“Only Fix Things After The Worst Has Happened”: The Conservative Case For Strengthening Amtrak
The Amtrak crash in Pennsylvania killed eight people and injured dozens more. It has sparked much hand-wringing in the media, though its death toll is surpassed every few hours on American highways.
Still, Republicans have not hesitated in their plan to sharply cut Amtrak subsidies, recently voting on legislation to do just that. One GOP congressman called Amtrak a “Soviet-style operation,” which presumably means he would prefer abolishing Amtrak altogether.
But Republicans, as the ostensible party of conservatism, have an obligation to consider the extant fact of Amtrak, which is a critical institution for millions of Americans. By supposed conservative principles, it is not appropriate to sacrifice the current needs of existing people in pursuit of an ideological utopia.
Michael Oakeshott famously described the conservative temperament as follows:
To be conservative, then, is to prefer the familiar to the unknown, to prefer the tried to the untried, fact to mystery, the actual to the possible, the limited to the unbounded, the near to the distant, the sufficient to the superabundant, the convenient to the perfect, present laughter to utopian bliss. [On Being Conservative]
It may be the case that slashing Amtrak’s subsidies or selling it to private companies would result in an overall improvement in service at some future point. (If you care to poke around, successful national rail is operated on all sorts of ownership grounds, from mostly private in Japan to state-owned in Sweden.)
But it is inarguably true that right now millions of Americans depend on Amtrak as it currently exists. It’s a tried, factual, actually existing institution that works well enough for the more than 30 million people who choose to take it every year. Indeed, ridership is actually up 50 percent since 2000. Most of that business is done in the Northeast Corridor, where the population is concentrated enough for true high-speed rail to be a reasonable proposition (someday).
However, it’s also an institution in need of help. As I’ve written before, Amtrak faces a slow-motion emergency regarding its two tunnels under the Hudson River connecting New York City to New Jersey. They’re over a century old, and due to flooding during Hurricane Sandy, will need a total overhaul at some point in the next several years.
Back in 2009, there was a capacity expansion planned that would have alleviated the pressure. That’s out of the question now, thanks to New Jersey Gov. Chris Christie, who bogarted some of the money so he wouldn’t have to raise the gas tax.
A new tunnel under the Hudson is by far the most important potential piece of infrastructure in the nation. Four hundred thousand commuters go through the existing tunnels every weekday. If one were to shut down (or, God forbid, collapse), the total throughput would be cut by something like 75 percent, because the remaining tunnel would have to go both ways. A great many of those people simply would not be able to get to their jobs during rush hour.
Any looming disaster like this presents a choice. A crisis might be the opportune time for reform. But it is simply preposterous to imagine that a new tunnel could be built without substantial federal support. With a likely cost of $7-10 billion, it’s probably too expensive for private corporations to even finance in the first place. (Though it was a private train company that built the original tunnels, there are none remotely that big anymore.)
So my question for all the supposed conservatives out there champing at the bit to abolish Amtrak: What say you to the 400,000 daily New Jersey commuters, or the 30 million Amtrak customers generally? On Oakeshottian grounds, I’d say that conservatives are obligated to make some accommodation of those people, regardless of their ideology about markets.
It doesn’t seem very conservative, much less responsible, to simply procrastinate and only fix things after the worst has happened — which is what’s going to happen.
By: Ryan Cooper, The Week, May 18, 2015
“Mike Huckabee Is Prepared To Blow Up Republicans’ Big Ruse”: Pulling Back The Curtain On The Party’s Double Dealing
By the time the sixth or seventh candidate enters a Republican presidential primary, it’s usually tough to identify a unique quality that distinguishes him from those who came before. Most of the predictable niches—the Establishment candidate, the Religious Right candidate, the Conservative Absolutist candidate, the non-white/non-male outreach/token candidates, the outsider candidate, etc.—have already been filled.
With that pattern in mind, you might imagine Mike Huckabee missed his moment. At the time of his announcement last week, the GOP race already included a Religious Right tribune (Ted Cruz), an Evangelical Christian (Scott Walker), a fair-weather libertarian (Rand Paul), an outreacher (Marco Rubio), an outsider (Ben Carson), and a woman (Carly Fiorina). And in a purely electoral sense, Huckabee did miss his moment.
Huckabee, a Southern Baptist minister, had a better opportunity to consolidate the religious conservative vote against the donor candidate in 2008 than he does now, and even then he came up short. Eight years ago, as Nate Cohn wrote recently at the New York Times, “religious conservatives had serious reservations about the two main candidates, John McCain and Mitt Romney.” This year things are different.
But this isn’t just a simple story about a hopeless underdog deluding himself about his odds, or a retread of so many GOP primaries where too many conservatives vie for the right wing vote and clear a path for the money guy.
Huckabee appears to be aware of his liabilities, and is thus angling not only for the evangelical vote, but for the old person vote in general. He’s adopted the view, unfathomable in modern Republican politics, that support programs for the elderly shouldn’t be tampered with, and not just for today’s seniors, but for at least a generation. By doing so he’s violated the GOP’s implicit pact that discourages members from accentuating the tensions between the party’s fiscal priorities and its aging political base. If he makes good on this cynical strategy, he will probably still lose, but his candidacy will have served a valuable and revealing purpose.
Let’s be clear up front that Huckabee’s positioning here is 100 percent cynical. As John McCormack of the neoconservative Weekly Standard reminded us last month, Huckabee was a proponent of the Republican consensus as recently as August 2012, when he wrote on his Facebook page that “Paul Ryan is being demonized for his suggested Medicare reforms. But the alternatives may be scarier.”
Today, Huckabee says he wouldn’t sign legislation codifying Ryan’s Medicare reforms if he were president, and lambasted New Jersey Governor Chris Christie’s proposal to further raise the Social Security retirement age over time. In Iowa this week, Huckabee told a crowd of supporters, “It is a foolish thing for the government to involuntarily confiscate money from your pockets and paychecks for 50 years, and then suddenly tell you, oh, we were just kidding.”
What he didn’t mention is that his proposed “Fair Tax”—a hefty tax on consumption—would disproportionately increase costs for fixed-income seniors, who spend most of their money, and thus operate in effect much like a Social Security benefit cut.
But for political purposes, it doesn’t really matter that Huckabee isn’t acting out of compassion for the elderly or the poor. What matters is that he’s motivated enough to pull back the curtain on the party’s double dealing.
For the entirety of Barack Obama’s presidency, Republicans have taken an awkward, cynical, schizophrenic view of entitlements. They have voted with near unanimity for a budget that would radically overhaul Medicare, but have promised (unworkably) to isolate the old and nearly old from any disruptions. They have largely sidelined their preferred Social Security reforms, but salivated over the prospect of voting for a cut to Social Security benefits when they thought Obama might sign it. They have railed against the Affordable Care Act for reducing spending on Medicare while voting for budgets that preserve those very cuts.
The only way to make sense of this mishmash is to remember that the GOP owes its political livelihood to the elderly. To pursue conservative goals, without obliterating their coalition, Republicans must twist themselves into pretzels. They must detest spending, but only on those other people. Their rhetorical commitments are impossible to square with their ideological and substantive ones, though, and the agenda they’ve promised to pursue when they control the government again would not exempt retirees and near retirees in any meaningful way. At the end of the day they can only keep their promises to one interest group, and it’s not going to be the elderly.
In effect, Huckabee is promising to lay this all out for Republican primary (i.e. older) voters, and place his rivals in the exquisitely awkward position of having to explain themselves. Normally the way things work in Republican primaries is that candidates seek advantage by drawing attention to their opponents’ insufficient commitment to conservatism. Huckabee’s big bet is that—in this one substantive realm, where conservatism and voter self-interest point in opposite directions—he can do the same by running to the left. Watching him test this theory, even in defeat, will be fascinating.
By: Brian Beutler, The New Republic, May 11, 2015
“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
“The Most Opaque Investment Schemes Ever Devised”: Cities And States Paying Massive Secret Fees To Wall Street
California’s report said $440 million. New Jersey’s said $600 million. In Pennsylvania, the tally is $700 million. Those Wall Street fees paid by public workers’ pension systems have kicked off an intensifying debate over whether such expenses are necessary. Now, a report from an industry-friendly source says those huge levies represent only a fraction of the true amounts being raked in by Wall Street firms from state and local governments.
“Less than one-half of the very substantial [private equity] costs incurred by U.S. pension funds are currently being disclosed,” says the report from CEM, whose website says the financial analysis firm “serve(s) over 350 blue-chip corporate and government clients worldwide.”
Currently, about 9 percent — or $270 billion — of America’s $3 trillion public pension fund assets are invested in private equity firms. With the financial industry’s standard 2 percent management fee, that quarter-trillion dollars generates roughly $5.4 billion in annual management fees for the private equity industry — and that’s not including additional “performance” fees paid on investment returns. If CEM’s calculations are applied uniformly, it could mean taxpayers and retirees may actually be paying double — more than $10 billion a year.
Public officials are overseeing this massive payout to Wall Street at the very moment many of those same officials are demanding big cuts to retirees’ promised pension benefits.
“With billions of public worker and taxpayer dollars put at risk in the highest-cost, most opaque investment schemes ever devised by Wall Street for a decade now, investigations that hold Wall Street profiteers accountable are long, long overdue,” said former Securities and Exchange Commission attorney Ted Siedle.
Private equity firms have argued that their fees are worth the expense, because they supposedly deliver returns for investors that beat low-fee index funds, which track the broader stock market. But those private equity returns are typically self-reported by the firms over the life of those longer-term investments, meaning there are few ways to verify whether the returns are real. Indeed, a recent study from George Washington University argued that private equity firms are using their self-reporting authority to mislead investors into believing their returns are smoother and more consistent than they actually are.
In a 2014 speech, the SEC’s top examiner, Andrew Bowden, sounded the alarm about undisclosed fees in the private equity industry, saying the agency had discovered “violations of law or material weaknesses in controls over 50 percent of the time” at firms it had evaluated.
To date, however, the SEC has taken few actions to crack down on the practices, but some states are starting to step up their oversight.
In New Jersey, for instance, pension trustees announced a formal investigation of Gov. Chris Christie’s administration after evidence surfaced suggesting that the Republican administration has not been disclosing all state pension fees paid to financial firms.
In Rhode Island, the new state treasurer, Seth Magaziner, a Democrat, recently published a review of all the fees that state’s beleaguered pension fund has paid. The analysis revealed that the former financial firm of Democratic Governor Gina Raimondo is charging the state’s pension fund the highest fee rate of any firm in its asset class.
In Pennsylvania, the new Democratic governor, Tom Wolf used his first budget address to call for the state “to stop excessive fees to Wall Street managers.”
These moves are shining a spotlight on one of the most lucrative yet little-noticed Wall Street schemes. With so much money at issue – and with pensioners retirement income on the line — that scrutiny is long overdue.
By: David Sirota, Senior Writer at the International Business Times; The National Memo, April 24, 2015
“Huckabee Is Ted Cruz’s Nightmare”: Playing Both Sides Of The Ball
The Upshot’’s Nate Cohn is making the contrarian case for Mike Huckabee. I give him credit for seeing things that others might not, but—despite the optimistic headline: “Mike Huckabee Would Be a More Important Candidate Than You Might Think,” he actually underestimates Huck’s potential as a disruptive factor in this campaign.
It’s unclear what’s in the water in Hope, Arkansas, but that Bill Clinton and Huck are both from the same hamlet is nothing short of miraculous. Put aside the snake oil salesman stuff, and the numerous ridiculous things Huckabee has said to get attention, and you’re left with a man who is essentially the love child of Clinton and Ronald Reagan. I recently argued that only the great politicians like The Gipper and Bubba can oscillate between indignation and compassion. Well, guess what: Huckabee can do both, too. This is a guy who’s so compelling he actually got Jon Stewart to question his own abortion stance.
“I’m a conservative; I’m just not mad about it,” he often quips. Except he can be mad about it—or feign anger, at least. So he can play the reasonable conservative or he can hurl red meat. As they say in football, he can play both sides of the ball. In 2008, Huckabee came out of nowhere to wow us in the debates. The competition will be stiffer this time around, but he can do it again.
The fact that Huckabee is a good communicator—and that he can appeal to evangelical Christians, a hugely important constituency in Iowa—is not exactly the most novel observation. But I think there are two additional things Huckabee has going for him that are not as widely appreciated.
The first is that he spent the last several years as a Fox News host. Now, let’s be honest: It’s unlikely that many people reading this have ever watched Huckabee’s Saturday night show—except to see if he was going to announce for president (or for purely ironic purposes). And I’m not even suggesting you were watching Girls instead. A lot of us who watch Fox shows like Special Report wouldn’t think to turn on Huckabee.
But millions of Americans did watch his show—and guess what? Many of these same Americans will vote in Republican primaries. I think we probably underestimate the impact of hosting a weekly show on Fox News.
Lastly, though, I think there is a huge underserved constituency in the GOP—and that constituency is what might best be termed populist conservatives. These folks tend to be white and working-class and who feel they’ve been left behind in America. They are culturally conservative—but they also want to keep government out of their Medicare.
Mitt Romney was arguably the worst candidate Republicans could have ever nominated to appeal to this constituency. But while candidates like Huckabee and Rick Santorum flirted with going full populist, something always seemed to keep them from really doubling down on it.
One can only assume this is because there is a ceiling on how much populist demagoguery one is permitted to dole out—and still remain a Republican in good standing. There’s a fine line between attacking the “fat cats” and engaging in class warfare, and one doesn’t want to get on the wrong side of that line. But having cashed in, and now finding himself in his post-radio, and possibly post-TV phase, Huckabee might well decide it’s time to throw caution to the wind.
Don’t get me wrong: As a free market conservative, this brand of populism isn’t my cup of tea. Nor do I think Huckabee can win the nomination. He’s always lacked money and organization, and that won’t change. But as a political observer, I can’t help but suspect that there is a huge opening for a conservative candidate willing to be the working man’s conservative.
The last time someone really tried this was when “Pitchfork” Pat Buchanan, and then Ross Perot, ran in 1992. It resonated then, but that was before the “giant sucking sound” really kicked in. Whether it’s globalization or immigration—or whatever “-ation” might have taken your job—it stands to reason that the same grassroots phenomenon that helped Buchanan and Perot tap into an underserved constituency might be even more potent today.
Already known as a tax-and-spender, Mike Huckabee isn’t soon going to win over Steve Forbes or Larry Kudlow or The Club for Growth, so why try? There are tons of Americans out there listening to country radio, clinging to God and guns…and government.
The other day, when New Jersey Governor Chris Christie proposed some fairly modest reforms to save social security (means testing and raising the retirement age to 69), ostensibly conservative readers weighed in against it on the Facebook page of the Daily Caller, where I work.
“I’m entitled to social security because it’s MY money that I have given to the govt since I was 16 years old with the PROMISE I would get it back when I was older. FU Christie.” Yes, this is anecdotal—but this comment was also representative of a lot of comments on that particular post. A lot of conservatives appear to believe there is some lockbox where “their” money is being saved for their retirement.
A few days later came this headline from the Weekly Standard: “Huckabee Bashes Republican Plans to Reform Medicare and Social Security.” As Huckabee himself told The Daily Beast over the weekend, “I’m getting slammed by some in the GOP ruling class for thinking it wrong to involuntarily take money from people’s paychecks for 50 years and then not keep the promise government made.”
Some of the same underlying trends behind the excitement over Elizabeth Warren are present, if dormant, on the right. So how can Huckabee break away from the pack? Most free market conservatives I know agree that “crony capitalism” is a problem. This has become boilerplate language you can expect from everyone from Marco Rubio to Ted Cruz, and it’s a kind of flirting with populism.
But Huckabee appears poised to do what no other Republican will have the ability or the inclination to do—and that is to go full populist in a way that acknowledges the fact that a lot of folks need the government’s help, that resents the fact that the game has been rigged by the rich and the corporations, yet still embraces a culturally conservative lifestyle. This will provoke serious pushback from the libertarian and pro-business wings of the conservative coalition. But if he does it—if he sticks to it—out there in the hinterland, there’ll be a market for it.
Get your pitchforks ready.
By: Matt Lewis, The Daily Beast, April 21, 2015; Editor’s note: Matt Lewis’s wife previously consulted for Ted Cruz’s senate campaign, and currently consults for RickPAC, the leadership PAC affiliated with Rick Perry.
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