(The Return of) The Weekend Link

In the wake of yesterday's big televised health care summit, we've got lots of commentary on the state of reform:

According to Paul Krugman, Republicans never once offered a viable solution to the health care crisis, despite a 7-plus hour discussion.

Ezra Klein and Jonathan Cohn both (separately) argue that the one thing the summit clearly demonstrated is that compromising on this issue is not an option for Republicans.

Ezra Klein tackles some of the Republicans' talking points during the summit: (1) America has the best health care in the world, therefore reform is unnecessary and dangerous; (2) Allowing insurance companies to sell insurance across state lines will bring costs down by offering greater competition and consumer choice; Washington should not decide what health insurance is and isn't; and the claim that, if reform passes, health insurance premiums will increase.

And, finally, Damon Linker on how conservatives claim a monopoly on American identity.

The Stimulus Worked (and is working)

David Leonhardt of the NY Times:

Imagine if, one year ago, Congress had passed a stimulus bill that really worked.

Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.

If that had happened, what would the economy look like today?

Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Now, I would still argue that, given the magnitude of the economic situation, an even larger stimulus was (and is) needed. But to say that the stimulus has had no positive impact (or a negative impact) is simply false.

Here are some additional thoughts from Ezra Klein.

Krugman on "Starving the Beast"

Since the late 1970s, conservatives have sought to shrink the size of government through a strategy of "starving the beast", which consists of reducing government revenue streams (i.e. instituting major tax cuts) while simultaneously allowing spending to go unchanged. Over time, growing government deficits will force the termination of social welfare programs such as Social Security, Medicare, Medicaid, and the like. Paul Krugman has a good take on this strategy and calls the Republican's bluff.

Obama on why health care reform is critical

HCR deal making perspective

Jonathan Cohn puts the deal making within the health care reform legislative process within context and offers much needed perspective.

Medicare hypocrisy

As I've noted elsewhere, the Republican hypocrisy concerning Medicare cuts within the context of the health care reform debate has been staggering. Republicans have sought to kill Medicare since its inception, proposed massive cuts in the 1990s, and, in their recently released "shadow" budget, have outlined, not only massive cuts, but the program's ultimate termination. Such hypocrisy would be comical if it didn't play a major role in significantly altering the health care debate over the past year, scaring seniors into believing reform would cut their Medicare and introduce "death panels" to keep costs down. The Democratic plans do propose cuts in Medicare spending, but the cuts are targeted at wasteful spending, totaling approximately $400 billion over the next decade. In his column today, Paul Krugman takes on the hypocrisy.

Also, this graph, via Krugman:

Twitter

I've finally taken the plunge: I'm now tweeting on Twitter. I can be "followed" on Twitter by clicking here. Also, I have an updated Twitter feed on the right-hand side of this blog's homepage, just below my Profile --->

Wedge Issues

With the 2010 midterms approaching, it's time for Democrats to clearly differentiate themselves from the faux populist Republicans. I've identified several key wedge issues the Democrats would be smart to utilize in painting themselves, as opposed to the Republicans, as the true defenders of the people's welfare:

1. Financial regulatory Reform. I've noted in prior posts how the Republicans plan to block the creation of a Consumer Credit Protection Agency, which would essentially protect consumers from unfair and excessive credit card and mortgage fees, arbitrary interest hikes, and the like. The Republicans will be opposing such a new agency--in any form--as well as opposing financial regulatory reform in general. How will voters react to the party defending the interests of big banks and hedge funds?

2. Bank Fees. The Obama Administration unveiled a plan to recoup the remaining unreturned TARP bank bailout funds by instituting a fee on the largest banks that participated in the program. Obama outlined this plan during the State of the Union and was greeted with no--I repeat no--Republican applause. As the Republicans sat on their hands, a populist opening suddenly appeared for Democrats.

3. The Republican's "shadow" budget. Last week, Representative Paul Ryan (R-WI) unveiled a Republican budget proposal--essentially what the federal budget proposal would resemble if the Republicans were in power. The offering of a shadow budget is routine in parliamentary systems, such as Britain, but typically useless in the American system. But what may be useless for actual governance is a coup for Democrats. Ryan's budget includes draconian cuts in Social Security and Medicare--eventually privatizing those programs altogether--as well as other cuts to federal social programs and regulatory agencies. The plan also cuts taxes on the wealthiest Americans, further reducing the tax burden for the most well-off.

As has been suggested elsewhere, Democrats should force a vote on Ryan's most controversial budget proposals, primarily cutting Social Security. And it looks as if the Democrats might do just that. During the ongoing health care debate, Republicans effectively scared seniors into believing that major cuts to Medicare were on the way--including the creation of government "death panels." As I've noted elsewhere, despite the patently falseness of these claims, the narrative was irreversibly altered throughout the summer and fall. Now it's time for Democrats to call Republicans out on their bluff. After all, it was Republicans who fought for Medicare cuts in the 1990s and attempted to privatize Social Security--unsuccessfully due to united Democrat opposition--in 2005. Call their bluff.

4. Citizen's United Supreme Court decision. As I've noted in a previous post, this could be a major wedge issue for Democrats, if utilized. Read more here.

5. Senate procedural rules. The extent to which the filibuster has been used and politicized in the 110th Congress is unprecedented. (See here and here). A small, disciplined, minority has been able to significantly slow legislation, block executive nominees, and effectively require a 60 vote super majority on all major legislation. If Senate procedural rules were better understood by the public at large, this would be politically bad for Republicans. The problem is, the vast majority of people have very little knowledge of what the filibuster is and even how many votes are required to break a filibuster. And who can blame them! But because of the lack of public understanding of the procedure, Republicans have been able to use the filibuster as an effective minority political tool to not only prevent the majority from governing, but also to paint the Democrats as ineffective legislators. The end result is twofold: (1) the outcome of the prior two national elections--2006 and 2008--where Democrats won large majorities in both houses of Congress and the Presidency, were rendered near moot; (2) the public grows impatient with Democratic ineffectiveness and votes the incumbents out of office.

This strategy has been working very well for Republicans. They are allowed to effectively block most legislation without having to commit anything but vague talking points as an alternative. Democrats, in response, should work to reform the filibuster--either eliminating it outright or reducing the number of votes needed to break a filibuster. They should also require Republicans to literally stand on the Senate floor and filibuster. The idea of the filibuster in the public mind is that of an act of contrition: which side has the most endurance to continuously debate the issue on the Senate floor, on live C-SPAN. The filibuster, however, has evolved into a tool the minority uses to force a cloture vote--requiring a 60 vote majority--on nearly every piece of legislation and executive nominee. No one actually filibusters in the traditional, intended, sense!

6. Association with extreme Tea Party movement. And finally, the so-called Tea Party movement that has engulfed the GOP is a widely popular movement among right-wingers, but is hardly a symbol of moderation, progress, and tolerance to the mainstream observer. Democrats should tie the official Republican Party to the Tea Partiers in the public mind. Of course, the Republicans may do this on their own as the need for Tea Party approval becomes crucial for primary races.

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Positioning themselves as the defenders of working and middle-class interests, while effectively differentiating themselves from the Republicans, will be an important political goal for Democrats this year. In addition to the above "wedge" issues, Democrats must also successfully pass comprehensive health care reform, as not passing reform will be political suicide, as I have mentioned in the past and as recent polling shows is still very popular.

Contending Notions of Liberty

Over the course of the ongoing health care reform debate the right has put forward a barrage of disingenuous, cynical, and hypocritical arguments against reform--not to mention the utter falsehoods disseminated by reform opponents. Republicans oppose reform because, they say, it will increase the size and reach of government, including government spending and taxes--yet the bill will actually improve the budgetary position of the federal government over the next decade and beyond, and is, in fact, a requisite to addressing long-term budgetary challenges.

This argument also flies in the face of the Republican's own 2003 Medicare Part D policy, which is in reality one of the largest expansions of government domestic spending in decades without offsetting spending cuts or revenue increases.

Then there's the Republican's hypocrisy when it comes to Medicare cuts. One of the more effective Republican talking points against reform has been that seniors will experience drastic cuts in their Medicare. Without delving into how patently false this is, such arguments are both hypocritical and highly cynical, coming from the party whose raison de etre has been to outright eliminate social programs, primarily Medicare and Social Security, since their inception. This is coming from the party that fought tooth and nail to block Medicare's passage in the 1960s and fought throughout the 1990s for drastic cuts.

And finally we have the outright falsehoods, such as "death panels" and insurance for illegal immigrants. Misrepresentations that alter the nature of debate, often forcing proponents (of the policy) onto the defensive, while significantly altering the narrative.

But there are those who will engage in an honest, open debate regarding the policy, and will even concede that the health care reform legislation--taken as a whole--will likely succeed in accomplishing what it sets out to do: (near)universal coverage, insurance reform, cost containment, etc. These folks, however, remain adamantly opposed to the legislation. Why? They see health insurance reform--and essentially any other government attempt at "correcting" or "addressing" social challenges--as misguided and as an infringement on individual liberty. According to this view, government intervention is "not the American way" and is in opposition to America's founding principles.

Once "liberty" has been invoked we've left the realm of policy and we've entered a philosophical debate, one that is much less receptive to facts, statistics, models, and policy arguments--however persuasive. (The same can be said when religious belief is invoked).

And who would want to be on the wrong side of liberty, however vaguely defined?Ah, but there's the rub: this is but one aspect of liberty, one part of a larger whole. A more complete conception of liberty puts an emphasis on balancing sometimes contending priorities: liberty as "freedom of" and liberty as "freedom from."

When conservatives invoke "liberty" when opposing government involvement in the economy or health care, they are thinking of liberty in its "freedom of" form. These are the types of liberties encapsulated in the The Bill of Rights: freedom of speech, freedom of religion, etc., and are usually thought of as the individual's liberty from government encroachment.

But this is a narrow--and in many ways antiquated--view of liberty. The types of liberties provided under the American Bill of Rights and other like documents are still very much essential today as they were over two hundred years ago. But these liberties do not take into account the ways in which the modern world--with its capitalist superstructure--can impinge on the human spirit, human worth, and human welfare. Forces out of the control of any one individual--a volatile market economy, unforeseen medical illness, a major financial crisis--can lead to outcomes that put the individual's very well-being in jeopardy. That's why liberty construed as "freedom from" cannot be dismissed and wholly trumped by "freedom of."

In an excellent essay in The New Republic, William Galston attempts to differentiate between these two types of freedoms, particularly in the context of health care reform. I recommend reading the entire essay, but here are some key passages:

The deeper question concerns not public sentiment, but, rather, the basis on which government may legitimately act under the Constitution. In 1933, FDR argued that that only the powers of government could be adequate to the exigencies of the moment. If so, he said, it could not be the case that our Constitution had disabled us from meeting a grave threat to the general welfare, and potentially to constitutional government itself. He won that argument: We live today in the legacy of his victory, and (I say this at the risk of sounding “progressive”), we’re not going back.

The alternative formulation of the dispute--Mansfield’s, I think--is that the issue isn’t the relation of means and ends, but rather the right of government to act in certain ways. If government doesn’t have the right, then considerations of efficacy are irrelevant. Even if government could bring about a good result by acting ultra vires, doing so would be an invasion of liberty, which is the most fundamental good. Rather than invade liberty, we should be prepared to live with the consequences of government forbearance. (I note for the record that if Abraham Lincoln had accepted this view, we’d probably be presenting passports at the Virginia/Maryland border.)

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At the heart of the conservative misunderstanding of liberty is the presumption that government and individual freedom are fundamentally at odds. At the heart of any liberal understanding of freedom is the proposition that public power can advance freedom as well as undermine it.

In the real world, there is no such thing as freedom in the abstract. There are only specific freedoms, which differ in their conditions and consequences. FDR famously enumerated four such freedoms, dividing them into two pairs: freedom of speech and worship; freedom from want and fear. The first pair had long been recognized and enshrined in the Constitution. The second were a new formulation, and Roosevelt made them concrete when he signed Social Security into law, justifying it as a way of promoting freedom from want: "We have tried to frame a law which will give some measure of protection to the average citizen and to his family ... against poverty-ridden old age." Three years later, he declared that Social Security payments will "furnish that minimum necessary to keep a foothold; and that is the kind of protection Americans want."

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The other face of freedom--"freedom from"--points toward circumstances that (it is presumed) we all wish to avoid. In such instances, the task of government is, so far as possible, to immunize individuals against undesired circumstances. Here, government acts to protect not individual agency and choice, but rather an individual's life circumstances against outcomes that no one would choose, or willingly endure.

I'm afraid that unless the divide can be bridged between these two conceptions of liberty, conservatives will be unable to accept a role for government in advancing human and societal welfare. The challenges we face as a society in the 21st century render this philosophical resistance extremely unfortunate. Many of the challenges and obstacles we face--financial sector volatility, global climate change and other eco-environmental challenges, health care cost inflation and inequity--require effective, knowledge based governance that promotes and protects the public good.

Krugman and Klein on Budget Deficits

As a follow-up to my post on budget deficits, here's Paul Krugman's take on the deficit:

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

And here's Ezra Klein:

Deficit fear-mongering was a core part of the Democrats' strategy against Bush, too. It just didn't work very well. The reason is that the public didn't care very much about deficits. Why? Well, they weren't very worried about the economy. But now they're terrified about the economy. And deficits -- which signify irresponsible money management to voters who think of things in terms of household finances rather than Keynesian counter-cyclical spending -- are evidence, to them, that the government isn't handling the economy correctly. The fact that deficits rise sharply during recessions simply confirms to voters that there's a connection.

Republicans are taking advantage of this misguided analysis, just as Democrats would happily have latched onto the sentiment if it had presented itself in the Bush years. But the driver here isn't Republican messaging but, on the one hand, anger over the economy, and on the other hand, the fact that the troubled economy needed a vast expansion in the short-term deficit. A bad economy isn't popular and big deficits aren't popular, and combining the two is seriously unpopular, even if it's necessary.

Budgets, Deficits, and Hypocrites

The Obama Administration unveiled its FY2011 budget proposal on Monday. It clocks in at a record $3.8 trillion in expenditures, with a record $1.6 trillion deficit.

The Obama Administration has a difficult hand to play. In similar ways, the Clinton Administration took office in 1993 amidst (what were then) record peacetime deficits, largely caused by profligate defense spending and extravagant tax cuts for the wealthiest Americans during the Reagan and Bush I years. The ambitious domestic agenda that Clinton campaigned on was largely curtailed as the Administration chose to pursue a strategy of deficit reductions. That strategy ultimately resulted in a budgetary surplus of over $200 billion by the end of Clinton's 2nd term.

But the subsequent surpluses that were projected into the near and mid-term future never materialized as the incoming Bush II Administration pursued a series of policies that turned a sizable surplus into persistent and record deficits. Arguably the Clinton administration's largest economic achievement--turning record deficits into surpluses--was all for naught. The Republicans passed massive tax cuts--mostly for the wealthiest Americans--in 2001 and then again in 2003 (for good measure); engaged in two foreign wars, as well as the so-called war on terror, with borrowed funds; and passed a Medicare prescription drug program that locked in high rates, significantly benefiting the pharmaceutical industry. Before Obama set foot in the White House in 2009, much of projected deficits for the foreseeable future were locked in by Bush-era policies.

And this is all prior to the deficit-growing effects of a financial crisis and major recession. A recession has two automatic effects on budget deficits: decreasing tax revenues due to decreased income (wealth) and the automatic stabilizing effects of unemployment insurance and Medicaid funding. Add to this the very necessary--and transitory--TARP and stimulus programs, which were the lifeblood of a collapsing financial sector and economy, respectively.

This is the story of our short-term budgetary deficits. Obama is hardly to blame. In many ways he--and his ambitious agenda--is a victim of the budgetary environment in which he rose to power. For a visual, above is a graph from the independent Center on Budget and Policy Priorities, detailing the major contributors to current (and future projected) deficits.

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So this is the situation we find ourselves in: Much of the deficit is inherited from ill-advised Bush-era policies, much of the rest is due to either the structural effects of recession or the Keynesian necessity to use government spending to boost a recessionary economy.

Republicans have been highly critical in general of the incumbent Democrats, but particularly with regard to the budget and deficits. You see, Republicans believe it's appropriate when they run up huge deficits and then pass on those deficits to the incoming Democratic administration. But, as was the case in 1993, years of Republican profligacy handcuffs the Democrats once they finally take power. It's tragic, but true. The years of Republican rule lead to huge deficits and an overall ballooning of the national debt. But as soon as Democrats take power, Republicans sound the siren call for fiscal retrenchment: "No, we can't afford such and such new social policy. We need to focus on reducing the deficit and the size of government." Oh, now we do, do we?

So what happens is the Republicans are allowed to have it both ways. They govern like a drunken sailor, and then campaign against the the government's fiscal irresponsibility once the Democrats are in power. But when asked how they would reduce the deficit, Republicans resort to talking points, mainly their answer for just about every problem: cut taxes. You may be asking yourself: How does one reduce the deficit by cutting taxes? And you'd be asking a very good question, one for which, I'm afraid, there is no answer based in reality. Indeed, Republicans like to highlight the deficit when it is politically expedient, but when presented with an opportunity to deal with the issue, they oppose the measure.

Consider this: When presented with voting on the establishment of a bipartisan deficit commission--which would be responsible for offering specific recommendations to reduce the deficit and would then be presented to Congress for an up-or-down vote--Republicans, including their leadership, largely voted against the creation of the commission. The same can be said of Health Care reform. The Democratic plans establish various cost controls, as well as cuts to wasteful Medicare spending in an effort to slow the growth trajectory of health care. In the long term, it is rising health care costs that are putting the largest strain on the budget, via Medicare and Medicaid. But instead of working with Democrats on reform measures that will reduce the cost of health care, and thereby reduce future budget deficit projections, the Republicans have politicized the entire effort, misrepresenting reform as rationing and "death panels".

And this leads to another very important reality: when the budget has become so politicized, how are we going to effectively address its challenges?

How the Republicans plan on killing Financial Regulatory Reform

Via the Huffington Post, Republican spin doctor Frank Luntz draws road map to kill financial regulatory reform efforts. Luntz was a major source of keywords and talking points in the Republican's effort to paint health care reform as a socialist, government takeover. Now he's showing the Republicans how to paint financial regulatory reform as a special interest giveaway. Here's the full memo:

Language of Financial Reform -