Will Rand Paul Filibuster Janet Yellen?

Will Paul filibuster Yellen?
Will Paul filibuster Yellen?

Sen. Rand Paul (R-Ky.) announced today that he plans to place a “hold” on Fed Chair nominee Janet Yellen. By doing so, Paul sets himself up to perform another filibuster as he did against the nomination of CIA head John Brennan last February. It’s not clear at all that Paul will filibuster Yellen if Harry Reid ignores his “hold” and proceeds with the nomination. Paul’s demanding a vote on his bill to audit the Fed, something that his father pushed for years.

A filibuster will be another negative mark against the Republican party as Americans believe more and more that the party is unable to govern. This will lead many in the party to push him to allow her nomination to go forward. If the establishment comes out strongly in favor of allowing her to proceed, Paul will have a tough decision to make.

One argument against a filibuster is that Janet Yellen would be the first ever women chairman of the Fed and filibustering her would look terrible. It’s conventional wisdom that the Republican Party has a gender problem. Women don’t like the GOP. If the party cannot find a way to reverse that description, it will have a hard time taking back the presidency in 2016. That means it will have to nominate a candidate who has a strong track record on gender issues, or at least not a bad one. By filibuster Yellen, Paul reduces his chances of being that person. Not just will Yellen be the first woman to head the Fed, she is unquestionably qualified, has a huge amount of experience and has a terrific track record. Paul does not doubt any of that, of course. He simply wants a vote on his bill. But that doesn’t matter. What matters is the optics of his actions and those optics aren’t good. He’ll be filibustering the most-qualified Fed Chair nominee in recent history, who also happens to be the first woman nominee.

Except that doesn’t matter. Few issues affect a general election. A filibuster against a Fed nominee three years earlier will almost certainly be meaningless. Nearly half the country doesn’t know who Yellen is. That number will certainly rise, but most people vastly underrate rate the importance of the Federal Reserve. They don’t care who runs the place.

On the other hand, a filibuster offers Paul a chance to keep pace in the race for Tea Party support. The Tea Party is having a collective orgy over Sen. Ted Cruz’s (R-Tx.) filibuster* and government shutdown. Paul smartly avoided that fight and thus hasn’t infuriated the establishment, but it did allow Cruz to seize control of the right wing. Paul needs to strike back and this offers him a rare opportunity where the issue before the Senate relates directly to a topic he’s passionate about. He’s doesn’t get many chances where he can draw national attention to audit the Fed. Like drone strikes, this is an issue where Paul is the leader. It’s perfectly timed for him to demonstrate to the Tea Party that he is equally as defiant as Cruz is and will fight tooth-and-nail against the Obama administration.

Cruz earned Tea Party support for his government shutdown antics, but lost the establishment. Rand Paul still has that support, but he has to compete with Cruz in the primary. If he can earn an equal support from the Tea Party as Cruz does, it will set him up to be the senate leader for the Republican nomination. But if the establishment becomes enraged at Paul for filibustering Yellen, it will put him in the same position as Cruz and be a boon for the Republican governors eying the presidency. Paul has a tough decision to make.

*I know it was technically not a filibuster. Whatever.

Austerity Is Killing Us

Graph of the day comes from Sam Ro at Business Insider:

deficit falling.
Now, compare that to real GDP growth over the past couple of years:

The economy has been stuck in neutral for years now. Meanwhile, the deficit is falling at its fastest rate since World War II. The stupidity in this is astounding. The government is holding back the economy in so many ways and yet the next month will be spent talking about a small bargain to bring down the deficit, all to avoid a second government shutdown within a few months. Unbelievable.

 

The Only Way Big Business Turns Against the Tea Party

The Washington Post had a terrific story yesterday that examines which companies funded the campaigns of Ted Cruz and other Republicans who supported shutting down the government and fueled the debt ceiling brinksmanship. It turns out that a lot of major banks and firms gave big to those candidates:

The American Bankers Association gave more money over the past two election cycles to GOP lawmakers who in effect voted to allow the United States to default on its debt than those who voted against that scenario.

The ABA contributed $2.2 million to lawmakers who ultimately ignored the group’s warnings

The story reveals that Ted Cruz and other lawmakers who voted against the final debt ceiling deal received substantial donations from financial services companies. Yet, big business was adamant that the debt ceiling had to be raised. The Chamber of Commerce urged lawmakers to vote yes on the final deal, even making it a “key vote.” A number of CEOs took to the media to warn of the consequences of breaching the debt ceiling. They had no interest in messing around with it. Now that the business community has seen the willingness of Tea Party congressmen to cause an international financial crisis, will they begin funding the campaigns of moderate Republicans or even Democrats? It’s unlikely.

Big business shouldn’t be surprised by the debt ceiling brinkmanship. Many candidates ran on a commitment not to raise the debt limit. No one was surprised that Cruz and Tea Party conservatives were willing to let us default. Why did the Chamber and other large companies support these candidates if they knew that they were willing to cause an international financial crisis? The answer is that there are many other issues that big business cares about. They want fewer regulations and lower taxes, both policies that Republicans favor. On organized labor, big business and the Republican party have never been far apart.

As Alex Pareene notes, where the Republican Party and business community actually differ is on tactics, not policy (except immigration). The Chamber wants Obamacare repealed just like the Tea Party does. They differ on how to accomplish that. That’s why big business is so supportive of the Republican Party, Tea Partier or not.

The Tea Party has also proven to be a terrific vehicle for the business community to advance its agenda. It provides grassroots organizing and a vocal base that forces lawmakers to stick to an ultra-conservative platform. Then, the lobbyists come in and use that anger to push for ideas popular amongst big business. Look at how the debt ceiling deal unfolded. The policy concession the Republicans were pushing for on Obamacare was the repeal of the medical device tax, a huge win for that industry. Remember when Congress was fighting over the sequester and its immediate harmful effects? The Tea Party jumped on the flight delays as an area where the Obama administration was intentionally inconveniencing travellers to draw attention to sequestration. Eventually, Congress approved a bill to give the Department of Transportation more flexibility with its funding to alleviate the delays. Who would benefit most from that relief? Business travellers jetting around the country each week. It all began with Tea Party anger.

In addition, the Tea Party has dragged the policy conversation to the right. Despite its harm to the economy, spending cuts have been a prime goal of the Tea Party and big business. The Chamber knows that if it the government doesn’t cut spending significantly, it will be forced to raise taxes on the rich. Even if the austerity hurts the economy in the short-term, it’s an acceptable cost in order to keep taxes low in the long-term. More than any other constituency, the Tea Party is responsible for the laser-like focus on deficit reduction. The members most committed to cutting spending are the ones who are most conservative.

This gives Republicans little reason to challenge or turn against the Tea Party. But this alliance is not unbreakable. If the Tea Party begins pursuing strategies that actively harm and set back the goals of big business, it could cause them to rethink their support of conservative candidates. The main way this happens is if the Tea Party’s tactics endanger the GOP’s majority in the House. The government shutdown and debt ceiling brinksmanship have sent approval of the Republican Party to historic lows. Yet, thanks to gerrymandering, Republican districts are mostly safe. It’s still highly unlikely that Democrats take back the House. But if that becomes more likely, big business could start pushing for more mainstream Republican candidates, especially in competitive districts where a Tea Partier faces a moderate challenger in the primary,

It’s tough to imagine a situation where the Tea Party’s tactics become so extreme so as to directly put the business community’s goals at risk. Is there anything the Tea Party could do that would result in higher taxes or increased regulation? The debt ceiling is the one area where the Tea Party could put the economy at risk, but Boehner was never going to allow us to default. It wasn’t going to happen and big business knew it. They weren’t scared of Cruz and Co.’s tactics, because they always knew that Boehner was bluffing. Indeed, the only risk the business community sees in the Tea Party is that its radical stances could alienate so much of the electorate that Democrats take back the House and enact a string of liberal policies. Until that becomes a real possibility though, don’t expect big business to break off from the Tea Party. It’s way too valuable a partnership for them.