January 2nd, 2013

That was no cliff. It was a kids’ playground

There is almost no way for a non-American to understand the context and nature of the ongoing US budget wars. They seem to have no rhyme or reason, even to an American, but especially in comparison with the budget debates in the UK. In the upside-down world of American politics, the Democrat Barack Obama has proven to be the best friend of Republican George W. Bush, championing the permanent extension of Bush’s tax cuts. This is not a sign of bipartisanship, but of incoherence.

Unlike the UK process, there is no budget process in the US. Sure, we have a budget law (passed in 1921) that directs the President to submit an annual budget to Congress. And yes, that will be done in February. But it has nothing any more to do with what gets spent or taxed. Spending lurches from stop-gap to stop-gap, not based on a budget plan. Taxes are dealt with in a scrum, like the one over new year on Capitol Hill. There is, of course, no government in the US. We have a President and 535 members of Congress, nominally members of two parties (with a sprinkling of independents), but in fact 535 geographic fiefdoms each representing local interests and vested corporate interests: oil, coal, Wall Street, healthcare, Hollywood, information technology, arms manufacturers, you name it. The only way to gain coherence in this process is through strong and clear presidential leadership, but more often than not Mr Obama defers to Congress.

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