Republican Balanced Budget Amendment: The Worst Idea In Washington
Bruce Bartlett takes a look at the Balanced Budget Amendment all 47 Republicans signed their names to and pronounces it “quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin.”
I think “stupid” is the wrong word. “Dangerous” is more like it. And maybe “radical.” This isn’t just a Balanced Budget Amendment. It also includes a provision saying that tax increases would require a two-thirds majority in both houses of Congress — so, it includes a provision making it harder to balance the budget — and another saying that total spending couldn’t exceed 18 percent of GDP. No allowances are made for recessions, though allowances are made for wars. Not a single year of the Bush administration would qualify as constitutional under this amendment. Nor would a single year of the Reagan administration. The Clinton administration would’ve had exactly two years in which it wasn’t in violation.
Read that again: Every single Senate Republican has endorsed a constitutional amendment that would’ve made Ronald Reagan’s fiscal policy unconstitutional. That’s how far to the right the modern GOP has swung.
But the problem isn’t simply that the proposed amendment is extreme. It’s also unworkable. The baby boomers are retiring and health costs are rising. Unless you have a way to stop one or the other from happening — and no one does — spending as a percentage of GDP is going to have to rise. This proposal doesn’t interrupt those trends. It simply refuses to acknowledge them — or, to be more generous, it rules them unconstitutional. This is the equivalent of trying to keep your kid cute by passing a law saying he’s not allowed to grow up.
Another problem: In a recession, tax revenue plummets and GDP stops growing, but spending has to be sustained, or even increased, to a) give people unemployment insurance and Medicaid and other services they need and b) keep the economy from contracting violently. This amendments includes no provisions for recessions, meaning that when the economy contracted, the government would have to contract as well. That is to say, we’re still not out of one of the deepest recessions in American history, and every Senate Republican has co-sponsored a constitutional amendment to make future recessions worse. It’s just breathtaking.
A world in which this amendment is added to the Constitution is a world in which America effectively becomes California. It’s a world where the procedural impediments to passing budgets and raising revenues are so immense that effective fiscal management is essentially impossible; it’s a world where we can’t make public investments or sustain the safety net; it’s a world where recessions are much worse than they currently are and the government has to do more of its work off-budget through regulation and gimmickry. I would like to say something positive about this proposal, say there’s some silver lining here. But there isn’t. This is economic demagoguery, and nothing more. It’s so unrealistic that it would’ve ruled all but two of the last 30 years unconstitutional, which means it’s so unrealistic that there has not yet been a Republican president who has proven it can be done. And that doesn’t just suggest it can’t be done: It suggests that when Republicans are actually in power and have control of the budget, they know perfectly well that it shouldn’t be done. They’re just pretending otherwise for the moment.
By: Ezra Klein, The Washington Post, April 1, 2011
Republican Policies Don’t Care About Poor People
I’m not saying that congressional Republicans don’t care about poor people. But they really care about rich people. So far, the policy agenda they’ve pushed has been a mixture of very expensive tax cuts for the very wealthy and very deep cuts to a lot of programs that focus on the very poor. It’s . . . curious.
Think back to the tax deal. The GOP’s demands were: 1) the extension of the Bush tax cuts for high-earners; and 2) a massive cut in the estate tax. Put together, the two items will increase the deficit by close to a trillion dollars over 10 years. If the GOP had wanted, they could’ve used that money for more tax cuts for the poor, or even the middle class. The Obama administration would’ve happily signed onto that compromise. But Republicans did not want that. If we were going to increase the deficit, we were going to do it on behalf of the wealthy.
Now they’ve moved onto deficit reduction, or at least spending cuts, and their priorities in the 2011 budget are telling. Their cuts are coming from non-defense discretionary spending. That’s a category of spending, as you can see here, that tends to focus on services to the poor, the jobless and children. Among other cuts, they’ve proposed slicing more than $1 billion off Head Start, $1.1 billion off the Public Housing Capital Fund, $752 million from the Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, and $5.7 billion from Pell Grants. I could, of course, go on. Democrats have tried to widen the cuts out to other categories so their impact falls less heavily on the disadvantaged, but so far, Republicans have refused. If we’re going to cut spending, we’re going to do it on the backs of the poor.
As for the 2012 budget, we know Social Security is being left alone, and we know Medicaid — which is to say, health care for poor people — is taking a $1 trillion cut. If we’re going to reform entitlements, it seems, we’re going to start with the one that serves the poor.
It’s very difficult to argue that these programs are the most wasteful in the federal government. The Pentagon is burning through a lot more cash than Head Start. Medicare spends much more for health services than Medicaid. The mortgage-interest tax deduction is regressive, as is the deduction for employer-based health care, but as of yet, Republicans haven’t proposed reforming either. Again, I’m not saying Republicans don’t care about poor people. But so far, their policy proposals don’t. And you can’t chalk it up to an appetite for sacrifice, because for all that the GOP is asking from the poor, they’ve fought hard to protect the rich from having to make any sacrifices. So far, it’s been program cuts for the poor and tax cuts for the rich. It’s a disappointing set of priorities.
By: Ezra Klein, The Washington Post, April 1, 2011
‘Government Shutdown Prevention Act’ Undermines Democracy
Legal training is not a requirement to serve in Congress, although many of the members are, and have been, lawyers. Nor is it necessary for a House or Senate member to have served in another government post, although many have, and their experience at forging alliances and compromises has been helpful. We no longer have literacy tests for voters, a technique southern states used until the 1960s, effectively to disenfranchise African-American voters.
Yet, it might not be a bad idea to require incoming members of Congress to take a basic test in civics.
How else, other than an alarming misunderstanding of the basic of American government, to explain the effort of House Republicans to shut the Senate out of the budget process? Their sanctimoniously titled “Government Shutdown Prevention Act” would do just that, deeming that if the Senate failed to pass a measure to keep the government running amid the current budget dispute, that the House-passed version would become law.
The idea is bizarre on so many levels—not least because the Senate would actually have to pass the Government Shutdown Prevention Act for the House to assume a dictatorial role in one of the three branches of the world’s greatest democracy. The current fashion of anti-intellectualism in politics aside, do the House Republicans not understand the elementary-school fundamentals of how a bill becomes a law.
The freshman GOP lawmakers are annoyed with the Democratic-controlled Senate, this time for failing to cave in on the dramatic cuts the House Republicans want in the budget. Join the club, folks: The House has long been irritated by the Senate. Ask the House Democrats, who approved more than 300 bills in the last Congress that ended up dying in a Senate that failed to pass them or even consider them.
But the rudimentary lesson of lawmaking (FYI—a bill has to be passed by both the House and the Senate, then signed by the president, to become law. If the president vetoes a bill, each chamber of Congress must summon a two-thirds majority to override the veto) are nowhere near as important as the lesson about getting things done in a country of diverse interests. The Tea Party crowd ran campaigns of anger and frustration, blaming Congress for its failure to get balanced budgets and myriad other things. There’s a reason for that, and it’s not because members are stupid (they’re not, and some of them are absolutely brilliant) or lazy (they work longer hours than most Americans imagine) or weak. It’s because this is a country of wildly divergent attitudes and perspectives, reflected in the lawmakers those citizens send to Congress. The Tea Partyers believe they were sent to Washington with a mission, and they likely were. So were Nancy Pelosi and other liberal members whose constituents have drastically different perspectives than those in the Tea Party team’s districts. And their views are no less valid.
Legislating requires compromise, and compromise is hard, especially during times of economic stress. Being a congressman is a difficult job, forcing them to balance their districts’ needs with the national interest. The new members signed up for this job. They should do it.
By: Susan Milligan, U.S. News and World Report, April 1, 2011
The Rich Are Different: They’re Luckier
This long attack on the unfairness of progressive taxation from the Hoover Institution by Kip Hagopian usefully embodies a lot of right-wing delusions about income inequality. It argues that a person’s income is determined by three things:
America’s free enterprise system provides an environment in which the substantial majority of its citizens can realize their fullest earnings potential. Within that environment, individual economic outcomes are the product of a combination of three elements: aptitude, work effort, and choice of occupation.
Aptitude. For the purposes of this essay, aptitude is broadly defined as the capacity to produce, or to earn income. For the most part, it comes from circumstances of birth and is distributed unequally. Aptitude may be derived from innate talents (cognitive, musical, artistic, athletic, etc.) or physical attributes (appearance, dexterity, possession of senses, etc.). Or it may be acquired from lessons learned from parents and other life experiences. Aptitude emanating from circumstances of birth (either innate or acquired) can be significantly enhanced by individual effort applied to strengthening one’s skills (see “Work Effort” below). Aptitude is measured from low to high in accordance with the monetary value placed on it in the marketplace. This is a measure of earning power and is not in any way an indication of an individual’s intrinsic worth as a human being. For most people aptitude is the most significant determinant of income. But it has to be understood as capacity; aptitude does not produce income until it is combined with individual effort.
Work effort. For any given level of aptitude and occupation, work effort plays the decisive role in determining income, and in many cases may result in persons with lower aptitudes earning more than their higher-aptitude peers. For the purposes of this essay, the term “work effort” includes not only the number of hours worked, but also the intensity of the effort applied during those hours. As noted above, it also includes work effort applied to strengthening one’s skills.
At every level of aptitude and in every profession, whether the pay is in salary or hourly wages, there are workers who outperform their peers in each hour worked. They do this by performing tasks more quickly; focusing on the tasks more intently; finding and completing additional tasks that need to be done; and using some of their leisure time practicing or training to become more skilled. These people get more raises, larger bonuses, and more promotions than their peers. Thus, greater work effort can produce higher income whether the person is paid by the hour or earns a salary.
In addition to producing higher income in its own right, work effort applied to strengthening one’s skill — resulting in “learned” or “enhanced” aptitude — can make a substantial contribution toward increasing income. The “rough” carpenter who spends nights and weekends developing the skills necessary to qualify as a more highly valued “finish” carpenter will move up the wage scale by doing so. Professional athletes, musicians, singers, and other performers can enhance their innate aptitudes substantially through extensive practice, and a great many are renowned for having done so. A classic example is Hall-of-Famer Jerry Rice, who is generally recognized as the best wide receiver in NFL history. He was one of the highest paid players in pro football for twenty years, an achievement largely credited to his intense practice and workout regimen. Perhaps the most effective way of enhancing aptitude is through increased study in school. Whether it is grade school, high school, vocational school or college, for any particular tier of aptitude, those who study the most almost always get the best grades, matriculate to the best colleges, and secure the best jobs.
Choice of occupation. Choice of occupation is also important in determining income. Had Bill Gates decided to finish Harvard and become a high school math teacher, he almost certainly would have been successful, but he would not have become a multi-billionaire.
Earned income is determined by a mix of the three factors described above, and the relative contribution of each varies by individual.
This is obviously written to minimize the role of luck. It acknowledges that Bill Gates made more money by choosing to become a software mogul than by choosing t be a high school math teacher. But, of course, Gates (as he has acknowledged) benefited enormously not just from his family situation but from the timing of his birth, which put him in the work force at a moment when computing technology was set to explode. If he had been born a decade or two earlier, he probably would have been an anonymous lab geek if he had followed his mathematical inclinations, or perhaps the owner of a successful grocery store chain if he had pursued his entrepreneurial instincts.
What’s more, it is demonstrably not the case that income levels simply reflect aptitude and effort. Now, obviously being from a richer family affords all sorts of advantages, including physical, emotional, and cultural development. But factor all that out of the equation and assume that it’s just fair for all those things to translate into higher academic performance and higher earnings.
Even assuming that, there are massive advantages inherent simply in being born rich (and disadvantages in being poor.) My favorite example, simply because it’s so dramatic, is that a child born into the lowest-earning quintile who manages to attain a college degree is less likely to be in the highest-earning quintile than a child born into the top quintile who does not attain a college degree. This is all the more remarkable when you consider that making it to, and through, college is far harder for poor kids than rich kids even at a given level of aptitude. (Two thirds of the kids with average math scores and low-income parents do not attend college, while almost two-thirds of high-income kids with average math scores do.)
How would Hagopian explain this? The lower-income kids managed to beat the odds by graduating from college, yet they make less money than the rich kids who beat the odds in the other direction by not going to college. By any measure, the former group has more aptitude and greater work ethic. Now, clearly right-wingers in general, and wealthy right-wingers in particular, like to think aptitude and effort and choices determine how much money you make. (Hagopian is the co-founder of a venture capital and private equity firm.) You see this from Greg Mankiw, Arthur Brooks, and on and on. The right-wing worldview is based on a moral premise about the relationship between merit and wealth that is demonstrably false.
By: Jonathan Chait, The New Republic, April 1, 2011
Tip Offs That Karl Rove Is A Perpetual Liar
There are certain tip-offs that suggest when somebody is misleadingly describing a politicians’ position. One of those tip offs is when you see somebody quoting a small piece of a sentence fragment, which often suggests a statement being wrenched out of context to alter its meaning. Another tip-off is when you read anything in the frequently-misleading Wall Street Journal editorial page. And yet another is when you come across any statement spoken or written by the compulsively dishonest Karl Rove. So the combination of Rove, writing for the Journal, quoting a sentence fragment is a red-siren tip off that some misleadin’ is going on.
Here’s Rove in today’s Journal, charging President Obama with flip-flopping on democracy promotion:
Mr. Obama also came out rhetorically for his predecessor’s Freedom Agenda, saying America supports “freedom for people to express themselves and choose their leaders” throughout the region. That statement is at odds with what Mr. Obama said in June 2005, when he insisted “we cannot, and should not, foist our own vision of democracy” on the Middle East.
Okay, having already used heuristics to establish with 99.99% certainty that Rove is lying, let’s nail down the final 0.01% by consulting Obama’s speech from 2005:
In testimony before Congress, Secretary Rice stated that while she believed it was possible to create a multi-ethnic, democratic Iraq under a unified national government, it was also possible that, in the near term, Iraq may look more like a loose federation and less like a tightly-knit, multi-ethnic society. According to the deal struck in the writing of the Constitution, the structure of the national government may still be altered by discussion among the three major factions. If it is the Administration’s most realistic assessment that the Iraqi government will take the form of a loose confederation, then we need to be thinking about how we should calibrate our policies to reflect this reality. We cannot, and should not, foist our own vision of democracy on the Iraqis, and then expect our troops to hold together such a vision militarily.
Notice that Rove has actually distorted Obama’s speech in two different ways. Obama was not invoking “our vision of democracy” to mean democracy, period. He was describing the debate in Iraq between advocates of a loose federation versus a strong national government, and arguing that the U.S. should let Iraqis settle this question rather than foist our vision upon them. Nowhere did Obama state, hint or imply that people in Iraq or elsewhere should not enjoy democracy.
Indeed, Rove cut off the portion of Obama’s sentence that referred to “on the Iraqis” and changed it to “the Middle East,” to further pull it out of the context and transform it into an attack on the rights of Arabs to enjoy democracy.
By: Jonathan Chait, The New Republic, March 31, 2011
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