitting on that board.) (Source : www.sourcewatch.org/index.php/Fix_the_Debt%27s_Leadership)
To add further insult to injury, Erskine Bowles offers a more nuanced attribution of thanks to Pete Peterson, connecting Simpson-Bowles co-founders of Fix the Debt to Peterson.
“We would not be here if it wasn’t for the Peterson Foundation and Pete Peterson. They laid the groundwork and we stand here on their shoulders.” – Fix the Debt Co-Founder Erskine Bowles (Source : www.prwatch.org/node/11990)
PRWatch documented further that the entire crisis was a premeditated fraud with ‘Fix the Debt’ at the helm.
“Key to the strategy is ginning up a crisis. In lockstep, the CEOs, politicians, and partner organizations stormed the media last fall warning of the looming disaster of the so-called “fiscal cliff.” Breaching the fiscal cliff “will lead to chaos,” warned Erskine Bowles; “derail the fragile recovery,” said Goldman Sachs CEO Lloyd Blankfein; generate a “shock to the financial markets and a painful return to the recession,” said the CEO of Morgan Stanley.” (Source : www.prwatch.org/node/11990)
‘Fix the Debt’ steering committee member, Phil Bredeson, admitted that the strategy was designed to create an “artificial crisis” that would force Congress to act.” (Source: www.prwatch.org/node/11990)
The anti-social contract tantrums of Alan Simpson…
The other half of this tag team, Alan Simpson, has proven his animus against social insurance programs like Social Security multiple times. Sparing no prejudice, he attacks anyone daring to suggest entitlement to the very social insurance they paid into– their entire working lives. Here is Simpson’s response to criticisms from the Older Women’s League, objecting to his personal bias against Social Security:
… “I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ’em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits! Call when you get honest work!” (Source : www.money.cnn.com/2010/08/25/news/economy/alan_simpson_fiscal_commission/index.htm)
Simpson continues to spew bile against any social insurance, never disappointing in his war against Social Security and Medicare. Simpson on the PBS Newshour explaining his position on ‘saving’ Social Security AND MEDICARE :
…”You have two (sic) choices…you either raise the payroll tax or decrease the benefits or start affluence testing. The rest of it is B.S. And if the people are really ingesting B.S. all day long, their grandchildren will be picking grit with the chickens. This country is going to go to the bow-wows unless we deal with entitlements, SOCIAL SECURITY AND MEDICARE.” (Source: http://motherjones.com/mojo/2010/04/pete-petersons-anti-entitlement-juggernaut-gets-fueled-obama)
Nowhere does Simpson ever suggest the fair and obvious choice–namely raising the payroll tax so the rich pay their PROPORTIONAL fair share by eliminating the payroll tax ceiling.
Whether the dismantling of Social Security and Medicare/Medicaid occurs through the budgetary sledgehammer of the sequester, or through the Simpson-Bowles/Fix the Debt propaganda campaign–the game appears to be rigged. It is a safe bet that the president and Simpson-Bowles would prefer the Fix the Debt plan, as opposed to the sequester–as the sequester provides for deep military cuts to major arms manufacturers, ie. big business.
Peterson’s goal through ‘Fix the Debt’ scam…
The Center for Media and Democracy reported that a majority of the corporations and other groups pushing ‘Fix the Debt’, pay extremely low tax rates, with some presenting a negative tax rate. These ‘Fix the Debt’ corporate boosters constitute the corporate force, pushing for savage cuts to Social Security, while many criminally underfund their employee pensions.
It is a curious coincidence that the amount of initial ‘savings’ produced via spending cuts (ie. 2.4 trillion) is suspiciously close to the amount the federal government owed the Social Security trust fund in 2011. According to a report issued by the Financial Management Service of the U.S. Treasury; the Social Security ‘trust fund’ was owed in excess of $2.669 TRILLION in 2011 by the federal government. (Source : http://socialsecurityinstitute.com/news/recent-news/trust-fund-bait-and-switch/)
The fiscal skeptics frantically screaming that the ‘trust fund’ doesn’t exist, but is based on the ‘good faith and credit’ of the U.S., need to be reminded that Social Security is a ‘pay as you go’ system, and any monies transferred for other purposes–with no scheduled repayment–constitutes premeditated fraud. These very same corporate tax breaks (including some negative corporate tax rates) are thus indirectly subsidized by the Social Security ‘trust fund.’ If anything is to be cut–it should be these corporate tax loopholes broad enough you could pilot Airbus through them.
This austerity mess, disguised as ‘fiscal medicine’ in 2013, is brought to us from the good people at ‘Fix the Debt.’ The president and both parties in Congress have unilaterally surrendered their authority by passing the 2011 Budget Act which was engineered to have the very spending cut trigger the billionaire class demanded–especially Pete Peterson.
The sequester trigger was designed to be such an egregious non-starter, that the people would accept the Simpson-Bowles austerity plan, in order to save other budget items like education– while leaving the military-industrial-complex budget intact–along with the negative tax balances of these same corporations belonging to– ‘Fix the Debt.’
Congress acquiesced to the demands of the post-modern robber barons. The Simpson-Bowles Commission would have succeeded in using the sequester as a tactical maneuver to push virtual dismantling of the social contract,especially Social Security and Medicare–with the exception of some crazy, recalcitrant GOP congressmen failing to cry ‘uncle’–to their game of fiscal ‘chicken.’
The fact that the fiscal disaster was caused by a toxic mixture of massive corporate fraud in the investment sector, ( via exotic instruments such as derivatives), even more massive corporate tax evasion, and a wholesale continual outsourcing of jobs worldwide–is a mere triviality to Dems and the GOP. On top of this premeditated fiscal treason is a set of economic theories based on even bigger lies.
The ‘inconvenient truth’ of the sequester lies in the fact that our government is controlled by a handful of oligarchic billionaires who like Caesar, are never quenched in terms of their greed. The Obama Justice Department has refused to criminally prosecute the Wall Street thieves for obvious fraud, declaring the banksters as ‘too big to fail,’ aristocrats. The attack on the same social contract funded by OUR payroll taxes– has truly been bipartisan and representative of our bogus ‘2-party’ system–a spit away from a banana republic.
The rule of law is dependent on a sense of justice or fairness. When the rule of law is replaced by the arbitrary and capricious law of man–our system becomes illegitimate. The only way to save us now–is to copy the French–and storm the streets.
Otherwise, the nation’s birthday present for 2013…courtesy of ‘Fix the Debt’, will be perpetual economic feudalism. The Peterson toadies will fulfill their goal, achieving
…”a Simpson-Bowles style “grand bargain” on an austerity agenda for the United States by the nation’s 237th birthday on July 4, 2013.” (Source : www.prwatch.org/node/11990)
Happy birthday us.