5 Crises That Could Explode In The Next Few Weeks


Since September 11, 2001, America has either been recovering from a crisis or on the verge of another one.

When President Obama came into office, our financial system was still at risk of completely failing, we were in two wars and 1 out of 8 jobs were threatened by the collapse of the auto industry.

Five years later, corporations are seeing record profits, the war in Iraq is over, the war in Afghanistan is winding down and American automakers struggle to keep up with the demand for their vehicles.

Still, middle-class wages are stagnant, a new war may be brewing in Syria and the percentage of Americans participating in the labor market is lower than it has been since the ’70s.

In the next few weeks, the economic climate could get dramatically worse — or somewhat better. Congress will take a series of votes that will set the country’s course for the next few years. Meanwhile, the most dramatic transformation of our health care system in history will roll out in all 50 states.

Here are five crises that could either happen or be avoided — depending on the choices our government makes during the remainder of 2013.

Photo: RecycledStarDust via Flickr.com


Hands Off Syria
It’s an unprecedented situation. A nation weary of war. A civil war that’s been raging for years. A president who says he was elected to end wars, not start them.

The president said that the use of chemical weapons by the Syrian government would be a “red line,” a statement former vice-presidential nominee Paul Ryan agreed with during a debate last year. In the wake of a preponderance of evidence that chemical weapons had been used, the White House prepared a limited strike without the support of a United Nations deadlocked by Syria’s allies, China and Russia. But when the British Parliament voted against participating in any military campaign, President Obama decided to ask Congress for its support.

Current whip counts show bipartisan opposition to the attack, reflecting strong opposition from the public. In the next few days, administration officials will reveal more classified evidence to Congress and the president will make a speech to the American people. Eventually, both houses of Congress will vote.

If they say yes, the attack could achieve its stated goal of enforcing international norms, de-escalating the Syrian crisis and deterring other regimes from ever using such weapons. Or, it could spiral into a prolonged war that engulfs the region.

If they say no, the president has indicated that he’s not likely to attack. But if he does anyway, there’s no doubt that the animosity between House Republicans and the White House would lead to at least impeachment hearings — if the government is still open, that is.

AFP Photo/Ben Stansall

Funding The Government

John Boehner


Republicans used to accept that shutting down the government during the Clinton administration was a terrible idea. But that was before the Tea Party, before the GOP ran against cuts to Medicare then proposed much larger cuts to Medicare, before the Affordable Care Act was about to start handing out tax credits and completely subsidized health insurance to tens of millions of Americans.

Senators Ted Cruz (R-TX), Mike Lee (R-UT) and Marco Rubio (R-FL) are the leaders of a movement that asserts any vote to fund the government that includes funding for Obamacare is a vote for the president’s signature legislative achievement.

Speaker John Boehner (R-OH) obviously wants to fund the government. And the “Defund Obamacare” challenge isn’t his only problem. He’s trying to sell his caucus on accepting the “victory of the stimulus.” But Republicans haven’t been able to agree on appropriations that meet the cuts required.

Ironically, a shutdown wouldn’t stop Obamacare, as its spending is “mandatory,” according to the Congressional Research Office. But it would slow the economy, which is already growing too slowly.

Also, soldiers, including those who might be in Afghanistan or bombing Syria, wouldn’t get paid but Congress would. That’s exactly the kind of headline Boehner is trying to avoid.

“In this case you’re actually putting the gun to your own head,” Rep. Tom Cole (R-OK) told The New York Times‘ John Harwood. “You’re basically saying, do what I want or I’ll shoot.”

In order to avoid this kind of dumb unforced error, Republicans are selling their members on another option, which is why the next crisis is so scary.

AFP Photo/Jim Watson

Raising The Debt Limit


Republican leaders in Congress have been telling their members that the debt limit fight is the time to defund or at least delay Obamacare. At some point in October, the Treasury Department will run out of the authorization — not the actual funding, just the authorization — to pay our debts, unless Congress raises the limit.

In the summer of 2011, Republican threats to default on our debts were taken so seriously that markets crashed and America’s credit rating was downgraded. To get the Republicans to agree to pay the debts Congress had already approved, President Obama agreed to a debt deal that would require a “super committee” to cut $1.5 trillion or a set of automatic budget cuts, AKA the sequester, would go into effect. No deal was made, and the cuts went into effect.

The worst irony of this situation is that Republicans wanted cuts of at least $150 billion a year. The deficit for the fiscal year of 2013 is down more than $400 billion. And a fraction of that is from the sequester.

Not paying our debts would unfold disaster after disaster on the American people. If threatening a government shutdown is a gun to your own head, the debt limit is a cruise missile. Is the desire to kill Obamacare so great that Republicans would volunteer for a financial crisis? That’s what they want you to believe.

The president believed them in 2011 when his second term was at stake. The White House insists that he doesn’t believe them now.

Unfortunately, all we can do is wait to find out.


Obamacare Open Enrollment

Obamacare Protest


On October 1, tens of millions of uninsured Americans will be asked to sign up for health care coverage through state exchanges. Congress has allocated less money to do this than was spent to educate Medicare recipients about Medicare Part D. If the situation wasn’t bad enough, Republicans are doing everything they can to sabotage this process, including telling people to not enroll.

The Obama administration says it is focused on the goal of getting at least seven million into the state-based insurance exchanges. Of them, 2.7 million need to be 18-35-year-olds to make sure there are enough young, healthy people to keep the system viable. These goals are low and seem attainable. But along the way, expect Republicans to create, emphasize and amplify every possible complication in order to justify their constant insistence that the law is going to collapse on itself.

Photo: Fibonacci Blue via Flickr.com

The Fed


Expert analyst Barry Riholtz, the author of Bailout Nation, has looked at the roots of the financial crisis and found that former Chairman of the Federal Reserve Alan Greenspan’s refusal to regulate the financial system and insistence on ultra-low rates played a huge role in creating the financial crisis.

Greenspan’s successor Ben Bernanke failed to predict the crisis but actively tried to prevent a depression. Since the Republicans took over the House, the Fed chair continually urged Congress to stop cutting and focus on stimulus. They’ve done the complete opposite. So the Fed used the monetary powers they had to keep rates low and financial markets flowing. Even though the recovery is still sluggish, Bernanke has indicated that the Fed at some point in the near future will “taper” its monthly purchase of $85 billion in assets, which has already led to high interest rates.

The current chair is likely to leave his job early next year, and debate over who the president will pick to succeed him has erupted. The two frontrunners are reportedly former Clinton administration official and Obama advisor Larry Summers and current chairwoman of the Fed’s board of governors Janet Yellen, who would be the first female chair ever. A proxy war between the two candidates’ supporters has broken out, which has sparked the president to defend Summers.

Regardless of who the president chooses, the next chair will be the country’s only hope of economic stimulus, given the makeup of Congress. And given all the crises s/he could be inheriting, this choice could either go right — or horribly wrong.

Photo: Mike Licht via Flickr.com



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