Living for Today Means Going Nuclear

We live and learn. Last week, I learned that it is a mistake to believe that moderation and reason, informed by 225 years of American history, can prevail in today’s Congress.

Less than six months ago, I expected that talk of a “nuclear option” in the U.S. Senate – a vote to strip the minority party of most of its power to filibuster legislation and appointments – would ultimately amount to no more than saber-rattling. I was wrong. With their vote to change Senate rules and allow presidential appointments (except for the Supreme Court) to proceed on a simple majority vote, Democrats who control the chamber overrode one of the last remaining checks on their power to ram unpopular or ill-considered decisions down the national gullet.

It has been called the nuclear option, and it probably blew up the last shreds of institutional respect and bipartisan cooperation remaining in Washington.

Backers of the Senate action contend that Majority Leader Harry Reid and his fellow Democrats had no choice. They charged that repeated Republican filibusters on some administration appointments and judicial nominations amounted to simple obstructionism. Or, as Oregon’s Sen. Jeff Merkley put it, “The filibuster has been used to wage continuous warfare on the presidency.”

Elsewhere in the Capitol, just a short while after the Senate voted 52-48 to change the filibuster rule (with three Democratic senators joining every Republican in dissent), a cease-fire must have taken hold. The Senate Banking Committee approved President Obama’s nomination of Janet Yellen to head the Federal Reserve, with three Republicans joining all but one of the committee’s Democrats in the 14-8 vote. There was no serious filibuster threat even under the old rules, and Yellen’s confirmation was all but assured despite widespread Republican disagreement with her super-soft monetary policy.

This goes to show that despite Democrats’ claims of indiscriminate Republican obstruction, the GOP actually has been choosing when and where to draw the line. Mostly, that line has been drawn in predictable places – against executive branch nominees to rulemaking positions whose views on labor matters, financial regulation and other forms of government oversight were too expansive for Republicans too swallow, and against prospective district and appellate court judges whose sympathies are believed to be more liberal than Republicans are prepared to accept.

Does a president have a right to nominate anyone he wants? Certainly. Is every nominee entitled to an up-or-down vote on the Senate floor, as Democrats argued yesterday? I don’t see why. The marketers who call my office every day (and get put into voice mail by my assistants) would probably argue that they are entitled to make their case and get an up-or-down decision about whether I want to buy what they are selling. But I reserve the right to allocate my own time and attention, just as the Senate reserves the right to decide which presidential appointments get a vote.

Now, however, the Senate’s decision to exercise that right will be determined by a bare majority. It is more democratic this way, but it’s not particularly wise.

The value in the Senate’s filibuster rule is that, by giving a substantial minority the ability to block many actions, it forces two sides to listen to one another – or at least to take into consideration the other side’s reaction to a particular proposal. The former 60-vote requirement to advance legislation or appointments did not give undue power to small coalitions on the political fringe. It only gave power to positions that had something approaching parity in their Senate representation.

Democrats, however, seem to have convinced themselves that all Republicans are on the political fringe, and thus worthy of being disregarded. Back in the pre-2011 days when Democrats controlled the House of Representatives as well as the Senate, this philosophy helped bring about a number of party-line policies, most spectacularly in the Affordable Care Act – enacted after Democrats lost their 60-vote Senate bloc only because of a special provision that stripped the GOP of its blocking powers.

I see four results of last week’s Senate action in the future.

First, during the next year, there will be a rush by the Obama administration to fill executive and judicial appointments with candidates who will never clear the Senate if the GOP manages to gain control via the 2014 elections.

Second, in the event the Republicans end up in control of both houses of Congress, just about the only thing Obama will do during his final two years in office will be to veto GOP legislation, which will be artfully crafted to make those vetoes hurt the Democrat’s contender in the 2016 election. And if Democrats keep the Senate while the GOP holds the House, virtually no legislation is going to make it through Congress for the next several years. Immigration, tax reform, fixes to Obamacare – all are now dead on arrival, as the House will refuse to address Senate legislation.

Third, though the Senate has for now left intact the filibuster power for Supreme Court nominees and for legislation, those are dead rules walking. As soon as Republicans control the Senate and the White House, Senate Democrats might as well stay home and watch their chamber on C-SPAN.

Finally, with moderates essentially drummed out of Congress, the last hope for our country’s political center now lies in the two parties themselves. The GOP has to become a party that accommodates social liberals and fiscal conservatives, and the Democrats need to find a place for those same individuals, as well as for the few social conservatives who share the party’s expansive view of government’s role in society. Until these things happen, we will see frequent and sharp policy vacillations as first one party and then the other implements its agenda unchecked.

Democrats succumbed to their worst live-for-today instincts when they pulled that nuclear trigger. They may live for today and live to regret it.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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