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“Tax Cuts Pay For Themselves”: Behold, The Magic Kingdom Of Dynamic Scoring

While most citizens were distracted by the holidays, the enlarged Republican majority in Congress was laying golden pavers for its magical kingdom — a fabulous place where taxes are cut, military spending is not, and budgets balance effortlessly. The coat of arms reads, “Tax Cuts Pay for Themselves.”

And to think the rubble has hardly been cleared from the ruins of the most recent magical kingdom, ruled by George W. Bush. Not only did the Bush tax cuts not pay for themselves but tax revenue as a share of the economy today isn’t even close to what it was in 2000.

So how can Republican leaders restore the realm? For starters, they’ve launched a campaign to replace Doug Elmendorf, the economist overseeing the Congressional Budget Office. The CBO is the nonpartisan agency that estimates the cost of legislation.

Let it be noted that prominent conservative economists — among them Gregory Mankiw, chairman of W.’s Council of Economic Advisers — have called for Elmendorf’s reappointment. Elmendorf “is a superb economist and, over the past six years as CBO director, has shown himself to be scrupulously nonpartisan,” Mankiw said.

But nonpartisan may not be partisan enough for tax cut activists. They want the bean counters to make the numbers work for them through the powers of “dynamic scoring.”

The idea that reducing taxes could unleash new economic activity, generating new tax revenues, is not without merit. Dynamic scoring factors in those revenues. Count them, Republicans insist, and the burden of finding painful ways to pay for tax cuts is lightened. That makes tax cutting easier.

Rep. Paul Ryan, the incoming chairman of the House Ways and Means Committee, calls dynamic scoring “reality-based scoring.”

The problem is the ease with which politicians can make their own reality. Dynamic scoring is a dark art, producing wildly different estimates, depending on the choice of economic model and other assumptions. For example, some kinds of tax cuts raise more revenues than other kinds.

Another nonpartisan office, the Joint Committee on Taxation, did apply dynamic scoring to the tax reform plan submitted by retiring House Ways and Means Chairman Dave Camp. The result was eight scenarios, some considerably rosier than others. At the low end, the Camp plan would raise only $50 billion in additional revenue over 10 years. The high-end estimate was $700 billion — 14 times the low one.

Furthermore, the optimistic $700 billion figure included deficit reductions that future Congresses might make. Some of the assumed policy changes weren’t even mentioned in the Camp plan.

Bruce Bartlett, an economist in the Reagan and George H.W. Bush administrations, points to another flaw in the Republicans’ approach: the highly selective use of dynamic scoring on some elements of their proposals but not others.

“Republicans want to use dynamic scoring only for tax cuts,” Bartlett wrote me in an email. “They refuse to acknowledge that spending, such as public works spending, also has dynamic effects. They should either do it for spending and taxes or not at all.”

Bartlett added that “spending cuts can have negative dynamic effects that Republicans also never acknowledge.”

The Joint Committee on Taxation’s models are themselves problematic, according to the liberal Center on Budget and Policy Priorities. For example, they count the economic benefits of investments in new machinery but not investments in worker training. Human capital doesn’t get much attention.

But even when score makers do their darnedest, they’re working with numbers pulled from the air. So Republicans can use butterfly nets to catch those guesses that produce the conclusions they want. Bear in mind, the last time they performed their tax cut magic trick, things didn’t work out too well.

 

By: Froma Harrop, The National Memo, December 25, 2014

December 26, 2014 Posted by | Federal Budget, Republicans, Tax Cuts | , , , , , , , , | Leave a comment

“The Duck That Roared”: Obama Has Demonstrated That The Term “Lame Duck” Has Its Limits

Politics in a democracy is a team sport that leans heavily on individual high performers. This explains the paradoxical closing of President Obama’s most difficult year in office.

He ends 2014 in surprisingly buoyant spirits, having proved that he still has the power to push policy in new directions in foreign affairs and on issues ranging from immigration to climate change.

But his underlying political position is weaker, meaning that Obama and his aides are aware that changing the trajectory of the nation’s debate and the fortunes of his party are among his primary obligations over the next two years. Just as Ronald Reagan’s legacy was secured by the presidential victory of George H. W. Bush in 1988, so does Obama need a Democrat — at the moment, this would seem to be Hillary Clinton — to win in 2016.

In the short run, Obama has demonstrated that the term “lame duck” has its limits. Over the seven weeks since the Democrats’ pummeling in November’s midterm elections, the president has moved forcefully to show he will use all the power he still has.

He used executive action to legalize the situations of up to 5 million undocumented immigrants and in doing so created a political problem for Republicans. They are split on the immigration question and will greatly weaken their ability to appeal to Latino voters in 2016 if they are too aggressive in trying to reverse what Obama has done.

He reached an agreement with China setting ambitious targets to reduce greenhouse gases. It was a signal, his senior aides say, that acting on climate change will be a central focus of Obama’s final two years in office.

And last week, he upended 53 years of American policy by opening diplomatic relations with Cuba. Republican opposition was fierce. Yet, as on immigration, Obama’s opponents will have difficulty altering the course he has set unless they win the presidency in 2016. And by then, both initiatives may be too widely accepted to uproot.

In the meantime, Obama continued with negotiations to stop Iran’s quest for nuclear weapons, even as some of his older bets were paying off. The Russian economy is reeling from sanctions imposed in response to its invasion of Ukraine (and from low oil prices). An approach seen by its critics as not tough enough is beginning to show its teeth.

The health care website, whose crash was an enormous political and practical problem for Obama and his party in 2013, is working smoothly. The fact that so many Americans are interested in obtaining health insurance under the Affordable Care Act, his aides argue, is a vindication of the effort Obama put in to passing it. And the economy continues to hum with the unemployment rate at its lowest in six years while gas prices are also sharply down. This year is set to produce the largest increase in payrolls since the late 1990s.

Thus did Obama’s good mood at his news conference on Friday defy the political obituaries that proliferated after the election. “My presidency is entering the fourth quarter,” he said brightly. “Interesting things happen in the fourth quarter.”

But in that quarter, Republicans will control both houses of Congress, and Obama will have to work with them just to keep the government running. He will also have to pick his fights. A senior administration official said the president would lay out bottom lines — one imagines especially on health care and financial reform — where he cannot compromise with the GOP and will count on congressional Democrats to uphold potential vetoes.

On the economy, Obama will try to square a circle that flummoxed Democrats in the midterms. His aides say he wants to highlight what’s working in the economy while also making clear that ending wage stagnation will require government to invest in variety of areas, including infrastructure, education and economic development. Democrats can also be expected to press fights on issues related to employee rights, including overtime rules, the minimum wage and family leave.

The irony is that while Republicans can certainly make life more difficult for Obama, the president and his party can also make life more difficult for the newly empowered GOP by casting them as obstructing broadly popular measures.

Obama has shown he can still accomplish a lot on his own. The harder test will be whether he can advance ideas and arguments that strengthen the ability of his allies to sustain his policies beyond the life of his presidency.

 

By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, December 22, 2014

December 23, 2014 Posted by | Politics, President Obama, Republicans | , , , , , , , , , | Leave a comment

“Pretending They’ve Come To The Rescue”: Republicans To Play Blame Game On Obamacare Subsidies?

I’ve been saying for a while now that Republicans could be in a jam if the U.S. Supreme Court announces a decision in June invalidating the insurance premium subsidies for people living in the 36 states utilizing federally establishment exchanges under Obamacare, if only because the immediate impulse of rank-and-file conservatives will be to dance and sing even as millions are in danger of losing affordable health care coverage.

Perhaps behind the scenes conservatives are beginning to plan an education campaign to explain to The Troops via Fox News or other “trusted” sources why they can’t just let the subsidies die. Last week I noted that Ramesh Ponnuru had begun talking about Republicans agreeing to fix the subsidy problem while pivoting (presumably as part of some national “deal”) rapidly to an Obamacare “replacement.” But he didn’t sound terribly confident about selling this strategy to the GOP. Since we’re unlikely to find out where SCOTUS is going until June, there is time for sober reflection on the consequences of taking away the subsidies among a constituency that’s a lot more likely to include a lot of Republican voters than the subjects of a Medicaid expansion. The question is whether it can be effectively and quickly communicated to people who have been told since 2010 that the Affordable Care Act is the work of the devil.

Now one of Ramesh’s reformicon colleagues from National Review, Yuval Levin, has (with his collaborator on one of hte Obamacare “replacement” proposals, James Capretta) written a careful message to conservatives via the Wall Street Journal suggesting they get ahead of the curve:

In essence, if the court rules today’s subsidies illegal, those state officials could face a choice between creating a state exchange (and so reinforcing ObamaCare) or seeing some residents lose coverage they now have. ObamaCare’s opponents in Congress should give them a third option: a viable alternative to the Affordable Care Act.

The first step is to introduce legislation that would allow any state to opt out of all of ObamaCare’s mandates, regulations, taxes and requirements, and instead opt into a far simpler and more flexible alternative system. In that system, state residents not offered health coverage by their employers could receive a federally funded, age-based credit for the purchase of any state-approved health-insurance product—including those bought outside of any exchange and regardless of whether they meet ObamaCare’s coverage requirements.

Anyone who remains continuously insured in this system would be shielded from higher premiums or exclusions from coverage based on an existing condition. This would give consumers a strong incentive to buy coverage without a mandate to do so. All other insurance regulation, however, would happen at the state level.

States that opt for this approach would also be permitted to transform their Medicaid programs into premium-support systems for lower-income households. These would function as add-ons to the credit and allow eligible residents to buy the same kind of coverage everyone else can purchase.

The credit could be large enough to allow anyone to purchase at least catastrophic coverage—enabling the uninsured to be covered and everyone to be protected from the most extreme health expenses. Alternatively, it could be used to supplement the purchase of more comprehensive coverage. In essence, the credit would extend to everyone else the same benefit that many people have long received in the employer system. It would do so without disrupting the employer system, the coverage most Americans have.

What they are describing is pretty much the Burr-Coburn-Hatch “PCARE” proposal offered early this year as a suggested Obamacare “replacement,” with some transitional rules that would let Obamacare subsidies stay in place through the end of 2015. And they think Obama would be forced to accept something like this “solution” since otherwise he, not Republicans, will look like the one standing in the way of restored insurance for the people afflicted by the Court.

It’s all pretty clever, but a comment from Ponnuru shows its central flaw:

My only quibble is with the headline, “Time to Start Prepping ObamaCare Reforms.” What they’re talking about is better described as preparing an exit ramp from Obamacare.

Reforms, “exit ramp,” whatever. Such terms are meant to obscure the fact that such plans would keep Obamacare in place until such time as a new system could be implemented–again, before “the base” can make it all moot by forcing GOP policymakers to celebrate the carnage instead of repairing it. And if I know that and you know that, so too would the president, and I think it’s very predictable that well before congressional Republicans could be united behind such a proposal Obama would let them know the only non-disruptive course of action is to restore the intended subsidy system and then talk about what’s next. Pretending they’ve come to the rescue of people in danger of losing their health insurance by eliminating all the provisions that make it good coverage at an affordable price isn’t likely to work. But nice try.

 

By: Ed Kilgore, Contributing Writer, Political Animal, The Washington Monthly, December 19, 2014

December 20, 2014 Posted by | Affordable Care Act, Obamacare, Republicans | , , , , , , , | 2 Comments

“No New Or Plausible Idea’s”: Cuba Diplomacy; Behind Right-Wing Outrage, An Intellectual Void

Listen carefully to the Republican leaders and presidential hopefuls roaring with outrage over President Obama’s courageous decision to normalize relations with Cuba; listen very carefully, because no matter how long or how closely you listen to them, there is one thing you will surely never hear.

You will never hear a new idea – or any plausible idea – about bringing liberty, democracy, and prosperity to the suffering Cuban people.

Instead, the furious denunciations of the president’s initiative from his adversaries reveal only an intellectual void on Capitol Hill, where the imperatives remain partisan and cynical. Everyone paying attention has known for decades that the frozen relationship between the United States and Cuba has accomplished nothing – except possibly the prolongation of the Castro regime, which has long considered the embargo a plausible excuse for its own economic failures – and viewed the United States as a politically convenient enemy.

Anyone who has visited the island knows that the Cubans wish nothing more than to see the embargo lifted, because they know it has done nothing to advance their liberty or prosperity – just the opposite.

As former president Bill Clinton likes to say, the definition of insanity is to keep doing the same thing and expecting a different result. (He wanted to normalize relations as president, but the Cuban government clearly didn’t.) The U.S. government has been doing the same thing in Cuba for 54 years, yet the Republicans still don’t think that was long enough. They haven’t explained how or why – or when – their policy will achieve a different result.

Opponents of change have also failed to justify why treating Cuba so differently from other – and in various respects, worse – authoritarian regimes with which we maintain not only vigorous diplomatic relations but massive trading partnerships and even military cooperation. The conduct of those governments is arguably more repressive in important respects; there is, for instance, less religious freedom in China or Saudi Arabia than Pope Francis found in Cuba.

To browse human rights findings from the State Department’s annual reports or the online files maintained by groups like Human Rights Watch and Amnesty International is to find at least a dozen countries with atrocious human rights records, from Chad to Turkmenistan. But the United States maintains diplomatic and trade relations with all of them.

Indeed, Republican leaders and businessmen – notably including members of the Bush family – have profited handsomely from investment in countries like China and Saudi Arabia for many years, with scarcely a peep about human rights violations in those places. It is impossible to forget how the first President Bush toasted the Chinese regime, immediately following the massacre in Tiananmen Square – and how his opportunistic family members showed up in Beijing and Shanghai, looking for a deal.

With the liberation of more than 50 political prisoners – along with USAID worker Allen Gross and an unnamed American spy – the Cubans have suddenly improved their human rights performance, while the Chinese continue to inflict horrendous repression and even torture on Tibetans, Uighurs, and Han Chinese who dare to dissent. (Many of our leading Republicans don’t object to torture, of course, unless it is perpetrated in foreign countries. Sometimes.)

House Speaker John Boehner accused the president of making “another mindless concession to a dictatorship.” What seems entirely mindless, however, is his insistence that we dare not abandon an unworkable and destructive strategy. No boycott observed and enforced by one country alone – even a powerful country like the United States – is ever going to prevail.

That is among the reasons why international human rights organizations, always the most consistent and implacable critics of Castro’s abuses, have long advocated engagement rather than embargo. As Human Rights Watch notes on web pages devoted to detailing those abuses, U.S. policy has imposed “indiscriminate hardship on the Cuban people” since 1961, “and has done nothing to improve the country’s human rights.”

Not long after the president concluded his historic speech – among the most lucid, logical, and inspiring he has delivered in his second term – a spokeswoman for Amnesty International called his new approach “the best opportunity in half [a] century for human rights change in Cuba.”

Designed to quarantine the Cuban government, the policy that failed for five decades has only succeeded in isolating the United States from the rest of the world. Its end is long overdue.

 

By: Joe Conason, Editor in Chief, The National Memo, December 19, 2014

December 20, 2014 Posted by | Cuba, Human Rights, Republicans | , , , , , , | Leave a comment

“When Elephants Attack”: Red On Red Violence, Like Ignorance, Is A Signifying Trait Of Wingnuttery

And now, let us have a brief moment of silence to honor the victims of red-on-red violence.

They’re fresh off their biggest electoral victory in years. But when Massachusetts Republicans got together this week for their regular state committee meeting, they dwelt on the losses of last month’s election, voting to scold former governor William F. Weld for endorsing a Democrat.

The members of the Massachusetts Republican State Committee voted 35 to 18 to condemn endorsements of Democrats by Republicans and name-checked their former standard-bearer for his violation. Weld endorsed Democrat Michael Day in the contest for a vacant House seat representing Stoneham and Winchester, narrowly edging out Republican Caroline Colarusso.

The Republicans also called out former party chairman Brian Cresta for his across-the-aisle endorsement of state Representative Theodore Speliotis, a Democrat who edged out Republican Tom Lyons.

You would figure that Republicans in the Bay State would get down on their knees every morning and thank the God they allegedly believe in for Weld, who kicked off a 16-year streak of GOP control of the State House when he defeated the late John Silber in 1990. Of course, ingratitude, like ignorance, is a signifying trait of wingnuttery.

The move comes at a time when Weld is resuming a leading role in Massachusetts. Charlie Baker, the Republican who just won the race for governor, was Weld’s political protege. He has named several fellow former Weld-era officials to his own cabinet…But to disgruntled conservatives, the former governor has betrayed them. The resolution expresses ‘deep disappointment in the poor judgment exercised by any Republican official who supported any candidate other than the Republican candidates during the past election cycle.'”

Keep in mind that the real reason the wingnuts are still angry at Weld is not because of anything he did in this election cycle; it’s because of what he did in the 2008 election cycle, when he endorsed Barack Obama instead of John McCain.

Weld’s endorsement of Mitt Romney in 2012 wasn’t enough for these cranks to set aside their hatred. At least one of the cranks admitted it:

“This guy is a traitor,” said one disgruntled Republican, John DiMascio, who faulted the party establishment for showcasing Weld, despite his support for Democrats. “You don’t turn around and take someone who endorsed Barack Obama in 2008 and further make him a celebrity in the state.”

Well, there you go. How dare Weld think for himself! Doesn’t he know he’s a Republican, and therefore he’s not supposed to think at all?

The RINO-hunting will only get worse as we move into the 2016 election cycle, and with your help, we’ll be able to keep an eye on the savagery and stupidity of these scoundrels. Please make a tax-deductible donation today, so that we can continue to record the radicalism and monitor the madness.

 

By: D.R. Tucker, Political Animal, The Washington Monthly, December 14, 2014

December 15, 2014 Posted by | Massachusetts, Politics, Republicans | , , , , , , , | 1 Comment

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