“I’m Not A Politician So Let Me Be Perfectly Clear”: Raise America’s Taxes!
President Obama in his speech on Wednesday confronted a topic that is harder to address seriously in public than sex or flatulence: America needs higher taxes.
That ugly truth looms over today’s budget battles, but politicians have mostly preferred to run from reality. Mr. Obama’s speech was excellent not only for its content but also because he didn’t insult our intelligence.
There is no single reason for today’s budget mess, but it’s worth remembering that the last time our budget was in the black was in the Clinton administration. That’s a broad hint that one sensible way to overcome our difficulties would be to revert to tax rates more or less as they were under President Clinton. That single step would solve three-quarters of the deficit for the next five years or so.
Paradoxically, nothing makes the need for a tax increase more clear than the Republican budget proposal crafted by Representative Paul Ryan. The Republicans propose slashing spending far more than the public would probably accept — even dismantling Medicare — and rely on economic assumptions that are not merely rosy, but preposterous.
Yet even so, the Republican plan shows continuing budget deficits until the 2030s. In short, we can’t plausibly slash our way back to solid fiscal ground. We need more revenue.
Kudos to Mr. Obama for boldly stating that truth in his speech — even if he did focus only on taxes for the very wealthiest. I also thought he was right to say that we need spending cuts — including in our defense budget. Mr. Obama didn’t say so, but the United States accounts for almost as much military spending as the entire rest of the world put together.
As I see it, there are three fallacies common in today’s budget discussions:
• Republicans are the party of responsible financial stewardship, struggling to put America on a sound footing.
In truth, both parties have been wildly irresponsible, but in cycles. Democrats were more irresponsible in the 1960s, the two parties both seemed care-free in the ’70s and ’80s, and since then the Republicans have been staggeringly reckless.
After the Clinton administration began paying down America’s debt, Republicans passed the Bush tax cuts, waded into a trillion-dollar war in Iraq, and approved an unfunded prescription medicine benefit — all by borrowing from China. Then-Vice President Dick Cheney scoffed that “deficits don’t matter.”
This borrow-and-spend Republican history makes it galling when Republicans now assert that deficits are the only thing that matter — and call for drastic spending cuts, two-thirds of which would harm low-income and moderate-income Americans, according to the Center on Budget and Policy Priorities. To pay for tax cuts heaped largely on the wealthiest Americans, Republicans in effect would gut Medicare and slash jobs programs, family planning and college scholarships. Instead of spreading opportunity, federal policy would cap it.
• Low tax rates are essential to create incentives for economic growth: a tax increase would stifle the economy.
It’s true that, in general, higher taxes tend to reduce incentives. But this seems a weak effect, often overwhelmed by other factors.
Were Americans really lazier in the 1950s, when marginal tax rates peaked at more than 90 percent? Are people in high-tax states like Massachusetts more lackadaisical than folks in a state like Florida that has no personal income tax at all?
Tax increases can also send a message of prudence that stimulates economic growth. The Clinton tax increase of 1993 was followed by a golden period of high growth, while the Bush tax cuts were followed by an anemic economy.
• We can’t afford Medicare.
It’s true that America faces a basic problem with rapidly rising health care costs. But the Republican plan does nothing serious to address health care spending, other than stop paying bills. Indeed, Medicare is cheaper to administer than private health insurance (2 percent to 6 percent administrative costs, depending on who does the math, compared with about 12 percent for private plans). So the Republican plan might add to health care spending rather than curb it.
The real challenge is to control health care inflation. Nobody is certain how to do that, but the Obama health care law is testing some plausible ideas. These include rigorous research on which procedures work and which don’t. Why pay for surgery on enlarged prostates if certain kinds of patients turn out to be better with no treatment at all?
Ever since Walter Mondale publicly committed hara-kiri in 1984 by telling voters that he would raise their taxes, politicians have run from fiscal reality. As baby boomers age and require Social Security and Medicare, escapism will no longer suffice. We need to have a frank national discussion of painful steps ahead, and since I’m not a politician, let me be perfectly clear: raise my taxes!
By: Nicholas Kristof, The New York Times, April 13, 2011
The Selfish Budget Or The Selfless Budget
It was refreshing to hear all those unambiguous declarations from President Obama on Wednesday. “I will not” let Medicare become a voucher program or deprive families with disabled children of needed benefits. “We will” reform government health-care programs without disavowing the social compact. “I refuse” to sign another renewal of the Bush tax cuts for millionaires. Republicans “want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. . . . And it’s not going to happen as long as I’m president.”
Okay, there weren’t any lines with the simple heat of “Mr. Gorbachev, tear down this wall” or the terse power of “Make my day.” But Obama’s budget manifesto represented a significant warming of his usually cool rhetoric. He said he wanted to find common ground but instead devoted much of the speech to drawing lines in the sand.
And thank goodness. If ever there were a time when lines desperately needed to be drawn, it’s now.
Before we get carried away with praise, let’s remember that even as he gets in touch with his Old Testament side, Obama is playing defense. Republicans have already forced him to accept budget cuts that he abhors, and it’s a given that more slashing and burning will follow. Obama noted the questionableness of choking off government spending at a time when the economy is struggling for altitude. Yet he proposes doing just that — which means his GOP opponents are setting the agenda.
Let’s also remember that those tax cuts for the rich were as unjust, outrageous and totally unacceptable last fall as they are today. Which many commentators noted (ahem). Before someone caved to Republican demands and signed legislation extending the millionaires’ tax break for two more years. That someone being Obama.
The president glossed over this inconvenient history. What he managed to do admirably, however, was distinguish between his vision of America and the one sketched by Rep. Paul Ryan (R-Wis.) on behalf of House Republicans. It was, as Obama’s critics charge, a political speech — and rightly so. The questions at the heart of the battle over spending and entitlements are, after all, fundamentally political.
It’s not just a matter of drawing a graph in which the line called “expenditures” meets the line called “revenue.” The question is how this intersection is made to occur. Ryan’s plan and Obama’s plan both reduce the deficit by about $4 trillion over the next decade, but they do so in starkly different ways.
Perhaps the clearest example of the difference is how the two plans would handle Medicare and Medicaid, the chief drivers of the deficit. Obama wants to maintain both programs as entitlements. He believes, as I do, that we have a collective interest in ensuring that the elderly and the poor receive the health care they need and deserve. He sees this as a matter not just of compassion but of common sense: We’ve already fallen behind other industrialized democracies in major health indicators, including life expectancy, and we certainly won’t “win the future” by becoming an unhealthier nation.
Republicans apparently believe it’s enough to ensure that state-of-the-art medical care is available to those who can afford to pay for it. Under Ryan’s plan, Medicare and Medicaid could no longer be described as true federal entitlements. This is no exaggeration, because under neither program would adequate health care be guaranteed. Seniors and the poor would, increasingly, have to fend for themselves.
The Republican plan would turn Medicare into a voucher program that subsidizes the purchase of private health insurance. So what if an individual’s insurance premiums are not covered by the voucher? So what if health costs, and premiums, continue to skyrocket? The free market will surely take care of all that, somehow or other.
On Medicaid, Republicans want to shift the burden to the states, giving them block grants and essentially telling them to take care of the indigent however they choose. Some states would be diligent in providing adequate medical care. Some would not.
Is this the kind of America we want? How selfish are we, really? How selfless? To what extent does this churchgoing nation take the biblical instruction to “love thy neighbor” seriously?
These are the kinds of basic choices we face. There are two plans on the table now. Only one of them — Obama’s — appeals to the better angels of our nature.
By: Eugene Robinson, Opinion Writer, The Washington Post, April 14, 2011
Behind the Abortion War: Sen Jon Kyl And Other Things “Not Intended To Be Factual”
Part of the price of keeping the government operating this week is another debate over the financing of Planned Parenthood. Whoopee.
At least it’ll give us a chance to reminisce about Senator Jon Kyl, who gave that speech against federal support for Planned Parenthood last week that was noted for: A) its wild inaccuracy; and B) his staff’s explanation that the remarks were “not intended to be a factual statement.”
This is the most memorable statement to come out of politics since Newt Gingrich told the world that he was driven to commit serial adultery by excessive patriotism.
The speech in question was Kyl’s rejoinder to the argument that Planned Parenthood provides a critically important national network of women’s health services.
“You don’t have to go to Planned Parenthood to get your cholesterol or your blood pressure checked. If you want an abortion, you go to Planned Parenthood, and that’s well over 90 percent of what Planned Parenthood does,” Kyl declared.
Planned Parenthood says that abortions, which are not paid for with federal money, constitute 3 percent of the services they provide. That’s quite a gap. But only if you’re planning on going factual.
Anyhow, that was definitely a high point. Next year, Kyl is retiring from the Senate and returning to the private sector, where he will have leisure to contemplate that this was the single moment of his public career for which he became nationally famous.
But there’s another part of Kyl’s speech that’s more significant. Take a look at the “good” nonabortion services he does mention. They don’t include contraception, which seems strange since Planned Parenthood has definitely gone public with its association with family planning.
And he’s not alone. Senator Patty Murray, one of the leaders of the defense of Planned Parenthood in the Senate, says that she doesn’t remember any of the lawmakers who wanted to strip Planned Parenthood’s funds mentioning that they supported contraception services. “They just lump everything into one big basket with the word ‘abortion,’ ” she said.
This is important because it speaks to a disconnect in the entire debate we’ve been having about women and reproduction. For eons now, people have been wondering why the two sides can’t just join hands and agree to work together to reduce the number of abortions by expanding the availability of family-planning services and contraception.
The answer is that a large part of the anti-abortion community is also anti-contraception.
“The fact is that 95 percent of the contraceptives on the market kill the baby in the womb,” said Jim Sedlak of the American Life League.
“Fertility and babies are not diseases,” said Jeanne Monahan of the Family Research Council’s Center for Human Dignity, which has been fighting against requiring insurance plans to cover contraceptives under the new health care law.
Many anti-abortion activists believe that human life and, therefore, pregnancy begin when the human egg is fertilized and that standard birth control pills cause abortions by keeping the fertilized egg from implanting in the womb. This isn’t the general theory on either count. The American College of Obstetricians and Gynecologists defines pregnancy as beginning with the fertilized egg’s implantation. Dr. Vanessa Cullins of Planned Parenthood says that the pills inhibit the production of eggs or stop the sperm before they reach their destination. “There is absolutely no direct evidence that there is interference with implantation,” she said.
Beyond the science, there’s the fact that many social conservatives are simply opposed to giving women the ability to have sex without the possibility of procreation.
“Contraception helps reduce one’s sexual partner to just a sexual object since it renders sexual intercourse to be without any real commitments,” says Janet Smith, the author of “Contraception: Why Not.”
The reason this never comes up in the debates about reproductive rights in Washington is that it has no popular appeal. Abortion is controversial. Contraception isn’t. A new report by the Guttmacher Institute found that even women who are faithful Catholics or evangelicals are likely to rely on the pill, I.U.D.’s or sterilization to avoid pregnancy. Rachel Jones, a lead author of the report, said the researchers found “no indication whatsoever” that religious affiliation has any serious effect on contraception use.
What we have here is a wide-ranging attack on women’s right to control their reproductive lives that the women themselves would strongly object to if it was stated clearly. So the attempt to end federal financing for Planned Parenthood, which uses the money for contraceptive services but not abortion, is portrayed as an anti-abortion crusade. It makes sense, as long as you lay off the factual statements.
By: Gail Collins, Op-Ed Columnist, The New York Times, April 13, 2011
The Long Game In The Budget Battles: Advantage Obama
Late last year, when President Obama overhauled his economic team, some people complained that the departure of Larry Summers and Christina Romer left the White House short of first-rate economists. That may have been true, but what the White House lost in intellectual sparkle it more than made up for in Washington know-how. With Gene Sperling as head of the National Economic Council and Jack Lew as budget director, it boasts two veterans of the Clinton-era budget war—two men who know how to outmaneuver right-wing Republicans.
In the past few months, Sperling and Lew have been playing from the nineteen-nineties playbook. Initially, they produced a budget for 2012 that didn’t do very much at all about long-term deficits, and was instantly proclaimed dead on arrival. Budget hawks cried foul. But the White House was playing a long game, and its budget proposal was merely an opening gambit. Then came Congressman Paul Ryan with his radical “roadmap” to budget balance over the next ten years, which featured slashing reductions in domestic spending, more big tax cuts for the rich, and the conversion of Medicare to a voucher program. I irked some readers by saying that Ryan deserved credit for at least making a specific proposal, but I still believe liberals everywhere should be grateful. By spelling out what the Republicans would do to Medicare and Medicaid, he may well have deprived his party of the White House for the foreseeable future.
If you want to know why Ryan’s “budget-cutting” plan makes no financial sense, the Financial Times’ Martin Wolf spells it out very clearly in his latest column, which is based on an analysis by the non-partisan Congressional Budget Office analysis. If you want to know why Ryan’s plan is political poison, look at Ezra Klein’s blog, where he cites a recent opinion poll showing that a plurality of Republicans—yes Republicans—think the best option for Medicare is to not cut it at all. To say the very least, Ryan presented President Obama with a big opportunity to occupy the center ground. And despite the jibes about him being a covert socialist, this is clearly the ground on which the President feels most comfortable.
And so to today’s budget speech, in which Obama presented his own eminently centrist plan to reduce the deficit without privatizing Medicare, without slashing domestic spending to the point where many government programs won’t be able to operate, and without introducing any big tax increases. I wouldn’t sweat the individual numbers that Obama presented, such as his claim that his proposals would cut the budget deficit by four trillion dollars over twelve years. Forecasting the budget deficit next year is a challenge. Forecasting the deficit three years out is extremely difficult. Ten-year budget projections are largely meaningless.
What is important is the big picture. Where Ryan proposes radical changes to taxes and spending that would alter the social contract between government and governed, President Obama is arguing that we can trim our way to fiscal sustainability. Some cuts here, some tax breaks eliminated there, and, lo and behold, the deficit will be down to two per cent of G.D.P.
To be fair, the President isn’t saying it will be easy. If by 2014 Congress can’t come up with enough cuts to stabilize the debt-to-G.D.P. ratio, he is calling for a “debt failsafe” trigger that would involve spending reductions in all programs except Social Security, Medicaid, and low-income programs. To slow the growth of entitlement spending, he is proposing to beef up the Independent Payment Advisory Board, which the health-care reform act created, and setting it at a target of keeping Medicare growth to the rate of G.D.P. growth plus half a per cent. Even the Pentagon, which has been largely exempted from budget pressures since 9/11, would have to find some (overly modest) cuts. But compared to what Ryan is proposing, these are all relatively minor changes.
Is the plan credible? Without seeing the details, it is hard to say. In the fact-sheet it circulated today, the White House avoided saying which tax loopholes it is in favor of eliminating—the mortgage interest deduction?—and it also failed to provide any projections about, say, the level of federal spending and debt as a percentage of G.D.P. in 2020. That vagueness was certainly deliberate. At this juncture, the White House still doesn’t want to reveal all of its hand. Rather than placating the budget hawks with a definitive and fully worked out set of proposals, the Administration is betting that the bond market will give it more time—time in which the American people can learn more about the specifics of Ryan’s proposals, and get even less enthusiastic about them.
This game still has a long way to run. But if I were a betting man, and occasionally I am, I would wager on Sperling and Lew coming out on top rather than the congressman from Wisconsin.
By: John Cassidy, The New Yorker, April 13, 2011
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