During the Schwab Impact conference in Washington, three members of the political class addressed federal government dysfunction, all lamenting that they had never seen such blatant partisanship. Only one presented a practical way to end that dysfunction: former Sen. Olympia Snowe, R-Maine.
Greg Valliere of the Potomac Research Group, a popular speaker at what seems to be every Schwab national conference, and former Defense secretary, CIA director and congressman Leon Panetta bemoaned the current state of affairs in Washington, where Impact is running through mid-Wednesday. On Sunday evening, Valliere said that throughout his long career reading the political tea leaves in DC, he had never seen such dysfunction and partisanship between leaders and rank-and-file of the Democrats and Republicans, though the GOP was also facing its own "civil war" between Tea Partiers and the Republican "establishment." He predicted that government deadlock would, ironically, be a good thing for the markets and economy, partly because there would be no new spending in Washington.
In his heartfelt speech and follow-up Q&A session with Schwab's Neesha Hathi, Panetta also railed against the political tone in the capital. "In my 50 years of public service, I've never seen so much government dysfunction." He recalled being a young member of Congress during the Reagan administration's budget talks, when the leadership of both parties demanded that a budget deal be done.
"They told us to get a deal," he said, "and that everything was on the table." Speaking of Congress and the necessity for compromise, Panetta said "these guys have to learn that good governing can be good politics."
Reflecting his last government responsibilities as secretary of Defense, Panetta responded to a question on the effects of sequestration by warning that "sequestration is hollowing out our military," and that large portions of the military are not training nor deploying important assets because of sequester. "That shows you how crazy Washington has become," he said: "they put a gun to their own heads" in setting up sequestration cuts that would be so "crazy" that a compromise would have to be reached. But Congress was not able to forestall that bit of craziness.
