Archive for the ‘Federal Budget’ Category

David Brooks Hammers Radical Republicans

Tuesday, July 12th, 2011

Great article by David Brooks on the Radical Republicans and their debt ceiling negotiations. Brooks takes these guys to the woodshed:

The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.

The members of this movement do not accept the legitimacy of scholars and intellectual authorities…The members of this movement have no sense of moral decency….The members of this movement have no economic theory worthy of the name…

The struggles of the next few weeks are about what sort of party the G.O.P. is — a normal conservative party or an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation….

If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.

MEOW!

I love it!

Senate to Vote on Ryan Plan

Sunday, May 1st, 2011

Here’s Steve Benen on the Harry Reid’s plan to put the Ryan plan to a vote in the Senate.

Brilliant.

As Jonathan Alter said, if the Democrats can’t hang Ryan’s plan to abolish Medicare around the neck of the Republican party, then they should go into a new business.

Barely anyone is paying attention to the intricacies of the budget debate, and Ryan plan has no chance to pass in the Senate, but the closer it gets to passage, the more people are going to start to pay attention. The Democrats should agree not filibuster this plan, so that it actually gets to the floor and we can have a full debate about whether the Senate wants to ratify the plan the House passed and send the bill to abolish Medicare to the President for his first veto.

Bevan muses about whether conservative Democrats would support it and whether moderate Republicans would. He puts the over/under at five but I’d be surprised if we didn’t see mass defections from Republicans on this bill.

As Rachel Maddow pointed out last week, as one of his first acts in office, Dean Heller, the newly appointed Senator from Nevada will become the only person to vote for the Ryan Plan in both the House and the Senate…Unless he decides to vote against killing Medicare after he voted for it.

What a way to start a re-election campaign in a swing state with a large population of seniors. 

 This should be fun.

Jon Stewart Explains the Ryan Plan

Wednesday, April 20th, 2011

The Daily Show – Ryan’s Private Savings – Path to Prosperity
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

If you have more than a few minutes, here is the intro.

You Balance the Budget

Sunday, April 17th, 2011

Here’s The New York Time’s Interactive Budget Balancer.

This is from before the 2010 budget deal,  and doesn’t include all of the current proposals, but it’s a great way to test your assumptions about the federal budget.

Keep Medicare and Social Security at current levels and see how much you need to increase taxes and cut defense in order to pay for it. Rollback the Bush tax cuts for only the rich (as Obama is proposing) and see how much additional cutting you need to do to maintain a balanced budget in 2030. Exempt Social Security, Medicare, Defense and tax increases (as many Republicans have advocated) and see how impossible it becomes.

“Starve The Beast” Unmasked

Sunday, April 17th, 2011

Here’s Lawrence O’ Donnell with analysis on Obama’s Wednesday speech.


The real analysis starts at the 2:30 point. O’ Donnell explains how the Republican strategy of “Starve the Beast” got us to the point we are at today. As Reagan said:

You know, we can lecture our children about extravagance until we run out of voice and breath, or we can cure their extravagance by simply reducing their allowance.

O’Donnell continues:

Reducing their allowance. If you’re a conservative republican you can reduce the government’s allowance by cutting taxes, and then sit by and try to watch the democrats preserve their spending programs when they don’t have the money to do it…

“Starve the Beast”…Starve it, cut taxes, don’t collect the money the government needs to run its programs and those programs will then have to be cut. This has been the republican strategy since Reagan. It is the Republican strategy now. If you don’t understand that it is the republican strategy, then you do not understand what you’re up against.

With a nod to Naomi Klein’s “The Shock Doctrine,” this is basically an argument that the Republican theories and policies (along with Democratic enabling) basically created this crisis knowing that it would bankrupt the country. Now that the bill for endless tax cuts with no accompanying spending cuts has come due, they tell us that we have no other choice but to dismantle the social programs that Americans have worked decades to build up and maintain.

O’ Donnell, again:

That plan, the Reagan plan, the Starve the Beast plan, controls our governing dialogue today. This is not an accidental legacy of Reagan’s. This was his plan. This didn’t happen because George W. Bush lost his way and forgot to pay for things, it was because George W. Bush faithfully executed the plan.

This is why the Ryan Plan and Obama’s response to it represent a turning point in the debate, and indeed in America’s history.

The Republicans just spent all last year arguing that tax cuts for the richest 2% had to be preserved. They filibustered benefits for 9-11 responders so that they could preserve these tax cuts. Now that they’ve seized the House, they turn around and say: we have no choice as Americans. We now have to dismantle the safety net that has been in place for over 40 years.  

Bullshit.

The Republicans will tell you that we are “broke.” Don’t believe that for a second.

We’re the richest country in the world. We’re fighting two wars, one in Asia and one in the Middle East. We’re supporting an air campaign against another dictator in North Africa and running a covert drone based bombing campaign in a fourth country.  We have 12 aircraft carriers that allow us to project force anywhere in the world on short notice. We have hundreds of thousands of troops stationed in countries where we fought wars over sixty years ago. We’re the strongest economy in the world and we have more billionaires than any other country in the world by a mile.

We also have one of the lowest tax rates of any industrialized country and our taxes are the lowest they have been in fifty years. 

To be sure, there will need to be decreases in spending across the board and entitlements need to be a part of that. But Americans need to make some tough decisions about what kind of a country we want to be. Medicare is the 2nd most popular social program in the country and the Republicans just voted to dismantle it because they say that we’re broke. But we’re apparently not so broke that we couldn’t afford to pass even more tax cuts for the rich as part of the same budget.

The time for maintaining  high levels of defense spending, moderate levels of social spending and low taxes is over. Americans now need to decide whether we would rather deny poor, disabled and the elderly the health care that they need, or whether we should cut back out military commitments around the world. We need to decide if it’s more of a priority to have low taxes for the top 2% or if we can go back to the tax levels of the Clinton years (when the economy created 23 million new jobs) and cushion the cuts to the social programs that most Americans now view as a right. 

I honestly cannot believe that the Republican House actually passed the Ryan budget yesterday. If their vision of America is one where the safety net is no longer guaranteed and seniors no longer have their medical bills paid so that the rich can get more tax cuts, then you’ve got to give them credit for standing up for their beliefs. But I think they’ll soon find that what they believe differs significantly from what the American people believe in.

Finally: Obama Comes Out Swinging

Thursday, April 14th, 2011

I have to admit that the president’s performance during the budget negotiations was disheartening. It’s not so much that I care if $38 billion is cut from the very small pie of non-defense discretionary spending, but that Obama and Senate negotiators gave so much away in the face of Republican threats to shut down the government.  The negotiations made me question what would be left of the social safety net that so many American generations fought for after the president finished compromising. 

The speech he made yesterday could be a turning point. It was a strong statement that he realizes how important this moment in our history is and is ready to fight for the principles that liberals have fought for and the programs that are under attack from the Radical Republicans. Not only was it a shrewd statement politically, it was probably the most specific and eloquent defense of liberalism that I’ve heard in some time. 

If you missed it, I highly recommend watching or reading it but here are my highlights:

Obama gave a nod to the idea of an America of “rugged individualists, a self-reliant people with a healthy skepticism of too much government.” But also spoke of “another thread running throughout our history”:

A belief that we are all connected; and that there are some things we can only do together, as a nation. We believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves. And so we’ve built a strong military to keep us secure, and public schools and universities to educate our citizens. We’ve laid down railroads and highways to facilitate travel and commerce. We’ve supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire industries. Each of us has benefited from these investments, and we are a more prosperous country as a result.

Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. “There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities. We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.

Without naming the Ryan Plan specifically, he savaged it.

He savaged it in soaring rhetoric when he explained how much we could accomplish if we invested in our country:

It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but biofuels. And yet, we are presented with a vision that says the United States of America – the greatest nation on Earth – can’t afford any of this.

Then he savaged it with specifics:

It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors. It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today. It says instead of guaranteed health care, you will get a voucher. And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own. Put simply, it ends Medicare as we know it.

He drew attention to the fact that the Ryan budget proposes to dismantle the health care systems for the poor, the disabled and the elderly and plows that savings into even more tax cuts for the wealthy. Along the way, he pointed to the rising inequality that accompanied the tax cutting spree of the Bush years:

Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes?

They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs?

That’s not right, and it’s not going to happen as long as I’m President.

When I watched the section above, I had to rewind the Tivo once or twice to understand the math he was explaining: giving one person a two hundred thousand dollar tax cut and financing it by asking thirty three old people to pay six thousand dollars more in health care costs. This is the Republican’s plan for the future.

Just as he did in his Libya speech, Obama consistently drew on the ideals of American Exceptionalism that Republicans have unfairly knocked him for not honoring:

The America I know is generous and compassionate; a land of opportunity and optimism. We take responsibility for ourselves and each other; for the country we want and the future we share. We are the nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI bill and saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.

This is who we are. This is the America I know. We don’t have to choose between a future of spiraling debt and one where we forfeit investments in our people and our country. To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.

Finally the fight is joined. For years, the Republicans have engaged in a “Starve the Beast” strategy which consistently cut taxes and then blamed the shortfalls that ensued on runnaway social spending.

But the Ryan plan is a bridge too far. It shows the real vision that the Republicans have for the country, and the argument that we need to dismantle Medicaid and Medicare and provide even more tax cuts for the rich just isn’t going to fly.

Yesterday, the President provided an alternative to that vision and indicated that he is willing to fight for it. How much he is willing to fight remains to be seen, but I’m feeling better than I did a few days ago.

Milbank on the 2011 Budget Farce

Friday, March 11th, 2011

Here’s Dana Milbank on the farcical nature of Al Franken presiding over the Senate as David Vitter lectures everyone on morality, Chuck Schumer and Orin Hatch trade cliches and both sides agree to vote on 2011 budget plans that have no chance of passing in order to score political points.

voting against both plans was Sen. Claire McCaskill (D-Mo.), who scolded her own side for being “in denial . . . about the nature of the problem and how serious it is.” Sen. Ben Nelson (D-Neb.) joined McCaskill in grown-up-land. “Both bills are dead and they deserve to be dead,” he said, in uncharacteristically colorful terms. “One bill cuts too little. The other bill has too much hate.”

Hate is subjective, but it’s pretty clear that the Republican plan would do violence to everything from the FBI to food-safety inspections, and throw hundreds of thousands out of work. The Democratic plan, by contrast, has no sense of urgency, cutting only one half of 1 percent of discretionary spending. And neither does much about the long-term debt.

Despite the shenanigans on the Senate floor, the Senate remains the best hope for long term deficit reduction as the bi-partisan “Gang of 6″ continues to negotiate over a plan that would bring federal budgets closer to balance.

Bill Maher Explains the Budget with Dinner

Sunday, February 27th, 2011

This is great (start at 3:39).

I’ve been saying all along that the thing the Tea Partiers never understood is that the bulk of Federal spending is in programs that people in the Tea Party actually like (like Social Security, Medicare and Defense).

The initial Republican budget goes after things like NPR, Planned Parenthood, earmarks (less than 1% of the budget), but as Maher points out, that is like trying to decrease your calorie intake by cutting back on the garnish on your giant plate of fried chicken, mashed potatoes and mac and cheese.

It’s easy to don a tri-corn hat and rage against how Obama’s a Socialist, but it’s harder to cut programs that you like and surveys consistently show that Americans like a lot of programs and don’t have a firm grasp on what their money is spent on.

The wake up call is coming.

I’m With Krauthammer

Tuesday, January 4th, 2011

Just catching up from the holidays and posting a few things I missed while gone.

This is from the aftermath of the tax deal.

While the Democrats were damning the president for giving up core principles and Republicans were crowing about the fact that they got their number one priority (tax cuts for the top 2%) by threatening to stop all legislative activity, (including benefits for 9-11 first responders and tax cuts for 98% of Americans) Fox News Commentator Charles Krauthammer wrote this piece, in which he called the tax cut deal a “really big win for the president.”

He cited some of the same reasons that I had given for arguing that it wasn’t such a bad deal for Obama, namely that Obama, in effect, tricked the Republicans into running short term deficits to stimulate the economy after they spent two years arguing that deficits were no good and very bad, even during a recession.

In a somewhat discordant note, Krauthammer noted that the deal “will add as much as 1 percent to gross domestic product and lower the unemployment rate by about 1.5 percentage points.”… Sounds good to me so far… but, he quickly added, ”that easily could be the difference between victory and defeat in 2012.”

For someone who spends their time writing and thinking about politics, that is a stunning statement to make. We’re in the greatest recession since the Great Depression, hiring has stagnated and we are debating a policy that you believe will add 1% to the GDP and lower unemployment by 1.5%… But you consider that a bad thing because Obama might get re-elected when more people have jobs? That’s positively Limbaugh-esque.

But I digress…Krauthammer followed this one up with another article in which he said that, if Obama is reelected, “historians will mark his comeback as beginning on Dec. 6, the day of the Great Tax Cut Deal of 2010.” There’s a lot of water that needs to pass under that bridge, but this may ultimately be true. If the economy comes back, Obama’s going to get the lionshare of the credit. The stimulus effectively built a floor under the economy and (we can hope) the new package will prime the pump for more private sector hiring to get this economy going.

All in all, Obama ends his 2nd year with a ton of challenges, but also a ton of accomplishments.

As I joked recently, Obama’s first two years have been a total failure:

  • preventing a Great Depression
  • stabilizing the US banking system
  • rescuing the American Auto Industry
  • equal pay for women
  • a children’s health care expansion
  • ending subsidies to corporate banks for college loans
  • a major national service program expansion
  • the largest federal investments in energy and education in the country’s history
  • the largest federal investments in infrastructure in the country’s history
  • health care for 30 million more Americans (which eluded progressive presidents for 70 years)
  • significant increases in assistance for veterans
  • repeal of Don’t Ask Don’t Tell
  • a new START Treaty with Russia

And even though the Democrats had historic losses in the House, his approval is still better than Reagan and Clinton at the same time in their presidencies.

and now comes the pivot to the center.

All this against the backdrop of a Republican Congress that ended the year explaining how some $17 billion in unemployment extensions during the worst recession since 1932 “need to be paid for” but $140 billion in tax cuts for the top 2% can just be added to the deficit.

As Krauthammer notes, soon after they voted for the tax deal,

Republicans began righteously protesting $8.3 billion of earmarks in Harry Reid’s omnibus spending bill. They seem not to understand how ridiculous this looks after having agreed to a Stimulus II that even by their own generous reckoning has 38 times as much spending as all these earmarks combined.

Hey, I’m all for ending earmarks. They’re symbolic of a broken process in which even the so called “fiscally conservative” bring home the goodies for their constituents. But let’s get real: they account for one half of one percent of the federal budget; and defeating a proposal that has $8.3 billion in earmarks with one hand while you increase the federal deficit by $900 billion with the other does not show “fiscal responsibility.”

As I noted before, the biggest short term benefit to this deal for Obama is to show how hypocritical the Republicans are when it comes to running deficits that benefit their core constituency (those in the upper income brackets).

At least on that point, I’m with Krauthammer.

Obama Makes Lemonade out of Lemons

Friday, December 17th, 2010

I have to say that I have been surprised at the liberal fulmination over the two year extension of Bush tax cuts. On one level, I get it: it’s frustrating as hell that the Republicans acted as irresponsibly as they did over the past two years and have been rewarded with a control of the House, 6 new seats in the Senate and the policy that they care about the most: tax cuts for the rich (which are also the least economically stimulative of the policies that have recently been considered). Still, it’s hard to say that you couldn’t see this coming and I would argue that the total package is not a bad deal either politically for Obama or economically for the country.

Regarding the extension of tax cuts for the rich, the die was probably cast when the Democrats punted on taxes in the run up to the election. They didn’t have the votes in the Senate for an extension of tax cuts for just the middle class (due to Republican filibuster threats and Democrats that vote like Republicans) and didn’t want to put a handful of their own members in a situation of filibustering the Democrats’ tax bill just before a tough election. The House, in turn, refused to take another tough vote if the Senate couldn’t pass the bill.

The Democrats problem here was the same one that they had for the past two years: they were afraid to stand up to the Republicans and provoke a fight over taxes. What they should have done is made the Republicans (and Lieberman, Ben Nelson, Blanch Lincoln, etc.) filibuster….and I don’t mean have a cloture vote, say that they couldn’t get 60 votes and then go home early for the weekend. I mean make them stand up on the Senate floor and talk and talk and talk about why they were filibustering tax cuts for 98% of the people so that they could preserve taxes for the top 2%.  They may not have gotten their bill passed, but it would have been a clear contrast for the American people and they could have prepared the public for the fight we are having now and put pressure on Republicans for a better deal. Senate Democrats have complained that Obama is not standing up enough to the Republicans, but they are the ones responsible for not dealing with this issue until the last two weeks of this session and giving the Republicans maximum leverage.

And while the deal cut with Republicans is far from an optimal deal, there are a number of ways that this deal works politically as well as economically for the President and the country as a whole. First, most economists agree that the economy needs additional stimulus and that the worst thing you can do during a deep recession is to cut government spending and raise taxes. Obama clearly believes this as well, since he has argued for it both domestically and internationally again and again, even when he can’t get agreement from allies.

A comparison of the framework agreement between the Obama administration and congressional leaders and another option

Just after the election, I commented on Peter Beinart’s lamenting ”the Death of Keynesianism” as a result of the Republican victory. In the aftermath of the election it seemed that the dysfunction in Washington left Ben Bernake’s Fed holding the only weapon in the fight to revive our economy. But the president is showing that the death of Keynesianism has been greatly exaggerated, at least for the short term. While the policies agreed to in the compromise are far from the most effective stimulative policies, they will provide some lift to the economy that would have been missing had the Republicans governed like they campaigned.

As I’ve said before, I’m not completely opposed to a 2 year extension of the Bush tax cuts for the top 2%, although I would rather see those provisions expire and the money be redirected to tax cuts that actually stimulate more (like a payroll tax cut that benefits employers as well as employees (instead of just employees)). It also would have been nice to get some construction projects to deal with our crumbling national infrastructure, but perhaps this was a bridge too far for the Republicans. What we will get is a  package of tax cuts that, depending on how you break them out, amount to close to a stimulus of $900 billion (or $600 billion over and above what had previously been supported by both parties).

In addition to the economic benefits of the tax cut deal, Obama may reap some political rewards as well. As Chuck Todd has pointed out, part of Obama’s problem over the past two years has been that he has acted more like a Prime Minister trying to shepherd his agenda through Congress than a President using the bully pulpit to call legislators out in order to build support for his agenda (as he was able to do so effectively in the 2008 campaign). And while the strong reaction from the left has been surprising, recent opinion polls have showed broad support for the deal. In addition, economists have projected that the tax cuts will increase the  GDP by as much as 1%, create an additional 3 million jobs and decrease the unemployment rate by close to 1.5%.

As an added bonus, the debate has shown just how hypocritical the Republican party’s leaders really are. For the past two years, they consistently complained about the budget deficits that were run in order to prevent an even larger economic collapse than we actually had. They pretended that they couldn’t distinguish between short term deficits to prop up the economy, and long term structural deficits that were unsustainable. As my conservative uncle liked to say, the Tea Party led Republicans were going to bring “fiscal responsibility” back to Washington. And what did they do within a month of their election? Add another $900 billion to the deficit before the new Congress even got there. Like I said previously, I understand that you need to run deficits in times of economic downturn. But I didn’t spend the last two years running a constant campaign against those deficits. 

Some have argued that the Republicans may be successful at extending the Bush tax cuts for the top earners in 2012. But this also sets up a fight that Obama can use to his advantage. If the Republican House brings up the extention in 2012, it should die a quiet death in the Senate. Plus, the country will be focused on deficit reduction by then, and Mitt Romney can explain to the country in the presidential debates why he wants to add another $700 billion to the debt and the onus will be on him to propose cuts to programs in order to pay for them.

The deal is far from perfect. But, all in all, it’s a much better deal than I thought Obama could get just a few months ago.

But don’t take my word for it. Take Charles Krauthammer’s.