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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

April 14, 2011 Posted by | Congress, Conservatives, Democrats, Economy, Federal Budget, GOP, Ideology, Lawmakers, Medicaid, Medicare, Politics, President Obama, Rep Paul Ryan, Republicans, Right Wing, Social Security | , , , , , , , , , , , | Leave a comment

Gut Punch To Seniors: Republicans Are Done Pretending

“Should Congress have cut Medicare half a trillion dollars to pay for ObamaCare?” asked a 2010 ad for Republican newcomer Renee Ellmers in North Carolina’s 2nd congressional district. 

That theme — “Obama’s coming for your Medicare!” — helped Ellmers and GOP candidates across the nation consolidate the senior vote, winning that crucial voting bloc by a 59-38 margin. In 2008, Democrats won seniors by 49-48. The dramatic shift was a massive component of the GOP wave.

It was a dishonest attack, of course. The Democratic healthcare law cut $126 billion from Medicare Advantage over 10 years, not half a trillion. And Medicare Advantage, which allowed seniors to get healthcare via private insurers, was an inefficient and wasteful experiment to see whether private companies could deliver health services more efficiently than the government. It failed. In fact, Medicare Advantage cost 11 percent more to run than standard Medicare for identical services.

Yet “fiscally responsible” Republicans successfully demagogued the issue all the way to a majority, winning precious senior support with promises to “protect Medicare.” Those promises are now officially history. Republicans are now rewarding seniors for their vote by punching them in the gut.

GOP Rep. Paul Ryan (Wis.) has fired the first shot in a new war to destroy the benefit structure that seniors paid for throughout their working lives. Under his plan, seniors will no longer enroll in Medicare, but rather receive vouchers to try and secure care through private insurers. Ryan’s plan delays implementation for 10 years to ward off the wrath of current seniors, but the end result is the same — the elimination of a program Republicans pretended to protect.

After all, if the plan is so great for seniors, why wait until 2021 to implement it? 

Ryan’s plan would cap the growth of vouchers to a hair over the rate of inflation. However, the cost of medical services has far outpaced inflation. So what happens when the vouchers aren’t enough to cover the cost of expensive life-saving medical procedures? If Republicans won’t bargain with drug companies or limit reimbursements to doctors (and they won’t), the only thing left would be real-world death panels.

In other words, seniors would die, needlessly and prematurely.

It is no coincidence that Republicans are using this moment to try and discredit the AARP, which will undoubtedly push back against this irresponsible plan. The House Ways and Means Committee has launched an investigation into the organization’s finances, arguing that its support for last year’s healthcare reform measure should invalidate its tax-exempt status. “Republicans are desperate to try to break the trust that America’s seniors have in AARP,” said Rep. Pete Stark (D-Calif.) during the committee hearings. “They need to do so before they announce their budget that will devastate Medicare, Social Security and Medicaid.”

If Republicans were serious about containing healthcare costs, they would take a fresh look at a public option, allowing Americans to choose government-run insurance that would compete against private insurers. But Republicans don’t really care about providing quality care at reasonable prices — they care about enriching their insurance lobbyist friends. 

Seniors allowed themselves to be taken in by the GOP in 2010. But their choice now is obvious. Republicans are done pretending.

By: Markos Moulitsas, The Hill, April 5, 2011

April 12, 2011 Posted by | Affordable Care Act, Congress, Conservatives, Corporations, Democrats, Elections, GOP, Health Care, Health Reform, Insurance Companies, Lobbyists, Medicaid, Medicare, Pharmaceutical Companies, Politics, Public Option, Republicans, Right Wing, Social Security, Voters | , , , , , , , , | Leave a comment

Echoes Of Ayn Rand: How The GOP Came To View The Poor As Parasites And The Rich As Our Rightful Rulers

Last week the Republican Party sounded two distinct voices. First we heard the angry demands of the Tea Party, speaking through its hardline conservative allies in the House, pushing the government to the brink of a shutdown. But then emerged the soothing tones of Paul Ryan, the House Budget Committee chairman, who fashions himself the intellectual leader of the party, unveiling a budget manifesto he calls the “Path to Prosperity.”

Ryan portrays his goals in reassuringly pecuniary terms—he’s just the friendly neighborhood accountant here to help balance your checkbook. “I have a knack for numbers,” he chirps. ABC News compared him to a character in Dave, the corny 1993 movie about an average Joe who mistakenly assumes the presidency and calls in his CPA buddy—that would be Ryan—to scour the federal budget and bring it into balance. If he has any flaw, he just cares too much about rescuing the country from debt, gosh darn it!

In fact, the two streams—the furious Tea Party rebels and Ryan the earnest budget geek—both spring from the same source. And it is to that source that you must look if you want to understand what Ryan is really after, and what makes these activists so angry.

The Tea Party began early in 2009 after an improvised rant by Rick Santelli, a CNBC commentator who called for an uprising to protest the Obama administration’s subsidizing the “losers’ mortgages.” Video of his diatribe rocketed around the country, and protesters quickly adopted both his call for a tea party and his general abhorrence of government that took from the virtuous and the successful and gave to the poor, the uninsured, the bankrupt—in short, the losers. It sounded harsh, Santelli quickly conceded, but “at the end of the day I’m an Ayn Rander.”

Ayn Rand, of course, was a kind of politicized L. Ron Hubbard—a novelist-philosopher who inspired a cult of acolytes who deem her the greatest human being who ever lived. The enduring heart of Rand’s totalistic philosophy was Marxism flipped upside down. Rand viewed the capitalists, not the workers, as the producers of all wealth, and the workers, not the capitalists, as useless parasites.

John Galt, the protagonist of her iconic novel Atlas Shrugged, expressed Rand’s inverted Marxism: “The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains.”

In 2009 Rand began popping up all over the Tea Party movement. Sales of her books skyrocketed, and signs quoting her ideas appeared constantly at rallies. Conservatives asserted that the events of the Obama administration eerily paralleled the plot of Atlas Shrugged, in which a liberal government precipitates economic collapse.

One conservative making that point was Ryan. His citation of Rand was not casual. He’s a Rand nut. In the days before his star turn as America’s Accountant, Ryan once appeared at a gathering to honor her philosophy, where he announced, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.” He continues to view Rand as a lodestar, requiring his staffers to digest her creepy tracts.

When Ryan warns of the specter of collapse, he is not merely referring to the alarming gap between government outlays and receipts, as his admirers in the media assume. (Every policy change of the last decade that increased the deficit—the Bush tax cuts, the Medicare prescription-drug benefit, the wars in Afghanistan and Iraq—Ryan voted for.) He is also invoking Rand’s almost theological certainty that when a government punishes the strong to reward the weak, it must invariably collapse. That is the crisis his Path to Prosperity seeks to avert.

Viewed as an effort to reduce the debt, Ryan’s plan makes little sense. Many of its proposals either have nothing to do with reducing deficits (repealing the financial-reform bill loathed by Wall Street) or actually increase deficits (making the Bush tax cuts permanent). It relies heavily on distant, phantasmal cuts. During the debate over health-care reform, Ryan insisted that Medicare cuts used to finance universal coverage might add up on paper but they’d never stick—they were too far down the road, and Congress would just walk them back when people complained.

But Ryan proposes identical cuts in his own plan. What’s more, he saves trillions of dollars from Medicare by imposing huge cuts on anybody who retires starting in 2022. So not only has he adopted the cuts he claimed would never come to pass because they’re too harsh and too distant, he imposes far harsher and more distant cuts of his own. Indeed, Alice Rivlin, the fiscally conservative Democratic economist who endorsed an earlier version of his Medicare plan, called his new plan unrealistic. (Ryan nonetheless continues to imply that she supports it.)

Ryan’s plan does do two things in immediate and specific ways: hurt the poor and help the rich. After extending the Bush tax cuts, he would cut the top rate for individuals and corporations from 35 percent to 25 percent. Then Ryan slashes Medicaid, Pell Grants, food stamps, and low-income housing. These programs to help the poor, which constitute approximately 21 percent of the federal budget, absorb two thirds of Ryan’s cuts.

Ryan spares anybody over the age of 55 from any Medicare or Social Security cuts, because, he says, they “have organized their lives around these programs.” But the roughly one in seven Americans (and nearly one in four children) on food stamps? Apparently they can have their benefits yanked away because they were only counting on using them to eat.

Ryan casts these cuts as an incentive for the poor to get off their lazy butts. He insists that we “ensure that America’s safety net does not become a hammock that lulls able-bodied citizens into lives of complacency and dependency.” It’s worth translating what Ryan means here. Welfare reform was premised on the tough but persuasive argument that providing long-term cash payments to people who don’t work encourages long-term dependency. Ryan is saying that the poor should not only be denied cash income but also food and health care.

The class tinge of Ryan’s Path to Prosperity is striking. The poorest Americans would suffer immediate, explicit budget cuts. Middle-class Americans would face distant, uncertain reductions in benefits. And the richest Americans would enjoy an immediate windfall. Santelli, in his original rant, demanded that we “reward people [who can] carry the water instead of drink the water.” Ryan won’t say so, but that’s exactly what he’s doing.

By: Jonathan Chait, Senior Editor, The New Republic

April 11, 2011 Posted by | Class Warfare, Congress, Conservatives, Corporations, Deficits, Democrats, Economy, Federal Budget, Financial Reform, GOP, Government, Government Shut Down, Health Reform, Ideologues, Income Gap, Journalists, Media, Medicare, Middle Class, Politics, Rep Paul Ryan, Republicans, Right Wing, Social Security, Tea Party, Uninsured, Wall Street, Wealthy | , , , , , , , , , , , | 1 Comment

How The Media Promotes Ignorance And Stifles Debate

Friday night, my eyes were glued to to the news, as I awaited any and all emerging details about the possible government shutdown. As outlets began reporting that republicans and democrats had finally reached a deal, I immediately felt a sense of relief.  Thank goodness, I thought, so much unnecessary suffering averted.  But the relief didn’t last long, because in the pit of my stomach was fear for the many millions of people who will be affected by the $38 billion in budget cuts passed by congress. Unfortunately, the media feels differently, preferring to discuss ad-nausium the budget cut’s political ramifications for the two parties.

The same thing happened when the GOP was determined to shutdown the government if democrats did not sign on to defunding Planned Parenthood.  Again, the media’s focus was not on the health of the 3 million people the organization treats every year, by providing cancer screenings, HIV and STI checks, and contraceptives.  They focused on how this painted republicans as partisan ideologues, or the democrats as supporters for women’s rights, which party was to blame for the almost-shutdown, and most notably, the consequences this would have on their popularity.

Almost all of the reporting by the establishment media centers around how X will affect the democrats favorability numbers, or how Y will affect the republicans chances in 2012.  Whether I was watching MSNBC or CNN, the sole concern was always on the political implications of the budget cuts, rather than the real life consequences for the many millions of Americans already suffering from unemployment, foreclosures, and sky-rocketing medical costs.

And therein lies the problem with our media establishment: Every major policy issue is strangled by the established “right vs left” consensus.  Whether it’s civil liberties, our endless wars, healthcare reform, or the economy, all are presented through the prism of democrat and republican disagreement.  Not only does this ignore the tribulation of people around the country, but most importantly the media omits discussion of issues that receive bipartisan support, which has increasingly become the case, issue after issue.

There is very little that republicans and democrats in office disagree on.  They both support the wars, the private insurance industry, tax cuts for the wealthy, deregulation, budget cuts during an economic recession, and the list goes on.  Perhaps this is because both parties are corporately owned by the same interests.  The only real difference today remains their position on social issues.  Republicans are still against women’s reproductive rights and marriage equality, while democrats remain pro-choice and advocates for ending institutionalized discrimination against homosexuals (although they don’t do a very good job at consistently standing up for these rights).  While these issues are of great importance, they are not the only problems afflicting the nation.

Look no further than the lack of coverage on economic suffering for proof.  Republicans want to cut all social spending, while democrats prefer to cut a fraction of social services that benefit the public at large.  So rather than discussing alternatives to austerity aimed at the working class and poor, the media solely focuses on how much austerity is enough.  Poll after poll shows that Americans overwhelmingly support increasing taxes on the wealthy to reduce the deficit.  In addition, major cuts to Medicaid, Medicare, or Social Security to balance the budget are wildly unpopular.  But the mainstream narrative does not even challenge whether budget cuts are necessary, or if other alternatives for deficit reduction exist, let alone the public’s opinion.

The media also refuses to bring up defense spending, which costs upwards of $1 trillion annually.  Probably because both parties agree that the national security and warfare state are untouchable.  Which is interesting, given that the public prefers cutting defense spending rather than social spending to reduce the deficit.  Then again public support for the Afghanistan war is at an all-time low, but the bipartisan Washington consensus in support of the war remains unmoved.  The fact that war spending is draining our treasury should be a significant story for the media, particularly since the government just launched another war in Libya, while ironically calling for fiscal responsibility.

If they aren’t even capable of exposing the cost of war, it is no surprise that the casualties of war, both the injured and dead, soldiers and civilians, are completely omitted from discussion.  Again, this makes sense, given the bipartisan support for war, with tactical nuances making up the few points of contention.  This was most apparent in the lead up to the Iraq war, which enjoyed strong bipartisan support, with the media following suit by forcing a pro-war narrative and firing those who loudly dissented.

The same is true for healthcare reform.  Americans overwhelmingly support a single payer, medicare-for-all system, but since democrats and republicans are both in the pockets of the private insurance industry, single-payer is not a viable topic for debate on the airwaves.  Even climate change has become a forgotten issue.  Now that President Obama and his fellow democrats have adopted the Bush approach — i.e. refusing to cut greenhouse gas emissions, regulate resource exploiting industries, or invest in alternative energy — climate change and it’s very real, disastrous effects, are almost never examined.

It is no wonder so many Americans are turned off by politics.  Many don’t realize how political decisions effect their everyday lives, from the quality of the water and air that they breath, to the seat-belts they wear and sick days they receive.  If not for independent media outlets like Democracy Now! and independent journalists like Glenn Greenwald, Jeremy Scahill, and Marcy Wheeler, to name a few, I would be an apathetic liberal uninterested in “silly political debate”.

If the goal of the establishment media class is to portray significant political decisions as boring ideological nonsense, then they have succeeded.  One doesn’t need to attend journalism school to understand that the mainstream media has failed at its job of informing the public and holding those in power accountable.  Instead they have successfully promoted ignorance and stifled debate, to the detriment of truth and social justice.

By: Rania Khalek, CommonDreams.org, April 10, 2011

April 11, 2011 Posted by | Congress, Conservatives, Consumers, Corporations, Deficits, Democracy, Democrats, Economy, Education, Elections, Foreclosures, GOP, Government, Government Shut Down, Health Care, Health Care Costs, Human Rights, Ideology, Journalists, Media, Medicaid, Medicare, Populism, Public Opinion, Pundits, Republicans, Social Security, Tax Increases, Womens Rights | , , , , | Leave a comment

The Budget Battles: Prosperity for Whom?

If the House Republican budget blueprint released on Tuesday is the “path to prosperity” that its title claims, it is hard to imagine what ruin would look like.

The plan would condemn millions to the ranks of the uninsured, raise health costs for seniors and renege on the obligation to keep poor children fed. It envisions lower taxes for the wealthy than even George W. Bush imagined: a permanent extension for his tax cuts, plus large permanent estate-tax cuts, a new business tax cut and a lower top income tax rate for the richest taxpayers.

Compared to current projections, spending on government programs would be cut by $4.3 trillion over 10 years, while tax revenues would go down by $4.2 trillion. So spending would be eviscerated, mainly to make room for continued tax cuts.

The deficit would be smaller, but at an unacceptable cost. Health care would be hardest hit, followed by nonsecurity discretionary spending — the sliver of the budget that encompasses annually appropriated programs. Those include education, scientific research, environmental preservation, investor protection, disease control, food safety, federal law enforcement and other areas that bear directly on the quality of Americans’ daily lives. The proposed cuts in such programs are $923 billion deeper than President Obama called for in his 2012 budget, which pushed the edge of what is politically possible.

Another big cut — $715 billion over 10 years — comes from mandatory spending other than Social Security and the big health care programs, a category that includes food stamps and federal retirement.

The blueprint does not call for any specific changes to Social Security, but, without explanation, it assumes a reduction of $1 trillion over 10 years in the program’s surplus. That would weaken the program by hastening the insolvency of Social Security.

When he unveiled this plan, Paul Ryan, a Republican of Wisconsin and the chairman of the House Budget Committee, declared, “This isn’t a budget. This is a cause.”

There is much truth in that. The blueprint is not a serious deficit reduction exercise for many reasons, the most important of which is that serious deficit reduction requires everything to be on the table, including tax increases. The plan released at the end of last year by the Obama deficit commission was one-third tax increases and two-thirds spending cuts. President Obama’s budget calls for a mix of tax cuts and tax increases, among the latter, letting high-end Bush tax cuts expire at the end of 2012. The Republican plan calls only for tax simplification. It would get rid of loopholes and reduce rates in a way that would not raise overall revenues but would invariably cut the tax bill of wealthy taxpayers for whom lower rates are more valuable than assorted loopholes.

The deficit is a serious problem, but the Ryan plan is not a serious answer. With its tax cuts above all, and spending cuts no matter the consequences, it is a recipe for more loud talk about the deficit but no real action.

By: Editorial, The New York Times, April 5, 2011

April 6, 2011 Posted by | Congress, Conservatives, Deficits, Economic Recovery, Federal Budget, GOP, Health Care, Health Care Costs, Medicaid, Medicare, Middle Class, Politics, President Obama, Rep Paul Ryan, Republicans, Social Security, Uninsured | , , , , , , | Leave a comment

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