Month: January 2013

Tactical retreat in the budget wars

by digby

When it comes to beating back extremists, I’m all in favor of living to fight another day, so the idea of kicking the can down the road on some horrible debt deal never seems like the worst thing that could happen. But I can’t figure out why everyone seems to believe that by extending the debt ceiling three months the House Republicans have been vanquished for all time. It doesn’t sound as if the Republicans believe that:

Rep. Raúl Labrador (R-Idaho), who declined to vote for Speaker John Boehner (R-Ohio) earlier this month, said he was “OK” with the leadership’s strategy of putting off a fight over the debt ceiling until after a pair of battles over government funding and the automatic spending cuts of sequestration over the next two months.

The chief Republican vote-counter, Majority Whip Kevin McCarthy (Calif.) told reporters the leadership had whipped the bill during a Tuesday afternoon vote series but had not counted the totals yet. He was vague on the conservative claims that the leadership, from Boehner on down, had committed to putting forward a budget that balances within 10 years.

“We had very good discussions. We’ve always wanted to get to a balanced budget,” he said. “I think 10 years is a great time to get to a balanced budget. I would have wanted to get there beforehand.”

“I’m committed to getting to a balanced budget,” he added.
[…]
Two other conservatives who have bucked the leadership in previous fiscal votes, Reps. Trey Gowdy (S.C.) and Lynne Westmoreland (Ga.) said Tuesday they would probably support the bill.

“This is the most viable option that we’ve got,” Westmoreland said, likening the strategy to a chess game.

With a smaller majority in the 113th Congress, Boehner’s hold on his conference has been weakened in recent months, with a majority of Republicans voting against legislation on the fiscal cliff and providing disaster relief for victims of Hurricane Sandy.

Conservatives described a tentative ceasefire with the leadership, but they put heavy pressure on Boehner and his team to deliver both on the party’s budget resolution and in the fiscal battles ahead.

Maybe this really is total surrender and they are all just blowing smoke. The debt ceiling battle is done, we’ll get through the sequester with a reasonable deal that won’t include cuts to vital programs and mature governance will have returned to the land. But that sure doesn’t sound like what those guys have in mind. It’s very hard for me to believe that Club for Growth has overnight become a responsible citizen.

I’m going to guess they are just making a tactical retreat. Hopefully the Democratic generals are aware of that. (Or should I call them the Washington Generals?)

Whatever the case, this gave me the biggest laugh I’ve had all week:

The House Republican budget proposal approved last year would not have balanced until close to 2040, according to projections at the time, meaning that the party will have to find steeper cuts to do so sooner without raising taxes.

Conservatives said the path would be easier in 2013 because of the tax increases that have become law as part of the fiscal cliff deal, and because the budget would include the more than $1 trillion in scheduled cuts from sequestration.

Talk about making lemons out of lemonade …

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Pray for gridlock, Pareene style

by digby

Alex Pareene asks an important question: what do the so-called moderates really want, anyway? And I think he answers the question very well:

[W]hat three policy areas did Lanny Davis identify as “common ground” between the parties? Immigration reform, gun control and global warming. Three issues, that is, that effectively define the wildly different domestic policy priorities of the current Democratic and Republican parties.

Rich, moderate Republicans support immigration reform. The party itself does not, as George W. Bush learned. Gun control is “bipartisan” in the sense that a large number of Democrats share the entire Republican Party’s fanatical opposition to it. Republicans do not believe global warming is real, and even if they did they would not support any measures to halt it. (Though Davis simply brought up global warming to pimp nuclear power — did I mention who sponsored this little breakfast panel?)
[…]
The one topic all good centrists and moderates agree on is deficit reduction. Specifically, it has to be deficit reduction accomplished by cutting Social Security and Medicare. And that would be accomplished in 10 minutes if the GOP hadn’t decided that it made more sense to wish very hard for severe social insurance cuts than to actually pass the less-severe ones the Democratic president effectively offered to give them.

In other words I guess I am pro-gridlock, if it means people like David Brooks, Lanny Davis and Michael Steele don’t get their way.

You know I agree, and for the very same reasons.

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We’ve come a long way

by digby

There’s a lot of talk today, as there should be, about the historic nature of President Obama’s inclusion of Stonewall in the pantheon of turning points in American civil rights in his Inaugural Address yesterday. It was a great moment.

But I didn’t realize just how great it was until I read this piece that Michael Moore tweeted out yesterday:

Homo Nest Raided, Queen Bees Are Stinging Mad

The Raid Last Friday

Queen Power

Bruce and Nan

Meet Shirley

Police Talk

We’ve come a long way. Thank God.

Update: Speaking of Stonewall, Dennis Hartley reminds me that he reviewed this documentary about the event a while back, for those of you who need a quick primer on it.

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Larry Summers late to the party

by digby

You know, I’m just a dumb old country blogger who doesn’t know nothin’ ’bout no economics but what I learned as a stoned undergraduate back in the dark ages. (I may have read a book or two since then…) But I, like a lot of people, have been making certain common sense observations for several years now about the sheer insanity of our deficit obsession. (And was summarily dismissed because of it, I might add.) You don’t need a PhD in economics to understand that this is a political and ideological obsession, not an economic one — after all, it’s economically counter-productive and all the evidence of disaster from austerity in the face of recession that we’ve seen in the last few years proves it.

Nonetheless, the Very Serious People refuse to change course, either because they are simply not very serious or because they are using this crisis to further shrink the already shrunken and starving welfare state and lower wages and living standards of average people. There can be no other explanation: they are either stupid or venal. Or maybe both.

Anyway, here’s Larry Summers very late to the party, but better late than never:

Economists are familiar with the concept of repressed inflation. When concern with measured inflation takes over economic policy, and so drives the introduction of price controls or subsidies to hold down prices, the results are perverse. Measured prices may not rise, so the appearance of inflation is avoided. But shortages, black markets and enlarged budget deficits appear. The repression is unsustainable and when it is relaxed, measured inflation explodes, as happened with the Nixon price controls during the early 1970s.

Just as repressing inflation is misguided, repressing budget deficits can also be a serious mistake. Just as corporate managements that are measured on earnings can take perverse steps that are ultimately harmful to shareholders, government officials in the grip of a budget obsession repress rather than resolve deficit issues. When arbitrary cuts are imposed, government agencies respond by deferring maintenance, which leads to greater liabilities later. Or compensation is provided in the form of promised retirement benefits that are less than fully accounted for, with the ultimate burden on taxpayers increased. Or measures such as the recent Roth IRA legislation are enacted, encouraging taxpayers to accelerate their tax payment while reducing total payments over the long run.

As important as avoiding the repression of budget deficits is ensuring that the focus on the budget deficit does not come at the expense of other equally real deficits. Interest rates in the United States and much of the industrialized world are remarkably low. In real terms, governments’ cost of borrowing recently has been negative for horizons as long as 20 years. No one who travels abroad from the United States can doubt that this country has an enormous infrastructure deficit. Surely even leaving aside any possible stimulus benefits, current economic conditions make this the ideal time for renewing the nation’s infrastructure. Such investments, borrowed at near-zero interest rates, need not increase debt ratios if their contribution to economic growth raises tax collections.

Infrastructure represents only the most salient of the deficits facing the United States. Nearly six years after the onset of financial crisis, we clearly are living with substantial deficits in jobs and growth. Consider that if an increase of just 0.15 percent in the economy’s growth rate were maintained over the next 10 years, the debt-to-GDP-ratio in 2023 would be reduced by about 2.5 percentage points. That’s an amount equal to the much debated year-end fiscal compromise that raised taxes. Increasing growth also creates jobs and raises incomes.

As Krugman and Mark Thoma point out, however, the problem is that he brackets that salient point with the standard disclaimers about how deficits really do matter yadda, yadda, yadda, (which frankly, sounds like the typical right wing babble insisting “I’m not a racist, but….”)

As Krugman says:

[T]hat’s the INK disclaimer — I’m Not Krugman. It’s supposed to establish Larry’s bona fides as a Serious Person, appeasing the deficit scolds so that he can get on with the substance of his argument.

I wish him luck, but don’t think he’ll get far. For the deficit scolds are unappeasable.

If you believed that the scolds were just honest citizens concerned about America’s long-run prospects, you might also believe that a careful, rational argument about how those prospects are better served by investing more, not less, while the economy is depressed could win them over. But to hold such beliefs, you’d have to have been living in a cave, reading nothing but the Washington Post editorial page, for the past four years.

The reality, first, is that the deficit scolds — who are, after all, making a living by scolding — depend on constant warnings of imminent fiscal crisis to drum up interest. Saying that it’s a longer-term issue, and not our first priority right now, is not something they can afford to hear.

Still, it’s a good thing, I suppose, for Larry Summers to make the case against deficit fetishism. Unfortunately, it’s a little late. This argument should have been had back in the beginning of the Obama administration when they were holding “fiscal responsibility” summits in the middle of an epic downturn and demagoguing debt as if it were a plague of locusts. That’s how we ended up here.

Maybe Summers really cares about the fact that we are still struggling with crisis levels of unemployment and that we have already lost years and years of growth while the top 1% are gobbling up more and more of the world’s wealth. But it wasn’t as if nobody saw this coming.

But hey, Krugman is still shrill and John Maynard Keynes was a loser, so there’s that.

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Michael Gerson represents all that’s wrong with the Village

by David Atkins

Michael Gerson, he of the Bush Administration’s hyperpartisan, Iraq-invading presidency, has to gall to write a column entitled “Obama shoves idealism into its grave.” Nope, no joke. Here’s the key bit:

This will, no doubt, please the president’s strongest supporters, who are grateful that he has given up the pious balderdash of bipartisanship. They welcome his sharper political edge. They describe him as “wiser,” “wary” and more realistic about the unchangeable obstructionism of his opponents.

It is not the first time a president has been indicted by the praise of his courtiers. Obama arrived with limited experience on the national stage — only to find himself in the fight from the last act of Hamlet. He seemed surprised that Washington could not be changed by the force of his personality. He has become a sobered and hardened figure. A former public official who often interacted with Obama put it this way to me: “Obama disdains politicians and the art of politics, but he is highly competitive and wants to beat them at their own game.”

This is not a problem if the president is merely one participant among many in a series of zero-sum political battles. But this approach has serious drawbacks if a president is called to play a leadership role in reforms that require both parties to trust each other and take simultaneous risks. On the evidence of his second inaugural, Obama has moved beyond such idealism.

Gerson represents the Village in its purest, most vapid form. After chiding the President for believing that he could pacify the squabbling Village and convince Republicans to be reasonable, Gerson makes no mention of the reasons the President failed in this endeavor. Then, having acknowledged that the President’s gestures of bipartisanship had failed, he chides the President for at least rhetorically abandoning somewhat his previous commitment to pure bipartisanship. Gerson calls this a failure of idealism, echoing the Village sentiment that true idealism lies not in the desire for good public policy, but rather in a desire for pleasant comity within the Village. Nor is there a shred of shame for a key player from the dramatically partisan and corrupt Bush Administration in making this argument. Gerson will doubtless remain invited to all the best galas and cocktail parties.

Revolting.

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Gettin’ down in the viewing box

by digby

This is great:

It is pretty irresistible. Those Iowans can get funky.

And the crowd was very, very big:

Despite lowered expectations for turnout, inauguration officials estimate that at least one million people came out for President Obama’s second inaugural swearing-in ceremony, according to a White House pool report.

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So cheaters do prosper after all

by digby

In case you were wondering if the GOP was really as proudly anti-democratic as they seem:

In a classic Kinsley gaffe, the Republican State Leadership Committee released a report boasting that the only reason the GOP controls the House of Representatives is because they gerrymandered congressional districts in blue states.

The RSLC’s admission came in a shockingly candid report entitled, “How a Strategy of Targeting State Legislative Races in 2010 Led to a Republican U.S. House Majority in 2013″. It details how the group spent $30 million in the 2010 election cycle to sweep up low-cost state legislature races in blue states like Michigan, Ohio, Pennsylvania, and Wisconsin. Their efforts were so successful, in fact, that Republicans went from controlling both legislative chambers in 14 states before Election Day to 25 states afterward.

In turn, the new Republican majorities would be tasked with redrawing congressional districts for the 2012 election. “The rationale was straightforward,” the report reads. “Controlling the redistricting process in these states would have the greatest impact on determining how both state legislative and congressional district boundaries would be drawn.”
[…]
From the report:

Farther down-ballot, aggregated numbers show voters pulled the lever for Republicans only 49 percent of the time in congressional races, suggesting that 2012 could have been a repeat of 2008, when voters gave control of the White House and both chambers of Congress to Democrats.

But, as we see today, that was not the case. Instead, Republicans enjoy a 33-seat margin in the U.S. House seated yesterday in the 113th Congress, having endured Democratic successes atop the ticket and over one million more votes cast for Democratic House candidates than Republicans. The only analogous election in recent political history in which this aberration has taken place was immediately after reapportionment in 1972, when Democrats held a 50 seat majority in the U.S. House of Representatives while losing the presidency and the popular congressional vote by 2.6 million votes.

The report credits gerrymandered maps in Michigan, Ohio, Pennsylvania, and Wisconsin with allowing Republicans to overcome a 1.1 million popular-vote deficit. In Ohio, for instance, Republicans won 12 out of 16 House races “despite voters casting only 52 percent of their vote for Republican congressional candidates.” The situation was even more egregious to the north. “Michiganders cast over 240,000 more votes for Democratic congressional candidates than Republicans, but still elected a 9-5 Republican delegation to Congress.”

Isn’t that special?

Gerrymandering is as old as the republic, of course. But I don’t think it’s ever been nationally systematic before. Certainly, nobody would have thought of bragging about it — it’s never been considered exactly on the up and up.

When these Republicans insist that they “won” the election too, Democrats should throw this in their faces. They have one House of congress because basically, they cheated. But what else is new?

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Villager pap

by digby

The Politico thinks that the President said something meaningful about “entitlements”:

President Barack Obama drew a hard line once again Monday against entitlement cuts that could change the basic structure of programs like Medicare or Social Security — making it clear that any measures to reduce the cost of health care must be done on his terms.

It wasn’t a new message, but by reinforcing it in his inaugural address, Obama doubled down on the boundaries he has drawn in his fight with Republicans over the next stages of deficit reduction. The president’s forceful defense of these social safety-net programs fit with a larger theme of his speech, defending the role of government in American society.

“We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future,” Obama said.

Obama delivered those lines as Rep. Paul Ryan (R-Wis.), the author of the House Republican Medicare plan and Mitt Romney’s former running mate, sat in the crowd at the Capitol.

Obama’s message could make it harder to negotiate entitlement changes down the road as part of a deal to head off across-the-board spending cuts, or to keep the government open this spring after its temporary funding runs out. But it could also buy him some room to make cuts that don’t restructure the programs — as long as Obama can convince Democrats that they don’t shift costs to “the generation that built this country.”

Uhm, no. Unfortunately, when it comes to this I’m afraid Democrats need to be in full blown trust but verify mode. In fact, they need to just be in verify mode and willing to just say no.

And that’s because “his terms” so far have been completely unacceptable. Such as this, and this and this and this:

Bob Woodward, on Meet The Press with David Gregory discussing the leaked 2011 White House Grand Bargain memo to House Speaker John Boehner:

“This is a confidential document, last offer the president — the White House made last year to Speaker Boehner to try to reach this $4 trillion grand bargain. And it’s long and it’s tedious and it’s got budget jargon in it. But what it shows is a willingness to cut all kinds of things, like TRICARE, which is the sacred health insurance program for the military, for military retirees; to cut Social Security; to cut Medicare. And there are some lines in there about, “We want to get tax rates down, not only for individuals but for businesses.” So Obama and the White House were willing to go quite far.”

You can see the memo here.

Those are all occasions in the first term, dating from the very beginning, that the administration said it was willing — sometimes eager — to cut vital programs. And all of the cuts would have hurt the people who depend on them.

There are savings in Medicare that are acceptable, but we all know that in order to bring down over all health care costs in the long run the government must take much greater responsibility for costs and regulation, some of which it must be hoped will come about because of Obamacare. (Or an epiphany to lower the medicare eligibility age to — 0.)Other than that, there’s not one idea on the table about any cost savings to “entitlements” that won’t come out of the hides of average citizens.

So no, he squandered whatever trust Democrats (those who give a damn anyway) might have had in his ability to “restructure” the programs without hurting the people they serve. There’s no running room on that at all.

I like that he said this, though. It’s always good to say it:

Together, we resolved that a great nation must care for the vulnerable, and protect its people from life’s worst hazards and misfortune.

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Positive signs from the President on climate change

by David Atkins

Digby noted earlier today the numerous positive and progressive signs in President Obama’s 2nd Inaugural Address. None of them were more welcome than the significant piece of it related to climate change. From the speech:

We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise. That is how we will maintain our economic vitality and our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.

The White House is also beginning to realize that just getting results is more importance than the process used to get there, particularly in the face of such intransigence from the Republicans:

Mr. Obama is heading into the effort having extensively studied the lessons from his first term, when he failed to win passage of comprehensive legislation to reduce emissions of the gases that cause global warming. This time, the White House plans to avoid such a fight and instead focus on what it can do administratively.

The centerpiece will be action by the Environmental Protection Agency to clamp down further on emissions from coal-burning power plants under regulations still being drafted — and likely to draw legal challenges.

That step will be supplemented by adoption of new energy efficiency standards for home appliances and buildings, a seemingly small step that can have a substantial impact by reducing demand for electricity. Those standards would echo the sharp increase in fuel economy that the administration required from automakers in the first term.

The Pentagon, one of the country’s largest energy users, is also taking strides toward cutting use and converting to renewable fuels.

It’s also notable that much more of the speech was dedicated to climate change than to deficit reduction. That’s a welcome change from the Presidential campaign, particularly the debates, in which the deficit was mentioned 72 times while climate change was never addressed.

Skeptics and cynics will say that the Inaugural Address was simply pretty words and window dressing. That view is understandable. We’ve certainly been disappointed before.

But Martin Luther King, Jr. Day is an opportunity for hope and forgiveness. With his last election in the rear view mirror, it may be that the President is ready to take a more forceful role as a more progressive leader. If he follows through, there will be a legion of activists ready and excited to support him.

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Scalia’s Fascinator

by digby

I don’t know about you but that looks suspiciously New Black Pantheresque.

Hat tip (literally) to The Atlantic Wire, which offers a variety of opinions on what exactly the hell that thing is.