Five Best Thursday Columns
Nancy Pelosi on jobs, Stephen Carter on balanced budgets, and Larry Harris on credit cards
.Nancy Pelosi on job creation America's top priority must be creating jobs, writes Democratic House minority leader Nancy Pelosi in USA Today. "This week, we've crossed the bridge from an obsession with the national debt and a real risk of default to a discussion of job creation," she writes. Democrats proposed a "Make it in America" initiative "to rebuild our roads, bridges, and rail lines; to invest in innovation, broadband, clean energy, and new technologies to create the jobs of tomorrow for our businesses and workers." Pelosi proposes an "infrastructure bank" to fund investments that will both create jobs in the short term and strengthen America's infrastructure in the long term. She says Congress must reiterate its demand that China stop manipulating its currency because it helps keep jobs out of America. When the bipartisan committee considers where else to reduce the deficit, Pelosi argues they must put job creation first and take an approach that increases revenue and cuts the budget. "During more than 200 days in the majority, House Republicans have put our economy at risk by threatening a first-ever default on our debt and refusing to propose legislation to create jobs," she asserts. But job creation will improve the economy and help reduce the deficit in the long-term.
Karl Rove on political winners and losers Neither party should claim victory in the debt ceiling debate, argues the former strategist for George W. Bush in The Wall Street Journal. Both parties lost credibility, but Democrats made the biggest mistake by failing to raise the debt ceiling when they held a majority in December. President Obama took the biggest hit of all by looking powerless and angering his own party. The Republican congressional leaders, conversely, looked better. Sen. McConnell put forward a plan that helped advance talks at a crucial moment and Rep. Boehner managed to control his party without brandishing earmarks or committee reassignments. Rove says the cuts achieved do not solve the federal budget crisis. To do that, substantive reform to federal entitlement programs must be passed, but this will not happen as long as a Democrat-controlled senate and White House oppose such strategies. "And so the GOP must take its case to the people in 2012 in the hope of earning a mandate," he says.
Fareed Zakaria on cutting defense spending If the congressional committee created by the debt ceiling compromise does not agree how best to reduce the deficit, automatic cuts will slash the defense budget by $600 to $700 billion over ten years. "[L]et the guillotine fall," writes Fareed Zakaria in The Washington Post. "It would be a much-needed adjustment to an out-of-control military-industrial complex." In the past decade, the defense budget has soared past historic highs from the Cold War. "U.S. defense spending has gone from about a third of total worldwide defense spending to 50 percent," Zakaria says. "In other words, we spend more on defense than the planet’s remaining countries put together." There is precedent for making major cuts to defense budgets in the aftermath of a major military conflict, Zakaria writes, and major cuts could be taken without damaging national security. "Serious conservatives," Zakaria says, would see that wasteful spending is more rampant in the military than in any other part of the federal budget. "As former defense secretary Robert Gates pointed out, there are more members of military marching bands than make up the entire U.S. foreign service... Top State Department officials seeking to negotiate vital matters arrive without aides and bedraggled after a 14-hour flight in coach. Their military counterparts whisk in on a fleet of planes, with dozens of aides and pots of money to dispense." America's foreign policy is thus more primed to see military solutions to foreign policy problems.
Stephen Carter on the balanced budget amendment Republican calls for a balanced budget amendment to the Constitution are "understandable," writes author and law professor Stephen Carter in Bloomberg. "Yet, while I remain skeptical of objections that the amendment would lead to fiscal disaster, I do think its opponents are right on the merits," he says. "The amendment is a poorly designed cure for a disease of complex causes." The most recently proposed bill requires "outlays" to match "receipts" during a fiscal year. But, Carter writes, government can manipulate the definition of a fiscal year, pushing back the date it starts. Congress could also "game" the definition of "receipts" and "outlays" by, for instance, setting up a separate non-profit--he calls it "Fannie Bae"--that would issue bonds that look similar to Treasuries and hand over the money it raises to the government. "Now, you might protest that the establishment of Fannie Bae would seem to vitiate the purpose of the amendment," he says. "But the federal government gets around constitutional provisions all the time. (Remember the congressional power to declare war?)" Lastly, he argues, the amendment seeks to "enshrine as fundamental law" of just one philosophy on macroeconomics, a field which has many theories, all of which can use data to support their claims. "That is why politicians and the economists whose work they rely on should approach the subject, as Harvard economist N. Gregory Mankiw has put it, with 'humility.'" By granting legal status to those who argue against Keynesian deficit spending, America would "pretend to know more than we can confidently say we do about how the economy works."