Most commentators think that a clean continuing resolution, based on the budget numbers agreed to last month by Boehner, would pass the House if only put to a vote. See, e.g., Loosinhouse, The Two Words All Democrats Must Start Using Immediately, Daily Kos (Oct. 7, 2013). The shutdown would end, and the government agencies and offices could transition back to doing their work. Congress could then get back to real work instead of the "showdown at the OK Corral" tactics intentionally planned, adopted and pursued relentlessly by the Tea Party wing of the GOP based on the idea that it is okay for a congressional minority to attempt to undo legislative enactments achieved in the ordinary process of legislation by threatening to cause great harm through withholding funds or withholding approval for an increase to the debt ceiling if it (the minority) doesn't get its way.
Boehner, however, says the votes aren't there. And although the radicals have wasted a lot of Congress's time (with endless unsuccessful votes to repeal or defund Obamacare) and a lot of ordinary Americans' time (with furloughed inactivity and the anxiety that non-rich people experience when they aren't getting paychecks but have bills to pay), Boehner claims that he doesn't want to waste time by calling for a vote that will certainly lose. Id.
The Daily Kos (op.cit.) suggests that Boehner shouldn't expect us to believe him when he tells us it simply isn't possible to pass a clean CR because the votes aren't there. There's a list of who would likely vote for funding the government without any strings attached, and it includes a lot of Republicans--enough to pass a clean CR with Democrats. See, e.g., Bendery, Here's a Tally of Which House Republicans Are Ready to Fund the Government, No Strings Attached, HuffingtonPost.com (Oct. 1, 2013, as updated Oct. 8, 2013). That's at least 23 Republicans who, if voting with all 200 House Democrats, would easily surpass the 217 votes needed to pass a clean CR. (The Huffington Post article notes that 4 GOP House members who said they would support a clean CR have now flip-flopped to say they will not.)
And finally other journalists are beginning to ask the kinds of probing questions that makes journalism different from a he-said, she-said echo chamber. Take a listen to this interview by Anderson Cooper of Republican hostage-taker Raul Labrador (R-Idaho): This isn't Fox or MSNBC: You're Getting Real Questions Here (Oct. 7, 2013).
So shouldn't the burden of proof be on Boehner? Why not hold a vote if there is a good chance it could pass? How could it possibly be a waste of time to hold a vote that would end the personal pain and suffering being inflicted on hundreds of thousands of federal employees, their families, their communities, and the economic potential for the country at large?
[Edited at 8:54 pm to add House action Monday night and Senate leader statement]
The Senate voted 54-46 to reject the House's plan to hold the government hostage to its whims (including delaying Obamacare, okaying the Keystone Pipeline without regard to environmental objections, and imposing other anti-regulatory measures).
The President addressed the nation tonight on the Tea Party's attempt to hold the nation hostage to its demands about a law it doesn't like. As Obama noted, a minority in Congress does not get to "extract a ransom" to dictate its will to the majority on the basis of its undenied ability to cause great harm to the country and all of our citizens. Tiron, Rubin & Hunter, Government nears shutdown as Obama says he won't pay ransom, Bloomberg Businessweek (Sept 30, 2013).
The Tea Party/GOP set up another situation--planning to re-pass a measure that the Senate has already rejected and that Obama threatened to veto. Boehner refused to allow a vote on a spending bill without the Tea Party's conditions. Peter King, one of six responsible members of the GOP who voted against taking up the bill, admitted that what the GOP is doing is "leading ourselves into a government shutdown for no reason." The House just passed the new conditional funding bill 228-201, making its last offer the same old delay Obamacare offer that already failed.
Not surprisingly, every one of the 10 main industries in the S&P 500 dropped on the news.
Richard Hudson, a new Republican from North Carolina, claims that he doesn't want a shut down but "I also want to protect my constituents from this law." Fact is, the law is the first possible improvement in health care that this country has seen in decades. It is not perfect, but without the obstructionists Tea Party/GOP coalition, Americans would be eagerly awaiting the chance to get health insurance for pre-existing conditions and all the other improvements this law makes. Yet these Congresspeople are willing to put the country at risk in order to appease their rabidly irrational base. The Sacramento Bee (see Editorial: House GOP owns the shutdown, below) has it correct:
They can spin it all they want, but House Republicans manufactured the crisis that now threatens to shut down the federal government and wreak havoc on world finances. Unless they budge, they will go down in history as hostage takers willing to tank the economy if their demands are not met.
The Senate leaders announced that they would immediately pass the spending bill without the health care language and send it back to the House. See House Passes Another Budget Bill that Delays Health Law, New York Times (Sept 30, 2013 at 8:47 pm).
The Tea Party/GOP needs to stand down and start acting like legislators who have a duty to act for the good of the country rather than just the narrow interests of their base.
The House, dominated by Tea Party/GOP politicians (or those fearful of their impact on upcoming primaries) passed a bill that attempted to tie the continuing operations of the government to compliance with Tea Party ideas about getting rid of the health reform legislation duly enacted four years ago. See Weisman, House Bill Links Health Care Law and Budget Plan, New York Times (Sept. 20, 2013). Ted Cruz has now run his non-filibuster filibuster in the Senate, and then voted against his own "principled" filibuster position (presumably out of a quite justifiable fear that he would be shown for the fool he is as the only one voting in support of his "principles", since the Senate vote was unanimously on the other side). Ted Cruz Filibuster, NY Daily News (Sept. 27, 2013).
Remember, these are the same Tea Partiers who cried "Get Government Hands Off My Medicare," so one can't expect to see much rational debate about facts and ideas, especially on health care. The fact that Obamacare is based on a Republican, business-centered idea is lost on the Tea Partiers, who seem to simply hate anything associated with Obama and Democrats. Similarly, the fact that the reforms for the first time ensure that people who have pre-existing conditions can find insurance to help pay for catastrophic health costs at reasonable rates doesn't seem to penetrate the Tea Party conscience.
The Tea Party and its amenable GOP politicians, however, apparently aren't done trying to use whatever tool however destructive to get their way on health care. Having a sustainable economy is not even on their agenda. After not succeeding in repealing the health care reform law that at least offers some Americans a chance for needed health coverage (including those with pre-existing conditions and those whose employers offer no plans and who cannot afford the typical premiums for non-group plans), the Tea Party/GOP coalition is using the threat (and likely reality) of a devastating government shutdown unless it gets its way on a matter that the American people as a whole have soundly rejected. It is ready to push the country off the fiscal cliff all over again. So after the Senate voted cloture to consider the House bill and then passed a clean funding bill to get us through at least a few more months, the House GOP (with the Tea Party reactionaries in charge) again voted on Saturday to add amendments intended to destroy Obamacare to the funding bill (a one-year delay plus a repeal of the medical device tax, one of the measures intended to cut health care costs and pay for needed reforms).
The message is simple. The GOP is attempting to hold hostage the entire federal government, including at least 800,000 federal employees who will be furloughed but who need their paychecks to live, and many towns and cities across the country that depend on their federal government agencies and employees for their own livelihoods. The Tea Party/GOP coalition has demonstrated that it doesn't care about the government, the long-term harm to the country, or the suffering of individuals caused by these actions. The Tea Party/GOP coalition is willing to keep going its selfish way, like a petulant child determined not to let anybody have anything at all unless he gets his way.
And even then, it apparently intends to continue to wreak havoc, with the threat of causing the US government to default on its debt for the first time ever, using the silly comparison of the federal government to a family operating on a fixed budget as its equivalent of P.T. Barnum's fictitious but real-seeming mermaid to scam its "Tea Party" members.
While we need to make judicious choices about how and what we spend on, we shouldn't make those decisions based on a single-minded and short-sighted goal of cutting tax revenues and not increasing the federal debt limit. We are an enormously rich country. We could work miracles of ending poverty, repairing infrastructure, funding basic research, and creating educational opportunity if only we had the will to do so. And doing those things would create jobs and hope for the under-and un-emplolyed. This is because the federal government is not a family operating on fixed wages. It can print money. It can also raise taxes. We are one of the lowest-taxed countries in the OECD, down at the bottom of advanced countries with the likes of Turkey and Mexico. We have allowed corporations (and their mostly very rich shareholders) to avoid taxes, through legislation and through sharp-witted corporate tax attorneys, to the point where they are only paying a pittance of their enormous profits to the government. We have allowed our tax brackets to become fossilized at the upper range at extraordinarily low levels of income, when the top earners get so many millions that they pittance that even the top rate brings in is just a gnat's bite for the rich.
These facts scream for recognition that the Tea Party goals are not only damaging in the process of government-hostage-taking being used to try to reach them, but highly unfair and irresponsible in their likely impact of accelerating the increasing inequality in this country--inequality that means the rich are getting rich while the poor and middle class are losing ground. Thus, the Tea Party/GOP coalition is pushing forward in what amounts to class warfare on behalf of wealthy Tea Party funders like the Koch Brothers and their corporate empire and the "silver-spoon" crowd like Mitt Romney who think that they got where they are through their "merit" (ignoring the many advantages of networks and educational opportunities that helped them "make it" in the status-and-power-based world of crony capitalism).
Charles Reid at Huffington Post concluded that Cruz was a huckster primarily intent on self-promotion appealing to a Tea Party/Republican base that invites itself to be huckstered. Here's his description:
[A] good half of the Tea Party is pure, old-fashioned American hokum. There are the conspiracy theorists selling their tales of devious plots by the Federal Reserve. And the gold dealers who spin elaborate yarns of out-of-control inflation which the government keeps secret. And there are the Second Amendment fanatics warning ominously about plots to disarm law-abiding American constitutionalists. There are even the patent-medicine folks. Newsmax, a principal Tea Party news organ, is filled daily with claims about cures for everything from diabetes to Alzheimer's. Charles J. Reid, P.T. Barnum, Joe McCarthy, and the Rise of Ted Cruz, HuffingtonPost (Sept 27, 2013).
This mode of thinking is darkly conspiratorial. The world is sharply divided -- "us" against "them." And those who stand against the heroic defenders of justice and the American way are always secretly scheming to run not just the country but the entire world.
***
[T]o enter today's GOP base is to cross the border from reality into Glenn-Beckistan. There are the young-earth creationists who see the whole of empirical science as a diabolical plot to conceal divine creation. There are the global warming skeptics, found even in the pages of the formerly great Wall Street Journal. And then there are the folks who come out of the woodwork at conservative workshops and rallies: The ones who want to abolish the IRS. Those who wish to dismantle whole government agencies. Those who believe Social Security is irretrievably insolvent, an accusation first made by Alf Landon in 1936. Even the next generation of segregationists who once thrilled to Wallace and Goldwater.
This is what the U.S. Congress is reduced to--paranoid hucksterism parading as compassion for the people. A minority of flim-flam artists huckstering for attention that will, they think, win them reelection and please their paranoid-prone base of Tea Party/GOP constituents--the group who thinks their religious freedom is being oppressed when they can't repress everybody else's religious rights; who thinks a conspiracy to undermine them exists when saner thinking attempts to impose some kind of reasonable restrictions on the gun mayhem that is killing this country's children and youth and elderly in what we once thought were relegated to movie depictions of Old West shoot-em-outs; and who combines this paranoid conspiracy-thinking with anarchic libertarianism to conclude that "taxation is theft" and "government is the problem" even when these majority-Republican rural constituencies from Alaska to Mississippi depend on government employment and other federal dollars for their very livelihoods. See In Republican States, More Government Jobs, New York Times (Sept. 27, 2013).
There's the rub. The inability of the Tea Party base to listen, to consider facts, to accept the importance of community and the important role of taxes in maintaining the institutions that make community possible through collective action. It makes me think of George Orwell's 1984, as depicted in the movie with John Hurt and Richard Burton --a population that has taught itself not to think with home-schooling and religious indoctrination, reinforced by political demogogues who retain power and perks by figuratively beating the proletarian to a nonthinking mass that resents any attempt to act collectively for the greater good of the people.
Today's GOP is dominated by the Tea Party types that are a cross between an ostrich with its head stuck in the sand-- the "ignorance is bliss" philosophy-- and a 1860s cowboy as depicted in the 1960s western-mania TV shows-- the "hell bent on raising a ruckus"/"my way or the highway" mentality. The combination is deadly dangerous for democratic egalitarianism.
On the ignorance is bliss side, see, for one example out of many possible, the "two pending Republican bills that seek to curtail or end vital surveys by the Census Bureau." Editorial, Stragegic Ignorance, New York Times (May 25, 2013).
As described in GOP Census Bill Would Eliminate Key Economic Indicators, Huff. Post (May 26, 2013), the only purpose of H.R. 1639, the bill introduced by Jeff Duncan (R-SC), appears to be to ensure that the government does not have reliable data on the many important indicators of the health of the economy, from housing and health to crime, employment and the environment.
A spokesman for Duncan declined to explain why the congressman wants to eliminate such data or even whether he understands that the data would be compromised by his bill, which has 10 co-sponsors.
But the proposed Census Reform Act is explicit in its intent to end nearly every survey the Census conducts, mandating the "repeal" of the nation's agricultural census, economic census, government census and mid-decade census. It would also bar the bureau from carrying out the American Community Survey (ACS), which the House voted last year to end, although the Senate let that measure die.
There is very little done by the government or big businesses that does not at some level depend on the reams of information provided by the Census surveys, from writing regulations and distributing federal services to rolling out new products and finding customers. The ACS is an ongoing survey that collects data every month, instead of every 10 years, so that governments and businesses have current information. Id.
Because it bars the Secretary of Commerce and the Census Bureau from carrying out "any survey, sampling, or questionnaire", the bill would effectively hamstring the government's ability to gather any kind of information other than a numerical count of population. Note that this would also include all of the information collected by the Department of Labor's Bureau of Labor Statistics, since those statistics are generally gathered through the U.S. Census Bureau. See, e.g., Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey. To get a further sense of the importance of the information provided through the Department of Labor with Census Bureau support, see this page showing the subject categories of Labor statistics collected. Some information collected by the Census Bureau is also used by the Department of Health and Human Services, although DHHS surveys are so specialized that the department has an extensive set of specialized surveys that various of its agencies conduct. (Let's hope Duncan doesn't notice them, or he will set out to gut that agency, too.)
A similar bill was introduced in the Senate by Rand Paul (R-KY) which specifically targets the American Community Survey--the frequently updated survey that gathers information anonymously and provides a wealth of data about economic trends across the country. See Poe press release; see also Huff Post, Rand Paul, Ted Poe Sponsor Bill that Seeks Religion Law that Already Exists (May 25, 2013) (noting that a 1976 law already ensures that answers about religion on the Census are voluntary, but the Paul/Poe bill gratuitiously includes the same provision again).
Paul claims the mandatory survey is too intrusive--he wants it to be "voluntary". Voluntary surveys get low participation rates, particularly in some geographic areas. The data needs are universal--having gaping holes where there were too many dropouts to give the survey statistical validity would be a huge problem. But Paul doesn't care--he's too busy scoring Tea Party points with anarcho-libertarians who've been brought up (since Reagan) to think that "government is the enemy", while at the same time benefitting from billions in government aid because of these very surveys. And too busy using terms like "protect Americans" (from the Poe Press Release) in hypocritical ways that have nothing to do with protecting anybody but the elite--since the result of not having the ACS survey will be to allow more misleading pronouncements to go unchecked by data. Like Sarah Palin's ignorant assertions about Alaskan self-sufficiency (when more federal tax dollars go to Alaska than come from it), these anti-tax/anti-government claims are mere posturing that misleads ill-informed people to support policies that favor the elite. As the HuffPost article notes,
[T]he 14 largest counties in Poe's state of Texas received more than $14 billion in federal funding in 2008 based on ACS data, according to a recent Brookings Institution study. Id.
Without such data, it would be harder to show the failure of the laughable tax-cuts-for-the-rich/austerity-for-everybody-else policies of the rightwing in Congress and in state legislatures. Take, for example, the recent reporting about the way the GOP legislatures that have decided NOT to expand Medicaid will leave the most vulnerable poor in the lurch (yet again) as far as receiving health care that all of us need and most of us take for granted. The better off will receive the benefit intended by Obamacare, but the worst off will remain vulnerable in those recalcitrant states where the GOP runs the show with the "ignorance-is-bliss" mentality. Without the kind of regular information collected by the Census Bureau and in particular the American Community Survey, the government won't be able to track results of these Red State "experiments" in austerity to show how much like Third World countries their states become regarding poverty, unemployment, and all the other economic indicators provided by the census.
This ostrich-with-tits-head-in-the-sand mentality makes sense only if the ideas you support are purely ideological ones, for which data is irrelevant. As Maurine Haver, head of Haver Analytics, noted to a reporter:
[T]here is a fundamental divide between people who are interested in solid, reality-based data and those who are not. "If you know what you think, you don't need information to help you assess what's going on," she said. "The people that need information are the people who use it because they really want the truth, not people who think that because they believe it, it becomes the truth." Id.(paragraphing changed and italics added).
Of late, that seems to be the position of the Tea Party reps in Congress, like Rand Paul, Ted Cruz and too many others. And they don't care about the ensuing harm to ordinary folk from their efforts.
Need more proof of the ostrich-plus-cowboy mentality? Just look at the fight breaking out in Congress between Ted Cruz and the rest of the Tea Party cohort with the somewhat more sensible GOP members like John McCain over the debt ceiling. Kusskin-Shoptaw, McCain, Tea Party Senators Squabble over Debt Ceiling Procedures, Bloomberg.com (May 22, 2013).
Once again, the Tea Party is willing to run the United States off a cliff over an artificial fiscal limit that is, in the actual economic scheme of things, meaningless except as a stage for such masquerades about fiscal responsibility concerns. The Party of No wants to Know Nothing to disguise its "bankrupt the US to get at the liberals" ideology in the sheep's clothing of a fake "we care about economic responsibility" policy initiative.
Freedom does NOT reside in allowing brute force economic might to set the rules. Freedom is having government institutions that work and are subject to the will of the people. So that when 81% of the American public want gun check legislation, Congress listens to the people instead of to the well-funded NRA. So that when a majority of the American people don't want corporate funding to be siphoned to campaigns behind the closed doors of erroneous 501(c)(4) status, IRS employees are allowed to do their work to find "parties" that are circumventing politicking disclosure requirements rather than being hung out to twist in the wind under a fake "scandal" created by the ideological anti-tax right. So that when agencies allocate resources or describe results of economic legislation, they have accurate data to do so. Freedom does not rest in willful ignorance.
Pretty much as I predicted, Obama's failure to go over the fiscal cliff--instead "negotiating" and settling for a half-assed deal that hardly got rid of any of the stupidities of the Bush tax cuts--convinced the Republicans that they can play their brinkmanship game on the debt ceiling debate yet again and perhaps finally get the Democrats to undo their own most significant programs of the last 100 years--Social Security and Medicare.
What we ought to be doing is cutting the military/defense and corporate welfare budgets. And then increasing taxes--with (1) new layers of tax brackets and tax rates corresponding to our new levels of income inequality, so that multimillionaires are taxed at a higher rate than mere millionaires and billionaires are taxed higher than multimillionaires and (2), at the least, legislation to eliminate the farce of the so-called "carried interest: privileged compensation taxation for LBO managers, who get mostly preferential capital gains for their "services" in buying companies and loading them with debt that makes the managers but not the workers wealthy.
But the Democrats somehow still thought they would get some kind of credit, even from the staunchest of the right-wingers, for being "bipartisan" and working out a "deal" to avoid the "fiscal cliff." So they made the ridiculous Bush tax cuts permanent, except for those in the upper-upper crust making three times as much as anybody in the middle class. And they made the estate tax cut even larger than it was--with a $5.2 million exemption (double for a couple) and only a 40% rate. Inequality will continue to grow at accelerated rates. And they extended the litany of truly egregiously stupid corporate tax breaks, like the bonus depreciation/expensing provisions that ultimately permit corporate multinational giants a NEGATIVE effective tax rate (read Cary Brown on the way noneconomic frontloading of expensing amounts to nontaxation under time value of money principles).
The GOP however is currently running deranged. The party that purports to care about fiscal conservatism only wants to fund more military and make sure that vulnerable elderly don't get as much in their Social Security checks and have to pay even more for their health care. McConnell--the MINORITY leader in the Senate--has pronounced his party's views on the matter: "The tax issue is finished." Brian Knowlton, McConnell Takes Taxes Off the Table in New Talks, New York Times (Jan 6, 2013).
Folks, the stuff about the debt ceiling and the need to cut benefits under Social Security and Medicare is baloney. The US government isn't a family--it's a sovereign regime . We should learn from the Euro nations that are embroiled in a self-defeating austering regime that leaving citizens suffering while trying to toady to big business is a recipe for disaster.
President Obama had damn well better take Social Security and Medicare off the table as well as any corporate tax reductions. Get rid of corporate loopholes and let corporate tax revenues INCREASE. It is the only way left to try to re-balance an economy that is skewed in favor of the uber-rich and the multinational corporations and against ordinary Americans. Oh, it would also help to move to single-payer single-provider health care and get profit-making out of what should be an important human right.
And are we "spending way too much" anyway, as McConnell declares? Surely not, since we are only spending on things that the Congress has voted to spend on. If McConnell wants to spend less, let him propose a spending cut and put it to the vote. If it fails, then he should vote the taxes or borrowing needing to pay for the spending Congress has legislated.
So, just as my advice in the "fiscal cliff" debate was to go over the cliff, let the Bush tax cuts expire, and then put in place some decent cuts for the REAL middle class (those making less than $100,000 a year), my advice here is to go over the "sequester cliff" and let the across-the-board cuts, with the first real cuts to the military in decades, take place. We should damp down our military zeal and start to put our money where it will build good schools, good colleges, good public transportation, and ultimately good jobs.
As for the debt ceiling, the best thing would be for the Senate to eliminate the filibuster rule (or at least make the right-wingers do a physical filibuster) and eliminate the debt ceiling. It is an artifact of a different age, and is meaningless. Think about this.
1) we have spending bills that require us to spend X dollars
2) we have tax bills that only raise X-Y dollars.
3) we have a governmental obligation to pay the X dollars that we spend to those who provide the goods and services amounting to X dollars.
4) Therefore we have a governmental obligation to borrow the Y dollars that we don't raise with taxes.
Some in the GOP have realized what progressives have been saying all along--that by winning the election, President Obama is in a much better negotiating position on taxes and spending than before, and the GOP really doesn't have many hands to play.
The trouble is, the GOP thinks if it "gives" on any tax increases on the wealthiest Americans that it should have the "right" to a "balanced deal" and get the Dems to go along with the decimation of Medicare, Medicaid and Social Security. This is the main battle of the radical right's class warfare against ordinary Americans--their goal is to eliminate, reduce, or privatize Social Security, Medicare, and Medicaid benefits. They created the fiscal cliff with brinkmanship temper-tantrum threats to throw the United States into default unless they got their way, and they are trying to use the December 31 deadline that they themselves set in place to push the Democrats into being the ones to destroy the most effective social welfare programs that the Democrats have created.
See, e.g., Hiedi Przybyla, Republican Defectors Ready to Back U.S. Tax-Rate Compromise, Bloomberg.com (Dec. 5, 2012). Some members of the GOP have "signed a letter calling for exploration of 'all options' on taxes and entitlement programs"; Petition signers like Mike Sampson (R-ID) say this means he would be willing to "accept higher rates for married couples earning more than $500,000 a year, in exchange for an overhaul of spending on entitlements such as Medicare." "We've [the GOP,that is, has] got to have entitlement reform," he says. Id.
Steny Hoyer--the center-right Democratic whip in the House--said that "proposals to raise the eligibility age from 65 to 67 and other entitlement changes 'clearly are on the table'."
Hoyer is writing a suicide note for the Democratic party with that statement, for two reasons.
1) Tax increases cannot be significant enough if they are limited to married couples with $500,000 or $1 million of income, as Simpson suggested, nor if they do not raise the top rate to at least the Clinton era rate of 39.6 percent.
In reality, they should introduce additional brackets above that rate level for the top earners (e.g., 4o% for 750,000 or more, 45% for 2 million or more , 50% for 10 million or more, up to perhaps 65% for those who make hundreds of millions of income per year).
And the capital gains preference should be eliminated. But the GOP is also digging its "line in the sand" against any increases in taxes on investment income--even though this is an income category that creates tax arbitrage opportunities for the wealthiest Americans and high-income Americans (like Mitt Romney) end up paying tax at rates substantially less than ordinary Americans because of the preferential treatment of their capital gains income. See, e.g., James Politi, Republicans in capital gains tax fight, Financial Times.com (Dec. 4, 2012) (noting that Republicans in the House are "fighting tax increases on capital gains and dividends, ruling out investment income as an acceptable source of additional revenues in increasingly urgent talks to avert the fiscal cliff") [hat tip--Yves Smith at Naked Capitalism].
2) Democrats were elected as the party most likely to protect earned benefit programs, not destroy them. There is no way that Democrats should accept ANY "overhaul" of Medicare or the other social program eligibility requirements as a way to cut spending. They are vitally essential to Americans, and the GOP suggestions take the brunt of cuts out on the most vulnerable populations. The GOP's cuts include lowering the COLA for the elderly for Social Security, when the elderly actually have a HIGHERr cost-of-living than ordinary Americans, or raising the eligibility age for Medicare, when those who labor all of their lives often need EARLIER eligibility because they need to retire earlier and have no health care outside of work and can't afford to pay what private insurers will charge.
The savings from these stingy GOP proposals are de minimis, but the impact will be to create a momentum for reducing benefits as a way to save. That is treating a symptom and not the problem.
The problem of increasing health care costs comes from the inordinate profit-taking by parties at every link of the health care chain--consultants who bid out to insurers, insurers, hospitals, doctors, Big Pharm, Big Nursing Home, and shareholders. The only way to address the problem is to do what every other advanced civilization in our era has already done--move to a single payer system that treats health care as a citizen's right and treats the provision of health care as in some sense a public good that the government must provide. Single payer allows the government to bargain on behalf of its citizens, reducing the monopolistic rights of pharaceutical, hospital and other health care intermediaries.
The article notes that about 120 Dems would need to "buy in" to entitlement cuts in the House for the GOP to agree to tax increases. The Dems should say no. The tax increases will come into law on January 1, and then the Dems can propose a bill that will cut taxes for those for whom it makes sense, without decimating the star programs that have supported the middle class since FDR. (Note to Dems--progressives will not vote for anyone who goes along with such entitlement changes.)
House republican leaders have sent a letter to President Obama with their "fiscal cliff" proposal, which the Republicans cast as a "fair middle ground" and a "balanced framework for averting the fiscal cliff." Id. Republicans object that the administrative proposal has is unbalanced, because it has "four times as much tax revenue as spending cuts" (under a Republican claim that the Administration shouldn't count already enacted spending cuts that were part of the Administration's original proposal as part of the bargain). And of course the Republicans don't like the idea of any stimulus measures being included in the deal or the proposal to finally do away with our arcane and unnecessary debt ceiling mess, which invites games of chicken that have no point. They claim that they are merely supporting the Bowles-Simpson plan, which of course they are not since they are refusing all tax rate increases.
The letter is written rather confusedly and is therefore somewhat ambiguous on exactly what it is offering as a concrete proposal. One has to conclude that it isn't a concrete proposal but actually merely puffery that restates the position that the GOP wants lots of entitlement cuts, no military cuts, and no tax rate increases (but might go along, maybe, with some unspecified "loophole eilmination" for the nonce). It appears to propose the following:
$900 billion in cuts to mandatory spending including Medicare and Medicaid spending over the next decade
The Republican letter, of course, tries to assume the mantle of "preserving and protecting" social welfare programs even while they reach out to reduce, eliminate or privatize them, when it suggests that perhaps the Republicans will return to the Budget Resolution that offered a voucher plan for limiting Medicare benefits (and hoped to buy off current seniors and those nearing retirement by promising them benefits under the current program). The Republican proposal referred to claims to "reform" Medicaid by offering "flexibility" that cuts $800 billion from the program over 10 years! Although admitting that the election makes pursuing those kinds of harsh reforms "counterproductive", the Republican leaders promise to "continue to support and advance them."
$300 billion in cuts to other discretionary spending over the next decade
$200 billion in cuts to Social Security benefits (by revising the method of calculating cost of living increases, which would also apply to keep the tax brackets from rising as fast and for adjustments to government pensions)
$800 billion in new revenue--achieved through "pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates" (but of course without mentioning just what loopholes and deductions would be removed). The letter goes on to declare that the Republican leaders will not agree to higher tax rates, asserting that their position is to "protect small businesses and our economy".
Let's assess this so-called "proposal."
Lowering rates is absurdity at this point: no reasonable person should vote for a proposal to lower US tax rates even more than they already are. Lowering rates while eliminating deductions or loopholes doesn't work any better: immediately after such a bill is passed, the lobbyists will be back on the floor. First they'll demand a temporary extension while markets "adjust" (mostly bulls..t). Then they'll demand that the temporary provision be made permanent to provide "certainty" to markets and businesses. Then they'll demand enhancement of the loophole to broaden it, since they say such provisions will incentivize job creation. Etc. This is an old story that never plays out the way the lobbyists promise. Congress shouldn't fall for it again. Because the next ploy will be--oh, let's broaden the base by removing these new old loopholes and then we can lower rates even more. The only thing that is likely to happen in this ploy is that the top rates go down for the wealthiest taxpayers, who pay less and less.
Cutting the various safety net programs is equally absurd. Especially in a time of continuing difficulty, especially for vulnerable populations like the elderly, poor, laborers with inadequate pension and health care possibilities after retirement and other large groups in our population. There is no reason to cave to the GOP's forty-year campaign to reduce, privatize or eliminate social welfare programs: let the gradual onset of taxes and sequesters take place in January, and then ask them to pass a tax cut to benefit those in the middle and lower-income groups.
The letter ends with an oxymoronic statement that essentially states that if the Obama administration will cave to these GOP demands, they are "ready and eager to begin discussions about how to stucture these reforms." They go on to suggest that President Obama has taken actions to "undermine good-fith effrorts to reach a reasonable and equitable agreement."
That's bunk, boys. If the GOP is going to play this game this way, the administration should not attempt any kind of short-term resolution. After the Bush tax cuts are repealed once and for all by operation of existing law as of January 1, it will be much easier to discuss what reasonable tax cuts should be enacted to protect the middle class rather than the wealth of corporate managers and owners. And once there is a first start on the reduction of the military budget, we can move on to reduce it even more. Action can be taken to stave off problems that would be caused by any of the provisions in early 2013.
Robert Reich is at it again--producing a quick (2 1/2 minute) video with sketches to illustrate his suggested rules for Democrats in the "fiscal cliff" negotiations with the GOP. The video is available various places, including on Salon at the following link: Robert Reich, Understanding the fiscal cliff in 150 sections, Salon.com (Dec. 3, 2012).
"Reich's Rules" sound an awful lot like the stuff I've been writing on my blog, so readers may see some building of a consensus here. (I hope.)
Rule 1. "Hold your ground." Dems won the election.
Rule 2. "No deal is better than a bad deal." Bush tax cuts end. (I'd add--the military sequester is the first real cut in the military and a start on reducing that huge 60% stake of our budget.)
Rule 3. "Make Republicans vote on extending the tax cuts just for the middle class." How can they really refuse?
Rule 4. "Demand higher tax rates on wealthy, not just limits or deductions."
Rule 5. "Don't cut safety nets" (Medicare, Social Security, Medicaid, programs for the poor).
When Mitt Romney disparaged ordinary Americans, it was visible, obvious, and clearly an indication of the lack of esteem he held for ordinary Americans. The same arrogance is at work in the class warfare that the radical right is waging against the social programs that have been partof the great stabilization of the middle class and a singular pathway to a more sustainable lifestyle for those who are underprivileged in America--Social Security, Medicare, and Medicaid.
The drumbeat for "fiscal cliff" worries continues to build in the media. The right wants us to think that they are worried about future generations facing mountains of debt. They aren't. The right wants us to think that they are worried that the only way to combat skyrocketing health care costs is by cutting back on benefits for ordinary Americans. They aren't, and it isn't. The right wants us to think that the wealthy have sacrificed already and are truly noble if they bear even minimal tax increases from the expiration of the Bush tax cuts. They haven't and they aren't. The right wants the progressives to roll over and play dead, so they can insist that they have the good of the country at heart when they demand cuts to infrastructure spending and cuts to "entitlements" as a condition for petty little increases in the taxes of the ultra rich who have greedily sucked up all the juice in the economy for forty years. We won't.
Readers may think this blog has become a broken record of arguments for higher taxes--at least on the wealthy, at least through the removal of the preferential capital gains rate--and holding firm on protecting Social Security, Medicare, Medicaid. Maybe so. But we must continue to speak out until those we elected to lead the country act like they heard the prevailing sentiment of the election: we want more taxes on the upper class; we want an economy that is stimulated by government spending when private spending won't do it; we want a sustainable economy that distributes resources more equitably and not a winner-take-all economy that allows those with monetary power to dictate the lifestyles of the rest of us.
Krugman is, as usual, correct. What they can't get by buying an election the rich will try to get by lobbying and pretending to worry about the fiscal cliff. Let them try. Progressives in Congress should start talking, on any available outlet, about "going over the cliff" because it really isn't so bad. It will free us once and for all of the ridiculous Bush tax cuts and allow us to undertake thinking about the tax code without that "status quo" hanging over our head like the sword of Damocles. And we can pass some really decent tax cuts for the lower income quintiles at the first of the year, without having to deal yet again with the "extenders" on the table. We can reform corporate tax--getting rid of loopholes; getting rid of the transfer pricing games--without lowering rates. And we can deal with the sequester in reasonable ways. What should we spend on and why. Let the rest go. We would finally begin the process of lowering the expectations of the military-industrial complex.
The following are excerpts from Krugman's piece.
The important thing to understand now is that while the election is over, the class war isn’t. The same people who bet big on Mr. Romney, and lost, are now trying to win by stealth — in the name of fiscal responsibility — the ground they failed to gain in an open election.
***
Consider, as a prime example, the push to raise the retirement age, the age of eligibility for Medicare, or both. This is only reasonable, we’re told — after all, life expectancy has risen, so shouldn’t we all retire later? In reality, however, it would be a hugely regressive policy change, imposing severe burdens on lower- and middle-income Americans while barely affecting the wealthy. Why? First of all, the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer? Second, both Social Security and Medicare are much more important, relative to income, to less-affluent Americans, so delaying their availability would be a far more severe hit to ordinary families than to the top 1 percent.
***
[A]ny proposal to avoid a rate increase is, whatever its proponents may say, a proposal that we let the 1 percent off the hook and shift the burden, one way or another, to the middle class or the poor.
***
The point is that the class war is still on, this time with an added dose of deception. And this, in turn, means that you need to look very closely at any proposals coming from the usual suspects, even — or rather especially — if the proposal is being represented as a bipartisan, common-sense solution. In particular, whenever some deficit-scold group talks about “shared sacrifice,” you need to ask, sacrifice relative to what?
***
America’s top-down class warriors lost big in the election, but now they’re trying to use the pretense of concern about the deficit to snatch victory from the jaws of defeat. Let’s not let them pull it off.
When George W. Bush got reelected with a minority of the popular vote and contested state counts, the GOP claimed a mandate to keep going with the fiscally irresponsible program of high military spending combined with tax cuts particularly advantageous for their wealthy and corporate-owning supporters.
When Barack Obama got reelected with a clear majority of the popular vote and a resounding majority in the electoral college, the GOP says Obama has no mandate because the GOP managed to retain the House though Democrats in the House got more votes than Republicans in the House.
Anybody notice the partisan inconsistency there?
What we do know is that a majority of Americans--even lots of those Republicans who voted for Romney--want this Congress to preserve Medicaid and Medicare. There is a huge effort by some--like the Peterson Institute, the Simpson-Bowles comedy tour, and right-wing propaganda tanks--to cast Medicare as impossible to sustain because of the current trend in health care costs. The argument goes this way:
health care costs in the US are rising
the population that is eligible for Medicare in the using is rising as baby boomers age
Medicare costs will therefore inevitably increase
even though Medicare costs are rising less rapidly than non-Medicare health care costs (because of the ability of the government to mandate certain cost controls), those increases will eventually require significantly higher government outlays
the US has unprecedented levels of debt and annual budget deficits
the US spends too much compared to its tax revenues (the tax take is several percentage points less of the GDP than the spending percentage)
therefore the US can't afford to pay those increasing amounts for Medicare health care costs
therefore we should cut back on eligibilty for, and benefits from, Medicare.
But this argument has several fatal flaws that include the following:
debt is extraordinarily cheap right now
if you can borrow at very low rates, it is better to borrow now than later
if you can borrow at very low rates and there are important projects on which to spend the money, the borrowed money acts as a stimulant to the economy
if the economy is stimulated by the borrowed money, the GDP growth will likely support continued low interest rates and faster revenue growth that will repay the debt faster
deficit spending by the government is vital when there isn't private spending
and if the economy grows, private spending will grow and deficit spending can pull back
spending priorities have to be determined:
there is no per se rule that higher spending is necessarily bad (though the right-wing in this country presupposes that there is and based almost all policy prescriptions on that presupposition, because the right-wing ideologically wants to divert public spending to its private pocketbooks)
there is no arbitrary and fixed percentage of GDP that is the "right" amount to be spent by the government on government programs
we spend too little now on public infrastructure ( public transporation, national roadways, electrical grids, and sewage systems are badly deteriorated), basic research (we have cut back on funding for NIH and NSF, major drivers of advancements in scientific and medical knowledge), and major priorities like combatting global warming/ supporting renewable energy
we spend too much now on the military (the military-industrial complex constitutes about 60% of the federal government)
we should support continued spending on Medicaid and Medicare, because those programs fill a vital need and serve the population well--we should not reduce benefits but rather increase them, at least for those who rely on Medicare/Medicaid as their primary or only health care plan
We've already built in various cuts to the spending for Medicare and Medicaid (possibly too much) and the question of what the costs will be ten years down the road depend in part on what else we do along those lines and how those things work out. See Editorial, Health Care Entitlements, New York Times (Nov. 29, 2012); Yves Smith, Naked Capitalism.
tax policy should be based on fairness in the way we raise revenues and spending priroities in the amount of revenues we raise
An equation that says "X (health care costs) is increasing and Y (Medicare coverage of health care costs) is increasing (because the number of people needing the program that pays for health care costs is increasing) and Z (taxes for coverage of health care costs) is increasing" and then concludes "therefore we must reduce Y" is using false logic:
to maintain a relative constant, there are more options than "reduce Y" since the country could:
reduce X (move to single payer, as every other advanced nation has done, and halve the cost of health care)
increase Z (increase the tax support for Medicare, because it is a high priority that a majority of the citizens of our democracy support)
What we have to do is get away from the kind of thinking that seems to permeate so much of the discussion in Congress and in the media--that there are pre-set limits to how much we should borrow, how much we should spend, or how much we should raise in tax revenues.
The deficit hawks want us to think that the coutnry will be just another Greece if we don't rein in spending and debt and keep taxes low. Traditionally our spending has ranged around 21% of GDP, but there is nothing magical about that number--it could rise to 24% or 26% without harm. And we are not Greece, because we remain a powerful economy, one that can print our own money and one that commands interest from the global economy, so our debt (mostly caused by the Bush tax cuts combined with the Bush wars, and the Reaganomics deregulatory mania) is not an unbearable yoke around our necks. We should be discussing the real needs of the country for infrastructure and provision of public goods and then figuring out how to pay for them with a combination of taxes and debt.
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