Eleven months ago, the wealthy Koch Brothers started orchestrating the current government shutdown; now they understand that they have unleashed a monster because many of the most vocal Tea Party members in Congress are ignorant. And stupid.
Last Saturday, the New York Times divulged the background for the plot to create the current developing disaster for the United States:
“Shortly after President Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in the capital to plot strategy. Their push to repeal Mr. Obama’s health care law was going nowhere, and they desperately needed a new plan.
“Out of that session, held one morning in a location the members insist on keeping secret, came a little-noticed ‘blueprint to defunding Obamacare,’ signed by Mr. Meese and leaders of more than three dozen conservative groups. It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles: that Republicans could derail the health care overhaul if conservative lawmakers were willing to push fellow Republicans — including their cautious leaders — into cutting off financing for the entire federal government. …
“To many Americans, the shutdown came out of nowhere. But interviews with a wide array of conservatives show that the confrontation that precipitated the crisis was the outgrowth of a long-running effort to undo the law, the Affordable Care Act, since its passage in 2010—waged by a galaxy of conservative groups with more money, organized tactics and interconnections than is commonly known. …
“A defunding ‘tool kit’ created in early September included talking points for the question, ‘What happens when you shut down the government and you are blamed for it?’ The suggested answer was the one House Republicans give today: ‘We are simply calling to fund the entire government except for the Affordable Care Act/Obamacare.’
“Groups like Tea Party Patriots, Americans for Prosperity and FreedomWorks are all immersed in the fight, as is Club for Growth, a business-backed nonprofit organization. Some, like Generation Opportunity and Young Americans for Liberty, both aimed at young adults, are upstarts. Heritage Action is new, too, founded in 2010 to advance the policy prescriptions of its sister group, the Heritage Foundation.
“The billionaire Koch brothers, Charles and David, have been deeply involved with financing the overall effort. A group linked to the Kochs, Freedom Partners Chamber of Commerce, disbursed more than $200 million last year to nonprofit organizations involved in the fight. Included was $5 million to Generation Opportunity, which created a buzz last month with an Internet advertisement showing a menacing Uncle Sam figure popping up between a woman’s legs during a gynecological exam.”
The day after the NYT revealed the right-wing plans to shut down the government, House Majority Leader John Boehner (R-OH) admitted that in July he had cut a deal with Democrats: if the Senate would accept his budget demands, the House would pass a clean Continuing Resolution to keep the government functioning. Then Boehner double-crossed the Democrats.
Up until now the right-wing and their funder, the Koch Brothers, have held the position that they need to get rid of democracy because it allows views that they don’t want, such as raising taxes on the wealthy to help other people in the country. The Koch Brothers have also supported the right-wing neo-Confederate ideology that states have the right to ignore federal mandates, especially those that help racial minorities and the poor.
“States’ rights” gained its popularity to first defend slavery and then maintain racial segregation after the Civil War.It continued in the second half of the 20th century with Richard Nixon and Ronald Reagan getting Southern Democrats to turn Republican by fueling their white resentment against integration.
In the 21st century, voters are beginning to understand that survival of the middle class depends on investment in infrastructure, research, education, health care, and other domestic programs, using revenue from increased taxes on the rich. They also recognize that slowing and eventual reversal of global warming depends on reduction of carbon dioxide and other emissions while changing the U.S. energy system.
The Koch Brothers and other right-wing billionaires retaliated by paying millions to extremist far-right organizations, getting them to create strict voter ID laws and gerrymander congressional districts to keep control of state legislators and the U.S. House of Representatives. Throughout the nation, the right-wing follows William F. Buckley’s position from 1957: “The white community in the South is entitled to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically.”
The Koch Brothers saw the problem with their strategy because many of the GOP House members think that not raising the debt ceiling will not cause problems. Rep. Ted Yoho (R-FL) led the debt ceiling denier caucus when he claimed that reaching the debt limit will help the economy: “I think, personally, it would bring stability to the world markets.”
Other GOP Congressional members asserted that the government could pick and choose what bills to pay, like they do in their personal lives. Sen. Tom Coburn (R-OK) said, “I would dispel the rumor that is going around that you hear on every newscast, that if we don’t raise the debt ceiling, we will default on our debt. We won’t. We’ll continue to pay our interest.”
If investors start pulling cash out of money market funds, which hold large amounts of short-term government debt, credit markets will freeze up, as in the 2009 collapse of Lehman Brothers, resulting in the worst financial crisis since the Great Depression. Rep. Richard Burr (R-NC) claimed that “the only people buying our bonds right now is the Federal Reserve.” He ignored the nearly $6 trillion, almost half the public outstanding debt, that is owned by foreign governments, including $2.4 trillion by China and Japan alone. Both of those nations this week warned the United States against doing anything that would put these massive investments at risk.
At least two large banks have already stocked ATM machines with extra money out of concern for a run on the money. The price of insurance contracts on Treasury bonds, known as credit default swaps, more than doubled in the last two weeks. If nothing is done, the swaps will drastically increase, interest rates will send shockwaves through markets, and disaster will ensue except for those who invest in credit derivatives.
People who don’t get Social Security, Medicare, and other benefits may decide to revolt against government. The GOP needs to remember that one-third of the people in this country have over 300 million guns, thanks to the GOP laissez-faire attitude toward gun control and its promotion of a violent culture.
“A Federal debt default would rank as one of the more unprecedented economic and financial events in the country’s history,” Michael Cembalest, global head of investment strategy at J.P. Morgan Asset Management wrote in a note to clients. Debt limit denier Sen. Rand Paul (R-KY) showed his ignorance in this statement: “They are trying to overstate their case to get their way. I think if the president were a true leader, he would take default off the table and he would say, ‘We’re not going to default.’”
In an attempt to pretend that they had nothing to do with the government shutdown, a top official from Koch Industries sent a letter today to senators stating that they have not “lobbied on legislative provisions defunding Obamacare.” Privately, Koch officials have expressed concern to lawmakers that the prospect of a government default over the Obamacare issue would be a “disaster” for the economy. Last month, Koch Industries paid $7.2 billion for a company that makes connectors for Apple iPhones and other consumer products–one of many markets that could be effected by spikes in credit resulting from a government default.
“We believe that Congress should–at a minimum–keep to sequester-level spending guidelines, and develop a plan for more significant and widespread spending reductions in the future,” the letter claimed.
The Koch Brothers’ influence is obvious. Soon after the letter was sent, Heritage Action CEO Michael Needham told reporters he wants to defund “Obamacare,” but he doesn’t want this to be tied to the debt ceiling because “failure to raise the debt ceiling would indeed disrupt the global economy.” Immediately after that, FreedomWorks CEO Matt Kibbe said that he, too, believes Congress needs to raise the debt ceiling.
The Democratic Party’s favorability rate has gone down slightly to 43 percent, but the GOP rating is now 28 percent, the lowest at any time since Gallup started measuring party favorability. Rep. Alan Grayson (D-FL) tried to get a vote on a clean CR by using the declining popularity of Congress under Rule IX. “The government shutdown is a mark upon the dignity of the House, and the House should be willing to pass a clean continuing resolution to end it,” he said. To make his point, he explained that Congressional popularity was lower than witches, hemorrhoids, and dog poop. Speaker pro tempore Steve Womack (R-AR) cut off Grayson at dog poop.
In separate op-ed pieces today, Reps. Eric Cantor (R-VA) and Paul Ryan (R-WI) show the direction in which the GOP House may be heading. They will likely veer away from Obamacare toward “reform” of Social Security and Medicare (aka raising the age and reducing the benefits). The GOP House leadership is caught between pressures from the “take no prisoners” position of the Tea Party and the growing fear of the Koch Brothers. At the same time, President Obama may have learned his lesson from the past two negotiations when he rewarded the bad behavior of the GOP who continued to starve the U.S. economy.
Meanwhile Congressional members are still being paid. And fortunately for them, the House members’ gym stays open, providing the hostage-takers with swimming pool, basketball courts, paddleball courts, a sauna, a steam room, and flat screen TVs. Sadly, towel service is unavailable, but taxpayers are paying for daily cleaning and maintenance as well as heating the pools and keeping the lights on.