The House Republicans are contemplating a new budget-hostage strategy, the Washington Post reports in a story that is both highly useful and inadvertently Onion-esque. The hallmark of Onion news reporting is conveying insanity as if it were sane in a completely deadpan way. The news contained within the story is that the House GOP is thinking of tying the next increase in the debt ceiling to tax reform. Under this proposed strategy, the Post reports, “The debt limit might be raised for only a few months, with the promise of another increase when tax reform legislation passes the Senate.”
If you didn’t fall out of your chair when reading that apparently anodyne sentence, let me explain why you should have. In 2011, House Republicans undertook a novel and radically new dangerous political tactic of using the debt limit as a political bargaining chip. Before, the opposition party had treated the debt limit increase as a necessary step, though one they would posture over and use to flay the administration. (Senator Barack Obama followed this pattern.) The Republicans instead decided to actually threaten not to raise the debt ceiling unless Obama granted them policy concessions. This was extraordinarily risky. By mixing together a vote that was needed to prevent economic calamity with inherently contentious debates over the size of government, it turned routine budget disputes into a financial Cuban Missile Crisis.
The official party rationale for this extraordinary tactic was that, risky though it may be to fail to lift the debt ceiling, failing to reduce the debt was even riskier. An extreme imminent crisis justified extreme tactics. The risk of becoming Greece outweighed the risk of a debt-limit snafu (though it was not, of course, high enough to justify even a partial repeal of the Bush tax cuts).
President Obama has taken these arguments at face value, offering to meet the opposition halfway, or more than halfway, in order to strike a deal. He has publicly offered significant cuts to spending on retirement programs. But some Republicans don’t want that deal, the Post reports, because “The proposals, included in the president’s budget request, outraged seniors, and some Republicans fear that embracing them would be political suicide.”
Oh! So you threaten to melt down the world economy unless Obama agrees to cut spending on retirement programs, and then he offers to do that, and then you decide it’s too unpopular?
The decision that they no longer care about the thing they were prepared to unleash worldwide economic havoc to achieve has not caused them to abandon the debt ceiling as a hostage. (It’s the party’s Nelson Muntz–ian approach to resolving policy disagreements: “Gotta nuke something.”) If obtaining retirement cuts went from so urgent it was worth threatening to nuke the world economy over to “meh,” the next step is to figure out the next thing to nuke the world economy over. That thing, the Post reports, is tax reform.
But what is the GOP position on tax reform? It’s that tax reform must cut tax rates and not raise any revenue at all. So House Republicans are prepared to refuse to raise the debt ceiling unless Democrats agree to let them cut tax rates without increasing revenue. Their extraordinary threat, first presented as a way to force a reduction in the deficit, is now being wielded to prevent a reduction in the deficit.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, April 29, 2013
If the White House’s political goal in calling for Social Security cuts in its budget was to reveal the GOP as the intransigent, uncompromising party in Washington, it’s having the desired effect.
The statements from Republican leaders today in response to the budget are noteworthy, though not surprising: They say we should proceed with Obama’s proposed entitlement cuts but not raise any new revenues by closing any millionaire loopholes. Oh, they don’t put it in those terms. But here’s John Boehner:
While the president has backtracked on some of his entitlement reforms that were in conversations that we had a year and a half ago, he does deserve some credit for some incremental entitlement reforms that he has outlined in his budget. But I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes. Listen, why don’t we do what we can agree to do? Why don’t we find the common ground that we do have and move on that?
And here’s Eric Cantor:
If the President believes, as we do, that programs like Medicare, Medicaid and Social Security are on the path to bankruptcy, and that we actually can do some things to put them back on the right course and save them to protect the beneficiaries of these programs, we ought to do so. And we ought to do so without holding them hostage for more tax hikes.
In other words, let’s only do the thing where there’s common ground (entitlement cuts) and not do the thing where there is disagreement (tax hikes).
Now in one sense, this can be seen to validate some of the left’s worst fears about what would happen if Obama offered entitlement cuts. Now that he’s formally proposed cutting Social Security benefits, Republicans can describe that proposal as the one area of agreement between the two parties. And it’s true Obama will probably take a political hit for the proposal.
At the same time, though, it’s worth noting that this doesn’t put Republicans in the greatest political position, either. The GOP position — revealed with fresh clarity today — is that we should only cut entitlements but not raise a penny in new revenues by getting rid of any loophole enjoyed by millionaires. GOP leaders try to compensate for this by robotically repeating the phrase “tax hikes” as a negative, but polls show that majorities already understand that Republican policies are skewed towards the rich. The use of the phrase “tax hikes” to obscure what Dems are really calling for — new revenues from the wealthy — didn’t fare too well in the 2012 elections.
And so, if the White House budget was partly intended as a trap, Republicans walked into it, revealing themselves as the only real obstacle to compromise. Indeed, as Steve Benen points out, Paul Ryan helped underscore the point when he struggled to name anything Republicans could support that their base wouldn’t like.
Now, maybe you don’t believe that there’s much political value in staking out the compromising high ground in this debate, because the Very Serious Deficit Scolds in Washington won’t ever award Obama any real credit for doing this. And maybe you believe that offering Chained CPI will do nothing more than make it easier for Republicans to attack Dems for cutting Social Security in 2014 and 2016.
All I can say to that is that the White House views things differently. Obama advisers believe Republicans could just as easily attack him this cycle for cutting Social Security based on his previous support for Chained CPI. They think the lesson of 2012 (remember the failed “he raided Medicare to pay for Obamacare” talking point?) is that Dems can fend off this attack with relative ease. And from what I have been told, they are looking beyond just getting the approval of the Very Serious People. They want to establish a Beltway narrative that GOP devotion to protecting the wealth of the rich is what’s preventing a deal to replace the sequester, in hopes that it will seep into local news coverage of the cuts around the country as the pain of those cuts sinks in, weakening Republicans further.
Chained CPI is awful policy, and I oppose it. On the raw politics of all this, however, only time will tell who is right.
By: Greg Sargent, The Plum Line, The Washington Post, April 10, 2013
On Twitter this morning I observed the irony that after an anemic jobs report the chattering classes would spend the rest of the day talking about whether the president’s budget (a summary of which was leaked today; the actual document is due to be released next Wednesday) offered enough spending cuts to be taken seriously.
The big news, if you want to call it that, is that the budget will formally propose what Obama has offered hypothetically as part of a “grand bargain” in exchange for significant new revenues: a shift to a “chained CPI” for Social Security COLAs (and other federal pensions and benefit programs, it seems), and some additional means-testing of Medicare benefits.
Whether or not chained CPI (which assumes consumers will switch to lower-price alternatives in purchases as overall prices rise) is a more accurate estimate of inflation, there’s no doubt utilizing it would operate as an across-the-board benefit cut–albeit one that occurs very slowly over time–something Obama and virtually all Democrats have opposed as a matter of principle in the past. There will be howls of outrage from Democratic members of Congress and progressive advocacy groups about this fresh Obama endorsement of the idea, some based on categorical rejection of Social Security benefit cuts, some based on the argument that Obama is offering a crown jewel and getting very little if anything in exchange from Republicans.
What may temper this reaction is the knowledge that this budget is entirely symbolic, and that it is certain to be rejected and denounced by House Republicans immediately for its inclusion of new revenues and its failure to project an actual balanced budget. It appears the White House is again trying to show a willingness to compromise for purposes of strengthening his hand in future fiscal battles, though some think it’s related to Obama’s effort to kick-start “grand bargain” negotiations with those Senate Republicans who are willing to consider some new revenues in exchange for “entitlement reform.”
For the record, there is actually some new spending in Obama’s budget: a pre-K initiative and this week’s “brain research” proposal, both paid for by a tobacco tax increase and a cap on the size of Individual Retirement Accounts. But there’s little in the way of “stimulus.” While the budget would cancel the appropriations sequester, it would in other ways achieve even lower defense and non-defense discretionary spending. Aside from the “offsets” just mentioned, new revenues in the budget–the usual reductions in “loopholes” theoretically supported by some Republicans–come in at $580 billion, a pretty low figure.
How you view this budget depends almost entirely on how you view Obama’s overall fiscal strategy. Is he maintaining the “high ground” on the budget, or making unilateral concessions to an opposition that is just going to pocket them without making any of their own? And is this budget connected to the forced fiscal negotiations that might occur in May or June if House Republicans decide to make a play on a new debt limit increase, despite warnings from the business community not to do so?
In any event, there’s zero that is self-executing about this budget, so it will mostly just represent another maneuver in a budgetary chess game that now seems increasingly disconnected from the economy.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, April 5, 2013
America’s social safety net, such as it is, has recently come under some scrutiny. Chana Joffe-Walt’s in-depth exploration of the increase in people getting Social Security Disability benefits at NPR got many listeners buzzing. Then in The Wall Street Journal, Damian Paletta and Caroline Porter looked at the increase in the use of food stamps, called SNAP. All three journalists look at the increasing dependence on these programs and come away puzzled: Why are so many people now getting disability and food stamp payments?
The answer is two-fold. Recent trends give us the first part of the explanation. Yes, as Paletta and Porter note, the economy is recovering and the unemployment rate is falling. But, as they recognize, the poverty rate is also rising. And therein lies the rub: people are getting jobs but staying poor. The available jobs are increasingly low-wage and don’t pay enough to live off of. And the big profits in the private sector haven’t led to an increase in wages.
GDP and employment may be doing well, but that hasn’t done much for those at the bottom of the totem pole. As the WSJ article points out, 48.5 million people were living in poverty in 2011, up from 37.3 million in 2007, a 30 percent increase. This is despite an unemployment rate that’s fallen off its peak. Some of the fall in the unemployment rate has been driven by people simply giving up on looking for a job altogether. But those who do get jobs are likely trading their once middle-class employment for low-wage work. The National Employment Law Project has found that mid-wage jobs have been wiped out during the recovery in favor of low-wage work: low paying jobs grew nearly three times as fast as mid-wage or high-wage work.
But there’s a deeper explanation that goes beyond the current economic picture. Aren’t there other programs for the increasing ranks of people living in poverty to turn to? Unfortunately, we’ve worked hard to weaken key parts of the safety net by changing how programs operate and then cutting back on their funds. Consequently, the number of people who are reached by programs for the poor has shrunk. But when you take away someone’s lifeline, they don’t stop needing it. So they either suffer hardship or find support elsewhere. What disability insurance and SNAP have in common is that they are fully funded by the federal government, which also can set the eligibility requirements. While states narrow eligibility requirements for TANF or unemployment insurance, the federal government can leave them (relatively) more open for SNAP and disability. That leaves them absorbing those who we’ve thrown off the rolls of other programs.
Unemployment benefits are where people turn when they lose a job and need income before getting back to work. But due to financial and other requirements, not everyone gets them. These rules vary state by state because states are in almost complete control of the program. They set their own eligibility criteria and benefit levels and are also on the hook for most of the funding for the benefits. As the Center on Budget and Policy Priorities reports, “the federal government pays only the administrative costs.”
Unlike the federal government, states have constrained budgets and most have to balance them every year. These budgets get even tighter in a downturn when people lose jobs and don’t pay as many taxes. On top of this, states have come under pressure from business groups during good times to reduce the contributions they use to fund the reserves that pay out benefits when things get tough. So many states have cut back on eligibility or benefit amounts in light of squeezed budgets. Given all of these constraints on benefits, only about a third of all children whose parents were unemployed at some point in 2011 actually saw any unemployment insurance benefits. They were far more likely to get food stamps, a federally funded program that has been much more flexible.
This story of a program financed by states that hasn’t been able to keep up with demand is the same for another huge part of the social safety net: welfare, or as we know it now, TANF. TANF does even worse than unemployment: it reaches just 10 percent of the children living with unemployment parents and just 30 percent of those living in poverty. The program used to do much better: in 1996, it reached 70 percent of poor families with children living in poverty. But then there was welfare reform, which turned it from a cost-sharing model to a block grant. Rather than the federal government sharing the costs with the states, the government now doles out lumps of cash and mostly lets states handle the rest. That lump doesn’t change even if the economy gets worse and more people live in poverty—and hasn’t even kept up with inflation.
While welfare reformers initially claimed victory as rolls fell during a booming 90s economy, the numbers have continued to fall even as jobs have disappeared. The poverty rate among families is back up to 1996 levels, but TANF’s caseload has fallen by 60 percent since then.
These families aren’t magically de-impoverished when they’re kicked off of government support programs. So they either go hungry or find other means of support. Enter SNAP and disability. SNAP has grown by 45 percent to meet increased need in the poor economy. The federal government was able to increase funding and waive some barriers to entering the program.
The CBPP reports that the growth in the use of disability insurance, on the other hand, is in large part due to demographic factors—an aging population and women’s increased entrance into the workforce—which accounts for half its growth since 1990. The elderly are far more likely to be disabled than younger workers, and more women workers means more workers who might become disabled. Other factors that contributed to its growth include the economic downturn. Joffe-Walt reports on how disability has dovetailed with welfare pruning its rolls. As she shows in two graphs, the number of low-income people on disability rose just as the number of families on welfare declined. Disability receipts also rise as unemployment rises. To qualify for disability, an applicant must have, as CBPP puts it, “little or no income and few assets”—which means that if unemployment and poverty rise, more people will fit this description. As Harold Pollack points out, “If you have a bad back, and the only jobs available are manual labor, that’s a real limitation. You’re unable to work. So it very much matters that we’re in a deep recession and a lot of the opportunities people faced are limited.”
Other than elderly disabled workers, those who sign up for disability are those who can’t even dream of finding a job that doesn’t require physical exertion and have no other income—thus leaving them with no where to turn but disability. After all, unemployment only lasts so long and TANF now comes with strict work requirements. Disability steps in when those with low education levels who live in communities based around industry—hard manual labor—lose their jobs and fall into poverty.
This is what happens when you burn enormous holes in the fabric of the social safety net: people either fall through or cling to the remaining parts. We can certainly debate whether we want food stamps and disability to carry so much of the burden of supporting the poor and vulnerable. In fact, this all seems to point to the simplest answer, which is to just hand money to those in poverty rather than funnel it through these different programs that may or may not actually meet people’s needs. But what we shouldn’t do is assume that food stamps and disability are bloated programs because so many people rely on them and then jump to cutting them back. Poor people don’t disappear just because we slash the programs they rely on. They still struggle to get by. That’s the lesson we should have learned over the past two decades.
By: Bryce Covert, The Nation, March 28, 2013
When it comes to power in Washington, John Boehner isn’t exactly a hapless schlub, at least not on paper. He’s the Speaker of the House, second in the presidential line of succession, and ostensibly the most powerful member of the legislative branch of government. He has a powerful megaphone, a sizable House majority, and the capacity to have an enormous impact on policymaking.
And yet, John Boehner believes leadership is something others should show. In his new Washington Post op-ed on the larger budget fight, the House Speaker is giving new meaning to the phrase “leading from behind.”
The problem, in large part, is that Democrats refuse to make the tough choices necessary to solve our long-term debt crisis…. [P]residential leadership is really what’s needed.
Needed for what? Well, according to Boehner, he’d like to see President Obama cut spending the way Republicans want, cut entitlements the way Republicans want, balance the budget the way Republicans want, and approve the Keystone XL pipeline the way Republicans want.
And if Obama disagrees, he’s not making “tough choices” and failing to show “leadership.”
Left unsaid: John Boehner, despite his power and authority, isn’t leading, doesn’t want to lead, has no intention of leading, and doesn’t even know how to lead — which is precisely why he keeps waiting for the White House and Senate to do the real work while Boehner waits patiently (or as evidenced by this op-ed, perhaps not so patiently) on the sidelines.
Let’s make this easy for the Speaker: (1) Name one budget issue on which you and your party are prepared to compromise; (2) Name one concession you and your party are willing to accept in exchange for a related Democratic concession.
If the answer to either of these is questions is a blank stare, then the Speaker of the House has no business calling himself a leader of anyone or anything.
By: Steve Benen, The Maddow Blog, March 14, 2013
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