“Ignoring The Elephant In The Room”: No, President Obama’s Policies Are Not Holding Back The Economy
Wall Street Journal columnist Daniel Henninger had fun this week arguing that President Obama’s problems implementing health reform pale next to his problems getting the economy back to health. The attack on Obama’s economic stewardship, however, looks just like the standard conservative attack on health reform: it’s light on sound arguments and ignores the elephant in the room — Republican obstructionism.
First, health care. As the president says, it’s on him that the rollout of HealthCare.gov and the health insurance marketplaces — where individuals can purchase health insurance to avoid the fine for not having it — has been, to put it kindly, rocky. But Republicans have provided no clear alternative to expand access to good quality, affordable health care, and they have made the rollout more difficult.
Many Republican governors and state legislatures have left implementation of their health insurance marketplaces (also known as exchanges) to the federal government rather than do it themselves — hardly the usual position of a party that believes in devolving as much power as possible to the states. And, at the moment, 25 states are not moving forward to implement the Medicaid expansions — which are a very good deal for them — leaving a significant coverage gap among low-income adults and complicating the determination of eligibility for coverage on the exchanges.
Finally, Republican proposals to “fix” the problem would undermine, not improve, health reform. The president’s proposal, while not perfect, is the best on the table.
Like problems with the health care rollout, the problems in the economy are plain to see. Henninger plays fair when he notes that the president did not cause the Great Recession, which is the source of the problems with which we’re still grappling. But, he’s wrong to say it’s the president who “has the economy on lockdown.”
First, he ignores what many economists and policymakers see as the main problem we still face – inadequate demand for goods and services. Second, he cavalierly dismisses the benefits of economic stimulus in such an economy. Third, he insists the main thing holding back the recovery is excessive business regulation. With that mindset, he naturally doesn’t acknowledge the drag on economic activity and job creation from the premature austerity that Congress has imposed on the economy since Republicans regained control of the House in the 2010 mid-term elections and the barriers that Republicans have put in the way of a budget plan that could boost the recovery in the short run while still putting deficits and debt on a sustainable longer-run trajectory.
Just a reminder to all who, like Henninger, parrot the shibboleth that stimulus did not work: the Congressional Budget Office finds that gross domestic product has been higher each year since 2009 than it would have been without the 2009 American Recovery and Reinvestment Act and unemployment has been lower (see chart).
CBO includes a broad range of estimates about the recovery act’s impact to encompass the views of economists who continue to doubt the mounting evidence that stimulus is highly effective under the economic conditions prevailing in recent years. But, that evidence suggests that act’s impact is quite likely much nearer the high than the low estimate.
Here’s what the International Monetary Fund says about that research, the expansionary effects of fiscal policy (tax cuts and increases in government spending) and the “old Keynesian mulitplier” that Henninger mocks: “While debate continues, the evidence seems stronger than before the crisis that fiscal policy can, under today’s special circumstances, have powerful effects on the economy in the short run [and] that fiscal multipliers are larger.”
The powerful effects of fiscal policy in today’s special circumstances work both ways. The economic forecasting firm Macroeconomic Advisers estimates that the economic uncertainty and policy choices to raise taxes and cut spending that we’ve made since 2010 have cost the economy up to a percentage point per year of slower economic growth and up to 2 million jobs.
It’s Republicans whose policy preferences have pulled policy toward greater near-term fiscal austerity through spending cuts; Democratic plans look more like bipartisan proposals for less spending restraint in the short term and more deficit reduction that’s balanced between revenues and spending down the road when the economy is stronger.
It’s Republicans who have the U.S. economy on lockdown.
By: Chad Stone, Chief Economist, Center on Budget and Policy Priorities, U. S. News and World Report, November 22, 2013
“The Party Of Zilch”: The GOP Is Out To Destroy The Country
Yes, the headline is rather hyperbolic. It’s as over-the-top as some of President Obama’s most unhinged critics, who believe he is running the nation without care or concern for the Constitution. But when you look at the actions of the Republican Party, particularly its members in Congress, my headline seems appropriate.
Three different pieces highlighted how the GOP is grinding just about every sector of the federal government to a halt. And it is doing it through a cynical combination of obstruction, saying no and failing to have viable alternative proposals worthy of national debate. Whatever political gains Republicans achieve in the short-term come at the long-term expense of the country. That’s simply unacceptable.
Even though the Affordable Care Act (a.k.a. Obamacare) is much more than a Web site, the disastrous roll out of Healthcare.gov has done a number on the president’s standing with the American people. According to the latest Post-ABC News poll, Obama’s overall approval rating sits at 42 percent. His 55 percent disapproval rating is the highest of his presidency. This would be the perfect time for the opposition to step forward with those alternative proposals. But the GOP is “The Party of Zilch,” as Ron Fournier so accurately described.
Rather than be the party of solutions in a gridlocked capital, appealing to a leadership-starved public, the GOP is the party of obstruction, ensuring that its putrid approval ratings nose dive apace with Obama’s.
The country needs sensible immigration reform that brings 11 million or so undocumented residents out of the shadows. No, says the GOP
The country needs to tame a massive debt that will be 100 percent of the gross domestic product by 2038 unless Congress raises revenue and trims entitlements. No, says the GOP.
The country needs fair debate and compromise around existential issues such as climate change, income inequality, and a deteriorating 20th century infrastructure. No, says the GOP.
“Other than hard partisans on the left and right, the majority of the public—moderate, fix-it Americans who simply want a sensible government—now have nowhere to turn, because the GOP is the party of nothing,” Fournier correctly concludes.
The New York Times editorial board delivered its own party-of-zilch disquisition using opposition to the ACA as the jumping off point.
What is the Republican alternative to this government program, flawed as it is right now? There is none. Party members simply want to repeal the health law and let insurers go back to canceling policies at the first sign of a shadow on an X-ray. They have no immigration policy of their own. They have no plan that will stimulate job growth. They are in favor only of shutdowns and sequesters and repeals, giving the public no reason to believe they have a governing vision or even a legislative agenda.
That congressional Republicans have no “governing vision or even a legislative agenda” was proven in a Politico story on Sunday. The headline said it all: “House GOP 2014 agenda starts with blank slate.”
Last Thursday, a group of House Republicans filed into Majority Leader Eric Cantor’s Capitol office suite and received a blank piece of paper labeled “Agenda 2014.”
The blank slate just about sums up where Republicans find themselves after a year marked by the first government shutdown in 17 years, futile efforts to repeal Obamacare and the inability to pass spending bills at the levels set by Republican leaders.
As bad as that is, what a Republican aide said is worse. “What we have done so far this year clearly hasn’t worked,” the GOP aide involved in the planning sessions told the Politico reporters. “Cantor wants to take us in a new direction, which is good. The problem is we don’t know where we are headed, and we don’t know what we can sell to our members.” This no way to run an enterprise as large and as important as the United States.
The judicial branch is crippled as qualified nominees go unconfirmed due to “unfair hurdles in the Senate.” As a result, the U.S. Court of Appeals for the District of Columbia, the nation’s second-highest court, has three vacancies on the 11-seat court that handles cases involving federal regulations and national security. Half of the legislative branch is in thrall to a band of right-wing zealots unmoved by facts as much as they are motivated by hatred of the president. As a result, the threat of government shutdowns and default is constant. Inaction on pressing issues is now routine. And the executive branch finds its agenda held hostage by an opposition that schemed against it since before its inauguration in 2009, even though said agenda was approved by the American people — twice.
That the Obama administration has been able to get as much done as it has speaks to the president’s determination to move this nation forward. Yet it’s not enough. Ours is a government that requires two functioning parties that produce good public policy through the necessary friction of governing. Neither party is perfect nor has all the ideas or the answers. But no good comes from a party that gives up completely on governing.
At the end of its editorial, the Times noted, “Democrats may be stumbling right now, but at least they are trying.” Would that Republicans did the same. It is long past time they did.
By: Jonathan Caphart, The Washington Post, November 20, 2013
“Things Are Neither Perfect Nor Disastrous”: Obamacare Panic To Enter Even Stupider New Phase
No, Democrats are not abandoning it en masse, and no, it isn’t going to be repealed.
I want to follow up on what I wrote Friday about those who are deciding that because of a) web site problems and b) the largely manufactured controversy over people who have one private insurance plan but now face the unfathomable horror of moving to a different private insurance plan, the Affordable Care Act is an unrecoverable disaster that has destroyed Barack Obama’s second term. I’m sensing that this is about to move into a new phase of inane speculation that we should think about before it starts.
I’ll just use one article as an example. This morning, under the headline “Why Obamacare Is On Life Support,” Josh Kraushaar of the National Journal all but declares that the law is about to be repealed. “Unless the HealthCare.gov website miraculously gets fixed by next month,” he writes, “there’s a growing likelihood that over time, enough Democrats may join Republicans to decide to start over and scrap the whole complex health care enterprise.” That’s so blindingly stupid I’m almost not sure where to start, but let’s give it is a shot. First, would it really be “miraculous” if Healthcare.gov got fixed by next month? It’s a website. Yes, a complicated one, and yes, one that had many problems. But it isn’t as though those problems are somehow beyond the ken of human ingenuity to solve, requiring heavenly intervention. The administration isn’t trying to achieve faster-than-light transport or make us all immortal. It’s a website. It may not be perfect, but it’ll work.
Kraushaar then goes through some counting of vulnerable Democratic seats in both houses to argue that it’s a real possibility that a repeal of the entire ACA could not only pass, but pass with a wide enough margin to override a veto from the President. His main evidence is the 39 House Democrats who voted last week for a symbolic Republican proposal to undo some of the individual-market reforms; he thinks the number for full repeal of the ACA will be even greater. But that’s completely backwards. It would take some kind of as-yet-unforeseen utter catastrophe to transform even those votes into a vote for full repeal. As Jonathan Bernstein says, “There’s an enormous difference between playing along on a symbolic vote and abandoning a policy Democrats are stuck with, like it or not.” Not even House Democrats from swing districts are dumb enough to think that voting to repeal the law would serve their political interests, despite Kraushaar’s bizarre and demonstrably false assertion that already, “Even [the ACA’s] most ardent supporters are running for the hills.”
If you’re going to start speculating about repeal, you have to confront what’s going to happen six weeks from now, on January 1. Let’s have a little reminder:
- Millions of people will begin getting coverage through Medicaid. Repeal would mean kicking these people off their insurance.
- Millions of people will begin getting subsidies to pay for private insurance. Repeal would mean taking away their subsidies, making it unaffordable for them to get insurance.
- Denials for pre-existing conditions will be officially over. Repeal would mean that once again, insurers could deny people coverage if they’ve ever been sick.
- Annual limits on coverage will be outlawed. Repeal would mean that people will once again start being forced to pay huge medical bills, in many cases forcing them into bankruptcy, if they have a serious illness or accident.
And that’s not to mention the parts of the bill that have already gone into effect, like “rescission” becoming illegal, children not being allowed to be denied coverage for pre-existing conditions, or young people being allowed to stay on their parents’ insurance until they’re 26. You think some news stories about people in the individual market having to pay more for a new insurance plan tug at lawmakers’ heartstrings? Wait until you see the stories about the 5-year-old girl with leukemia who’ll get kicked off her coverage if Republicans in Congress have their way. Right now we’re talking about a few people who are supposedly the “losers” in the ACA, but the most they’ve lost is some money they’ll have to pay for a more comprehensive plan. If you repeal the law, the country would be overflowing with people whose losses are genuinely catastrophic.
January 1 is the end of any talk of repeal, and Republicans know it—as many of them have been saying all along, once you start giving people benefits, it’s all but impossible to take them away. That doesn’t mean there isn’t still work to do, and it doesn’t mean there aren’t things that could go wrong. Nor does it mean there might not be piecemeal fixes to one or another provision debated in the future; there almost certainly will be. But unless you think that in the next six weeks Republicans are going to manage to put together a two-thirds majority in both houses of Congress to repeal the ACA—something you’d have to be nuts to believe—it’s never going to happen.
I realize that there’s an impulse as a reporter or a pundit to cast everything in the most dramatic terms possible. “Things are neither perfect nor disastrous” is a much less interesting assertion to make than “Everything has changed! Earth-shattering developments are afoot!” But that happens to be the truth.
By: Paul Waldman, Contributing Editor, The American Prospect, November 18, 2013
“Prudence Or Cruelty?”: Slashing Food Stamps Is A Mark Of Shortsighted Cruelty
When members of Congress debate whether to slash the food stamp program, they should ask if they really want more small children arriving at school having skipped breakfast.
As it is, in the last few days of the month before food stamps are distributed, some children often eat less and have trouble focusing, says Kisha Hill, a teacher in a high-poverty prekindergarten school in North Tulsa, Okla.
“Kids can’t focus on studying when their stomachs are grumbling,” Hill told me.
Some 47 million Americans receive food stamps, including some who would otherwise go hungry — or hungrier. A recent government study found that about 5 percent of American households have “very low food security,” which means that food can run out before the end of the month. In almost a third of those households, an adult reported not eating for an entire day because there wasn’t money for food.
Meanwhile, 14 percent of American toddlers suffer iron deficiency. Malnutrition isn’t the only cause, but it’s an important one — and these children may suffer impaired brain development as a result. This kind of malnutrition in America is tough to measure, because some children are simultaneously malnourished and overweight, but experts agree it’s a problem. We expect to find malnourished or anemic children in Africa and Asia, but it’s dispiriting to see this in a country as wealthy as our own.
Let me take that back. It’s not just dispiriting. It’s also infuriating.
“The cutback in food stamps represents a clear threat to the nutritional status and health of America’s children,” says Dr. Irwin Redlener, the president of the Children’s Health Fund and a professor of pediatrics at Columbia University. Dr. Redlener said that one result of cutbacks will be more kids with anemia and educational difficulties.
Food stamp recipients already took a cut in benefits this month, and they may face more. The Senate Democratic version of the farm bill would cut food stamps by $4 billion over 10 years, while the House Republican version would slash them by $40 billion.
More than 90 percent of benefits go to families living below the poverty line, according to federal government data, and nearly two-thirds of the recipients are children, elderly or disabled.
Let’s remember that the government already subsidizes lots of food. When wealthy executives dine at fancy French restaurants, part of the bill is likely to be deducted from taxes, which amounts to a subsidy from taxpayers. How is it that food subsidies to anemic children are more controversial than food subsidies to executives enjoying coq au vin?
Meanwhile, the same farm bill that is hotly debated because of food stamps includes agricultural subsidies that don’t go just to struggling farmers but also, in recent years, to 50 billionaires or companies they are involved in, according to the Environmental Working Group, a Washington research group.
Among the undeserving people receiving farm subsidies has been a New York Times columnist. Yes, I have been paid $588 a year not to grow crops on wooded land I own in Oregon (I then forward the money to a maternity hospital in Somaliland). When our country pays a New York journalist not to grow crops in an Oregon forest, there’s a problem with the farm bill — but it’s not food stamps.
Granted, safety-net spending is more about treating symptoms of poverty than causes, and we may get more bang for the buck when we chip away at long-term poverty through early education, home visitation for infants, job training and helping teenagers avoid unwanted pregnancies.
That said, food stamps do work in important ways. For starters, they effectively reduce the number of children living in extreme poverty by half, according to the Center on Budget and Policy Priorities in Washington.
By improving nutrition of young children, food stamps also improve long-term outcomes. In recent years, mounting scholarship has found that malnutrition in utero or in small children has lasting consequences. One reason seems to be that when a fetus or small child is undernourished, it is programmed to anticipate food shortages for the remainder of its life. If food later becomes plentiful, the metabolic mismatch can lead to diabetes, obesity and heart disease.
An excellent study last year from the National Bureau of Economic Research followed up on the rollout of food stamps, county by county, between 1961 and 1975. It found that those who began receiving food stamps by the age of 5 had better health as adults. Women who as small children had benefited from food stamps were more likely to go farther in school, earn more money and stay off welfare.
So slashing food stamp benefits — overwhelmingly for children, the disabled and the elderly — wouldn’t be a sign of prudent fiscal management by Congress. It would be a mark of shortsighted cruelty.
By: Nicholas D. Kristof, Op-Ed Columnist, The New York Times, November 16, 2013
“Can We Please Get A Grip?”: Having The Backbone To Set Minimum Standards For Health Insurance
Democrats are showing once again they have the backbones of banana slugs.
The Affordable Care Act was meant to hold insurers to a higher standards. So it stands to reason that some insurers will have to cancel their lousy sub-standard policies.
But spineless Democrats (including my old boss Bill Clinton) are caving in to the Republican-fueled outrage that the President “misled” Americans into thinking they could keep their old lousy policies — and are now urging the White House to forget the new standards and let people keep what they had before.
And some congressional Republicans are all too eager to join them, and allow insurers to offer whatever crap they were offering before — exposing families to more than $12,700 in out-of-pocket expenses, canceling policies of people who get seriously sick, failing to cover prescription drugs, and so on.
Can we please get a grip? Whenever industry standards are lifted — a higher minimum wage, safer workplaces, non-toxic foods and drugs, safer cars — people no longer have the “freedom” to contract for the sub-standard goods and services.
But that freedom is usually a mirage because big businesses have most of the power and average people don’t have much of a choice. This has been especially the case with health insurance, which is why minimum standards here are essential.
Yes, the President might have spelled this out a bit more clearly beforehand, explaining that 95 percent of us aren’t in the private insurance market to begin with and won’t be affected, and that most of the 2 percent who lose their lousy policies and have to take better and more expensive ones will be subsidized.
But right now the President needs all the political support he can muster to hold insurers’ feet to the fire. Democrats should stand firm for a change.
By: Robert Reich, The Robert Reich Blog, November 15, 2013
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