Reality Check!!

In the wake of the re-election of Barack Hussein Obama there is elation in liberal and Democratic circles and soul searching in the Republican folds.

The focus is on the fact that “Democrats have won the popular vote in four out of the last five Presidential elections — including the 2000 race in which Al Gore got 500,000 more votes than George W. Bush nationally, but wound up losing the electoral vote by two votes, courtesy of the Supreme Court.” See here. Of course, at the same time it overlooks that Obama, is the only Democratic President since F.D.R. to be granted a second term by a popular majority. See here.

But the first part sounds good! Makes for good headlines! Even has Republicans eating crow. Thus Governor Bobby Jindal in the most dramatic words of any Republican spokesperson said:  

We’ve got to stop being the stupid party… It’s time for a new Republican Party that talks like adults. It’s time for us to articulate our plans and our visions for America in real terms… We are not the party of big business, big banks, big Wall Street bailouts, big corporate loopholes or big anything…We must not be the party that simply protects the well off so that they can keep their toys.

So is it a whole new ball game. Have Republicans seen the light? Or in the immortal words of Yogi Berra, is it  “deja vu all over again".

It is a mere six years since I posted an article on my blog entitled "Euphoria and Reality" in which I pointed out that despite the big win in mid-term elections, the ability to govern was far from our grasp. After 2008 euphoria was even greater, but it was still a very big slog to get real reform enacted. To get the stimulus enacted, three Republican votes had to be found to overcome a filibuster, and the three votes were bought by diluting the crucial funding of state governments, leading to enormous job losses in the state’s public sectors, and a drag on job creation in the private sector.

But now in the elation of 2012 we seem to have forgotten what happened a mere two years ago. That was a real drubbing. As a result in 25 of the 50 states Republicans have complete control of all three branches of government, and 30 of the 50 states have Republican governors.  This came at a very propitious time for them since it followed the 2010 census, allowing them to redraw Congressional and even state legislative lines so as to assure them of a majority in State legislatures and in the House of Representatives into the indefinite future. See here. As of this year Democrats will hold complete sway in only 13 states. See here.

But what of the new Republican awakening as outlined by Jindal? Just recently he introduced into his state legislature a plan to “eliminate Louisiana's income and corporate taxes and pay for those cuts with increased sales taxes…” which according “to the Institute onTaxation and Economic Policy, would end up cutting taxes for the wealthiest Louisianans while raising taxes on the bottom 80 percent of Louisianans. So much for “We must not be the party that simply protects the well off so that they can keep their toys.” The talk has changed! The reality has not!

And is Jindal this new Republican moderate on other issues? According to Raw Story he favors "allowing creationism to be taught in biology classes, opposes abortion in all cases, votes against expanding federal funding for stem cell research and supports a constitutional ban on marriage equality."

So what does he mean when he says we have to stop being “the stupid party"? He means that they have to be better at obfuscation.

The fact is that the shift in state taxes from income to sales taxes, increases the burden on lower incomes, and decreases the burden on upper incomes, and it is happening in Republican controlled states, through out. For example Republicans in North Carolina are pushing such a plan. Kansas, which cut its income tax significantly last year, may trim further. Oklahoma, which tried to cut income taxes last year, is expected to try again. See here.

But far more ominous are Republican attempts to fix not only congressional elections by gerrymandering, but fixing the electoral votes by changing the rules.

They tried to suppress the vote in the last election. It didn’t work, or at least it didn’t work well enough. As the Washington Post wrote, now Republicans:

...who have control of states that went for President Obama in the 2012 election are pushing for their states to change how they award electoral votes. While almost every state awards electoral votes on a winner-take-all basis, Republicans want these states to instead award one vote to the winner of each congressional district. 

The other two electoral votes that each state has likely would be given to the statewide winner, as they are in the two states that currently employ this method: Maine and Nebraska. 

The new system would allow Republicans to consistently win electoral votes (and quite possibly a majority of electoral votes) from states like Michigan, Ohio, Wisconsin, Pennsylvania and Virginia, regardless of whether they win the statewide vote. 

All five of these states went for Obama in 2012. Michigan, Wisconsin, and Pennsylvania have consistently gone blue at the presidential level, and Virginia is tilting in that direction, which would make winning any electoral votes in these states a victory for the GOP. 

Why does it matter? 

It matters because the congressional district method gives the GOP a much better chance of winning, since a strong majority of U.S. congressional districts lean Republican. 

In fact, if every state awarded its electoral votes by congressional district, it’s likely that Mitt Romney would have won the 2012 presidential election despite losing the popular vote by nearly four percentage points. See here.

They are talking about a new party. They are talking about being more inclusive. About courting the Hispanic vote by supporting legalization of the 11 million illegal aliens in the US. Watch what they do, not what they say. It is already no legalization until the borders are secure, and of course we have been trying to make the borders secure for decades. They will never be secure enough to suit these pretend converts. They are owned lock stock and barrel by a majority of Caucasians, mostly rural, who founded this country on slavery and will never, never, accept the idea that they may no longer be the majority. They will do whatever it takes to keep the vote in their hands. Charles Krauthammer writing in the Washington Post speaks for them. “There is an obvious solution: enforcement first.” Even if somehow Republicans in the Congress agree to legalization, i.e. Green Cards, the will never agree to citizenship. Would they really allow 11 million more non-whites to vote, particularly if they are more then likely going to vote Democratic? I think not! Or as the Christian Science Monitor explains: 

In addition to sinking $1 billion into the failed "virtual fence," the US government has spent $2.6 billion for 650 miles of solid border. This wall doesn’t deter people – but it does defy the laws that protect the land.

As for the idea that the illegal aliens have to go to the end of the line before being considered for legalization that is the biggest hoax of them all. As was pointed out in a recent article in the New York Times:

If we really want to tackle unauthorized migration, we need to understand why it exists in the first place. The most important cause is our system of allocating green cards, or visas for permanent residency, which stipulates that no country may have more than 7 percent of the total each year. With an annual ceiling of 366,000 family- and employer-sponsored visas, the per-country limit is 25,620. 

“In practice, this means it is easy to immigrate here from, say, Belgium or New Zealand, but there are long waits — sometimes decades — for applicants from China, India, Mexico and the Philippines. These four max out on the limit every year. When critics admonish prospective immigrants — as well as the 11 million plus undocumented migrants currently in America — to “go to the back of the line,” they should realize that for many people the line is a cruel joke.

Republicans may go along with allowing illegal immigrants, who in the words of Senator McCain are, “… individuals to mow our lawn, serve our food, clean our homes and even watch our children, while not affording them any of the benefits that make our country so great, … I think everyone agrees that it’s not beneficial to our country to have these people hidden in the shadows.”

Republicans may allow them to come out of the shadows, but I predict that giving them citizenship and the right to vote is something that they will fight to the bitter end.

For a history of attempts at immigration reform, see here.

Marco Rubio, a descendent of Cubans, who won his Florida Senate seat, by less than 50% of the vote because his opposition was split, has been touted as the great immigration reformer. Is he? See here.

The cry of  “no amnesty” may no longer be the rallying cry, but citizenship and the right to vote is another matter all together. Of course that “no amnesty" cry was always phony, for we have statutes of limitations for every crime except murder. Why would we not have a statute of limitations for aliens having come here illegally decades ago?

But people who have made lives for themselves in this country, who have been here for decades, who have families here, are entitled to not only come out of the shadows, but to have full participation in our Democracy. Nothing else can or should be accepted.

Comments, questions, or corrections, are welcome and will be responded to and distributed with attribution, unless the writer requests that he/she not be identified.

The Inscrutable Center Keeps Moving Rightward (Continued)

In my last post "The Inscrutable Center Keeps Moving Rightward" I concluded with: “Next time I will focus on the so-called Ryan budget, which isn’t really a budget, and discuss how the so called Middle, in the face of this Rightward drift, or is it a Rightward dash, makes excuses and drifts further and further right in an effort to stay in the new Middle."

So first the Ryan budget: Most of the publicity has been given to what the Ryan outline for a budget (his plan) would do to Medicare, but the media has given the impression that it would leave Social Security alone, save for raising the retirement age. That would be nice, but it isn’t so. First Ryan and many of his allies want us to believe that there is no trust fund, that all the money we have paid and are paying in Social Security payroll taxes have already been stolen; that they are no more than an additional tax for the general treasury. That just because the money has been invested in Treasury IOUs backed by the full faith and credit of the US, that it is not a debt that has to be honored. See Charles Krauthammer’s delusional rationality for this here and all the other Right Wing blogs that you can find by Googling “Social Security lockbox.”

But the lockbox exists (it is usually referred to as the trust fund) and will continue to exist, unless and until Ryan, (and Romney who has endorsed the Ryan plan) and their friends manage to get legislation through Congress that would indeed steal it. The only non-partisan source for this information is the Social Security Administration, who on their website explain the trust fund, how it is invested and how long it will last. In a PDF document which you can find here (highlighted at page three) the Social Securities Administration sets forth that the trust fund will be adequate for full payments till 2027, but the Disability insurance fund would have to reduce payments as early as four years from now. (Social Security by the way is not just for seniors.)

I have been urging some adjustments now because 2027 is not that far away, and the sooner we act the smaller the adjustments that would have to be made, and we need to assure the young that the Social Security taxes they are paying will not be stolen from them in a system that will not exist when they come of age.

However, according to the Ryan/Romney plan there is no trust fund, meaning they plan to divert it toward wiping out the deficit, rather than reducing the deficit with other cuts, (there are many that are in fact desirable) or (God forbid) taxes on the well off. According to the Huffington Post, Ryan/Romney creates an unprecedented new fast-track procedure to ram through Social Security benefit cuts. To quote from the Post’s article:

                       

Under Ryan's plan, any year Social Security is not in 75-year balance, the president and Congress would have to legislate changes that bring it to solvency through an "expedited process."            

In effect, Ryan would free up Social Security for fast-track cuts by turning it into a regular line budget item. Since Social Security is not part of the general budget, has its own revenue stream, and is forbidden by law from borrowing, it has always been dealt with separately from the rest of the budget. In fact, Ryan had to create a new fast-track process to trigger cuts for Social Security alone, because by law, it is excluded from fast-track reconciliation procedures for the general budget.  

Further, projections of Social Security's solvency change every year, which means that Ryan's plan could force big changes to Social Security based on very short-term variations in the program's finances.

The Ryan “budget”, as endorsed by Romney, then takes the Bowles-Simpson Plan, (there really is no such plan, since the necessary votes for a plan to be put forth were not forthcoming) - and which has not been given support by any member of Congress, and cherry-picks it. He proposes to enact the cuts in the plan, without enacting the revenue enhancements, and he goes far beyond the Bowels-Simpson plans proposals. In fact, by the time he is through Bowels-Simpson is no longer recognizable.

The proposals of the Bowels-Simpson plan have never been fully vetted, but the Ryan plan simply cherry picks them, and proposes benefit cuts over and above the savings that would result from raising the retirement age to 69, which I support as necessary. Incredibly, according to the Huffington Post it cuts benefits for 60% of "Very Low" earners, those with average annual earnings of $10,771 (for graph illustrations see here), reduces benefits for all by changing the cost of living formula, which would take a bigger and bigger bite out of the small benefit now given by Social Security each year, even as fewer and fewer retirees have the benefit of an employers pension, and erodes the link between earnings and benefits.

As for the Ryan/Romney plan on Medicare, which has gotten far more publicity, it would simple do away with the program and substitute for it a voucher system that would do no more than provide a small subsidy toward buying private insurance.

To put it simply and bluntly, the proposals in the Ryan plan are as far Right as could be imagined on the benefit side, and on the revenue side propose a drastic cut in tax rates, which is set forth in detail, and which are supposed to be made up by reductions in unspecified tax expenditures. Why unspecified? I suggest because they are like the bird in the bush. They are not serious, yet the media and the pundits evaluate this proposed “budget” as though the unspecified cuts in tax expenditures were real.

So one would think that the so-called Middle would denounce this document as a fraud and as a Trojan horse for the most Right Wing destruction of our safety net and our most basic regulatory system for the safety of our air, water, pharmaceuticals, etc. But what have they been saying?

Well, let us look at James B. Stewart writing in the New York Times with the title “…Ryan Plan, It’s a Place to Start.” Can anybody who fully and fairly analyses the Ryan/Romney plan truly argue that it is a place to start. Has Mr. Stewart bothered to read the proposals rather than its propagandistic claims? 

In endorsing it he quotes this claim:

The plan stands on two pillars: tax reform and reducing the long-term deficit by reining in entitlement spending… it contends that “the social safety net is failing society’s most vulnerable citizens” and is “poised to unravel in the event of a spending-driven debt crisis”. The tax code, it goes on, “has become a broken maze of complexity and political favoritism; it is overgrown with special-interest loopholes and characterized by high rates, both of which stifle economic growth and job creation.”

And then goes on to say:

“Does anyone, Democrat or Republican, seriously disagree?

Well, No! But what has that to do with the actual proposals in the Ryan plan as outlined above. Mr. Stewart goes on to say that Ryan is a nice guy and if the plan is bad, it is because he has no choice given the stand of his colleagues. So because Ryan is a nice guy, (whatever that means) we should embrace an outrageous plan on the assumption that he doesn’t really mean it. Duh!

Mr. Stewart goes on to say: “The question is what would happen to the big break that the wealthy now get — the lower rate on capital gains.” Yes, that is indeed the question! What is there that makes this “plan” (more accurate than “budget”) appealing, if so basic a question is not answered. All Mr. Stewart can offer is that the Club for Growth has criticized it –so it must have merit.

Fortunately an article that appeared on the website of the Center for Policy Research exposes the Stewart article for what it is. In a short article it demolishes the Stewart contentions and concludes rightly:

We have people who want to be part of the inside Washington conversation who praise the budget's courage and integrity. Then we have people who believe in arithmetic who call it what it is: a piece of trash. By the way, Paul Ryan is a very nice guy.

Comments, questions, or corrections, are welcome and will be responded to and distributed with attribution, unless the writer requests that he/she not be identified.

Discussions With My Readership

I posted my last commentary on December 12, 2011. For those who may want to re-read it, it can be found under the title "The Deficit Reduction Committee I and II (Discussion)."

In that post Robert Malchman, Esq. of Brooklyn, NY reacted to a rebuttal that I had made to a column written by Charles Krauthammer with: "using your skills on someone like Klownhammer is like using a flamethrower on a strawman." In response thereto, I offered to consider a column by Ross Douthat entitled "An Argument Against Redistribution," which has more meat to it for rebuttal. However, I concluded with an invitation for additional comments, and many came. Therefore, before I venture on new ground, let me share with you the comments, some of which covered new grounds, and the exchanges to which they led.


Former Judge Edwin S. Bernstein Esq. of Boynton Beach Florida spoke to me on the telephone and said some things that disturbed me, prompting me to write the following rebuttal:

Apropos our telephone conversation, you aroused my curiosity about where my parents were born, causing me to use Google to see what I could find. I told you my mother was born in Zalishchyky, which could possibly be called a shtetl. According to its web site: it has a population of 13.000 people. The 1772 census listed 159 Jewish families in Zalishchyky. The Germans sent 200 Jews to the Kamionka (Kamyanka) labor camp; about 40 others were sent to a nearby army camp and forced to dig mass graves. Soon the other 800 were brought there and gunned down. 

           

However, my mother had left there with my grandmother when my mother was quite young and settled in Vienna, Austria. My mother was born in the late 19th century. During 1772 - 1918 Zalishchyky belonged to the Austrian empire (later Austrian-Hungarian empire when the double monarchy was introduced in Austria). This is important to me, because my mother always claimed that since at the time of her birth the city was part of Austria, she was born in Austria. But the US authorities classified her as Polish because at the time of desired immigration to the US (1938-1939) it was part of Poland. 

           

This was crucial and almost cost her life because the Austrian immigration quota was a favorable one, and if she had been classified Austrian she could have come to the US with her children in 1938, instead of having to wait until 1939 for her Visa, which she obtained while a refugee in Italy.

A similar story applies to my father, who was born in Lemberg, which was also part of Austria when he was born, but which was part of Poland in 1938. Its population in 1869 was 87,109 of whom 26,694 were Jews; in 1890 it was 127,943, including 36,130 Jews; in 1900 there were 44,801 Jews in a total population of 159,618, probably too large to be called a shtetl. 

           

Same immigration classification by the US. Had my mother not had a Visa forged, he would have died in the Buchenwald concentration camp.

           

With all our claims (US) of being hospitable to immigration, such quotas and exclusion acts make it a motley tale.

           

On our political discussion, I am very disappointed that you do not seem to be reading my blog postings. They would frequently prevent you from adopting "facts" that are wrong. I write them not to express opinions, which in most cases my readers share, or at least have similar opinions to mine, but to make sure my readers are familiar with relevant facts, toward which end I spend many hours doing research. 

           

For example I was bothered by some of the comments you made, e.g. that we ought to cut foreign aid, which arises from a neo-isolationism that has gained popularity both on the Left and Right. Please take the time to click on the following.

           

As you will readily see we are not a generous nation. Less than one per cent of our federal budget goes to foreign aid. US aid, as a percent of personal income, is second to last among wealthy nations. We give about 25 cents per American per year in foreign aid. Our total aid in dollar amount is $47.7 billion of which economic assistance is $33.9 billion, and that includes helping African babies avoid the scourge of Aids, Malaria, etc and helping hurricane, earthquake and tsunami victims. Would you argue we should not extend such help? Military assistance comes to $13.7 billion. Of that almost $4 billion goes to Israel and another $1.5 billion goes to Egypt to persuade it to keep the peace with Israel. See here.

           

As for interest on our debt, our treasury notes pay an astounding less that 1% on 30 year notes (see here) and less than 3% on average. See here.

           

As a result the present debt is not a significant problem, but projections into the future are troublesome. At the moment Republicans are using it as a wedge to try to destroy our safety net and regulatory structure. Every one of their budgets and proposals actually would increase the debt, not decrease it. (This is documented at length on my blog postings.)

           

Republicans keep arguing that the government should act more like a business, but not a single business functions without incurring debt, (which is why our banking system is so crucial and why it they had to be rescued) nor do individuals. Very few could buy a house without incurring debt, and most need to incur debt to buy large items such as a car. Borrowing, so as to do that which brings a bigger return than the interest on the debt, such as infrastructure, makes sense, always has, and always will.

           

On the other hand, Social Security, Medicare and Medicaid are not sustainable without some changes. Republican changes would amount to ending them, but Dems must make changes that will not necessarily be popular, but without changes these programs will not survive. I have written on this subject on my blog in the past, and will, in due course, discuss it in greater detail.

Some time later Bernstein commented on my post entitled "The Deficit Reduction Committee I and II (Discussion)" writing:

As always, I enjoy reading your blog and its comments. As I have said all too many times, our basic problem is the influence that money has on elected officials. This is especially true in Defense spending, where a grateful representative urges retaining unnecessary defense hardware to please his contributors - and his friends in Congress reciprocate. The cure is a Constitutional Amendment limiting contributions to elected officials. It is highly unlikely that this will occur. In its absence, perhaps the answer is something I have opposed in the past – term limits. 

To which I responded:

I hadn't planned to address the issue of money in politics in the near future, but since you raise it, and since it is one of the most corrosive influences in our government, I will address it soon, maybe in my next post.

                       

At this point let me just say that the problem is not just the "the influence that money has on elected officials." It has a much broader sweep than that. It infects our military procurement officers; it infects our regulatory agencies; it infects the staff of our officials; it effects our judges right up to the Supreme Court. You are Right that the cure is a constitutional amendment limiting contributions to elected officials, or at least giving Congress the power to do so. We need a Constitutional amendment stating that corporations are not persons, as persons are referred to in the Constitution, and that nothing in the Constitution shall limit Congress' power to regulate Corporations.

                       

We need an amendment that says money is not speech, and nothing in the Constitution shall limit Congress power to limit or regulate the collection, receipt, or expenditure of money in the political process, except the equal protection clause.

                       

Obama meant well when he decreed that lobbyists shall not serve in his Administration, but it should be the other way around. We need laws that forbid anyone who has served in the government from ever thereafter accepting employment from any individual or corporation who was effected by any act during such person's tenure in government, or from accepting any gratuity or fee from such person or persons for the remainder of their life.

                       

The delayed bribe for government services rendered is a greater problem that the money spent during campaigns.

                       

As for term limits, they accomplish nothing, and in fact are counter productive. The elimination of good people from government service by term limits is a great loss. It takes time to learn the job and term limits remove experienced people just when they become most effective, without any reason to believe that their successors will be an improvement. Stability is a valuable trait. I would, in fact, like to remove term limits from the Presidency.

                       

You are right it is all but impossible to accomplish these things, but they are so important that I think an effort in this direction is warranted. It may take years, or decades but it is so important, that the debate needs to begin. 

                       

How long did it take to gain women's suffrage? How long to emancipate African-Americans, and they are still not truly emancipated. 

If I address this as a full commentary, I will go into the many ways money corrupts, many of which are far from obvious.

                       

But it isn't only money; it is the gerrymander. We need federal rules that set the criteria for creating districts. Each with an equal population (within say 2%) contiguous, without dividing subdivisions such as towns or counties and providing that minorities be represented within (say 5%) of the population, and that the lines be drawn by computer based on these criterion.

                       

Of course, the filibuster must be abolished. It is ridiculous for us to be told that the vote was, e.g. 59 in favor - 39 opposed - the bill is defeated. Why do we have gridlock? It is the most important reason though there are others. The rule about not attaching non-Germaine items to a bill needs to be enforced.

Comments are welcome and will be distributed with attribution unless the writer requests that he/she not be identified.

The Deficit Reduction Committee I and II (Discussion)

I posted and distributed my commentary "The Deficit Reduction Committee" on November 28, 2011 and "The Deficit Reduction Committee II" on December 4, 2011. I received comments on both and would like to take this opportunity to share them with you. On the first of the two posts:

Ernest Hauser of the Bronx, NY responded to the following observation, which I made:

So we have ended up with $1.2 trillion cuts going into effect beginning in 2013. $600 billion of that will be in defense spending which is in addition to a cut of $450 billion previously agreed to. Not the worst of all possible outcomes, and in 2013 the Bush tax cuts will expire. No Congressional action is needed. Beginning in 2013 the deficit will be reduced over the following ten years by 6.1 trillion. The hammer of using the deficit to justify attacks on needed spending will be gone. Not bad negotiating by our President.

with:

I don't think for one minute that the Republicans having bet and lost will let things go; they are already planning to cut the defense dept budget out of the deal. The generals are planning to cut the medical benefits for dependents and retirees rather then losing one planned multi-billion $ carrier or another new plane.

To which I replied:

They can plan all they want, but executing is another matter.

As far taking defense cuts out of the deal, the President has already said he will veto it if they get through both Houses of Congress, with a 60 vote threshold in the Senate. As for the generals they don't run the defense establishment. The President as Commander in Chief does.

As for medical benefits for military retirees, see the observations of Albert Nekimken below.

Republicans have boxed themselves into a corner and have been outwitted by Obama.

Albert Nekimken of Vienna, Virginia added this observation:

Bravo on a well-written and well-conceived comment. 

 I would add the reminder that Robert Gates also told congress before he departed that the uncontrolled growth of health care (and pension?) costs for the military was unsustainable and must be reformed. (Which without having seen Hauser’s comment appears to be a rejoinder to it)

On the point of what the correct size and scope of the U.S. military establishment ought to be there is clearly a large gap between the views of Republicans and Democrats. The Republicans believe fervently that the U.S. (apparently due to its Christian, moral superiority and exceptional mission in the world) must retain the ability to dominate the world everywhere by force of arms, while Democrats believe that the U.S. is, and should be, only one of many major players in world events. Further, Democrats see attempts by Americans to assure military domination as counter-productive. By coincidence, the primary beneficiaries of the Republican view are defense contractors

And, as we know, one of the largest contributors to the general federal deficit is Medicare and Medicaid. All evidence accumulated to date corroborates that the problem is a lack of control on the "spending" side of the system and the primary causes are an open checkbook to vendors of medical supplies and services, excluding doctors who have already been squeezed hard by prior reforms. To my mind, this forces us to reconsider either a single-payer federal health care system for all citizens, civilian, military and members of congress, or a system of private health insurance that is highly regulated by the federal government as are utilities with limits on profit margin and controls on prices as well as coverage. As an aside, the "individual mandate" idea was ill-conceived from the beginning. National healthcare needs a dedicated source of revenue such as general tax receipts or a national sales tax on all goods and services.

Regarding your criticism of the media for not doing their job, I disagree insofar as we do want news reporters to maintain a line between factual journalism and comment, or other editorial analysis. Your real criticism seems not that the facts are not being made available, but that the analysts have been prostituted into eviscerating their own logical conclusions.

 Overall, I think your views of the consequences of the failure of the supercommittee are accurate.

I did not respond to the observations on Health Care, but I disagree, and will address this subject at a later time, when the subject is Reform of our Health Care System.

On the second of my two posts Robert Malchman responded to my analysis of a Krauthammer column with:

 Does anyone who doesn't believe in Fox News-eque fairy tales, lies and manipulations take Charles Krautkopf -- excuse me, Krauthammer -- seriously? Debunking Krauthammer is like debunking Santa Claus, if instead of a merry, gift-giving elf, Santa were a bitter, miserly troll. I can see taking on politicians who at least have some influence, even nutjobs like Herman Cain because his 9-9-9 plan needed a response like the 4.5-4.5-4.5 one you provided. But using your skills on someone like Klownhammer is like using a flamethrower on a strawman.

To which I issued the following challenge:

Who do you think would be a worthy columnist for a critical analysis of their views? If you would like, nominate someone, and if you are so inclined, I would be happy to have you suggest a particular column for dissection. Would George Will be better? Ann Coulter? Bill Kristol? You name it!

Malchman retorted:

Will and Kristol are at least serious people. Coulter is a self-promoter who believes in nothing but her own self-aggrandizement; her goal is simply to shock and to draw attention to herself, so the best thing one can do is to ignore her. (Did you know she was two years ahead of me in law school? I only knew her by sight, but she did not have the reputation for being insane yet, only a Federalist Society-style conservative; that's what leads me to believe her public persona is an act.)

           

To which I repeated my challenge by saying:

 I await your nomination. Hopefully, a specific column, but if that is asking too much, your choice of a columnist and I will look for a column. There is no rush. Give it some thought and find a column that would be a challenge.

No specific nomination came, but I am considering a column by Ross Douthat entitled: “An Argument Against Redistribution," which has more meat to it, for rebuttal.

In the meantime your comments and observations are welcome and will be distributed with attribution, unless you request to remain anonymous.


With the holidays fast approaching I will take a sabbatical until after the New Year has rung in. Until then חנוכה שמח, Joyeux Noël and Feliz Año Nuevo or Happy Chanukah, Merry Christmas and Happy New Year.

The Deficit Reduction Committee II

On November 28, 2011 I posted and distributed my commentary entitled "The Deficit Reduction Committee" on the DRC's failure to reach agreement, and pointed out that Republicans on the committee never made a good faith effort to reduce the deficit, since the only proposal that they made would have increased the deficit. (In this connection it should be noted that in pushing for the extension of the Bush tax cuts for the very wealthy, they insisted that no offsets were necessary, when it came to to an extension of the of the payroll tax cut, they insisted that offsets are a sin qua non. Tax Cuts for working Americans, according to them, pose a danger to the economy, but Tax Cuts for the wealthy, who they call “Job Creators” are, according to them, good for the economy and need no set offs, no matter how much they increase the deficit.

I have received two comments to this article, but will postpone sharing them with you until the next post because of space constraints. In the meantime I invite further comments.

At the end of my last post, I promised to analyze point by point a column by Charles Krauthammer that appeared in the November 24 issue of the Washington Post, under the heading "The Grover Norquist tax myth." See here.

I suggest you first read it in full by clicking "here” above and then read my comments thereon, for which purpose I reproduce the article and intersperse my responses in contrasting type.

            Democrats are unanimous in charging that the debt-reduction supercommittee collapsed because Republicans refused to raise taxes. Apparently, Republicans are in the thrall of one Grover Norquist, the anti-tax campaigner, whom Sen. John Kerry called “the 13th member of this committee without being there.” Senate Majority Leader Harry Reid helpfully suggested “maybe they should impeach Grover Norquist.”

            With that, Norquist officially replaces the Koch brothers as the great malevolent manipulator that controls the republic by pulling unseen strings on behalf of the plutocracy.

Nice theory. Except for the following facts:

            ●Sen. Tom Coburn last year signed on to the Simpson-Bowles tax reform that would have increased tax revenue by $1 trillion over a decade  There was no Simpson-Bowles Tax Reform. This refers to a bi-partisan commission appointed by the President, the formation of which Republicans opposed. The President stipulated that its recommendations would only be submitted to Congress if 14 of its members voted for it. That vote was not achieved and the plan died. Sen. Coburn (R) voted for the report, but the Republican leadership in Congress showed no interest in it, and never brought it up for a vote in the House.

            ●During the debt-ceiling talks, House Speaker John Boehner agreed to an $800 billion revenue increase as part of a Grand Bargain. Yes, and then reneged when he found that his caucus would not consider it, despite the fact that cuts would have been three times the size of revenue increases.

            ●Supercommittee member Pat Toomey, a Club for Growth Republican, proposed increasing tax revenue by $300 billion as part of $1.2 trillion in debt reduction. This is precisely, what I was talking about in my last post. The proposal was to increase $300 billion in revenue, provided there was a decrease of $4 trillion in revenue, through a permanent extension of the Bush tax cuts. This means a net cut in revenue $3.7 trillion.

Leading, very conservative Republicans proposing tax increases. So why does the myth of the Norquist-controlled anti-tax monolith persist? You might suggest cynicism and perversity. Let me offer a more benign explanation: thickheadedness — the inability to tell the difference between tax revenue and tax rates.

            In deficit reduction, all that matters is tax revenue. The holders of our national debt care not a whit what tax rates yield the money to pay them back. They care about the sum.The Republican proposals raise revenue, despite lowering rates, by opening a gusher of new income for the Treasury in the form of loophole elimination. For example, the Toomey plan eliminates deductions by $300 billion more than the reduction in tax rates “cost.” Result: $300 billion in new revenue. This is unadulterated nonsense! Democrats don’t care how revenues are raised as long as they are raised. It is not a question of rates. Republicans have made clear they will not agree to anything that brings more revenue to the treasury.

The Simpson-Bowles commission — appointed by President Obama and endorsed by Coburn — used the same formula. Its tax reform would lower tax rates at a “cost” of $1 trillion a year while eliminating loopholes that deprive the Treasury of $1.1 trillion a year. This would leave the Treasury with an excess — i.e., new tax revenue — of $100 billion a year, or $1 trillion over a decade. Not extending the Bush tax cuts nets $4 trillion. As indicated, Republicans do not support the Simpson-Bowles plan. So this is a straw man. What is the significance of one Republican supporting it on the commission, when we don’t even know if he is prepared to support it in Congress? And it is one Senator. One!

            Raising revenue through tax reform is better than simply raising rates, which Democrats insist upon with near religious fervor. It is more economically efficient because it eliminates credits, carve-outs, and deductions that grossly misallocate capital. And it is fairer because it is the rich who can afford not only the sharp lawyers and accountants who exploit loopholes but the lobbyists who create them in the first place. This is the latest canard. No Republican reform plan proposed would increase revenue, and none of any kind has been proposed. What they mostly talk about is reforming the tax code, so as to do away with mostly middle class deductions, and a flat tax that would further shift the burden of taxation away from the rich and toward the middle class. This is truly class-warfare. It is war on the middle class and the poor.

            Yet the Democrats, who flatter themselves as the party of fairness, are instead obsessed with raising tax rates on the rich as a sign of civic virtue. This is perverse in three ways:

            (1) Raising rates gratuitously slows economic growth, i.e., expansion of the economic pie for everyone, by penalizing work and by retaining inefficiency-inducing loopholes. We should get rid of the loopholes!!! That is a good start. Lets do it now and reduce the deficit. Increasing taxation on those who can best afford it doesn’t slow growth, no matter how often it is repeated. If we wish to encourage work then we should reduce taxes on those who indeed work, and increase taxes on the “coupon clippers.” Or in other words, tax unearned income the same as earned income. Tax Capital Gains and Dividends the same as earnings from work. Tax Inheritance, at the upper end, since the beneficiaries have never worked for it.

            (2) We’re talking pennies on the dollar. Obama’s coveted repeal of the Bush tax cuts would yield the Treasury, at the very most, $80 billion a year — offsetting 2 cents on the dollar of government spending ($3.6 trillion). This is the ultimate in juggling numbers. It sounds like Enron. That is not 80 billion a year. It is $4 trillion over ten years. And no one expects spending to be anywhere near 3.6 trillion going forward. But of course spending has to be reduced, and the President and Congressional Democrats have proposed spending cuts three times as large as revenue enhancements. Their proposals would begin to bring the deficit under control. The answer has been No and No and No. Every Republican proposal, whether the Ryan budget, or the plan put forward by Republicans on the Deficit Reduction Commission, would actually increase the deficit.

            (3) Hiking tax rates ignores the real drivers of debt, which, as Obama himself has acknowledged, are entitlements. Deficits are driven by lack of revenue or spending or both. Most non-partisan economists feel it is both. Entitlements need structural adjustments and Obams’s “Patient Protection and Affordable Care Act” makes a number of changes that make a beginning in reducing these expenses, over Republican opposition. In negotiations, other changes have been proposed as part of a comprehensive debt reduction measure. Republicans have rejected each and every one, because small revenue enhancements were to be included.

            Has the president ever publicly proposed a single significant structural change in any entitlement? Yes, Many! Again and again, as part of a balanced approach, only to be rebuffed each time. After Simpson-Bowles reported? No. In his February budget? No. In his April 13 budget “framework”? No. During the debt-ceiling crisis? No. During or after the supercommittee deliberations? No.

Indeed, Obama was AWOL from the supercommittee — then immediately pounced on its failure by going on TV to repeat his incessantly repeated campaign theme of the do-nothing (Republican) Congress. Obama had actively negotiated with Boehner and they had a deal until the Republican caucus rejected it. After this failure, it was agreed to set up the super-committee, which was to work without interference from Boehner or the President.

A swell slogan that fits nicely with the Norquist myth. Except for another inconvenient fact: It is the Republicans who passed — through the House, the only branch of government they control — a real budget that cut $5.8 trillion of spending over the next 10 years. Yes, it does. It does away with SS, Medicare and Medicaid, and the whole safety net, and still has so many tax cuts that it increases the debt by $6 trillion. Obama’s February budget, which would have increased spending, was laughed out of the Senate, voted down 97 to 0. Dems didn’t want the vote, and turned it into a joke by voting against it. As for the Democratic Senate, it has submitted no budget at all for 2 1 / 2 years. Does the filibuster have anything to do with this?

Who, then, is do-nothing? Republicans should happily take on this absurd, and central, Democratic campaign plank. Bring Simpson-Bowles to the House floor Yes, why not, but all of it, not cherry picking it. and pass the most radical of its three deficit-reduction alternatives.

Dare the Senate Democrats to vote down the grandest of all bargains. Dare Obama to veto his own debt commission. Dare the Democrats to actually do something about debt. They already have, most particularly in the “Patient Protection and Affordable Care Act,” which Republicans want to repeal.

Krauthammer isn’t even consistent. On July 14, 2011 he wrote: 

 If conservatives really want to get the nation’s spending under control, the only way is to win the presidency. Put the question to the country and let the people decide. To seriously jeopardize the election now in pursuit of a long-term, small-government, Ryan-like reform that is inherently unreachable without control of the White House may be good for the soul. But it could very well wreck the cause. But they would never put their hostility to the entitlements to a vote. They would lose overwhelmingly. Instead, they will talk about anything else, and hope they can fool the voters, and do all they can to keep the economy from improving.

The Deficit Reduction Committee

Surprise, Surprise! The Deficit Reduction Committee did not reach agreement.

Our media, as is their wont, bills it as a failure of our two parties unwillingness to compromise, and as a symptom of our broken government. But it is not the former, and it is the latter, only in so far as one of our two major parties, the Republican Party, is determined to keep government from working. As the old saying goes: “it takes two to tango.”

No compromise was possible because the Right (Republican Party) has no interest in what the Committee was charged with accomplishing, i.e. deficit reduction and they demonstrated this again in blocking any possibility of agreement.

           

As I have demonstrated in past writings on the deficit, Republicans have no interest in deficit reduction. It is simply a weapon with which to destroy the hated, “Welfare State.” I discussed this at length, and I urge you to go back and read my posts starting with my latest post on the subject: "The Deficit – One Big Hoax (Part VI)" and working backwards from there, using the links provided.

           

To repeat part of what I said in these posts:

Their lack of concern with the deficit can easily be seen in that not one of their proposed “reforms” decreases the deficit. The Ryan plan, which has passed the House with almost unanimous Republican support (four Republicans voted against it and no Democrats voted for it) would, according to Representative Paul Ryan himself, add $6 trillion to the national debt over ten years as reported by the Economist, hardly a left wing source, and as far as I can find nowhere else in the media.

This lack of concern with the deficit surfaced again in the deliberations of the “The Deficit Reduction Committee.” Democrats genuinely concerned with the deficit and anxious to reach agreement offered to agree to cuts in entitlement programs, which need to be cut in any case for their sustainability, as I discussed in my post which you can find here. 

They asked that Republicans come to the table with an agreement that would raise revenues, and until a few days before the deadline the Republicans on the panel would not put one dime in increased revenue on the table. With the deadline fast approaching they finally talked about an “increase (in) tax revenue by $300 billion, which was seen by some lawmakers as a breakthrough given the party’s resistance to increased revenues.”  

Since the committee was charged with coming up with at least 1.2 trillion in reduction to the deficit, this would have meant that Democrats would have to agree to $ 900 billion in cuts, a three to one ratio. The Dems swallowed hard and indicated they might be willing to go along. They thought they had a breakthrough, in so far a Republicans finally appeared to have put “added revenue” on the table. Then came the kicker! In order for them to agree to 300 billion in added revenue, Dems would have to agree to extend the Bush tax cuts, or a decrease in revenue of $4 trillion. It doesn’t take a mathematical genius to see that if you deduct 2.1 trillion from 4 trillion, you get 1.9 trillion, the amount by which the deficit would be increased. Or to put it another way, it’s the Ryan budget all over again. You cut entitlement spending and you increase the deficit at the same time, which, according to their logic requires further slashing of entitlements and other programs that they don’t like. Or heads we win, tails you lose. Needless to say, there was no agreement.

But where was the media to explain all this? As usual they were missing in action. All they could come up with was a shake of the head and the usual bromide, “Why can’t they agree.” Well there is a damn good reason why! There was no desire on the part of the Republicans to offer anything that remotely accomplishes anything, other than do away with entitlements.

How could any sane Democrat agree to this?

Why doesn’t the media, who even with their fear of speaking the truth is denounced by the Right, speak the truth for once. Why are they so afraid of being accused of partisanship? Telling the truth wherever it may lead, is what good journalism is supposed to be all about.

One of the few media outlets, The Christian Science Monitor reported what happened accurately:

Republicans insisted during the super committee negotiations that curbing tax breaks to raise revenues be coupled with guarantees that all the Bush tax cuts would continue beyond 2012…Democrats countered that the super committee was created to reduce the budget deficit, not add to it by extending tax cuts.

The Economist all alone tells us the way it is:

The game being played here has little to do with the budget itself. It is an ideological debate about the role and obligation of government. First, cut taxes for the wealthy to create a big hole in the budget, have a Great Recession aid the cause by stripping government at all levels of tax revenue, increasing costs of serving people, and creating short-run deficit problems (and a war here and there doesn't hurt the cause either), and finally use the deficit as a club against social insurance programs such as Medicare and Social Security. 

So we have ended up with $1.2 trillion cuts going into effect beginning in 2013. $600 billion of that will be in defense spending which is in addition to a cut of $450 billion previously agreed to. Not the worst of all possible outcomes, and in 2013 the Bush tax cuts will expire. No Congressional action is needed. Beginning in 2013 the deficit will be reduced over the following ten years by 6.1 trillion. The hammer of using the deficit to justify attacks on needed spending will be gone. Not bad negotiating by our President.

In response to my post “What can we, and should we do about the deficit?” Bruce Weintraub wrote:

Republicans should be forced to make choices too:  Either an increase in marginal tax rates for the superwealthy or steep cuts in ‘defense’. But Democrats NEVER put them on the spot.

Well Bruce, they did, and the “Elephants” were maneuvered into agreeing to steep defense cuts.

            

Would Bruce and the Left please apologize to our President and admit he did a brilliant job of negotiating under the most difficult circumstances.


The threat to our National Security according to Admiral Mike Mullin then Chairman of the Joint Chiefs of Staff is our debt, as shown below:

While Secretary of Defense, Leon Panetta, has talked about all kinds of disasters from cuts in defense of $1 trillion, this does not square with the facts. As an article in US News and World Report points out: 

Despite the doomsday scenarios continually espoused by Secretary Panetta and the military chiefs, a cut of that size would amount to only 15 percent, in real terms return spending to its 2007 level, and still leave the United States above what we spent on average in the Cold War. Finally, such a cut would be far less than cuts made by Eisenhower (27 percent), Nixon (29 percent), and Reagan, H.W. Bush, and Clinton (35 percent), which were done without jeopardizing security.

           

Now the Republican deception takes full form in a column by Charles Krauthammer that appeared in the November 24 issue of the Washington Post, under the heading “The Grover Norquist tax myth." I will analyze this point by point in my next post.

I regret that I was forced by events to abandon my analysis of where we could beneficially cut spending. Hopefully events will make it possible for me to return to beneficial cutting without ignoring developing news.

Comments are welcome and will be distributed with attribution unless the writer requests not to be identified.