But I want to offer a special point about Summers. All the evidence says that Larry Summers seriously appears to be a sexist, which alone should disqualify him for consideration. As the UK's Independent put it several years ago, in Summers' 'sexism' costs him top Treasury job,
For Mr Summers ... may be famous for his brilliance but is equally so for saying things he politically ought not to. Most memorable was his remark in early 2005 while serving as President of Harvard University that women may somehow be innately less able in science and maths than men are.
If it discriminated against tea party groups that attempted to register as 501(c)4 social welfare organizations, then that’s a grave offense, and it needs to be investigated thoroughly and dealt with severely.
But the particular bias people are angry about is the opposite of the bias they should be angry about. The problem wasn’t that the IRS was skeptical of tea party groups registering as 501(c)4s. It’s that it hasn’t been skeptical of Organizing for America, Crossroads GPS, Priorities USA and Heritage Action Fund registering as 501(c)4s. The IRS should be treating all these groups equally and appropriately — which would mean much more harshly.
So like Young Ezra, Krugman hears that the White House is offering the chained CPI to "prove" he's willing to compromise. (As if that wasn't obvious already.) I don't pretend to understand Obama's psyche, but I can't help but notice how much he reminds me of my friends who had alcoholic parents: "Please, Mommy, Daddy, please don't fight! I'll be good!"
The question is, to whom are these things being “proved”?
Since the beginning, the Obama administration has seemed eager to gain the approval of the grownups — the sensible people who will reward efforts to be Serious, and eventually turn on those nasty, intransigent Republicans as long as Obama and co. don’t cater too much to the hippies.This is the latest, biggest version of that strategy. Unfortunately, it will almost surely fail. Why? Because there are no grownups — only people who try to sound like grownups, but are actually every bit as childish as anyone else.
After all, if whoever it is that Obama is trying to appeal to here — I guess it’s the Washington Post editorial page and various other self-proclaimed “centrist” pundits — were willing to admit the fundamental asymmetry in our political debate, willing to admit that if DC is broken, it’s because of GOP radicalism, they would have done it long ago. It’s not as if this reality was hard to see.
But the truth is that the “centrists” aren’t sincere. Calls for centrism and bipartisanship aren’t actual demands for specific policies — they’re an act, a posture these people take to make themselves seem noble and superior. And that posture requires blaming both parties equally, no matter what they do or propose. Obama’s budget will garner faint praise at best, quickly followed by denunciations of the president for not supplying the Leadership (TM) to make Republicans compromise — which means that he’s just as much at fault as they are, see?
So let’s nominate Michael Bloomberg, who will offer the exact same policies but, you know, really mean it (and supply Leadership (TM)).
No, seriously (but not Seriously): who do you think could possibly be persuaded by this budget who hasn’t already been persuaded?
Steven Brill has written a must-read article for this week's Time magazine about health care costs and why we really do have to be concerned about them. Following on that, he made an appearance on the round table segment of This Week to discuss those costs and why he's sounding the alarm.
Anyone who has spent even a day in the hospital knows what the problem is. When one over-the-counter pain reliever administered in the hospital costs as much as an entire bottle at the pharmacy, there's a very, very big problem.
Brill correctly points out that Medicare is an efficient program that Congress has managed to hog-tie into some ridiculous costly measures:
And it actually that bears on the conversation we're having, because a chunk of that money is paid by Medicare. Medicare is I point out in the article is very efficient at most things. It buys health care really efficiently, which is a great irony, because it's supposed to be the big government of bureaucracy.
Where Medicare is not efficient is where Congress, because of lobbyists have handcuffed Medicare. Medicare can't negotiate what it pays for any kind of drugs. It can't negotiate what it pays for wheelchairs, diabetes testing equipment. And if Congress took those handcuffs off of Medicare, you could get about half of the spending cuts that we're sitting around here talking about.
Yes, this. Of course, that assumes anyone in Congress is brave enough to stand up to the mighty PhRMA lobby, which seems to have as deep a lock on Washington as the gun lobby. Brill also makes the compelling argument for lowering the Medicare eligibility age, which I have argued over and over again here at C&L. The single biggest cost-saver for Medicare would be to drop the eligibility age, let people buy in until they actually reach retirement age, and then they would drop to the levels under the Social Security law.
By the way, Steve Brill is not by any stretch of the imagination some liberal socialist out to destroy capitalism. The man is a moderate conservative who has done quite well in the land of free enterprise, which made his declaration is a refreshing breath of intellectual honesty about health care in this country.
Brill makes compelling arguments, and I agree with every single one of them. What struck me about this exchange, however, was how George Will hijacked the conversation to talk about all the people in the whole United States who are nothing but a bunch of health care moochers! It's not the costs of health care, people! No, not at all. What we have in this country are a bunch of moochers who don't carry their own weight.
Here's Will, telling us all we mooch:
Here's an argument against that, for a different kind of reform, all the big numbers, billions and trillions, 12 cents is the most important number. 12 cents is the portion of every health care dollar paid by the person receiving the health care. Someone else is paying the rest. It was 47 cents 50 years ago when Jack Kennedy was president.
Here's Young Ezra moderating a panel at yet another one of Pete Peterson's "fiscal summits."
This is what drives me crazy about the media today. Ezra Klein, who made his bones as a liberal blogger, scales the heights of establishment to helm the Washington Post's Wonkblog. Television soon follows and even the hint of having his own show. And with that elevation of visibility, so too, goes Klein's need to represent the liberal point of view, falling backwards into some weird Broderism in his column. He, after all, anointed Ayn Rand devotee Paul Ryan a "serious" budget person.
I don't think Ryan is a charlatan or a flim-flam artist. More to the point, I think he's playing an important role, and one I'm happy to try and help him play: The worlds of liberals and conservatives are increasingly closed loops. Very few politicians from one side are willing to seriously engage with the other side, particularly on substance. Substance is scary. Substance is where you can be made to look bad. And substance has occasionally made Ryan look bad. But the willingness to engage has made him look good. It's given some people the information they need to decide him a charlatan, and others the information they need to decide him a bright spot. It's also given Ryan a much deeper understanding of liberal ideas than most conservative politicians have.
And therein lies the problem. Ryan doesn't have a deep understanding of anything. His entire world view is filtered through a terribly written and economically ridiculous novel by a sociopathic hypocrite. It is incumbent upon journalists to make this truth known -- especially the token liberal columnist for the paper of record in the nation's capitol. By not doing so, Klein validates this false equivalency: that conservative and liberal ideas are of equal value.
Don't look now, but Klein's done it again. This time, his "target" is David Brooks, a columnist who exists solely to be mocked for his omnipresent wrongness, as my colleague Driftglass demonstrates weekly. Ezra makes a point that he disagrees with Brooks, but then simply gives him more column inches to back off on some of more ridiculous points without acknowledging that Brooks simply doesn't know what he's writing about.
EK: On that point, one theme in your column, and in a lot of columns these days, is this idea that the president should, on the one hand, be putting forward centrist policies, and on the other hand, that if he’s putting forward policies that the Republican Party won’t agree to, those policies don’t count, as they’re nothing more than political ploys. But while I agree that some level of political realism should enter into any White House’s calculations, it seems a bit dangerous and strange to say the boundaries of the discussion should be set by the agenda that lost the last election.
DB: In my ideal world, the Obama administration would do something Clintonesque: They’d govern from the center; they’d have a budget policy that looked a lot more like what Robert Rubin would describe, and if the Republicans rejected that, moderates like me would say that’s awful, the White House really did come out with a centrist plan.
EK: But I’ve read Robert Rubin’s tax plan. He wants $1.8 trillion in new revenues. The White House, these days, is down to $1.2 trillion. I’m with Rubin on this one, but given our two political parties, the White House’s offer seems more centrist. And you see this a lot. People say the White House should do something centrist like Simpson-Bowles, even though their plan has less in tax hikes and less in defense cuts. So it often seems like a no-win for them.
DB: My first reaction is I’m not a huge fan of Simpson-Bowles anymore; I used to be. Among others, you persuaded me the tax reform scheme in theirs is not the best. Simpson-Bowles just doesn’t do enough on entitlements. For sensible reasons, they took health care more or less off the table. I don’t know where Rubin is right now. I held him up as an exemplar of Democratic centrism, but if he had a big tax increase and entitlement reform, I’d be for that.
There are times when I think the White House offered Republicans plans they were crazy not to take. I wrote that in 2011. And I hope Republicans look back on that as a gigantic missed opportunity. So I agree with you they shouldn’t be given veto power over the debate, but I still think that if you look at what moderates want the administration to do, they have not gone far enough.
Did you catch all of that? How many times did Brooks claim ignorance of facts, backtrack and hold up what he suspects of centrism absent any data?
This is not a serious person. He deserves no such attention in national debate. His opinions are based on what he feels like writing, not on facts.
And instead of pointing this out, Klein simply validates his existence in the punditry world.
The whole "fiscal cliff negotiation" theme is driving me crazy. Ever since Jonathan Chait and Ezra Klein started acting like there were serious negotiations underway, everyone has gone wild on both sides.
I realize it was only ten days ago, but you know there was a time where we were banging the drum for the White House to hold fast, and you know who was losing that battle? John Boehner, Eric Cantor, and the entire Republican party. We were winning. They were losing. And they knew it.
All of a sudden, Boehner started playing "Let's Make a Deal" and the Villagers went crazy with it. But we don't have to. I don't understand why we're letting them muck this up with all manner of stupidity, which is only bolstering Republicans' images at the expense of Democrats.
All anyone has to do is start with what we know: Republicans do not negotiate in good faith ever, and they only negotiate at all when they are pressed to the wall. Therefore, we can all assume this is a lot of smoke with lots of mirrors and absolutely no sincerity.
I am of the belief that absolute clarity is needed in order to get this done in an orderly fashion. That means no muddling up the issues. It is absolutely driving me crazy to see the narrative driven by media that Medicare, Social Security, tax reform and the debt ceiling MUST be wrapped up in a tiny little neat package by December 31st.
No. Nothing need be wrapped up by December 31st. Absolutely nothing. I've heard arguments for why they should be, and so I'll take them one by one:
Unemployment extensions expire 12/29: These are urgent. I am not minimizing that. But they are separate from any discussion about tax reform, tax rates, and tax cuts. There is no relationship between them and they should be addressed separately from the other issues. If the extensions are renewed in the first weeks of January, it will not do harm to recipients, and can retroactively be corrected.
But the debt ceiling. ZOMG, the debt ceiling: President Obama needs to have us clamoring and echoing him on this: the debt ceiling is UNRELATED to the tax revenue question now and forevermore, and we should be prepared to have Republicans shut down government over it. Let them take the hit for their folly. Never before 2011 was the debt ceiling a serious hostage, and it shouldn't be one now.
More stimulus! - The stimulus package the President is suggesting won't even cover Hurricane Sandy relief, which the sick GOP cheapos in Congress have already delayed and dithered about for weeks now. Seriously. President Obama is asking for $56 billion in stimulus. Sandy relief is expected to cost around $60 billion. It's just math.
Better a Democrat shore up Medicare, Medicaid and Social Security, right? Sure. But certainly not in the name of deficit reduction or tax reform. Again, these are issues that are being intentionally smashed together to muddy up what is a simple, straightforward process.
The payroll tax expires! Uh oh. Good. It should expire. It was always dangerous territory. If they want to extend it, they can extend it in the form of a refundable tax credit for 2013, which doesn't cause money from the General Fund to be transferred to the Social Security trust fund. Withholding can be adjusted to account for the credit, and the economy will be saved from ruin.
The only time Republicans care about the deficit is when they are not in the White House. This is a game, an act, an obscene dance of political gamesmanship, but it is NOT a negotiation.
What we should be doing:
Ignore the Villagers' hand-wringing
Stop accepting what they say as truth.
Stop reacting to everything.
Start saying out loud that the only thing that should happen before January 1st is an up or down vote in the House on the Senate extension of middle class tax cuts.
Stomp your feet, call your Congressman, shout it out: ONLY an up or down vote on the middle class tax cuts is warranted, and that means one vote on the Senate bill, not some stupidly crafted package of nonsensical, arcane, ridiculously meaningless "cuts".
Ten days ago we were winning this by not budging at all. Yes, President Obama, that means YOU too. Now suddenly we're engaging in the farce Republicans call "negotiations?" Give me a break. This has been an exercise in how to turn media narratives around for the Republicans' benefit, but it is nothing like a negotiation.
If we really want to win, we simply stop acknowledging all of the stupid GOP party trial balloons floating around us and start pushing for one vote. One vote before December 31st. Just one. No amendments, no extras. One vote on the Senate bill to extend the middle class tax cuts.
Then make them sit at OUR table next year, when the upper rates are set and not going back down. That's how it's done. Our way, not theirs.
Ezra Klein, who's been a reliable White House conduit, says the White House is going to make a deal with the Republicans that will accept a relatively small increase in taxes on millionaires -- in exchange for the chained CPI that will cut benefits for the vulnerable elderly. By the way, not only will the chained CPI cut benefits for the elderly (disproportionately affecting women), it will also affect benefit payments for disabled veterans.
In addition to being an actual cut, it's a cut that hides its face behind the skirts of technical jargon. After voters were told that Social Security cuts are "off the table," we learn that they're simply going to be hidden under a different shell in this game. (Remember when I told you to pay attention to Obama using the word "slash"?) This is more than discouraging; it's undemocratic. Voters were clear and unambiguous: they supported Obama to prevent Medicare and Social Security cuts, and the president accepted their support by assuring them it wouldn't happen. But he used enough weasel words that some of us figured what was coming.
Hi, my name is [NAME] and I'm a constituent living in [CITY].
I would like the senator to commit to opposing any cuts to Social Security, Medicare or Medicaid benefits.
This includes committing to oppose any plan which raises the retirement age or Medicare eligibility age, or changes the cost-of-living adjustment to reduce benefits over time -- all of which are benefit cuts.
Can I count on the senator to vote against any bill that includes any cuts to Medicare, Medicaid or Social Security benefits?
Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.
On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.
The deal will most likely attempt to modify the effect of the chained CPI with a bump in benefits, as recommended by the Simpson-Bowles chairmen's report. For the typical single elderly woman, the cut from the chained CPI would reduce her monthly benefits by an amount equal to the cost of one week’s worth of food each month at age 80. She would still have two years to wait before receiving any help from the bump-up.The Bowles-Simpson bump-up would restore her monthly benefits to current levels for only two years – and then benefits would fall behind again.
Unlike what we’d heard from Republicans before, this contains stuff that Obama can’t get just by letting us go over the cliff: more revenue than he could get just from tax-cut expiration, unemployment and infrastructure too. But it has a cost, those benefit cuts.
Those cuts are a very bad thing, although there will supposedly be some protection for low-income seniors. But the cuts are not nearly as bad as raising the Medicare age, for two reasons: the structure of the program remains intact, and unlike the Medicare age thing, they wouldn’t be totally devastating for hundreds of thousands of people, just somewhat painful for a much larger group. Oh, and raising the Medicare age would kill people; this benefit cut, not so much.
The point is that we shouldn’t be doing benefit cuts at all; but if benefit cuts are the price of a deal that is better than no deal, much better that they involve the CPI adjustment than the retirement age.
But is this rumored deal better than no deal? I’m on the edge. It’s not clear that going over the cliff would yield something better; on the other hand, those benefit cuts are really bad, and you hate to see a Democratic president lending his name to something like that. There is a case for refusing to make this deal, and hoping for a popular backlash against the GOP that transforms the whole debate; but there’s also an argument that this might not work.
I want to see more — and also want to see whether the Republican crazies scuttle the whole thing before it even gets off the ground. If they don’t, there will be some serious agonizing for progressives, yours truly included.
Here is a sentence you won’t hear politicians or policy wonks saying in the next few weeks: “We should pay Social Security beneficiaries less in the future and push a lot of people into higher tax brackets.” Here is a sentence you almost certainly will hear: “Let’s adopt chained CPI.”
Since Ezra Klein is the person the White House taps when they want to get out a message, this could be encouraging news. We're all sick of watching Obama give away the store, so this is new. The problem is, Ezra also says Obama is playing rope-a-dope to make the Republicans propose the very cuts he's already willing to give them -- and they may be the cuts that shred our safety net:
Republican aides are circulating their summary of the White House’s opening bid on the fiscal cliff. They’re circulating it because they believe it fleshes out Speaker John Boehner’s complaint that “the White House has to get serious.” Above all, they’re circulating it because the president isn’t offering them anything in his opening bid.
Suzy posted the full summary here. It calls for $1.6 trillion in taxes and only $400 billion in new entitlement spending cuts (though note that it assumes the roughly trillion dollars in discretionary spending cuts passed in the Budget Control Act and the trillion dollars in savings from ending the wars, such that the total spending cuts, at least in the White House’s view, are nearer to $2.4 trillion). It also includes about $200 billion in stimulus, including the extension or replacement of the payroll tax cut, and a proposal to encourage homeowners to refinance. Oh, and it lifts the debt ceiling.
“How did it take them three weeks (and two days) to offer nothing but President Obama’s budget?” A GOP leadership aide asked me rhetorically.
We’re seeing two things here. One is that the negotiations aren’t going well. When one side begins leaking the other side’s proposals, that’s typically a bad sign. The other is that Republicans are frustrated at the new Obama they’re facing: The Obama who refuses to negotiate with himself.
That’s what you’re really seeing in this “proposal.” Previously, Obama’s pattern had been to offer plans that roughly tracked where he thought the compromise should end up. The White House’s belief was that by being solicitous in their policy proposals, they would win goodwill on the other side, and even if they didn’t, the media would side with them, realizing they’d sought compromise and been rebuffed. They don’t believe that anymore.
Perhaps the key lesson the White House took from the last couple of years is this: Don’t negotiate with yourself. If Republicans want to cut Medicare, let them propose the cuts. If they want to raise revenue through tax reform, let them identify the deductions. If they want deeper cuts in discretionary spending, let them settle on a number. And, above all, if they don’t like the White House’s preferred policies, let them propose their own. That way, if the White House eventually does give in and agree to some of their demands, Republicans will feel like they got one over on the president. A compromise isn’t measured by what you offer, it’s measured by what the other side feels they made you concede.
Alice Rivlin has been one of the chief cheerleaders for the Grand Bargain.
David Dayen says there will be no Grand Bargain in the lame duck, and that's why Obama says he'll veto anything in the lame duck that doesn't allow the high-end tax cuts to expire. Ezra Klein says the plan is to put the screws to the Republicans (and not incidentally, to seal the Grand Bargain with Social Security and Medicare). Well, at least it gives us some time to organize. But the odds are stacked against us, and we're going to have to raise holy hell:
Basically, the Obama Administration (and this is all contingent on them winning the election) has decided to take the advice of a lot of folks on the left and use the leverage inherent in the way the fiscal slope operates. With no plan, all the Bush tax cuts expire, including the tax rates on the wealthy. This turns around completely the dynamic of the negotiation. Instead of trying to decouple the top marginal tax rates with the other ones, Democrats could offer a pure tax cut package to compensate for whatever they feel should have been extended. And Republicans will be in the position of rejecting a tax cut for a broad mass of the American people.
But that’s not all the White House wants to do. The sequester will also begin if there’s no agreement, with the cuts split between defense and discretionary programs, but programs for the poor like Medicaid, as well as Social Security and the bulk of Medicare (there’s a 2% across-the-board cut to reimbursement rates), held harmless. The payroll tax cut will expire (and save your breath, AARP, that ship has sailed). Extended unemployment insurance benefits will expire. The alternative minimum tax for the 2012 tax year will not be patched. Tax extenders for a variety of businesses will not be extended.The Obama Administration looks at that prospect and sees a leverage opportunity.
I’ve called this the GOP’s dual-trigger nightmare. It’s bad for the economy, but it also effectively ends our deficits with a mix of tax increases and spending cuts more progressive than anything any Democrat has dared propose. Republicans absolutely can’t let it happen. But the only way they can stop it from happening is to make a deal.
The administration hopes this deal will include more than just deficit reduction. They also see it as a vehicle for infrastructure investment and tax reform. They think there’s some chance that parts of the American Jobs Act, like the hiring tax credits, could sneak through the door, too. There’s even talk of using it to address climate change, though everyone agrees that’s unlikely. Whatever ends up in the final deal, there’s little doubt that it will be a big deal, and it’s likely to come together fairly quickly in the first year. The White House — and the expiring tax and spending provisions — won’t give Republicans any other choice.
In a way, the Obama administration’s plan for a second term is much like their plan for the first term: Make a deal with Republicans. Get a big bipartisan solution to our problems. But the means are almost precisely the opposite. Where in the first term, the hope was that they could reach out, talk through the issues, and come to an agreement, the plan for the second is to push the Republican Party off the fiscal cliff, and then force them to reach out in order to get pulled back up.
I think it’s wrong to distrust the source here. This is the plan. The sweeteners to the grand bargain will be some infrastructure investment and maybe job creation tax credits.But what this is really called is a budget. In other words, the Obama Administration will do nothing in the lame duck, nor will their allies in Congress, and then, they will propose a large mix of spending, tax and social insurance changes – i.e., a budget. The budget will attempt to make trade-offs that supplant the tax rates and spending cuts from the fiscal slope.
The question becomes why, if this is such an advantageous position for Democrats to find themselves in, is it necessary to loop in programs like Medicare, which was substantially altered by the Affordable Care Act in ways that we don’t know will work yet, and Social Security, which has nothing to do with the budget? The answer: because. The elites want a deal on these issues, and the Administration thinks they’ve figured out a way to secure that deal.
In Massachusetts, the 2006 health care reform Governor Mitt Romney signed into law lowered the uninsured rate from 10 percent to a national low of two percent. Even with its individual mandate, "Romneycare" is extremely popular, enjoying a 3 to 1 margin of support from Bay State residents. Now, a new study by Charles J. Courtemanche and Daniela Zapata published by the National Bureau of Economic Research (NBR) shows that universal coverage in Massachusetts is indeed making people there healthier. As Ezra Klein of the Washington Post summed up their findings:
The answer, which relies on self-reported health data, suggests they did. The authors document improvements in "physical health, mental health, functional limitations, joint disorders, body mass index, and moderate physical activity." The gains were greatest for "women, minorities, near-elderly adults, and those with incomes low enough to qualify for the law's subsidies."
Importantly, the researchers concluded that "the general strategies for obtaining nearly universal coverage in both the Massachusetts and federal laws involved the same three-pronged approach of non-group insurance market reforms, subsidies, and mandates, suggesting that the health effects should be broadly similar." (Or MIT professor and architect of both laws Jonathan Gruber put it bluntly last year, "they're the same f--king bill.") It's no wonder Mitt Romney used to recommend his Massachusetts reform as a model for the nation.
If the individual mandate is one of the highest profile (if contentious) aspects of the 2010 Patient Protection and Affordable Care Act, the expansion of Medicaid is among the most important in enabling 30 million currently uninsured Americans to get coverage. By extending Medicaid coverage to families earning up to 133 percent of the federal poverty level (FPL) and providing subsidies to those up to four times the FPL, starting in 2014 the Affordable Care Act passed by Democrats in Congress will bring insurance to millions more Americans. A March 2011 analysis by the Commonwealth Fund revealed that when fully implemented, the ACA will bring relief to "nearly all of the 52 million working-age adults who were without health insurance for a time in 2010."
As it turns out, America's future is Oregon's present.