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Friday, September 27, 2013

The Last Days Are The Hardest Days

The next seven days will likely be the most difficult of the 113th Congress. You see, before the new fiscal year starts on October 1, the behemoth that is the U.S. government needs money so that its agencies can operate.

Congress’ most significant purpose is to prepare the annual budget. But as the government has exploded in size and complexity, it’s become increasingly difficult to manage. And, in fact, much of the government isn’t managed at all… It lives on because of inertia.

As a result of the increasing complexity, Congress has thrown all of the appropriations bills into a big pot called the Continuing Resolution (CR). The CR is so big that nobody reads it. Instead, members are briefed by their staff and told whether anything controversial is included.

This year, the opponents of Obamacare have amended the CR to prohibit any funds being spent on the Affordable Care Act, a.k.a. Obamacare. This has the leadership that jammed Obamacare through Congress – Obama, Rep. Nancy Pelosi and Senator Harry Reid – in an uproar.

Since the CR has been passed by the House of Representatives, it now must go to the U.S. Senate for a vote. Majority Leader Harry Reid has declared the bill “DOA,” or Dead on Arrival. Obama added that even if it passes the House, he won’t sign it.

In the next seven days, this very significant disagreement must be resolved or the government shuts down. If it shuts down, the financial markets react badly, confidence in the United States erodes and the economy, which is already struggling, will likely take a renewed downturn.

Or so common wisdom from the mainstream media tells us. But I don’t buy it.

The problem is that John Boehner does. He’s preparing to cave. Let me explain why this is bad for America.

Can Boehner Stand Up to Obama?

Since the financial crisis of 2008, monetary policy has been easy.  In normal times, easy money gooses bank lending and leads to a recovery. But in 2009, something very damaging happened that stalled the recovery in its tracks…the inauguration of Barack Obama and the election of a far left, anti-business Congress led by Ms. Pelosi and Mr. Reid.

The confluence of these two historic occurrences gave us two years of power grab and a legacy of terrible legislation that’s an immense drag on economic recovery. First there was the $800 billion stimulus bill. The bill borrowed 100% of the money and spent it on crony capitalism, grants to left-leaning institutions and big government growth.

Next, the banks and financial firms were socked in the gut by the Dodd-Frank bill. It allowed the “too big to fail” banks to continue their bad behavior, and it also over-regulated them so they couldn’t even misbehave well. Our banks will likely never start lending again until they’re cut down to size and then given freedom to die. Free enterprise only works when management that fails goes out of business.

After these two major mistakes, Obamacare was forced down the throat of the country, and we’ve been captured in the Obama malaise (or the twilight zone) ever since. On top of all this are business killing regulations from the EPA, Labor Department and Energy Department that are the icing on the cake of this current disaster.

America reacted to the Pelosi, Reid and Obama triumvirate by throwing Pelosi out of the Speaker’s job and replacing her with John Boehner. But since the change happened, Boehner has been reticent to fight.

So here we stand at a crossroads of history. Will America adopt the socialism of Obama, or will we move back toward the free enterprise of Ronald Reagan. This is a historic week. It’s an inflection point in history.

History is never easy. John Boehner is going to experience hell. But he has a caucus that backs getting rid of Obamacare, and if he stands like “Horatio at the Bridge,” he can defund and end Obamacare. But to do it he’ll need to shut down government. He’ll need the Obama constituencies to feel the pain of losing their money. Once they feel the pain, Obama will relent and come to the table to compromise.

Currently, Obama says, “I won’t negotiate.” Well, democracy is all about negotiating. He’ll need to quit throwing tantrums and engage his opponents in the House of Representatives. In the end, history will judge if John Boehner is enough of a man to force Obama’s hand.

Your eyes on the Hill,
Floyd Brown
Floyd Brown