Republicans Ignored Warnings On Paul Ryan Plan
It might be a political time bomb — that’s what GOP pollsters warned as House Republicans prepared for the April 15 vote on Rep. Paul Ryan’s proposed budget, with its plan to dramatically remake Medicare.
No matter how favorably pollsters with the Tarrance Group or other firms spun the bill in their pitch — casting it as the only path to saving the beloved health entitlement for seniors — the Ryan budget’s approval rating barely budged above the high 30s or its disapproval below 50 percent, according to a Republican operative familiar with the presentation.
The poll numbers on the plan were so toxic — nearly as bad as those of President Barack Obama’s health reform bill at the nadir of its unpopularity — that staffers with the National Republican Congressional Committee warned leadership, “You might not want to go there” in a series of tense pre-vote meetings.
But go there Republicans did, en masse and with rhetorical gusto — transforming the political landscape for 2012, giving Democrats a new shot at life and forcing the GOP to suddenly shift from offense to defense.
It’s been more than a month since Speaker John Boehner (R-Ohio) and his lieutenant, Majority Leader Eric Cantor (R-Va) boldly positioned their party as a beacon of fiscal responsibility — a move many have praised as principled, if risky. In the process, however, they raced through political red lights to pass Ryan’s controversial measure in a deceptively unified 235-193 vote, with only four GOP dissenters.
The story of how it passed so quickly — with a minimum of public hand-wringing and a frenzy of backroom machinations — is a tale of colliding principles and power politics set against the backdrop of a fickle and anxious electorate.
The outward unity projected by House Republicans masked weeks of fierce debate, even infighting, and doubt over a measure that stands virtually no chance of becoming law. In a series of heated closed-door exchanges, dissenters, led by Ryan’s main internal rival — House Ways and Means Committee Chairman Dave Camp (R-Mich.) — argued for a less radical, more bipartisan approach, GOP staffers say.
At a fundraiser shortly after the vote, a frustrated Camp groused, “We shouldn’t have done it” and that he was “overridden,” according to a person in attendance.
A few days earlier, as most Republicans remained mute during a GOP conference meeting on the Ryan plan, Camp rose and drily asserted, “People in my district like Medicare,” one lawmaker, who is now having his own doubts about voting yes, told POLITICO.
At the same time, GOP pollsters, political consultants and House and NRCC staffers vividly reminded leadership that their members were being forced to walk the plank for a piece of quixotic legislation. They described for leadership the horrors that might be visited on the party during the next campaign, comparing it time and again with former Speaker Nancy Pelosi’s decision to ram through a cap-and-trade bill despite the risks it posed to Democratic incumbents.
“The tea party itch has definitely not been scratched, so the voices who were saying, ‘Let’s do this in a way that’s politically survivable,’ got drowned out by a kind of panic,” a top GOP consultant involved in the debate said, on condition of anonymity.
“The feeling among leadership was, we have to be true to the people who put us here. We don’t know what to do, but it has to be bold.”
Another GOP insider involved to the process was more morbid: “Jumping off a bridge is bold, too.”
Time will tell whether the Medicare vote, the most politically significant legislative act of the 112th Congress thus far, will be viewed by 2012 voters as a courageous act of fiscal responsibility — or as an unforced error that puts dozens of marginal GOP seats and the party’s presidential candidates at serious risk. That question might be answered, in part, this week during a special election in New York’s 26th Congressional District, in which Republican Jane Corwin appears to be losing ground to Democrat Kathy Hochul.
The GOP message team is already scrambling to redefine the issue as a Republican attempt to “save” Medicare, not kill it.
But the party’s stars remain stubbornly misaligned. Presidential hopeful Newt Gingrich candidly described the Medicare plan as “right-wing social engineering” — only to pull it back when Ryan and others griped. And Priorities USA Action, an independent group started by two West Wing veterans of the Obama administration, was out Friday with its first ad, a TV spot in South Carolina using Gingrich’s words to savage Mitt Romney for saying he was on the “same page” as Ryan.
“The impact of what the House Republicans have done is just enormous. It will be a litmus test in the GOP [presidential] primary,” said former White House deputy press secretary Bill Burton, one of the group’s founders.
“I couldn’t believe these idiots — I don’t know what else to call them — they’re idiots. … They actually made their members vote on it. It was completely stunning to me,” said former Pennsylvania Gov. Ed Rendell, a Democrat who worked hard to win over the western part of his state, which has among the highest concentration of elderly voters in the country.
It was also the site of some of the Democrats’ worst losses in 2010 — three swing House seats Democrats hope to recapture next year, largely on the strength of the Medicare argument.
“Look at [freshman House members in the Pittsburgh-Scranton area], they make them vote on this when they’re representing one of the oldest districts in the country?” Rendell asked.
“We have a message challenge, a big one, and that’s what the polling is showing,” conceded Rep. Patrick McHenry (R-N.C.), a former Karl Rove protégé who enthusiastically backed the Ryan plan. “There’s no way you attack the deficit in my lifetime without dealing with the growth of Medicare. Do we get a political benefit from proposing a legitimate solution to a major policy problem? That’s an open question.”
The House Republican leadership had hinted at an emerging plan to tackle entitlement reform on Feb. 14 — the day Obama released his budget without reforms to Medicare, Medicaid and Social Security.
Cantor caught Hill reporters by surprise when he said, nonchalantly, that the Republican budget would be a “serious document that will reflect the type of path we feel we should be taking to address the fiscal situation, including addressing entitlement reforms.”
But there were also internal motivations in the decision to go big on Medicare, rooted in Boehner’s still tenuous grasp of the leadership reins, according to a dozen party operatives and Hill staffers interviewed by POLITICO.
Republican sources said Boehner, who has struggled to control his rambunctious new majority, needed to send a message to conservative upstarts that he was serious about bold fiscal reform — especially after some of the 63 freshmen rebelled against his 2011 budget deal that averted a government shutdown.
Then there’s the ever-present friction between Boehner and Cantor, who, along with Minority Whip Kevin McCarthy (R-Calif.), has positioned himself as the next generation of GOP leadership and champion of the conservative freshman class.
Boehner’s camp said the speaker has always supported the Ryan approach — which would offer vouchers to future Medicare recipients currently younger than 55 in lieu of direct federal subsidies — and proved his support by voting for a similar measure in 2009.
“Boehner has said for years, including leading up to the 2010 election, that we would honestly deal with the big challenges facing our country,” said his spokesman, Michael Steel. “With 10,000 Baby Boomers retiring every day, it is clear to everyone that Medicare will not be there for future generations unless it is reformed. The status quo means bankruptcy and deep benefit cuts for seniors. It’s clear who the real grown-ups in the room are. We’ve told the truth and led, while the Democrats who run Washington have cravenly scrambled and lied for partisan gain.”
But that message hasn’t always been quite that clear. On several occasions, Boehner has seemed squishy on the Ryan budget. In talking to ABC News, Boehner said he was “not wedded” to the plan and that it was “worthy of consideration.”
Still, even if Boehner had opposed the plan — and his top aide, Barry Jackson, expressed concerns about the political fallout to other staffers — he probably couldn’t have stopped the Ryan Express anyway, so great was the push from freshmen and conservatives.
That’s not to say some of the speaker’s allies from the Midwest didn’t try. Camp and Ryan hashed out their differences in a series of private meetings that, on occasion, turned testy, according to several GOP aides. Camp argued that the Ryan plan, which he backed in principle — and eventually voted for — was a nonstarter that would only make it harder to reach a bipartisan framework on real entitlement reform.
A few weeks later, Camp told a health care conference that, from a pragmatic legislative perspective, he considered the Ryan budget history. “Frankly, I’m not interested in talking about whether the House is going to pass a bill that the Senate shows no interest in. I’m not interested in laying down more markers,” he said.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) also made the case for a more moderate approach — but his principal concern was the Medicaid portion of Ryan’s plan, an approach he believed wouldn’t do enough to reduce burdens of indigent care on states.
But even as Democrats high-five over the possibility of Medicare-fueled political gains, Republicans are trying to muster a unified defense. Cantor, for his part, stumbled by suggesting to a Washington Post reporter that the Ryan Medicare provisions might be ditched during bipartisan debt negotiations being led by Vice President Joe Biden.
Cantor later clarified his remarks and claimed he still backed the Ryan principles, but no GOP staffer interviewed for this article believed the Medicare overhaul has any realistic chance of passage.
By: Glenn Thrush and Jake Sherman, Politico, May 23, 2011
John Boehner’s Unreality Check On The Deficit
The news out of House Speaker John Boehner’s speech to the New York Economic Club was his demand for “cuts of trillions, not just billions” before the debt ceiling can be raised. Not just broad deficit-reduction targets, the Ohio Republican insisted, but “actual cuts and program reforms.”
That’s alarming enough. It is all but impossible to get this done in the available time. It certainly can’t be accomplished on Boehner’s unbending, no-new-taxes terms. And if the speaker truly believes that it would be “more irresponsible” to raise the debt ceiling without instituting deficit-reduction measures than not to raise it at all, we’re in a heap of trouble.
Even more alarming, because it has consequences beyond the debt-ceiling debate, is the incoherent, impervious-to-facts economic philosophy undergirding Boehner’s remarks.
Reporters naturally tend to ignore this boilerplate. Journalistically, that makes sense. Boehner’s economic comments were nothing particularly new. Indeed, they reflect what has become the mainstream thinking of the Republican Party. But that’s exactly the point. We become so inured to hearing this thinking that we neglect to point out how wrong it is.
My argument with Boehner is not that he believes in a more limited role for government than I do, not that he is more skeptical of government intervention and regulation, and not that he is more worried about the economically stifling implications of tax increases. Those are legitimate ideological differences. American politics is better off for them.
I’m talking about statements that are simply false.
“The recent stimulus spending binge hurt our economy and hampered private-sector job creation in America.”
Reasonable economists can disagree about the effectiveness of the stimulus spending and whether it was worth the drag of the additional debt, but no reasonable economist argues that it hurt the economy in the short term.
The Congressional Budget Office estimates the stimulus added, on average, about one percentage point annually to economic growth and reduced the unemployment rate by half a point between 2009 and 2011. And that’s the low-end estimate. The high-end numbers show the stimulus spending adding more than 2 percentage points annually to economic growth and cutting the unemployment rate by more than 1 percentage point.
The CBO is not alone. Economists Alan Blinder and Mark Zandi estimated in a July 2010 paper that without the stimulus spending, the unemployment rate would be 1.5 percentage points higher.
“The massive borrowing and spending by the Treasury Department crowded out private investment by American businesses of all sizes.”
Crowding out occurs when government spending drives up interest rates and makes borrowing unattractive to the private sector. As economist Joseph Minarik of the Committee for Economic Development explains, “When interest rates are on the floor, you can’t say federal government borrowing is crowding out business investment.” The lackluster investment climate reflects low consumer demand and underutilized capacity. You can’t be crowded out of a room you’re not trying to enter.
“The truth is we will never balance the budget and rid our children of debt unless we cut spending and have real economic growth. And we will never have real economic growth if we raise taxes on those in America who create jobs.”
Never? Under President Clinton, taxes were raised, primarily on the wealthy. During the eight years of his administration, the economy grew by an average of close to 4 percent.
“I ran for Congress in 1990, the year our nation’s leaders struck a so-called bargain that raised taxes as part of a bipartisan plan to balance the budget. The result of that so-called bargain was the recession of the early 1990s. It wasn’t until the economy picked back up toward the end of that decade that we achieved a balanced budget.”
Boehner blames the budget deal for tanking the economy, but the recession actually started in July 1990, two months before the agreement was reached. And that revived economy? It came despite the supposed dead weight of the Clinton tax increase.
“A tax hike would wreak havoc not only on our economy’s ability to create private-sector jobs, but also on our ability to tackle the national debt.”
During the early 1980s, taxes were cut and public debt ballooned, from 26 percent of GDP in 1980 to 40 percent by 1986. In 1993, taxes were increased (and spending cut); debt as a share of the economy fell, from 49 percent to 33 percent. In 2001 and 2003, taxes were cut. By the time President Obama took office, debt had climbed to 40 percent of GDP.
Listening to Boehner, I began to think the country suffers from two deficits: the gap between spending and revenue, and the one between reality and ideology. The first cannot be solved unless we find some way of at least narrowing the second.
By: Ruth Marcus, Opinion Writer, The Washington Post, May 10, 2011
Deficits Still Don’t Matter To Republicans
Think there will eventually be a bipartisan deal to increase the public debt limit after an extended period of Kabuki Theater posturing? Maybe it’s time to think again.
Ezra Klein really hits the nail on the head in describing the “negotiations” as they stand today:
The negotiation that we’re having, in theory, is how to cut the deficit in order to give politicians in both parties space to increase the debt limit. But if you look closely at the positions, that’s not really the negotiation we’re having. Republicans are negotiating not over the deficit, but over tax rates and the size of government. That’s why they’ve ruled revenue “off the table” as a way to reduce the deficit, and why they are calling for laws and even constitutional amendments that cap federal spending rather than attack deficits. Democrats, meanwhile, lack a similarly clear posture: most of them are negotiating to raise the debt ceiling, but a few are trying to survive in 2012, and a few more are actually trying to reduce the deficit, and meanwhile, the Obama administration just met with the Senate Democrats to ask them to please, please, stop laying down new negotiating markers every day.If we were really just negotiating over the deficit, this would be easy. The White House, the House Republicans, the House Progressives, the House Democrats and the Senate Republicans have all released deficit-reduction plans. There’s not only apparent unanimity on the goal, but a broad menu of approaches. We’d just take elements from each and call it a day. But if the Republicans are negotiating over their antipathy to taxes and their belief that government should be much smaller, that’s a much more ideological, and much tougher to resolve, dispute. The two parties don’t agree on that goal. And if the Democrats haven’t quite decided what their negotiating position is, save to survive this fight both economically and politically, that’s not necessarily going to make things easier, either. Negotiations are hard enough when both sides agree about the basic issue under contention. They’re almost impossible when they don’t.
It’s worth underlining that “deficits” and “debt” don’t in themselves mean any more to conservatives than they did when then-Vice President Dick Cheney said “deficits don’t matter” in 2002. Every Republican “deficit reduction” proposal is keyed to specific spending cuts–without new revenues–and increasingly, to an arbitrary limit on spending as a percentage of GDP. Even the version of a constitutional balanced budget amendment that Sen. Jim DeMint is insisting on as part of any debt limit deal would have a spending-as-percentage-of-GDP “cap” (at 18%, as compared to about 24% currently) that would force huge spending reductions (you can guess from where since GOPers typically consider defense spending as off-limits as taxes).
Today’s Republicans are simply using deficits as an excuse to revoke as much of the New Deal/Great Society tepid-welfare-state system as they can get away with. And it’s really just a latter stage of the old conservative Starve-the-Beast strategy for deliberately manufacturing deficits in order to cut spending. Democrats should point this out constantly, and not let Republicans get away with claiming they are only worried about debt and fiscal responsibility.
By: Ed Kilgore, The Democratic Strategist, May 12, 2011
The Grand Delusion: Higher Taxes “Soak” The Rich
Squeezing, gouging, soaking, it’s all the same, and it’s all wrong. The richest Americans, we hear it said, pay most of the federal income taxes. That’s true. But since 1980 their AFTER-TAX SHARE of America’s income has TRIPLED. That’s a trillion dollars a year in extra income for the wealthiest 1%.
A trillion dollars is seven times more than the budget deficits of all 50 states combined.
A trillion dollars, if it hadn’t been redistributed to the rich, would provide an extra $10,000 a year for every family that has contributed to American productivity since 1980.
The defenders of unlimited wealth insist that the very rich have earned their money. But what does EARN mean? Does it mean that the million richest families worked harder than the other 99 million families for thirty years? Does it mean that one man can bet against the mortgage industry and make enough money to pay the salaries of 100,000 health care workers? Does it mean using American research and infrastructure and national security to build a corporation that pays zero federal income taxes?
Most of the fortunate 1% benefited from tax cuts, financial system de-regulation, ownership of 50% of the stock market, and a 15% capital gains tax. According to a study by the University of California, in 2008 only 19% of the income reported by the 13,480 individuals or families making over $10 million came from wages and salaries.
The very rich claim that their income growth stimulates the economy. But it hasn’t happened. Low-income earners spend a greater percentage of their overall income on consumption, but they have less purchasing power than they had thirty years ago.
What the very rich won’t admit is that they benefit the most from government-funded research, national security, infrastructure, property rights, and a financial industry tailored to their pleasure and profit.
Instead, they claim that anyone can be rich if only they work hard. Much of America wouldn’t know if this is true. They haven’t had a chance to work lately.
By: Paul Buchheit, CommonDreams.org, May 10, 2011
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