An important part of being a politician is to keep your name before the public in the press. House Majority Leader Eric Cantor (R-VA) did a lot of that recently in the debt ceiling hostage-taking by the Tea Party wing of the GOP as its articulate spokesperson and rising star. While congress is on vacation, to keep his name in the press, Cantor signed off on an opinion piece in The Washington Post, “Removing the obstacles to economic growth.” He says there are two: “The first is the federal government’s debt crisis” and “The second is the jobs crisis.” He should know, since his majority is responsible for creating the first one and for doing nothing about the second one. Cantor blames President Obama for each.
The so-called debt crisis is a product of the previous Republican administration that decided to wage two wars and to finance them with deficit increases instead of tax increases. “In fact, you need a war to really get a big deficit,” says Christopher Chantrill on usgovernmentspending.com. “The peak deficits came during World War I (16 percent of GDP in 1919) and World War II (24 percent in 1945).” Moreover, “The deficits of the Great Depression only came to about five percent of GDP, and the big $1.4 trillion deficit for FY 2009 amounted to 13 percent of GDP.”
The real problem with extreme government debt would be the interest burden it would create. If interest payments reached 12 percent of GDP, that could cause a government default. The US is far from reaching that point. However, it was using the debt ceiling to extort political concessions that made a routine financial process look like the crisis it became. Cantor kept his name in the press then by walking out of negotiations with Vice President Biden.
In his Washington Post opinion, Cantor writes, “Republicans passed a budget this spring, written by Rep. Paul Ryan, that would address our challenges head-on by putting in place common-sense reforms to manage our debt over the short and long term.”
That is not what the nonpartisan Congressional Budget Office’s analysis says. The CBO found “that by the end of the 10-year budget window, public debt will actually be higher than it would be if the GOP just did nothing.” In addition to requiring additional raises in the debt ceiling, the CBO also acknowledged, “that seniors, disabled and elderly people would be hit with much higher out-of-pocket health care costs.”
Who needs facts when rhetoric will do?
“President Obama is wrong to think that the answer is to increase spending or raise taxes when so many millions of Americans are out of work.” Cantor’s interpretation of what the president thinks is not what the president says. In a televised address on July 25, 2011, President Obama petitioned for a “balanced” approach that includes spending cuts as well as revenue increases from tax increases for wealthier Americans. In that speech Obama also debunked the Cantor/GOP rhetoric about the debt ceiling allowing the congress to spend more money.
As to jobs, Congress has offered only one piece of legislation that has the word “jobs” in its title, but that is all. It is HR 1745, the ‘‘JOBS Act of 2011.” Cantor does not mention it in his op-ed piece, probably because it does not have anything to do with jobs. What it does is to allow states the option of using federal unemployment benefit dollars to repay federal loans to help balance their budgets or provide tax breaks to businesses.
According to Cantor, however, “the Obama administration’s anti-business, hyper-regulatory, pro-tax agenda has fueled economic uncertainty and sent the message from the administration that ‘we want to make it harder to create jobs.’” HR 1745 takes money away from the long-term unemployed. Where is the job creation in that?
While Representative Cantor keeps his name before the public, with such rhetorically inflamed publicity as his Washington Post piece, he deserves consideration as one of Congress’s rising stars.
The Treasury Department used $267 million of taxpayer funds to buy preferred stock in a private banking company that employed his wife, Diana Cantor. As part of a Treasury Department program to boost “healthy banks” with extra capital, New York Private Bank and Trust (NYPBT) received its bailout money in January 2009. NYPBT is the holding company for Emigrant Bank, a savings bank with 35 branches in and around New York City. She ran the Virginia branch of the wealth management division of Virginia Private Bank & Trust, a subsidiary.
To be fair, Cantor’s deputy chief of staff, Rob Collins, said the congressman didn’t know the bank was seeking bailout money and never interceded on the bank’s behalf with government regulators. Additionally, a spokesman for the bank said Diana Cantor had nothing to do with the operation of NYPBT and was “never aware that the parent bank was seeking or received [bailout] funding.”
Last year The Wall Street Journal reported, “Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds—and perhaps on inflation in the future.”
The Huffington Post picked up the story when it obtained information saying that Cantor “stands to profit from U.S. treasury default, which thereby raises the appearance of a conflict of interest,” and that he “may be sabotaging [debt ceiling] negotiations for his own personal gain.”
Again, to be fair, Cantor spokesman Brad Dayspring said, “The insinuation is so outrageous that it shows a fundamental lack of understanding about how the markets work, how the U.S. economy works.” Dayspring added, “Any member of Congress who would seriously identify themselves with this would reveal a complete inability to understand the United States economy and basic investing.” Maybe, but such ignorance does not stop people from acting, especially for personal gain.
Rhetoric and deniability are common in politics and in court. The Department of Justice is investigating the US credit downgrades by rating agencies Standard & Poor’s and Moody’s. The downgrade is a direct outcome of the debt ceiling crisis which congressional Tea Party members and House Majority Leader Cantor championed. The credit downgrade also spooked the markets. Cantor’s piece may keep him in the public eye, but it obfuscates the fact that the crisis and the downgrade cannot be laid at the president’s feet. They can be laid at Mr. Cantor’s.Powered by Sidelines