Tag Archives: entitlements

Quote of the Day

“The wrong turn we’ve taken in economic policy — our obsession with debt and ‘entitlements,’ when we should have been focused on jobs and opportunity– was of course, driven in part by the power of wealthy vested interest.  but it wasn’t just raw power.  The fiscal scolds also benefited from a sort of ideological monopoly:  for several years you just weren’t considered serious in Washington unless you worshipped at the altar of Simpson and Bowles.

“Now, however, we have the president of the United States breaking ranks, finally sounding like the progressive many of his supporters thought they were backing in 2008.  This is going to change the discourse — and, eventually, I believe, actual policy.”

Paul Krugman, “Obama Gets Real,” NYT

It’s been so frustrating to me that during and since the Great Recession, we’ve sacrificed growth by focusing too much on each year’s deficit and the national debt.  Of course, deficits were going to spike when unemployment was so high and we were paying out so much more for unemployment benefits, food stamps, Medicaid, etc. and taking in so much less in revenues.  But we behaved as if that was not just a temporary circumstance, but our long-term destiny, and thus prolonged and deepened that temporary state, weakening us as a country and cruelly crushing a whole lot of families unnecessarily.  Keynes is (still) right, Paul Ryan is wrong, and Ayn Rand was a novelist, not an economist.  It’s time for the Prez and the Dems to lead us out of this economic wilderness.

The GOP — All Politics, No Policy

“[W]hat you’re seeing clearly demonstrated here is a kind of policy nihilism on the part of the GOP that helps explain why addressing the country’s problems has become all but impossible. It isn’t enough for Boehner to disagree with [NRCC Chair Greg] Walden over Chained CPI. Boehner effectively controls the NRCC. The notion that this is a private matter between him and Walden is just hogwash. If Boehner doesn’t think the NRCC should attack Dems over a policy that GOP leaders themselves say they want Dems to join them in supporting, he could, you know, just say so. After all, if Republicans won’t say they’ll refrain from attacking Dems over Chained CPI — after embracing the Ryan plan to cut Medicare while attacking Dem candidates over Obamacare’s Medicare cuts for two straight cycles — why would they ever embrace entitlement reform, as GOP leaders themselves are asking them to do?”

Greg Sargent, The Plum Line, WaPo

Hypocrisy and politics are like peanut butter and jelly, but I really believe today’s GOP has taken things to a whole new — and low — level.  They are, in effect, refusing to govern.

Prez “Chaining” Himself for Nothing?

Josh Marshall at Talking Points Memo on the President’s coming out for chained CPI to calculate Social Security benefits:

“[O]n the politics, President Obama and his advisors have made clear this isn’t what President Obama is actually for. He doesn’t think it’s a good idea. It’s rather what he’s willing to do if Republicans are willing to make a big move on revenues. So he’s anticipating claims that he’s not serious about long term cuts and making clear that he’s willing to put real cuts, painful cuts that most of his supporters will hate, on the table. There’s an internal logic there. But the problem is that there doesn’t seem to be much of any evidence that Republicans are going to make that any kind of move like that. So really this is just the President negotiating with himself, validating the wisdom of big Social Security cuts while Republicans are still saying — and show no signs of not saying — that no more taxes should ever go up ever.

“Now, the counter to this is that the optics of going the extra length helps the President with swing voters who want to see he’s trying to compromise. I’m uncertain about that. But that’s certainly part of the calculus.

“But there’s the third point that I think is most important to understanding what’s going on here. This isn’t only about President Obama’s negotiating acumen. In conversations with the president’s key advisors and the President himself over the last three years one point that has always come out to me very clearly is that the President really believes in the importance of the Grand Bargain. He thinks it’s an important goal purely on its own terms. That’s something I don’t think a lot of his diehard supporters fully grasp. He thinks it’s important in long-range fiscal terms (and there’s some reality to that). But he always believes it’s important for the country and even for the Democratic party to have a big global agreement that settles the big fiscal policy for a generation and let’s the country get on to other issues — social and cultural issues, the environment, building the economy etc.

“This has always struck me as a very questionable analysis of the where the country is politically and what it needs. But I put it forward because I don’t think these moves can really be understood outside of this context.”  Emphasis added.

My personal feeling is that the President can’t do a Grand Bargain with the group that’s in Congress now, especially the House, and that we don’t need one anyway.  As the economy comes back, deficits are declining to reasonable levels in the short and medium-term.  A Grand Bargain can wait, but jobs and growth can’t.  The more growth we can fuel now, the less painful that Grand Bargain will ultimately have to be.  Now is the time to pave the way for a future Grand Bargain rather than for doing that Bargain itself.

Progressives are freaking out today about chained CPI, but it ain’t gonna happen without revenues, which means it ain’t gonna happen.  So the President is making an offer that the GOP can — and will — refuse.

Quote of the Day

“I realize that tax reform and entitlement reform won’t be easy.  The politics will be hard for both sides.  None of us will get 100 percent of what we want.   But the alternative will cost us jobs, hurt our economy, and visit hardship on millions of hardworking Americans.  So let’s set party interests aside, and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future.  And let’s do it without the brinksmanship that stresses consumers and scares off investors.  The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next.”

Barack Obama, State of the Union

Thomas Friedman Despairs

From “Obama’s 1-2 Punch?,” Thomas Friedman, NYT:

“If election campaigns are supposed to be an exercise in coming to grips with our biggest problems, then the one we just went through was a dismal failure.  Our only real solution — a strategy to reignite consistent growth so we can narrow our income gaps and lift the middle class.  — never got a serious airing.  Instead, each side was focused on how to secure a bigger slice of a shrinking pie for its own base.

“On Sunday, The Times’s Annie Lowrey wrote a piece quoting [Harvard economist Benjamin] Friedman who wondered aloud whether we’re not now entering a reverse cycle, ‘in which our absence of growth is delivering political paralysis, and the political paralysis preserves the absence of growth.’

“I think he’s right and that the only way to break out of this deadly cycle is with extraordinary leadership.  Republicans and Democrats would have to govern is just the opposite way they ran their campaigns — by offering bold plans that not only challenge the other’s base but their own and thereby mobilize the center, a big majority, behind their agenda, to break the deadlock.

“[T]he mantra that if you ‘just work hard and play by the rules’ you should expect a middle-class lifestyle is no longer operable.  Today you need to work harder and smarter, learn and re-learn faster and longer to be in the middle class.  The high-wage, middle-skilled job is a thing of the past.  Today’s high-wage or decent-wage jobs all require higher skills, passion or curiosity.  Government’s job is to help provide citizens with as many lifelong learning opportunities as possible to hone such skills.

“I still believe that America’s rich and the middle classes would pay more taxes and trim entitlements if they thought it was for a plan that was fair, would truly address our long-term fiscal imbalances and set America on a journey of renewal that would ensure our kids have a crack at the American dream. … If only we had a second-term president, unencumbered by ever having to run again, who was ready to test what really bold leadership might produce.”  Emphasis added.

 

The Phony Patriots of “Fix the Debt”

The NYT has a terrific take-down on the front page today* of that “Fix the Debt” group.  They’re not high-minded at all, just a front for high-value tax benefits and defense contracts.

It’s a bunch of lobbyists trying to protect stuff like the “carried interest” loophole for private equity, tax breaks for multinationals, military spending, etc.  They want to fix the debt on the backs of others while keeping their goodies.

For example, their core principles argue that we should cut entitlements dramatically, but don’t say a word about cutting even a penny from the defense budget.

The story links “Fix the Debt” leaders to specific companies:  Sam Nunn to General Electric;  Erskine Bowles to Morgan Stanley; Judd Gregg to Goldman Sachs, Honeywell, and International Exchange.

The article is sickening, but a must read.  They pretend to be about patriotism, but really it’s all about their perks.

* “Public Goals, Private Interests in Debt Campaign,” Nicholas Confessore

Quote of the Day

“If the White House is able to pocket this revenue and then extract a 1:1 match, or something close to it, for any further spending cuts, administration officials are liable to end up looking quite smart. But if, as Republicans believe and some Democrats fear, the White House folds when confronted with the debt ceiling and agrees to big entitlement cuts in return for few or no revenues, this deal will be seen as the moment when the White House blinked and traded away the guaranteed revenue of the fiscal cliff for a lowball offer from the GOP.”

Ezra Klein, WaPo

This mini-deal is a battle, not the war, which may be the reason it can pass the House.  It’s impossible to say who won and who lost until we resolve the debt ceiling and the delayed sequester.  Tougher fights to come.

It’s Falling Apart

From “‘Major setback’ in fiscal cliff talks,” Manu Raju and John Bresnahan, Politico:

“Negotiations between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell have suffered a ‘major setback’ after Republicans demanded the inclusion of a new method for calculating entitlement benefits as part of the fiscal cliffpackage, according to Democratic sources.

“The provision, known as ‘chained CPI,’ is opposed by many progressives because it would result in lower payments for Social Security beneficiaries.

“Democrats are objecting to including this as part of the current negotiations on a scaled-down fiscal cliff deal. They say they’ve already given ground on other issues, including raising the threshold for new taxes to around $400,000 annually, as well as showing flexibility on estate taxes, sources said.

“But Republicans are insisting on the ‘chained CPI’ provision in exchange for raising taxes.

“If no deal is reached — and that’s where things stand at the moment — Reid will push a proposal to raise taxes for those families making over $250,000 in income, though Republicans say that stands little chance of passing both chambers before New Year’s Day. With no deal, about $500 billion in tax hikes and spending cuts would take effect in 2013, a double-dose of austerity that could send the economy back into recession.”

The stock market won’t be happy, and when the stock market ain’t happy, ain’t nobody happy.