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Centrist Senator Bayh’s retirement another blow to bipartisanship

21 Feb 2010 - Preaching the News for Sunday

The psalmist’s plea this Sunday for the Lord’s assistance in time of trouble is answered: God promises to be there in periods of distress. Democratic leaders were troubled and distressed this week when popular Democratic Senator Evan Bayh of Indiana announced he would not seek reelection this year because of the rancor and partisanship in Congress. Bayh’s surprise announcement, in which he criticized the “brain dead” politics and hyper-partisanship of Congress, dealt a triple blow to the Democratic Party and President Barack Obama, analysts said. The decision unexpectedly puts his seat--and, some forecasters said, possibly his party’s Senate majority--in jeopardy, sends a discomforting message to already demoralized Democrats about this year’s political climate, and reminds voters that Obama has yet to usher in the post-partisan era, a major theme of his 2008 campaign. Norman Ornstein of the American Enterprise Institute said the timing of Bayh’s announcement could affect politicians in both parties, prodding more Democrats to consider retiring and more Republicans to take a chance on challenging an incumbent because the climate looks so favorable. “It’s a self-fulfilling mechanism,” he said. Tom Mann of the Brookings Institution, arguing that Bayh “did no favor to his president and his party,” said the senator’s announcement could further damage Democrats’ hopes of passing a major health-care bill. “It weakens the spine of Democrats at a time when they need to finish one job,” he said. “Because falling short on that, it’s hard to see how they stop the bleeding and gain some measure of stability, if not control, moving into the midterm elections.” The unwillingness of the two parties to compromise to control a national debt that is rising to dangerous heights is causing serious concern internationally as well. After decades of warnings that increased spending, escalating health-care costs, and an aging population would lead to a day of fiscal reckoning, economists and the nation’s foreign creditors say that moment is approaching faster than expected. “I used to think it would take a global financial crisis to get both parties to the table, but we just had one,” said G. William Hoagland, who was a fiscal policy adviser to Senate Republican leaders and a witness to past bipartisan budget summits. “These days I wonder if this country is even governable.” Articles by Dan Balz for the Washington Post and Jackie Calmes for the New York Times

barack obama national debt tom mann norman ornstein partisanship democratic party evan bayh democrats health care reform congress g william hoagland

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Woe to the euro

28 Feb 2010 - Preaching the News for Sunday

This Sunday's reading from the Letter to the Philippians criticizes those who are "occupied with earthly things." The European Union (EU) finds itself occupied with the eroding value of its currency this week and criticized for lack of leadership in a time of crisis. A critical debt situation in Greece triggered the crisis, and the Greek government recently announced a freeze on civil-service wages, cuts in public-sector entitlements, the closing of tax loopholes, and a fuel-tax increase. The moves--unpopular at home--were aimed at reducing Greece's growing budget deficit, currently near 13 percent of gross domestic product and well over the EU's 3-percent limit. On Wednesday protesters clashed with riot police in Athens during a one-day general strike protesting the austerity policies. Greece claims the EU has made matters worse by failing to calm market fears that the country might default on its massive debt load. Greek Deputy Prime Minister Theodoros Pangalos said EU leaders were "not up to the scale of the task" in dealing with the crisis. At the end of last year a Euro cost $1.50 US. This week it is trading near $1.35 US and further erosion is expected. Some say the euro could reach parity with the dollar, something not seen since it was launched as a currency in 2002. "Investors have already started to think about the next likely phase of the present crisis, and it appears that all they are finding are new reasons to sell the euro," said David Woo, global head of foreign-exchange strategy at Barclays Plc in London. The economies in Spain, Portugal, Italy, and Ireland are also on shaky footing. "This is a very deep crisis for the euro and all of Europe because what we have is a terrible debt and deficit problem that virtually all European nations share and no collective structures to deal with any of it," said Philippe Moreau Defarge, a European affairs expert at the French Institute on International Relations. "Europe is being forced to recognize it isn't as rich or as well-organized as it thought, and faces several long, hard years of finding its way back to solid ground." Source: Articles by Sebastian Moffett and Costas Parish for the Wall Street Journal, Bruce Crumley for TIME, Liz Capo McCormick and Oliver Biggadike for Bloomberg.com, Derek Gatopoulos for the Associated Press, and Reuters

greece european union euro debt crisis theodoros pangalos david woo philippe moreau defarge

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Democrats find Obama’s agreement with Republicans disagreeable

12 Dec 2010 - Preaching the News for Sunday

The Lord sustains the fatherless and the widow and gives food to the hungry, the psalmist informs us Sunday. Unemployment benefits serve a similar purpose for many of the long-term unemployed. An extension of expiring benefits is part of a compromise deal between President Obama and Republican leaders that would also extend Bush-era tax cuts. The deal has some Democrats crying foul. “It’s not perfect, but this compromise is an essential step on the road to recovery,” Obama said on Monday in announcing the deal. “It will stop middle-class taxes from going up. It will spur our private sector to create millions of new jobs and add momentum that our economy badly needs.” The president touted a temporary break on payroll taxes, saying it will give a lift to the economy and put more money back in the pockets of workers than the main tax break included in last year’s economic stimulus it is meant to replace. A family making $50,000 would save $1,000 with the payroll tax cut next year. At the same time, Obama made substantial concessions to Republicans. In addition to dropping his opposition to an extension of the current income tax rates on upper-income Americans, he agreed to a deal on the federal estate tax that angered many Democrats. The package would cost about $900 billion over the next two years, to be financed entirely by adding to the national debt, at a time when both parties are professing a desire to begin addressing long-term fiscal imbalances. Defending the deal during a press conference Tuesday, Obama said: “This isn’t an abstract debate. This is real money for real people and it will make a real difference in the lives of the folks who sent us here.” Adding to the urgency for a deal to extend unemployment benefits was news from the U.S. Bureau of Labor Statistics that the unemployment rate jumped to 9.8 percent in November as hiring slowed, indicating that the economic recovery is wobbly. More than 15 million people looking for work are unemployed. On a more positive note, however, the U.S. Labor Department reported Thursday morning that the number of Americans filing for their first week of unemployment benefits fell slightly last week. Source: Articles by Richard Cowens for Reuters, Jared A. Favole for the Wall Street Journal, Susan Page for USA TODAY, Sheryl Gay Stolberg and David M. Herzenhorn for the New York Times, Scott Wilson, Felicia Sonmez, David A. Fahrenthold, Peter Whoriskey, and Nathan Rott for the Washington Post, and Annalyn Censky for CNNMoney.com

barack obama income tax payroll tax tax cuts national debt republicans democrats unemployment unemployment benefits estate tax

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Republican New Years’ resolution: Restrict, resist, repeal

09 Jan 2011 - Preaching the News for Sunday

In this Sunday’s first reading we learn that God’s servant will bring forth justice without crying out, shouting, or making a commotion in the street. Political street-fighting appears to be the order of the day as the 112th Congress opens this week. Republicans are promising to make their increased presence felt in a session sure to feature plenty of loud voices and heated debate over everything from the new health care law to the national debt. While President Obama and Republicans were able to work together during last month’s lame-duck session--to the vocal consternation of the most partisan ends of each party’s base--such bipartisan consensus seems unlikely at the outset of the new House session. A vote to repeal the health care law already has been scheduled for next Wednesday in the Republican-controlled House of Representatives. A flat-out repeal would face a steep hurdle in the Senate, where Democrats still hold a diminished majority, and would in any case be vetoed by President Obama. But Rep. Fred Upton of Michigan, the incoming chairman of the House Energy and Commerce Committee, said the House action would not be merely symbolic. “If we pass this bill with a sizable vote, and I think that we will, it will put enormous pressure on the Senate to do perhaps the same thing,” Upton said. “But then, after that, we’re going to go after this bill piece by piece.” Republicans also are threatening to cut off the ability of the government to borrow money unless spending goes back to where it was before the stimulus and the banking bailout. "I'm not going to vote for a debt-ceiling increase unless we go back to 2008 spending levels," said Sen. Lindsay Graham (R-S.C.). In response, one of the president's top economic advisers, Austan Goolsbee, said that not raising the debt ceiling would be "catastrophic" for the country and could cause the U.S. to default. In light of the increased partisanship, Democrats are pushing for procedural reform in the Senate to lessen the power of the filibuster, a parliamentary tactic in the Senate in which any one member can extend debate on a bill indefinitely in order to avoid a final vote. Source: Articles by Jonathan Karl and Z. Buyron Wolf for ABC News, Jennifer Steinhuer, Robert Pear, and Laurie Kellman for The New York Times, Alex M. Parker for U.S. News & World Report, Heidi Przybyla and Mike Dorning for Bloomberg.com, and Jake Sherman for Politico.com

barack obama lindsay graham fred upton national debt filibuster republicans health care reform congress senate austan goolsbee

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Debt ceiling poker--the cards are on the table

17 Apr 2011 - Preaching the News for Sunday

“At the name of Jesus every knee should bend,” says the Palm Sunday reading from the Letter to the Philippians. The weight of the mounting national debt threatens to bring the United States to its knees, financially speaking. Fresh off last week’s budget showdown, Republicans and Democrats now face off with competing visions on how to staunch the red ink. The stakes this time are much higher--potential government default if the debt ceiling is not raised this spring. Last week Republicans led by Rep. Paul Ryan (R.-Wisc.), chairman of the U.S. House Budget Committee, unveiled a plan they say would cut more than $5 trillion from the deficit over 10 years with major cuts to the nation's signature health-care programs for the elderly and the poor. Meanwhile, six senators have formed a bipartisan group to work on their own plan to rein in long-term deficits by making changes to Medicare and Medicaid and examining a fundamental overhaul of the tax system that would yield additional revenue. On Wednesday President Barack Obama jumped into the fray with his vision for deficit reduction in a speech at George Washington University. The president indicated a willingness to work with Republicans but also indicated stark differences over how to conquer trillions of dollars of debt. His goal, say observers, is to stake out a middle ground that calls for shared sacrifice. His plan calls for tax increases on higher-income Americans, closing of tax loopholes, and reductions in entitlement and defense spending. “As a country that values fairness,” said Obama in calling for an end to the Bush-era tax cuts for the wealthy, “wealthier individuals have traditionally born a greater share of this burden than the middle class or those less fortunate. This is not because we begrudge those who’ve done well--we rightly celebrate their success. “Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back,” said Obama. “Moreover, this belief has not hindered the success of those at the top of the income scale, who continue to do better and better with each passing year.” While the president is likely to be criticized from all sides for his middle-ground approach, 64 senators, evenly split between the two parties, wrote to Obama last month pressing him to lead a bipartisan effort to slash the nation’s debt through spending cuts and tax increases. “I continue to believe that if we start from a bipartisan basis, we’ve got a better chance of actually getting the job done,” said Democrat Mark Warner of Virginia, a leader of the Senate bipartisan effort. Source: Articles by Jim Juhnhenn for the Associated Press and Julie Hirschfeld Davis and Hans Nichols for Bloomberg.com

taxes budget paul ryan national debt budget cuts republicans democrats medicare medicaid barack obama mark warner

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Congress, can you spare a dime?

22 May 2011 - Preaching the News for Sunday

Reflecting on this Sunday’s reading from the Acts of the Apostles, PrepareTheWord.com scripture commentator Alice Camille quips that “the diaconate has its roots in people bickering about church resources.” While Republicans and Democrats continue to bicker about budget reform, the U.S. Treasury Department reached the nation’s borrowing limit Monday and warned of potential default if the financial impasse is not resolved soon. Treasury Secretary Timothy F. Geithner has suspended a program that helps state and local governments manage their finances and will begin tapping federal retiree programs to help fund operations, adding urgency to efforts in Washington to fashion a compromise over the debt. If Congress does not vote by August 2 to raise the debt limit, Geithner said the government is likely to default on some of its obligations, which he said would cause enormous economic harm and the suspension of government services, including the disbursal of Social Security funds. Many congressional Republicans, however, have been skeptical that breaching the deadline would be as catastrophic as Geithner suggests. What’s more, Republican leaders are insisting that Congress cut spending by as much as the Obama administration wants to raise the debt limit, without any new taxes. Obama is proposing spending cuts and tax increases to rein in the debt. Treasury secretaries have drawn from special programs to avoid default six times since 1985. But today the government needs far more money to cover its obligations than in the past, making the special measures less effective than they used to be. The government needs about $125 billion more a month than it takes in each month. Source: Articles by Zachary A. Goldfarb for the Washington Post and Tim Fernholz for National Journal

barack obama congress timothy geithner republicans debt ceiling treasury department

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Can Greece achieve prosperity via austerity?

03 Jul 2011 - Preaching the News for Sunday

“My yoke is easy and my burden light,” Jesus promises, inviting all “who labor and are burdened” to come to him. Greek workers are finding new austerity measures passed by the Greek parliament to be a burden, and they along with other sectors of Greek society are making their opinions known through massive street protests, some of which turned violent Wednesday. Greece's parliament approved the deeply unpopular austerity steps despite worsening street violence in a vote that was vital to secure international aid and prevent the eurozone's first sovereign debt default. Lawmakers passed a five-year package of spending cuts, tax increases, and state asset sales, handing a victory to embattled Prime Minister George Papandreou. "We must avoid the country's collapse at all costs. Now is not the time to step back," the Socialist premier told lawmakers just before the vote. The vote suggested the government should be able to push through laws implementing specific budget measures and asset sales on Thursday, clearing the last obstacle to obtaining 12 billion euros of emergency loans. But with the country on the brink of bankruptcy and social unrest mounting, it is unclear whether the government can stick to the tight schedule imposed by the European Union and the International Monetary Fund to implement the stringency moves, even if it wins all this week's parliamentary votes. An estimated 80 percent of the Greek people oppose the measures, which will drastically cut public spending and affect pensions and also include a big increase in income taxes and national insurance contributions. Some 150,000 public-sector jobs will be eliminated, and those keeping their jobs will have their salaries cut 15 percent. The presidents of the European Council and the European Commission, Herman van Rompuy and Jose Manuel Barroso, said in a joint statement that Greece had taken a "vital step back from the very grave scenario of default." Many economists and investors still expect Greece to default eventually anyway because its 340 billion euro debt is so huge, amounting to about 150 percent of the country's annual economic output. Sources: Articles by Renee Maltezou and Dina Kyriakidou for Reuters and International Business Times

greece eurozone debt default

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Medicare needs intensive care, argue senate rebels

03 Jul 2011 - Preaching the News for Sunday

Saint Paul encourages his hearers in the Letter to the Romans this Sunday to focus on the spirit more than the body, reminding them that “we are not debtors to the flesh.” The body still needs tending, however, and for seniors in the U.S. Medicare is a big part of that. Medicare is also a big part of the federal budget, which itself is deeply in debt. Two U.S. senators stepped forward this week with a provocative plan that would apply strong medicine to the program. "We can't save Medicare as we know it," said Sen. Joseph Lieberman (I-Conn.), who authored the plan with Republican Sen. Tom Coburn of Oklahoma. "We can only save Medicare if we change it.” The two Senate mavericks want to raise the age of Medicare eligibility to 67 and increase monthly premiums for millions of current beneficiaries, especially better-off seniors. Democrats reacted with criticism of the proposal, which Coburn said was designed to rescue the financially imperiled program and help the nation confront a "wall of debt." Republicans offered no sign of support either. The plan the two men outlined includes a gradual increase over the next five years in the monthly premium that seniors pay for doctor and other non-hospital services. Aides said it would translate into a monthly increase of $15 to $20 initially. The age of eligibility would rise gradually from 65 to 67. And for the first time better-off seniors would be charged more money for Medicare Part A, which covers hospital care. They already pay more for doctor visits as well as for prescription drug coverage and under the plan would face even higher monthly premiums. "Nobody's going to like this plan, we understand that," said Lieberman, who was the Democratic vice-presidential candidate in 2000 but is now an independent who regularly picks spots to challenge his former party. Coburn is a conservative Republican, but he defied his party orthodoxy earlier this year when he said he was willing to include higher revenues as part of any deficit-reduction deal. Sources: Articles by David Espo and Ricardo Alonso-Zaldivar for the Associated Press

joseph lieberman medicare democrats republicans debt tom coburn

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Will debt deal do the trick?

07 Aug 2011 - Preaching the News for Sunday

In this Sunday’s gospel, Saint Peter cries out for the Lord to save him when he begins to sink below the waves while walking on the water. To save the nation from imminent default, the U.S. Congress and the White House cobbled together an 11th-hour deal to raise the debt limit. But will it really resolve the deficit dilemma or only kick the problem down the road a few months? Without further deep cuts, critics point out, by the end of the 10-year deal passed Tuesday the federal debt would be much larger than it is today. Indeed, both the government and its debts will continue to grow faster than the American economy, primarily because the new law does not address federal spending on health care. That is the reason that ratings agencies are still threatening to remove the United States from their lists of risk-free borrowers. It is also the reason that many are calling the accord a grossly inadequate answer to a pressing problem. Proponents of the agreement counter that it is an important first step, constrained by the political realities of divided government. Republicans want to reduce the debt solely through cuts in spending, while Democrats favor a mix of cuts and increased revenues. Both parties are pointing to the 2012 elections as a national referendum on how to proceed. “Is this the deal I would have preferred? No,” President Barack Obama said Sunday in announcing the agreement. “But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.” The problem facing the nation has been clear for some time. The Congressional Budget Office estimates that the federal debt is likely to exceed 100 percent of the nation’s annual economic output by 2021, largely because of the rising cost of Medicare, Medicaid, and Social Security. Americans will face higher taxes, particularly as investors begin to demand higher interest rates. Economists disagree about the amount of debt a nation can safely carry relative to the size of its economy, but there is widespread concern that 100 percent is too much. Source: An article by Binyamin Applebaum for the New York Times

barack obama deficit debt ceiling

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Debt downgrade drags Dow down

14 Aug 2011 - Preaching the News for Sunday

A Canaanite woman approaches Jesus in this Sunday's gospel with the plaintive cry, "Have pity on me, Lord . . . . help me." Investors large and small are also feeling desperate after credit-rating agency Standard & Poor's downgraded U.S. debt last week and new doubts emerged about European debt. Many fear a new recession in the face of the recent stream of dismal economic news. U.S. stocks slumped Wednesday as investors fretted over the soundness of European banks and the U.S. Federal Reserve's gloomy economic outlook. "Markets are having an extremely difficult time here--volatility is rising and the speed and voracity of these declines is [sic] so rapid I don't think anyone can wrap their heads around this," said Robert Pavlik, chief market strategist at Banyan Partners. The continued whipsawing of stock markets underscores the uncertainty of investors in light of a growing body of evidence which points to a global economic slowdown. A number of market experts, though, said stocks prices have been driven down by panic rather than a change in the economic fundamentals. “Memories are fresh. People who during the last financial crisis did not sell right away, next time around are ready to sell quick and ask questions later. People are seeing this as [the] 'next time,’ ” said Ed Crotty, chief investment officer at Davidson Investment Advisors. Sources: Articles by Jonathan Cheng for the Wall Street Journal and Nathaniel Popper for the Los Angeles Times

recession united states debt ed crotty robert pavlik credit rating standard poors

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