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October 16th Talking Points For President Obama

2:55 pm in Uncategorized by SJGulitti

Obama vs. Romney 2012

(photo: DonkeyHotey/flickr)

As an avid observer of national politics I’ll be honest and admit that President Obama’s last debate performance was nothing short of abysmal. What I find particularly frustrating about Barack Obama in general, and in his performance in the last debate in particular, is that he continues to fail to counterpunch with some very basic facts when challenged by his opponents on the right. Here are just a few suggestions that should be taken to heart, if the president wants to win the last two debates.

1) Nature and Size of Deficit Spending: Mitt Romney, Paul Ryan and the rest of the conservative community need to be called to account for misrepresenting the reason why the deficit is where it is at the present time. Obama’s critics on the right have never been honest when it comes to analyzing the current economic downturn. Rather than addressing the Great Recession for what it is, the worst downturn since the Great Depression, they’ve routinely portrayed it as a garden variety downturn made all the worse by Obama’s policies trying to link those “failed” policies with the growth in the national debt. Obama’s counterpunch here is obvious, during the next debate, and thereafter, he needs to ask Mitt Romney why he doesn’t understand that when the economy falls into a deep recession, government spending goes up as a result of increased outlays for unemployment, food stamps ad infinitum, while tax revenues decline and that those factors have played a large part in the growth of the deficit. Moreover, he could ask Romney what he and the Republican’s would have done differently and to what effect. That’s pretty easy to understand and rather straightforward yet Obama and his surrogates have failed to throw these very obvious and elemental counterpunches much to their own detriment. The second counterargument that Obama needs to make is that this administration, unlike the last, put the costs of the wars in Iraq and Afghanistan on the books so that those costs were reflected in deficit spending more accurately than had previously been the case. That in and of itself would have resulted in a dramatic increase in the deficit regardless of the state of the economy.

2) Medicare: President Obama needs to make it crystal clear that there is a fundamental difference between reduced outlays for Medicare that result from reduced payments to insurance companies and health care providers compared to reduced funding levels for the Medicare program per se that would result from conservative proposals. After establishing this factual difference Obama needs to press Romney on whether or not he understands this fundamental difference and to prove that it isn’t true.

3) Attacking Success: Obama needs to challenge the notion that he’s an enemy of success and that should start with the statement, based on his own life, that he himself is the embodiment of American success. Secondly, he needs to point out that asking the very wealthy to pay a little bit more in taxes isn’t the same thing as attacking success. Obama isn’t attacking the American system of private property and private initiative, he’s merely asking for a readjustment of tax rates that are now skewed to the benefit of a few in what many economists have called the greatest upward realignment of wealth since the 1920s. President Obama should ask Mitt Romney to cite a specific example where Obama conceptually, theoretically or figuratively has come out and denounced the American value of success.

4) Role of Government: President Obama needs to publicly disabuse Mitt Romney of the notion that almost everything that has ever benefited America is a function of private enterprise. Obama needs to give Mitt Romney a history lesson in the role of the federal government in fostering growth in the American economy that began in the early years of the Republic with nationally funded roads, canals and aids to navigation systems and continued through to the development of the Internet as detailed in Free Market Fantasies, referenced below. Obama needs to point out the critical fact that generally government builds infrastructure as individual companies rarely if ever ban together to build highways, bridges, dams and airports, without which there will be little in the way of an environment fostering economic growth. He also needs to point out the percentage of developmental research and development that is funded by government. President Obama needs to point out that Romney’s own proposals related to funding technical and occupational training for today’s unfilled jobs as well as those of tomorrow are unlikely to come about with out government funding and involvement. Lastly, Romney needs to be brought to understand that there isn’t a developed economy in this world that didn’t get to where it is today without significant economic policy input from it’s national government.

5) Foreign Policy: The time for Barack Obama to call out Mitt Romney on his Neoconservative power trip has long since arrived, particularly as it pertains to the Iranian nuclear program. To listen to Romney and Ryan speak of Iranian nukes one would think that the Iranians made their most dramatic advance since Obama took office. This however is factually incorrect. Foreign policy writer David Sanger pointed out that Iran made great strides in developing nuclear capabilities during the eight years of the Bush administration, while American foreign policy was distracted in the quagmire of Iraq. An analysis of the timeline of Iranian nuclear development contained the references below reveals that Iran made great strides in nuclear development from 2002 through early 2009. Barack Obama needs to put Mitt Romney on the spot and ask him how a military solution would effectively cripple Iran’s nuclear program, given that Iran’s military capabilities are considerably more formidable than where those we faced in Iraq or Libya and that much of Iran’s nuclear facilities are either underground or near population centers and that makes such a strike far more complicated.

Obama needs to ask Mitt Romney to square his implied muscular foreign policy rhetoric with the fact that the vast majority of the American people are beyond tired of overseas military involvement and want the money spent on war to be spent here at home. Obama needs to make the point that the foreign policy failures of the Bush administration have real consequences and will affect our foreign policy options for years to come. President Obama needs to distinguish between what military power can and can’t do, a point laid out by the Neoconservative Robert Kagan in an NPR interview: “Well, a lot of what people think is decline is based on a very faulty memory of what things used to be like. People have a sense that America used to call the shots, used to be able to dominate the world, get everyone to do what we wanted them to do. And of course that’s ludicrous. Anyone who remembers even the early Cold War years knows that we couldn’t do anything about the revolution in China. We couldn’t do anything about the Soviets getting a nuclear weapon, etcetera, and etcetera. So we’re making a bad comparison…In terms of military power, even with defense budget cuts that I think are unfortunate, the United States is still by far the most powerful nation in the world. So I think the United States remains tremendously influential.” Kagan, who is himself a Romney advisor, goes on to question the Romney campaigns notion that Obama believes that America is in decline. Look at this interchange between the NPR moderator Steve Inskeep and Kagan:
Read the rest of this entry →

The Looming Compromise on Revenues: A Postscript

2:31 pm in Uncategorized by SJGulitti

A recent article by David Leonhardt, “Why Taxes Will Rise in the End”, directly reinforces the points made earlier in: “The Looming Compromise on Revenues.” Leonhardt paints a picture in which revenue increases of some sort have to be an elemental part of fiscal reform, whether they be closing loopholes, the elimination of tax subsidies, an outright increase in taxes or any combination thereof. He points to several factors that make revenue increases inevitable for those who are serious about addressing America’s looming fiscal crisis. Lets take a look at his analysis.

1. No Free Lunches: “If only we could get back to the past — get spending under control, as the cliché goes — we’d be O.K. The debt ceiling, with its harsh finality, offers the chance. Unfortunately, this nostalgic view depends on a misunderstanding of the budget. It imagines a budget in which the United States indefinitely has the world’s highest medical costs, its largest military, an aging population and, nonetheless, taxes that are among the world’s lowest. Economists have a name for that combination: a free lunch… Free lunchism is ultimately the problem with the no-new-taxes pledge that so many politicians have adopted. A refusal to raise taxes, no matter how principled, cannot take us back to the good old days. It would instead lead to a very different American society. For taxes to remain where they are, Washington would need to end Medicare as we know it, end Social Security as we know it, severely shrink the military — or do some combination of the above.” The aforementioned situation has led Douglas Elmendorf of the Congressional Budget Office to point out that those who are hewing to the “no new taxes” line are simply not seeing the true parameters of the overall situation: “The aging of our population and the rising cost of health care have changed the backdrop for federal budget policy in a fundamental way.”

2. Paul Ryan’s Plan is D.O.A.: “Early indications are that Americans don’t like Mr. Ryan’s plan all that much. In upstate New York this spring, a Democrat won a typically Republican House district by campaigning relentlessly against the plan. National polls show huge majorities favor keeping Medicare and Social Security in something approaching their current form — much larger majorities, tellingly, than oppose an increase in the debt ceiling. In the near term, Congressional Republicans have decided to play down the Ryan plan. Most continue to oppose new taxes, without going so far as to explain the consequences. They will have little trouble sticking to that position through the current debt ceiling fight, because the deficit does not need to be solved immediately. Eventually, though, drawing up a credible deficit plan with neither Ryan-like cuts nor higher taxes will be impossible. And you can already see the start of a potential Republican compromise.” To underscore the fact that the Republican leadership in Washington is edging towards a compromise position, Leonhardt points to the fact that Speaker Boehner signaled his willingness last week to shrinking individual and corporate loopholes, as just one example. Likewise Conservative economists like Martin Feldstein and Gregory Mankiw favor addressing loopholes as well. There also seems to be renewed interest on the right regarding the approach of the bipartisan Simpson-Bowles deficit commission which includes revenue increases in any wide ranging attack on the deficit. To wit: “One obvious compromise along these lines would follow the outline sketched out by the Simpson-Bowles Plan. Marginal tax rates could actually fall. But the closing of loopholes would more than make up for the loss in revenue from lower tax rates. Conservatives might accept the deal, partly because it would satisfy their longtime desire for a simpler tax code with lower rates and partly because spending cuts would still make up the bulk of any deal. Liberals might accept the deal because tax loopholes disproportionately benefit the wealthy, and a simpler code — even one with lower rates — could be more progressive.”

3. How Might It All Play Out?: “So what kind of tax increases do Americans support? The old-fashioned kind. Seventy-two percent support raising taxes on income above $250,000, according to a recent NYT/CBS poll and a large majority likewise favor raising Social Security taxes on the affluent. In the end, the most likely tax increase may be the one that’s already on the books. On Jan. 1, 2013, all the Bush tax cuts— on the affluent and nonaffluent alike — are set to expire, which would solve roughly one-quarter of our long-term deficit problem.”

Again, in the final analysis there is simply no way that we can get spending and deficits under control by drastic cuts to social programs alone. Moreover, that’s a hypothetical argument to make in the first place as the Democrats will never abide such a thing so other than for the scoring of political points with their base, particularly the Tea Party, what realistically did the Republican leadership hope to achieve? The G.O.P. leadership may seek to avoid dealing with revenues in the short run by allowing Barack Obama to get what he wanted in the first place, an increase in the debt ceiling free of any spending cuts. However, in the long run the Republicans will still be in a no win situation when it comes to raising revenues, unless of course they chose to abandon their goal of overall deficit reduction.



The Looming Compromise on Revenues

Why Taxes Will Rise in the End

Will a Deficit Reduction/Debt Ceiling Deal Help Re-elect Barack Obama?

7:35 pm in Politics by SJGulitti

Right now I think the likelihood of Barack Obama being reelected is far from assured.

Political commentator Mark Halperin thinks that concluding a deal on deficits and debt will greatly aid Obama in his reelection bid. With regard to how a deal will go down with Democrats on Capitol Hill, Halperin observes:

“Democratic strategists (including those associated with the President) will quietly argue to liberals that this is the best deal they could get, and that a deal is vital. They will also argue (even more quietly) that such a deal will make the President’s re-election even more likely (by as much as 15%-20%), freeing him up to raise more money for them in 2012. Smart/honest Republicans will agree with that judgment, but will be powerless to make it in public.”

Halperin believes that signing a deficit / debt deal will allow Obama to “take off the table the single most damaging issue that could be used against him in 2012.”

TIME Magazine’s Jay Newton-Small believes that even a deal half as large as the proposed $4.5 trillion dollar deal will still play out to Obama’s favor. Saturday’s apparent failure to continue along the path to the largest deal suggested to date is seen by Newton-Small as a minor victory for the president. To wit:

“The details of a smaller deficit reduction deal have yet to be worked out, but the collapse of the grand bargain leaves President Obama in a more favorable political position. If both parties agree to cut $2 trillion from the budget with minor tax increases, he’ll notch a bipartisan accomplishment. But he can also say he tried something more ambitious in putting cuts to Social Security and Medicare on the table without facing the political fallout of actually slashing those programs. Read the rest of this entry →

12:38 pm in Uncategorized by SJGulitti

Against the backdrop of heightened political rhetoric among conservatives about not being willing to raise tax revenues as part of the deal to raise the debt ceiling, there is a growing acknowledgement among many Republicans in Washington as to the ultimate need to increase revenues. While many on Capitol Hill continue to parrot conservative talking points about not increasing tax revenues, the political leadership within the G.O.P. and outside the Republican Party is sounding more and more amenable to some form of raising revenue, even if it is structured as tax reform.

In an interview that came in under the radar following the collapse of the debt talks chaired by Vice President Biden, Republican insider and former congressman Vin Weber appeared on the PBS News Hour to discuss the emerging cracks in Republican opposition to raising taxes to curb the deficit. This controversy is clearly evident in the ongoing public spate between Grover Norquist of Americans for Tax Reform and Senators Tom Coburn (R-OK) and Saxby Chambliss (R-GA) over what actually constitutes a tax revenue increase and the necessity of increasing revenues. Weber stated of Republicans engaged in deficit negotiations: “And I think, if they’re allowed to define, on their own terms, what constitutes a tax increase that opens the door to a broad tax reform that might broaden the base by closing loopholes and eliminating deductions and credits and exemptions, probably coupled with a reduction in top rates to spur economic growth, but resulting in a net tax increase.” As you may recall, Norquist’s Americans for Tax Reform had circulated a Taxpayer Protection Pledge to conservative politicians for their signature ahead of the 2010 elections which many, particularly members of the Tea Party, signed. The Pledge includes the following wording “ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and…TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.” Thus the pledge, a document of the utmost importance on the far right, not only prohibits tax increases; it opposes any effort to raise revenue through the elimination of loopholes, deductions and credits “unless matched dollar for dollar by further reducing tax rates.”

In the time that has elapsed since Weber’s PBS interview Speaker of the House, John Boehner (R-OH) has approached the White House with a proposal for $ 1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare, Medicaid and Social Security. According to White house officials, “Mr. Boehner suggested that he was open to the possibility of $1 trillion or more in new revenue that would be generated by addressing tax issues already raised in the talks, like killing breaks for the oil and gas industry, eliminating ethanol subsidies and ending preferential treatment for corporate jets. But those changes would fall far short of the revenue goal, and the source of the rest of the money would, under what they described as Mr. Boehner’s proposal, be decided by Congress through a review of tax law changes. One official said some revenue could be generated by allowing Bush-era tax cuts for affluent Americans to expire at the end of 2012, which would produce hundreds of billions of dollars, though those savings would be offset by the costs of retaining lower rates for those below the income threshold.” Eric Cantor (R-VA), who had walked out of the Biden talks and who has previously been a staunch opponent of raising revenues was quoted on PBS on July 6 as saying that he was willing to talk about closing loopholes and his fellow Republican in the Senate, Mitch McConnell (R-KY) likewise was quoted on the same program, “I’m open to tax reform. We need to do it broadly… Everybody’s going to have to contribute to it in one way or another.” Why even Tea Party backed Senator Mike Lee (R-UT) was on the news this evening saying that he was not necessarily opposed to raising revenues as long as it didn’t involve an increase in tax rates.

There is one other factor to consider in this whole discussion and that’s the current opinion of the American people. The latest Pew Research Polling on the subject: “Public Wants Changes in Entitlements, Not Changes in Benefits; GOP Divided Over Benefit Reductions”, reveals an American public that on a two to one basis feels that keeping entitlements the way they are is more important than reducing the deficit. Likewise similar levels of support are evident for other issues such as Medicare cost responsibilities and whether or not poor people should have their Medicaid benefits taken away. In fact if you go inside the numbers what you see is that even less affluent Republicans are now opposed to reductions in entitlements. While the political class and its attendant punditry are embroiled in discussing what to cut and where to raise revenues, the American people, even though they know that some type of reform is required, have expressed an emphatic desire to leave their benefits largely unchanged. Thus the Republican leadership in Washington has to maneuver between a public that wants it’s entitlements left alone, a Tea Party faction that has yet to understand that compromise is part of governing and the prospect of throwing our economy and the world economy along with it, into the tailspin that would result if we were actually to default on our Treasury obligations by failing to raise the debt ceiling.

The bottom line on the issue of raising revenues as part and parcel of a debt deal is that opposing such measures is a lose-lose proposition. Republicans came to power in the House in 2010 with the idea that getting the debt under control was one of the most important issues facing the nation today. Few reputable economists have taken the position that the debt could be reduced by spending cuts alone, thus revenue increases of some sort are required. To forgo increased revenue is to fail in the effort to reduce the debt, which for the G.O.P. is a loser. However, to consider revenue increases after having campaigned on no new tax increases of any type is a loser as well and as such any debt deal compromise that includes revenue increases can only be seen as a setback for the Republican Party. But beyond the fortunes of the Republican leadership are those of the Tea Party movement. Any debt deal that contains a significant increase in federal revenues can only be seen as a major setback for the Tea Party movement as well seeing as opposition to increased federal revenue has been a major reason behind the movement since its arrival on the political landscape.

Steven J. Gulitti


Sen. Cornyn to Obama: Take Tax Increases Off the Table:

Cracks Emerge in Republican Opposition to Raising Taxes to Curb Deficit:

Americans For Tax Reform: Taxpayer Protection Pledge;

Obama to Push for Wider Deal With G.O.P. on Deficit Cuts;

Lawmakers Remain Divided on Deficit Fundamentals as Deadline Draws Closer;

Public Wants Changes in Entitlements, Not Changes in Benefits; GOP Divided Over Benefit Reductions;

Boehner Must Navigate Rocky Road to a Budget;

The Tea Party, Taxes and Spending Cuts‏

10:48 am in Uncategorized by SJGulitti

A key goal of the Tea Party movement is the reduction of the national debt and thus the size of government via spending cuts. However, it is highly unlikely that the federal deficit can be reduced through spending cuts alone. That said if the Tea Party movement harbors such a fundamental opposition to tax increases and revenue enhancements and those measures are required in order to effect the deficit reduction they hope to achieve, how can the movement can ever hope to be successful.

It was a perquisite that those seeking Tea Party support in the 2010 elections for the House and Senate sign a statement stating that they would never raise taxes or eliminate tax breaks in attempt to reduce the federal deficit. This may prove a pledge that cannot be kept for those who ultimately want to lower the deficit. Two of the three major deficit reduction panels, the National Commission on Fiscal Responsibility and Reform, co-chaired by, Republican Alan Simpson and Democrat Erskine Bowles, and the Bipartisan Policy Center’s Debt Reduction Task Force, co-chaired by former CBO Director Alice Rivlin and retired Senator Pete Domenici (R-NM), have both included revenue enhancements as part of deficit reduction. Quoting political reporter Jackie Calmes: “The sponsors of the plans say that the scale of the nation’s fiscal problem is too great to resolve without both raising taxes and cutting projected spending on Medicare, Medicaid and Social Security, all popular entitlement programs.” It is these recommendations that are at the center of the bipartisan discussion currently underway in the Senate. While those on the far right will continue to insist that the deficit can be reduced by spending cuts alone, the political reality is that the discussion in Washington has now moved beyond that argument and the facts reveal that there is some degree of bipartisan support for revenue enhancements in any deficit reduction package.

A growing minority within the G.O.P. is also making the case that the projected debt is too big to handle simply by cutting spending. In the run up to the 2010 elections, Saxby Chambliss (R-GA) observed: “Everything has got to be on the table for discussion… “there are a lot of things people are going to have to be educated about, on the spending side as well as the revenue side.” Chambliss is now one of the “Gang of Six” senators involved in negotiations as to how to implement the deficit reduction panel’s proposals. Since the panels findings have made it into the discussion on deficit reduction, Chambliss stated, “We’ve got to have an increase in revenues to be able to retire this debt.” Chambliss appearing on CNN in April said, “Now, if we don’t want to pay the debt back, then we could just not worry about the revenues. But the fact is we’ve got a $14 trillion debt staring us in the face, and revenues have to be on the table if we’re serious about attacking that debt.” Tom Coburn (R-OK), who had been a “Gang of Six” member, has parted company with those who rule out revenue enhancements. Appearing on Meet the Press in April Coburn said that increasing revenues may be required in order to address the deficit issue and in an NPR piece, he indicated that the solution to the deficit problem may involve tax increases. Coburn’s stance has touched off an internecine feud within the ranks of conservatives as well. Grover Norquist of the Americans for Tax Reform, the creators of the anti-tax pledge, criticized Coburn on his change of heart as it relates to tax increases. Coburn in responding to a question on Meet the Press has in turn dismissed Norquist and his organization as being nothing more than just another anti-tax lobbying group: “Which pledge is most important, David, The pledge to uphold your oath to the Constitution of the United States? Or a pledge from a special interest group who claims to speak for all of American conservatives, when in fact they really don’t?”

Now, even though he seems to have temporarily left the Gang of Six, Coburn continues to point to the need for revenue enhancements. To wit: “But look, realistically we cannot solve our problems unless we generate growth in this country, and the only way we’re going to do that is back off on a lot of regulations, create a tax structure that’s going to cause investment to happen, and get dynamic returns that actually increase the revenues coming to the federal government. We can’t do it all by eliminating large sections and duplicate spending and waste. We can do a large portion of it, but there has to be some revenue component to that, and anybody that says that’s not the case, I think they’re just wrong and they’re not thinking about the long-term health of our country.”  James Thurber, an expert on congressional affairs at American University points out: “It’s significant that both Chambliss and Coburn see increased revenues as part of the solution to chronic deficits… This is the beginning of a crack, which may allow for a deal, Thurber says. “Norquist will try to stop it, and it will be a major confrontation between the Republican senators and Norquist.” Thus while the hot rhetoric flies back and forth on the political street, in the chambers of the Senate, all manner of measures are being considered in deficit reduction strategy sessions.

It’s not only practical politicians on the right who have abandoned the idea that the deficit could be addressed by spending cuts alone, conservative sources outside the Beltway are weighing in on the need for revenue enhancements as well. Quoting David Stockman: “It is obvious that the nation’s desperate fiscal condition requires higher taxes on the middle class, not just the richest 2 percent. Likewise, entitlement reform requires means-testing the giant Social Security and Medicare programs, not merely squeezing the far smaller safety net in areas like Medicaid and food stamps.” The Wall Street Journal’s David Wessel pointed out that the ideas contained in Paul Ryan’s budget plans will actually lead to tax increases due to Ryan’s faulty math and unrealistic assumptions as to what can be done and how. In addition, the nonpartisan Tax Foundation makes the following observation: “Overall, this feed the beast question is the core question that conservatives must answer before taking a position on the role of tax hikes in solving the long-term budget problem. If feed the beast isn’t a problem at all, but you still hold deep to your no tax hike position so as to support fiscal insolvency which would trigger enormous tax hikes, your position is so illogical that you don’t deserve to be part of the debate.” Martin Feldstein, former Reagan Economic Advisor, made the following observation, “Reducing the budget deficit and stopping the explosion of our national debt will require more tax revenue as well as reduced government spending. But the need for more revenue needn’t mean higher tax rates. As the bipartisan fiscal commission appointed by President Obamastressed last year tax revenues can be increased substantially by limiting the deductions, credits and exclusions that are essentially government spending by another name.” Likewise, even the conservative National Journal says that revenue increases have to realistically be on the table.

Are there still those among the newly elected Tea Party caucuses that are insisting on reducing the national debt and the size of government but spending cuts alone, of course there are but their actual influence is now hardly the force it was once thought to be. What is important to note is that these people will not have the final say in the ultimate policy outcome. I predict the scenario will play out as follows. The Tea Party Caucus in the House of Representatives will continue to clamor for drastic cuts in spending and no increase in taxes or revenues and Speaker Boehner will continue to parrot that line right up until the last minute upon which he will take his proposals to the Senate only to have them rejected. Thereafter, Boehner will return to the House, just as he did during the Continuing Resolution debates, where he will inform the Tea Party crowd that what they had hoped to accomplish is not in the cards politically. Like the situation related to the Continuing Resolution, the final product will be the result of compromise not political extremism and that compromise will be tempered by the fact that the Democrats control the Senate and Obama wields the veto pen. Thus, the only choice that the House Tea Party Caucus will have available to it will be a solution that is quite different from the philosophy of its core beliefs. The ultimate result will be that those who came to Washington with the idea that they could reduce the deficit and size of government by spending cuts alone will be in for a rude awakening sooner rather than later. There is no way that can be seen as good news for the Tea Party. After all, if you cannot come through on one of the single most important planks in your platform, what can you do? Therein lies what could be the single greatest threat to the continued existence of the Tea Party. If you cannot even remotely accomplish that which you set out to achieve, why would anyone continue to be attracted to your core philosophy or vote for your candidates? Hence, the ultimate fallout from this great debate before us on raising the national debt limit and the concomitant discussions related to taxes and spending may very well be the end of the beginning for the Tea Party movement as a force in American politics.

Steven J. Gulitti
May 23, 2011
Can Deficit Reduction Panels Get Congress’ Attention
Obama Deficit Panel Gets Some Competition
Jackie Calmes: Deficit Panels Go Where Politicians Won’t
‘Gang of Six’ may solve U.S. debt mess
On Deficit Proposals, a Failure of Will and Not Ideas
Meet the Press – Showdown Over Spending, Room for Compromise?
NPR: Conservative Heavyweights Trade Jabs Over Taxes
Sen. Coburn: Americans for Tax Reform a Special Interest
One-on-One with Senator Tom Coburn
Raise Taxes, but Not Tax Rates
David Stockman: The Bipartisan March to Fiscal Madness
David Wessel: New Proposal Hits Old Hurdles of Budget Math
Tax Foundation: Should Conservatives Favor Tax Hikes to Solve Long-Term Budget Gap? An Outline to Answering the Question

Facts vs. Fiction: The Big Lie About the Government “Takeover” of Health Care

9:30 pm in Uncategorized by SJGulitti

Back on December 9th, in a post entitled Fox Fair and Balanced” on Health Care Debate…..NOT!I pointed out how the Fox News Network had deliberately tried to skew the national discussion on health care reform in such a way as to discredit the concept of a public option. Well just yesterday The Saint Petersburg Times’ Pulitzer Prize winning affiliate, published:”PolitiFact’s Lie of the Year: ‘A Government Takeover of Health Care”. This article pointed out how, when the facts are objectively analyzed, that for all of the rhetoric surrounding health care reform as being Socialist, it was in fact far from it .

Well with the health care debate behind us and with those facts on the table, the folks at PolitiFact’ have detailed the inaccuracies of this conservative claim, labeling it the political lie of 2010. This falsehood was second only to Michele Bachmann’s bizarrely absurd claim that Barack Obama’s trip to India would cost 200 Million Dollars a day. deconstructs the logic behind the argument that “ObamaCare” represents a “government takeover of health care” with the following facts:

“Government takeover” conjures a European approach where the government owns the hospitals and the doctors are public employees. But the law Congress passed, parts of which have already gone into effect, relies largely on the free market:

Employers will continue to provide health insurance to the majority of Americans through private insurance companies.

• Contrary to the claim, more people will get private health coverage. The law sets up “exchanges” where private insurers will compete to provide coverage to people who don’t have it.

• The government will not seize control of hospitals or nationalize doctors.

• The law does not include the public option, a government-run insurance plan that would have competed with private insurers.

• The law gives tax credits to people who have difficulty affording insurance, so they can buy their coverage from private providers on the exchange. But here too, the approach relies on a free market with regulations, not socialized medicine.

PolitiFact reporters have studied the 906-page bill and interviewed independent health care experts. We have concluded it is inaccurate to call the plan a government takeover because it relies largely on the existing system of health coverage provided by employers.

It’s true that the law does significantly increase government regulation of health insurers. But it is, at its heart, a system that relies on private companies and the free market.”

This very argument was raised last February when the renowned health care economist Uwe Reinhardt published an article entitled: ”A Government Takeover of Health Care? Reinhardt came to the following conclusion: “A common refrain among critics of the health reform bills passed by the House and the Senate is that they constitute a “complete government takeover of 17 percent of the American economy.”How could this be so? Start with the $950 billion price tag over the next decade for federal subsidies toward the purchase of private health insurance.  Divide that amount by $34 trillion, the current projection for total national health spending over the next decade even in the absence of health reform. You will get 2.8 percent.  Does that, then, constitute a government takeover of our health system?” Reinhardt concluded that the proposed reforms at the time, while certainly representing a major intrusion by the Federal Government into the health care process, were necessary as the system was “wasteful and unwieldy” and ”would require substantial intrusion of government into the system, as evidently the system cannot correct itself.”

Thus with the benefit of hindsight and with the 2010 elections where “ObamaCare” was certainly a topic of discussion now history, the question arises: To what extent have the American people been misled, if not outright bamboozled by the ultra right campaign against health care reform and it’s conflating of that topic with the conjured up ”specter of creeping Socialism?” To my mind the conservative attack on health care reform fits very neatly into a pattern of history that stretches all the way back to Theodore Roosevelt’s first mention of the need for some type of national health care system. Since that time, health care reform has dovetailed neatly into more than one of the “red scares” that have accompanied this debate and that of progressive reform in general. Then like now, health care reform was seen as something that was tied to a decline of freedom in America and its replacement with that European import labeled “Socialism.” Remember how Ronald Reagan once told us that the enactment of Medicare would bring about the decline of freedom in America and how we would all one day tell our grandchildren what it was once like to live in a free country? And just like then, these claims have now been proven by facts to be far fetched at best and fictitious at the very worst. Thus have those Americans who bought into this rhetoric of fiction and fear become nothing more than the “useful idiots’ for those on the far right who have a vested interest in the status quo? Have they in so doing sacrificed their own best interests so as to avoid a “Socialist” threat that doesn’t even exist in today’s America? Or, have just so many Americans become fooled by the likes of Glenn Beck and Rush Limbaugh as to be unable to distinguish fact from fantasy and what does that say about the future of American Democracy?

 Steven J. Gulitti



 PolitiFact’s Lie of the Year: ‘A government takeover of health care’

 The ‘Government Takeover’ of Health Care, and Other Whoppers

 A ‘Government Takeover’ of Health Care?

An Impending and Inevitable Train Wreck

5:15 pm in Uncategorized by SJGulitti

In the event of a Republican takeover of one or both houses of Congress on November 2nd, it won’t be long before the Tea Party Movement and the G.O.P. will be involved in one or more train wrecks, some of which could be pretty dramatic. These train wrecks will arise from fundamental differences in philosophy and will occur over a period of time that could begin sooner rather than later. Upending Republican establishmentarians during primaries was relatively easy; winning general elections where competitive ideas are at issue could be a bit harder. Governing will be much harder still, particularly when you take into account the differences between Tea Party rhetoric and American political reality.

The first obstacle newly elected members of the movement will face is the institutional nature of Congress. Tea Party freshmen in both the House and Senate will be at the bottom of Congressional seniority lists and thus not immediately in line for leadership roles as committee chairpersons. Thus they will be in the position of having to sell their policy proposals to the existing leadership. That leadership may be more amenable to the ideas of the newcomers given the fact that several veteran Republican lawmakers are no longer around thanks to the Tea Party. Conversely the G.O.P. leaders may let Congress work the way it always has thereby attenuating the influence of the Tea Party. In the Senate in particular the likely Republican winners are veteran politicians who will come to the office with considerable experience. According to political observer David Herszenhorn: “Insurgent challengers may be grabbing all the headlines in midterm elections this year, but most of the Republicans who are best positioned to snap up Senate seats currently held by Democrats are veteran politicians — and most of them have already served in Congress. Based on their experience, the 2010 class of Senate Republican freshman could well prove to be relatively pragmatic and wise to the ways of legislative deal making — almost certainly more so than the Tea Party-backed firebrands like Sharron Angle in Nevada and Rand Paul in Kentucky, who have built their campaigns around ideological demands and an end to business as usual.“ In all of the discussions surrounding this election, few have pointed out the difference between those candidates who come out of, or are closely aligned with the Tea Party Movement and those who have received the movement’s support solely because of their Republican affiliation. This second group will not necessarily move in lock step with the hard-core ideologues of the Tea Party seeing as they are not beholden to the movement in any meaningful way. Therein lay the seeds of intra-party conflict and controversy.

The next challenge facing newly elected members of the Tea Party Movement will be the reconciliation of their penchant for spending cuts and ending earmarks versus what can be achieved in the realm of the possible. These desires will butt up against the fact that cutting government spending during a severe economic downturn could only make things worse and many Republicans favor an ending of the G.O.P.’s moratorium on the use of earmarks. There’s a reason that the G.O.P’s leadership has been mum on the political talk show circuit when it comes to detailing the particulars of spending cuts and the reason is that they don’t have a viable plan. Even as late in the game as this morning, Haley Barbour, appearing on “Meet the Press” was unable or unwilling to fill in the blanks when asked how a Republican controlled Congress will reduce the size of government. Tom Brokaw, appearing on this same show pointed out that many Republican candidates have made rash promises on the campaign trail that can’t be kept or will be nearly impossible to keep given the current political situation. Again we see the future of conflict as already being baked into the cake, so to speak.

I read “A Pledge to America” and it is full of general statements regarding spending cuts, but for the scope of its discussion, it lays out few policy specifics. The “Pledge” is equal parts indictment, rallying cry and Act of Contrition, but what it isn’t is a blueprint for reducing government. I can’t help but wonder why the G.O.P. trotted out the “Pledge” when they have Congressman Paul Ryan’s (R-WI) “A Roadmap For America’s Future” which is a well reasoned analysis full of specific proposed cuts. Again to Herszenhorn: “while polls show that the Republicans’ message is succeeding politically, Republican candidates and party leaders are offering few specifics about how they would tackle the nation’s $13.7 trillion debt, and budget analysts said the party was glossing over the difficulty of carrying out its ideas, especially when sharp spending cuts could impede an already weak economic recovery…(both) parties share blame for the current fiscal situation, but federal budget statistics show that Republican policies over the last decade, and the cost of the two wars, added far more to the deficit than initiatives approved by the Democratic Congress since 2006…Calculations by the nonpartisan Congressional Budget Office and other independent fiscal experts show that the $1.1 trillion cost over the next 10 years of the Medicare prescription drug program, which the Republican-controlled Congress adopted in 2003, by itself would add more to the deficit than the combined costs of the bailout, the stimulus and the health care law.” Moreover, most Republicans are calling for the permanent extension of all Bush-era tax cuts and that would add $700 billion more to the deficit over the next 10 years.

The “Pledge” has come in for scathing criticism on the right as well as the left. Janet Hook and Naftali Bendavid of the Wall Street Journal made the following observations: “The new policy manifesto released by House Republicans Thursday is laced with ideas and rhetoric designed to appeal to the surging tea-party movement. But it left some conservatives disappointed with its omissions and complaining that the plan had limited sweep… Yet the new agenda was silent on some of the most sought-after goals on the tea-party wish list, such as a balanced budget constitutional amendment and a ban on special-interest appropriations called earmarks.” Many conservatives look to what is now happening in the United Kingdom as a model of inspiration for cut backs here. But that program involves a significant reduction in defense spending; something that would have to be included here as well as those outlays constitutes 58% of discretionary federal spending. With a large portion of federal spending being committed to Social Security, Medicare, Medicaid and paying off interest on Treasury Bonds, the amount of money subject to discretionary spending reduction is only one third of all outlays. There is a growing minority within the G.O.P. on Capitol Hill who are making the case that the projected debt is too big to handle through spending cuts alone. According to Saxby Chambliss (R-GA): “Everything has got to be on the table for discussion… “there are a lot of things people are going to have to be educated about, on the spending side as well as the revenue side. They’re thinking we can come in and eliminate earmarks and everybody’s going to be happy on the spending side. Gee, that just scratches the surface.” Is Senator Chambliss tacitly acknowledging that tax cuts will have to expire or even that tax increases may be needed to deal with the deficit? The “Pledge” is notoriously silent on the subject of earmarks and seeing as they are a major source of spending, this is sure to give rise to a rift within the new Republican caucus on Capitol Hill. It doesn’t take a soothsayer or a professional handicapper to see that the G.O.P. and the Tea Party Movement are on a collision course with regard to spending and the practical ability to reign in that spending given the current economic situation and the present composition of federal government outlays. Thus there is little reason to believe that the Republican rhetoric of the campaign trail will carryover to policies that actually achieve what that rhetoric has promised. Therein lies the root of yet another G.O.P. – Tea Party collision.

Newly elected Tea Party Movement lawmakers may find themselves running into some strong headwinds in the form of those special interests that have invested heavily in this election on behalf of conservative causes. While it is now likely that in the final analysis Democrats may end up spending more money than their opposition, there is an unprecedented amount of money flowing to the Republican side from outside sources as a result of the Citizens United ruling. According to the 2010 midterms have seen a whooping 186.7 million dollars flowing into Republican coffers vice 88.6 million for the Democrats. Likewise an article on the U.S. Chamber of Commerce and business donations shows the tide running against the Democrats among these groups at a rate of almost two to one. Ostensibly one would say what difference does it make where all this money is coming from if the Democrats are actually spending more? But within the confines of this argument, what matters is that this tidal wave of money spent by outside interests is being spent for a reason, to influence the election’s outcome and thereafter to buy influence with the winners. Washington lobbyists are already courting the potential new Congressional chairmen and in the process could effectively be outmaneuvering the Tea Party activists in the game of power and influence. Thus the many questions that beg to be asked: Won’t all of this money muscle out the grassroots crowd and how will the Tea Party activists compete for attention with the lobbyists who are already prowling the halls of Congress and the bars and restaurants of downtown Washington? Is the movement about to get mugged on K Street? Are the rank and file Tea Party patriots in the process of “taking their country back” just to have it taken away in turn by the wealthy interests who have spent all of this money to influence the outcome of the 2010 elections? Surely this money was not spent because it was burning a hole in someone’s pocket. Does anyone believe that these special interests were in the mood to do the activists a favor on November 2nd? Will the rank and file Tea Partier unwittingly deliver “his country” as a gift to a new class of plutocrats that will have no use for him except for his vote during the next election cycle and his attendance at rallies? Don’t look now but we may be about to witness the greatest political hustle since the evangelicals came out in force for George W. Bush only to get nothing of substance in the bargain.

Finally, the Tea Party Movement will continue to run up against the fact that many of its essential beliefs are divorced from reality and therein lay the seeds of train wrecks to come. First and foremost is one of its core ideas, that Americans are over taxed. The fact is that taxes are as low as they have been in sixty years; lower than they were when Ronald Reagan was President. As Senator Chambliss implied above, increased taxes may be inevitable if people are serious about reducing the deficit. The Tea Party waxes nostalgic for the Reagan era, yet unemployment was higher when the “Gipper” went into his first midterm election than it is now and his approval rating was roughly the same as Obama’s. The movement preaches fiscal restraint while refusing to consider reductions in defense spending where wasteful spending is well documented and widespread. This will lead to calls for a reduction in social programs during the worst economic downturn since the 1930s and that will only create resistance on the left and reluctance on the part of practical Republican officeholders on the right. The Tea Partiers clamor, “keep your hands off my Medicare” but underplay how to reign in the program’s cost increases. They rail against TARP, blaming Obama for its inception all the while ignoring the fact that many of the very Republicans running for re-election are the ones who originally put the bailout in place. How will they address the fact that TARP’s costs will be less than originally anticipated? Even conservative observer Ross Douthat admits that for all its shortcomings TARP was a necessary evil at the time of its inception. On the issue of repealing health care reform there is now no clear consensus to do so, according to the latest CBS poll, yet repeal is a major Tea Party goal.

The continued Tea Party fixation with Obama as a Socialist, Fascist or both at the same time reveals a lack of understanding of what actually comprises these two somewhat similar yet fundamentally different schools of political thought. If it’s not that, then what else could it be other than a deliberate attempt to misinform the public for partisan ends. It goes without saying that this is something that can only contribute to further gridlock. This fact stands in direct contrast to what the public wants. The latest polling by both Bloomberg and the New York Times / CBS News reveals an electorate that wants compromise not confrontation. Yet with the arrival of Tea Party backed lawmakers the stage is now set for a political environment more favorable to confrontation than to compromise. Attempts to fix the blame on President Obama for the current economic situation are likely to fail as well as “nearly 60 percent of Americans were optimistic about Mr. Obama’s next two years in office and nearly 70 percent said the economic slump is temporary. Half said the economy was where they expected it would be at this point, and less than 10 percent blamed the current administration for the state of the economy, leaving the onus on former President George W. Bush and Wall Street.” In the final analysis, the 2010 election is shaping up to be something of an anomaly. On the one hand you have widespread voter dissatisfaction with the status quo while at the same time the party likely to gain seats has a favorability rating below the party that will be turned out of office. Thus for the Republicans this victory will be a political windfall rather than an endorsement of the party and its platform. The G.O.P. will find itself in an inopportune marriage of convenience with the Tea Party Movement which in the long haul may turn out to the G.O.P.’s detriment as the public grows weary of the gridlock and political train wrecks that are sure to come. Rather than being on the cusp of a Republican revival or a “return to our core values” we are more likely on the verge of an environment of political chaos which is just what we don’t need at this point in time and that chaos may well come back to haunt the Republican Party and hobble its chances in the 2012 election and beyond. Ladies and Gentlemen, fasten your seat belts.

Steven J. Gulitti



The New Face of the G.O.P.? Grizzled Veterans, by David Herszenhorn;

Deficit Divisions Likely to Grow After Election by Jackie Clames;

Earmarks Cause GOP Rift By NEIL KING JR. ;

A Pledge to America;

Republican Plan Fails to Persuade Some Activists, By JANET HOOK And NAFTALI BENDAVID;

As G.O.P. Seeks Spending Cuts, Details Are Scarce by David Herszenhorn; The Center for Responsive Politics;

Top Corporations Aid U.S. Chamber of Commerce Campaign

Federal Discretionary and Mandatory Spending;

Lobbyists Court Potential Stars of House Panels;

United Press International: U.S. tax burden at lowest point in years;

TARP Bailout to Cost Less Than Once Anticipated, by Jackie Calmes;

The Great Bailout Backlash, by Ross Douthat;

The Hill: Polls: Americans want compromise from Obama, GOP, by Michael O’ Brien;

NYT / CBS News Poll: Three in Four Want Political Compromise; Marist Poll: 10/8:

Obama Approval Rating at 43%, but Majority of Voters Confident in Obama’s Approach;