“Let’s Take Healthcare Away”: Lindsey Graham Struggles With Fiscal Basics
There was an exchange yesterday between Fox News’ Chris Wallace and Sen. Lindsey Graham (R-S.C.) that was hard to watch, but nevertheless illustrative of a larger point.
WALLACE: You know that if we go into the sequester the president is going to hammer Republicans. The White House has already put out a list of all the things, terrible things that will happen if a sequester kicks in: 70,000 children losing Head Start, 2,100 fewer food inspectors, small business will lose $900 million in loan guarantees. And, you know, Senator, the president is going to say your party is forcing this to protect tax cuts for the wealthy.
GRAHAM: Well, all I can say is the Commander-In-Chief thought — came up with the idea of sequestration, destroying the military and putting a lot of good programs at risk. Here’s my belief: let’s take “Obamacare” and put it on the table…. If you want to look at ways to find $1.2 trillion in savings over the next decade, let’s look at “Obamacare”. Let’s don’t destroy the military and just cut blindly across the board.
Now, the first point is obviously ridiculous. Republicans are heavily invested in the idea that automatic sequestration cuts were something President Obama “came up with,” but reality shows otherwise. It’s trivia anyway — what matters is resolving the threat, not imagining who created it — but what Graham chooses to overlook is every relevant detail: the sequester was part of the ransom paid to the Republican Party when it took the nation’s full faith and credit hostage for the first time in American history. GOP leaders, at time, bragged that this policy was their idea, not Obama’s.
If Graham doesn’t like the sequester — and he clearly seems to agree that it’s a serious problem — he can support scrapping the policy or coming up with a bipartisan alternative. For now, he’s opposed to both of those options, making his whining yesterday rather unpersuasive.
But Graham turning his focus to the Affordable Care Act serves as a reminder of just how unserious he is about public policy.
Let’s be clear about what the South Carolinian is saying here. About $1.2 trillion in automatic cuts are set to kick in, doing real harm to the economy, the military, and the country overall. Lawmakers could cancel or delay the policy, though Republicans aren’t interested in either of these options, or they can come up with a bipartisan alternative that replaces the sequester with something else.
With 11 days to go, Lindsey Graham’s contribution to the discussion, in effect, is, “I know! Let’s take health care benefits away from millions of Americans!”
It’s worth noting that even the most reflexive partisans should realize their anti-“Obamacare” preoccupation is quickly becoming laughable. Republican governors are implementing the law; House Speaker John Boehner (R-Ohio) recently conceded the Affordable Care Act is “the law of the land“; public support for repeal is evaporating; and when folks like Orrin Hatch and Michele Bachmann unveil repeal bills, even most GOP lawmakers ignore them.
Graham, in other words, really needs to get over it.
But more important from a substantive perspective is that the South Carolina Republican still doesn’t understand the basics of the fiscal debate. The point of looking for a sequester alternative is to find a new policy on debt-reduction. If policymakers scrapped the Affordable Care Act, it would make the debt worse, not better.
In other words, Graham thinks Washington can produce smaller deficits by producing larger deficits. That doesn’t make any sense.
By: Steve Benen, The Maddow Blog, February 18, 2013
“Weather Vane Man”: Tracking Paul Ryan’s 5 Different Positions On The Sequester
House Republicans are attempting to blame Democrats and President Obama for “sequestration,” the automatic budget cuts that will begin taking effect on March 1 if Congress fails to avert them. But even as they cast that blame and ignore their own role in creation of the sequester, which wouldn’t exist had Republicans not refused to raise the debt ceiling in August 2011, Budget Committee Chairman Paul Ryan (R-WI) is expected to count the sequester’s automatic cuts in the next version of his budget, BuzzFeed reports:
According to two senior GOP aides familiar with Ryan’s thinking on the budget, the Wisconsin Republican and former vice presidential candidate will use the so-called sequester as part of the baseline level of spending for his budget.
Ryan’s position on the sequester has changed multiple times:
1. Helped make the sequester happen. Ryan was among the Republicans leading demands for spending cuts to offset a debt ceiling increase in the summer of 2011, and was among the leaders who refused to consider new revenues in those negotiations. Had Republicans not refused to raise the debt ceiling in the first place, the sequester wouldn’t exist.
2. Voted for plan to create the sequester, then bragged about it. Ryan took credit for the sequester in August 2011, bragging to Fox News that it guaranteed the massive budget cuts Republicans were seeking. “We got that in law,” he boasted. On the House floor, he said the Budget Control Act’s spending cuts were “a victory for those committed to controlling government spending.”
3. Called the sequester “devastating” during the presidential election. Ryan blasted Obama for wanting the sequester’s “devastating defense cuts” to take place during the presidential election, when he was the GOP’s vice presidential candidate.
4. Blamed the likelihood of the sequester occurring on Obama. The sequester “will probably occur” because “the president has not a proposal yet on the table,” Ryan told CBS News last week. “Don’t forget it’s the president who first proposed the sequester. It’s the president who designed the sequester as it is now designed,” he added.
5. Will include sequester cuts in his latest budget.
This is hardly a new strategy for Ryan, who crisscrossed the country blasting Obama for cutting Medicare spending even as he included the cuts in his last budget proposal and made even bigger changes to the program.
By: Travis Waldron, Think Progress, February 15, 2013
“Kick That Can”: Fiscal Austerity Should Wait Until The Economy Has Recovered
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.
Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.
This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.
Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.
One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.
Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.
Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 7, 2013
“Driving While Impaired”: After Falling In Sequester Ditch, GOPers Look For Way Out
Remember the Republicans’ debt-ceiling crisis in 2011? It was about a year and a half ago when GOP leaders handed President Obama a ransom note: accept more than $2 trillion in debt reduction or the economy gets it. The parties agreed to more than $1 trillion in cuts, but agreed they needed more time to work on a larger agreement.
So, they crafted a mechanism intended to force both sides to the negotiating table — a sword of Damocles hanging over Washington’s head that would be so severe, Democrats and Republicans would have a strong incentive to strike a deal to avoid the drastic consequences.
The mechanism was automatic sequestration cuts — or “the sequester” — valued at about $1.2 trillion, half of which would come from the Pentagon. (Democrats originally wanted automatic tax hikes to motivate the GOP, but Republicans refused — even hypothetical tax increases were deemed outrageous — and deep Defense cuts were used instead.)
These cuts kick in three weeks from today, and so far, the two sides aren’t close. Democrats want a balanced deal the GOP should find tolerable — spending cuts on one side of the ledger, revenue from closed tax loopholes on the other. Republicans, meanwhile, say they’re prepared to simply let the sequester happen, regardless of the consequences to the economy, the military, or the public.
At least, that’s what they say publicly. Behind the scenes, the GOP strategy is on shaky ground.
One thing is becoming clear: Republicans want to find a way to replace the cuts in the sequester, despite some loud rhetoric to the contrary.
Top House Republican aides privately concede that the politics of allowing the cuts to hit — layoffs, furloughs and a stalled economic recovery — are tough to stomach and they would prefer to make a deal, on their terms of course. […]
A top GOP leadership aide, speaking anonymously to divulge internal thinking, laid out 10 options that the House GOP leadership would be willing to accept, along with savings estimates developed by GOP policy aides, in order to avoid the sequester.
So, the good news is, Republicans are not actively seeking a course that would hurt the country on purpose. The bad news is, they’re still struggling with the whole “compromise” concept.
To date, with just 21 days to go, Republicans leaders have offered nothing — there is no sequester alternative on the table, and in this Congress, no bills to replace the sequester have even been written. There are reportedly 10 different scenarios Republican leaders would be willing to consider, but all 10 are made up entirely of deep spending cuts and would not include so much as a penny in additional revenue.
In other words, Republicans want to replace sequestration with a package that gives them 100% of what they want and 0% of what Democrats want.
This after a national campaign in which Democrats voiced support for a balanced approach, and the American electorate strongly agreed.
It’s nice, I suppose, that there are so many Republican-friendly options to choose from — the menu includes everything from raising the Medicare eligibility age to chained CPI, cutting federal pensions to cutting agricultural subsidies — but so long as GOP officials expect a 100%/0% deal, the likelihood of a breakthrough is remote.
That said, with three weeks to go, I expect some movement away from the intransigent status quo. Put aside the rhetoric and the posturing and we’re left with a picture in which Democrats and Republicans actually have the same goal: to get rid of the sequester. The GOP doesn’t want to admit it, but a bipartisan deal, featuring a combination of spending cuts and revenue from closed tax loopholes and unnecessary deductions could come together with relative ease.
What’s more, if the automatic sequestration cuts happen, and the economy tanks, Republicans probably realize this will be their fault and they’ll likely get the blame. It’s why Josh Green wrote late yesterday that a “Republican crackup over the sequester” almost seems inevitable.
As the process unfolds, I’d like to take a moment to throw in my own suggestion: get rid of the sequester. Don’t try to replace it, don’t struggle to find some satisfying ratio that pleases both sides, don’t delay it for a few months, just cancel it. The deficit is already shrinking, spending has already been cut, and if policymakers want to do even more to improve the nation’s long-term finances, they can work on a deal without some dangerous threat hanging over their heads.
Sequestration was a bad idea. There’s no reason both sides can’t agree to get rid of the darn thing and start fighting over something else.
By: Steve Benen, The Maddow Blog, February 7, 2013
“Let’s Destroy The Village”: Four Years Later, Paul Ryan Wants More Of The Same
Just when I thought that the National Review Institute demonstrated that Republicans are ready to compromise, Paul Ryan outlined a somewhat apocalyptic vision of budget negotiations there on Saturday.
According to POLITICO, Ryan said “that the nation will face ‘tepid growth and deficits’ under President Barack Obama and Republicans must prudently ‘buy time’ and ‘keep the bond markets at bay — for the sake of our people.'” Like a third-rate objectivist action hero, he is.
Ryan continued:
“Unfortunately, the Democrats are unlikely to accept our proposals. They refuse to consider real reform. But we will lay the groundwork for future endeavors. So when reform is possible, we will be ready.
“The president will bait us. He’ll portray us as cruel and unyielding,” Ryan said. “Look, it’s the same trick he plays every time: Fight a straw man. Avoid honest debate. Win the argument by default.
But neither the President nor any other Democrats need to portray Ryan as “cruel and unyielding” because his policies do a fantastic job of that on their own.
Ryan has time and time again demonstrated that he isn’t interested in paying down the national debt or in “reforms to protect and strengthen Medicare and Medicaid,” as he claimed on Saturday. He’s interested in turning Medicare into a voucher program and in slashing Medicaid’s budget by over a trillion dollars — his logic reminiscent of that infamous Vietnam era talking point “destroying the village in order to save it.” And speaking of bombs, Ryan has repeatedly refused to consider cutting one of the most draining and unnecessarily large parts of the budget: defense spending. He also refuses to consider forcing those with mountains of idle or otherwise unproductive cash to pay for these programs, and isn’t content with Democratic compromises thus far, refusing to appreciate the $2.2 trillion in cuts agreed to during the 112th Congress, because he’s cranky about the $620 billion in tax increases.
Moreover, he isn’t even right about the one thing that libertarian types are supposed to be intimately familiar with — the bond market. As I pointed out a few weeks ago, interest rates are about as low as they can be and aren’t expect to rise, and demand for U.S. Treasury bonds is robust. This suggests that the market has confidence in the U.S. government’s ability to honor its debts, and that federal borrowing isn’t “crowding out” private sector investment.
Who’s avoiding honest debate, Congressman Ryan?
POLITICO also reported that Ryan’s outlook contrasts sharply with Speaker Boehner’s. The latter is attempting to compromise with Democrats by forcing the Senate to pass a budget so that the two houses can find some middle ground. But if Ryan uses his budget committee chair to turn this into another fiscal knock-down drag-out fight — something that makes virtually no sense in light of his party’s November drubbing, and Congress’ low approval rating — the ensuing conference committee might make the super committee look like serious adults.
So much for learning from the past four years.
By: Samuel Knight, Washington Monthly Political Animal, January 26, 2013
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