“An Unserious Man”: Ryanomics Is And Always Has Been A Con Game
Mitt Romney’s choice of Paul Ryan as his running mate led to a wave of pundit accolades. Now, declared writer after writer, we’re going to have a real debate about the nation’s fiscal future. This was predictable: never mind the Tea Party, Mr. Ryan’s true constituency is the commentariat, which years ago decided that he was the Honest, Serious Conservative, whose proposals deserve respect even if you don’t like him.
But he isn’t and they don’t. Ryanomics is and always has been a con game, although to be fair, it has become even more of a con since Mr. Ryan joined the ticket.
Let’s talk about what’s actually in the Ryan plan, and let’s distinguish in particular between actual, specific policy proposals and unsupported assertions. To focus things a bit more, let’s talk — as most budget discussions do — about what’s supposed to happen over the next 10 years.
On the tax side, Mr. Ryan proposes big cuts in tax rates on top income brackets and corporations. He has tried to dodge the normal process in which tax proposals are “scored” by independent auditors, but the nonpartisan Tax Policy Center has done the math, and the revenue loss from these cuts comes to $4.3 trillion over the next decade.
On the spending side, Mr. Ryan proposes huge cuts in Medicaid, turning it over to the states while sharply reducing funding relative to projections under current policy. That saves around $800 billion. He proposes similar harsh cuts in food stamps, saving a further $130 billion or so, plus a grab-bag of other cuts, such as reduced aid to college students. Let’s be generous and say that all these cuts would save $1 trillion.
On top of this, Mr. Ryan includes the $716 billion in Medicare savings that are part of Obamacare, even though he wants to scrap everything else in that act. Despite this, Mr. Ryan has now joined Mr. Romney in denouncing President Obama for “cutting Medicare”; more on that in a minute.
So if we add up Mr. Ryan’s specific proposals, we have $4.3 trillion in tax cuts, partially offset by around $1.7 trillion in spending cuts — with the tax cuts, surprise, disproportionately benefiting the top 1 percent, while the spending cuts would primarily come at the expense of low-income families. Over all, the effect would be to increase the deficit by around two and a half trillion dollars.
Yet Mr. Ryan claims to be a deficit hawk. What’s the basis for that claim?
Well, he says that he would offset his tax cuts by “base broadening,” eliminating enough tax deductions to make up the lost revenue. Which deductions would he eliminate? He refuses to say — and realistically, revenue gain on the scale he claims would be virtually impossible.
At the same time, he asserts that he would make huge further cuts in spending. What would he cut? He refuses to say.
What Mr. Ryan actually offers, then, are specific proposals that would sharply increase the deficit, plus an assertion that he has secret tax and spending plans that he refuses to share with us, but which will turn his overall plan into deficit reduction.
If this sounds like a joke, that’s because it is. Yet Mr. Ryan’s “plan” has been treated with great respect in Washington. He even received an award for fiscal responsibility from three of the leading deficit-scold pressure groups. What’s going on?
The answer, basically, is a triumph of style over substance. Over the longer term, the Ryan plan would end Medicare as we know it — and in Washington, “fiscal responsibility” is often equated with willingness to slash Medicare and Social Security, even if the purported savings would be used to cut taxes on the rich rather than to reduce deficits. Also, self-proclaimed centrists are always looking for conservatives they can praise to showcase their centrism, and Mr. Ryan has skillfully played into that weakness, talking a good game even if his numbers don’t add up.
The question now is whether Mr. Ryan’s undeserved reputation for honesty and fiscal responsibility can survive his participation in a deeply dishonest and irresponsible presidential campaign.
The first sign of trouble has already surfaced over the issue of Medicare. Mr. Romney, in an attempt to repeat the G.O.P.’s successful “death panels” strategy of the 2010 midterms, has been busily attacking the president for the same Medicare savings that are part of the Ryan plan. And Mr. Ryan’s response when this was pointed out was incredibly lame: he only included those cuts, he says, because the president put them “in the baseline,” whatever that means. Of course, whatever Mr. Ryan’s excuse, the fact is that without those savings his budget becomes even more of a plan to increase, not reduce, the deficit.
So will the choice of Mr. Ryan mean a serious campaign? No, because Mr. Ryan isn’t a serious man — he just plays one on TV.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 19, 2012
“Mitt’s Plot To Confuse You”: Goal Isn’t To Win Over Voters On Medicare But To Make Them Frustrated
What’s most noteworthy about the new Medicare-themed ad that the Obama campaign unveiled today is its defensive tone. The spot opens by referring back to a Romney ad that claims the president “robbed” $716 billion to pay for the new healthcare reform law, then contrasts AARP’s favorable assessment of Obama’s actions on Medicare with its ominous take on what Paul Ryan has proposed.
There’s a lot going on here, and that might be problematic for Obama.
Medicare is a supremely popular program, and attempts to cut or alter it dramatically always poll terribly. The hope for the Obama team is to replicate the success that Bill Clinton and Democrats enjoyed in 1996, when they positioned themselves as the last line of defense between Medicare and the Republicans who would (in the famous words of Newt Gingrich) let it “wither on the vine.”
But the issue is more complicated in this year’s campaign, because of the Medicare changes that Obama made through the Affordable Care Act. That the law cuts spending by $716 billion over 10 years is true, but the reductions do not affect benefits; instead, they’re aimed at hospital reimbursement rates and the excessively costly Medicare Advantage private insurance program, with smaller cuts for home healthcare providers and others. What’s more, Ryan’s own Medicare plan, which House Republicans almost unanimously endorsed (and which Romney has indicated he would have signed as president), upholds all of these cuts. But Ryan says he’s now running on the Romney plan, not his own, and the Romney plan (such as it is) calls for wiping out the Medicare cuts.
It’s all rather slippery, but that doesn’t mean it won’t work. The upshot is that Romney and Ryan are now running around blasting Obama for making savage cuts in Medicare, and running ads to the same effect. This, of course, is also what Republicans did in the 2010 midterms, when their landslide was keyed in part by an anti-Obama backlash among senior citizens. This complicates Obama’s hopes of replicating Clinton’s reelection strategy. Clinton never had to answer for his own cuts; he could just fire away at the “Dole-Gingrich” attempt to raid Medicare. Obama’s task is trickier. He has to explain his own actions first, then pivot to an attack on his rivals. As Greg Sargent points out, all the GOP needs to do here is to muddy the waters enough that swing voters throw up their hands in confusion and move on to other issues – like the economy.
If there’s a silver lining for the Obama side, it’s that voters still instinctively regard his party to be more supportive of Medicare than the GOP. A poll a few months ago found that voters trust Democrats over Republicans by a 40-24 percent margin to look out for the program. Obama has also enjoyed a wide advantage over congressional Republicans on this front. The gap is tighter when Romney enters the picture; a poll of swing state voters this week found Obama running 8 points ahead of Romney, 42 to 34 percent, on who would better handle Medicare. By comparison, Clinton was running more than 20 points ahead of Dole on the issue at this point in ’96. (Of course, he was also running about 20 points ahead of Dole in the horse race.)
That said, voters are more inclined to give Obama and Democrats the benefit of the doubt on Medicare than Romney and the GOP. And the Democratic assault on Ryan-ism is only beginning. The polls may look different a few weeks, or months, from now. But just because Romney’s running mate is the author of a reviled Medicare plan doesn’t necessarily mean that the GOP ticket will pay a price for it.
By: Steve Kornacki, Salon, August 17, 2012
“Polarized, Inefficient and Unproductive”: Congressional Brinkmanship Threatens Economic Recovery
Congress’s job approval rating has slowly ticked up over the past six months—reaching a whopping 16 percent in the first half of July, with 78 percent disapproving. However, even these dismal numbers may be giving Congress too much credit, especially if legislators don’t act soon to avoid the looming fiscal cliff.
The scenario is eerily reminiscent of last spring, when political deadlock over the federal budget threatened a government shutdown before an 11th-hour deal was struck. Such political wrangling risked the loss of 800,000 jobs and the curtailment of crucial public services such as mortgage, passport, and loan processing—not to mention a massive disruption of a fragile economic recovery.
And another similar scenario just a few months later was the battle over the federal debt ceiling, gambling the possibility of another government shutdown. The haphazard deal reached during that policy fight, which failed to produce long-term practical solutions, laid the groundwork for what the country faces today.
The risks of the impending fiscal cliff are similar, if not graver. If current fiscal policy is allowed to take effect, the United States economy will simultaneously experience across-the-board income tax hikes and deep, automatic spending cuts of billions of dollars at the end of this year. According to the nonpartisan Congressional Budget Office, these policies combined will contribute to lower incomes and higher unemployment numbers, slowing economic growth in 2013 to a mere 0.5 percent—and sending America into a double-dip recession.
The general assumption is that lawmakers will not let it get to that point; spending measures will be passed and tax cuts will be extended—though how much and for whom remains undecided. We all need to be asking when this is going to happen.
The 112th Congress has been called the most polarized, inefficient, and unproductive Congress in the 236-year history of the United States; and if they’re trying to fight that image, it sure is hard to tell. Legislators have shown little political will to act before the November presidential elections, dangerously close to the December 31 deadline when the first of a series of tax cuts will expire.
Such political brinkmanship is detrimental to the business environment and to a weak economic recovery. Small businesses are particularly hard hit by the uncertain climate created by Washington, and the threat of substantial tax increases has done nothing to ease fears. According to a Chamber of Commerce poll in July, over half of small business owners cite economic uncertainty as their top concern. Only 20 percent of those surveyed expected to hire in 2013.
This is bad news—with real implications for American prosperity. Small businesses are the key to economic recovery, spurring the majority of job creation. But to hire, business owners need the assurance of a stable investment environment in which they can secure returns. Regardless of whether America falls off the fiscal cliff, Congress’s behavior is already having detrimental effects on business and employment expectations. Amid discouraging jobs and industry reports, this political game is not something we can afford.
Lawmakers must realize that their gridlocked partisanship is hurting a nation already struggling. The 112th Congress has five months left in its term. Is it too naïve to hope things might change?
By: Steve Zelnak, U. S. News and World Report, August 3, 2012
“No More Tax Cuts For The Wealthy”: As Debt Battle Looms, No Option But To Raise Taxes
President Obama and Republican leaders in Congress made history of sorts last year when they agreed to a 10-year plan to reduce annual deficits with spending cuts and no tax increases. Mr. Obama vows not to let it happen again.
Both he and Speaker John A. Boehner put down their respective markers this week, suggesting a potential replay of their damaging showdown over the debt ceiling last summer. On Tuesday, the speaker reiterated what has become known as the Boehner Rule: House Republicans will not increase the debt ceiling again without spending cuts of a greater amount. Mr. Obama, on Wednesday, told him Congress must pass a “clean” debt-limit increase to cover the nation’s obligations; there will be no more deficit deals, he said, without higher tax revenues from the wealthiest Americans.
While the Republicans largely prevailed last year, this time the Obama administration believes it has the greater leverage. The pain of the reductions is being felt as House Republicans advance the annual spending bills; already they have proposed to raise the spending caps for the military, and they are squabbling over domestic programs.
“It’s not reasonable or right for there to be another discussion of a spending-only package” for reducing deficits, said Jacob J. Lew, the White House chief of staff and former budget director. “When you look at how we got into the hole we’re in, it’s very clear that tax cuts for the wealthy were part of contributing to the deficits we’re now trying to close.”
Mr. Obama’s position leaves open the question of whether election-year politics will play to his advantage among voters who do not like deficits or the measures needed to reduce them. Neither party expects the fight to be resolved until after the election, the results of which will determine who actually has the upper hand in a lame-duck Congress. The debt limit must be raised by early 2013, Treasury has said.
The two budget deals last year — the deficit-reduction compromise in August and a smaller agreement before that — called for cutting $1.7 trillion from so-called discretionary spending, which covers the bulk of federal programs whose budgets Congress controls annually, including air-traffic control, the military, education, research and much more.
Those deals left unscathed the entitlement programs like Medicare, Medicaid and Social Security, which, given the growing aging population, are driving projections of unsustainable deficits.
And those deals, because of Republicans’ resistance, did not raise taxes, unlike the deficit measures of the 1980s and 1990s.
“Tax hikes destroy jobs,” Mr. Boehner said in his speech on Tuesday.
But veterans of past budget wars say that discretionary spending for domestic programs, which make up just 15 percent of the federal budget, cannot continue to bear the brunt without significant implications for government services. “They’ve gone way past fat and are cutting into muscle,” said Bruce R. Bartlett, who was a Treasury official in the Reagan administration.
Nor, these people say, would the public support the deeper reductions that would have to be made in programs like Medicare if taxes are not part of the mix.
“That’s basically why I, and a very large number of other people, conclude that you do need some additional revenues,” said Rudolph G. Penner, a Republican who headed the Congressional Budget Office in the 1980s and was co-chairman in 2010 of a blue-ribbon panel that proposed a debt-reduction plan.
“I’ve been kind of surprised at these recent agreements, where almost all of the reduction comes from discretionary programs over 10 years,” he said. “What you’re talking about is a very large number of years of austerity — through various Congresses, elections and possible natural disasters and terrorist attacks and on and on, which is just not plausible to me.”
Barry Anderson, a former deputy director of the White House and Congressional budget offices, said, “Eventually you’re going to have to increase taxes across the board” — not just for the wealthy — “by at least a third.”
Former Senator Pete V. Domenici, who was the chairman or senior Republican leader on the Senate Budget Committee from 1981 to 2007, said in an interview, “Adequate projections of revenues and expenditures have to be put on the table. Everything has to be on the table.”
Senator Domenici, with Alice Rivlin, a former budget director for Congress and the Clinton administration, was chairman of a panel in 2010 of former lawmakers, administration officials, academics and executives, that produced a blueprint for debt reduction. It came just before a roughly similar plan from a majority on Mr. Obama’s fiscal commission, which was led by Alan K. Simpson, a former Senate Republican leader, and Erskine B. Bowles, a businessman and former chief of staff to President Bill Clinton.
All three recent debt proposals — Bowles-Simpson, Domenici-Rivlin and that of Mr. Penner’s group, sponsored by the National Research Council and the National Academy of Public Administration — recommended trillions of dollars in savings, both from higher taxes and reduced entitlement spending. Yet it is those two sources that the White House and Congress have avoided, given Republicans’ opposition to tax increases and Democrats’ to cutting Medicare unless taxes are raised.
Tax increases were part of nearly every significant deficit-reduction measure of the 1980s and 1990s, including the 1982, 1984 and 1987 packages signed by Ronald Reagan, the 1990 accord under George H.W. Bush and Mr. Clinton’s 1993 measure. The exception was a deal in 1997, though by that agreement Congressional Republicans ratified Mr. Clinton’s 1993 tax increases that they had vowed to repeal.
Mr. Obama’s chief of staff, Mr. Lew, participated in most of those deals, as an aide to House Democratic leaders and then as Mr. Clinton’s budget director.
“The history of dealing with big problems like this is, almost in every case, it’s been a balanced package” of taxes and cuts in both discretionary and entitlement spending, Mr. Lew said. “So it’s not like it is some radical Democratic position.”
By: Jackie Calmes, The New York Times, May 18, 2012
“Recalcitrant And Incorrigible”: John Boehner Threatens To Take The Debt Limit Hostage Again
Last August, the nation narrowly avoided hittingits debt limit thanks to a last minute deal cut by Congress. House Republicans had threatened to push the country into a default unless Democrats agreed to spending cuts that were larger than the amount of the debt limit increase.
The episode is widely regarded as an embarrassment for good governance and a blow for the economy. Standard & Poor’s, even with the deal, downgraded America’s credit rating, citing the GOP’s complete intransigence regarding revenue increases. But it seems Speaker of the House John Boehner (R-OH) is ready to write the sequel, as he will reportedly demand today that the next increase in the debt limit follow the same GOP criteria:
In a speech Tuesday, House Speaker John A. Boehner (R-Ohio) plans to address the issue of national debt, which will once again be nearing its legal limit in January, just as the tax hikes and spending cuts are due to hit.
According to advance remarks provided to The Post, Boehner will insist that any increase in the debt limit be accompanied by spending “cuts and reforms greater than the debt limit increase” — the same demand that pushed the Treasury to the brink of default during last summer’s debt-limit standoff.
According to the Economic Policy Institute, the cuts demanded by the GOP in exchange for raising the debt limit will cost the economy 1.8 million jobs this year. Treasury Secretary Tim Geithner already pushed back on Boehner’s remarks, saying, “this commitment to meet the obligations of the nation, this commitment to protect the creditworthiness of the country, is a fundamental commitment that you can never call into question or violate.”
By: Pat Garofalo, Think Progress, May 15, 2012
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