On Debt Impasse, GOP Full Of Contradictions
Sen. Mitch McConnell has a clever plan to resolve the federal debt impasse. Congressional Republicans would invite President Barack Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.
Hmm. Just a bit contradictory?
Meanwhile, the impasse arose because congressional Republicans thunder against government red ink, yet refuse to raise revenue by ending tax breaks that help Warren Buffett pay a lower tax rate than his receptionist (which he agrees is preposterous). Another contradiction? Of course.
McConnell’s plan – a pragmatic way to avert a catastrophic default – may be torpedoed by more extremist House Republicans, such as Michele Bachmann. They seem to fear that ending tax loopholes for billionaire fund managers would damage a fragile economy. Yet they seem to think that this invalid of an economy would be unperturbed by the risk of a default on our debts.
A contra- . . . yes, you got it!
What about this one? Republicans have historically been more focused on national security threats than Democrats. Yet what would do more damage to America’s national security than a default that might halt paychecks for American military families?
This game of “spot the contradiction” is just too easy with extremist Republicans; it’s like spotting snowflakes in a blizzard. Congressional Republicans have taken a sensible and important concern – alarm about long-term debt levels, a genuine problem – and turned it into a brittle and urgent ideology.
Politicians in both parties have historically been irresponsible with money, but President Bill Clinton changed that. He imposed a stunning fiscal discipline and set the United States on a course of budget surpluses, job growth and diminishing federal debt – until the Republicans took over in 2001.
In the Bush years, Republicans proved themselves reckless both on the spending side (unfunded wars and a prescription drug benefit) and on the revenue side (the Bush tax cuts). Their view then was, as former Treasury Secretary Paul O’Neill quoted Vice President Dick Cheney as saying, “Reagan proved deficits don’t matter.”
It may seem odd that Republicans were so blithe about debt in the Bush years, yet now insist on addressing the problem in the middle of a downturn – even though basic economics dictates that a downturn is the one time when red ink is advisable. Well, just another of those contradictions.
Then there’s the rise of health care costs, a huge burden on our economy. It’s pretty clear what doesn’t work: the existing, dysfunctional system. A forthcoming book on health care by Paul Starr, “Remedy and Reaction,” notes that in 1970 the United States spent a smaller fraction of income on health care than Denmark and the same share as Canada.
Today, in dollar terms, we spend 21/2 times the average per capita of other rich countries.
When congressional Republicans do talk about health care, they have one useful suggestion – tort reform – and it was foolish for Democrats (in bed with trial lawyers) to stiff them on it. But research suggests that curbing malpractice suits, while helpful, would reduce health costs only modestly.
Beyond that, the serious Republican idea is to dismantle Medicare in its present form. That would indeed reduce government spending but would increase private spending by even more, according to the CBO.
The Obama health care plan could have done better on cost control, but it does promote evidence-based medicine, so that less money is squandered on expensive procedures that don’t work. And the Independent Payment Advisory Board will recommend steps to curb excess spending in Medicare.
Yet congressional Republicans are trying to kill the Obama health plan. Yes, of course: another contradiction.
A final puzzle concerns not just the Republican Party but us as a nation. For all their flaws, congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts – and most voters say in polls that they’re against raising the debt ceiling. I fear that instead of banishing contradictions, we as a nation may be embracing them.
By: Nicholas Kristof, Columnist, The New York Times, Published in the Milwaukee Journal Sentinel, July 14, 2011
The Incredible Crazies: Finding Someone The House GOP Will Listen To
Negotiating with House Republicans isn’t just difficult because they refuse to compromise; it’s also because they don’t even appreciate the point of the exercise. Told, for example, that failure on the debt ceiling would lead to a disaster, the House GOP simply doesn’t believe the evidence.
It’s challenging enough trying to craft an agreement when the parties have the same goal. But what happens when the crew of the Titanic says, “The captain’s wrong; icebergs are no big deal”?
The trick is finding someone the crazies find credible. (thanks to T.K.)
Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation’s debt limit, offering warnings and concessions to move the hard-line majority toward a compromise that would avert a federal default. […]
At a closed-door meeting Friday morning, GOP leaders turned to their most trusted budget expert, Rep. Paul D. Ryan of Wisconsin, to explain to rank-and-file members what many others have come to understand: A fiscal meltdown could occur if Congress fails to raise the debt ceiling. […]
The warnings appeared to have softened the views of at least some House members who, until now, were inclined to dismiss statements by administration officials, business leaders and outside economists that the economic impact would be dire if the federal government were suddenly unable to pay its bills. [emphasis added]
Right-wing freshman Rep. Steve Womack (R-Ark.) said he found the presentation, particularly the parts about skyrocketing interest rates, “sobering.”
Oh, now it’s “sobering”? We’re 17 days before the drop-dead crisis deadline, and now it’s dawning on some House Republicans that they’re not only playing with matches, but may actually torch the entire economy?
At this point, of course, I’ll take progress wherever I can find it. If some of the House GOP’s madness is “softening,” maybe they’ll be slightly more inclined to be responsible.
But I can’t help but find it interesting the limited pool of individuals Republicans are willing to listen to. The Treasury tells the House GOP caucus members they have to raise the debt ceiling, and Republicans don’t care. The Federal Reserve tells them, and they still don’t care. House Speaker John Boehner tells them, and that doesn’t work, either. Business leaders, governors, and economists tell them, and Republicans ignore all of them.
But Paul Ryan warns of a meltdown and all of a sudden, the House GOP is willing to pay attention.
I guess we should be thankful the radical House Budget Committee chairman is only wrong 90% of the time, and not 100%.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 16, 2011
Eric Cantor Loves Government Spending…On The Drug Industry
Republicans would like you to believe that our deficit problem is primarily a spending problem and that responsibility for that problematic spending is primarily a Democratic responsibility. But the second claim is as misleading as the first. Republicans have also been known to promote wasteful government spending, particularly when it goes towards an industry with which they happen to be cozy. For a vivid illustration of this, look no further than a new Politico article about House Majority Leader Eric Cantor and his position on a key deficit reduction proposal.
The proposal in question would lower the cost of what the federal government currently pays to provide low-income seniors with prescription drugs. For years, the government purchased drugs for these seniors directly through Medicaid, taking advantage of the low prices drug companies must, by law, provide when selling drugs for the people in that program. But that changed in 2006, with the creation of Medicare drug benefit. At that point, the government delegated the purchasing of drugs for low-income seniors to private firms. And the firms haven’t been able to negotiate equally deep discounts, partly because of restrictions on their ability to limit drug availability.
According to the Congressional Budget Office, restoring the “Medicaid discount” for low-income seniors could save more than $100 billion over the course of a decade, depending on the structure of the proposal. And, at one point, many health care reformers had hoped to include that proposal as part of what became the Affordable Care Act. The administration and leaders of the Senate Finance Committee agreed not to include the proposal in the final legislation, as part of their infamous deal with the drug industry lobby. But that was a one-time deal, at least in theory, and congressional negotiators are looking seriously at enacting the proposal now.
The problem is lawmakers like Cantor, who oppose the idea. According to the Politico story, written by Matt Dobias, Cantor is making the same argument that the drug industry lobby does: That the proposal would amount to a form of government price controls, retarding economic growth and discouraging innovation.
The latter point is highly dubious: The reduction would bring reimbursement levels for these drugs very close to what they were a few years ago. Many experts, including the CBO, think the likely impact on research and development would be negligible. (Harvard economists Richard Frank and Joseph Newhouse addressed this issue at some length in Health Affairs a few years ago.)
As for the former suggestion, it’s true that any net reduction in government spending could reduce economic growth, at least at this particular moment. That’s why it’s not a good idea to be madly slashing government spending right now — and why, perhaps, congressional negotiators should delay implementation of this cut, like the others, so that it would take effect after the economy has more fully recovered.
But Cantor’s anxiety over the economic ramifications of spending cuts seems strangely selective. He hasn’t raised similar concerns about cuts to food stamps, Medicaid, and similar programs that would likely have a more devastating impact, both on the economy as a whole and the people who depend upon them for support.
Then again, food stamp recipients didn’t donate $168,000 to Cantor’s reelection campaign in the last cycle. The drug industry did.
By: Jonathan Cohn, The New Republic, July 15, 2011
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