Boehner The Extortionist: “Give Us Trillions In Cuts In Medicare and Medicaid Or We Blow Up The Economy”
Stripped of its politician’s gloss, this is the message that House Speaker John Boehner delivered to Wall Street Monday in discussing the price Republicans demand for raising the debt ceiling.
Boehner portrays himself as a reluctant extortionist: “It’s true that allowing America to default would be irresponsible.” But he told the barons of Wall Street he has no choice. The Tea Party made him do it: “Washington’s arrogance has triggered a political rebellion in our country. And it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process.”
Notice the Speaker’s phrasing. He curses deficits and debt but he isn’t focused on them. He is focused on “our spending addiction.” “Everything is on the table,” he says, “with the exception of tax hikes.”
And even that is a half-truth, since Boehner and his party have also no appetite for real cuts in the defense budget. Boehner isn’t pushing to get out of Iraq and Afghanistan and roll back the costly U.S. global police role. In the budget that Boehner pushed through the House, Republicans voted to give the Pentagon back most of the relatively nominal defense cuts that Defense Secretary Robert Gates had projected over the next years. And many harshly censored the president for suggesting that another $400 billion in cuts might be chipped out of the more than $8 trillion the Pentagon will spend over the next 12 years.
So if tax hikes aren’t allowed—even though the wealthiest Americans are now paying a lower effective tax rate than their chauffeurs—and defense cuts are off the table, how does Boehner propose to get “trillions” in spending cuts? Medicare and Medicaid get the ax. Or as Boehner puts it in politician speak, “Everything on the table” includes “honest conversations about how best to preserve Medicare.”
The budget math is inescapable. The federal government, as Paul Krugman puts it, is basically an insurance system for our retirement years that also has an army. About half of the government’s spending is in retirement programs—Social Security, Medicare, much of Medicaid and other insurance programs. Defense is half of the rest. All of the rest of government —public health, environmental protection, the IRS, the FBI and Justice Department, education, Pell grants, roads, health research, R&D—consumes the last fourth. When Republicans take taxes and defense off the table, and call for trillions in spending cuts and you have no choice but to go after Medicare, Medicaid and/or Social Security.
Which of course is what they are doing. The House budget cuts nearly $800 billion out of Medicaid over the next five years—and ends Medicare as we know it.
There is a bitter irony to this. The current deficits stem largely from three sources—the Bush tax cuts, the two wars that were fought on the tab, and the Great Recession that cratered tax revenues and lifted spending on everything from unemployment to food stamps to the recovery spending. Boehner argues that “adding nearly a trillion to our national debt—money borrowed mostly from foreign investors—caused a further erosion of economic confidence in America.” But he ignores the trillions added to the debt by the Bush tax cuts, the wars and the Great Recession, focusing only on the Obama recovery spending, which made the smallest contribution of all of these to the deficits. And, he rules out reversing the top-end tax cuts or cutting the military spending to address the deficits that they helped to create. (And if we actually adopt his policies, he’s likely to extend the Great Recession as well).
Boehner argues that adopting his position would show that Washington is “starting to get the message” from the American people. But Boehner isn’t hearing what most Americans are saying. Americans are concerned about deficits, and they are certain that government wastes significant portions of their money. They also oppose the billions squandered on subsidies and tax breaks for Big Oil, Big Pharma, Agribusiness and the like—tax breaks that Republicans defend, arguing that repealing them constitutes a tax increase.
In fact, the vast majority of Americans don’t agree with Boehner’s priorities. The Campaign for America’s Future, which I help direct, has started an American Majority campaign to remind the media of this fact. Three quarters oppose cutting Medicare to help balance the budget. Two thirds oppose raising the retirement age. Three fourths oppose cutting state funding for Medicaid. Over 60 percent favor raising taxes on those making over $250,000 to help reduce the deficit. A growing majority think defense cuts ought to be on the table.
Boehner wants to extort his cuts now—at a time when the economy is struggling, and the country is suffering from mass unemployment. With interest rates near record lows, the construction industry idle and our infrastructure in deadly state of disrepair, the country would be well advised to use this occasion to invest in rebuilding the country, and put workers back to work.
Instead, Boehner offered Wall Streeters a shower of conservative shibboleths, stuck randomly like pieces of lint on a serge suit. “The massive borrowing and spending by the Treasury Department crowded out private investment by American businesses of all sizes,” he argued to what must have been a bemused audience well aware that with interest rates low, and business sitting on trillions in capital waiting for demand to pick up, the only “crowding out” comes from ideology displacing reality in Boehner’s head..
Boehner argues that business people crave stability. Even the mere threat of tax hikes causes them to retreat from investments they might otherwise make. Regulatory changes are similarly disruptive:
“For job creators, the ‘promise’ of a large new initiative coming out of Washington is more like a threat. It freezes them. Instead of investing in new employees or new equipment, they make the logical decision to stand pat.” Sadly, Boehner didn’t explain why the threat to blow up the economy if he can’t get trillions in unidentified spending cuts doesn’t constitute the “promise” of a large new initiative coming out of Washington.”
What happens now? Boehner’s position is untenable. He is holding a hostage—the economy—that he dare not shoot. He is demanding trillions in cuts from programs that he dare not name. He is looking for a back room negotiation in which he can get the president to give him cover in enacting cuts that are unpopular to the American people and likely to be ruinous to the economy. If the president falls for it, Republicans make progress in dismantling the Medicare program that they have always opposed, and the president takes the rap for the bad economy.
What’s to be done? Jonathan Chait gets it right. The president—and the country—would benefit from an open discussion, not a backroom negotiation. The president needs to call Boehner out. What are the trillions in cuts that he wants as the price for letting the economy go free? If he lays them out, as in passage of the House budget plan that ends Medicare as we know it, the President can show Americans why they are unacceptable, and use the bully pulpit to take the case to the country. If Boehner isn’t prepared to lay out his cuts, call his bluff. Surely he can’t long threaten to cripple the economy if he doesn’t get cuts that he isn’t prepared to define.
One thing Boehner says rings true. Americans are sick of the arrogance in Washington. But it is hard to imagine a more arrogant politician than one threatening to blow up the economy if he doesn’t get his way.
By: Robert Borosage, CommonDreams.org, May 10, 2011
Big Government Bailout Worked
Don’t expect to see a lot of newspapers and Web sites with this headline: “Big Government Bailout Worked.” But it would be entirely accurate.
The actual headlines make the point. “Demand for fuel-efficient cars helps GM to $3.2 billion profit,”declared The Post. “GM Reports Earnings Tripled in First Quarter, as Revenue Jumped 15%,” reported the New York Times.
Far too little attention has been paid to the success of the government’s rescue of the Detroit-based auto companies, and almost no attention has been paid to how completely and utterly wrong bailout opponents were when they insisted it was doomed to failure.
“Having the federal government involved in every aspect of the private sector is very dangerous,” Rep. Dan Burton (R-Ind.) told Fox News in December 2008. “In the long term it could cause us to become a quasi-socialist country.” I don’t see any evidence that we have become a “quasi-socialist country,” just big profits.
Rep. Lamar Smith (R-Tex.) called the bailout “the leading edge of the Obama administration’s war on capitalism,” while other members of Congress derided the president’s auto industry task force. “Of course we know that nobody on the task force has any experience in the auto business, and we heard at the hearing many of them don’t even own cars,” declared Rep. Louie Gohmert (R-Tex.) after a hearing on the bailout in May 2009. “And they’re dictating the auto industry for our future? What’s wrong with this picture?”
What’s wrong, sorry to say, is that you won’t see a news conference where the bailout’s foes candidly acknowledge how mistaken they were.
The lack of accountability is stunning but not surprising. It reflects a deep bias in the way our political debate is carried out. The unexamined assumption of so much political reporting is that attacks on government’s capacity to do anything right make intuitive sense because “everybody knows” that government is basically inefficient and incompetent, especially when compared with the private sector.
Government failure gets a lot of coverage. That’s useful because government should be held accountable for its mistakes. What’s not okay is that we hear very little when government acts competently and even creatively. For if mistakes teach lessons, successes teach lessons, too.
In the case of the car industry, allowing the market to operate without any intervention by government would have wiped out a large part of the business that is based in Midwestern states. This irreversible decision would have damaged the economy, many communities and tens of thousands of families.
And contrary to critics’ predictions, government officials were quite capable of working with the market to restructure the industry. Government didn’t overturn capitalism. It tempered the market at a moment when its “natural” forces were pushing toward catastrophe. Government had the resources to buy the industry time.
What’s heartening is that average voters understand that broad assaults on government provide better guidance for the production of sound bites than for the creation of sensible public policy. That’s why House Republicans are backpedaling like crazy on their plans to privatize Medicare — even as they pretend not to.
Conservatives really believed that voters mistrusted government so much that they’d welcome a chance to scrap Big Government Medicare and have the opportunity to purchase policies in the wondrous health insurance marketplace. Don’t people assume that anything is better than government?
But there were deep potholes on the road to a market utopia. Put aside that the Republican budget wouldn’t provide enough money in the long term for the elderly to afford decent private coverage. The truth is that most consumers don’t have great confidence in the private insurance companies, with which they have rather a lot of experience.
When it comes to guaranteeing their access to health care in old age, most citizens trust government more than they trust the marketplace. This doesn’t mean they think Medicare is without flaws. What they do know is that Medicare does not cut people off in mid-illness and that its coverage is affordable because government subsidizes it.
It’s axiomatic that government isn’t perfect and that we’re better off having a large private sector. It ought to be axiomatic that the private market isn’t perfect, either, and that we need government to step in when the market fails. The success of the auto bailout and the failure of the Republicans’ anti-Medicare campaign both teach the same lesson: The era of anti-government extremism is ending.
By: E. J. Dionne, Opinion Writer, The Washington Post, May 8, 2011
What Do You Mean We, White Man? Deficit Edition
Whenever I read pieces like David Brooks’s column this morning — pieces that attribute our budget deficits to the public’s irresponsibility and lack of realism — I find myself wondering how so much recent history went down the memory hole.
To be fair, polling on budget questions does suggest a popular demand that we repeal the laws of arithmetic — that we not raise taxes, not cut spending on any popular program, and balance the budget.
But if we look at actual policy changes, it’s hard to see that too much democracy was the problem.
Remember, we had a budget surplus in 2000. Where did it go? The two biggest policy changes responsible for the swing into deficit were the big tax cuts of 2001 and 2003, and the war of choice in Iraq.
And neither of these policy changes was in any sense a response to public demand. Americans weren’t clamoring for a tax cut in 2000; Bush pushed his tax cuts to please his donors and his base. And the decision to invade Iraq not only wasn’t a response to public demand, Bush and co. had to spend months selling the idea to the public.
In fact, the only budget-busting measure undertaken in recent memory that was driven by popular demand as opposed to the agenda of a small number of powerful people was Medicare Part D. And even there, the plan was needlessly expensive, not because that’s the way the public wanted it — it could easily have been simply an addition to traditional Medicare — but to please the drug lobby and the anti-government ideologues.
Now, a lot of historical rewriting has taken place — I’ve even seen pundits solemnly describe the Iraq war fever as an illustration of the madness of crowds, somehow erasing the fact that it was Bush and Rumsfeld, not the masses, who wanted the thing.
But the reality is that if you want to see irresponsibility and self-indulgence at the expense of the nation’s future, you don’t want to visit Main Street; you want to hang out in the vicinity of Pennsylvania Avenue.
By: Paul Krugman, The New York Times, Opinion Pages, May 6, 2011
Health Care Hypocrisy: How Paul Ryan And House Republicans Are Contradicting Themselves Over Medicare
In the debate over the House Republicans’ budget plan championed by Representative Paul Ryan, it’s been remarkable to watch the contortions and contradictions in the GOP on the issue of health care. The cornerstone of the Republican critique of the Affordable Care Act over the past year or so has been that it would lead to rationing. While Republicans initially manufactured lies about this issue—anyone remember death panels?—they eventually focused on one provision in the bill that was focused on cutting costs: the Independent Payment Advisory Board (IPAB). As specified in the legislation, the IPAB is a 15-member board of medical experts who are appointed by the president, confirmed by the Senate, and tasked with cutting costs in the Medicare system, unless Congress acts to alter the proposal or discontinue automatic implementation. The legislation also specifies that a goal of such cost-cutting should be to actually improve access for beneficiaries. At a time when rising health care costs are a concern for families’ pocketbooks and the federal budget, the IPAB was a means to maintain public oversight of Medicare but insulate it from the normal politics of congressional decision-making, thus helping ensure that best medicine was the driver of cost reductions.
Republicans, however, viciously attacked the IPAB as being a bunch of unelected bureaucrats making decisions to cut costs at the expense of the quality of care seniors would receive. The rhetoric became quite heated: Congressman Phil Roe went so far as to call the IPAB the “real death panel.” Other Republicans, like Representative John Fleming, likened the IPAB to communism, saying, “It will take you back to the old Soviet Union, that’s the way they did things—with a central planning committee that set prices, targeted costs.”
Now, more than a year after health care reform passed, Paul Ryan, facing stiff opposition to his plan to end Medicare as we know it, has taken to attacking the IPAB as a way to rebut his critics. He’s arguing that, while his plan would keep Medicare the same for current beneficiaries, the IPAB “puts a board in charge of cutting costs in Medicare” that will “automatically put price controls in Medicare” and “diminish the quality of care seniors receive.” It’s this sort of dishonest vitriol that has led to 73 House Republicans, as well as some Democrats, to cosponsor legislation to eliminate the IPAB.
What’s fascinating about the posture of these cosponsors is that it runs into direct conflict to the vote the House took mere days ago on the overall Ryan budget, which passed thanks to broad Republican support. Indeed, the budget, which the co-sponsors voted for, changes Medicare into a voucher program in which seniors can only choose from among private insurance options, eliminating the public insurance that is currently at the heart of Medicare. In other words, rather than public officials, elected or unelected, making decisions as to what is covered in Medicare, the Republicans just voted to more or less privatize the program. So, , after all of their complaining about how the IPAB moved too far away from public accountability, they’ve just proposed eliminating all such accountability, insisting instead that private insurance companies know best.
Would Americans really feel better with insurance companies deciding whether they or their parents get the care they need? Probably not. The truth is that Republicans are not actually worried about accountability or giving Americans more health care options. They are not even worried about cutting costs: Medicare has a much lower cost per beneficiary than private health care now, so it makes no sense to privatize it in order to lower costs. What they are worried about is public health care; they can’t stand it—and are even willing to contradict themselves and hand people’s health over to unelected, private insurers to defeat it.
By: Neera Tanden, Chief Operating Officer, Center for American Progress, April 30, 2011
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