Republicans Stampede Toward The Cliff
Interesting findings from the NBC/WSJ poll. Asked about deficit reducing options, the options the public overwhelmingly favors are ones Democrats favor, and the options they overwhelmingly oppose are ones Republicans are promising to propose:
[The survey] listed 26 different ways to reduce the federal budget deficit. The most popular: placing a surtax on federal income taxes for those who make more than $1 million per year (81 percent said that was acceptable), eliminating spending on earmarks (78 percent), eliminating funding for weapons systems the Defense Department says aren’t necessary (76 percent) and eliminating tax credits for the oil and gas industries (74 percent).
The least popular: cutting funding for Medicaid, the federal government health-care program for the poor (32 percent said that was acceptable); cutting funding for Medicare, the federal government health-care program for seniors (23 percent); cutting funding for K-12 education (22 percent); and cutting funding for Social Security (22 percent).
But the public demands deficit reduction, right? Well, actually, they care more about jobs:
In the poll, eight in 10 respondents say they are concerned about the growing federal deficit and the national debt, but more than 60 percent — including key swing-voter groups — are concerned that major cuts from Congress could impact their lives and their families.
What’s more, while Americans find some budget cuts acceptable, they are adamantly opposed to cuts in Medicaid, Medicare, Social Security and K-12 education.
And although a combined 22 percent of poll-takers name the deficit/government spending as the top issue the federal government should address, 37 percent believe job creation/economic growth is the No. 1 issue.
Republican pollster Bill McInturff, who conducted the survey with Democratic pollster Peter D. Hart, says these results are a “cautionary sign” for a Republican Party pursuing deep budget cuts.
He points out that the Americans who are most concerned about spending cuts are core Republicans and Tea Party supporters, not independents and swing voters.
“It may be hard to understand why a person might jump off a cliff, unless you understand they’re being chased by a tiger,” he said. “That tiger is the Tea Party.”
By the standards of these things, those are extremely sharp comments from McInturff. Leaders are usually more worried about internal threats than external threats. Boehner needs to make sure he doesn’t get deposed as speaker before he worries about winning a showdown with Democrats.
The specifics of the fight — Republicans promising to cut overwhelmingly popular programs, being willing to shut down the government, and pushing a plan that private analysts predict will reduce jobs — put them in a very tough position. Republicans are working really hard to buck each other up and ignore data about public opinion. Democrats have the upper hand here. President Obama may decide to cut a deficit deal, but both the politics and the policy say he should hand the Republicans their head first.
By: Jonathan Chait, The New Republic, March 3, 2011
No Glory For Governors Trying To Do The Right Fiscal Thing
If you want to get national attention as a governor these days, don’t try to be innovative about solving the problems you were elected to deal with – in education, transportation and health care. No, if you want ink and television time, just cut and cut and cut some more.
Almost no one in the national media is noticing governors who say the reasonable thing: that state budget deficits, caused largely by drops in revenue in the economic downturn, can’t be solved by cuts or tax increases alone.
There is nothing courageous about an ideological governor hacking away at programs that partisans of his philosophy, including campaign contributors, want eliminated. That’s staying in your comfort zone.
The brave ones are governors such as Jerry Brown in California, Dan Malloy in Connecticut, Pat Quinn in Illinois, Mark Dayton in Minnesota and Neil Abercrombie in Hawaii. They are declaring that you have to cut programs, even when your own side likes them, and raise taxes, which nobody likes much at all. Rhode Island’s Lincoln Chafee has warned of possible tax increases too.
Indeed, to the extent that Quinn received any national press coverage, he got pilloried in conservative outlets in January when he signed tax hikes that included a temporary increase in Illinois’ individual income tax rate from 3 percent to 5 percent.
Despite all the commotion around whether the federal government will shut down, the clamor in the states may be even more important than what’s happening in Washington, which is missing in action on the moment’s most vital fiscal question.
What states are doing to ease their fiscal agonies will only slow down our fragile economic recovery, and may stop it altogether. The last thing we need right now are state and local governments draining jobs and money from the economy, yet that is what they are being forced to do.
As the last three monthly reports from the Bureau of Labor Statistics showed, an economy that created a net 317,000 private-sector jobs lost 70,000 state and local government jobs. Cutbacks are dead weight on the recovery.
In a more rational political climate, President Obama would have resurrected the lovely old Republican idea of federal revenue sharing. Washington should have continued replenishing state budgets for two more years, until we were certain the economic storms had passed. Instead, anything that might be called “stimulus” – “S” is now a scarlet letter in politics – was rejected out of hand.
The federal government could also help the states by picking up more of their Medicaid costs. In the long run, health-care spending should be a responsibility of the national government – as it is in almost every other wealthy democracy. A national commitment would end the specter of states forcing already financially beleaguered citizens off the health insurance rolls.
Such ideas are off the table because the current rage is not for figuring out how to make government work better – a cause that once united governors of both parties – but for cutting back even its most basic and popular functions.
Consider the new budget Gov. Scott Walker announced in Wisconsin on Tuesday. Among other things, he proposed cutting state aid to schools by $834 million over the next two years, a 7.9 percent reduction.
On top of that, Walker would make it harder for localities and school districts to make up for the shortfall by limiting their ability to raise property taxes. This isn’t about education reform. It’s about forcing larger class sizes, layoffs, reductions in extracurricular activities or cuts in teacher pay and benefits. But, hey, if it’s labeled “government,” let’s slash it.
What’s truly amazing, as Stateline.org reported recently, is the number of governors who are cutting taxes at the same time they are eviscerating programs. A particularly dramatic case is Florida’s Republican Gov. Rick Scott. He faces a $3.5 billion budget gap – and is pushing for $2 billion in corporate and property tax cuts.
Historically, times of fiscal stress forced states to make useful economies in programs that didn’t work or were not essential. But what’s happening in so many places now is a reckless rush to gut the parts of government that all but the most extreme libertarians support – and that truly deserve to be seen (one thinks of education and programs for poor children) as investments in the future.
And those governors doing the hard work trying to balance cutbacks and tax increases get ignored, because there’s nothing sexy about being responsible.
By: E. J Dionne, Op-Ed Columnist, The Washington Post, March 3, 2011
Mr. Obama’s Health Care Challenge-The Ball Is In Your Court GOP
President Obama had a splendid idea this week. He challenged governors who oppose his health care reforms, most of whom are Republicans, to come up with a better alternative. He has agreed to move up the date at which states can offer their own solutions and thus opt out of requirements that they oppose, like the mandate that everyone buy health insurance and that most employers provide it.
Let as many states as possible test innovative approaches to determine which works best.
The president told the nation’s governors on Monday that he supported a bipartisan bill — sponsored by Senators Ron Wyden, Democrat of Oregon, Scott Brown, Republican of Massachusetts, and Mary Landrieu, Democrat of Louisiana — that would allow states to fashion solutions right from the start of full-scale reform in 2014, rather than waiting until 2017, as the law requires.
The catch is that a state’s plan must cover as many people as the federal law does, provide insurance that is as comprehensive and affordable, and not increase the deficit. That won’t be easy for the governors to accomplish, and House Republicans seem unlikely to pass the bill to let them try. They would much rather repeal the reform law — or have it declared unconstitutional by the Supreme Court — than join Mr. Obama in improving it.
The decision to set the date at 2017 was based on a desire to get the reform elements up and coverage greatly expanded before allowing states to start changing the law. There also were concerns that the early start would be more costly. That’s because the states would be given money for alternatives equal to the cost of insuring their citizens under health care reform. Without three years of experience to get firm figures, those block grants would probably be set too high.
Neither rationale still seems compelling. It would be wasteful to require states to set up exchanges and other elements of the reform only to abandon them for an alternative system three years later. The pending bill would wisely allow states to submit proposals in the near future and, if approved, put them into effect in 2014.
Alternative approaches might include replacing the mandate to buy insurance with a system to automatically enroll people in health plans, reformulating tax credits for small businesses and low-income individuals to encourage near-universal coverage, adopting such liberal approaches as a single-payer plan or a public option, and even moving all or part of the enrollees in Medicaid into new health insurance exchanges. These would all have to be done without driving up the federal deficit or reducing benefits, affordability and coverage.
Reaction among Republican governors has been mixed. The vast majority are focused on their immediate need to reduce Medicaid spending to help close their budget gaps, not on fashioning alternatives for 2014. For the near-term budget problems, the administration is already advising states on ways to reduce Medicaid costs and the president asked the governors to form a bipartisan group to work on further cost-reduction.
The president’s new olive branch is not apt to change the legal arguments over whether the mandate in the reform law is constitutional. But it can’t hurt to bring forcefully to everyone’s attention that there are alternatives to the mandate if states want to pursue them. Republicans ought to rise to the challenge.
By: The New York Times-Editorial, Published March 1, 2011
Whatever Happened To Uncertainty?
With the House passing a two-week funding extension and Harry Reid promising the Senate will do likewise, it looks like we have at least until March 18th before any federal agencies have to shut their doors. But then there’s a shutdown risk. And there’s another one coming as early as April 15th, when the Treasury bumps into the the debt ceiling and needs Congress to lift it in order to avoid default. Federal budget policy over the next few months is going to be like a weekend with Charlie Sheen: A constant effort to avoid blackouts (yes, Wonkbook went there).
Prior to winning the election in November, the GOP spoke often about the pressing need to reduce “uncertainty” in the economy. This was a core principle of their plan to restore economic confidence and create jobs. As Rep. Paul Ryan put it to me in July, “uncertainty is a new economic buzzword, but for good reason: If we can reduce it, we’ll unlock capital.” If businesses and individuals could be confident about what government was doing, what taxes would look like, and what regulators would ask of them, they could start investing again.
So are they succeeding at their own promise of reducing uncertainty? It’s hard to see how. Budget experts on both sides of the aisle have sharply upgraded their estimate of how likely a government shutdown is in the next few months, either over the continuing resolution for 2011 or the debt limit or both. There’s an ongoing effort to starve health-care reform of implementation funds and a promise to “replace” it with some policy that hasn’t yet been written — no one in the health space would say that the shape of health-care policy over the coming years looks more certain now than it did six months ago. The GOP chose a tax deal that lowered all rates for two years rather than a tax deal that lowered most rates permanently, so there’s uncertainty over future tax rates. The tax and health-care policies would both do much more to increase the deficit than anything else on the list would do to reduce it, ensuring that concern continues to loom. So for what definition of “uncertainty” has the GOP succeeded in reducing its prevalence in the economy?
In each case, of course, the GOP has a good argument for the choice it’s made: Lower tax rates on large estates and income over $250,000 were judged more important than tax certainty or deficit reduction. The health-reform law is so unwise that repealing it should be a top priority. The prospect of a government shutdown and/or default provides leverage to extract spending cuts, which are more important right now than assuring the market that there won’t be some sort of shutdown or default. It’s all fair enough, at least on its own terms. But it’s meant that the post-election GOP takes the risk of uncertainty a lot less seriously than the pre-election GOP did. It’s a tension I’d like to hear more of them comment on.
By: Ezra Klein-The Washington Post, March 2, 2011
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