Pragmatic Policy vs Ideological Philosophy
For some time now, Democrats and Republicans alike have been yearning for a great philosophical clash between the two parties. No more of this five percent of 12 percent of the federal budget stuff. We wanted entitlements, the role of government, the obligations that the old have to the young, that the rich have to the poor, that the powerful have to the powerless.
Paul Ryan’s budget offer exactly that sort of reconstruction of the social compact. America is a very different place before his budget than it would be after his budget. But though Obama’s speech was closer to that sort of clash of visions than anything he’s offered before — he used the word “vision” 15 times, for instance — what he offered was not philosophy. It was policy. But you have to read it closely — and know where it came from — to see that.
This is difficult advice when it comes to deficit reduction, but don’t look at the number. This plan cuts $4 trillion, that plan cuts $2 trillion, that one cuts $10 trillion. Those numbers reflect little but the internal hopes and dreams of the plan. If I say that my plan means Medicare will never spend another penny and economic growth will shoot to 8 percent — and that’s only a shade less optimistic than the assumptions and models included in the Ryan budget (pdf) — I can save an almost unlimited amount of money. My number can be anything I want it to be. The problem is I actually can’t save that much money because my math is based on fantasy. So my number is meaningless.
President Obama says his plan cuts $4 trillion over 12 years. Rep. Paul Ryan says his plan cuts $4 trillion over 10 years. If you look at the numbers, the two plans appear quite similar. But if you look at how they’d get to the number, they couldn’t be more different. And it’s how you get to the number that matters, because that’s what decides whether you’ll get to the number. It’s also, incidentally, what decides the shape of our government going forward.
Ryan’s number is the product of holding the growth of Medicare and Medicaid to the rate of inflation, which is far lower than has ever been shown to be possible. How he gets there is, on Medicaid, he tells the states to figure it out, and on Medicare, he tells seniors to figure it out. Both strategies have been tried: Various states have gotten waivers to radically remake their Medicaid program, and the consumer-driven model that Ryan is proposing for Medicare has been attempted in the Federal Employee Health Benefits Program and Medicare Advantage. None of these programs have worked, which is why we’re in our current predicament.
Obama’s number is the product of holding Medicare growth to GDP+0.5 percent — which is, in practice, a few percentage points beyond inflation, and a few percentage points behind the health-care system’s normal rate of growth. He mostly gets there through the cost controls passed as part of the Affordable Care Act, which hope to hold Medicare to GDP+1 percent. He then proposes to shave a further half-percentage point off the growth rate by introducing value-based insurance — where we pay more for treatments that are proven to work than for treatments that are not proven to work — into Medicare and giving generic drugs quicker entry into the marketplace. These programs have worked at smaller scales and in more limited pilots. We don’t know if they’ll work across the entire Medicare system, but we have reason to think they will.
Then there are taxes. Ryan’s plan pledges to make the Bush tax cuts permanent, at a cost of at least $4 trillion over 10 years, and more after that. He’d then clean out the tax code, but he’d pump the money he made from closing expenditures back into tax cuts. Obama proposes to return to the Clinton-era tax rates on income over $250,000 and then raise a further trillion through closing tax expenditures. Altogether, that’s about $2 trillion less than letting all the Bush tax cuts expire, but at least $2 trillion more than Ryan’s plan. Notably, Obama hasn’t said which expenditures he’d close to get to $1 trillion. The difference between the two tax plans — particularly when added to Obama’s decision to cut $400 billion from security-related spending, while Ryan largely exempts that category — explains why Obama doesn’t have to make such deep cuts in programs for seniors and low-income Americans.
So are we finally getting the grand philosophical debate we wanted? Not quite. Obama spoke extensively of vision — the GOP’s, which “claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires … {while} asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill,” and his, “where we live within our means while still investing in our future; where everyone makes sacrifices but no one bears all the burden; where we provide a basic measure of security for our citizens and rising opportunity for our children,” but he’s overselling it.
Obama’s budget is not philosophy. It is very similar to the Simpson-Bowles report, which attracted the votes of Republicans as far to the right as Tom Coburn. Few Democrats would say their vision of balancing the budget is one in which there was only one dollar of new taxes for every three dollars of spending cuts, but that’s what Obama’s proposal envisions. Obama’s budget, somewhat curiously, is what you’d expect at the end of a negotiation process, not the beginning. In fact, as it’s modeled off of Simpson-Bowles, it is the product of a negotiation process, as opposed to an opening bid. It is, in other words, policy. You could argue that this is a philosophy, and that philosophy is pragmatism, but I think that’s getting too cute. This is the sort of policy that might pass and might work.
Ryan’s budget is purer, but it is also more fantastical. It posits the government it wishes were possible, and the policies it wishes would work. It is an opening bid so ideological that it leaves little room for a process of negotiation. Every dollar it purports to raise comes from cutting spending. Not one comes from taxes. It privatizes Medicare and unwinds the federal government’s role in Medicaid. For all the philosophy in his budget — and his budget does have a very different philosophy about the proper role of government than we see in federal pllicy today — there’s neither policy that could pass nor policy that could work. And, curiously for a conservative who distrusts both government and congress, it has no answer to the question of “what if this fails?”
The policy that clarifies this difference is the “trigger.” Obama’s budget, aware that it might not pass and, if it does pass, it might not work, proposes to make automatic cuts to discretionary spending and tax expenditures if the promised savings don’t materialize. If Ryan’s budget falls shorts, there’s no comparable failsafe. That is to say, Obama’s budget has two plausible ways to get to its number, while Ryan’s budget has none. You don’t need a PhD in philosophy to understand why that’s a problem.
By: Ezra Klein, The Washington Post, April 13, 2011
What The Republican Budget Plans Tell Us About Republican Values
The Republicans want you to believe that they’re concerned about the deficit. Of course, that concern is a lie. They don’t care about the deficit. They only care about using the deficit as an excuse to pursue their extremist agenda. And the single most extreme part of it is their war on people. On workers. On women. On immigrants. On the environment that keeps us all healthy and alive. If they cared about the deficit itself, they’d have noticed that the previous three Republican presidents produced consecutively the largest deficits in human history, each outdoing his predecessor, and the most recent Republican president not merely shattering his father’s unprecedented standard, but actually having to destroy the federal surplus built by a Democratic president in order to do so. An impressive feat, by any measure. But when Republicans talk about deficits, you know they are lying. Republicans destroy surpluses and create record deficits. That’s the truth.
If Republicans cared about the deficit, they wouldn’t have held middle-class tax cuts hostage for a ransom of tax cuts for the very wealthy, tax cuts that the very wealthy do not need. Tax cuts for the wealthy that won’t create jobs or stimulate the economy. Tax cuts for the wealthy that added to the federal deficit, the same federal deficit Republicans now pretend to be so worried about that they need to slash and burn federal spending. Spending for such things as food assistance for low-income Americans, which Republicans want to cut even as they retain farm subsidies. Spending for such things as life-saving immunizations. Spending for such things as food and health assistance around the world, without which some 70,000 children could die. And not content to make Americans go hungry and die of preventable diseases, and for tens of thousands of children around the world to starve to death, rather than have the very wealthy pay more taxes, Republicans also have their “hearts” set on eliminating Medicare and eviscerating Medicaid. And they want to repeal the Obama health plan, even though doing so would make the deficit even worse.
Let’s not pretend that Republicans actually care about the deficit. If they did, their approach in addressing it would be responsible and humane. Republicans don’t care about the deficit. They only care about cutting government programs that help people in need. It’s part of their larger agenda of blatant class warfare. Republicans prefer that millions of people suffer, and that at least tens of thousands of people die, rather than that the very wealthy once again pay the taxes that eliminated the previous Republican deficits to create the previous Democratic surplus. Leave it to the mental health professionals to diagnose the psychology of such values. If anyone can afford mental health professionals, with states now also in budget crises thanks to the genius of tax cuts.
But lest you think that Republicans don’t have any spending priorities at all, keep in mind that they do want to use federal money, just so it is spent in pursuit of their Medieval social agenda. But that’s just relative pocket change. While Republicans seem actually to want for people in need to suffer and die, they also want to throw unfathomably budget-busting pallets of cash at their favorite budget sinkhole. As reported by Ryan Grim:
While media attention focuses on the cuts to government spending demanded by House Republicans and broadly accepted by Democrats, the Pentagon is poised to reap billions more in federal funds, according to sources close to the discussions. The confines of the budget negotiations established by the two parties results in a system where every extra dollar going to military spending ends up being offset by a dollar reduction in spending on domestic social programs.
Got that? It’s an actual tradeoff. Punish more people in need to free up more cash for the Pentagon. The Democrats actually proposed some reductions to the Pentagon budget, and in January Defense Secretary Robert Gates and Chairman of the Joint Chiefs Mike Mullen outlined plans for responsible Pentagon budget cuts:
“A major objective beyond creating monetary savings is to make this department less cumbersome, less top heavy and more agile and effective in the execution of its responsibilities,” Gates said. “My hope and expectation is that as a result of these changes over time, what had been a culture of endless money, where cost was rarely a consideration, will become a culture of savings and restraint.”
But Republicans know better than the Defense Secretary and the Chairman of the Joint Chiefs. Grim:
Democrats and Republicans are now moving toward an agreement that would increase defense spending. But Democratic sources close to the talks said the Democrats’ spending recommendation remains roughly $2 billion shy of that of their Republican counterparts. A spokesman for the Senate spending panel declined to comment, citing ongoing talks. A spokesman for Senate Democratic leadership did not respond to requests for comment.
So the Pentagon itself says it doesn’t need more money, but not only are Democrats being pushed to give them more, the Republicans are insisting that the amount the Democrats are offering, and which the Pentagon says it doesn’t need, still isn’t enough! But it’s so important that we cut the deficit that we have to cut funding that feeds the hungry, prevents disease, and cares for the sick. And keep in mind that it’s not as if the Pentagon is anything remotely close to being underfunded. So what is it? Do Republicans think the answer to everything is to throw money at it? Do they have so little respect for the men and women in American uniform that they think they need such hardware overkill in order to protect the homeland? Are Republicans perpetually mired in a state of priapic adolescent arrested development, thinking the measure of their machismo is the size of their arsenal? Or is it just good old corporate welfare for the military industrial complex? Maybe it’s some combination of all of the above. But it’s a staggeringly irresponsible waste of resources that does nothing to enhance our national security.
As The Center for Arms Control and Non-Proliferation made clear, the United States spends more than eight times as much on defense as does the next closest country, Russia. The United States spends more than twice as much as does the next major military presence, which is America’s combined NATO allies. And not that it will satisfy paranoid Republicans, but the United States spends more than three times as much as do imagined potential adversaries Russia, China, Saudi Arabia, Iran, Pakistan and Venezuela combined. And for those particularly paranoid Republicans, the United States also spends more than 10 times as much as does that most sinister of all perpetual antagonists: France. And to put it in terms of actual budget and policy priorities, there is this concise explanation from The Center on Budget and Policy Priorities:
Between fiscal year 2001 (the last year for which appropriations levels were set under President Clinton) and fiscal year 2008, funding for domestic discretionary programs has been more constrained than any other area of the budget and has shrunk both as a share of the budget and as a share of the economy. In contrast, appropriations for defense and other security-related programs have increased more rapidly than any other area of the budget — even more rapidly than the costs of the “big three” entitlement programs: Social Security, Medicare, and Medicaid.
Republicans don’t care about the budget. They are using the budget as an excuse and red herring to recast the very nature of the United States government, and the very nature of the United States. They don’t care if those in need suffer and die. They don’t care about jobs. They don’t care about a social safety net. They do care very much about protecting the very wealthy. They do care very much about wealthy corporations. And the one thing at which they want to throw truly unimaginable amounts of money is the military. This is a huge clue as to their mindset. Because when you stop and consider the consequences of causing more and more suffering and unrest among more and more people while at the same time ensuring that the military is much more powerful than any military anywhere needs be, the only conclusion that can be drawn is that Republican values are not only inhuman and inhumane, they are dangerous and creepy.
By: Laurence Lewis, Daily Kos, April 10, 2011
Looming Government Shutdown Reminds Us That Congress Is Not A Business
It’s become common to bash large public institutions with the phrase, “if I ran my business the way they run [government/public schools/whatever], I’d be bankrupt.”
Maybe so. But Congress and law making are not businesses (the high-cost business of campaigning and lobbying aside). And public schools are not businesses, either.
Still there’s a tendency to think that putting corporate executives or small business owners in leadership positions at public institutions will somehow make those entities profitable or successful. That accounts for the election of some businesspeople to Congress, and the appointment of former magazine magnate Cathie Black as New York City schools chancellor.
Just a few months after her appointment by New York City Mayor Michael Bloomberg, Black is out. It was hardly a surprise, her approval rating among city residents had been an anemic 17 percent, according to a Quinnipiac University poll released last month. She had made some foolish comments, such as suggesting that birth control was the solution to schools overcrowding, and she upset some parents with her proposal to install an “elite” new high school inside an existing Park Slope high school.
Black had no education experience, which might have contributed to her troubles. She may be great at bottom-line decisions, but such calculations are nearly impossible in a public school. You can’t fire your students to improve your graduation rate. You can call a school “failing” for not reaching certain testing standards, but the school can’t do anything about the challenges–such as poverty, substance abuse in the home, or language barriers–that make certain student populations more difficult to teach.
And ironically, the business model on Wall Street doesn’t follow the market approach being imposed on schools. Financial big-wigs who helped run the economy into the ground got big bonuses, despite their poor performance. Their businesses weren’t closed for incompetence; they were given government bailouts. There is indeed an argument to be made that letting those businesses fail would have done tremendous damage to innocent parties, such as people whose IRAs are dependent on the performance of stocks over which they have no control. So why are schools not given the same “business” courtesy?
The same goes for the federal budget. Sure, one couldn’t run a business budget in the same way. But then, the government can’t fire Social Security recipients. It can’t–not without planning and consensus–decide to shutter “underperforming” enterprises such as the Afghan war. The government is meant to take care of everyone, to some degree, and unlike a business, the government can’t pick and choose which customers to target.
As stubbornness in Congress threatens a government shutdown, lawmakers tethered to a business model approach should remember their roles. A CEO or small business owner can dictate; a House member is one of 435 and must accept the needs and perspectives of the rest of the chamber. Businesses can price items high enough to cut out low-income consumers. Government has an obligation–though to what degree is a valid discussion–to protect the neediest. Having former businesspeople in Congress provides a valuable perspective in a diverse institution. But Congress is not a business.
By: Susan Milligan, U.S. News and World Report, April 7, 2011
Chairman Ryan Gets Roughly Two-Thirds of His Huge Budget Cuts From Programs For Lower-Income Americans
House Budget Committee Chairman Paul Ryan’s budget plan would get about two-thirds of its more than $4 trillion in budget cuts over 10 years from programs that serve people of limited means, which violates basic principles of fairness and stands a core principle of President Obama’s fiscal commission on its head.
The plan of Erskine Bowles and Alan Simpson, who co-chaired President Obama’s National Commission on Fiscal Responsibility and Reform, established, as a basic principle, that deficit reduction should not increase poverty or inequality or hurt the disadvantaged. The Ryan plan, which the chairman unveiled in a news conference, speech, and Wall Street Journal op-ed today, charts a different course, turning its biggest cannons on these people.

This finding emerges from a Center on Budget and Policy Priorities analysis of the Ryan plan. Table S-4 of the plan shows that it proposes net program cuts of $4.3 trillion over ten years. The plan shows a $5.8 trillion cut in outlays from the Congressional Budget Office baseline, but $446 billion of that is interest savings and another $1.04 trillion is simply an assumption that the Iraq and Afghanistan wars will phase down on the Obama Administration’s timetable. Actual program cuts produce net savings of $4.322 trillion.
Cuts in low-income programs appear likely to account for at least $2.9 trillion — or about two-thirds — of this amount. The $2.9 trillion includes the following three categories of cuts:
- $2.17 trillion in reductions from Medicaid and related health care. The plan shows Medicaid cuts of $771 billion, plus savings of $1.4 trillion from repealing the health reform law’s Medicaid expansion and its subsidies to help low- and moderate-income people purchase health insurance.
- $350 billion in cuts in mandatory programs serving low-income Americans (other than Medicaid). The budget documents that Chairman Ryan issued today show that he is proposing $715 billion in cuts in mandatory programs other than Medicare, Medicaid, and Social Security, but do not specify how much will be cut from various programs (although they imply that cuts in the food stamp program will be large). In this analysis, we make the conservative assumption that savings from low-income mandatory programs (other than Medicaid) would be proportionate to their share of spending in this category. Thus, we derive the $350 billion figure from the fact that about half of mandatory spending other than for Medicare, Medicaid, and Social Security goes for programs for low- and moderate-income individuals and families. This likely substantially understates the cuts that the plan would make in low-income programs. The Ryan documents show that $380 billion in cuts would come from programs in the income security portion of the budget (function 600), and the overwhelming bulk of the mandatory spending in that category goes for low-income programs. The documents also show $126 billion in mandatory cuts in the education, training, employment, and social services portion of the budget (function 500), which, based on the discussion in those documents, would likely come mainly from cuts in the mandatory portion of the Pell Grant program for low-income students.
- $400 billion in cuts in low-income discretionary programs. The Ryan budget documents show that he is proposing $1.6 trillion in cuts in non-security discretionary programs, but again do not provide details about the size of cuts to specific programs. (The documents do identify some major low-income program areas, including Pell Grants and low-income housing, as prime targets for cuts.) Here, too, we make the conservative assumption that low-income programs in this category would bear a proportionate share of the cuts. Thus, we derive the $400 billion figure from the fact that about a quarter of non-security discretionary spending goes for programs for low- and moderate-income individuals and families.
Our numerical assumptions are conservative in another way as well. That’s because, when faced with the choice of which specific programs to cut, policymakers are unlikely to cut much from a number of non-low-income programs in these budget categories that are popular, such as veterans’ disability compensation and the FBI. That means that other programs — including low-income programs — would have to be cut by more than their proportionate share.
By: Robert Greenstein, Center on Budget and Policy Priorities, April 5, 2011