Month: January 2013

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GOP revenge on NE Liberal Democrats, Gov. Christie and of course “God Sent” hurricane Sandy itself …

‘Knife in the back’: Fury over House dropping Sandy aid vote

(CNN) — The outrage over inaction that began on Tuesday night in Washington quickly spread across the country, ultimately drawing the ire of governors and an impassioned plea from the president. But Republican leadership in the House showed no sign of changing its mind. A $60 billion aid package to help those affected by Superstorm Sandy would not materialize on Wednesday.

“It seems an even sadder commentary on the state of our Congress than we’ve observed to date,” said Paul Lurrie, who lives in Belle Harbor, New York, and had no heat or electricity for three weeks after the storm struck. He accused House Speaker John Boehner of “petulance” for not bringing the package to a vote as expected.

Rep. Peter King, a New York Republican, slammed his own party

“The Republican Party has said it’s the party of ‘family values.’ Last night, it turned its back on the most essential value of all, and that’s to provide food, shelter, clothing and relief for people who have been hit by a natural disaster,” King said in an interview with CNN.

“Anyone from New York or New Jersey who contributes one penny to the Republican Congressional Campaign Committee should have their head examined,” King said. It’s very rare for a lawmaker to call on anyone not to support his own party.

The Senate had already passed a bill that would have provided billions of dollars in aid to victims. President Barack Obama urged the House GOP leadership to hold a vote Wednesday — the final full day of the current Congress. At noon Thursday, a new Congress will be sworn in, and will have to start from scratch in passing any legislation.

Peter King Near Tears, Threatens to Quit Republican Party for Blocking Sandy Relief

Reuters:

Speaking after winning a “fiscal cliff” victory, President Barack Obama vowed on Tuesday to avoid a repeat of last year’s divisive fight with Congress over an extension of the nation’s borrowing authority.

“While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up,” Obama said in remarks in the White House.

Eighty-five Republicans joined with the Democrats to pass the deal last night, and that was 29 more than were needed. It wasn’t even close. When you consider that 16 Democrats voted no (something none of them would do on the debt ceiling) we have about a 45 vote cushion against failing to pay our bills on time.

There will be a different hostage this time. The hostage will be the whole federal budget and the GOP’s refusal to fix it without significant and painful cuts to entitlements. This battle was never avoidable. The president has never denied this. Here’s what he said on New Year’s Eve:

Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans. Obviously, the agreement that’s currently being discussed would raise those rates and raise them permanently. (Applause.)

But keep in mind, we’re going to still have more work to do. We still have deficits that have to be dealt with. We’re still going to have to think about how we put our economy on a long-term trajectory of growth, how we continue to make investments in things like education, things like infrastructure that help our economy grow.

And keep in mind that the threat of tax hikes going up is only one part of this so-called fiscal cliff that everybody has been talking about. What we also have facing us starting tomorrow are automatic spending cuts that are scheduled to go into effect. And keep in mind that some of these spending cuts that Congress has said will automatically go into effect have an impact on our Defense Department, but they also have an impact on things like Head Start. And so there are some programs that are scheduled to be cut that we’re using an axe instead of a scalpel — may not always be the smartest cuts. And so that is a piece of business that still has to be taken care of.

And I want to make clear that any agreement we have to deal with these automatic spending cuts that are being threatened for next month, those also have to be balanced — because remember, my principle has always been let’s do things in a balanced, responsible way. And that means that revenues have to be part of the equation in turning off the sequester, in eliminating these automatic spending cuts, as well as spending cuts.

Now, the same is true for any future deficit agreement. Obviously, we’re going to have to do more to reduce our debt and our deficit. I’m willing to do more, but it’s going to have to be balanced. We’re going to have to do it in a balanced, responsible way.

For example, I’m willing to reduce our government’s Medicare bills by finding new ways to reduce the cost of health care in this country. That’s something that we all should agree on. We want to make sure that Medicare is there for future generations. But the current trajectory of health care costs is going up so high we’ve got to find ways to make sure that it’s sustainable.

But that kind of reform has to go hand-in-hand with doing some more work to reform our tax code so that wealthy individuals, the biggest corporations can’t take advantage of loopholes and deductions that aren’t available to most of the folks standing up here — aren’t available to most Americans. So there’s still more work to be done in the tax code to make it fairer, even as we’re also looking at how we can strengthen something like Medicare.

Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone — and you hear that sometimes coming from them, that sort of after today we’re just going to try to shove only spending cuts down — well — (laughter) — shove spending cuts at us that will hurt seniors, or hurt students, or hurt middle-class families, without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists, et cetera — if they think that’s going to be the formula for how we solve this thing, then they’ve got another thing coming. That’s not how it’s going to work.

The key here is the word “revenues.” Don’t think for a moment that entitlements will be off the table. They won’t, and they never were going to be off the table. What the president is saying is that we are not done trimming the hair of the rich, and that is going to be the price for any cuts in entitlements. So, if you are an entitlement absolutist, you are going to be disappointed. Probably, you are going to be angry. But the president needs more revenue and the only way to get it is as part of a deal that is balanced. He couldn’t force the Republicans to acknowledge that this time around, but their will and unity has now been broken.

If you want to predict what will happen in politics, here’s my best advice. See what I have to say about the matter in question and then pick the opposite outcome. My track record on such things is remarkably consistent.

Since I also expect Boehner to lose his bid for another term as Speaker, it’s probably a lead pipe lock that he keeps his position. I wonder if Vegas (or your local bookie) takes bets on House leadership elections?

Lumping entitlements, earned benefits, and paid-in earned benefits (edited from the less descriptive “contributed benefits”) into the single category of entitlements is one reason why it’s so difficult to have rational discussions of federal tax and spend social policies.  For too many people, when they hear the word “entitlement,” they think welfare and in the US, welfare has a bad connotation.  

Social Security Retirement income is NOT an entitlement.  It’s a retirement insurance fund to which workers and their employers make contributions.  At a flat (regressive) rate.  It it financially solvent for decades if not forever.  Therefore, discussions of “chained CPI” or fixing a non-existent problem by raising the cap are naive and/or decades premature.  

The disability portion of Social Security is a mix of entitlement and worker contributed insurance.  Beneficiaries that worked before becoming disabled paid into the fund and therefore, those benefits are not an entitlement.  If there is a funding problem with either the insurance or entitlement portions of disability, the US Dept of Treasury has not made the case.

Medicare Part A (HI) – hospitalization – is like Social Security (OASDI).  Workers and employers contribute to the fund, but beneficiary status is based on age and not contributions.  This is not keeping pace with the inflation rate of hospitalization, and unlike OASDI, the earned income cap was removed long ago.

Medicare Part B, C, and D are partial entitlements funded out of general (income tax) revenues.  To access the entitlement, the beneficiary contributes a monthly premium during the period of entitlement.  Premiums cover approximately a quarter of the annual costs to the Medicare program.  Beneficiaries are also personally responsible for deductibles and co-pays.    

Medicaid is a means-tested entitlement program for medical and nursing home care.  Funded out of federal and state general revenues.  

SNAP is a means-tested entitlement program for food.  

VA benefits are a mix of means-tested and/or service connected disability earned benefits and earned benefits.

What has made the Social Security Retirement Income and Medicare programs so popular is that they have delivered the promised benefits and the beneficiaries view themselves as investor/owners in the programs.  Totally correct on Social Security, but only partially correct with regard to Medicare.  The entitlement portion of Medicare might work better if the beneficiaries didn’t feel, well, so entitled.  Matt Taibbi described the chiselers to a tea:

Scanning the thousands of hopped-up faces in the crowd, I am immediately struck by two things. One is that there isn’t a single black person here. The other is the truly awesome quantity of medical hardware: Seemingly every third person in the place is sucking oxygen from a tank or propping their giant atrophied glutes on motorized wheelchair-scooters. As Palin launches into her Ronald Reagan impression — “Government’s not the solution! Government’s the problem!” — the person sitting next to me leans over and explains.

“The scooters are because of Medicare,” he whispers helpfully. “They have these commercials down here: ‘You won’t even have to pay for your scooter! Medicare will pay!’ Practically everyone in Kentucky has one.”

A hall full of elderly white people in Medicare-paid scooters, railing against government spending and imagining themselves revolutionaries as they cheer on the vice-presidential puppet hand-picked by the GOP establishment. If there exists a better snapshot of everything the Tea Party represents, I can’t imagine it.

The original design or architecture of each of these programs was rational and solid.  None are perfect.  Whatever defects exist are more the product of unanticipated changes over time that were not sufficiently addressed.  That is one thing that can’t be said of Social Security.  The issue of the “Baby Boomer” retirement bubble was handled decades ago.  (Well, except for the part about properly managing the trust fund.)  Anyone that says otherwise is a liar and a cheat.  

So, when you hear people railing about the cost of “entitlements,” demand that they identify the program.  If they say Social Security, inform them that it’s not an entitlement.  It’s an earned benefit insurance program that beneficiaries have paid for.  It has never contributed a penny to the deficit and it’s not going bankrupt.  If they point to Medicaid, SNAP, or VA benefits, ask which poor sick people we should euthanize, which poor children we should let starve to death, and which veterans we should deny benefits to.  If they point to Medicare, well, socialized medicine would solve that and cut their medical costs in half as a bonus.    

     

For the first time in some of your lives, the House of Representatives just passed a bill that the majority of the majority party opposed. Ordinarily, such votes are not even allowed to happen. And, while technically this vote occurred past midnight (and thus in 2013), this is the first time that Republicans have voted for tax increases since they helped Poppy Bush violate his “Read My Lips” pledge over twenty years ago. The Republicans also voted for stimulative tax credits and an extension of unemployment insurance, in violation of their anti-Keynesian economics absolutism. Insofar as the fever could be broken, it has been broken.

If you watched the debate in the House, it was clear that the Republicans were absolutely miserable and the Democrats were absolutely giddy. Yet, many respectable voices in the Progressive movement are unhappy. I want to remind you, first of all, that only 16 Democrats in the House voted against this bill. That is only a tiny fraction of the Progressive movement. Unless you think your elected officials are idiots, you probably are wrong to see this as a defeat. This is a bill that was supported by people like Bernie Sanders, Al Franken, Jeff Merkley, Tom Harkin, and Sherrod Brown. If you think that they sold you out, you might be an extremist yourself.

Yes, it sets us up for a battle over the sequester and the debt ceiling, but that was where we were from the beginning, right? We were going to battle over those things, but also unemployment insurance and progressive tax credits and so much more that we got in this deal.

The GOP has been splintered, with their leader forced to take the minority position within his own party and then forced to ram it down the throats of his base. If you ever thought you’d see that day, raise your hand. And we need it to happen again to tackle immigration reform or assault weapons or climate change. It may not happen, but this was a prerequisite if it was going to happen.

If you are worried that we will see cuts in entitlements two months from now, you are probably correct. We were never going to escape that entirely. But any cuts we see will be matched by further tax hikes. We have a president who is coming off a series of victories whose popularity will have never been higher, and he isn’t going to cave. The GOP might think that cuts to entitlements are popular, but they are wrong. Actually, they know that they are wrong and that the only way to get them is as part of a bipartisan deal where blame is widely shared. They will not refuse to pay our debts in order to slash our Social Security checks and, if they do, we’ll win back the House.

Relax. Have a cigar. Bask in the glow.

Here is some recent history, via Wikipedia:

The majority of the majority is a governing principle (not a legal procedure) used by Republican Speakers of the House of Representatives since the mid-1990s to effectively limit the power of the minority party to bring bills up for a vote on the floor of the house.[1] Under the majority of the majority doctrine the Speaker of the United States House of Representatives will not allow a vote on a bill to take place unless the majority of the majority party supports the bill.[2] This is sometimes referred to as the “Hastert Rule”,[3] as its introduction is widely credited to former Speaker Dennis Hastert (1999-2007); however, Newt Gingrich, who directly preceded Hastert as Speaker (1995-1999), followed the same rule.[4] Hastert was vocal in his support of the rule stating that his job was “to please the majority of the majority.”[5]

Within the next hour, we may see Speaker John Boehner violate the Hastert Rule for the first time. In a parliamentary system, this would never happen. What would happen instead is that the parliament would express “no confidence” in their prime minister and a new coalition would elect a new prime minister. We don’t have a parliamentary system, but our system has been behaving like one since the Republican Revolution of 1994. Getting Boehner to behave like a Speaker of the House rather than merely the leader of its largest faction is a major accomplishment. It may cost him his gavel, but more likely it will save it. House members will need to be slowly house-trained to give up some of their delusions and bad habits if this country is going to be governable over the next years. The reason is simple: the majority of the House Republicans are stark-raving mad.

I’ve been busy celebrating my son’s third birthday this afternoon, so I have had to do a bit of reverse engineering to try to ascertain how things unfolded during the day. As I understand it, the House caucus met once at midday and then again just after 5pm. Ryan Grim’s reporting relates to the first of the two meetings. Apparently, it became clear that there was a division in the leadership team, with Boehner pointing out that the Senate bill passed with overwhelming Republican support and Paul Ryan saying that he opposed the bill. Eric Cantor went further, arguing “vociferously” against the bill, and then going on CNN after the meeting to drive home the point. Rep. Tim Huelskamp of Kansas, who was recently stripped of one of his committee assignments, said that conservatives were “heartened” to see Cantor take on the Speaker in front of the whole caucus.

Yet, no one is really talking about today’s impasse as part of some kind of coup against Boehner. Jennifer Rubin suggested that Boehner should resign if he can’t get the bill passed, but she didn’t predict that he would. Her point was that he should step down if he can’t lead this group of miscreants. But I am not sure if it is his choice anymore. Losing the battle over Plan B was bad enough, but to have Cantor and Ryan openly defying him in today’s first caucus meeting has to be seen as a clear indication that his power is spent.

Try to imagine, if you can, Steny Hoyer and Jim Clyburn pulling a similar kind of stunt on Nancy Pelosi. It’s impossible to imagine. That’s why I think we are quite possibly witnessing less of a freak-out over the terms of the deal than we are seeing a palace coup.

It’s just hard to see how or why the GOP caucus would reelect Boehner as their Speaker if they so obviously do not trust him or want to follow his lead.

I worry about making these kind of bold predictions, but I don’t think Boehner will still be Speaker if he can’t get this bill passed. If he does get it passed over the objections of his leadership team and most of his caucus, he could still be in danger.

What do you think the odds are of Boehner getting the Senate bill to pass the House?

I just don’t believe he can make it happen. I get all the issues progressives have with Obama as a weak negotiator. I’m personally concerned that Obama is not all that committed to preserving the social safety net. On the other hand, Boehner has consistently shown an inability to get his caucus to follow him, even on deals that are extremely favorable to Republicans. He’s no Tom “I’ll Make you Squeal Like a Stuck Pig Until You Vote the Way I Tell You too” Delay. He has the least power of any Speaker I’ve seen in my lifetime.

Perhaps someone can explain to me how Boehner (or any other member of the House GOP Leadership, for that matter) can corral the herd of cats that currently make up the Republican Caucus to accept the terms of the Senate deal. In fact, I don’t see him getting a majority of Republican members to sign off on any deal with Obama, especially since I suspect many of them think Obama will cave some more if they kill it. Why would any Republican Congressperson risk getting primaried over a deal that raises taxes (I know, it only raises them on a very small minority of well-off people, but nonetheless …)?

But I suppose I could be wrong.

I think today’s Krugman is Krugman at his very worst. A lot of progressives really do wait to see what he says before they make up their minds about whether something is good or bad, and he provides totally inadequate guidance based on idiotic principles. Krugman is good with numbers and terrible with politics, and that really shines through this morning. He explains that progressives have a bad taste in their mouths because they didn’t like the way the president negotiated, not because of the result he got. A hugely bipartisan deal in the Senate that actually raised taxes on the rich (on their income and their deductions, on their dividends, on their capital gains, and on their estates) while preserving tax cuts for students, the poor, and the middle class, without touching entitlements is not something we should feel badly about.

Disappointment that the president didn’t get everything he wanted should be tempered by the fact that he also gave up nothing near what he “offered” to give up. Arguing that he showed weakness by wanting a deal is foolish when what he really needs is a series of deals over the next two years with a very reluctant and frankly unhinged Republican Party. We need a lot more votes in the Senate where we get close to 90 votes, not less.

Krugman should stick to telling us how the economy works and leave the politics to the pros who keep winning battle after battle with the Republicans.

One hundred and fifty years ago, President Abraham Lincoln issued the Emancipation Proclamation. In retrospect, it seems to have been somewhat more important than whatever the Senate was doing last night. While you probably want to know what is in the Senate deal, it’s important to remember that it isn’t law until the House passes it and the president signs it. One thing I don’t want to hear a lot of whining about is the $400,000/$450,000 top marginal rate. We are talking about a 4.6% tax cut on $250,000 of income, which amounts to $10,500. When you consider that Obama exchanged that for an extension of unemployment insurance and a whole host of tax credits that affect the middle class and working poor, it’s not a big concession at all. What’s more difficult to swallow is that the capital gains and dividends rate only went up to 20%. It’s a hike on top earners, but not enough of a hike for my tastes. On the other hand, the rich will have to deal with a Personal Exemption Phaseout (PEP) set at $250,000 and an itemized deduction limitation (Pease) set to $300,000. That is where Mitt Romney will feel the pinch. The deal also extends the Farm Bill, which avoids a massive spike in the price of milk. It permanently fixes the problem with the Alternative Minimum Tax not being indexed to inflation, and it solves the so-called Doc Fix for Medicare compensation to physicians (a long-time headache).

The Republicans think they can make another go of hostage-taking during the debate over the debt ceiling, but I discussed yesterday why the White House is not overly concerned about that. In any case, the deal establishes that a quarter of the cost of extending the sequester for two months will come from defense spending and that half will come from new revenues from a change in the tax-deferral of individual retirement accounts.

Please keep in mind that all but seven Republican senators just voted to raise taxes (the first Republicans to do so in over twenty years). The Republican holdouts were Chuck Grassley of Iowa, Mike Lee of Utah, Rand Paul of Kentucky, Marco Rubio of Florida, and Richard Shelby of Alabama (who voted against), and Mark Kirk of Illinois and Jim DeMint of South Carolina (who didn’t vote). That means that 40 Republican senators (minus those who are retiring) will have to defend their vote to raise taxes when facing reelection. We’ll see how many follow suit in the House.

When judging the merits of this deal, it is important to keep in mind all the people on the margins of our society who will not be paying eight dollars for a gallon of milk or face losing their unemployment check or the loss of their child tax credit or their college loan tax credit. Keep in mind that the president won an extension of tax credits for clean energy. Even if taxes did not go up as much as they should on the rich, they will pay more in income, capital gains, and dividend taxes, while losing significant opportunities to create tax write-offs for themselves through charitable giving. The Estate Tax also went up modestly.

Let’s see if Boehner can do his job.