John Boehner And The Notion Of “Common Ground”
House Speaker John Boehner (R-Ohio) made an appeal to super-committee members yesterday, urging them to work towards a debt-reduction solution built on areas of agreement between the parties. If only his argument was as sensible as it sounds.
Boehner encouraged the committee to hone in on working to reform entitlements such as Social Security, Medicare and Medicaid in order to meet the committee’s mandate to drop $1.5 trillion from the deficit in the next decade. […]
Explaining that common ground is not analogous to compromise, the speaker called on Democrats and Republicans to come together on areas of agreement without violating the principles that brought them to elected office.
“Common ground doesn’t mean compromising on your principles. Common ground means finding the places where your agenda overlaps with that of the other party, locking arms, and getting it done, without violating your principles,” Boehner said. “The jobs crisis in America today demands that we seek common ground, and act on it where it’s found.”
That seems fair, doesn’t it? Democrats have a policy agenda; Republicans have a very different agenda; and to get something done, the two sides should focus on areas of commonality.
The context, however, makes all the difference. In this case, Boehner was talking about entitlements, and support in both parties for making structural “reforms” to Social Security, Medicare, and Medicaid. If Democrats and Republicans agree that entitlement changes are worthwhile to address long-term financing challenges, in the Speaker’s mind, it means the parties should “lock arms” and adopt these changes.
House Majority Leader Eric Cantor (R-Va.) made a very similar argument over the summer: “We both agree on doing something that’s good for the country, which is dealing with entitlements. Why don’t we just do that? Why do we have to sit here and say we still got to raise taxes when we don’t agree on that?”
The problem here is that GOP leaders don’t seem to understand what the words “compromise” and “common ground” mean.
Consider an example. Let’s say I go to pick up some lunch at the sandwich shop around the corner. The guy behind the counter and I are prepared to engage in a transaction — I’ll give him $5 and he’ll give me a sandwich. But I decide I’m not fully satisfied with the terms. “Look,” I tell the guy, “both of us agree that I should get the sandwich. It’s already right there on the counter, and this is the area where both of our agendas overlap. So, let’s focus on this area of common ground, I’ll eat the sandwich, and we can argue about the $5 later.”
This is, in effect, what Republican leaders are telling Democrats. Leading Dems in Congress and at the White House have told the GOP they’re willing to accept some entitlement “reforms” in exchange for some additional tax revenue from the wealthy. It’s a balanced approach that calls for broad sacrifice, which addresses the debt problem created by Republicans over the last decade.
Boehner and Cantor are saying, “Well, we both want to tackle entitlements, but we disagree about taxes, so just give us what we want since it’s an area of ‘common ground.’”
What GOP leaders don’t seem to understand — or at least choose to be confused about — is that giving one side everything it wants, and demanding no concessions at all from that side, is in no way similar to “finding the places where your agenda overlaps with that of the other party, locking arms, and getting it done.”
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, November 1, 2011
“Pay-For-Delay”: Ending Drug Companies’ Deals
An upcoming report by the Federal Trade Commission shows that brand-name pharmaceutical makers continue to cut questionable deals with generic manufacturers that delay the introduction of cheaper drugs onto the market.
Such pay-for-delay arrangements hurt consumers and increase costs for federal programs such as Medicare and Medicaid, according to the report, a copy of which was obtained by the editorial board. These deals are not illegal, but they should be.
Pharmaceutical companies rightly enjoy strong protections for products that often take years and billions of dollars to develop. These protections were so strong at one point that they discouraged would-be competitors from jumping in. The Hatch-Waxman Act of 1984 meant to address this problem by allowing generics to market “bio-equivalent” drugs as long as they did not infringe on the brand-name drug’s patent; the generic could also proceed if it proved the brand-name patent was invalid. The goal was to enhance competition and lower drug prices. That goal is thwarted when brand-name manufacturers engage in the popular practice of paying generic-drug makers to keep their products off the market.
In 2004, the FTC did not identify a single settlement in a patent litigation matter involving drug makers that raised pay-for-delay concerns. In its new report, the agency points to 28 cases that bear the telltale signs of pay-for-delay, including “compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product.”
Sens. Charles E. Grassley (R-Iowa) and Herb Kohl (D-Wis.) have introduced the Preserve Access to Affordable Generics Act to close the pay-for-delay loophole. The bill would make such schemes presumptively illegal and empower the FTC to challenge suspicious arrangements in federal court. The most recent version gives companies a chance to preserve certain deals if “clear and convincing evidence” proves that their “pro-competitive benefits outweigh the anti-competitive harms.” The Obama administration estimates that eliminating pay-for-delay could save the government $8.8 billion over 10 years; the Congressional Budget Office offers a dramatically more conservative savings estimate of roughly $3 billion over the same period.
The legislation should appeal to the deficit-reduction “supercommittee,” which has been tasked with identifying ways to cut the federal deficit.
By: Editorial Board Opinion, The Washington Post, October 24, 2011
Three Reasons Why It’s Better For The Economy If The Super-Committee Fails To Get A Deal
Last Thursday’s Washington Postheadline blared: “Debt panel’s lack of progress raises alarm on Hill.”
In fact it is far better for everyday Americans if the so-called Super Committee fails entirely to get a deal.
The overarching reason is simple: any deal they are likely to strike will make life worse for everyday Americans — and worsen our prospects for long-term economic growth.
Of course that’s not the view of many denizens of the Capitol who are still obsessed by the notion that it is critical for the Congress to produce a “compromise” that raises revenue and cuts “entitlements.” There are three reasons why these people are wrong:
1). Any deal would likely slash the income of many everyday Americans. You could design a plan to substantially reduce the deficit without big cuts in Social Security, Medicare or Medicaid. My wife, Congresswoman Jan Schakowsky, who served on President Obama’s Fiscal Commission, designed just such a proposal last year. And, of course, Social Security has nothing to do with the deficit in the first place.
Unfortunately, however, in order to get Republican support any large-scale deal in the Super Committee would almost certainly require big cuts in either Social Security, Medicare or Medicaid — or all of them. Substantial cuts in any of these programs will make life harder for everyday Americans and reduce the likelihood of long-term economic growth.
Without a “deal” in the Super Committee, the current budget plan does not cut Social Security, Medicare and Medicaid — and that’s a good thing.
According to the Social Security Administration, the average monthly Social Security check now averages the princely sum of $1,082 — or about $13,000 per year. Next year, for the first time since 2009, payments will increase by $39 per month to offset inflation, but $18 a month of that increase will go right back out the door in the form of Medicare premium increases.
Already under current law, Medicare Part B premiums, that cover services like doctors, outpatient care and home health services, must be set annually to cover 25% of program costs. And remember that Medicare recipients aren’t getting an “entitlement” — they are getting an earned benefit that they paid for throughout their working lives. The same, of course, is true of Social Security.
Mean while, Medicaid is the principle means of assuring that America actually begins to provide health care for all — including nursing home and home care.
The problem with medical care costs isn’t that “greedy” seniors and others are gobbling up too much care. The problem is that the costs of providing care are going up too fast. In fact, the per capita costs of providing health care in America is 50% higher than anywhere else on earth, and the World Health Organization only ranks health care outcomes as 37th, in the world.
Medicare is actually the most efficient means in the American economy for providing health care. Any action by the “Super Committee” that reduces the percentage of Americans on Medicare — say, by raising the eligibility age from 65 to 67 — would cost the American economy.
- According to a study by the Kaiser Family Foundation, if such a proposal were operational in 2014 it would raise total health care spending in America by $5.7 billion per year.
- This is so because, while it would save the Federal government a net of about $5.7 billion ($24 billion savings in Medicare payments largely offset by $18 billion of increased Medicaid payments and subsidies to low-income participants in exchanges), it would also generate an additional $11.4 billion in higher health care costs for individuals, employers and states — resulting in a net cost to the economy of $5.7 billion.
The one thing you could do to cut Medicare costs without hurting ordinary families or the economy as a whole is to require Medicare to negotiate with the drug companies for lower prices the same way the Veterans Administration does today. That would cut hundreds of billions in costs to the government over the next ten years, but don’t expect the Republicans to include that as an acceptable cut in “entitlements” as part of a Super Committee deal.
Of course, America has no business cutting the income of seniors who get $13,000 a year in Social Security payments regardless of anything else that is in a deal. The deficit problem should be fixed by asking millionaires and billionaires to pay their fair share and by jobs plans that put America back on a path of sustained economic growth. And we have no business reducing access to health care for everyday people so that CEO’s can fly around in their corporate jets, oil companies can keep their tax breaks, or Wall Street hot shots — who we all bailed out just three years ago — can pack in their huge bonuses.
Even if a Super Committee proposal includes increases in revenue to the government from millionaires and billionaires, that is not reason that normal people — whose real incomes have dropped over the last decade — should also be called upon to “share in the sacrifice.”
The problem isn’t that everyday Americans are gorging themselves on excesses that “America can’t afford.” The problem is that Wall Street, the financial sector and the 1% have gobbled up all of the increases in economic growth that the country has produced over the last two decades.
That has meant that the standard of living for normal people has been stagnant. But just as problematic, it has lead to a stagnant economic growth. Since the incomes of everyday people haven’t increased at the same rate as increased worker productivity, there simply haven’t been enough new customers to buy the new products and services that American businesses produce. That is the formula for recession and depression. And that’s just what happened.
American corporations are sitting on two trillion dollars of cash. The reason they aren’t hiring has nothing to do with the need for more tax breaks. What stops them isn’t lack of “confidence,” it’s a lack of customers.
For decades the International Monetary Fund (IMF) has preached the need for fiscal constraint and austerity. According to the Washington Post, now even the IMF is warning that, “austerity may trigger a new recession, and is urging countries to look for ways to boost growth.
If you want to lay a foundation for long-term economic growth in America, the last thing you would do is reduce the income going to ordinary Americans — even over the long run. That’s not the problem — just the opposite. We do not need ordinary people to “share in the sacrifice.” We need policies that will increase the share of income going to ordinary people and reduce the exploding inequality between the 99% and the 1%.
Any deal in the Super Committee will almost certainly do just the opposite.
2.). The worst effects of sequestration could be solved without a “grand bargain”. The one big downside of a failure of the Super-Committee to act would be the level of discretionary spending cuts that would be required through the resulting sequestration. This is particularly true of cuts in education funding.
The budget deal that was struck in order to prevent Republicans from plunging America into default last summer requires an additional $1.2 trillion reduction in the deficit over the next ten years. If the Super Committee fails to agree on the distribution of these cuts, they will automatically be spread over defense and non-defense segments of the budget beginning in 2013. But there would be no cuts in Social Security, Medicare or Medicaid.
Congress would have the ability to adjust these sequestration requirements between now and 2013, regardless. But the “fast track” authority that would require up or down votes on a proposal from the “Super Committee” would expire if the Committee cannot reach agreement by November 23rd.
The best solution to the problem of big cuts in discretionary spending would be to put together a smaller deal to raise some revenue and reduce cuts in discretionary and – if necessary — military spending — after the mandate of the Super Committee has expired.
The Congress will have a year to help solve this problem, and the pressure to ameliorate some of the cuts in military spending that have so far proved ineffective at forcing Republicans to consider big revenue increase, may be more persuasive when it comes to smaller increases as the actual date of sequestration (2013) draws near.
Of course it’s possible that the Super Committee itself could come with a small-bore deal of this sort, simply to avoid the full force of sequestration. But that would be very different than a $1.2 trillion dollar package that includes cuts in Social Security, Medicare and Medicaid. Progressives should avoid cuts to these programs at all costs, because any cuts that sliced Social Security, Medicare or Medicaid benefits would require changes in the structure of the programs themselves that would last forever. Cuts in discretionary spending — as bad as they might be — are one-time events and do not fundamentally change the structure of the American social contract.
3). There is no reason for Congress to fear that its failure to act on a “Super Committee” agreement will have massive adverse consequences on “market confidence,” since the level of the deficit will not be affected. That has already been set — with a mandate for a $1.2 trillion cut. The Wall Street gang and the ratings agencies might sputter something about government dysfunction for a day or two. But the fundamentals will not be affected, since the level of government borrowing won’t be affected by whether or not there is a deal.
It’s also worth noting that even after Standard and Poor’s downgraded the U.S. debt because of the process leading up to the debt ceiling deal, it had no effect on the interest rates the government is paying for bonds. In fact those interest rates dropped to record lows. U.S. government debt remains the safest investment in the world, no matter what S&P did, and the market reflected that indisputable fact.
In other words then, Congress does not have its back against the wall like it did during the debt ceiling “hostage” crisis. When it came to the debt-ceiling deadline, failure was not an option. In the case of the “Super Committee” failure to come to an agreement is a very real option — in fact, it’s the best option.
There are some in Congress — most notably in the Senate — who truly believe that what the country needs is a “grand bargain” that cuts the deficit by making ordinary people “share in the sacrifice” even if millionaires and billionaires are asked to share some as well.
Hopefully those who are working for such bargain will be thwarted by two important political realities.
First, that cuts in Social Security, Medicare and Medicaid are politically toxic. People get really angry when you take away something they have earned.
Second, the Republican’s stubborn unwillingness to give an ounce of new revenue from the pockets of millionaires and billionaires – who, after all, are the true core constituency of the Republican Party.
This time a little “gridlock” may be a good thing.
GOP Congressman Equates Purchasing Health Insurance With Buying An Expensive Vacation Home
Just when you thought it could not get more ridiculous, GOP Congressman and Chairman of the House Appropriations Labor-Health and Human Services subcommittee, Denny Rehberg, has come up with a novel idea. He wants the Congressional super committee to solve $1.2 trillion in deficit reduction by simply killing off the expansion of Medicaid and the subsidies that will open the door to health care for millions of Americans.
In making his argument, Rehberg noted that expanding the Medicaid safety net program, and providing subsidies to low and middle class workers, is akin to the “expensive vacation home” that the average American would choose not to buy if that American was facing a deficit as serious as the nation’s.
Before getting to the heart of Rehberg’s suggestion, one can’t help but wonder what makes the Congressman think that the “average” American can afford an expensive vacation home (or any vacation home for that matter) on what the average American earns, even if that American is not in debt?
But should we be surprised by the Congressman’s view of the world? This is the same Denny Rehberg who is not only listed as number 23 on the list of the wealthiest members of Congress, but is the same Congressman Rehberg who had no idea what the minimum wage was in his own state (check out this video as it is priceless.)
Of course, far more important is Rehberg’s inability to grasp that getting treatment for cancer or unblocking that clogged artery that is going to make someone a widow or widower is not quite the same as purchasing a vacation home—expensive or otherwise.
And while life might not be worth living for Rep. Rehberg and friends without that idyllic home on the lake, the average American would still prefer to remain alive, thank you very much, which is precisely why Medicaid coverage was extended to more people and subsidies are to be made available to the working poor and middle-class so that medical care will become an option in their lives.
When asked how low and middle class Americans will manage to purchase health care, should the mandate requiring them to do so be found to be Constitutional by SCOTUS, Rehberg answered that Health and Human Services would be able to grant waivers to those who cannot afford coverage without Medicaid or subsidies.
Thus, Rehberg’s solution is to simply leave millions of Americans without coverage by way of a waiver. Nice.
Health Care For America Now’s Executive Director, Ethan Rome, put it this way:
Rep. Rehberg’s proposal is yet another part of the Republican assault on the middle class. Denny Rehberg says that basic health care is a luxury item, as if a mother in Montana taking her children to the doctor or a cancer patient getting treatment is the same as buying ‘an expensive vacation home.’
Considering that estimates place the uninsured under age 65 in Montana at somewhere between 16 percent and 20 percent of the population, a number well in excess of the national average, I suspect that Rehberg’s fellow Montanan’s might disagree with his approach.
Let’s hope they voice that disagreement at the ballot box next November.
By: Rick Ungar, Mother Jones, October 6, 2011
Modern Snake Oil: “We Have No Revenue Problem”
OK, this is the day everyone hates. You have to pay your taxes. Who wants to write that check? Nobody, probably.
The truth, however, is that Rep. Paul Ryan, the Tea Party, and most politicians are not being honest when they tell us there is no revenue problem, only a spending problem.
The Associated Press reports today that an IRS analysis tells us that 45 percent of Americans will pay no federal income taxes for 2010. Plus, the 400 Americans with the highest adjusted gross incomes averaged $345 million for the year. Their average federal income tax rate was 17 percent, down from 26 percent in 1992. Wow, and they need another tax break?!
This confirms the Warren Buffett line that his secretary pays a higher percentage of her income in taxes than he does.
But here is our problem: We cannot come close to dealing with this deficit unless we both cut spending and raise revenue. We certainly won’t accomplish anything unless we deal with the tax problem and reform our tax code.
I firmly believe that every American who works or gets income should pay something in federal taxes. Even if it is a small amount. This by itself won’t do much to dent the deficit, but it would be important as a symbol that everyone is in this together. Second, and most important, the gap between rich and poor and the middle class is widening in this country. Those who earn over a million dollars did not deserve an average tax cut of $120,000 under George Bush; they certainly don’t need that raised to $200,000 under the Ryan plan.
We need to recognize that the richest 2 percent of Americans should pay more, but we also need to make this tax system make sense. How can you have a society where nearly half the income earners pay no income taxes, due to deductions, loopholes, and special deals?
I am not arguing that struggling families should be hit with a whooping tax bill, but, rather, that our politicians should be honest with the American people. If you are fighting two wars, you have to pay for them. If you have to save the car companies and our financial institutions, you have to pay, at least initially. If you are going to provide Medicare, Medicaid, Social Security, education, bridges, roads, and air traffic controllers, for that matter, you have to have the revenue.
It is just plain dishonest to put forth a budget and a plan that says “we have no revenue problem.” That is modern snake oil. It is time that we dealt with our tax problem, otherwise we won’t really be dealing with our deficit at all.
By: Peter Fenn, U.S. News and World Report, April 18, 2011
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 