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Deficit Hawks and The Games They Play

For 30 years, conservative ideologues have played moderate deficit hawks for suckers.

You’d think this might endow those middle-of-the-road deficit-busters with a touch of humility. Fat chance. They stick with their self-righteous moralism, pretending to be bipartisan and beyond ideology. In fact, they make the problem they want to solve worse by continuing to empower the tax-cuts-in-every-season conservatives.

It’s thus satisfying to see President Obama ignore the willfully naive who are wailing over deficits. He knows that new revenue will have to play a big role in deficit reduction. He also knows that House Republicans are pretending we can cut our way out of this mess and would demagogue any general tax increases.

So he has proposed some serious spending cuts and some modest revenue increases to keep things stable as he embarks on a long struggle to move our dysfunctional budget politics to a better place. This annoys his deficit-obsessed critics, by which I mean just about everyone who says he should simply embrace the proposals of the Bowles-Simpson commission. Obama should smile, let them rage and go about his business.

Let’s look at history. When Ronald Reagan took office in 1981, he won big tax cuts coupled with big increases in military spending. The tax cuts and a severe recession tanked government revenue.

Unlike today’s conservatives, Reagan at least acknowledged mathematical reality and signed some tax increases. But these were insufficient, and it fell first to George H.W. Bush – the last truly fiscally responsible Republican – and then to Bill Clinton to restore budgetary sanity.

But the conservatives who dug the hole did nothing to get us out of it. On the contrary, they denounced the first President Bush for raising taxes, and every Republican voted against Clinton’s economic plan. For their bravery in supporting tax increases in 1993, Democrats lost control of Congress in 1994.

By the end of the Clinton years, we had a handsome surplus. In came the second President Bush who, with Republicans in Congress, declared the surplus too big. It was one problem they worked very hard to solve. Two tax cuts and two wars later, we were plunged into deficits – again. And the economic downturn that started on Bush 43’s watch made everything worse, cutting revenue and requiring more deficit spending to get the economy moving.

Where were the moderate deficit hawks in all this? They have a very bad habit. When conservatives blow up our fiscal position with their tax cuts, the deficit hawks are silent – or, at best, mumble a few words of mild reproach to have something on the record – and let the budget wreckage happen. Quite a few in their ranks (yes, including some Democrats) actually supported the Bush tax cuts.

But when it’s the progressives’ turn in power, the deficit hawks become ferocious. They denounce liberals if they do not move immediately to address the shortfall left by conservatives. Thus, conservatives get to govern as they wish. Liberals are labeled as irresponsible unless they abandon their own agenda and devote their every moment in power to cutting the deficit.

It’s a game for chumps. The conservatives play it brilliantly. By winning their tax cuts and slashing government revenue, they constrain what liberals can do whenever they get back into power.

How do we know our difficulties stem primarily from a shortage of revenue? Consider what would happen if we allowed all the tax cuts scheduled to expire in 2012, including the ones enacted under Bush, to go away. That would produce nearly as much deficit reduction over the next decade – roughly $4 trillion – as all the maneuvers of the Bowles-Simpson commission put together. If you want to be serious about closing the deficit, ending the Bush tax cuts is a good place to start.

The commission’s work showed just how effective conservatives have been. By saying they will never, ever, ever raise taxes, conservatives intimidate moderates into making concession after concession.

In the end, the Senate conservatives on the commission – but not the House conservatives – supported some mild tax increases. But Bowles-Simpson proposed about twice as much in spending cuts as in revenue increases. You would think that moderates could at least hold out for a 50-50 split. But no, they’ll do anything to win over a few conservatives.

As a result, any conservative who supports even the smallest tax increase is hailed as courageous. Any liberal who proposes moderate spending cuts is condemned as a gutless coward unless he or she also supports slashing Social Security and Medicare. What’s “moderate” or “balanced” about this?

I hope Obama has the spine to keep calling the bluff of the deficit hawks until they get serious about changing the politics of deficit reduction. We can’t afford another 30 years of fiscal evasion.

By: E. J. Dionne, Jr-Op-Ed Columnist, The Washington Post, originally posted February 17, 2011

February 27, 2011 Posted by | Budget, Deficits | , , , , , , , , , , , , | Leave a comment

Beyond Reason on the Budget: House Republicans Have Finally Revealed There Real Vision

After two years of raging at President Obama’s spending plans, House Republican leaders have finally revealed their real vision of small government: tens of billions in ideologically driven cuts to job training, environmental protection, disease control, crime protection and dozens of other critical functions that only the government can perform.

In all, they want more than $32 billion in cuts below current spending packed into the next seven months. They would be terribly damaging to a frail recovery and, while spending reductions must be part of long-term deficit control, these are the wrong cuts, to the wrong programs, at the wrong time.

But they are not deep enough for many Tea Party members, freshmen and other extremists in the House Republican caucus. In a closed-door meeting on Wednesday, they forced the leadership to abandon its cuts and prepare to double them. The new list is expected on Friday and promises to be one of the most irresponsible budget documents ever issued by a House majority.

The Senate should make it clear that it is not worthy of consideration, and President Obama should back them up with a veto threat.

If House Republicans don’t come to their senses, they could shut down the government on March 4 when the stopgap measure that is now financing it runs out. If that does take place, it will at least be clear to voters that their essential government services were turned off in the service of two single-minded and destructive goals: giving the appearance of cutting a deficit that was deliberately inflated by years of tax cuts for the rich, and going after programs that the Republicans never liked in good times or bad.

Many of the Republican freshmen want to stick to the “Pledge to America” that they would cut $100 billion from the president’s 2011 budget, a nice round number apparently plucked from thin air. More experienced Republican leaders knew it would be impossible to cut that much in the remaining few months of the fiscal year and said they would trim the equivalent percentage. Harold Rogers, the Republican chairman of the House Appropriations Committee, warned that the full cut would require laying off F.B.I. agents and air traffic controllers.

If he was trying to make his $32 billion in cutbacks seem modest by comparison, he failed. The list would cut $2 billion from job training programs — precisely what is needed to help employ workers mismatched with the job market. It would cut $1.6 billion from the Environmental Protection Agency, which is struggling to keep up with the growth of greenhouse gases. There would be significant cuts to legal assistance for the poor and renewable energy programs and an end to all spending for AmeriCorps, public broadcasting and high-speed rail.

The battle over the rest of the 2011 budget is only a prelude, of course, to the bigger fight about to begin over the 2012 budget. President Obama is scheduled to unveil his budget on Monday, and already he seems willing to feed the bottomless Republican hunger for cuts rather than fight them. An ominous early sign is his proposal to cut the low-income heating assistance program nearly in half to $2.57 billion. Administration officials say that energy prices have fallen, but, as Democratic lawmakers from the frostbitten Northeast have pointed out to him, there are many more unemployed people now.

Some cuts will have to be made, but strategically it seems to make little sense to start giving away important ones before reaching the negotiating table. Republican lawmakers in the House have already made it clear that they are indifferent to the suffering and increased joblessness their cuts will cause. As the extreme reductions are heaped up in the next few days, Democrats in Congress and in the White House need to make a clear case to the public that quality of the nation’s civic life is at stake.

By: Editorial-Opinion Pages, The New York Times, February 10, 2011

February 14, 2011 Posted by | Budget, Deficits, Jobs | , , , , , , , , , , | Leave a comment

Postcard From A Free Egypt

Circulating through the streets of Cairo tonight, with families packed into cars honking their horns in celebration and everyone strolling to Tahrir Square, I heard so many celebratory chants, but none more accurate and powerful in its simplicity than this one: “The people of Egypt made the regime step down.’’

The overwhelming sense of personal empowerment here, by a people so long kept down and underestimated by their own government was a sight to behold.

Tomorrow we can all talk about how hard this transition will be, how many pitfalls and uncertainties lie ahead for Egypt, but to be in Tahrir Square tonight, to feel the energy and pride of a people taking back the keys to their country and their future from a tired old dictator, was a privilege. As a group of men who had commandeered a horse and buggy bellowed as they crossed the Nile Bridge: “Hold your head up high. You are Egyptians.’’

My guess right now is that there are a lot of worried kings and autocrats tonight – from North Africa to Burma to Beijing. And it is not simply because a dictator has been brought down by his people. That has happened before. It is because the way it was done is so easy to emulate. What made this Egyptian democracy movement so powerful is its legitimacy.

It was started by youth and enabled by Facebook and Twitter. It was completely non-violent and only resorted to stone-throwing when faced with attacks by regime thugs. It drew on every segment of the Egyptian population. There was a huge flag in Tahrir Square today with a Muslim crescent moon and a Christian cross inside it. And most of all, it had no outside help.

In some ways, President Barack Obama did the Egyptian revolution a great favor by never fully endorsing it and never even getting his act together for how to deal with it. This meant in the end that Egyptians know they did this for themselves by themselves – with nothing but their own willpower, unity and creativity.

This was a total do-it-yourself revolution. This means that  anyone in the neighborhood can copy it by dialing 1-800-Tahrir Square. And that is why my favorite chant of all that I heard coming back from Tahrir tonight was directed at the leader next door, Muammar el-Qaddafi of Libya. It said, “We don’t leave Tahrir until Qadaffi leaves office.’’ Hello Tripoli, Cairo calling.

In many ways, what we have witnessed in Egypt today is the real decolonization of this country. That is, after the British left Egypt, the country was ruled by an incompetent king and then, since 1952, by a stifling, top-down military dictatorship. For the first time in modern history, “Egypt is truly in the hands of its own people,’’ remarked Egyptian political scientist Maamoun Fandy.

And the sense of liberation is profound, or as another sign in Tahrir said: “Mubarak, if you are Pharaoh, we are all Moses.’’

Egypt has always been the center of gravity of the Arab world and because it drifted these past 30 years, so too did the whole Arab world. One can only hope with this liberation that Egypt can now start to catch up with history and become a leading model for Arab development. If it does, others will follow. If it does, the Arab world will have two emotional hearts, not just one.

There will always be Mecca in Saudi Arabia, where Muslims will make the pilgrimage to be closer to God. And there will be Tahrir Square, where people will come to touch freedom. For that to happen, though, Egypt will have to take this freedom it just earned and run with it – to show that it really can improve the lives of an entire nation. That will not be easy, and it will not happen overnight.

This country has a lot of catching up to do. But if Egyptians show just half the creativity, solidarity and determination in the next year of nation-building that they showed in Tahrir Square these last 18 days, they just might pull this off.

By: Thomas L. Friedman, Op-Ed Contributor, The New York Times, February 11, 2011

February 11, 2011 Posted by | Egypt, Revolution | , , , , , , , , | Leave a comment

Judge Vinson’s Health Care Smackdown: What’s A Tea Party Without Tea Leaves?

 In his spare time, U.S. District Judge Roger Vinson, the author of Monday’s sweeping ruling  gutting as “a bridge too far” the entirety of the Patient Protection and Affordable Care Act, apparently serves as the president of the board of directors of the American Camellia Society, an industrious group that evidently appreciates and nurtures a tiny, colorful corner of God’s Green Earth. The camellia is known around the world not just as a plant that produces beautiful flowers — it is the state flower of Alabama, for example — but also as a plant that produces tea leaves. And what’s a Tea Party, after all, without a healthy supply of tea leaves?

It cannot be a coincidence, then, that Judge Vinson, the Reagan appointee who has chosen reverence to the camellia as a hobby, would choose to compare (unfavorably, even) the Obama Administration’s complicated (and increasingly endangered) effort to bring health insurance to 30 million Americans with the efforts of King George III and the British East India Company to tax the tea the colonials quoffed.

“It is difficult to imagine,” Judge Vinson wrote in his 78-page ruling, “that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.”

Tea Party analogy? Check. Head-scratching analysis? Check. Judge Vinson wrote:

“… the mere status of being without health insurance, in and of itself, has absolutely no impact whatsoever on interstate commerce (not ‘slight,’ ‘trivial,’ or ‘indirect,’ but no impact whatsoever) — at least not any more so than the status of being without any particular good or service. If impact on interstate commerce were to be expressed and calculated mathematically, the status of being uninsured would necessarily be represented by zero. Of course, any other figure multiplied by zero is also zero. Consequently, the impact must be zero, and of no effect on interstate commerce.

The uninsured can only be said to have a substantial effect on interstate commerce in the manner as described by the defendants: (i) if they get sick or injured; (ii) if they are still uninsured at that specific point in time; (iii) if they seek medical care for that sickness or injury; (iv) if they are unable to pay for the medical care received; and (v) if they are unable or unwilling to make payment arrangements directly with the health care provider, or with assistance of family, friends, and charitable groups, and the costs are thereafter shifted to others.”

Got that? The uninsured can only have a “substantial effect on interstate commerce” — and thus be regulated by Congress — if they are subject to the precise conditions which exist today all over the country, and which prompted the Act in the first place. The judge acknowledges this point, to his credit, saying that the Congress would of course have the power to regulate the millions of people who meet his five criteria above. But he then concludes: “But, to cast the net wide enough to reach everyone in the present, with the expectation that they will (or could) take those steps in the future, goes beyond the existing ‘outer limits’ of the Commerce Clause” (emphasis in original).

I suspect there will be a million words of legal and political analysis over the logic and viability of that conclusion.

Unsolicited and simplistic recommendations for the legislative branch? Also check. Judge Vinson wrote: “If Congress intends to implement health care reform — and there would appear to be widespread agreement across the political spectrum that reform is needed — it should do a comprehensive examination of the Act and make a legislative determination as to which of its hundreds of provisions and sections will work as intended without the individual mandate, and which will not.” In other words: Try again, Congress, and good luck with that!

Painfully half-hearted expression of regret for kicking the entire Affordable Care Act to the curb? Check. Judge Vinson wrote: “I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here” (emphasis added).

I am sure that others, including some of my colleagues here at the Atlantic, will be spending time in the coming hours and days further parsing the ruling. For me, for now, it’s enough to say that Judge Vinson delivered for opponents of the Act precisely what he had promised them one month ago in open court in the motion hearing; a epic, hero-to-a-cause ruling that somehow makes U.S. District Judge Henry Hudson’s ruling last month in Virginia, which also struck down the “individual mandate,” seem like a relative exercise in judicial restraint. And that’s saying something.

Two federal trial judges (Democratic appointees both) have declared the law valid. Now two federal trial judges (Republican appointees both) have declared the law invalid. Ultimately, the United States Supreme Court — and by that I mean swing-voter Justice Anthony Kennedy, who also is a Reagan appointee — will decide. But no matter what happens from here on in, Judge Vinson, lover of flowers and tea-leaf-reader by choice, has just ensured himself at least one more day in the sun.

By: Andrew Cohen -The Atlantic-January 31, 2011: Andrew Cohen has served as chief legal analyst and legal editor for CBS News and won a Murrow Award as one of the nation’s leading legal analysts and commentators.

February 1, 2011 Posted by | Affordable Care Act, Individual Mandate | , , , , , , , , , , | Leave a comment

More Small Businesses Offering Health Care To Employees Thanks To Obamacare

The first statistics are coming in and, to the surprise of a great many, Obamacare might just be working to bring health care to working Americans precisely as promised.

The major health insurance companies around the country are reporting a significant increase in small businesses offering health care benefits to their employees.

Why?

Because the tax cut created in the new health care reform law providing small businesses with an incentive to give health benefits to employees is working.

We certainly did not expect to see this in this economy,” said Gary Claxton, who oversees an annual survey of employer health plans for the nonprofit Kaiser Family Foundation. “It’s surprising.”

How significant is the impact? While we won’t have full national numbers until small businesses file their 2010 tax returns this April, the anecdotal evidence is as meaningful as it is unexpected.

United Health Group, Inc., the nation’s largest health insurer, added 75,000 new customers working in businesses with fewer than 50 employees.

Coventry Health Care, Inc., a large provider of health insurance to small businesses, added 115,000 new workers in 2010 representing an 8% jump.

Blue Cross Blue Shield of Kansas City, the largest health insurer in the Kansas City, Mo. area, reports an astounding 58% increase in the number of small businesses purchasing coverage in their area since April, 2010-one month after the health care reform legislation became law.

One of the biggest problems in the small-group market is affordability,” said Ron Rowe, who oversees small-group sales for the Kansas City operation for Blue Cross Blue Shied. “We looked at the tax credit and said, ‘this is perfect.”

Rowe went on to say that 38% of the businesses it is signing up had not offered health benefits before.

Whatever your particular ideology, there is simply no denying that these statistics are incredibly heartening. However, for those of you who cannot get past your opposition, even for a moment of universal good news, let’s break it down.

The primary, most enduring complaint of the opponents of the ACA has been that the law is deathly bad for small business.

Apparently, small businesses, and their employees, do not agree.

The next argument has been that the PPACA is a job killer.

If these small businesses found the new law to be so onerous, why have so many of them voluntarily taken advantage of the benefits provided in the law to give their employees these benefits? They were not mandated to do so. And to the extent that the coming mandate obligations might figure into their thinking, would you not imagine they would wait until 2014 to make a move as the rules do not go into effect until that time?

Of course, there is the nagging banter as to how Obamacare is leading us down the road to socialism.

Let it go, folks.

Private market insurance companies are experiencing significant growth because of a tax break provided by the PPACA. I may have missed the day this was discussed in economics class, but I’m pretty sure this is not a socialistic result of federal legislation.

When data like this appears, we have the opportunity to really find out who is talking smack for political benefit and who actually cares about getting affordable and available health care to America’s workers. Certainly, there will be elements of the new law that will not work out exactly as planned. That’s simply reality when it comes to any new piece of landmark legislation. But if you cannot celebrate what appears to be an important early success, you really should give some thought as to where your true interests and intents lie.

If you’re all about beating up on President Obama, you can conveniently forget this bit of data as if it never really happened. However, if your interest is to make health care available to more Americans, this should be a happy day for you – no matter what your ideological beliefs.

By: Rick Ungar, The Policy Page-Forbes, January 6, 2011

January 9, 2011 Posted by | Health Reform | , , , , , , , , , | Leave a comment

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