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“A Gigantic House Of Cards”: Mitt Romney Gets Away With It, For Now

So other than the fading echoes of Republican celebration and Democratic angst from last night’s presidential debate, and the wait we will now have to endure to see if it made any tangible difference in the contest, what should we actually carry away from the event?

I’ve already confessed myself a non-expert on the “visuals,” and on the “energy level” of the candidates, because I honestly don’t give a damn about any of that. What Mitt Romney needed to do last night, however, was relatively clear: reintroduce himself to swing voters as someone other than a distant plutocrat, and fill in the gaping holes (of omission and commission) in his policy agenda. With quite a bit of help from Barack Obama, he achieved both of those goals, at least temporarily, and in that respect he “won.”

But it came at a price. Jonathan Bernstein summed it up nicely last night at WaPo:

Romney’s policy positions are even more of a shambles now than they were previously. Romney’s position, over and over again, is to simply bluff it on policy. His tax plan continues to be the most obvious one, but it really happens across the board. Romney insisted tonight more than once that his tax plan will keep taxes the same for the wealthy, cut them for everyone else, and not add to the deficit. Forget about the Tax Policy Center; just that much is obviously incoherent and impossible. And, more to the point, it’s clear he’s going to keep on insisting that it adds up, no matter how clearly it doesn’t. But it’s not just that; on every policy, he’s just going to insist that the consequences of his plans that anyone might not like simply don’t exist, so that he’s for sweeping spending cuts but insists that no particular program that anyone brings up might lose any funding, or that he’s for repealing Obamacare but those with pre-existing conditions will magically be protected.

In other words, Mitt Romney lied a lot, and his lies extended beyond his own policies to those of the president (particularly in health care and “green jobs”). His self-representation, moreover, as a deeply caring moderate who shares the president’s goals but is far more eager to reach across the aisle, must have caused some bitter laughter behind the scenes in conservative circles. But because the president, presumably quite deliberately, chose not to depict Romney as a liar and a phony, Mitt largely got away with it, at least for the moment.

Jon Chait believes that Romney has finally pulled off his “etch-a-sketch” moment, reinventing himself as the moderate Republican he once seemed to be in Massachusetts, at a moment when conservatives were too terrified of defeat to object, as they certainly would have earlier in the year if he had hedged on his tax cut plan, let his heart bleed all over the stage for the unemployed and suffering, and begged for a chance to work with Democrats.

But atmospherics aside, what did Mitt actually change last night? He’s long claimed his tax plan wouldn’t increase the deficit, and wouldn’t reduce the relative tax burden on high earners. Last night he said he wouldn’t pursue it if his plan violated either of those principles. But since he’s denied repeatedly there’s any risk of that, why should anybody believe he’d somehow sacrifice the crown jewel of Republican policy–tax cuts for the wealthy–when he’s in office, surrounded by Republicans clamoring for it? But you’d best believe a lot of assurances were going out last night from Team Mitt to conservative opinion leaders denying anything had changed other than how Romney chose to frame and defend his tax plan.

Had Obama more effectively counterpunched last night (or had Jim Lehrer not provided the most passive moderation of a debate in memory), Mitt might not have been able to pull off this feat of prestidigitation. After all, when you think about it, Romney is now saying the high-end tax cuts that Republicans want more than life itself just won’t happen unless he can come up with revenue offsets that don’t change the tax burden, and also get through spending reductions that he’s consistently refused to identify (yea, promised to oppose when it came to most popular spending categories). It’s all a gigantic house of cards. And even if you buy the ludicrous assumption that Romney was sincere in his desire not to upset anyone with his policies, his party won’t for a moment let him actually “move to the center.” Hell, they spent the entire primary season roping him in, and even if they let him posture and maneuver a bit right now, the rope’s still around his neck and their brand is on his posterior.

Obama continually talked around the central problem, attacking the vagueness of Romney’s policies and near the end, finally just coming right out and saying Mitt’s hiding something. But he could not bring himself to say out loud that Mitt’s a serial dissembler who owes his political soul to extremist ideologues and depends strictly on a hidden-hand presentation of his record and agenda. I guess it wouldn’t have been “presidential.”


By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 4, 2012

October 5, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Let Me Count The Ways”: Would A Republican Candidate Lie About Taxes?

The United States faces a gigantic economic choice next year, and last night’s debate centered largely around what Mitt Romney would do about it. Romney’s plan is to lock the Bush tax cuts into place, reduce the long-term deficit entirely through spending cuts, enact an additional 20 percent tax rate cut that would disproportionately benefit the rich and cover the cost through unspecified closings of tax deductions. But Romney labored tirelessly, and with evident success, to portray himself in a far more egalitarian light. Every time President Obama described the cost of his tax rate cost, Romney dismissed it as untrue, pledged that his plan would not reduce the current tax burden on the rich, and even implied that he would make the rich pay higher taxes by closing their loopholes.

It was a virtuoso performance. But what does it tell us about how Romney would govern if elected? Here he was making promises about how he would govern that flatly contrasted with his plans. Which promises should we believe? Ross Douthat argues that Romney’s soothing moderate rhetoric shows that he is likely to govern as the moderate he presented himself as.

It’s worth considering a similar — in many ways, identical — episode that took place a dozen years before. During the 2000 election, the growth of a budget surplus offered the country a major choice. Al Gore proposed to use most of the surplus to retire the national debt and the balance for public investment. George W. Bush proposed a large, regressive income tax that Gore warned would exacerbate inequality and jeopardize the soundness of the budget.

Then, as now, the Republican simply denied over and over that his plan would do what the Democrats said it would. Bush portrayed his plan as devoting just a small fraction of the surplus to tax cuts and described his tax cut itself as benefitting the poor far more than the rich. And you certainly could find circumstantial evidence to suggest that Bush might govern the way he portrayed himself, rather than the way his plan read. He had governed in a bipartisan way in Texas, he had explicitly denounced the conservative wing of the Congressional GOP, and he had surrounded himself with moderate advisers like Michael Gerson and Karen Hughes.

But Bush in fact followed through on what his plan actually did, which happened to be what Gore described it as, and not what Bush described it as. His promises to maintain the budget surplus and direct most of the tax cuts to lower-earners fell by the wayside. What mattered was the party, and the Republican Party was committed to a policy of regressive tax cuts.

The Bush-Gore debates centered primarily around Gore’s endless, frustrating attempts to pin down Bush’s priorities. I compiled pieces of Bush denying he would pursue what turned out to be the centerpiece of his administration’s economic agenda.

Here’s Bush in the first presidential debate:

I want to take one-half of the surplus and dedicate it to Social Security. One-quarter of the surplus for important projects …

tonight we’re going to hear some phony numbers about what I think and what we ought to do. …

this is a man who has great numbers. He talks about numbers. I’m beginning to think not only did he invent the Internet, but he invented the calculator. It’s fuzzy math. It’s a scaring — he’s trying to scare people in the voting booth. Under my tax plan that he continues to criticize, I set one-third. The federal government should take no more than a third of anybody’s check. But I also dropped the bottom rate from 15% to 10%. Because by far the vast majority of the help goes to people at the bottom end of the economic ladder. …

After my plan is in place, the wealthiest Americans will pay a higher percentage of taxes then they do today…

Let me tell you what the facts are. The facts are after my plan, the wealthiest of Americans pay more taxes of the percentage of the whole than they do today.

The second presidential debate:

First of all, that’s simply not true what he just said, of course. And secondly, I repeat to you —

MODERATOR: What is not true, Governor?

That we spent — the top 1% receive 223 as opposed to 445 billion in new spending. The top — let’s talk about my tax plan. The top 1% will pay one-third of all the federal income taxes. And in return, get one-fifth of the benefits, because most of the tax reductions go to the people at the bottom end of the economic ladder. …

GORE: I think that what — I think the point of that is that anybody would have a hard time trying to make a tax cut plan that is so large, that would put us into such big deficits, that gives almost half the benefits to the wealthiest of the wealthy. I think anybody would have a hard time explaining that clearly in a way that makes sense to the average person.

BUSH: That’s the kind of exaggeration I was just talking about. (LAUGHTER)

The third presidential debate:

But the top 1% will end up paying one-third of the taxes in America and they get one-fifth of the benefits.

Under my plan, if you make — the top — the wealthy people pay 62% of the taxes today. Afterwards they pay 64%. This is a fair plan. You know why? Because the tax code is unfair for people at the bottom end of the economic ladder. If you’re a single mother making $22,000 a year today and you’re trying to raise two children, for every additional dollar you earn you pay a higher marginal rate on that dollar than someone making $200,000, and that’s not right. So I want to do something about that.


By: Jonathan Chait, Daily Intel, October 4, 2012

October 5, 2012 Posted by | Election 2012 | , , , , , , , , | 1 Comment

“A Stark Election Choice”: Study Measures Mitt Romney’s Plan To Screw The Poor And Sick

The largest and clearest point of distinction in the presidential race is universal access to health insurance. If President Obama wins reelection, his law to provide access to the uninsured will go forward. If Mitt Romney is elected, it will be gutted, and Medicaid — the bare-bones coverage plan for the most desperately poor and sick — will face enormous additional cuts.

Commonwealth Fund has released a report comparing the stark choice. Estimating conservatively, Romney’s plan — to the extent that the report was able to piece it together — would increase the uninsured population to about 72 million, while Obama’s would cut it to 26 million (his plan does not cover illegal immigrants.) Probably more telling is Romney’s official campaign reaction:

“Under ObamaCare, Americans have seen their insurance premiums increase, small businesses are facing massive tax increases, and seniors will have reduced access to Medicare services,” Ryan Williams, a Romney spokesman, wrote in an email to POLITICO. “The American people did not want this law, our country cannot afford this law, and when Mitt Romney becomes president he will repeal it and replace it with common-sense, patient-centered reforms that strengthen our health care system.”

Note that the statement is almost entirely an attack on Obamacare, with a brief clause at the end vaguely promising something good will take its place. But that something requires resources. Most people lacking insurance are either sick or have a sick family member or they’re poor. If you want to cover them, you need to cough up some money. Obamacare undertook the massive political heavy lift of providing those resources, and that’s what Romney attacks — he included higher taxes on “small businesses” (i.e., people making more than $250,000 a year) and “reduced access to Medicare services” (i.e., cuts in reimbursements to Medicare providers, as a trade-off for providing them with 30 million new paying customers.)

Romney’s budget is premised on denying the government enough resources to fund any kind of universal health insurance program. His promise to cut tax rates by 20 percent would reduce tax revenue well below current levels. But even if you accept Romney’s arithmetically impossible claim that he can cut tax rates by 20 percent and raise the same tax revenue as the tax code does right now (and without raising taxes on the middle class), merely holding revenue at current, Bush-set levels would make any kind of universal coverage impossible.

Both campaigns describe the election as a stark choice, and this is correct. It’s a choice between universal health coverage for legal citizens and preserving the Bush tax cuts.


By: Jonathan Chait, Daily Intel, October 2, 2012

October 5, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“The Rise Of The Super Rich”: GOP Congress Really Does Make The Rich Richer

Are you rich and want to get richer? Vote Republican! The stronger the GOP is in Congress, the larger the share of wealth the top 1 percent controls, according to a new study in the October issue of American Sociological Review, which confirms what we figured all along — there’s a direct connection between the rightward shift of Congress and the upward advance of the richest Americans’ net worths.

From 1949 through 2008, the impact of a 1 percentage point increase in the share of seats held by Republicans in the House (a little over five seats) raised the top 1 percent’s income share by about .08 percentage points.

“At first glance, this might seem negligible,” said Thomas Volscho, a sociologist at CUNY-College of Staten Island who co-authored the study. But it’s not. “Given that the estimated national income in 2008 was more than $7.8 trillion, an increase of only 1 percent in Republican seat share would raise the income of the top 1 percent by nearly $6.6 billion. That equates to about $6,600 per family in the top 1 percent.”

The ASR study, “The Rise of the Super-Rich,” looks at the experience of the 1 percent from just after World War II to 2008 and identifies several other factors that have propelled the top tier’s rise. The fact that the uber wealthy have gotten richer much faster than lower-income brackets has been well documented and helped spark the Occupy movement, but this research looks at the role that policy and other variables have played.

Beyond politics, Volscho and Kelly found that the decline of private-sector union membership, and the increasing financializing of the economy — which has heightened the impact of financial-asset bubbles — were also key contributors to income inequality and the rise of the 1 percent. Over the 60 years the paper studied, a 1 percentage point decrease in union membership among private sector workers was linked to a more than 0.4 percentage point increase in the income share of the super-rich.

But the most surprising finding of the study may be the impact a GOP Congress has on income inequality. “Based on our analysis, Democrats appear to favor an economic system that produces more egalitarian outcomes even before any redistribution occurs,” the study concludes. “In essence, the market is not completely beyond the influence of politics and policy, and it is not just in the realm of explicit redistribution that political parties produce divergent distributional outcomes. Political decisions in part ‘make the market.”

Interestingly, the party affiliation of the president did not significantly impact the wealth share of the top 1 percent. Volscho told Salon he was surprised by that finding. Instead, it’s Congress that has the bigger impact. “It was surprising, but not. Because if you look at, in 1995, the Republican takeover over Congress, that’s when you started to see the spike in the top 1 percent,” he said. “They had been doing well since around 1980, but not as well as around 1995. And the stock market boom started in 1995 as well, but we took that into consideration and that had an independent effect.”

The study doesn’t get into specific policies that impact income inequality much, calling for further research on the subject, but it doesn’t take a Ph.D. to make some pretty good guesses. Republicans (with help from Democrats, no doubt) have pushed tax cuts that disproportionately impact the wealthy, opposed redistributive programs, decreased financial regulation, which allowed for the explosion of financial speculation, cut education funding, etc. “There are so many things, appointments, heads of agencies, mundane policies and regulations that filter down from Congress into government agencies that potentially can aid the very rich,” Volscho said.

But a Republican president like Mitt Romney could help in that they would “make that pro-1 percent legislation flow through so much quicker,” Volscho said. Of course, this isn’t too surprising — polls consistently show that Americans think Romney and the GOP would do more to help the wealthy. Now social science shows they’re right!


By: Alex Seitz-Wald, Salon, October 2, 2012

October 5, 2012 Posted by | Congress | , , , , , , , , | 1 Comment

“True Perversity”: Mitt Romney’s Obscene Posturing As A Wall Street Critic

Among the many obfuscations of Mitt Romney last night, this was perhaps the biggest laugher of them all:

ROMNEY: Dodd-Frank was passed, and it includes within it a number of provisions that I think have some unintended consequences that are harmful to the economy. One is it designates a number of banks as too big to fail, and they’re effectively guaranteed by the federal government. This is the biggest kiss that’s been given to—to New York banks I’ve ever seen. This is an enormous boon for them. There’s been—22 community and small banks have closed since Dodd-Frank. So there’s one example I wouldn’t designate five banks as too big to fail and give them a blank check. That’s one of the unintended consequences of Dodd-Frank. It wasn’t thought through properly.

Romney—the private equity veteran running a presidential campaign funded by Wall Street, on a platform that contains a full repeal of every financial regulation over the past four years—positioning himself as an opponent of those big “New York banks” was a historic moment in presidential debate cravenness. (And a real missed opportunity for Obama to wallop his opponent).

So what exactly was Romney talking about? It’s a complicated answer, but understanding it reveals the true perversity of Romney’s posturing.

Dodd-Frank has two provisions regarding too-big-to-fail that Romney is talking about here. The first is the ability of the Financial Stability Oversight Council, created by the legislation, to name financial institutions “systemically significant.” This means they are so big that their failure could threaten the health of the financial sector, and that designation subjects them to heightened regulation and higher capital requirements.

The big banks hate this requirement, for obvious reasons—they come under increased scrutiny and restrictions. So Republicans have been dutifully attacking it. (Romney’s running mate, Representative Paul Ryan, repeatedly blasted it before joining the ticket). The GOP argument, as you heard Romney deliver it, is that by giving them the “systemically significant label, the government is officially “designating” banks as too-big-to-fail—a very bad-sounding thing indeed!

But this is nonsense—these firms are too big to fail. The FSOC designation doesn’t make them so, and is in no way a “kiss” to the big banks—again, it subjects them to higher regulation. Romney and his party would prefer to repeal this provision, full stop, and thus effectively stick their heads in the sand about too-big-to-fail institutions. It’s like saying a doctor who diagnoses someone with cancer has given it to him.

Interestingly, a key feature of this provision is that FSOC can name non-banks as systemically significant, and just this week news broke that AIG is on the verge of receiving this label. Republicans on the House Financial Services Committee have been trying to amend Dodd-Frank to protect AIG from that designation, which to me raises an interesting question about Romney’s timing here.

In any case, when Romney spoke about “guaranteeing” a bailout, and of “blank checks,” he’s echoing another GOP complaint about the resolution authority provision of Dodd-Frank. That gives the federal government the power to wind-down big banks in the event of a failure. The idea is to dissolve the bank, without taxpayer money, not save it—Rep. Barney Frank has called this a “death panel” for big banks. (Pat Garofalo wrote on this issue for us here).

Banks also hate this provision, preferring instead the inevitable ad hoc, blank-check bailout that we saw in 2008. So Republicans have been going after resolution authority—the 2012 Ryan Budget would repeal it—by arguing that the provision somehow guarantees bailouts. This is the same flim-flam as before: the bailout is going to happen either way if the firm is too big to fail, and by repealing resolution authority, you take away the increased power of the government under Dodd-Frank to deal the problem. (Former Treasury Secretary Hank Paulson said he “would have loved to have had” resolution authority in 2008 instead if issuing straight-up bailouts).

Many progressive critics have legitimate complaints about the failure of Dodd-Frank to be tougher in dealing with too-big-to-fail firms, but to be absolutely clear, that’s not what Romney and the Republicans are trying to do. They’re trying to get rid of the limited reforms that have been made. To do it while preening as tough-on-Wall-Street politicians is deeply, deeply cynical.

By: George Zornick, The Nation, October 4, 2012

October 5, 2012 Posted by | Election 2012, Financial Reform | , , , , , , , | Leave a comment

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