Sunday, January 6, 2013
The Cliff, Political Newbies, Barney and FHA!
Cliff Results, More to Come Later
Color me very disappointed, temporarily dismayed, unhappy with the President, and—showing my best “USA quality”—always optimistic that our “cowardly lion” Congress (those who aren’t just plain dumb) will get it together and show the guts (too many Senate ands House women to mention testosterone or “cajones”) to solve problems.
The President labored long and presided over a nothing burger budget deal with no spending cuts of any note but some budget additions, displaying the worst of Washington habits.
If the man with the bully pulpit and a recent national victory—who never has to run again for office—can’t bring himself to admit that we spend too much, some federal spending is wasteful/unneeded, the tax code is gagging, and he needs to help fix that, who will?
The automatic 5% across the board cut approach suited me fine—from a political science/politics angle—because once you start going line by line over the budget to end spending and produce savings, the cries and moans of every interest group in the nation will drowned the Congress and will freeze them in vacillation because most of those pols will seek reelection.
But when the special interests and general public begin wailing and seek protection for their pet federal programs, the indecisive Congress “won’t know whether to s***, p***, or go blind,” as we used to say.
I Say Go Medieval, Go Meat Axe!
So yes, House R's, go heavy meat axe because scalpels won’t do the job or won’t do enough. Where you can cut more than 5%, do so. Our nation will survive, despite the sheep bleats.
Temporarily, I am putting on a GOP jersey here—while I disagree strongly with their wing nuts—I want to see more money cut from the budget than Congress adds through tax revenues. Greater revenues are fine, but greater shaved entitlements are better.
We have gotten slovenly as a nation relying too much on Uncle Sugar, but the only way that gets reversed is if we all (meaning those us--that’s me, too--relying on federal expenditures) feel some pain, when reductions to virtually all federal spending and tax advantages get mandated. My only caveat is that those among us with the least get protected (that’s where I rip off my GOP t-shirt).
I want Speaker John Boehner (R-Ohio) to bail us out by coming up with spending cuts, tied to raising the national debt ceiling, and giving the weak kneed congressional and national leadership cover and an excuse to begin the job that virtually all Americans—no matter our political persuasion—believe needs doing.
President Obama could have no greater legacy than using his next two or three years to reverse the growth of federal spending as a percentage of GDP and bring some fiscal balance back to Washington and the nation.
That’s what will near enshrine President Obama in our history books and in our and our children’s memories.
Seventy five thousand pages of federal tax laws and regulations represent thousands and thousands of special interest goodies which likely don’t pass the “need versus wanted” test, “Does the nation need it or some special interest want it?”
So, bring on the next “sequester” running clock.
My hopes are high (listening to my heart not head) that both parties will take some wisdom from words of both the President and Boehner that it’s time for Congress to work for the American people, not just show them Congress’s collective ass, again.
New Congressional Diversity
I welcome with delight the new women and minorities to Congress and believe they can make some difference in the traditional white male bastion. While these demographic changes make both the House and Senate more like America, neither chamber comes close to sharing national demographics with America and their members have tons more income than the people they represent.
But the make up of the 113th Congress narrows the differences between the people and their representatives and that’s good.
Come on in rookies and bring your energy and cynicism about the “Boy’s Club.”
Word out of Massachusetts is that former House Financial services Committee Chairman Barney Frank, recently married and recently retired, now would like Governor Deval Patrick to name him “Senator” until the state can choose a successor to current Senator John Kerry, who will be nominated by President Obama to the post of Secretary of State, and seems almost certain to win Senate approval.
Barney thinks being “United States Senator Frank” might be a nice cap to his career which doesn’t sound like he’s going to sleep through his few months in that august body, if Gov. Patrick goes along.
Everyone knows Barney is one of the smartest Members ever to serve in Congress and for a while he earned the reputation as one with the thinnest skin and nastiest temper. No doubt Barney could add value no matter on which congressional committee he served but serving on Senate Financial Services for three or four months—the time estimate, now, to get a Kerry replacement elected—would give Barney a chance to embellish his House legacy and also deal with what is expected to be some attacks on the Dodd-Frank legislation.
Normally this never would happen because Massachusetts’s junior Senator Elizabeth Warren also serves on Financial Services and that’s not how states like to spread their influence. Yet for a limited time, the Senate leadership could accommodate that.
Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass) and Barney Frank (D-Mass) and
Rep Chuck Schumer (D-NY), for a time would all be serving on the same congressional committee. (To be fair, Schumer and Barney both served on together on the then “House Banking Committee,” when they first were elected to Congress.)
My, oh my, oh my, financial bigwigs beware.
Fannie/Freddie and Related Issues
The American Enterprise Institute and Ed Pinto are at it again. This time he's attacking the Federal Housing Administration’s (FHA) core guaranty program.
One would think after Ed’s last performance against Fannie Mae, which earned him lambasting rebuttals from the staff of the Federal Reserve, the Federal Financial Crisis Commission, Nobel winner Paul Krugman and others—not to mention this blog—Ed (and AEI) would learn some lessons.
This assault’s target might have changed, now that he’s aiming at the FHA instead of Fannie Mae and Freddie Mac, but his goal is to reduce the federal role in the mortgage finance system, which frankly is the only thing which insures (no pun intended) that consumers can find affordable fixed rate financing.
Whomever is bankrolling Ed’s AEI efforts (Shh, if I follow the money, my guess is the private mortgage industry) should remember Ed’s “analysis” of Fannie Mae financing in the 1990’s, which he claimed mostly was of the shaky subprime variety just wasn’t, no matter how he tortured his definitions.
Yes, his work was flogged by many in the GOP, AEI, the Wall Street Journal and others. But no matter how Pinto defined Fannie’s 1990’s lending--to fit his opportunistic definition of poor quality originations--the loans he claimed were lousy seldom failed because they were well underwritten. The people/families who got them could afford them and made their payments.
That should be the end of the GSE chapter, Ed.
So, whoever has it in for the FHA and now is using Ed and his happy AEI warriors to beat it up should remember how his initial wobbly campaign collapsed thuddingly and not with grace for the authors.
Tip to “silent” AEI funder, avoid the splashing mud when Ed’s latest tiny temple comes crashing down.
But, if the House Financial Services Committee runs true to form, rehashes history, and schedules some “stomp Fannie and Freddie hearings,” Ed Pinto would be an excellent witness, since he walks the Conservative walk. But that also means formidable witnesses will be clambering to challenge everything he says.
Oh, if those hearings occur, majority staff please remember those “Summary Judgment” rulings.
(Excuse any typos. I also managed to screw up the spacing as I published this blog. So, why should anything else change in the new year?)