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Calmes: Republicans being the party of fiscal conservatism? Don’t believe it for a minute

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With a Democrat inhabiting the White House, perhaps the most predictable thing about House Republicans’ return to power is this: They’ve rediscovered their faux fiscal conservatism.

All week members of the Republican majority have been chest-beating about how, thanks to the new House rules they devised, they will restore rectitude to federal budgeting. Income will be balanced against spending and debt reduced, just as American families have to do at their kitchen tables.

Don’t take that promise to the bank. It’ll bounce. And not because Republicans are up against the supposedly profligate Democrats who control the White House and Senate. As we begin what’s sure to be a chaotic two years of Republican governance in the House, a little fiscal history is in order, no green eyeshades needed.

In short, Republicans forfeited the title “fiscal conservatives” so long ago, most Americans weren’t even born yet.

Opinion Columnist

Jackie Calmes

Jackie Calmes brings a critical eye to the national political scene. She has decades of experience covering the White House and Congress.

A fiscal conservative advocates for small government and low taxes but is open to higher taxes if necessary to erase deficits. That kind of thinking defined the Republican Party for most of the 20th century.

Starting with the Reagan era, however, the party flipped its orthodoxy on its head: Republicans became so anti-tax that each time their party took power, they willfully drove up deficits in the higher cause of slashing taxes for businesses and the rich. And each time, Republicans’ claims that the tax cuts would pay for themselves (economic growth!) were disproved by the record — Reagan’s, George W. Bush’s and Donald Trump’s.

Yet to hear House Republicans lately, you’d think Democrats and a few RINOs were responsible for the entire $31-trillion gross federal debt. Heck, we’re still paying on debt from Bush’s administration, when, for six of his eight years, Republicans also controlled Congress. Republicans’ red ink, which quickly washed away a budget surplus Bush had inherited, flowed largely from tax cuts, an unnecessary war in Iraq and a big, unfunded domestic program, Medicare Part D, to cover seniors’ prescription drugs.

Democrats for years had wanted to add a drug benefit for older Americans, but were stymied by the cost; in 1990, they’d agreed with the first President Bush (a fiscal conservative, mostly) that new tax cuts or spending on entitlement programs like Medicare would be paid for with separate spending cuts or tax increases. The second Bush and his Republican allies simply got rid of the rule, so they could cut taxes and enact Part D, deficits be damned. (As Vice President Dick Cheney famously said, deficits didn’t matter anymore.)

Democrats, in true fiscally conservative fashion, revived the “pay as you go” rule when they regained power in Congress. President Obama’s Affordable Care Act was mostly paid for with spending cuts and new taxes on businesses that stood to benefit from additional paying patients. When Trump was elected and Republicans took charge again, those taxes were repealed, adding some Obamacare debt to the nation’s tab and once again rendering Republican claims to fiscal rectitude hollow.

That move was responsible for just a fraction of the debt we’re now shouldering from Trump’s tenure. Lest the former president’s defenders rush to argue that he was blindsided by a costly pandemic, know this: Before COVID-19 struck, Trump and a Republican-controlled Congress had piled up nearly $5 trillion in debt, projected over a decade, from both higher spending and tax cuts. That’s according to the (truly) fiscally conservative Committee for a Responsible Federal Budget.

Trump left behind almost $8 trillion in total debt after four years, more than either the second Bush or Obama did in each man’s eight years as president, as the conservative Manhattan Institute found.

Did the purported deficit-hawk Republicans now running the House complain? Of course not. On that, like any other outrage of the Trump years, they were silent. And complicit.

But they’ve found their voices now that Joe Biden is president, although their tough talk goes only so far: Tax cuts don’t have to be paid for under the new Republican rules, which require that only of some new spending.

Three times during Trump’s term, Republicans quietly went along in raising the federal debt limit, so that the government could keep borrowing to cover costs that they, along with past presidents and Congresses, had run up on the nation’s credit card. No drama, no conditions. Yet even before House Republicans won power in the midterm elections, they were promising to hold the debt limit hostage unless Biden and Democrats would agree to huge spending cuts.

“We’re not just going to keep lifting your credit card limit, right?” then-minority leader and now Speaker Kevin McCarthy said in October.

“Your” credit card, says the man who’s been a member of Congress for 16 years, and in the House Republican leadership for 14. Over time, he voted for countless unfunded tax cuts and more spending than he’d admit to.

Raising the debt limit doesn’t add a cent to deficits and debt; it merely ensures that the government can pay existing bills. But refusing to raise it could be catastrophic, for the nation and for a global economy that relies on the United States for a stable dollar. When House Republicans seriously flirted with blocking a debt ceiling increase in 2011, under Obama, the threat rocked markets.

To play this game again would be the most fiscally irresponsible and least fiscally conservative thing that Republicans could do. But as history warns us, don’t put it past them. They’re fiscal fakers.

@jackiekcalmes

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Making travel plans? Southwest’s holiday meltdown may be a sign of air travel drama to come

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Thousands of canceled flights. Countless separated bags. Millions of angry passengers.

Southwest Airlines’ costly holiday meltdown highlighted how quickly airline operations can go off the rails, particularly when you add bad weather to the complex calculation of how to get crews on the right planes at the right time.

The Dallas-based airline has pledged to do better. Southwest’s chief executive said the company would invest more than $1 billion to upgrade its IT system, and on Thursday during the first quarterly investor call since the fiasco, company executives spent significant time pledging that the year-end failures would not be repeated. In all, the company canceled more than 16,700 flights, sharply more than other airlines, which recovered faster from the multi-state storms than Southwest did.

“We disrupted thousands and thousands of customers at a critical point in time,” Southwest Chief Executive Bob Jordan said during the call. “I can’t apologize enough for that. I own that, and we will do everything it takes to make sure we don’t have an event like that again.”

But as climate change continues to make once-extreme weather events more routine, and airlines pack more passengers onto planes to increase efficiency and lower prices, a single disruption can throw the whole air travel system into chaos.

“It’s a commodity where everyone can fly and most people do,” said Ernest Arvai, president and co-founder of AirInsight, an aviation news and consulting site. “But if something goes wrong, there’s not enough slack left in the system to accommodate everyone quickly.”

Southwest is paying dearly for the December disaster.

The company said Thursday that an $800-million financial hit from the episode caused a net loss of $220 million for the last three months of 2022. Some travelers have since been avoiding the airline, decisions that will cause another loss in the first quarter of this year, Jordan said. The company expects things will turn around by March.

“There are things we need to work on as we continue to grow this operation,” Jordan said during the call.

Though much maligned as a major factor in the carrier’s slow recovery from weather-related flight cancellations, Southwest’s unique point-to-point system is a way for the airline to set itself apart in a competitive marketplace.

Flying from one destination to another, rather than through the traditional hub-and-spoke network used by many large airlines, allows Southwest to offer nonstop flights to many locations throughout the United States that aren’t being served with direct flights by other major airlines, said Laurie Garrow, professor and aviation expert at Georgia Tech.

The lack of hubs also means Southwest can spread out its labor costs instead of needing large numbers of employees during peak times at locations where many planes arrive at the same time. If a location has less demand than expected, it’s easier to move planes than relocate an entire hub.

However, the hub-and-spoke network is more resilient because there are more pilots and crew members in a single location. If something happens with one flight, there are crew members and planes nearby to help with a faster recovery.

In Southwest’s case, the complexity of its point-to-point system crashed into the antiquity of its crew scheduling system, leaving the carrier struggling longer than other airlines to return to normal operations, Southwest’s pilots union and aviation experts said.

The Southwest Airlines Pilots Assn. said the processes used by the airline to connect crews with planes have eroded over the years, leaving pilots stranded in hotel rooms or being shuttled via other passenger flights to their destination even in the best of times.

“We are a very complex network,” said Captain Casey Murray, president of the Southwest pilots union. “It’s much more difficult not only to manage but recover.”

American Airlines posted better-than-expected fourth-quarter profit, while Southwest Airlines lost money because of massive flight cancellations last month.

While the airline’s point-to-point network is the “magic that has allowed Southwest to succeed” and grow, Murray said the company hasn’t invested in the infrastructure or processes to make it more resilient to major disruptions.

Southwest officials said Thursday that a fix to the crew scheduling software is being tested now and that better communication with crew is being discussed in ongoing union negotiations.

A Times’ analysis of the late-December performance of Southwest and American Airlines, the nation’s largest carrier, showed that before the storms on Dec. 18, Southwest had a lower cancellation rate (0.05%) than American (1.18%).

By Dec. 23, as ferocious and deadly winter storms hit a large part of the nation, Southwest’s cancellation rate hit 34.63% while American was at 30.91%. That was the highest cancellation rate for American — after that, the airline largely recovered.

But Southwest’s cancellations kept climbing to a high of 76.22% on Dec. 26, long after the major inclement weather had passed. Southwest continued to cancel over 50% of its flights until the rate suddenly dropped to 1% on Dec. 30.

During the meltdown, Southwest also was forced to fly more than 700 non-passenger flights to reposition crew and planes, adding to the episode’s financial hit.

“We can’t continue to be unreliable and not provide our customers with a sense of that reliability,” Murray said. “The future of Southwest Airlines is at stake.”

And that future may not be up to just Southwest.

Shortly after the December debacle, the U.S. Department of Transportation announced it was looking into the incident. In a statement to The Times on Wednesday, a department spokesperson said the agency is in the “initial phase of a rigorous and comprehensive investigation,” and that the department has made clear to the airline it will face consequences if it doesn’t make timely refunds and reimbursements to customers.

The Transportation Department is also looking into whether Southwest executives “engaged in unrealistic scheduling of flights” — meaning the carrier had scheduled more flights than it could possibly have handled under the circumstances — which is considered an unfair and deceptive practice under federal law, the spokesperson said.

On Thursday, Southwest officials said they will cooperate fully with the investigation and that the airline’s recent on-time performance and reliability show that the airline’s schedule is viable.

Southwest’s stated efforts to fix its problems with new software and systems is a good step, but it can’t happen instantaneously, said Arvai of AirInsight.

“All we need is one giant storm, and will we have a repeat of what happened a few weeks ago?” he said.

Many Southwest Airlines passengers are still waiting to be reimbursed for costs they incurred during last month’s meltdown.

In the future, Southwest may want to cancel more flights ahead of poor weather to prevent the domino effect that happened this time, said Garrow of Georgia Tech.

“There’s a big incentive for Southwest to get this right,” she said. “Making some of the long-term infrastructure investments will help, but I think the real test is if you’re able to get your operational performance back up to the level of your competitors.”

But the narrow margin for error across the airline industry means that Southwest will not be the last airline in the future to face extreme disruption. Fuller planes mean there are fewer open seats to accommodate those passengers.

“The problem is, when disruption happens, how big is the disruption and how quickly can the airline come back with minimal cancellations, minimal delays and get back to normal operations?” said Ahmed Abdelghany, associate dean for research and professor of operations management at Embry-Riddle Aeronautical University. “At this level, we don’t have a way to completely eliminate this problem from the system.”

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Trepp Analyzes Q3 2022 Bank CRE Loan Performance, Findings Show…

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Trepp released its Q3 2022 bank CRE loan performance report, built on the examination of trends in Trepp’s Anonymized Loan-Level Repository (T-ALLR) data set. Trepp’s report found that conditions…

(PRWeb December 21, 2022)

Read the full story at https://www.prweb.com/releases/trepp_analyzes_q3_2022_bank_cre_loan_performance_findings_show_conditions_are_stable_but_for_how_long/prweb19088326.htm

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Iceland Recalls Popular Food Due to Health Fears Plus Which Customers Are at Risk

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Iceland is the latest major supermarket to recall a food product from its shelves. Some customers have been advised to consume the product but to return it to stores.

Source: express.co.uk

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