“The Fiscal Fizzle”: An Imaginary Budget And Debt Crisis
For much of the past five years readers of the political and economic news were left in little doubt that budget deficits and rising debt were the most important issue facing America. Serious people constantly issued dire warnings that the United States risked turning into another Greece any day now. President Obama appointed a special, bipartisan commission to propose solutions to the alleged fiscal crisis, and spent much of his first term trying to negotiate a Grand Bargain on the budget with Republicans.
That bargain never happened, because Republicans refused to consider any deal that raised taxes. Nonetheless, debt and deficits have faded from the news. And there’s a good reason for that disappearing act: The whole thing turns out to have been a false alarm.
I’m not sure whether most readers realize just how thoroughly the great fiscal panic has fizzled — and the deficit scolds are, of course, still scolding. They’re even trying to spin the latest long-term projections from the Congressional Budget Office — which are distinctly non-alarming — as somehow a confirmation of their earlier scare tactics. So this seems like a good time to offer an update on the debt disaster that wasn’t.
About those projections: The budget office predicts that this year’s federal deficit will be just 2.8 percent of G.D.P., down from 9.8 percent in 2009. It’s true that the fact that we’re still running a deficit means federal debt in dollar terms continues to grow — but the economy is growing too, so the budget office expects the crucial ratio of debt to G.D.P. to remain more or less flat for the next decade.
Things are expected to deteriorate after that, mainly because of the impact of an aging population on Medicare and Social Security. But there has been a dramatic slowdown in the growth of health care costs, which used to play a big role in frightening budget scenarios. As a result, despite aging, debt in 2039 — a quarter-century from now! — is projected to be no higher, as a percentage of G.D.P., than the debt America had at the end of World War II, or that Britain had for much of the 20th century. Oh, and the budget office now expects interest rates to remain fairly low, not much higher than the economy’s rate of growth. This in turn weakens, indeed almost eliminates, the risk of a debt spiral, in which the cost of servicing debt drives debt even higher.
Still, rising debt isn’t good. So what would it take to avoid any rise in the debt ratio? Surprisingly little. The budget office estimates that stabilizing the ratio of debt to G.D.P. at its current level would require spending cuts and/or tax hikes of 1.2 percent of G.D.P. if we started now, or 1.5 percent of G.D.P. if we waited until 2020. Politically, that would be hard given total Republican opposition to anything a Democratic president might propose, but in economic terms it would be no big deal, and wouldn’t require any fundamental change in our major social programs.
In short, the debt apocalypse has been called off.
Wait — what about the risk of a crisis of confidence? There have been many warnings that such a crisis was imminent, some of them coupled with surprisingly frank admissions of disappointment that it hadn’t happened yet. For example, Alan Greenspan warned of the “Greece analogy,” and declared that it was “regrettable” that U.S. interest rates and inflation hadn’t yet soared.
But that was more than four years ago, and both inflation and interest rates remain low. Maybe the United States, which among other things borrows in its own currency and therefore can’t run out of cash, isn’t much like Greece after all.
In fact, even within Europe the severity of the debt crisis diminished rapidly once the European Central Bank began doing its job, making it clear that it would do “whatever it takes” to avoid cash crises in nations that have given up their own currencies and adopted the euro. Did you know that Italy, which remains deep in debt and suffers much more from the burden of an aging population than we do, can now borrow long term at an interest rate of only 2.78 percent? Did you know that France, which is the subject of constant negative reporting, pays only 1.57 percent?
So we don’t have a debt crisis, and never did. Why did everyone important seem to think otherwise?
To be fair, there has been some real good news about the long-run fiscal prospect, mainly from health care. But it’s hard to escape the sense that debt panic was promoted because it served a political purpose — that many people were pushing the notion of a debt crisis as a way to attack Social Security and Medicare. And they did immense damage along the way, diverting the nation’s attention from its real problems — crippling unemployment, deteriorating infrastructure and more — for years on end.
By: Paul Krugman, Op-Ed Columnist, The New York Times, Julo 20, 2014
“Addicted Republicans Wage War On Latino Voters”: The GOP Is Rolling The Dice While Standing On Quicksand
It’s an addiction. Republicans really can’t help themselves — when they see an opportunity to irritate the Latino electorate, they go for it with gusto.
Republicans have transformed the humanitarian crisis of children at our southern border into an “invasion” that must be repelled with soldiers.
This is war!
Rep. Louie Gohmert (R-Texas), speaking on Glenn Beck’s program, said “We are under invasion, and this president will not protect our country, and he will not step in and enforce the law as it is.”
Of course, it’s President Obama’s fault. Because anything that goes wrong in this world is either Obama’s overreaching or disengagement. There is no issue to which the Republicans will not attach one of these labels — a cognitive dissonance that seeks to depict Obama simultaneously as a power-mad dictator and, in Speaker John Boehner’s (R-Ohio) unfortunate depiction, a president who sleeps through crisis.
Playing on this meme, Michael Reagan, son of the president that signed the amnesty bill in 1986, wrote recently: “Emperor Obama is the culprit in chief.”
Yet the law is being enforced. According to the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008, passed unanimously by both houses of Congress and signed into law by President George W. Bush, these kids have a right to due process. They cannot simply be shoved into a bus and dropped like cargo in Mexico. Or sent first class on a plane, as Oklahoma Sen. Tom Coburn (R) suggested as a bizarre solution.
Republicans’ aggressive response against these kids is baffling as both a matter of policy and politics. The border kids crisis is not about immigration. The flows of unaccompanied minors over the last few months (estimates put the number of kids at over 57,000) has many causes: brutal violence, chaos, mortal fear and hope.
The violence and related mayhem in Central America has reached a critical juncture. The toxic cocktail of narco-mafias, violent gangs, acute poverty and corrupt governments has created dangerous instability and the subsequent need to flee from a life-threatening situation.
Ironically, much of this instability can be directly traced to America’s multi-decade, failed and wildly expensive “War on Drugs” that has made these countries transit points for America’s illegal drug imports.
The narco-mafias are multi-billion dollar “enterprises” with the economic capacity to cripple governments, field heavily armed guerrilla armies and an addiction to violence that terrorizes a vulnerable population that has been largely abandoned to fend for itself by the weak governments in the region.
Politically, the GOP is like a man standing on quicksand. After killing immigration reform in Boehner’s House of Representatives, voting to deport the Dreamers and urging the faster deportation of the border kids, the party’s chances of attracting a sizable percentage of Latino voters needed to win national elections recedes with every acrid declaration by Republican politicos seeking to court the far-right midterm election voters they need to win the Senate in November.
The GOP is rolling the dice with its future by seeking the older white vote while simultaneously repelling large swaths of the electorate – women, African-Americans, Asian-Americans, gay people, young people, Latinos, etc. — with its antediluvian policies.
While some analysts on the right have concluded that this is the optimum approach to win the midterm election — an assumption predicated on the expectation of low turnout of those same constituents that have largely voted for Democrats in past elections — that’s an awfully big bet when the very future of the GOP is at stake.
What happens if the unthinkable becomes reality? What’s the future of the GOP if come November 2014 furious Latinos turn out at the same rate as they did in the 2012 election? Or women outraged by the Supreme Court’s decision that a corporation’s newly “discovered” religious rights trump a woman’s right to control her own health?
Yes, the projecting of voter turnout is based on past voter participation. But as Mitt Romney’s failed campaign for president in 2012 showed, predictions of turnout can be wrong — very wrong.
In particular, Republicans underestimate the blowback from Latinos. This year in the California congressional primaries, I endorsed a moderate Republican, part of the reform wing of the party. The reaction from the audience of my radio program, and especially through social media, was swift and brutal. Hundreds of Latino voters told me I was crazy – and that they would never vote for Republicans after they killed immigration reform in the House.
As Gov. Rick Perry (R-Texas) and other big name Republicans continue to call for a military response to this crisis by deploying the National Guard, the image of a GOP actively vilifying children and comparing them to foreign invaders is bound to further crystalize Latino anger and voting patterns.
Whatever else, should the National Guard be deployed because of these GOP demands, the effect on public opinion could further sink the Republican Party.
Republicans will crash with a harsh reality of their own making: soldiers versus 10-year-olds is a “battle” with the optics of Birmingham, Ala. in 1963.
By: Fernando Espuelas, The Huffington Post Blog, July 20, 2014
“The Koch Brothers’ Expanding 2014 Operation”: Democrats Are Now Running Against Two Parties
It’s a number that gives Democrats chills: $125 million. That’s the widely reported number reflecting how much the Koch-financed Americans for Prosperity intends to spend on this year’s midterm elections. In practical terms, it means Democrats will effectively be running against two rivals: Republicans and the Republicans’ outside allies.
Reid Wilson reports today, however, that the scope of the AFP operation isn’t done expanding.
Americans for Prosperity, the on-the-ground wing of the network of conservative organizations spearheaded by the billionaire industrialists Charles and David Koch, will open new state chapters in South Dakota and Alaska in coming weeks, the group’s president said. In an interview, Tim Phillips said that would bring to 35 the number of states where AFP has permanent offices. […]
Phillips said early reports that his organization will dish out $125 million on the midterm elections understates the actual amount they will spend.
If you’re starting to see AFP as something resembling an actual political party, there’s a good reason – the lines have blurred. The Koch-funded group has hundreds of field operatives, just like a party. It’s opening field offices in dozens of states, just like a party. It’s focusing on GOTV operations, just like a party.
And, of course, it’s investing millions in anti-Democratic attack ads, just like a party.
But unlike other national far-right forces, the Kochs’ group (just like a party) also intends to help “influence the makeup of state legislatures.” Tim Phillips told the Washington Post, ”A lot of times a local property tax battle will bring a whole new group of people out. It’s easier to get movement on the state level.”
All of this, incidentally, doesn’t include the AFP’s “action fund.”
Remember this one?
During a closed-door gathering of major donors in Southern California on Monday, the political operation spearheaded by the Koch brothers unveiled a significant new weapon in its rapidly expanding arsenal – a super PAC called Freedom Partners Action Fund.
The new group aims to spend more than $15 million in the 2014 midterm campaigns – part of a much larger spending effort expected to total $290 million, sources told POLITICO.
As we talked about at the time, the “action fund” will allow the Koch brothers and their donor allies to be more explicit in their backing of like-minded Republicans, while devoting more of their campaign dollars to actual campaign activities.
This isn’t to say the beneficiaries of the Kochs’ support always win; the results from the 2012 cycle clearly show otherwise. But we’re nevertheless looking a formidable political force that Democrats and the left will simply never be able to keep up with financially.
By: Steve Benen, The Maddow Blog, July 18, 2014
“Fat Chance!”: Chris Christie Admits He Ignored The Law To Help Tesla. Do Republicans Want To Sue Him, Too?
After initially threatening to sue President Barack Obama over a variety of issues, House Speaker John Boehner settled on just one: the delay of the Affordable Care Act’s employer mandate. The legality of that action, as law school professor Nicholas Bagley has pointed out, is questionable. But the lawsuit also implies that the executive branch should have limited discretion in implementing laws. And Republicans only have to look toward Governor Chris Christie to show how that doesn’t make much sense.
In 2013, Obama delayed for a year the employer mandate, which requires all businesses with 50 or more full-time employees to provide health insurance to their employees or pay a penalty. Infuriated, Republicans called the president’s unilateral action illegal. On this count, they may be right. But it will be nearly impossible for Boehner to convince the courts that the House has suffered concrete damage that gives them the constitutional authority to challenge the action. In all likelihood, the lawsuit is meaningless.
However, this case has implications beyond its legal importance. Simon Lazarus, the senior counsel at the Constitutional Accountability Center, testified on Wednesday before the House Rules Committee about the historic discretion afforded presidents to implement laws.
“The Administration has not postponed the employer mandate out of policy opposition to the ACA, nor to any specific provision of it,” he said, according to his prepared remarks. “It is ludicrous to suggest otherwise, and at best misleading to characterize the action as a ‘refusal to enforce’ at all. Rather, the President has authorized a minor temporary course correction regarding individual ACA provisions, necessary in his Administration’s judgment to faithfully execute the overall statute, other related laws, and the purposes of the ACA’s framers.” The key is that Obama delayed the employer mandate in order to prioritize the success of the entire law. It does not fundamentally change the legislation or attempt to undermine it.
Lazarus also gave examples when former presidents George W. Bush and Bill Clinton used their discretion in implementing legislation. Bush, for instance, delayed certain EPA regulations not out of technical need, but because he opposed the policies. That is a much graver offense than delaying part of the law in order to increase the chances of its success. The Bush administration actively tried to undermine it. “Such intentional refusals to enforce or implement laws … do violate the laws in question, and are, by definition, failures to faithfully execute the laws as required by the Constitution,” Lazarus said.
Christie used discretion similarly in a decision regarding Tesla’s ability to sell directly to its customers. Under New Jersey statute, direct sales of automobiles are illegal. Christie opposes that law, but must enforce it—except, as he told CNBC’s John Harwood Wednesday, he gave Tesla a one-year grace period.
“The fact is we looked the other way for a year, to allow Tesla to do what they are doing,” he said. “I can’t just pick and choose the laws to enforce. So I give [sic] them what I felt was a reasonable period of time to operate the way they were operating.”
After a year, Christie believed that he had to enforce the law—and Republicans around the country freaked out. A.J. Delgado, of the National Review, questioned Christie’s commitment to the free market. “[Y]ou’d expect Christie, who claims to believe in free markets, to recognize a protectionist swindle, as he did when he took on the state’s powerful public-school teacher unions,” he wrote.
Legally, Christie’s selective enforcement on the ban on direct automobile sales might be more justifiable than Obama’s delay of the employer mandate. Executives frequently prioritize certain laws based on their limited resources. Obama defied a specific deadline in the law. But the functional implications of them are the same. Christie and Obama both used their discretion in enforcing laws to improve their administration’s governance. For Obama, that meant delaying the employer mandate to ease the implementation of Obamacare. For Christie, it meant giving Tesla a year-long reprieve from the direct-sales ban to give the legislature time to change the law.
That’s not to say that executives should have unlimited authority to adjust legislation. But they should be able to use discretion in implementing laws so that they have the greatest chance of success. The House’s lawsuit threatens to eliminate that discretion.
By: Danny Vinik, The New Republic, July 17, 2014
“Fighting Bad Science In The Senate”: The Days Of Making A Sport Of Trampling On Women’s Health And Rights Are Numbered
The Senate hearing for the Women’s Health Protection Act shows just how important it is for women’s health advocates to push for the facts.
The propensity of anti-choice advocates to eulogize false science was on full display on Tuesday’s Senate hearing on the Women’s Health Protection Act (WHPA). That bill is a bold measure that would counter the relentless barrage of anti-choice legislation that has made abortion — a constitutionally protected medical procedure — altogether inaccessible for many U.S. women.
The bill was introduced last year by Senators Richard Blumenthal and Tammy Baldwin and Representatives Judy Chu, Lois Frankel and Marcia Fudge. It prohibits states from applying regulations to reproductive health care centers and providers that do not also apply to other low-risk medical procedures. It would, essentially, remove politicians from decisions that — for every other medical issue — remain between individuals and their providers.
The WHPA is long overdue. For the past three years, conservative lawmakers have used the guise of protecting women’s health to pass more than 200 state laws that have closed clinics, eliminated abortion services, and left women across the country without access to critical reproductive health care. The WHPA would reverse many of those policies and prevent others from being passed.
Tuesday’s hearing was representative of the broader debate over abortion rights. Those in favor of the bill argued that securing unfettered access to reproductive health care, including abortion, is critical to the health and lives of U.S. women and their families.
Those in opposition used familiar canards about abortion to argue that the law would be calamitous for U.S. women. Representative Diane Black of Tennessee had the gall to make the abortion-leads-to-breast cancer claim, one that has been disproven many times over. Others repeatedly cited the horrific cases of Kermit Gosnell, insinuating that all abortion providers (abortionists, in their lingo) are predatory and that late-term abortions are a common occurrence. In fact, if women had access to safe, comprehensive and intimidation-free care, Kermit Gosnell would have never been in business. Given the opposition’s testimony, you’d never know that late-term abortion is actually a rarity. According to the Centers for Disease Control, more than 90 percent of all abortions occur before 13 weeks gestation, with just over 1 percent taking place past 21 weeks.
At one point Representative Black argued that abortion is actually not health care. The one in three U.S. women who have undergone the procedure would surely argue otherwise.
Perhaps the most ironic testimony against the WHPA — and in favor of abortion restrictions – came from Senator Ted Cruz, who hails from Texas, a state with so many abortion restrictions that women are now risking their health and lives by self-inducing abortions or crossing the border to get care in Mexico. Senator Cruz attempted to validate U.S. abortion restrictions by referencing a handful of European countries with gestational restrictions on abortions. This was a popular argument during the hearing for Texas’ HB2 — the bill responsible for shuttering the majority of clinics in that state.
Cruz wins the prize for cherry picking facts to best support his argument. When citing our European counterparts, he conveniently ignored that such abortion restrictions are entrenched in progressive public health systems that enable all individuals to access quality, affordable (often free) health care, including comprehensive reproductive healthcare. Senator Cruz and his colleagues have adamantly opposed similar policies in the U.S., particularly the Affordable Care Act’s provisions for contraceptive coverage and Medicaid expansion. On the one hand conservatives lean on European policies to argue for stricter abortion restrictions at home, and on the other they claim those policies are antithetical to the moral fabric of the United States.
Would Cruz support France’s policies that enable women to be fully reimbursed for the cost of their abortion and that guarantees girls ages 15 to 18 free birth control? Or Belgium’s policy that enables young people to be reimbursed for the cost of emergency contraception? Or the broad exceptions that both countries make for cases of rape, incest, and fetal impairment, to preserve woman’s physical or mental health, and for social or economic reasons? He absolutely would not.
As the House of Representatives seems to be more motivated by suing the president than by voting on – let alone passing — laws that will actually improve the health and lives of their constituents, it’s highly unlikely that the WHPA will become law. But Tuesday’s debate – and the bill itself — is significant and shows a willingness among pro-choice advocates to go on offense after too many years of playing defense.
Bills such as the WHPA — even if they face a slim chance of being passed by a gridlocked Congress — provide an opportunity to call out conservatives’ use of bad science in their attempts to convince women that lawmakers know best when it comes to their personal medical decisions. And they allow us to remind lawmakers and citizens that despite all of the rhetoric to the contrary, abortion is a common, safe and constitutionally protected medical procedure, and that regulating it into extinction will only force women into back-alley practices like those run by Gosnell, costing them their health and their lives.
Those in support of the WHPA showed anti-choice lawmakers that the days of making a sport of trampling on women’s health and rights are numbered.
By: Andrea Flynn, Fellow at the Roosevelt Institute; The National Memo, July 18, 2014
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