“Frontmen For American Austerity”: Sequestration Is Not Enough For Simpson And Bowles
Sequestration?
Cue the return of Alan Simpson and Erskine Bowles, frontmen for American austerity.
If sequestration is not averted by the end of the month, America will experience an arbitrary austerity agenda that shifts burdens from the wealthy onto working families. It makes across-the-board cuts to vital services. As President Obama noted Tuesday, sequestration would impose “automatic brutal spending cuts” to job creation, infrastructure and education initiatives. It would, as well, slash funding for air traffic control, federal prosecutions and Federal Emergency Management Agency grants that make it possible for states and local governments to hire needed firefighter and emergency personnel.
Even the parts of the sequester that are appealing—squeezing the bloated Department of Defense budget—will tend to harm low-wage federal employees rather than billionaire defense contractors.
Most troublingly, sequestration will slow, and perhaps stall, the economic recovery. “This is not an abstraction,” says President Obama. “People will lose their jobs.”
By any measure, the sequester is austerity.
But it’s not enough austerity for Simpson and Bowles.
The former Republican senator and defeated Democratic senate candidate who praises Paul Ryan’s budget don’t particularly like the death-by-slow-cuts of sequestration. They prefer a full frontal assault on the most vulnerable Americans and a redistribution of the wealth upward.
As President Obama has noted, Washington has already reduced the deficit by $2.5 trillion.
But the co-chairs of the failed National Commission on Fiscal Responsibility and Reform now want another $2.4 trillion.
To wit, in a “rehashed” plan to “Fix the Debt,” Simpson and Bowles are busy promoting schemes to “modernize…entitlement programs to account for” an aging population. That’s code for schemes to delay the point at which the hardest working Americans can get access to Social Security and Medicare.
Simpson and Bowles are arguing specifically for the adoption of “chained CPI.” That’s the assault on Social Security cost-of-living increases that Congressman Keith Ellison, D-Minnesota, correctly identifies as “a benefit cut.”
“It’s a bad idea and it’s a stealth way to give people less,” Ellison explained in a recent interview. “It is a benefit cut—and here’s the real problem with it being a benefit cut: It would be absolutely horrible if it were a benefit cut but the cut was designed to extend the life of Social Security and to make the program more solvent. But that’s not why they’re doing it. They’re doing it so that they can preserve somebody else to have a tax cut and to not raise taxes on the top 2 percent.”
Ellison is right. As is invariably the case with austerity schemes, Simpson and Bowles—and the billionaire-funded “Fix the Debt” group they head—are proposing cuts to the top marginal tax rate for wealthy individuals and corporations.
The United States can and should address debts and deficits. And there are sound plans to do so, including the “Balancing Act” advanced by Ellison and other members of the Congressional Progressive Caucus. That initiative rejects austerity and proposes a growth agenda based on tax fairness and investments in education and job creation.
That’s not Simpson-Bowles, which Nobel Prize–winning economist Paul Krugman dismisses as “terrible” economics. That’s responsible policy that avoids the “brutal cuts” of sequestration and the even more brutal cuts of full-fledged austerity.
“Almost $2 trillion has been cut over the past two years from teachers, firefighters, police officers, loans for college students, and infrastructure investments,” the congressman says of the warped federal budget priorities proposed by austerity advocates. “The American people shouldn’t continue to pay the price for massive tax breaks for millionaires and billions of dollars in subsidies to oil companies.”
By: John Nichols, The Nation, February 19, 2013
“Warmed Over Pablum”: Marco Rubio’s Lies About Healthcare Reform
Marco Rubio’s rebuttal to the State of the Union address was remarkable for being unremarkable—it contained much of the same warmed-over pablum we heard from the stage in Tampa Bay at the Republican National Convention six months ago. President Obama “believes [the government] the cause of our problems” and that “More government isn’t going to help you get ahead. It’s going to hold you back.” There was even a Solyndra reference.
But the most interesting and substantive part of Rubio’s speech was the attack he leveled against healthcare reform. The Affordable Care Act will be implemented over the next—wait, sorry. I’m incredibly thirsty. I need some water before I finish this post.
Okay, back. In any case, as the ACA is implemented over the next few years, Republicans must continue to launch rhetorical bombs at it, because a negative public perception of the law would create cover for Republican governors to deny Medicaid expansion in their state, and might also blunt “Obamacare” as a powerful Democratic talking point in 2014 and 2016.
So here’s what Rubio said about the ACA:
[M]any government programs that claim to help the middle class, often end up hurting them instead.
For example, Obamacare was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with. And because Obamacare created expensive requirements for companies with more than fifty employees, now many of these businesses aren’t hiring. Not only that; they’re being forced to lay people off and switch from full-time employees to part-time workers.
Rubio is explicitly trying to scare people into thinking they’re about to either lose their health insurance or get fired because of Obamacare. But none of this is true.
Let’s start with the first claim: that “some people are losing the health insurance they were happy with.” Rubio is eliding the fact that in the final telling, ACA is projected to insure 30 million Americans who otherwise don’t have health insurance. It’s not immediately clear who Rubio thinks is losing their policies, because after all, insurance companies can no longer just drop people from coverage because of pre-existing conditions.
Rubio goes on to say that “because Obamacare created expensive requirements for companies with more than 50 employees, now many of these businesses aren’t hiring” and others are switching from full-time to part-time workers because of the ACA. But that’s just not the case.
A study this summer from the Midwest Business Group on Health found that “there is little indication that employers plan to drop healthcare coverage.” The “expensive requirements” Rubio alludes to will be about 2.3 percent, according to one international consulting firm, and other studies show that healthcare reform might ultimately help small businesses because of the subsidies they receive and the fact they are offering a more attractive compensation package for employees. That’s what happened in Massachussets under Romneycare.
Sure, some right-wing business titans who run places like Applebee’s and Denny’s may say they’re going to cut back hours because of the dread of Obamacare, but they are the exceptions to the rule. Moreover, their actions are just one small part of a disturbing trend of large companies shifting healthcare costs onto low-wage workers—as would be any employer who cuts his full-time employees to part-time so he is not responsible for increased coverage requirements under the ACA.
And this gets to the real problem with Rubio’s speech. His case here is that Obamacare is hurting middle-class Americans—but then he specifically describes companies who would cut workers’ hours so they aren’t entitled to health insurance. It’s these vicissitudes of the free market that the ACA was trying to address, like when insurance companies drop people from coverage because they once took heartburn pills. Rubio’s larger case—his whole case in this speech—is that the government is hurtful, not harmful. But he was simply unable to prove it.
By: George Zornick, The Nation, February 13, 2013
“The Audacity Of Freedom”: President Obama Decisively Changes The Direction Of Our Politics
President Obama is a freer man than he has been at any point in his presidency. He is free from the need to save an economy close to collapse, from illusions that Republicans in Congress would work with him readily, from the threat of a rising tea party movement and from the need to win reelection.
This sense of freedom gave his State of the Union address an energy, an ease and a specificity that were lacking in earlier speeches written with an eye toward immediate political needs. It was his most Democratic State of the Union, unapologetic in channeling the love Bill Clinton and Lyndon Johnson had for placing long lists of initiatives on the nation’s agenda. Obama sees his second term not as a time of consolidation but as an occasion for decisively changing the direction of our politics.
Here was an Obama unafraid to lay out a compelling argument for the urgency of acting on global warming. He was undaunted in challenging the obsession with the federal budget — and in scolding Congress for going from “one manufactured crisis to the next.” By insisting that “we can’t just cut our way to prosperity” and that “deficit reduction alone is not an economic plan,” he brought to mind the great liberal economist John Maynard Keynes. He sought to add another big achievement to near universal health-care coverage, announcing a new goal of making “high-quality preschool available to every single child in America.”
And Obama made clear his determination to shift the center of gravity in the nation’s political conversation away from anti-government conservatism, offering a vision that is the antithesis of the supply-side economics that has dominated conservative thought since the Reagan era.
If supply-siders claim that prosperity depends upon showering financial benefits on wealthy “job creators” at the economy’s commanding heights, Obama argued that economic well-being emanates from the middle and bottom, with help from a government that “works on behalf of the many, and not just the few.”
The “true engine of America’s economic growth,” he said, is a “rising, thriving middle class.” He continued: “It is our unfinished task to restore the basic bargain that built this country, the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like or who you love.” With that last phrase, he linked gay rights to an older liberalism’s devotion to class solidarity and racial equality.
An Obama no longer worried about reelection was the worst nightmare of conservatives who feared he would veer far to the left if given the chance. In the GOP’s response, Sen. Marco Rubio (Fla.) conjured that liberal bogeyman, declaring that the president’s “solution to virtually every problem we face is for Washington to tax more, borrow more and spend more.”
But Rubio’s rhetoric felt stale, disconnected from the Obama who spoke before him. Obama did speak for liberalism, yes, but it is a tempered liberalism. His preschool proposal, after all, is modeled in part on the success of a program in Oklahoma, one of the nation’s reddest states. Most of the president’s initiatives involve modest new spending and many, including his infrastructure and manufacturing plans, are built on partnerships with private industry.
Even the president’s welcomed call to raise the minimum wage to $9 an hour and to index it to inflation was cautious by his own standards. In 2008, Obama had urged a $9.50 minimum wage, and it rightly ought to be set at $10 or above.
Moreover, the president’s words were carefully calibrated to the issue in question. On immigration reform — in deference to cross-party work in which Rubio himself is engaged — Obama kept the rhetorical temperature low, praising “bipartisan groups in both chambers.” But he invoked all of his rhetorical skills on the matter of gun safety, a more complex legislative sell. His gospel-preacher’s variations on the phrase “they deserve a vote” will long echo in the House chamber.
No, the liberated Obama is not some new, leftist tribune. He’s the moderately progressive Obama who started running for president before there was a financial crisis or a tea party. In his 2006 book “The Audacity of Hope,” he proposed to end polarization by organizing a “broad majority of Americans” who would be “re-engaged in the project of national renewal” and would “see their own self-interest as inextricably linked to the interests of others.” On Tuesday night, creating this majority was what he still had in mind.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 13, 2013
“Wrong Questions, Wrong Issues”: Are Republicans Rebranding Or Rethinking?
Rebranding is trendy in the Republican Party.
Rep. Eric Cantor gave a major speech Tuesday to advance the effort. Louisiana Gov. Bobby Jindal wants the GOP to stop being the “stupid party.” Karl Rove is setting up a political action committee (it’s what he does these days) to defeat right-wing crazies who cost the party Senate seats.
But there’s a big difference between rebranding and pursuing a different approach to governing.
The good news is that some Republicans have decided that the party moved too far to the right and are backing off long-standing positions on tax increases, guns and immigration. Their new flexibility, combined with President Obama’s new post-election aggressiveness, is producing a quiet revolution in Washington. The place is becoming less dysfunctional.
Congress has already passed a substantial tax increase, Republicans avoided a debt ceiling fight, and the ice is breaking on guns and immigration.
The mixed news: A lot of the rebranding efforts are superficial yet nonetheless reflect an awareness that the party has been asking the wrong questions, talking about the wrong issues and limiting the range of voters it’s been addressing.
This is why Cantor’s speech was more important than the policies he outlined, which were primarily conservative retreads. His intervention proved that Obama and progressives are changing the terms of the debate, much as Ronald Reagan did in the 1980s.
Cantor wasn’t making the case for smaller government or tax cuts for the “job creators.” He was asking what government could do for the middle class — “to provide relief to so many millions of Americans who just want their life to work again.”
No wonder Sen. Charles Schumer, one of the Democrats’ most subtle strategists, jumped at the chance to praise Cantor for taking “the first step toward finding common ground in agreeing on the problem you are trying to solve.” If the debate is about who will be nicer to business or who will cut taxes, Republicans win. What Schumer understands is that if the issue is providing relief for the middle class (and for workers, immigrants and low-income children), Republicans are competing over questions on which progressives have the advantage.
The bad news: In some states where Republicans control all the levers of power, they are rushing ahead with astonishingly right-wing programs to eviscerate government while shifting the tax burden toward the middle class and the poor and away from the wealthy. In trying to build the Koch brothers’ dystopias, they are turning states in laboratories of reaction.
As Neil King Jr. and Mark Peters reported in a Wall Street Journal article on the “Red State model,” Kansas Gov. Sam Brownback has slashed both income taxes and spending. This drew fire from moderate and moderately conservative Republican legislators, whom he then helped purge in primaries. Jindal is talking about ending Louisiana’s personal and corporate income taxes and replacing the revenue with sales tax increases — a stunningly naked transfer of resources from the poor and the middle class to the rich.
This deeply anti-majoritarian, anti-populist approach explains the really bad news: Some Republicans show signs of not worrying about winning majorities at all. Gerrymandering helped their party win a majority in the House (no longer so representative) in November while losing the popular vote overall by nearly $1.4 million. Some are trying to rig the electoral college in a way that would have let Mitt Romney win the presidency even as he lost by about 5 million popular votes.
And they are willing to use the Senate’s arcane rules and right-wing courts in tandem to foil the policy wishes of a majority of Congress and the president — witness the precedent-less U.S. Court of Appeals ruling voiding Obama’s recess appointments to the National Labor Relations Board. The president took this course because intransigent Republican senators blocked the nominations. There should be a greater outcry against such an anti-democratic power play.
What’s the overall balance sheet? Level Republican heads seem to be pushing against the electoral college rigging effort. The “Red State model” is likely to take hold in only a few states — and may provoke a backlash. The larger lesson may be the one Cantor offered: Republicans are slowly realizing that the nation’s priorities are not the GOP’s traditional priorities. If Republicans really do start asking better questions, they will come up with better — and less extreme — answers.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 6, 2013
“An Ossified Movement”: Bold New Conservative Ideas Still Mostly Involve Screwing The Poor
The Republicans, we’re told, are going to have to start making some big changes if they want to start winning elections again. (Besides all the congressional elections they handily win.) Americans are tired of their stale rhetoric and old, white standard-bearers. The party needs fresh blood and bold ideas. It needs people like Louisiana Gov. Bobby Jindal, a GOP rising star and highly regarded “ideas” guy.
After the election, Jindal told Politico that the Republicans had to totally rebrand themselves to escape being known as “the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything.” And so Bobby Jindal’s big new idea for Louisiana is … eliminating all income taxes. And shifting the tax burden onto poor and working people.
NEW ORLEANS, Jan 10 (Reuters) – Republican Governor Bobby Jindal said on Thursday he wants to eliminate all Louisiana personal and corporate income taxes to simplify the state’s tax code and make it more friendly to business.
Bold! Fresh! New! But how will Louisiana get money to pay for stuff? Easy!
Political analyst John Maginnis, who on Thursday reported in his email newsletter LaPolitics Weekly that Jindal will propose balancing the tax loss by raising the sales tax, now at 4 percent, said the strategy fits with the governor’s interest in keeping a high national profile.
While we don’t yet know the sales tax rate Jindal will propose, any hike would make Louisiana’s sales tax technically higher than New York state’s, which is also 4 percent. The tax will be still greater in many Louisiana parishes, including New Orleans, where the combined sales tax rate is currently 10 percent, making it already higher than New York City’s 8.875 percent.
The thing about sales taxes is that they are inherently and extremely regressive, hitting poorer people much harder than richer people, because the poor spend a greater proportion of their income on goods subject to the sales tax than rich people do.
The Institute on Taxation and Public Policy has already whipped up a little report, and, surprise, eliminating Louisiana’s income tax and replacing it with higher sales taxes means taxing rich people much less and poor people much, much more. According to ITEP, while Louisiana millionaires would receive a tax cut of around a quarter of a million dollars, “[the] poorest 20 percent of taxpayers, those with an average income of $12,000, would see an average tax increase of $395, or 3.4 percent of their income, if no low income tax relief mechanism is offered.” (And if a low income tax relief mechanism is offered, it will have to be paid for, almost definitely on the backs of the middle 20 percent, with average incomes around $43,000.)
This is the fresh new plan from a guy regularly touted as the future of the party: A massive tax cut for rich people, in an already low-service state, paid for with a tax hike on poor people. Remember this the next time you read a story about how a major conservative figure — like Jindal or Marco Rubio or Paul Ryan — has announced that his party has to get serious about helping the poor or at least not actively hurting them: The movement these guys are products of is incapable of generating “new ideas” to help poor people, and is still dedicated to a policy agenda developed mostly before Reagan was president.
Jim DeMint is not a fresh face, but he’s the new head of the Heritage Foundation, the most influential and powerful of the conservative think tanks. Heritage’s mission is to decide the policy agenda of the conservative movement. If “new ideas” on poverty or anything else are going to gain acceptance on the right, they will likely have to come from the Heritage Foundation. And so DeMint published an Op-Ed in the Washington Post last week, laying out his agenda as the new face of the intellectual arm of the movement. It is atrocious. It is so lacking in anything resembling substance or argument that I can’t figure out why the Post published it. This is the closest it gets to an attempt at persuasion:
Conservative ideas work. Numerous states are demonstrating that low taxes, right-to-work laws, school choice, energy development and other common-sense policies improve the lives of everyone. Conversely, progressive central planning has failed throughout history and is still failing today.
OK, sure. “Conservative ideas work and liberal ideas don’t” is a very compelling message. Remember what I said about the policy agenda not changing for 30 years? The rest of the piece is mostly about welfare reform and missile defense. DeMint says Heritage will work very hard on convincing Americans that ideas like welfare reform and missile defense are good ideas. And then we’ll defeat the commies and show the Ayatollah who’s boss. Maybe we can fight a War on Drugs, too?
How’s that welfare reform working out for people, exactly? In the state of Georgia, where 300,000 families survive below the poverty line, 4,000 people are on welfare. The goal is zero people on welfare. Not “zero poor people,” but zero recipients of government benefits. Welfare reformers, whose goal is the shrinking of welfare rolls, not the aiding of impoverished people, would consider this a success story. Conservative ideas work!
The Republican Party will not “get serious” about poverty, or foreign policy or climate change or anything else, until it extracts itself from the conservative movement that rescued it after the collapse of the New Deal coalition. But there’s not a single GOP “leader” or rising star who isn’t a product of that movement through and through. They may fix their electoral problems with fresh rhetoric or new faces, but once in office they’ll govern as if nothing has changed since 1980, with disastrous results for every non-wealthy American.
By: Alex Pareene, Salon, January 14, 2013
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