“Ideology Over Sound Policy”: Republican Governors No Longer A Force For Moderation
Republican governors, who actually have to govern, used to be a moderating force on the most extreme aspects of Republican ideology. No longer. In major areas such as health care, taxes, and jobless benefits, ideology is trumping sound policy judgment in many gubernatorial mansions and state legislatures.
Healthcare
Antipathy toward “Obamacare,” not reasoned analysis, seems to be why many governors have expressed hesitation, if not outright opposition, to the Medicaid expansions under the Affordable Care Act, even though the federal government would pick up almost all of the costs. A similar antipathy (and probably a hope before the Supreme Court decision and 2012 election that the law would go away) led many governors to pass on the chance to use the flexibility that the it afforded them to design their own health insurance exchanges—new competitive marketplaces in which individuals and small businesses can choose among an array of affordable, comprehensive health insurance plans that the Affordable Care Act requires.
I’ve previously explained why Medicaid expansion is a good deal for the states. But as the map below from the Center on Budget and Policy Priorities’ report on the healthcare law’s Medicaid expansions shows, many states remain undecided or are leaning against expansion:
The Center’s report on the state health insurance exchange implementation shows that 26 states, including most of the states leaning against Medicaid expansion, have declined to either operate a state-based exchange or partner with the Department of Health and Human Services in designing their exchange. Under the law, that means they default to a “Federally facilitated exchange” that HHS will establish.
Taxes
In another disturbing development, numerous states are considering—or have already enacted—sweeping tax and budget proposals that follow recommendations of the American Legislative Exchange Council, also known as ALEC. As this CBPP report explains, ALEC’s recommendations for deep tax cuts and limits on revenues and spending reflect extreme “supply side” and antitax arguments that mainstream economic research discredited long ago.
CBPP’s most recent assessment finds that at least five states (Kansas, Louisiana, Nebraska, and both North and South Carolina) are considering eliminating income taxes. At least 11 others (Idaho, Indiana, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, and Wisconsin) are considering deep tax cuts. And at least three states (Arizona, Arkansas, and Kansas) are considering harsh revenue limits.
Unemployment Insurance
Unemployment Insurance is a joint federal-state program in which states have traditionally offered up to 26 weeks of benefits to qualified workers who lose their jobs through no fault of their own, and the federal government typically provides additional weeks of emergency unemployment compensation when national unemployment is high. In the current jobs slump, by far the worst since the 1930s, seven states have cut back on the maximum number of weeks of regular benefits they offer. Because the maximum number of weeks of federal emergency benefits is proportional to the maximum number of weeks of state benefits, that means jobless workers in those states have seen a significant reduction in support while they look for work in what remains a tough labor market.
Research shows that Unemployment Insurance is valuable not only to unemployed workers and their families but also for the additional spending that it injects into the economy. States that have cut back on it are hurting struggling families and their own economic recovery.
The North Carolina Trifecta
North Carolina is the poster child for these disturbing trends in state governments.
The Tar Heel State is one of the five considering eliminating its income tax. The new Republican governor supports legislation that would prevent the state from expanding Medicaid or establishing a health insurance exchange. And, in July, the state will become the eighth to have reduced the maximum number of weeks of Unemployment Insurance it offers. Moreover, North Carolina also cut the maximum level of benefits which, under the “maintenance of effort” requirement for receiving emergency federal benefits, requires the federal government to cut off all emergency Unemployment Insurance to North Carolina.
Republican governors used to fight for Medicaid and Unemployment Insurance because they recognized how much their states benefited. Now, many are leading the effort to cut valuable programs in order to finance tax cuts for high-income households and businesses, while letting the chips fall where they may for those of more modest means.
By: Chad Stone, U. S. News and World Report, February 22, 2013
“The Party Of Ideas, From 20 Years Ago”: Which 1990s Era Bad Idea Will The GOP Pull Out Of Its Policy Posterior Next?
I wrote in my column a few weeks back that conservatives seem stuck in the 1990s. The NRA swaggers like the organization that could claim credit for taking down so many Democratic members of Congress … nearly two decades ago; House Republicans—including some from the class of 1994, apparently trying to relive their, uh, inglory years—are openly aching for a government shutdown; some even want an impeachment. It almost begs the question: What hoary policy proposal will they summon out of the Gingrich years next? The answer is apparently the Balanced Budget Amendment.
My old bloleague Scott Galupo, now at The American Conservative, flags the news that the GOP is going to try to write a balanced budget into the Constitution, including a supermajority requirement for raising taxes and raising the debt ceiling. Scott writes:
Just as problematic is the institutional folly that the BBA represents. Instead of reasserting democratic control over fiscal policy, as had been the plan until five minutes ago, a BBA regime would take us in the opposite direction – toward newly empowered judges. The literature on how a BBA would invite judicial interference into fiscal policy is vast — for a taste, see Ed Meese, Walter Dellinger , and Peter H. Schuck – and, to my lights, dispositive. But that’s not all. The executive branch, too, would potentially gain new authority over spending — which the Goldwater Institute, strangely, sees as a feature rather than a bug.
And David Frum points out perhaps the biggest problem with the scheme:
A cap on spending, especially one at 18 percent, also means recessions will be turning into depressions. The automatic stabilizers that have induced such deep deficits since 2008, especially unemployment insurance, would be capped under such a plan. Without that spending to prop up demand, expect the boom and bust cycle to get worse.
Even former U.S. News-er Jim Pethokoukis questions the realism of this idea. And you know something extraordinary is going on if I’m approvingly citing Jimmy P.
So which 1990s era bad idea will the GOP pull out of its policy posterior next? I suppose they have to wait until the Defense of Marriage Act has actually been overturned or repealed before they try to revive it. Maybe a flag burning amendment?
By: Robert Schlesinger, U. S. News and World Report, February 11, 2013
“Just Another GOP Liability”: Biting The Hand That Feeds Them
Paul Krugman noted on ABC’s This Week yesterday that the GOP’s problem is that their “base is old white people.”
This is largely true. Exit polls show that Mitt Romney won all voters 65 and older by 12 percentage points, and white older voters by 22 points. Barack Obama won all voters under thirty by 23 points, and nonwhite young voters by 36 points.
Such numbers are a big problem for the GOP amid fast changing demographics, as we’ve heard often in recent months.
But here’s an interesting question raised by the same data: If the GOP leans so heavily on older white voters, then why is it leading the charge to cuts entitlements for seniors?
Politics is supposed to be about who gets what, but things often don’t work that way. In 2011, the New York Times ran a fascinating chart about the percentage of personal income that comes from government benefits in different states. It showed that hardcore Republican states—where a lot of those older white coservative voters live—relied most heavily on benefits, with Social Security the largest form of assistance. In a previous post, I looked at John McCain’s margin of victory in 2008 in those states with the highest reliance on government benefits:
West Virginia: 28 percent of all personal income in this state come from government programs. McCain won the state by 13 points.
Mississippi: 26.2 percent of personal income from government benefits; McCain margin: 13 points.
Kentucky: 24.8 percent income from benefits; McCain margin: 17 points.
Arkansas: 24.5 percent income from benefits; McCain margin: 20 points.
South Carolina: 23.4 percent income from benefits; McCain margin: 9 points.
Alabama: 23.4 percent income from benefits; McCain margin: 22 points.
These numbers make you wonder: Do older GOP voters really understand that the conservative assault on government “handouts” may end up reducing their standard of living? And, if they do get better clued into that fact, will the GOP face pushback against entitlement cuts from their own base?
Entitlements aren’t the only area where Republicans aren’t doing a good job of serving the narrow financial interests of their base. As I have noted often, the U.S. tax system disprortionately raises revenue from affluent people in coastal blue states and keeps taxes low on Americans of more modest means in the red states. You’d think heartland Republicans would be okay with this arrangement; instead they have relentlessly fought proposals that would shift even more of the tax burden to residents of Manhattan and Malibu.
Likewise, one big feature of the reviled Affordable Care Act is that the law taxes rich people—which just started happening this month with the Medicare payroll surtax—and subsidizes health insurance for low-income people. The states I mentioned above, with high concentrations of poor rural residents, will benefit from this arrangement. Connecticut will not.
So amid all the talk of the GOP’s grim long-term prospects, let’s add another liability to the list: Congressional Republicans aren’t attuned to one of the most basic responsibilities of elected leaders—putting more money in the pockets of their constituents and getting somebody else’s constituents to pick up the tab.
By: David Callahan, The American Prospect, February 4, 2013
“Hell Isle”: A Commonwealth Of The United States Where “Funny Talkers” Need Not Apply
Check out what the loopy Ayn Randroids are up to now. In long-suffering Detroit, a libertarian real estate developer wants to buy a civic crown jewel, Belle Isle, the 982-acre park designed by Frederick Law Olmstead—think the Motor City’s Central Park—and turn it into an independent nation, selling citizenships at $300,000 per. Not, mind you, out of any mercenary motives, says would-be founder Rodney Lockwood—but just “to provide an economic and social laboratory for a society which effectively addresses some of the most important problems of American, and the western world.” (Sic.)
Address how? Well, let’s say I’ve never seen a document that better reveals the extent to which, for libertarians, “liberty” means the opposite of liberty—at least since Rick Santorum held up the company town in which his grandpa was entombed as a beacon of freedom.
An aspiring Ayn Rand himself, Lockwood has set out his vision in a “novel,” poetically titled Belle Isle: Detroit’s Game Changer. Although he’s actually done the master one better, by imagining he can get his utopia built. Last week he presented the plan, alongside a retired Chrysler executive, a charter school entrepreneur (who apparently enjoys a cameo in the novel running one of the island’s two K-12 schools) and a senior economist at the Mackinac Center for Public Policy, to what The Detroit News called “a select group of movers and shakers at the tony Detroit Athletic Club,” who included the president and CEO of the Detroit Regional Chamber of Commerce.
Never let it be said Rod Lockwood (perfect pornstar name? You be the judge) hasn’t thought this thing through. The plan is foolproof: “Belle Isle is sold by the City of Detroit to a group of investors for $1 billion. The island is then developed into a city-state of 35,000 people, with its own laws, customs and currency, under United States supervision as a Commonwealth.” Relations with neighboring, impoverished Detroit will be naught but copacetic, and not exploitative at all: “Plants will be built across the Detroit River…. with the engineering and management functions on Belle Isle. Companies from all over the world will locate on Belle Isle, bringing in massive amounts of capital and GDP.” (Because, you know, tax-dodging international financiers of the sort a scheme like this attracts are just desperate to open and operate factories.) Government will be limited to ten percent or less of GDP, “by constitutional dictate. The social safety net is operated charities, which are highly encouraged and supported by the government.”
Although, on Belle Isle, “the word ‘Government’ is discouraged and replaced with the word ‘Service’ in the name of buildings.” Note the verb-tense slippage between present and future throughout. Lockwood is a realist.
He says what he imagines is a “Midwest Tiger”—helpfully explaining that his self-bestowed nickname is “a play on the label given Singapore as the ‘Asian Tiger.’ Singapore, in recent decades, has transformed itself into the most dynamic economy in the world, through low regulation, low taxes and business-friendly practices.”
Singapore. You know: that libertarian paradise where chewing gum is banned; thousands of people each year are sentenced to whippings with rattan canes for such offenses as overstaying visas and spray-painting buildings; the punishment for littering can be $1,000, a term of forced labor and being required to wear a sign reading “I am a litter lout”; and where pornography, criticizing religion, connecting to an unsecured Wi-Fi hotspot and (yes!) over-exuberant hugging are all banned. Freedom!
What are the Commonwealth’s other inspirations, you ask? “The country of Liechtenstein, which, although a monarchy, has a very effective government.”
And indeed, just like little Liechtenstein, Belle Islanders will enjoy protection from America’s security umbrella: “As a Commonwealth of the United States…Belle Isle pays its share of the U.S. defense budget, based on its population. It amounts to about $2,000 per person per year.” In fact Belle Islanders can expect nothing but fiscal gratitude from citizens of the United States. Yes, “a citizen who lives on Belle Isle who operates an investment fund with world-wide customers will pay no income taxes” to the United States. “Won’t the US lose a lot of tax revenue?” Oh, ye of little libertarian faith. “It will probably gain revenue…. Entrepreneurs from around the world will locate on Belle Isle and headquarter there, but often have their plant operations in the US because the island is so small. Businesses producing products in the U.S. will still be taxed at US corporate rates…. the influx of capital and jobs will be staggering…. Detroiters will see this vision as the answer to their prayers, and how could the federal government deny Detroit a chance to turn itself around, accelerate its re-birth, all at no cost to the taxpayer? How could they deny this long standing population of over 700,000 their first real shot at the American dream.” (Sic.)
Want in? Three requirements. First, of course, you need to come up with $300,000. “Will the citizenship fee pay for the purchase of any land for homes or businesses on Belle Isle?” “No—that will be an additional cost.” But look what that $300,000 buys you: “One of the core values” of the new nation, Lockwood writes, “is respect for all its citizens, no matter their station in life.”
Second: approval by the “citizenship board.” (Freedom!) Third step: “a command of English.” Because nothing says “respect for all its citizens” like “funny-talkers need not apply.”
And yes, it’s true, Lockwood proposes the “Rand” as the name of Belle Isle’s currency. But I’m sure he means Rand as in “Ayn Rand,” not, you know, Rand as in “South Africa,” the former home of a social system that functioned by surrounding minority enclaves of affluent whites with a reserve army of impoverished and disenfranchised blacks. Not like that at all.
What could go wrong? What’s the downside? After all, writes Lockwood in the section of his FAQ asking, ‘What is Bell Isle used for currently?”, “It is uninhabited and functions as a public park.” Just like that dead zone between 59th and 110th Streets in Manhattan.
You can sign up for updates on the project here. Although, take note, in order do so you have to give the organizers your phone number. Because, you know… freedom.
By: Rick Perlstein, The Nation, January 28, 2013
“The Big Freaking Deal”: Progressives Might Want To Take A Brief Break From Anxiety And Savor Their Real Victories
On the day President Obama signed the Affordable Care Act into law, an exuberant Vice President Biden famously pronounced the reform a “big something deal” — except that he didn’t use the word “something.” And he was right.
In fact, I’d suggest using this phrase to describe the Obama administration as a whole. F.D.R. had his New Deal; well, Mr. Obama has his Big Deal. He hasn’t delivered everything his supporters wanted, and at times the survival of his achievements seemed very much in doubt. But if progressives look at where we are as the second term begins, they’ll find grounds for a lot of (qualified) satisfaction.
Consider, in particular, three areas: health care, inequality and financial reform.
Health reform is, as Mr. Biden suggested, the centerpiece of the Big Deal. Progressives have been trying to get some form of universal health insurance since the days of Harry Truman; they’ve finally succeeded.
True, this wasn’t the health reform many were looking for. Rather than simply providing health insurance to everyone by extending Medicare to cover the whole population, we’ve constructed a Rube Goldberg device of regulations and subsidies that will cost more than single-payer and have many more cracks for people to fall through.
But this was what was possible given the political reality — the power of the insurance industry, the general reluctance of voters with good insurance to accept change. And experience with Romneycare in Massachusetts — hey, this is a great age for irony — shows that such a system is indeed workable, and it can provide Americans with a huge improvement in medical and financial security.
What about inequality? On that front, sad to say, the Big Deal falls very far short of the New Deal. Like F.D.R., Mr. Obama took office in a nation marked by huge disparities in income and wealth. But where the New Deal had a revolutionary impact, empowering workers and creating a middle-class society that lasted for 40 years, the Big Deal has been limited to equalizing policies at the margin.
That said, health reform will provide substantial aid to the bottom half of the income distribution, paid for largely through new taxes targeted on the top 1 percent, and the “fiscal cliff” deal further raises taxes on the affluent. Over all, 1-percenters will see their after-tax income fall around 6 percent; for the top tenth of a percent, the hit rises to around 9 percent. This will reverse only a fraction of the huge upward redistribution that has taken place since 1980, but it’s not trivial.
Finally, there’s financial reform. The Dodd-Frank reform bill is often disparaged as toothless, and it’s certainly not the kind of dramatic regime change one might have hoped for after runaway bankers brought the world economy to its knees.
Still, if plutocratic rage is any indication, the reform isn’t as toothless as all that. And Wall Street put its money where its mouth is. For example, hedge funds strongly favored Mr. Obama in 2008 — but in 2012 they gave three-quarters of their money to Republicans (and lost).
All in all, then, the Big Deal has been, well, a pretty big deal. But will its achievements last?
Mr. Obama overcame the biggest threat to his legacy simply by winning re-election. But George W. Bush also won re-election, a victory widely heralded as signaling the coming of a permanent conservative majority. So will Mr. Obama’s moment of glory prove equally fleeting? I don’t think so.
For one thing, the Big Deal’s main policy initiatives are already law. This is a contrast with Mr. Bush, who didn’t try to privatize Social Security until his second term — and it turned out that a “khaki” election won by posing as the nation’s defender against terrorists didn’t give him a mandate to dismantle a highly popular program.
And there’s another contrast: the Big Deal agenda is, in fact, fairly popular — and will become more popular once Obamacare goes into effect and people see both its real benefits and the fact that it won’t send Grandma to the death panels.
Finally, progressives have the demographic and cultural wind at their backs. Right-wingers flourished for decades by exploiting racial and social divisions — but that strategy has now turned against them as we become an increasingly diverse, socially liberal nation.
Now, none of what I’ve just said should be taken as grounds for progressive complacency. The plutocrats may have lost a round, but their wealth and the influence it gives them in a money-driven political system remain. Meanwhile, the deficit scolds (largely financed by those same plutocrats) are still trying to bully Mr. Obama into slashing social programs.
So the story is far from over. Still, maybe progressives — an ever-worried group — might want to take a brief break from anxiety and savor their real, if limited, victories.
By: Paul Krugman, Op-Ed Columist, The New York Times, January 20, 2013
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