mykeystrokes.com

"Do or Do not. There is no try."

“Creating Straw Politicians”: Scott Walker And The GOP Are Wrong About The Safety Net

It’s back and Democrats are going to have to deal with it. I’m talking about the political argument that they want to lure as many people as possible into government dependency.

This is a staple of Wisconsin Gov. Scott Walker’s incipient presidential campaign, and he frames it as simple common sense. “Oftentimes when I think about the president and people like Hillary Clinton, I hear people who I think measure success in government by how many people are dependent on the government. By how many people are on food stamps and Medicaid and unemployment,” he said this week at the Florida Economic Growth Summit in Orlando. “I don’t know about all of you, but my belief in America is that we should measure success by just the opposite.”

Walker added: “I don’t remember any of my classmates saying to me ‘Hey, Scott, someday when I grow up, I want to become dependent on the government.’ Nobody signed my yearbook ‘Dear Scott, Good luck becoming dependent on the government.’”

Very funny, and a lot more appealing than Mitt Romney’s assertion that 47 percent of the electorate is dependent on government and will never take responsibility for themselves. The problem with Walker’s formulation, however, is that he’s creating straw politicians. President Obama and Clinton and practically everyone in their party — in fact both parties — talk incessantly about education, job creation, income inequality, and how to increase wages. That doesn’t sound like a yearning for Handout Nation. It sounds like people obsessing over how to make America a country of tubs standing on their own bottoms.

I’m not saying that Democrats haven’t given Republicans ammunition. The 2012 Obama campaign’s “Life of Julia” cartoon slideshow was a parody waiting to happen. From Julia’s enrollment in Head Start as a preschooler to her retirement aided by Medicare and Social Security, the sequence gave off a distinctly Soviet, cradle-to-grave vibe.

As pediatric neurosurgeon-turned GOP candidate Ben Carson put it in his announcement, “We’re not doing people a favor when we pat them on the head and say ‘there there, you poor little thing, we’re going to take care of all your needs. You don’t have to worry about anything.’ You know who else said stuff like that? Socialists.” That was less than a week after a real socialist — Vermont Sen. Bernie Sanders — announced he was running for the Democratic nomination.

Obama came into office amid the worst recession since the Great Depression. The rolls of the three programs Walker named swelled as people lost jobs, income and health insurance. Job losses climbed to a terrifying 818,000 in January 2009, the month Obama was inaugurated. Another 2.2 million jobs were gone by the end of April. The unemployment rate was at or near 10 percent for eight months. So yes, there were a lot of people relying on government programs, for good reason. The private sector had completely failed them.

Obama’s chief economic message for years has been about sustained job creation and an unemployment rate nearly down to half its recession peak, not high enrollment in safety-net programs. Democrats do try to educate people about benefits for which they may qualify. But the goal is to get them on their feet, not lock them into dependency.

There is one area of government “dependency” that Obama and his party are proud of, and that is health insurance. The Department of Health and Human Services said this week that 10.2 million people bought private health coverage this year under the Affordable Care Act, and 85 percent of them receive federal subsidies to help pay for it. Millions more have been able to enroll in Medicaid as a result of the ACA expansion of the program to people with incomes slightly above the official poverty line. For those who believe health coverage should be universal, the numbers justify a victory lap.

People who receive insurance help, or food stamps or unemployment benefits, do indeed depend on the government — just like farmers, homeowners, corporations, and anyone else who receives subsidies or tax breaks, as well as companies that don’t provide health insurance or living wages. And just to be clear, if they are not children, disabled, or elderly, people who use the safety net often have jobs. Nearly 43 percent of all food-stamp recipients live in a household with earnings, according to the Department of Agriculture. The Kaiser Family Foundation, in a study of states that haven’t adopted the Medicaid expansion, found there are workers with full- or part-time jobs in 66 percent of the families eligible for it.

Jeb Bush has called the safety net “a spider web that traps people in perpetual dependence.” We are going to hear a lot of statements like that in the next 18 months. But that doesn’t make them true.

 

By: Jill Lawrence, The National Memo, June 4, 2015

June 5, 2015 Posted by | GOP, Scott Walker, Social Safety Net | , , , , , , | Leave a comment

“Entitlements For Me And Mine”: The GOP Wants To Cut The Social Safety Net — But Only For Young And Poor People

Newly minted 2016 presidential candidate Mike Huckabee is selling himself to older Republicans as the guy who will keep Washington’s grasping hands off their government-provided Medicare and Social Security. In his recent announcement speech, the former Fox News host and ex-governor of Arkansas attacked rivals who “propose that to save the safety nets like Medicare and Social Security, we ought to chop off the payments for the people who have faithfully had their paychecks and pockets picked by the politicians.” For that and similar statements, Huckabee’s candidacy is being portrayed as some radical departure from GOP economic orthodoxy and, as The New York Times put it, is supposedly “exposing growing fault lines in the party over an issue that has long been considered a political third rail.”

Not so much, actually. Huckabee’s do-(almost)-nothing stance on entitlement reform reflects the GOP consensus. He’s just more explicit about it than most. It’s really only potential 2016er Chris Christie — with his call for cutting retirement pay for wealthier seniors — who seems to be the odd man out.

There was a time, of course, when Republicans were pushing hard to fix the fiscal problems of Medicare and Social Security. Rep. Paul Ryan’s 2010 “Roadmap for America’s Future” probably marked Peak Reform. That budget blueprint called for allowing pre-retirement workers to divert part of their payroll taxes into private retirement accounts and to receive vouchers to buy private health insurance when they finally called it quits. Such sweeping changes were needed, Ryan and other Republicans argued, to prevent these programs from “bankrupting” America.

But by the 2012 presidential election, Republicans were backtracking from those big ideas. In his convention speech, GOP presidential nominee Mitt Romney attacked President Obama for wanting to cut future Medicare spending. Vice presidential nominee Paul Ryan explained how important Medicare was for his grandmother with Alzheimer’s. Social Security wasn’t mentioned by name at all. Likewise, the Ryan budgets stopped calling for specific Social Security reforms.

Things went even further in the 2014 midterms, when GOP groups ran ads against some Democratic candidates accusing them of wanting to cut Social Security benefits and raise the retirement age. And today, the new Republican House-Senate budget drops the “premium support” Medicare reform that had been a staple of the Ryan budgets, although it does include some $400 billion in unspecified, 10-year Medicare savings also requested by Obama.

So what happened? The long-term federal financial picture hasn’t miraculously turned around since 2010. The Congressional Budget Office projects that federal spending on Medicare and Social Security over the next 25 years will rise by roughly three percentage points of GDP, from 8 percent to 11 percent. The debt deluge that prompted calls for radical reform is still on its way. What has changed is that Republicans are wising up to just how much they depend on older voters. Those 65 and over gave 56 percent of their votes to Romney in 2012 and were critical to congressional victories in 2010 and 2012.

Another big change since 2010: ObamaCare. The passage of the the president’s Affordable Care Act — opposed by older, tea party Republicans — has affected how GOP politicians view and talk about the safety net. They now clearly differentiate between “earned” entitlement benefits such as Medicare and Social Security and “unearned” welfare benefits such as ObamaCare subsidies, Medicaid, and food stamps. As Wall Street Journal columnist Holman Jenkins accurately predicted back in 2013, “The new ‘conservative’ position will be to defend Social Security and Medicare, those middle-class rewards for a life of hard work and tax-paying, against Mr. Obama’s vast expansion of the means-tested welfare state for working-age Americans.” Republican voters get the “good” entitlements, Democratic voters the “bad,” dependency-creating ones.

Huckabee clearly intends seniors to be the rock upon which he builds his candidacy. In the “Seniors” section of his campaign website, he promises to fight for the “earned benefits” of Social Security and Medicare — perhaps forgetting that a typical middle-class, one-earner couple retiring in 2030 will receive $1.3 million in lifetime Medicare and Social Security benefits, having paid in just under $500,000. Huckabee then attacks ObamaCare as a welfare program that diverts $700 billion from Medicare and fosters “government dependency.” Entitlements for me and mine but not for thee and thine.

The politics of this strategy are debatable. (Though it surely doesn’t help attract younger voters!) But regardless, it makes for simply awful public policy. Future safety net spending increases on older Americans need to be reduced. Republicans should continue the earlier work of Ryan in building the case for those changes. Moreover, more of what is spent will need to shift to lower-income Americans. At the same time, some kinds of safety net spending for the poor will need to be increased, such as the Earned Income Tax Credit. And turning Medicaid into a program that uses tax credits to buy private insurance, as some on the right want to do, would also likely cost more money.

If today’s GOP-leaning seniors want their grandkids to grow up in an America that can better take care of the truly needy — young and old — and pay its bills, they’ll reject Huckabee’s selfish populism.

 

By: James Pethokoulis, The Week, May 8, 2015

May 11, 2015 Posted by | GOP, Mike Huckabee, Social Safety Net | , , , , , , , , | Leave a comment

“Social Safety Net In Hands Of The States?”: The GOP’s State Budget Disaster Is The Best Case For Big Government

The Republican Party is cutting a swath of destruction through state budgets.

In Kansas, Gov. Sam Brownback’s experiment in income and business tax cuts has blown a $344 million hole in the budget for this fiscal year, and a projected $600 million hole for the next fiscal year. Part of his plan to close it is to cut $44.5 million from public schools and universities.

Illinois needs to cut over $6 billion to balance its books. So Gov. Bruce Rauner is calling for a $1.5 billion cut to the state’s Medicaid program, plus $600 million in cuts to local government finances and $387 million in cuts to higher education (though he may have trouble getting those ideas past the Democrats in the Illinois legislature).

Wisconsin’s state budget, meanwhile, faces a $238 million deficit, thanks in small part to tax cuts Gov. Scott Walker pushed through after taking office in 2011. That wiped out a $759 million budget surplus in 2013. Now Walker is looking to cut $300 million from higher education over the next two years, along with cuts to the state park system and its recycling programs, among other things, and to restructure about $100 million in debt payments the state already owes.

These three examples show the GOP’s “tax cuts now, tax cuts forever” ideology remains utterly unconcerned with economic reality. But more deeply, they’re a lesson in some bad choices America made in how to design its national social safety net, which set the stage for the current crises.

In not one of these three cases do the projected budget gaps rise above 1 percent of the income generated annually by the state’s economy. The idea that taxes couldn’t be raised, starting on high earners, to close these holes is risible.

On top of that, these tax cuts are often pitched as growth enhancers for state economies. That was the explicit case Brownback made for his tax cut package. But for such a policy gambit to have even a chance of working, spending must be held constant. If you start cutting spending on things like health care or education or transit or whatnot, you’re just pulling more dollars out of the state economy with one hand even as you leave more dollars in with the other.

In other words, you have to be able to deficit spend. But that can be hard for states. First off, most of them have balanced budget amendments in their constitutions, which means deficit spending is just a no-go. These restrictions generally don’t cover individual infrastructure projects and the like, which states can choose to borrow a set amount for from the bond markets. But covering shortfalls between general annual spending and revenue is much more difficult legislatively.

The other problem is that the bond markets might just not give you the money. Investors may consider a state a bad bet, which would drive its borrowing and interest payments up. That hasn’t been much of a problem in the aftermath of the recession, as investors have been desperate for safe places to park their money — which makes the refusal of state governments to borrow to cover their regular expenditures all the more absurd.

But the low rates won’t last forever, and the willingness of investors to take a bet on a state puts limits on state government borrowing.

What this all means is that state government spending is pretty pro-cyclical — i.e. it rises and falls with the economy. If the economy is doing well, state tax revenues go up. If the economy goes into recession, state tax revenues go down, forcing budget cuts in health, education, and elsewhere. And that’s before you factor in Republican governors and state legislators who are out to cut taxes willy-nilly.

But for spending on things like health care and education — two of the biggest drivers of any state’s budget — being pro-cyclical makes no sense. It’s not as if people just stop getting sick during recessions, or that children simply stop needing an education. These are public investments in the health and well-being of the American people themselves, and the need for them remains constant throughout all the ups and downs in the economy.

The only entity that can spend with impunity regardless of the state of the economy is the federal government. That’s because it can print money, which means it can always pay lenders back in a pinch. This does mean the federal government faces a different sort of threat — instead of being abandoned by investors, it could print so much money it drives up inflation. But that’s just really hard to do, historically speaking.

In short, these are programs that should be run through the federal government. But Medicaid is a joint state-and-federal program, meaning both the federal government and state government supply some of the money from their respective budgets. Meanwhile, education is funded by streams from the federal, state, and local levels at the same time.

That structure leaves these programs critically vulnerable to the whims of the economy — not to mention the whims of Walker, Brownback, Rauner, and their friends in the Republican Party.

 

By: Jeff Spross, The Week, February 24, 2015

February 25, 2015 Posted by | Social Safety Net, State and Local Governments, State Budgets | , , , , , , , | Leave a comment

   

%d bloggers like this: