Wise Winston

Details on Obama jobs / deficit plan…

Remember, the “supercommittee” deadline to present its plan to save $1.5 trillion over 10 years is Nov. 23. Obama’s approach has two parts: a $447 billion jobs plan (stimulus) and a 3.6 trillion deficit reduction plan over 10 years.

Note: this number does not include the $900B in spending cuts passed in August in debt ceiling deal.

BOTTOM LINE: Note: This will likely be passed, if passed at all, in several different bills. Main standoff is over tax increases. Republicans want none, Obama has included in his plan a threat to veto any bill that cuts Medicare without tax increases on the wealthy. Obama has leverage this time round that he didn’t have in the August debt ceiling deal. Namely, by doing nothing, the Bush tax cuts automatically expire Dec. 31.  

#1 DEFICIT REDUCTION 

Topline: Reduce deficit by 3.6 trillion over 10 years

- 1.5 trillion from tax increases ($800 billion from expiration of Bush-era tax cuts for those making $250,000+ plus $700 billion from closing tax loopholes (for those making over $250,000, oil companies, corporate jet-owners)

- 1.1 trillion in savings from winding down Afghanistan and Iraq

- No change to Social Security

- No change to Medicare eligibility age (currently 65)

- $320 billion cut to Medicare ($248 billion) and Medicaid ($72 billion) that won’t kick in till 2017 for beneficiaries

- $260 billion in other domestic spending cuts

- $430 billion cuts from additional interest savings
- “Buffett Rule” - Guiding principle (no dollar figure attached ) that individuals making over $1 million pay at least the same percentage of their earnings as middle-income taxpayers. - Threat to veto any bill that cuts Medicare without tax increases on the wealthy.

#2 JOBS PLAN
Topline: $447 billion jobs bill to get the economy going

- $245 billion payroll tax cut for individuals and businesses
- $62 billion in unemployment benefits extension and hiring programs
- $140 billion in infrastructure, schools, investment ($50 billion in surface transportation, $30 billion to refurbish schools, $35 billion to avoid layoffs among teachers and first responders, plus other small ticket items)

The Audacity of Retreat: Obama’s shameful jobs speech humiliation

The Obama administration has only itself to blame for its — let’s call it what it is — pathetic climbdown after picking a fight with Republicans in Congress over next week’s jobs speech.

“Can we please refrain from saying Obama ‘caved?’ He did no such thing,” David Gergen said, calling the matter “both silly and trivial.”
 
Oh boy, David Gergen you are SO wrong.
 
The White House lost BIG TIME.

“The last thing the White House needed was to appear to cave in to the Speaker and that’s what happened,” said James Carville.

He was right on the money.

“There’s a tendency to say ‘well it’s just a little spat between the two, and they got it resolved 24 hours later,’ but I think this is just gonna reinforce a lot of perceptions that already exist out there.”

Where did the White House go wrong. Oh let me count the ways…

First, in what Gawker correctly described as “the most gratuitously—and joyously!—dickish move of his presidency,” the White House deliberately announced that Obama would speak at the exact same time as the GOP debate at the Reagan Presidential library.

Bad idea. If you’re going to be a “dick,” you need to stick to your guns.

The White House then reacted in shock as Boehner called its bluff, suggesting that the date didn’t work for him due to “logistical impediments.”

Logistical impediments? Let’s say that again — Logistical impediments??????? Really?????

The New York Times called Boehner’s move “contemptuous” and “appalling,” and noted “there can be no excuse for his lack of respect for the office.”

So much is true. It’s the only thing the Times got right in an editorial which placed the blame for the most part squarely on Boehner instead of the White House itself. 

Can you imagine Republican anger had Pelosi done the same thing to President George W. Bush?? Of course you can. But that’s besides the point. 

The Times said it was possible the White House may have failed to notice that the day fell on the same day of the presidential debate. “Oh Grow Up,” New York Times. You’re embarrassing yourself.

Obama would have won this argument had he not flaked. Americans wouldn’t have bought the “logistical impediments” excuse.

Had the White House had the courage to see its ill-advised political gambit through, the narrative would have been: Republican obstructionism.

Instead, it has deservedly become: Weak White House caves to Republicans for the umpteenth time.  

But wait, it’s not over.

In the most galling moment of all, following a full retreat with its tail between its legs, the “adult” White House told political reporters the spat was just a “side show,” and that the American people — God love ‘em — care about jobs, not squabbling in Congress.

“Oh and by the way, don’t worry America, Obama will be finished speaking by the time the Packers and Saints kick off at 8:30pm ET.”

Pathetic. 

They started a fight, backed down, and then pretended to be above petty squabbles.

The Audacity of Retreat.

The “Super Committee” and Taxes

It’s Groundhog day with the second installment of the recently concluded debate over spending and taxes set to begin again  when Congress returns from its Summer break Sep. 7.

Spending is on the table. It is unclear whether taxes are on the table or hovering slightly near the table.

The BIG difference between the debt ceiling debate which just ended in such ugly fashion and the upcoming encounter is that this time, Obama also has leverage on the tax side of the equation. 

The big elephant in the room is the Bush tax cuts, which are set to expire on Dec. 31, 2012 if no action is taken by Congress. With a majority in the Senate and the veto pen, the president has the option of letting tax rates revert back to Clinton era-levels should he choose to do so. 

The two parties have recently named their starting lineups (mostly) for the 12-member so-called “super committee” which must present its plan to cut $1.5 trillion from the federal budget to Congress by Nov. 23. 

The current political mood is hard to judge.

Democrats experienced a major backlash from their base following the last deal and a narrative has taken hold in the media that Obama has been wounded by the economic malaise the country finds itself in. However, Republicans did themselves no favor with the general public, a trend consistently revealed by opinion polls.

The coming debate will be interesting to watch. Don’t expect any meaningful results to come out of the process just a year out from a general election.

At this point, you figure there’s a better than even chance we’ll be looking at an enforcement of the trigger mechanism that will automatically cut $1.2 trillion from the Pentagon budget and Medicare (providers only). 

Mitch McConnell and John Boehner showed intransigence in picking the likes of Toomey, Kyl, Hensarling and Camp to the super committee. Reid’s pick Patty Murray, the current head of the DSCC was also an easy political target for Republicans. 

2012: The Medicare Election

Both parties have problems with their arguments

By Matthew Alexander

The 2012 election is still 18 months away but some of its themes have already started to take root; Indeed it seems increasingly likely that the 2012 election will be fought over entitlement reform, and specifically - Medicare. 

The Republican plan put forward by Rep. Paul Ryan (R-Wis.) would make drastic changes to the current Medicare program, though no one 55 and older as of this writing would be affected.

However, the independent CBO has weighed in, saying that seniors starting in 2022 will end up paying more under Ryan’s “voucher” (yes, I know Republicans don’t like that term) proposal than under the current system. 

Most public polling I’ve seen (with the important exception of the New York Times/CBS poll) shows that the public are against the Ryan proposal - though I would strongly caution that the poll’s wording is absolutely critical in determining voter sentiment.

Also let’s face it, most people aren’t well-versed enough in the details to offer an informed response. At this stage, polling is more likely an indication of party ID than support for a particular plan.

Let’s be honest though. Politically speaking, the Democrats unquestionably have the stronger hand here. 

Shouldn’t we expect to see the Republicans’ plan get pummeled by Democrats much in the same way that they whipped Democrats over health care in the 2010 cycle? 

Well… Not exactly. Democrats should ask themselves this: If they have such a persuasive argument, then why do they feel the need to embellish the facts in Ryan’s plan?

I see you cynics rolling your eyes, “Both sides Lie!” Yes they do. Yes, they do. 

But Bill Maher and the DCCC have now both been accused of distorting/lying about Paul Ryan’s plan by Politifact - the independent political fact-checking website. 

If Democrats have enough political support to win this fight on the merits, then why resort to scare tactics and baseless attacks on Ryan’s plan?

Notice that Republicans are very quick to say that their plan begins in 2022 and doesn’t affect current seniors, which begs the obvious question: If their plan was so great and benefited seniors, then why not adopt it sooner? The GOP response to that is that a 10 year period is needed to give future seniors time to prepare for the switch. But, clearly there are other issues at play here too. The 55+ exception by Republicans is clearly a short-term political dodge. 

DEBUNKING DEMOCRATIC MYTHS

However, Democrats need to face up to some cold realities too.

No Democrats, the Ryan plan does NOT give seniors a $15K check and tell them to fend for themselves. The poor and sick are given more money than those at the top of the scale.

However, Ryan’s plan would seem to result in seniors having to pay more for their health care costs over the long run. If that’s the simple truth, then why don’t Democrats stick to that argument, bang it like a drum and take their chances at the polls? 

Now in defense of Ryan - He says that his plan would result in increased competition among private insurers, thereby driving down seniors’ costs. Is there an argument to be made there? Maybe. I confess to being skeptical. But how is one to know? In a world of spin and no truly independent arbiters, I’ll take the CBO at its word on this point and accept the fact that future seniors would pay more out of pocket under Ryan’s plan. 

Another defense of Ryan - He’s put the issue on the table which took a lot of political courage and he should be praised for that.

The Democratic argument that goes, “How can a plan be called courageous if it guts seniors’ rights, hurts the poor etc etc..” is unfair as

a) it IS politically courageous to put forward a plan likely to be opposed by an important voting bloc and

b) despite what it does or doesn’t do to seniors, the CBO does believe Ryan’s plan will lead to government paying less. i.e. It IS a serious long-term deficit reduction plan.

The most persuasive Republican argument at this point remains the fact that the status quo can’t continue and Ryan’s plan is one way of addressing our debt. Oh, and that Democrats don’t have a credible alternative. As Ryan correctly states - the real argument should not be about his plan versus the status quo but between his plan and a yet-to-be-formed Democratic alternative. Indeed, Democrats used this same line when arguing for universal health care during the 111th Congress.  

(BTW - my position on ObamaCare: While I favor the pre-existing conditions language and the 26 yr olds on parents’ plans parts, I do NOT believe the numbers add up and am not someone who advances the CBO report saying it reduces the deficit. If you’re covering 30M more people, then SURELY that must cost more money, not less, right? N.B. - Bill Maher is another who acknowledges this)

SO WHERE DO WE GO FROM HERE?

No doubt everyone wants to protect seniors, but the country also needs to face its looming debt burden as the national debt continues to rise as an alarming percentage of GDP.  

Clearly choices are going to have to be made. The music’s stopping. If Democrats are serious about the debt (which they claim to be), then they should argue against changes to the current Medicare system by refocusing the debate as a whole on to spending priorities and revenue collection.

Democrats should argue that of all the people who to have to bear a heavier burden, seniors - who for the most part rely on fixed incomes - should be the last ones forced to sacrifice.

Defense anyone? How about taxes?

Still, if Democrats are going to convince with this argument, then they will have to be willing to propose other spending cuts and increased sources of revenue (and yes, I’m talking about being courageous on the need for tax hikes on ALL income brackets).

Obama has committed (again) to his 2008 campaign pledge of tax hikes for those making over 250K. Meanwhile, Pelosi has (unhelpfully) floated the idea of raising the 250K threshold to 1 million. Either way, Democrats showed no backbone in the last tax showdown which resulted in both parties agreeing to extend the Bush tax cuts at the expense of the deficit. No courage was shown by either party. Free ice-cream for all!

STALEMATE

When Standard and Poor’s changed the US debt outlook to negative, it did so on the premise that it believed that the two parties would be unable to come to any political agreement in the next 2 years and therefore the United States debt would inevitably rise in at least the short-term. 

Meanwhile, while announcing its own decision not to change the country’s debt outlook, Moody’s cited its belief that the two parties will in fact come to an agreement to pay down the county’s long-term debt.

Who is right? Having seen the tax compromise during the lame duck congress — an agreement that required no sacrifice from anyone as it extending all tax cuts to all income groups in addition to a temporary payroll tax cut — my bet’s on S&P. 

If I was betting man, I’d say that Democrats will win the political argument but no tangible progress towards addressing the debt will result and Obama will win re-election somewhat comfortably in 2012. 

#1 The Democrats’ position, though far from courageous, is a winner at the polls

#2 Paul Ryan is explaining. He is therefore losing. 

The Democratic argument that will win Obama re-election is simple: Make no changes to Medicare, Medicaid and Social Security while agreeing to smaller cuts in discretionary spending, including defense and raise taxes on those making more than $250K a year. Oh yeah and close some tax loopholes too.

On Ryan’s plan, Democrats will say that he cuts Medicare and other vital programs in order to finance a huge tax cut for people who don’t really need it. Because that’s one point that Republicans don’t want to defend but should be forced to.

An effective criticism of Republicans — that their refusal to put taxes on the table shows an inherent lack of seriousness about the deficit reform they claim to cherish so much — has already been summed up rather well by The New Republic’s Jonathan Chait. 

“The standard GOP approach to budget debates for twenty years has been to vigorously isolate debates about taxes and debates about spending,” Chait writes. “If presented with a question that ties together debates about taxes and spending, Republicans will automatically deny the premise, and recontextualize taxes as a question of economic growth or abstract fairness. The two can never be discussed in tandem, because doing so clarifies a choice Republicans need to obscure.”

CONCLUSION

Republicans presently have a more serious and courageous plan for long-term deficit reduction on the table than Democrats. However, their refusal to consider meaningful tax increases and even, advocacy of lower tax rates for the rich, shows that they are far from making the really tough choices. 

Democrats have a winning hand politically and will likely take it to the polls with the eye more on winning than on seriously addressing the nation’s long term fiscal imbalance. 

Budget Battle Thought

WHY I”M SO ANGRY WITH CONGRESS RIGHT NOW

Democrats are liars for always using the $73 billion number when it’s really $33B; assholes and cowards for not passing a budget when they were in the majority; and hacks for shamelessly exploiting the Tea Party as a talking point.

Republicans are dicks for attaching abortion riders to budget bills and are shills for corporate America when it comes to the tax/spend debate (oh yeah, most Democrats are too). Obama’s an asshole for talking about energy in Fairless Hills, Pa., while all this important shit is going on (I see he finally canceled a trip to a hybrid vehicle factory in Indiana tomorrow, wow, about fucking time, Mr. President) and for not providing any leadership AT ALL on entitlements (Bowles-Simpson who?). I don’t know who’s worse. It really is a pox on all of Congress and The White House. Deeply, deeply angry with Congress right now.  

The incompetence is just embarrassing

What to watch for in politics Tuesday Feb 22, 2011

STATES VS THE UNIONS

The budget standoff in Wisconsin enters its eighth day of protests today as the Wisconsin Senate gets back to regular business with or without 14 missing Senate Democrats who left the state in protest of Republican Gov. Scott Walker’s “budget repair” bill. Public sector unions in Wisconsin have agreed to contribute more to their health care and pension benefits, but oppose Walker’s plan to limit public unions’ collective bargaining rights to pay and other measures that they say is a blatant attempt to break up unions in the state. Wisconsin Senate Republicans have threatened to schedule a vote on requiring people to show ID at polling stations — a policy abhorred by Democrats — as an inducement to get the senators back to Madison.
 
Meanwhile, protests shifted to other states, including Indiana where on Monday thousands of private union members protest a bill advanced by Gov. Mitch Daniels and Republican lawmakers to diminish collective bargaining rights. At least 5,000 protesters will also be out in Columbus, state capital of Ohio to oppose Gov. John Kasich’s efforts to reduce the collective bargaining rights of public sector unions - similar to Wisconsin.  
 
Be on the lookout for any polling on “Governors vs the Unions.”
 
CAPITOL HILL BUDGET FIGHT
In Washington, the Senate is in recess this week ahead of a March 4th showdown over a $61B public spending bill passed by House Republicans. Failure to reach agreement by that date will result in a federal government shutdown. Most expect a compromise to be worked out in which a temporary stopgap bill (or “continuing resolution”) is adopted to continue funding government at current levels with some, but not all of the adjoining spending cuts desired by Republicans. The final number is key.
 
POTUS
Obama heads to Cleveland, Ohio along with members of his cabinet to speak with small business leaders in the state. Watch for any soundbites on the looming 2011 federal budget battle or if he weighs into the current “collective bargaining debate taking place in the Buckeye state. On a Milwaukee TV station last week, Obama called some of Gov. Walker’s efforts an “assault on unions.”

CHICAGO MAYORAL RACE

Voters head to the polls in Chicago. Rahm Emanuel needs 50% to avoid a runoff.

 
2012
On the 2012 front, two potential GOP candidates — John Thune and Newt Gingrich have said they will make decisions concerning their presidential futures by the end of the month — next Monday. Watch out for potential exploratory committee announcements. Gingrich thought to be the more likely of the two to run.
 
Huckabee begins 41-city book tour to promote “A Simple Government” which hits book shelves today. Says he will use the  tour to test his financial and organizational support ahead of a 2012 decision.

Some initial thoughts on Wisconsin…

Not knowing much about unions and having never been to Wisconsin in my life, here are the facts as I see them having done some basic, preliminary research this weekend.

The basics:
Over 70,000 union supporters rallied in Madison, Wisconsin’s state capitol, Saturday in opposition to newly-elected Republican Gov. Scott Walker’s “budget repair” bill, which attempts to balance the state’s $3.6B budget deficit over the next two years by cutting public worker benefits and state unions’ collective bargaining rights.
 
At issue is Walker’s desire to go beyond the benefit cuts and curb unions’ collective bargaining rights in the state. The state employee unions have agreed to contribute more money to their pension and healthcare benefits — well below the average paid by private workers and public workers in other states — if Walker, for his part, drops his quest to essentially restrict collective bargaining to the issue of wages.

One of the most aggravating things about trying to follow what’s going on in Wisconsin is the sheer abundance of misinformation propagated by parties on all sides, including the unions, Walker and members of the media.

The debate has more to do with collective bargaining than about healthcare and pension reform. Let’s get the part about benefits out of the way and then go on to collective bargaining which is murkier.

Republican Governor Scott Walker faces a $137 million budget deficit through June 30 and must tackle a $3.6 billion in his upcoming two-year budget for 2011-13. For context: Wisconsin’s budget woes place it roughly in the middle of the pack compared to the other 49 states.

Walker’s argument:

I need to close this shortfall. I want public workers to contribute more to their healthcare and pension benefits. When it comes to healthcare, public workers in Wisconsin currently pay less than half of what public workers in other states pay and they also pay less than half of what Americans in the private sector pay. On pensions, most pay nothing. They should pay more. I want them to pay 5.8 percent towards their pensions and 12.6 percent towards their healthcare. These cuts would result in $330 million in revenue through 2013 that could help pay down the deficit.

Unions response:
Fair enough, we’ll pay more. But don’t say we haven’t already sacrificed. Under Walker’s predecessor, Governor Jim Doyle (D), we had furloughs imposed on us that constituted a reduction in pay. We also saw our healthcare premiums more than doubled from 2.5 percent to 5.6 percent in 2011 under Doyle. You realize your pension and healthcare reforms would result in an average cut in take-home pay of 8 percent!

Walker’s response:
Yes, but like I said, you still pay very little towards your benefits compared with those in the private sector and public workers in other states. Also, very few of you have been laid off, unlike in the private sector where about 5.6 percent of Wisconsin’s workforce lost their jobs since 2007. By making these cuts now, I won’t have to lay off public workers. Something has to be done.

Unions response:

Funny that the police and fire unions and state troopers that supported you in your campaign for governor are exempt from these cuts. Hmmm… Anyway, we said we’d pay more. Moving on — We have a major problem with the part in the bill that deals with collective bargaining rights. Let’s talk about that…

Walker’s response

Yes, let’s. I want to limit collective bargaining to the issue of wages only and cap all salary increases for union members to the rate of inflation (unless approved by referendum). I want to prohibit state workers from being required to pay union dues, I want unions to collect the dues themselves rather than having them automatically taken out of workers’ paychecks, and I want to limit union-government contracts to one year.

Unions response
That’s an “assault on unions!” President Obama said that. You ‘re blatantly attempting to break unions apart so that you can negotiate even lower wages for public workers in future contracts. Union membership will fall apart if union members see their pay raises limited to inflation while those of non-union members are not.

Walker’s response

Re: Obama - Yeah, I know he did and he shouldn’t have. He should focus on his own budget problems. I hear they’re quite bad. As for collective bargaining — We’re broke. Local municipalities need all the help they can to
balance their budgets and they can’t do that right now because collective bargaining currently gives unions too much power in those discussions.

Oh yeah, and elections have consequences.