Trumpcare Triumphant?

Republican leadership and Trump say that they have the votes to pass the American Health Care Act (AHCA), a.k.a., Trumpcare, the oft-promised repeal of the Affordable Care Act (ACA), a.k.a., Obamacare. The House vote is today. But no one knows for sure if it will pass.

The House Freedom Caucus is driving the vote. Backed by a formidable array of uber-conservative organizations -- Americans for Prosperity, FreedomWorks, Freedom Partners Chamber of Commerce, Heritage Action for America and the Club for Growth -- the Freedom Caucus rallying cry is one of sadism: "Essential Health Benefits," the part of Obamacare that "requires insurers to cover a base set of benefits, like maternity care, preventive services, wellness checkups and rehabilitative services," currently part of Trumpcare, must be stripped out (see "House Republicans Search for Votes to Repeal Obamacare" by Thomas Kaplan and Robert Pear) in order to lower premiums.

The problem for Trump and Ryan is that the more they move in the direction of the Freedom Caucus the more Trumpcare becomes radioactive for other Republicans. Even without the repeal of the Essential Health Benefits requirement, Trumpcare's chances of passing the Senate are remote.

The House vote is basically a charade that is conjuring up memories of the 2003 Medicare prescription drug benefit vote when clocks froze for hours as Billy Tauzin bribed his way to 216 votes.

I think we are in that territory today. It is accepted that if Trump can't get Trumpcare out of the House, the rest of his legislative agenda, what of it that there is (more tax cuts?), is cooked. That's why I expect that the American Health Care Act, in some monstrous form, will find its way to the Senate.

Trump Can't Win + Self-Driving Cabs Coming to a City Near You

With Donald Trump and Hillary Clinton the duopoly's presumed nominees, the best that we can hope for -- some sort of crash on the way to the coronation -- appears to be unfolding.

Trump is facing a row of very high hurdles. While RNC head Reince Priebus pledged fealty to the billionaire television phenom, GOP speaker of the house Paul Ryan has not. Ryan is the darling of the well-heeled funders of the Republican Party as well as an ideological fountainhead of what stands for conservative orthodoxy today. His refusal to back Trump is a sign that GOP paymasters are unwilling to climb aboard the "Make America Great Again" bandwagon and accept a reworking of Republican orthodoxy. This is very bad for Trump, who cannot or will not self-fund a general election with a $1 billion price tag.

The Bushes refuse to attend the GOP convention in Cleveland, as do the last two Republican nominees, Mitt Romney and John McCain. But there will be plenty of protesters. I got to see up close how this anti-Trump mobilization works. One of the big unions, say SEIU, gets a hint that Trump is coming to town. The central labor council is alerted. Resounding statements of resistance are communicated to the local press; members are told when and where to protest; and so on. There will be plenty of this in Cleveland.

To my mind the only question is how badly does Trump lose. Ten points? Probably not by that much. If Obama beat McCain by seven points in the popular vote in 2008, it is hard to imagine the cadaverous Clinton doing any better. On the other hand, if the GOP does split and possibly attempt a third-party campaign in key states, it could be a ten-point margin. How this impacts the Republican down-ticket is anybody's guess at this point.

For the Democrats, Hillary does just fine when she is out of the limelight. Bernie beat her in Indiana last week and he is going to beat in West Virginia tomorrow and in Oregon next week. But Clinton will be able to turn things around in New Jersey and California, concluding the primary season with a show of strength. One would hope that the anti-Hillary protests in Philadelphia will be as large as the anti-Trump rallies in Cleveland, but I doubt this will be the case.

So Hillary triumphs against Trump. The bigger issue though is the world around us. The neoliberal paradigm that has dominated the social sphere the last 40 years is falling apart. The main effort to keep it intact is a reboot of the Cold War. Both Russia and China are being engaged.

The New Cold War proceeds absent any public approval, as do combat operations in Afghanistan and Iraq (countries where the U.S. is officially not in combat).

Perpetual war conducted in silence.

The biggest story I read over the weekend though was not about Trump or Afghanistan; it was about a driverless cab service premiering as soon as next year in an unnamed U.S. city. According to Neal Boudette and Mike Isaac in "Head of Fiat Chrysler Sees Self-Driving Cars in Five Years, Not 20":

General Motors and Lyft, the ride-hailing start-up valued at $4.5 billion, intend to test a fleet of self-driving taxis in an American city as soon as within a year, according to a person who has been briefed on the two companies’ plans. That would most likely begin using the technology inside the battery-powered Chevrolet Bolt, said the person, who spoke on the condition of anonymity because he was not authorized to talk about unannounced initiatives. 

G.M. and Lyft formed a partnership in January and said they planned to introduce “an on-demand autonomous network” of self-driving vehicles. A spokesman from G.M. and a Lyft spokeswoman declined to offer additional details about their plans. 

News of the taxi tests was reported earlier by The Wall Street Journal.

I have heard that more American workers are employed in driving-related jobs than any other type of work. Can you see the way forward for a zombie neoliberalism? Cold wars with China and Russia and robots doing the work at home. Doesn't seem too stable to me.

Trump Pros and Cons (The Cons Have It)

There are two ways to look at the ascendance of Donald Trump, one pro and the other con; both positions find expression in Jennifer Steinhauer's frontpager this morning, "Republican Race Puts Donald Trump and Paul Ryan on Collision Course."

The positive is that The Donald is destroying the current Republican Party. Look at what the reality television star has accomplished so far: He quickly asphyxiated the presidential candidacy of a truly baleful Wisconsin governor, Scott Walker; and he ruthlessly exposed the Bush dynasty as nothing more than a mirage generated by the heat produced by furiously spending tens of millions of dollars.

Trump has proven himself an avatar of the new media. According to Nicky Wolf, a reporter covering the U.S. presidential race for The Guardian who was interviewed yesterday on Democracy Now!, Trump is rewriting the playbook:

But I think Trump is also a uniquely 21st century social media phenomenon, too. He’s huge, to paraphrase him, on Twitter. He’s got this enormous following. He can reach more people with a tweet than almost every TV ad market in the country. Now, that’s something that Schwarzenegger never had and that Jesse Ventura never had, that Reagan never had. I think that changes the arithmetic of stuff a bit here. And he’s just so able to build this brand. It’s difficult to not see him as a pretty unique phenomenon now. And it’s amazing to watch. I mean, it’s just absolutely spectacular how he’s playing with the Republican Party like a cat with a mouse. It’s fantastic.

The reason it is fantastic is that Trump is trumpeting positions that are the direct opposite of GOP orthodoxy -- on trade, on Social Security, on Russia. These differences between Trump and the Republican congressional agenda are what Steinhauer highlights in her story. We can only hope that enough power brokers in the GOP establishment maintain their delusion that Trump can somehow be kept from the nomination. The idea that some of these dead-enders seem to be forming, now that it is apparent that Rubio has very little mojo, is of a brokered convention that produces Paul Ryan as the party's nominee. As Steinhauer explains,

Though most in the Republican establishment are hoping for the dust to settle and for Senator Marco Rubio to emerge as their nominee — his Capitol Hill endorsements stack up daily — some still murmur privately that in the event of Mr. Trump’s nomination, they would like to see Mr. Ryan emerge as a brokered nominee at the Republican National Convention in July.

This amounts to a nuclear option. The potential damage to the GOP is beyond comprehension.

That's why there is already a significant amount of noise emanating from Capitol Hill that all sounds like "Wait a second. We can work with Trump." According to Steinhauer,

Some Republican lawmakers say, though nervously, that there would be plenty of intersection between their agenda and Mr. Trump’s. His tax plan — which calls for large tax cuts for all Americans, especially the rich — is similar to Mr. Ryan’s. Mr. Trump, like Mr. Ryan, is all for repealing and replacing the current health care law, although he, unlike Mr. Ryan, has endorsed the individual mandate. 

“In a lot of ways, it might actually be conducive to getting things done to have someone with business sense in the White House,” said Representative Mick Mulvaney, Republican of South Carolina and a leader of the conservative House Freedom Caucus.

Like Mr. Ryan, Mr. Trump also supports gun rights and a strong military, although Mr. Trump has broken with many Republicans with his criticism of the Iraq war. 

“All of the Republican presidential candidates would be better than Hillary Clinton,” said AshLee Strong, a spokeswoman for Mr. Ryan. “And Speaker Ryan would be able to work with any one of them.” 

Some even argue that Mr. Ryan, who operated in lonely political waters before his party took over the House in 2011, will adjust to the environment and try to help Republicans in congressional races who, in many states, will be fighting for their lives. 

***

Congressional Republicans — especially senators up for re-election in swing states — have been terrified to criticize Mr. Trump by name because they need his voters, too, in primary and possible general election battles. White-hot fear is beginning to set in.

This is the negative: Trump is the right wing's Obama 2008, a shape-shifting Manchurian Candidate who is in fact loyal to the 1%. I think this is the correct interpretation, brought home to me one morning reading a Gail Collins column, "Trump Shows His Inner Rabbit," where she points out that Trump back-tracked on his most powerful statement during the last Republican debate, that Bush and Cheney lied to get us into Iraq:

In a dramatic highlight of the last Republican debate, Trump accused the Bush administration of deliberately deceiving the American public about the invasion. (“They lied. They said there were weapons of mass destruction. There were none.”) It was a potentially historic moment: a top Republican candidate for president attempts to lead his party into a frank reappraisal of the Bush-Cheney administration’s inherent honesty.

Here we are, one week later: “I’m not talking about lying. ... Nobody really knows why we went into Iraq.” 

Meanwhile, reporters continue to ask Trump supporters what the attraction is. And his fans say that he tells it like it is.

Trump is an agile performer whose gift is the ability to mesmerize an audience with an apparent spontaneity; this sponateity creates a facsimile of truthfulness.

It is of course nothing of the sort. It is bullshit. A Trump White House would preside over a large tax cut for the 1% and a big increase in military spending. It would be Reagan's first term all over again.

Let's see who Trump selects for a VP. My guess is a hawkish general a la Curtis LeMay, George Wallace's running mate in his 1968 independent presidential bid.

Obama's TPP/Asia Pivot Waterloo + Organized Labor Proof of Life + Bad News for Saudis/ISIS + Greek Default and Peak Neoliberalism

There is quite a bit of good news this Monday morning. Dire assessments of Obama's "lame duckery" continue to roll in (Peter Baker, "The Trans-Pacific Partnership and a President’s Legacy") following Friday's failed vote in the House of Representative on trade-promotion authority (Jonathan Weisman, "House Rejects Trade Measure, Rebuffing Obama’s Dramatic Appeal"). Obama's Asia pivot is being declared DOA. This is from Baker's frontpage piece this morning:

The administration tried making a foreign policy argument over the last few weeks, maintaining that if the United States does not seal the trade pact, it will be leaving the field to China, which has been exerting its clout in recent years, whether by investing in energy supplies in Africa and the Middle East or by asserting claims over disputed waters and islands. 

But some on the left argue that the administration is using China to scare lawmakers and exaggerating the competition. “I just don’t buy this China boogeyman stuff,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former economic adviser to Vice President Joseph R. Biden Jr. “If anything, I see China as being more inward looking, devoting less resources to mercantile-type trade and more to internal investment, consumption and developing human capital.” 

Supporters of the trade pact hope to hold a new vote this week on the part of the trade package rejected by the House on Friday but will need to secure 90 more votes. Representative Paul D. Ryan, the Wisconsin Republican who has worked with the White House to secure trade negotiating authority, said on Sunday that if Mr. Obama wanted to avoid being a “very lame-duck president,” he would have to win over members of his own party. 

“I think that this can be salvaged because I think people are going to realize just how big the consequences are for American leadership,” Mr. Ryan said on “Fox News Sunday.” 

But there was little indication over the weekend that many minds had been changed on the political left. “We need to regroup and come up with a trade policy which demands that corporate America start investing in this country rather than in countries all over the world,” Senator Bernie Sanders of Vermont, a candidate for the Democratic presidential nomination, said on “Face the Nation” on CBS.

*** 

“There is no Asia pivot without an economic component, and that component is tied up in T.P.P.,” said Walter Lohman, director of the Asian studies program at the Heritage Foundation. The challenge for Mr. Obama, he added, is that no matter how important the trade pact may be to his foreign policy, Congress will consider it through an economic lens. “Geopolitics gets it very few votes.”

As I said, good news. Good news too that organized labor figured out how to do things properly on this one, both by working in concert with citizen groups and environmentalists, as well as playing hardball with two-faced Dems. This is from Noam Sheiber's weekend story, "Labor’s Might Seen in Failure of Trade Deal as Unions Allied to Thwart It":

Labor’s smartest move was lining up opposition to the president’s trade agenda as early as 2013, when the fight was still a distant prospect. “They did a good job getting out and defining T.P.A. early among Democratic House members, really peeling off an enormous number of folks who didn’t have long history or an understanding of the issue, prior to the White House engaging,” said Simon Rosenberg, president of the advocacy group NDN and a supporter of Mr. Obama’s effort. 

Mr. Rosenberg pointed in particular to a letter labor activists helped circulate late that year, which roughly 150 House Democrats signed. “It was a letter that was going to make it hard to vote for T.P.A. once you signed it,” Mr. Rosenberg said.

***

This time around, not only did the firefighters make a considerable investment — producing ads and paying to broadcast them in five congressional districts — but Mr. Schaitberger personally led the effort within the A.F.L-C.I.O. executive council to freeze all donations to members of Congress by the political action committees of the federation and affiliated unions until after the vote on trade promotion authority. (Mr. Schaitberger, who developed the motion, credits Mr. Trumka with helping create almost unanimous support for it.) 

Mr. Schaitberger acknowledged some apprehension within the labor movement about denying money even to longtime congressional allies, but he argued that it had been the most effective way to persuade friendly members of Congress to pressure wavering Democratic lawmakers. “We wanted to encourage those members to use their influence, their passion for our position, to move some of their colleagues,” he said.

A win for labor, a blow to the Asia pivot, why not add a story about workers at Gawker Media voting to join a union? Rachel Swarns reports in "At Gawker Media, New Economy Workers Strive to Form a New Kind of Union" that

. . . Last year, about 22 percent of recent college graduates were either working part time or unemployed, compared with about 15 percent in 2007, according to the Federal Reserve Bank of San Francisco.

That may be one reason young adults view unions more favorably than other age groups. In March, a national survey of 1,500 adults conducted by the Pew Research Center found that 55 percent of those ages 18 to 29 view unions positively, while 29 percent view them unfavorably.

Overseas, peace talks on Yemen begin in Geneva today. The Houthis continue to roll up victories despite the Saudi-led terror bombing. The Kurdish fighters are battering Islamic State in northern Syria, threatening to capture the main ISIS supply route from Turkey to Raqqa. All good news.

Plus, we are now approaching the decisive moment in the Greek-troika debt negotiations. A default by Greece seems unavoidable. Yves Smith of Naked Capitalism is terming this "Peak Neoliberalism":

The resolution of the Greece/creditor deadlock may also mark Peak Neoliberalism. It’s possible, but only remotely so, that Greece and its creditor overlords will back off from their collision. But as we’ve said for years, Germany is wedded to incompatible goals, namely running large trade surpluses but not financing its trade partners. It is destined to burn them down if it fails to find a new course of action. Greece is also wedded to incompatible goals, namely getting a real break from austerity while staying in the Eurozone. 

On the current trajectory, Greece will suffer horribly under a default or Grexit. The creditors have the incentive and the means to make either one more painful than continued austerity so as to force Greek citizens to capitulate and vote in a more compliant government. There is a bloody-minded faction that includes Finland, Latvia, Spain, as well as some ECB governors that is eager to punish Greece and sees that as necessary to preserve the Eurozone. We’ll see soon enough whether these austerity radicals that we call the ultras persuade enough key players to put their plans into action. 

But even in a less punitive scenario, a default or Grexit will do very serious damage to an already fragile and deeply depressed economy. Those who assert that Greece will bounce back quickly don’t have an economy this close to being a failed state as a comparable. 

Our view has been that the most likely scenario is a default in the Eurozone, and that the authorities have likely underestimated the damage if the impasse ultimately leads to a Grexit. Even if they are correct that financial contagion is contained, political contagion over the next few years is another matter entirely. 

But on a bigger frame, no matter how badly things turn out for Greece, the institutions at the core of the European project will emerge with their image badly damaged. The dirty secret has long been that the program of European integration was designed to produce rule by technocrats. Those technocrats, by being captive to bad ideology, have failed to deliver on the basic obligation of government: to provide for the safety and well-being of their populace. In a capitalist society, that means producing enough decently remunerated jobs. 

However, even if neoliberalism winds up receding as a result of the brutal Greek negotiations, it’s naive to assume that the exposure of the bankruptcy of neoliberalism means a return to the old European model of more social welfare and (at least in theory) democratic accountability. Ironically, the train wreck we are seeing now can be presented as a prime example of the dangers of democratic rule: a democratically elected government in Greece demanding better treatment from its jailer/creditors, when the most of the debt is held by democratically elected governments who are not willing to give Greece the breaks it wants. And as we’ve stressed from the outset, the fact that the two sides can’t come to agreement is that Syriza’s red line of pensions is also a red line to voters in the states that have provided funding to Greece. 

Thus even if the Greek denouement does represent Peak Neoliberalism, that does not mean that social democracy will emerge victorious. It simply means we will grope towards a new political order. Only if citizens are vigilant and engaged do they have a hope of coming out as winners.

All very true. But what Smith chooses not to underline is that there is no alternative to scrapping neoliberalism. Yes, the way forward to a new political dispensation is not clear because the neoliberal paradigm is still completely dominant; but a perception that it is bankrupt is now broadly taking root in popular consciousness. With this in mind, tomorrow some thoughts on Hillary Clinton's quixotic makeover as a New Deal populist and a working-class suffragette.

Sequester Partially Undone + Seymour Hersh's "Whose Sarin?"

The House and Senate budget conference led by Representative Raul Ryan, Wisconsin Republican, and Senator Patty Murray, Washington Democrat, yesterday revealed its budget deal. It undoes the deep cuts that went into effect at the beginning of the year when the sequester kicked in and it averts a January 15 repeat of the government shutdown fiasco we went through in October. The reliable Jonathan Weisman has the particulars this morning in his story, "Capitol Leaders Agree to a Deal on the Budget":

The agreement, which would finance the government through Sept. 30, 2015, would eliminate about $63 billion in across-the-board domestic and military cuts. But it would provide $23 billion in deficit reduction by extending a 2 percent cut to Medicare providers through 2023, two years beyond the cuts set by the Budget Control Act of 2011.

***

Under the agreement, military and domestic spending for the current fiscal year that is under the annual discretion of Congress would rise to $1.012 trillion, from the $967 billion level it would hit if sequestration spending cuts were imposed next month. Spending would inch up to $1.014 trillion in the 2015 fiscal year. 

The figure for this year is about halfway between the $1.058 trillion passed by the Senate this spring and the $967 billion approved by the House. 

Military spending would be set at $520.5 billion this fiscal year, while domestic programs would get $491.8 billion. The $63 billion increase over the next two years would be spread evenly between Pentagon and domestic spending, nearly erasing the impact of sequestration on the military. Domestic programs would fare particularly well because the 2 percent cut to Medicare health providers would be kept in place, alleviating cuts to programs like health research, education and Head Start. 

The increase would be paid for in part with higher airline fees that underwrite airport security. Higher contributions from federal workers to their pensions would save about $6 billion. Military pensions would see slower cost-of-living increases, a $6 billion savings over 10 years. Private companies would pay more into the federal Pension Benefit Guaranty Corporation. 

States receiving mineral revenue payments would have to help defray the costs of managing the mineral leases, saving $415 million over 10 years. Deepwater, natural gas and other petroleum research programs would end. 

Democrats gave up their demand that the deal extend unemployment benefits that expire at the end of the month, but they hope to press for an extension in a separate measure.

Senate Minority Leader Mitch McConnell doesn't like giving up the sequester cuts without a grand baragin on Medicare and Social Security spending; Heritage Action and the Koch's Americans for Prosperity have come out against the deal. One wonders how many rank-and-file Tea Party Republicans in the House will follow suit. It will be an interesting indication of whether the Tea Party is solely focused on making government dysfunctional or whether they want to add to their House majority and possibly recapture the Senate. Clearly if Republicans keep their heads down and bide their time waiting for the reality of Obamacare to sink in they stand to reap the rewards in the 2014 mid-term elections. As Weisman notes,

For Republicans and their negotiator, Mr. Ryan, the deal should mean the political focus can remain on Mr. Obama’s health care law and not on another round of budget brinkmanship next month with the government moving to another possible shutdown.

****

If you haven't had a chance to check out Seymour Hersh's article, "Whose Sarin?" in the London Review of Books it's worth taking the time. Moon of Alabama posted on it over the weekend. Hersh makes the argument that the Obama administration was engaged in the same type of cherry picking of intelligence as Bush in the run up to the invasion of Iraq; that plenty of evidence of existed pointing to Al Nusra Front having the capability to produce sarin, and that evidence was and continues to be suppressed.

What I found compelling was the refutation of the azimuth data that the New York Times and Human Rights Watch used at the eleventh hour to argue that "smoking gun" proof existed that Syrian government forces launched the August 21 chemical weapons attack on the Ghouta suburb:

Theodore Postol, a professor of technology and national security at MIT, reviewed the UN photos with a group of his colleagues and concluded that the large calibre rocket was an improvised munition that was very likely manufactured locally. He told me that it was ‘something you could produce in a modestly capable machine shop’. The rocket in the photos, he added, fails to match the specifications of a similar but smaller rocket known to be in the Syrian arsenal. The New York Times, again relying on data in the UN report, also analysed the flight path of two of the spent rockets that were believed to have carried sarin, and concluded that the angle of descent ‘pointed directly’ to their being fired from a Syrian army base more than nine kilometres from the landing zone. Postol, who has served as the scientific adviser to the chief of naval operations in the Pentagon, said that the assertions in the Times and elsewhere ‘were not based on actual observations’. He concluded that the flight path analyses in particular were, as he put it in an email, ‘totally nuts’ because a thorough study demonstrated that the range of the improvised rockets was ‘unlikely’ to be more than two kilometres. Postol and a colleague, Richard M. Lloyd, published an analysis two weeks after 21 August in which they correctly assessed that the rockets involved carried a far greater payload of sarin than previously estimated. The Times reported on that analysis at length, describing Postol and Lloyd as ‘leading weapons experts’. The pair’s later study about the rockets’ flight paths and range, which contradicted previous Times reporting, was emailed to the newspaper last week; it has so far gone unreported.

Why is this important? Because those of us who took the time to dispute the official narrative being trotted out by John Kerry and Samantha Power, that the Syrian government had to be responsible for the gas massacre in the Ghouta because none of the rebel groups had access to the missiles or the chemicals used in the attack, that rather than being merely marginal, knee jerk conspiracy junkies tapping out keyboard fantasies of salafis with sarin, we were actually in line with a substantial body of expert opinion. Next time the war drums begin to pound it will be no different. The obvious, the sensible will be crowded out of the media. Just remember the missing WMD in Iraq and Obama's phony casus belli against Syria.

Back to Where We Started: Boehner Will Have to Go Against His Caucus

The confidence that caused an increase in the Dow on Friday quickly disappeared over the weekend when a Paul Ryan brokered deal to end the government shutdown/debt ceiling standoff fell through.

Republicans are loudly blaming Democrats. Strange stuff since Republicans are the ones that initiated the shutdown and are the ones threatening default.

Apparently the fault lies with the Democrats because they're unwilling to throw the Republicans a bone; in other words, the government shutdown is going to continue and the the world financial system is going to have to get work on building a new foundation because Democrats will not reward Republican blackmail.

As Krugman says in his column this morning, "The Dixiecrat Solution":

[O]ur current state of dysfunction looks like a chronic condition, not a one-time event. Even if the debt ceiling is raised enough to avoid immediate default, even if the government shutdown is somehow brought to an end, it will only be a temporary reprieve. Conservative activists are simply not willing to give up on the idea of ruling through extortion, and the Obama administration has decided, wisely, that it will not give in to extortion.

U.S. Treasury bills can longer be viewed as a completely safe. Republicans want a bone tossed to them so they can maintain extortion as a weapon to enhance their minority status. A potentially catastrophic default on U.S. sovereign debt, one would imagine, renders this weapon inoperable for future use. This is why Democrats are correctly refusing to offer any concessions. Concessions mean we go through this all over again the next time we butt up against the debt ceiling or the government needs to be funded.

The deal being worked on in the Senate is under the care of Susan Collins, Republican of Maine. Jonathan Weisman describes the Collins plan this morning in his story, "Spending Dispute Leaves a Senate Deal Elusive":

The Collins plan would maintain sequestration-level spending through Jan. 15, when formal budget negotiators would be required to complete a House-Senate agreement on spending and taxation over the next decade. That date was already a concession. Ms. Collins, along with Senators Kelly Ayotte of New Hampshire and Lisa Murkowski of Alaska, both Republicans, initially wanted to finance the government for six months at those levels. The initial proposal by Ms. Collins would also have extended the debt ceiling only to Nov. 15, but at the request of Senate Democratic leaders, she and Mr. McConnell pushed it back to Jan. 31.

Having embraced this proposal, Senate minority leader Mitch McConnell is presumably using it as the basis for talks with Senate majority Harry Reid. As of now Democrats want the reduced spending of the sequester to last only through mid-November, not into the new year as Collins proposes.

It's hard to see how the Tea Party controlled House passes the Collins plan. So we're back to where we were at the beginning. Speaker of the House Boehner is going to have to go against the majority of his caucus and release whatever emerges from the Senate for an up-or-down floor vote. This is Krugman's conclusion, and it basically repeats the dynamic from the fiscal cliff negotiations last New Year's Eve.

Senate Democrats need to stand firm. They are who will determine if the neo-Dixiecrat rump will continue to dominate the federal government.

Republicans Beat the Retreat back to Paul Ryan + Free Syrian Army Implicated in Massacre

There is some confusion this morning about the possibility of a deal being reached between Republicans and Democrats on raising the debt ceiling. Conflicting reports from yesterday had Obama willing to sign off on a clean bill lifting the debt ceiling until November 22 without ending the government shutdown. As it turns out this was not the case. The Democratic position, reaffirmed by Senate majority leader Harry Reid, is that the government shutdown must end as well. Whether the GOP can get any deal through its caucus in the House is another question entirely.

All the to and fro yesterday of Democrats and Republicans meeting separately with Obama tended to obscure the real news of the last 48 hours -- the Tea Party demand that Obamacare be de-funded as the price to re-open government and lift the debt ceiling is now off the table. It is done, broadly acknowledged as a failure. A good story that captures the prevailing wisdom that the shuttering of government to coincide with the October 1 opening of the online health insurance exchanges has backfired is the Eric Lipton and Nick Confessore "Kochs and Other Conservatives Split Over Strategy on Health Law":

Opponents of the approach are arguing that conservatives would have been better served by trying to force an overall reduction in federal spending and tying that effort to the debt ceiling fight, a step the Koch-backed Americans for Prosperity urged this week. Specifically, the group argues that stopping the health care plan should be a years-long effort to marshal what it says will be growing public animosity toward the law. That will help elect Republican majorities in both houses of Congress, which will repeal it.

Conservatives are tossing recriminations back and forth as they beat a retreat back to fallen angel Paul Ryan and an elusive grand bargain on the budget.

I slightly misspoke yesterday when I assumed that the basis for Ryan's budget proposal offered in exchange for raising the debt ceiling was his 2012 The Path to Prosperity block granting of Medicaid and privatizing of Medicare. Chastened from his shellacking in last year's presidential election Ryan's budget prescriptions are apparently more modest and focused. This is from Jonathan Weisman's "Ryan Is Again in the Forefront for the G.O.P.":

An opinion piece [Ryan] wrote in The Wall Street Journal this week laid out what has now become the House Republican plan: a debt ceiling increase tied to changes to Medicare and Medigap plans that would save more than enough money to ease some of the across-the-board cuts to domestic and defense programs; a fast track for the comprehensive simplification of the tax code; and a demand for immediate, serious and structured negotiations with the White House and Democratic Senate. 

The fact that Mr. Ryan’s plan quite obviously made no mention of the health care law as a bargaining chip quickly drew him scorn from some on the right, but to Democrats and more moderate Republicans, the sidelining of the health care fight immediately gave the plan credibility. 

He marketed his idea on Wednesday to the House’s hard-line conservatives in the Republican Study Committee, getting enough favorable reaction to pull in the Republican leadership. On Thursday, after Mr. Boehner presented it to the full Republican conference, it became the official Republican position. As Mr. Boehner laid it out to the public, Mr. Ryan stood silently behind him. 

On Friday, he will take his message to the Values Voters Summit, a meeting of social conservatives. But according to an advance text of his remarks, he will add words of caution: “This president, he won’t agree to everything we need to do. A budget agreement — with this president and this Senate — it won’t solve all of our problems. But I hope it’s a start. I hope we can get a down payment on our debt.” 

Republicans and Democrats said Thursday that the success or failure of this new path forward will rest on Mr. Ryan’s shoulders. Republicans hope that with Mr. Ryan leading the charge, Washington will finally grapple with the true drivers of the federal budget deficit: entitlement programs like Medicare that are swelling as the population ages. Senator Rob Portman, Republican of Ohio, said conversations between Mr. Ryan and the senators he will need on his side had already begun. 

Democrats, closely examining the outlines of the Ryan plan, say he is showing a new modesty and a narrower vision than the one rejected by American voters in the 2012 presidential campaign. Back then, and even earlier this year, Mr. Ryan championed converting Medicare into a voucherlike program in which beneficiaries would be given fixed premium subsidies they would use to buy private health insurance. 

Now he is talking about means-testing Medicare to make richer beneficiaries pick up more of the tab and ensuring that taxpayers do not subsidize the private Medigap plans purchased by upper-income recipients to augment Medicare coverage. Versions of both of those proposals are in Mr. Obama’s budget for the current fiscal year.

It is hard to imagine that means-testing Medicare is going to mollify the fire eaters in the Tea Party caucus; there are not many realists in its ranks. The question is whether the Tea Party still has enough juice, now that conventional wisdom has coalesced around the idea that the shutdown and debt ceiling standoff has been an unmitigated disaster, to torpedo a deal based on Ryan's plan.

An important story worth mentioning is Human Rights Watch's report concluding that Syrian rebels committed "crimes against humanity" in an August 4 massacre of 190 civilians in Latakia province. Anne Barnard reports in today's New York Times that the Western-backed Free Syrian Army is implicated in the massacre and could be guilty of war crimes:

[A]t least 20 groups took part in the fighting, the report says, including some affiliated with the Free Syrian Army, the loose-knit collection of mainly Syrian rebel forces the council is trying to organize. 

And in a video filmed nearby during the operation, Gen. Salim Idris, who leads the military council, is seen insisting that his forces played a leading role, in statements responding to criticism from Islamist groups that his fighters were hanging back. The report said it was unclear whether forces linked to General Idris took part in the initial Aug. 4 attack, when forensic evidence suggests most of the civilians were killed. But it also said that anyone continuing to coordinate with such groups could be complicit in war crimes. 

The Human Rights Watch report accuses the five leading fighting groups of crimes against humanity; names several private donors in Kuwait and other Persian Gulf countries as financiers of the operation; blames Turkey for allowing the fighters to use its territory; and calls for an arms embargo against the five groups, adding to its previous calls for such an embargo against the Syrian government. 

“Unified action by the international community is really long overdue when it comes to trying to deter these abuses and violations,” Ms. Fakih said, recommending that war crimes in Syria be referred to the International Criminal Court, which could investigate all parties.

Government Shutdown Bait and Switch Underway

The date for when the government will default if Congress does not authorize an increase in the debt ceiling is apparently now November 1 not October 17. This according to a story by Annie Lowrey, "Tracing the Calendar Down to the Last Cent":

That is when more than $55 billion in federal payments come due, almost certainly more than enough to use up whatever cash the Treasury might still have on hand. The three weeks between now and then — should Congress fail to raise the debt ceiling — would most likely be ones of market turbulence, plummeting confidence and a slowing economy.

But so far the markets have not reacted in a significant way. Jesse Eisinger writes in a DealBook column "Complacency on Wall Street Could Be Worse Than a Panic" that having gone through this once before people are jaded and feel that this is all a pantomime on the Potomac that can be ignored. Eisinger cautions that this is dangerous and could lead to disaster; he thinks that there are real not fictive barriers to reaching a deal. As someone who has been predicting an adverse market reaction by now if a deal had not been reached, I tend to agree with him.

There appears to be a deal of sorts in the offing. That deal, according to the reliable Jonathan Weisman, involves a short-term funding of the government and raising of the debt ceiling while negotiations begin once again in pursuit of the El Dorado of the "grand bargain." The problem with the grand bargain is there is no deal at the end of that rainbow. It is a Paul Ryan initiative. It is my perception that anything Ryan touches -- not unlike George W. Bush, another youthful-seeming, modestly telegenic GOP standard bearer -- turns to shit in his hands. Ryan wants to take a meat ax to Medicare and Medicaid. There are not the Democratic votes there. Any grand budget deficit bargain would have to be extremely modest to get through the Senate. Then you're right back at the problem that started all this -- the Tea Party fire eaters in the House. They will torpedo any modest grand bargain.

As for the problem that started all this, the fire-eating Tea Party, there is a frontpage story by Eric Lipton, Nick Confessore and Nelson Schwartz, "Business Groups See Loss of Sway Over House G.O.P.," that is worth checking out. I think it oversells the extent to which groups like the National Retail Federation and National Federation of Independent Businesses will go out of their way to recruit and fund primary candidates to take down some of the Tea Party yahoos in the House. Nonetheless the article features some choice quotes:

“We ask them to carry our water all the time,” said one corporate sector lobbyist, who demanded anonymity in order to speak frankly about the relationship with Republicans. “But we don’t necessarily support them 100 percent of the time. And what has happened is the rise of an ideological wing that is now willing to stand up to business interests.”

Lipton, Confessore and Schwartz rightly point out that the Tea Party phenomenon is a Frankenstein monster of the Chamber of Commerce's making:

To some extent, the Chamber itself, along with other lobbying groups, helped create the conditions for Washington’s impasse. 

After the 2010 elections, the Chamber and other business interests funneled millions of dollars into Republican redistricting efforts around the country, helping draw overwhelmingly safe Republican districts whose occupants — many among the most conservative House members — are now far less vulnerable to challenges from more moderate Republicans. 

The Chamber spent more than $32 million on the 2012 election, nearly all of it backing Republicans. Similarly, the American Banking Association sent 80 percent of its $2.6 million in political action committee donations to Republicans in the last election cycle, compared with 58 percent in 2008, according to data compiled by the Center for Responsive Politics, out of dissatisfaction with Democratic efforts to impose more financial regulations.

Two-thousand-and-eight might seem like a lifetime ago but the political vibe that it created at the time remains vivid to this day. Bush and Cheney had thoroughly discredited the Republican Party with a disastrous invasion and occupation of Iraq and a ham-handed response to the Lehman Brothers collapse. A black man won the presidential election in a rout. He had large Democratic majorities to work with in the House and Senate. Business leaders were shitting their britches. They feared a raft of progressive legislation -- card check, carbon regulation, universal health care -- churning out of Washington.

Starting in the summer of 2009 they fired up the assault engines. In order to man those engines, the only people around willing to be used for the cause were the kooks and conspiracy-theorist types.

The kooks have always been around. In our recent political dispensation, say since the 1960s, they have been known as Birchers, the far Right Wing ideologues that filled the ranks of the John Birch Society in Southern California suburbs and who believed communists were everywhere hiding in plain sight. The difference is that in our present-day period these kooks have been provided a megaphone. The media dutifully fell in line and reported the orchestrated response of kooks being lined up to speak out against health care reform at the Congressional townhalls conducted that summer of 2009 as somehow signifying a grassroots popular democratic mass uprising against Obama and progressive policy. It was nothing of the sort. It was nothing more than an assiduous stove-piping of select events and images which created the impression of an uprising. "If you build it, they will come." And they did. Citizens United helped. The 2010 elections were a watershed for the Tea Party.

And here we are today.

Tea Party Headed for a Full Rout

My guess is that if the government shutdown and debt ceiling issues are not resolved by next week the markets will begin to decline significantly. Yesterday the Dow was down almost 140 points. It's one thing for the government to shut down and 800,000 workers to be sent home, but it's quite another for people to see the value of their 401(k) accounts plummet. Most people rely on the market for their retirement; that's where the nest egg is stored. The days when workers had a defined-benefit pension plan as well Social Security are over. Once the stock market begins a day-after-day tumble that will be when the Tea Party folds; it will be at this point that, as Obama likes to say, "the House Republican fever will break." Look for this to happen next week if a deal isn't struck over the weekend.

The deal being discussed once again centers around eliminating the medical device tax portion of the Affordable Care Act. There are also muffled noises from the odious Paul Ryan, chairman of the House Budget Committee, about a grand bargain (re-branded as a "down payment") on the budget which would include cuts to Medicare and Social Security. The medical device tax bargain was shot down by Senate leadership. And as for Paul Ryan, I wouldn't believe anything he says or any plan he even remotely comes in contact with.

The problem for Republicans is now that they have gone ahead and actually gone over the brink any deal that Democrats agree to will reinforce the effectiveness of the Tea Party strategy of "government by crisis," something that Democrats, who now occupy the high ground, are rightly unwilling to do. Republicans are mewling about the need for face-saving, that the Democrats need to toss them a bone -- repeal of the medical device tax -- so that they can ratchet back the shutdown. But, once again, why would Democrats do this? If they do they'll just be insuring that it will happen again.

No, the only way out of the impasse is for a full rout of the Tea Party caucus. And though there are plenty of complaints being voiced by Republican Party elders and governors -- Haley Barbour correctly points out that Obama's approval rating was in free fall prior to the shutdown standoff, but no more -- I think it is going to take consecutive days of the Dow falling by a couple hundred points before the pressure is great enough to force Boehner's hand. A significant development from yesterday is the story that Boehner will not allow a default on the debt, presumably by doing what he has so far be unwilling to do with the government shutdown -- allowing an up or down vote on the floor of the House. The Speaker of the House is getting pummeled in the press now, but I still think there is validity to the idea that he is playing the Tea Party against itself, backing the fire eaters on the government shutdown to expose them and burn them out prior to the larger catastrophe of a default on the debt.

Adam Liptak has a piece about Obama's options to raise money if the House Republicans refuse to raise the debt ceiling. Legal opinion centers on the Constitution's 14th Amendment:

Eric Posner, a law professor at the University of Chicago, said that the meaning if not the words of the Constitution left Mr. Obama with room to act. 

“The president has inherent emergency powers,” he said. “It has long been understood that the president should act to protect the country.” 

That is the broadest option for Mr. Obama. The second is based on the actual text of the Constitution, though there is a dispute about what the words in question mean. Section 4 of the 14th Amendment says: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” 

The provision, adopted in 1868, was meant to ensure the payment of Union debts after the Civil War. But it was written in more general terms, as the Supreme Court once noted in passing. “While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War,” Chief Justice Charles Evans Hughes wrote in 1935, “its language indicates a broader connotation.” 

On Thursday, Mr. Carney dismissed the argument, popular in some legal circles, that the amendment authorized the president to raise the debt ceiling. 

“We do not believe that the 14th Amendment provides that authority to the president,” he said. He added that the meaning of the provision had divided constitutional scholars. That alone, Mr. Carney said, “means that it would not be a credible alternative.”

House GOP Quick Kicks Debt Ceiling

House Republicans decide to "punt" on the debt ceiling.  The story by Ashley Parker (she covered the Romney campaign during the past presidential election) in yesterday's paper about the Republican retreat in Williamsburg revealed that Paul Ryan was arguing for a short-term extension of the debt ceiling. I thought that this would take time to play out, like a week, as the Republicans haggled among themselves. But by Friday House Republicans had uncharacteristically reached consensus. Here's how Jonathan Weisman lays it out in today's frontpage story:

The decision represents a victory — at least for now — for Mr. Obama, who has said for months that he will not negotiate budget cuts under the threat of a debt default. By punting that threat into the spring, budget negotiations instead will center on two earlier points of leverage: March 1, when $1 trillion in across-the-board military and domestic cuts are set to begin, and March 27, when a stopgap law financing the government will expire.

Reordering the sequences of those hurdles was central to the delicate Republican deliberations that resulted in the new plan. In the days leading to the Williamsburg retreat, Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman and former vice-presidential nominee, had been meeting with the leader and three past chairmen of the conservative House Republican Study Committee to discuss a way through the debt ceiling morass.

Those conversations led into Thursday morning, when Mr. Boehner and Representative Eric Cantor of Virginia, the No. 2 House Republican, opened the retreat by going through the timeline for the coming budget fights, according to aides who were there.

They turned the floor over to Representative Dave Camp of Michigan, the House Ways and Means chairman, who delivered a blow-by-blow description of the economic disaster that could be wrought by a government default. Mr. Camp also talked through the notion held by some Republicans that the Treasury Department could manage a debt ceiling breach by channeling the daily in-flow of tax dollars to the most pressing needs, paying government creditors, sending out Social Security checks and financing the military. His message was that it would not work, the aides said.

Then Mr. Ryan stood to talk over the options he had developed with the House conservative leaders. They could do a longer-term debt ceiling extension with specific demands, like converting Medicare into a voucherlike program. Or they could lower expectations, reorder the budget hurdles with a three-month punt, and add the “no budget, no pay” provision.

Persuading Republicans who adamantly oppose raising the debt ceiling took some time, and the ensuing discussion stretched on and on, breaking at noon for lunch on Thursday, resuming at 2:30, until 4 p.m., then concluding Friday.

Representative Kevin McCarthy of California, the House majority whip, met with freshmen early Friday to make sure they were on board. Mr. Boehner and Mr. Cantor joined Mr. Ryan for one last meeting with conservative leaders — Representatives Steve Scalise of Louisiana, Jim Jordan of Ohio, Jeb Hensarling of Texas and Tom Price of Georgia — to make sure they were on board. Then the top four leaders sealed the agreement midmorning.

I would call it more of a quick kick than a punt.  Quick kicks are not done anymore in the NFL. Dan Pastorini was the last guy I saw do a quick kick (maybe Danny White did one that I saw, but I don't remember). It's when the quarterback takes the snap from center, usually on third down, and punts it into the secondary. It catches the defense off guard and leads in theory to better field position than running a regular play on third down and then bringing out the punting team on fourth. The quick kick was a third-and-long play. Quick kicks aren't done anymore because passing attacks are much more sophisticated now and picking up long yardage on third down is a regular occurrence; also, passers used to be punters; punting was a skill set expected of your quarterback. No more.

House Republicans quick kicked wisely I believe. They're on more solid footing to extract their social welfare cuts when the sequester kicks in and then after that when the continuing resolution expires. The closer we got to February the greater the chance for another downgrade by one of the rating agencies; Fitch had said as much. When S&P dropped U.S. debt one notch from AAA to AA+ because of the last debt-ceiling standoff it cost taxpayers billions, not to say anything about loses in the markets. If the GOP Mad Mullahs in the House had pressed ahead with a default it would have been insanely destructive to global capitalism, which, as the Monthly Review argues, is largely concentrated in one country, the United States.