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Gut Punch To Seniors: Republicans Are Done Pretending

“Should Congress have cut Medicare half a trillion dollars to pay for ObamaCare?” asked a 2010 ad for Republican newcomer Renee Ellmers in North Carolina’s 2nd congressional district. 

That theme — “Obama’s coming for your Medicare!” — helped Ellmers and GOP candidates across the nation consolidate the senior vote, winning that crucial voting bloc by a 59-38 margin. In 2008, Democrats won seniors by 49-48. The dramatic shift was a massive component of the GOP wave.

It was a dishonest attack, of course. The Democratic healthcare law cut $126 billion from Medicare Advantage over 10 years, not half a trillion. And Medicare Advantage, which allowed seniors to get healthcare via private insurers, was an inefficient and wasteful experiment to see whether private companies could deliver health services more efficiently than the government. It failed. In fact, Medicare Advantage cost 11 percent more to run than standard Medicare for identical services.

Yet “fiscally responsible” Republicans successfully demagogued the issue all the way to a majority, winning precious senior support with promises to “protect Medicare.” Those promises are now officially history. Republicans are now rewarding seniors for their vote by punching them in the gut.

GOP Rep. Paul Ryan (Wis.) has fired the first shot in a new war to destroy the benefit structure that seniors paid for throughout their working lives. Under his plan, seniors will no longer enroll in Medicare, but rather receive vouchers to try and secure care through private insurers. Ryan’s plan delays implementation for 10 years to ward off the wrath of current seniors, but the end result is the same — the elimination of a program Republicans pretended to protect.

After all, if the plan is so great for seniors, why wait until 2021 to implement it? 

Ryan’s plan would cap the growth of vouchers to a hair over the rate of inflation. However, the cost of medical services has far outpaced inflation. So what happens when the vouchers aren’t enough to cover the cost of expensive life-saving medical procedures? If Republicans won’t bargain with drug companies or limit reimbursements to doctors (and they won’t), the only thing left would be real-world death panels.

In other words, seniors would die, needlessly and prematurely.

It is no coincidence that Republicans are using this moment to try and discredit the AARP, which will undoubtedly push back against this irresponsible plan. The House Ways and Means Committee has launched an investigation into the organization’s finances, arguing that its support for last year’s healthcare reform measure should invalidate its tax-exempt status. “Republicans are desperate to try to break the trust that America’s seniors have in AARP,” said Rep. Pete Stark (D-Calif.) during the committee hearings. “They need to do so before they announce their budget that will devastate Medicare, Social Security and Medicaid.”

If Republicans were serious about containing healthcare costs, they would take a fresh look at a public option, allowing Americans to choose government-run insurance that would compete against private insurers. But Republicans don’t really care about providing quality care at reasonable prices — they care about enriching their insurance lobbyist friends. 

Seniors allowed themselves to be taken in by the GOP in 2010. But their choice now is obvious. Republicans are done pretending.

By: Markos Moulitsas, The Hill, April 5, 2011

April 12, 2011 Posted by | Affordable Care Act, Congress, Conservatives, Corporations, Democrats, Elections, GOP, Health Care, Health Reform, Insurance Companies, Lobbyists, Medicaid, Medicare, Pharmaceutical Companies, Politics, Public Option, Republicans, Right Wing, Social Security, Voters | , , , , , , , , | Leave a comment

Risks To Boehner In Debt-Ceiling Brinkmanship

Although John Boehner and the Republicans are coming off what is widely being scored as a victory on the argument over the 2011 budget, they risk overconfidence as Congress turns its attention to the next debate, which is the fight over raising the federal debt limit.

Perhaps the most important piece of reporting that you’ll read on the debt limit debate is this one, from The Times’ Jackie Calmes:

The Republican leader, Senator Mitch McConnell of Kentucky, has privately urged the conservatives not to filibuster, without success, say three people familiar with the talks. He argued that if Republicans did not filibuster and just 50 votes were needed for passage, the Republicans could try to force all the votes to come from the 51 Democrats — including 17 who are up for re-election. But if 60 votes are required because of a filibuster, ultimately some Republicans would have to vote for the increase lest the party be blamed for a debt crisis.

Mr. McConnell is discouraging his colleagues from filibustering a vote to increase the federal debt limit because he knows that, if push came to shove, some of his colleagues would almost certainly have to vote yea. He’d rather it pass in a 51-vote environment, where all of the votes could come from Democrats, than in a 60-vote environment, where at least seven Republicans would have to agree to a cloture motion. 

Although Mr. McConnell’s remarks were made privately, other prominent Republicans have said as much publicly (including Mr. Boehner, who has said that a failure to raise the debt limit would create a “financial disaster,” and the G.O.P.’s designated budget hawk, Paul Ryan, who has remarked that the debt ceiling must be raised and will be raised.)

That doesn’t sound like much of a negotiating position. How to reconcile it against comments from other Republicans, such as Eric Cantor, that the debt ceiling vote will provide Republicans with “leverage” to extract additional policy compromises from President Obama and the Democrats. The obvious answer is that Republicans are running a bluff.

If the Congress does not vote to increase the debt ceiling — a statutory provision that governs how many of its debts the Treasury is allowed to pay back (but not how many obligations the United States is allowed to incur in the first place) — then the Treasury will first undertake a series of what it terms “extraordinary actions” to buy time. The “extraordinary actions” are not actually all that extraordinary — at least some of them were undertaken prior to six of the seven debt ceiling votes between 1996 and 2007.

But once the Treasury exhausts this authority, the United States would default on its debt for the first time in its history, which could have consequences like the ones that Mr. Boehner has imagined: a severe global financial crisis (possibly larger in magnitude than the one the world began experiencing in 2007 and 2008), and a significant long-term increase in the United States’ borrowing costs, which could cost it its leadership position in the global economy. Another severe recession would probably be about the best-case scenario if that were to occur.

A second recession would almost certainly hurt Mr. Obama’s re-election chances, regardless of how articulate he were about trying to pin the blame on the Republicans. But it would also hurt virtually every other incumbent, including the Republicans (and likely also the Democrats) in the Congress.

While it’s hard to know exactly what the political consequences might be — a debt default has never happened before — some combination of the following might occur:

1. Mr. Obama would be significantly less likely to win a second term;

2. Mr. Boehner, Mr. Cantor, Mr. McConnell and other Republicans would have more difficulty retaining their leadership positions in the Congress;

3. All incumbents would have more difficulty winning re-election, both because of the magnitude of the policy disaster and because the debt default (in addition to hurting the poor) would have a large impact on wealthy individuals and corporations, who are key to fund-raising;

4. Similarly, all incumbents, including Mr. Obama, would become significantly more vulnerable to primary challenges;

5. The two major parties would be significantly discredited and might fracture, possibly leading to the rise the rise of a credible presidential candidate from a third-party, or a spin-off of one of the existing parties;

6. A Constitutional crisis might ensue, because the Treasury has contradictory obligations in the event of a debt default with few clear rules (and no precedent) to guide them;

7. The challengers that were elected in 2012 would have significant difficulty retaining their seats in 2014 and 2016 because the fiscal crisis brought on by the debt default would probably last for several years and would lead to extremely unpopular austerity measures — so any immediate-term gains by either party could prove fleeting.

In short, this as close as you can get in American politics to mutually assured destruction. No matter how Machiavellian your outlook, it’s very hard to make the case that any politician with a significant amount of power would become more powerful in the event of a debt default. They also would be harmed personally, since many Congressmen have significant investments in credit, stock or housing markets, all of which would be adversely affected.

A lot of the reporting I’ve seen on the debt limit vote, especially in those publications that focus more on politics than policy, has portrayed it as a zero-sum game. That’s the wrong characterization. In contrast to a government shutdown — which could have some negative consequences for incumbents of both parties, but not ones so large that they couldn’t be outweighed by strategic considerations — a debt default would be a bigger emergency by at least an order of magnitude. Its consequences are also much less linear and much less predicable than those of a government shutdown: you can’t partially default any more than you can be half-pregnant.

Now, that doesn’t mean that Republicans won’t be able to extract any concessions at all out of the Democrats. It’s possible that the White House — which has been risk-averse in recent months as it has focused on Mr. Obama’s re-election — might not be willing to take the chance of something going wrong. It’s possible that the White House could give the Republicans some concessions that they viewed as minor, inevitable, or actually desirable from a political and policy standpoint.

But Mr. Boehner may face just as much risk as Mr. Obama, if not more. He has promised his more conservative members that he will extract significant concessions from the Democrats before he agrees to an increase in the debt limit. A White House that was willing to play hardball could put him to the test, and perhaps cause a substantial loss of face.

I don’t know that this particular (and rather cautious) White House is likely to do that. But the equilibrium outcome is probably some fairly token concessions — enough to provide Mr. Boehner with some cover with the Tea Party but not much more.

That’s assuming, of course, that both sides play the “game” optimally, which is far from assured. If Mr. Obama is a good poker player, he’ll know not to disregard Mr. Boehner’s earlier rhetoric, which gave away the vulnerability of his hand. And he’ll recognize Mr. Boehner’s more recent and more confident rhetoric for what it is: the oldest “tell” in the poker book, a show of strength betraying the ultimate weakness of his position.

By: Nate Silver, Five Thirty Eight, April 11, 2011

April 12, 2011 Posted by | Congress, Conservatives, Constitution, Corporations, Debt Ceiling, Debt Crisis, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Government Shut Down, Ideology, Lawmakers, Politics, President Obama, Republicans, Right Wing, Tea Party, Voters, Wealthy | , , , , , , , , , , , , | Leave a comment

What Actually Happens If The U.S. Hits The Federal Debt Ceiling?

Are you just now recovering from the migraine induced by months of partisan feuding over the 2011 federal budget? Looking forward to a lengthy reprieve before Congress tackles next year’s budget? Sorry, but you’re in for a rude awakening. (And you might want to reach for some aspirin.) Treasury Secretary Tim Geithner warned Congress last week that the United States — currently liable for more than $14 trillion of debt — will collide with the federal debt ceiling around May 16. Once the government hits the current limit of $14.3 trillion it will be legally prohibited from incurring any additional debt; problematic since the U.S. only takes in around 60 cents for each dollar it spends.

Congress has raised the debt ceiling 74 times since 1962. Ten of those increases occurred in the past decade. It’s a routine vote. However, the political calculus has shifted in the newly anointed “age of austerity.” House Speaker John Boehner acknowledged that a failure to raise the ceiling could have calamitous implications. However, congressional Republicans appear unlikely to authorize an increase in the debt limit without significant Democratic concessions, setting up yet another high-noon scenario on Capitol Hill. 

This poses the question: What would happen if the U.S. hit the debt ceiling?

In the immediate aftermath of such an event, the Treasury Department can impose “extraordinary actions” to help pay the bills. Those measures include, “suspending investments in a savings plan for federal workers and pulling Treasury securities out of a trust fund for two federal retirement plans. In such cases, the Treasury must make the funds whole again once the ceiling is raised.” However, such stopgap measures would prove ineffective before long, and the government would have to either authorize an increase in the debt limit or cut $738 billion in federal spending in the span of six months, with severe consequences for the economy. Notwithstanding such a massive curtailing of government spending, the U.S. would default on some of its debt obligations. And the implications are frightening: 

For one, the government would grind to a halt — cutting off military salaries and retirement benefits, along with Social Security and Medicare payments. Worse still, default would also plunge the U.S. back into recession. Interest rates and borrowing costs would surge, while the dollar would plummet. In a worst case scenario, the markets would go into a death spiral as investors distanced themselves from the U.S.

At the very least, defaulting would call into question the true value of U.S. Treasury bonds — heretofore the gold standard of the bond market. Additionally, such an event would damage the country’s credit rating, and significantly hamper its ability to generate revenue necessary to keep government running. A default on government debt obligations could conspire to undermine the United States’ preeminent position in the global economy. Needless to say, all of this would swiftly end the recovery, as Federal Reserve head Ben Bernanke pointed out.

As for the political repercussions, Nate Silver at the New York Times’ FiveThirtyEight blog argues that the failure to raise the debt ceiling would equate to nothing less than political ruin for virtually every elected federal official.

This as close as you can get in American politics to mutually assured destruction. No matter how Machiavellian your outlook, it’s very hard to make the case that any politician with a significant amount of power would become more powerful in the event of a debt default.That in mind, it seems unlikely that the ceiling won’t be raised. It’s just a matter of when, and how, we get there.

By: Peter Finocchiaro, Salon, April 11, 2011

April 12, 2011 Posted by | Congress, Conservatives, Debt Ceiling, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Government Shut Down, Ideology, Lawmakers, Middle Class, Politics, Republicans, Right Wing | , , , , , , , , , , , , | Leave a comment

Echoes Of Ayn Rand: How The GOP Came To View The Poor As Parasites And The Rich As Our Rightful Rulers

Last week the Republican Party sounded two distinct voices. First we heard the angry demands of the Tea Party, speaking through its hardline conservative allies in the House, pushing the government to the brink of a shutdown. But then emerged the soothing tones of Paul Ryan, the House Budget Committee chairman, who fashions himself the intellectual leader of the party, unveiling a budget manifesto he calls the “Path to Prosperity.”

Ryan portrays his goals in reassuringly pecuniary terms—he’s just the friendly neighborhood accountant here to help balance your checkbook. “I have a knack for numbers,” he chirps. ABC News compared him to a character in Dave, the corny 1993 movie about an average Joe who mistakenly assumes the presidency and calls in his CPA buddy—that would be Ryan—to scour the federal budget and bring it into balance. If he has any flaw, he just cares too much about rescuing the country from debt, gosh darn it!

In fact, the two streams—the furious Tea Party rebels and Ryan the earnest budget geek—both spring from the same source. And it is to that source that you must look if you want to understand what Ryan is really after, and what makes these activists so angry.

The Tea Party began early in 2009 after an improvised rant by Rick Santelli, a CNBC commentator who called for an uprising to protest the Obama administration’s subsidizing the “losers’ mortgages.” Video of his diatribe rocketed around the country, and protesters quickly adopted both his call for a tea party and his general abhorrence of government that took from the virtuous and the successful and gave to the poor, the uninsured, the bankrupt—in short, the losers. It sounded harsh, Santelli quickly conceded, but “at the end of the day I’m an Ayn Rander.”

Ayn Rand, of course, was a kind of politicized L. Ron Hubbard—a novelist-philosopher who inspired a cult of acolytes who deem her the greatest human being who ever lived. The enduring heart of Rand’s totalistic philosophy was Marxism flipped upside down. Rand viewed the capitalists, not the workers, as the producers of all wealth, and the workers, not the capitalists, as useless parasites.

John Galt, the protagonist of her iconic novel Atlas Shrugged, expressed Rand’s inverted Marxism: “The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains.”

In 2009 Rand began popping up all over the Tea Party movement. Sales of her books skyrocketed, and signs quoting her ideas appeared constantly at rallies. Conservatives asserted that the events of the Obama administration eerily paralleled the plot of Atlas Shrugged, in which a liberal government precipitates economic collapse.

One conservative making that point was Ryan. His citation of Rand was not casual. He’s a Rand nut. In the days before his star turn as America’s Accountant, Ryan once appeared at a gathering to honor her philosophy, where he announced, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.” He continues to view Rand as a lodestar, requiring his staffers to digest her creepy tracts.

When Ryan warns of the specter of collapse, he is not merely referring to the alarming gap between government outlays and receipts, as his admirers in the media assume. (Every policy change of the last decade that increased the deficit—the Bush tax cuts, the Medicare prescription-drug benefit, the wars in Afghanistan and Iraq—Ryan voted for.) He is also invoking Rand’s almost theological certainty that when a government punishes the strong to reward the weak, it must invariably collapse. That is the crisis his Path to Prosperity seeks to avert.

Viewed as an effort to reduce the debt, Ryan’s plan makes little sense. Many of its proposals either have nothing to do with reducing deficits (repealing the financial-reform bill loathed by Wall Street) or actually increase deficits (making the Bush tax cuts permanent). It relies heavily on distant, phantasmal cuts. During the debate over health-care reform, Ryan insisted that Medicare cuts used to finance universal coverage might add up on paper but they’d never stick—they were too far down the road, and Congress would just walk them back when people complained.

But Ryan proposes identical cuts in his own plan. What’s more, he saves trillions of dollars from Medicare by imposing huge cuts on anybody who retires starting in 2022. So not only has he adopted the cuts he claimed would never come to pass because they’re too harsh and too distant, he imposes far harsher and more distant cuts of his own. Indeed, Alice Rivlin, the fiscally conservative Democratic economist who endorsed an earlier version of his Medicare plan, called his new plan unrealistic. (Ryan nonetheless continues to imply that she supports it.)

Ryan’s plan does do two things in immediate and specific ways: hurt the poor and help the rich. After extending the Bush tax cuts, he would cut the top rate for individuals and corporations from 35 percent to 25 percent. Then Ryan slashes Medicaid, Pell Grants, food stamps, and low-income housing. These programs to help the poor, which constitute approximately 21 percent of the federal budget, absorb two thirds of Ryan’s cuts.

Ryan spares anybody over the age of 55 from any Medicare or Social Security cuts, because, he says, they “have organized their lives around these programs.” But the roughly one in seven Americans (and nearly one in four children) on food stamps? Apparently they can have their benefits yanked away because they were only counting on using them to eat.

Ryan casts these cuts as an incentive for the poor to get off their lazy butts. He insists that we “ensure that America’s safety net does not become a hammock that lulls able-bodied citizens into lives of complacency and dependency.” It’s worth translating what Ryan means here. Welfare reform was premised on the tough but persuasive argument that providing long-term cash payments to people who don’t work encourages long-term dependency. Ryan is saying that the poor should not only be denied cash income but also food and health care.

The class tinge of Ryan’s Path to Prosperity is striking. The poorest Americans would suffer immediate, explicit budget cuts. Middle-class Americans would face distant, uncertain reductions in benefits. And the richest Americans would enjoy an immediate windfall. Santelli, in his original rant, demanded that we “reward people [who can] carry the water instead of drink the water.” Ryan won’t say so, but that’s exactly what he’s doing.

By: Jonathan Chait, Senior Editor, The New Republic

April 11, 2011 Posted by | Class Warfare, Congress, Conservatives, Corporations, Deficits, Democrats, Economy, Federal Budget, Financial Reform, GOP, Government, Government Shut Down, Health Reform, Ideologues, Income Gap, Journalists, Media, Medicare, Middle Class, Politics, Rep Paul Ryan, Republicans, Right Wing, Social Security, Tea Party, Uninsured, Wall Street, Wealthy | , , , , , , , , , , , | 1 Comment

The Threat Of The Tea Party’s Budget Terrorism

Round one of the season’s big budget battle is over, with no real winners. Rounds two and three—the 2012 fiscal year budget and the debt ceiling—are bound to be nastier and more difficult. And it’s not just because budget-cutting is no fun and the Hill is so partisan. It’s that we now have a new element in the war against congressional impasse: the government suicide bomber.

It used to be, in budget battles past, that there was a common element that served as both a brake on emotional decision-making and an impetus for compromise. No one wanted to stop the entire government from operating, to deny basic services to people far away, literally and figuratively, from the partisan fights on the Hill. The floor fights had personal implications, as well, with lawmakers engaging in vitriolic, in-person arguments on the floor. I have a vivid memory of former Rep. Richard Gephardt somehow managing to slam the swinging doors in frustration as he exited the House chamber during one such battle. I remember former Rep. Ron Dellums, dressed exquisitely in a  tuxedo—and not in honor of the budget fight  vgb—as he pleaded for progress so he could attend the wedding of one of his children. “Mr. Speaker, can I please go love my son?” the former California lawmaker said.

As bad as those days were, they at least included a human element, and a common desire to avoid hurting their constituents. Now, lawmakers rarely debate each other on the House floor—they are more likely to come to the floor, make a two- or three-minute speech, then head back to their offices or party caucus meetings. And now, just as we have learned to adapt to airline security in a post-9/11 world, we have to contend with a federal budget terrorist mindset—the camp that is prepared to bring us all down to advance a political mission. What was once an ominous threat is now a battle cry, with antigovernment, Tea Party forces gleefully yelling “shut it down!”—as though all that was needed for peace and prosperity was to send home government workers.

There is a great deal of hypocrisy in some of that crowd; Michael Fletcher smartly reports in the Washington Post about the antigovernment mood in Oklahoma, which as a state benefits greatly from federal largesse. But while worries about the federal debt and deficit are justifiable, contempt for the very existence of government—and, by extension, the democratic process—is not. Members of Congress were elected to serve in the U.S. Capitol, not blow it up.

By: Susan Milligan, U.S. News and World Report, April 11, 2011

April 11, 2011 Posted by | Budget, Class Warfare, Congress, Consumers, Debt Ceiling, Democracy, Democrats, Economy, GOP, Government, Government Shut Down, Lawmakers, Middle Class, Politics, Republicans, Tea Party, Terrorism | , , , , | Leave a comment

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