President Obama’s speech on April 13th was used as an opportunity to spread false information about the GOP’s budget plan authored by Rep. Paul Ryan (R-WI) according to Fact Check.org. Among the deceptive claims were these:
- Obama claimed the Republicans’ "Path to Prosperity" plan would cause "up to 50 million Americans "¦ to lose their health insurance." But that worst-case figure is based in part on speculation and assumptions.
- He said the GOP plan would replace Medicare with "a voucher program that leaves seniors at the mercy of the insurance industry." That’s an exaggeration. Nothing would change for those 55 and older. Those younger would get federal subsidies to buy private insurance from a Medicare exchange set up by the government.
- He said "poor children," "children with autism" and "kids with disabilities" would be left "to fend for themselves." That, too, is an exaggeration. The GOP says states would have "freedom and flexibility to tailor a Medicaid program that fits the needs of their unique populations." It doesn’t bar states from covering those children.
- He repeated a deceptive talking point that the new health care law will reduce the deficit by $1 trillion. That’s the Democrats’ own estimate over a 20-year period. The Congressional Budget Office pegged the deficit savings at $210 billion over 10 years and warned that estimates beyond a decade are "more and more uncertain."
- He falsely claimed that making the Bush tax cuts permanent would give away "$1 trillion worth of tax cuts for every millionaire and billionaire." That figure — which is actually $807 billion over 10 years — refers to tax cuts for individuals earning more than $200,000 and couples earning more than $250,000, not just millionaires and billionaires.
- He said the tax burden on the wealthy is the lowest it has been in 50 years. But the most recent nonpartisan congressional analysis showed that the average federal tax rate for high-income taxpayers was lower in 1986.
You may say, “hey, those aren’t really that big of a deal – they’re not giant fibs”. Well yeah, they are – and collectively they paint a completely false picture of both the Ryan plan and the Obama plan because the way he presented each was to try to present them in such a way that you bought into the premise his falsehoods painted.
Had he just stuck with the facts, the GOP’s wouldn’t have sounded too bad and his wouldn’t have sounded very good (for instance the claim that ObamaCare will save $1 trillion assumes the “doc cut” will actually be made when there is absolutely no indication it will ever be made).
So he just made stuff up out of thin air or presented it in a highly-partisan way to make it sound much worse than it is.
We should expect better than that from the President of the US shouldn’t we?
And wasn’t he the guy who promised such “hope and change” in DC with his administration? That’s one campaign promise (among many others) that simply will never get the green checkmark in the box beside it. It is a complete and total “no-go”.
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And no, that’s not a new bar drink. It seems to be the unstated conclusion of a NY Times poll that measures the mood of the American people.
Granted, they’ll poll anything these days, and certainly all polls should be viewed cautiously, but they are an interesting peek into the thoughts of the American people. This particular poll and the write up indicate that perhaps a Carteresqe malaise is settling in as the citizenry appears to be losing hope about economic (and other) changes for the better. There are also some interesting comments in the story to discuss. But first some of the poll results. The lead:
Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.
The significance here? Well, first it is a NYT/CBS poll saying it. Secondly it is an indication that economic fatigue may be setting in which might translate, at some point, into major political opposition to the man in charge. It is inevitable. That’s how it has worked in the past and certainly there’s no reason to suppose it won’t work the same way now. Whether it is enough to put a Republican in the White House is still very debatable, mostly because of the crop of candidates the GOP currently sports. However, despite all the hope and change rhetoric this president spouted and promised, very little in the guise of either has been evident in his first two years in office. In fact, as some on the left have said, he turned into just another president – shorthand for “he’s not what I voted for”.
That doesn’t mean they’re necessarily going to abandon their man, but it does mean their enthusiasm about him is probably far below what it was in 2008. That usually turns into a “GOTV” problem in an election year.
Here’s one of the more interesting paragraphs in the piece:
And slightly more Americans approve than disapprove of a proposal by Representative Paul D. Ryan of Wisconsin to change Medicare from a program that pays doctors and hospitals directly for treating older people to one in which the government helps such patients pay for private plans, though that support derived more from Republicans and independents. A recent Washington Post/ABC News poll that found 65 percent opposed Mr. Ryan’s plan, suggesting results can vary based on how the question is asked.
Two points – of course it matters “how the question is asked”, which is a general comment on all polls. Most are pretty careful about how they do that – although some either purposely or inadvertently ask questions in a leading or biased way. I’m not saying that’s what happened in the WP/ABC poll, but it is certainly a reason to drill down into the details of a poll that seems to be (or should be) an outlier.
The second thing of interest is this statement about support for the Ryan Medicare plan: “ though that support derived more from Republicans and independents.” Or said another way the poll split along party lines with that all important independents apparently siding slightly with Ryan.
The poll goes into some fairly disturbing numbers for Obama supporters.
Mr. Obama’s job approval remains below a majority, with 46 percent saying they approve of his performance in office, while 45 percent do not. And support for his handling of the military campaign in Libya has fallen since last month: 39 percent approve and 45 percent disapprove. In a CBS poll in March, 50 percent approved and 29 percent disapproved.
I’d suggest that they reflect a growing frustration with what the country perceives – rightly or wrongly – as an all talk, no action administration.
For example, on the domestic front, Obama recently addressed gas prices by doing what? Saying he’ll appoint a commission to look into them. While he may be able to do little to influence gas pricing, appointing commissions has become recognized as a political method for avoiding any direct action on a subject. That leads to frustration like that which has driven down the number of those in this poll who think the economy is getting better by 13 points in one month:
Disapproval of Mr. Obama’s handling of the economy has never been broader — at 57 percent of Americans — a warning sign as he begins to set his sights on re-election in 2012. And a similar percentage disapprove of how Mr. Obama is handling the federal budget deficit, though more disapprove of the way Republicans in Congress are.
Bill Clinton’s first presidential campaign against the incumbent George HW Bush stayed focused on the real interest of the American people with his internal slogan– “it’s the economy, stupid”. Ronald Reagan had his famous question for the American people when running against the incumbent Jimmy Carter – “are you better off today than you were 4 years ago?” Both illustrate the power of the economy in deciding presidential outcomes – especially against an incumbent.
The poll also points out that Republicans in Congress don’t particularly come off well. But that’s a mixed bag. While the poll seems to concentrate on the Republican held portion of Congress – the House – you can’t help feel that any overall negative rating would include perceptions of the Democratically held Senate as well. The approval rating for Congress is at 17% in this poll, slightly higher than the single digit numbers 111th and all Democratic Congress racked up.
And, as usual in almost all polls, the “desires” of the American people, when asked about what they want in terms of government size, benefits, etc. are, as the NYT says, both “conflicting and sometimes contradictory views.”
Twice as many respondents said they would prefer cuts in spending on federal programs that benefit people like them as said they would favor a rise in taxes to pay for such programs.
Yet more than 6 in 10 of those surveyed said they believed Medicare was worth the costs. And when asked specifically about Medicare, respondents said they would rather see higher taxes than see a reduction in its available medical services if they had to choose between the two.
Given the choice of cutting military, Social Security or Medicare spending as a way to reduce the overall budget, 45 percent chose military cuts, compared with those to Social Security (17 percent) or Medicare (21 percent.)
That’s one of those “how the question is asked” or in this case, the choices given. What if they’d said just Social Security or Medicare? Or Social Security, Medicare and Medicaid?
But the results, as indicated, are all over the place (oh, and apparently the tax the rich mantra has been successfully sold by the left as 70% in this poll support doing that – but don’t raise their taxes.)
My personal favorite indicator is the “direction of the country” question. A whopping 70% say it is headed in the wrong direction. That’s huge. But, it doesn’t mean the frustration is all pointed at Democrats or Obama. Congressional Republicans come in for their fair share as well.
All of the angst, anger and frustration though is focused in one area:
Frustration with the pace of economic growth has grown since, with 28 percent of respondents in a New York Times/CBS poll in late October saying the economy was getting worse, and 39 percent saying so in the latest poll.
Those are not good numbers for an incumbent president. Right now the only silver lining in the otherwise dour outlook for the Obama reelection bid in 2012 is the dearth of exciting challengers on the Republican side. There’s just no passion evident for those who are probable for that race. And that too evolves into a GOTV problem in 2012.
Conventional wisdom and history say the incumbent president on the downside of a bad economy should be easy pickings for the opposition party. Unfortunately, given the GOP field at this moment, CW and history may be in for a revision.
Regardless, the mood in the country isn’t any better now than it was in 2008 or 2010 – and there doesn’t seem to be any relief in sight for the growing frustration of the voters.
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As Republicans and Democrats jockey for political position in the upcoming budget fights, entitlements should loom large as programs that must be addressed and addressed quickly.
Instead, as we see so many times, the tendency to avoid the problem – to kick the can down the road- often becomes the chosen path. Majority Leader Reid, for instance, has made it clear he doesn’t want to deal with Social Security at this time.
But, as we watch the deficit grow and debt pile up to unprecedented levels, most of us have come to realize there isn’t anymore road down which we can kick the can. We’re at a dead end. And the problem with entitlements still persists and has gotten worse.
Which brings me to the cite “elephant in the room” pertaining to entitlements. Note the word – entitlement. It connotes something which is owed without exception or change, something which is sacrosanct, something which can’t and shouldn’t be touched.
But Sal Bommarito at PolicyMic points out something which, despite all the rhetoric to the contrary, we should all realize:
Abrogation of existing entitlements is an arduous process as the roar of liberal lawmakers and civic leaders is much louder than the proponents of the fiscal conservatism side. Often, a sense of entitlement can overwhelm such debates. However, the most important thing to keep in mind is that an entitlement is only valid so long as it earns the approval of the people. Changing economic prospects could increase or decrease our nation’s propensity to be altruistic. In essence, entitlements are “people-given,” not “God-given”.
There is no “right” to “people-given” entitlements. They are a privilege we choose to bestow when we can afford it.
Some will argue, rightly, that not all of the entitlements are bestowed. That in fact, by legal mandate, we’re required to send Washington a portion of our income they demand for programs such as Social Security and Medicare.
But in reality, while that argument is valid, it isn’t valid for spending above and beyond what the programs take in. The fact that government has badly mismanaged programs into which we’re legally obligated to pay doesn’t mean the programs should be left untouched. Bommarito then addresses the elephant in the room, the argument those wanting entitlement reform to bring those programs to an affordable and sustainable level (or, elimination) should cite each and every time the subject is raised:
The legitimacy of the programs should not be based upon emotional responses to poverty — by Congress, society, and/or the media. If our government has the economic wherewithal, the effective transfer of money to those less fortunate should be law. However, the financial stability of our country is paramount even if this has become harder to achieve in recent years. And so, Congress and the president may have to rescind entitlements in response to bad times even if the beneficiaries will suffer greater hardships.
The absolute and primary priority for our national government should and must be the “financial stability of our country” – period. That priority should never be held hostage to emotional appeals about the result of cutting or changing programs we obviously can’t afford. We should never allow unsustainable spending on entitlements to threaten that top priority.
And of course the end state of 2 courses of action tell you why that priority should be paramount as Bommarito states. Course A – do nothing. We essentially bankrupt the nation with continued unsustainable spending and entitlements become null and void anyway. Course B – we address the problem head on and do what is necessary to make entitlements viable and sustainable. Some entitlements remain in force, even if at a lesser extent than before and we preserve the fiscal stability of the country.
President Obama, in his speech addressing the budget last week, essentially said we could have our cake and eat it too. He declared that the other side’s claim that we couldn’t “afford” much of the welfare state was just pessimistic and wrong. And of course, he then put forward a plan that would eventually raise taxes for everyone to pay for the profligacy of past (and present) government.
Bommarito has stated the primary reason entitlement reform must be a primary concern of the next budget cycle. Why not addressing those programs and doing what is necessary to reform them and make them sustainable or eliminate them is an abrogation of the primary priority for this government. Entitlements are a “people-given” choice which should and must always be secondary to the overall financial stability of our country.
It is time we addressed this elephant in the room properly.
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One issue that deserves much more attention is the cost of the powers government exercises to regulate. The Competitive Enterprise Institute has just issued a study that does exactly that – study the cost of the regulatory state and the impact it has on our economic viability.
You shouldn’t be surprised to learn that regulation is up and so is its cost (per the report, the cost of regulatory compliance in this country is about $1.75 trillion):
Among the report’s findings:
- The Federal Register stands at an all-time record-high 81,405 pages.
- In 2010, federal agencies issued 3,573 final rules.
- While agencies issued 3,573 final rules, Congress passed and the president signed into law a comparatively “few” 217 bills. Considerable lawmaking power is delegated to unelected bureaucrats at agencies, an abuse addressed recently in proposals such as the REINS Act.
- Alarmingly, proposed rules in the Federal Register have surged from 2,044 in 2009 to 2,439 in 2010, a jump of 19.3 percent.
- Of the 4,225 rules now in the regulatory pipeline, 224 are “economically significant” meaning they wield at least $100 million in economic impact—this is an increase of 22 percent over 2009’s 184 rules.
- Given 2010’s government spending (outlays) of $3.456 trillion, the regulatory “hidden tax” of $1.75 trillion stands at an unprecedented 50.7 percent of the level of federal spending itself.
- Regulatory costs exceed all 2008 corporate pretax profits of $1.463 trillion.
- Regulatory costs dwarf corporate income taxes of $157 billion.
- Regulatory costs tower over the estimated 2010 individual income taxes of $936 billion by 87 percent—nearly double the level.
- Regulatory costs of $1.75 trillion absorb 11.9 percent of the U.S. gross domestic product (GDP), estimated at $14.649 trillion in 2010.
- Combining regulatory costs with federal FY 2010 outlays of $3.456 trillion reveals a federal government whose share of the entire economy now reaches 35.5 percent.
The report urges reforms to make the regulatory costs more transparent and accountable to the people, including annual “report cards” on regulatory costs and benefits, and congressional votes on significant agency rules before they become binding.
Take a moment to absorb those numbers. And ponder, for a moment that final percentage. 35.5% of what our economy produces now is related to government spending or compliance to a government regulatory regime.
Here’s a thought – if the government wants to spur economic growth, create jobs and, most likely, increase revenue for government, perhaps a serious – and I mean very serious- look ought to be taken (along with action, please) at the mountain of costly regulations now imposed by said government and a majority of them rolled back. Over 81,000 pages of regulations, and I’m sure some bureaucrat out there believes everyone of them is necessary.
Sane people know better. Much of it is out of control or heading that way. For instance:
Runaway regulation under the Clean Air Act.
In regulating greenhouse gas emissions, the Environmental Protection Agency (EPA) is trying to pick and choose which provisions of the Clean Air Act it wants to implement. But that is not how the Clean Air Act was set up. Under the Act, regulation under one section trips regulation under multiple other sections. Even if EPA tries to avoid this outcome,environmental pressure groups have already filed several lawsuits to compel the agency to begin regulating greenhouse gas emissions under other sections. Unless Congress intervenes, every building larger than a single-family dwelling likely will become subject to carbon controls in the near future.
Of course the next logical step after pulling in all structures other than “single-family” homes is to do what? That’s right, pull in single family homes.
EPA’s administrative cap-and-trade power grab.
The EPA plans to propose greenhouse gas emissions control technology standards for power plants in July2011 under the Clean Air Act. One of the primary options the EPA is reportedly considering is a cap-and-trade program. The fact that even the Democratic-controlled 111th Congress refused to enact a cap-and-trade program appears not to matter to Climate Czar Carol Browner or EPA Administrator Lisa Jackson. The EPA’s authority under the Clean Air Act requires clarification and the agency’s unilateral actions require investigation.
Can’t get it done by Congress (whose job it is, by the way). Then do it by regulatory fiat.
De facto moratorium on American oil and gas production.
Political decisions by Interior Secretary Ken Salazar and his appointees have led to a steep decline in domestic oil and gas production on federal lands and offshore areas. Production is already down and will almost certainly decline further. The extent of these cancellations is not fully apparent because they have been done piecemeal. An investigation is needed to put all the pieces together and thus show the damaged one and being done to America’s domestic oil and gas industry.Congress refused to enact a cap-and-trade program appears not to matter to Climate Czar Carol Browner or EPA Administrator Lisa Jackson. The EPA’s authority under the Clean Air Act requires clarification and the agency’s unilateral actions require investigation.
These are the types of regulatory abuse and over reach that are harming our economy, costing us jobs and making us less competitive.
Not only do we need to get government spending back under control, we badly need to get the regulatory state back under control as both spending and over regulation are eating up increasingly large parts of our GDP.
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Funny stuff. Paul Krugman, representing much of the left, has apparently finally noticed what an empty suit Obama is:
What have they done with President Obama? What happened to the inspirational figure his supporters thought they elected? Who is this bland, timid guy who doesn’t seem to stand for anything in particular?
I realize that with hostile Republicans controlling the House, there’s not much Mr. Obama can get done in the way of concrete policy. Arguably, all he has left is the bully pulpit. But he isn’t even using that — or, rather, he’s using it to reinforce his enemies’ narrative.
Of course Krugman is pretty much focused on economic issues and so seemingly hasn’t been watching Obama through most of his presidency, as many of us have. He’s finally noticed the “timid guy” who doesn’t seem to stand for anything but does enjoy a good round of golf.
I guess I shouldn’t be surprised it has taken this long – the blinkers had to be firmly in place to elect him in the first place. You had, to quote Hillary Clinton as she addressed Gen. Petraeus about the situation in Iraq some years ago, “willingly suspend disbelief” in order to vote for the guy in the first place. What you had to suspend was the belief that experience and leadership count for something, especially when you’re talking about the highest office in the land.
This timid guy Krugman is talking about has shown the rest of us over and over he’s really unsuited for the job. And now, even the Krugman’s of the world are beginning to take some notice.
I have to admit to laughing out loud at Krugman’s example – apparently the one that finally clued him into the problem:
His remarks after last week’s budget deal were a case in point.
Maybe that terrible deal, in which Republicans ended up getting more than their opening bid, was the best he could achieve — although it looks from here as if the president’s idea of how to bargain is to start by negotiating with himself, making pre-emptive concessions, then pursue a second round of negotiation with the G.O.P., leading to further concessions.
And bear in mind that this was just the first of several chances for Republicans to hold the budget hostage and threaten a government shutdown; by caving in so completely on the first round, Mr. Obama set a baseline for even bigger concessions over the next few months.
Of course Krugman, as typified by his one-trick pony policy of more and more government spending to cure all ills is bound to be upset by any spending concessions a Democrat might make. However, I loved his characterization of Obama’s bargaining style. It is true and not only does it point to someone totally out of his depth, but someone with no real principles upon which to make a stand.
Krugman turns his attention, after wondering what happened to Obama, to trying to trash everything the GOP has put forward or will put forward. But so captured is he by his discovery of what Obama isn’t that he has to return to that subject:
You might have expected the president’s team not just to reject this proposal, but to see it as a big fat political target. But while the G.O.P. proposal has drawn fire from a number of Democrats — including a harsh condemnation from Senator Max Baucus, a centrist who has often worked with Republicans — the White House response was a statement from the press secretary expressing mild disapproval.
What’s going on here? Despite the ferocious opposition he has faced since the day he took office, Mr. Obama is clearly still clinging to his vision of himself as a figure who can transcend America’s partisan differences. And his political strategists seem to believe that he can win re-election by positioning himself as being conciliatory and reasonable, by always being willing to compromise.
But if you ask me, I’d say that the nation wants — and more important, the nation needs — a president who believes in something, and is willing to take a stand. And that’s not what we’re seeing.
Baloney. Krugman has to have lived in a cave if he believes the rhetoric has even come close to matching the reality of the Obama presidency. He is not a transcendent figure by any stretch. He is, instead, a true exception to the Peter Principle and has indeed risen to a level above his incompetence.
But to Krugman’s last point – Obama believes in one thing – Obama. And any objective appraisal of his performance in office these past 2+ years cannot give him very high marks on “principle” or a willingness to take a stand. There’s a reason for that. Obama traded principle for the achievement of his ambition years ago. He’s intelligent enough to talk the talk, but he seems absolutely incapable of walking the walk or even attempting to do so.
As Dale said on the podcast last night, you sometimes get the feeling that when he says something he truly believes it becomes reality. In this world you actually have to take action and lead to have things happen. Obama has no idea how to do that.
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So we’ve reached an agreement. I’m not surprised. The entire argument — over money, of course — was nothing more than a prelude to an inevitable act.
Foreplay, if you will.
Oh sure, the back and forth was heated at times, but was there ever any doubt that the money-spenders would arrive at a deal? I mean, you cut off a gold-digger from the credit cards and concessions will inevitably be made. Not at first of course (even whores have their pride), but once it becomes inevitable that the spigot will be cut off, even the lowliest scum whores will come to obeisance. It’s what they do.
Without the sweet ambrosia of federal income, the power brokers — a.k.a. your elected officials — would lose all of their power, ephemeral as it may be. And powerless whores are the lowliest whores of all.
Why are they (i.e. Congress, the White House) whores? Because no matter what, regardless of any consequences, our “betters” have declared themselves to be more concerned with maintaining their ability to lord their will over our money (being realistic, our credit), than they are with protecting our ability to spend it as we see fit. Their main worry is that they won’t be able to control how we spend that money, and — most importantly — that it won’t go to the “correct” people. Frankly, if they can’t control our income/wealth/money, then they can’t control us. Indeed, without access to our tax dollars, congress-critters will have no influence at all. And that will not abide for too many if them.
Whatever the deal may be, the only certainty is that, like any John, we’re screwed. And that we will still be paying maximum price for that pleasure.
I don’t mean to make light of the fact that the House was able to wrestle some budget cuts away from the opposition. Kudos are definitely due. But they are paltry … i.e. cuts of $39,000,000,000 in the face of a $1,650,000,000,000 deficit just for this year, which is about a 2.4% cut. Seriously? Who cares?
The unfortunate answer is, “your representatives of all stripes and colors.” Because they need that money to dole out the gifts that keep them in power. A government shutdown means that there will be no incoming money to buy the power and influence our rulers crave. They may whinge about seniors dying and children crying, but what they truly care about is the power of the purse. With that power they can pay off favored constituents whom they will eventually call to account for the government’s distribution of largesse (witness the current fear-mongering about budget-cutters wanting to “kill women” and starve the elderly). They are simply using our tax dollars to buy their own power.
Our elected money-spenders will always bleat in earnest when their source of power is interrupted. So, of course a budget deal was cut. Like a wanton slut, they will always strike a deal to keep the money flowing.
Problem: As a nation we’re in dangerous debt territory. If we don’t do something quickly and dramatically, we’re headed for some very rough and painful times.
But while it seems the American public senses this on the whole, polls seem to indicate that all the “free” stuff handed out by government is popular with a large percentage of the population. Or said another way, they understand that we have a debt problem, they understand the implications of that problem and they don’t mind spending cuts – just so the spending cuts don’t effect programs they like.
The problem is further compounded by an irresponsible administration which gives the debt problem lip service but submits budgets that exponentially increase the problem:
The president’s recent budget proposal would accelerate America’s descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.
Both of these facts make it hard for those who would actually like to address the problem of debt before it overwhelms us. That’s because they’ll really get no support politically from the administration, no call to arms and leadership, and the American people are proving to be fickle about the whole process sending very mixed signals.
Well the obvious solution is to find some means of cutting spending to at least the level of revenue and to begin working to pay the debt down in an earnest and timely manner. What isn’t a solution is business as usual but on steroids as proposed by the President. So today, Rep. Paul Ryan (R-WI) introduced the GOP plan to address the problem. Or at least part of the problem. That of out-of-control spending and addressing the debt. How it will play with the American people remains to be seen, but it is both an earnest and timely proposal. It also makes some pretty dramatic cuts which is where you can expect to see the pushback.
For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.
But there’s pain in them thar words. And it means things are going to have to be quite different in some areas than they are now. Government is going to have to be rolled back. That is unless we’re partial to a complete collapse of our economy and our currency, hyper inflation and all the good times those developments would bring.
So to specifics in Ryan’s proposal. Addressing welfare in general, he says:
This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.
As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don’t. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.
I am quite pleased to see the second paragraph. It is indeed time to eliminate “corporate welfare” and subsidies for favored industries. It also takes on what we would call traditional welfare. And make no mistake about it Medicaid and food stamps are welfare. As for the “perverse incentives” Ryan points too, here’s what they’ve yielded recently:
I’m sure some of that comes with the economic downturn, but it also indicates the effect of the incentives to sign people up for the welfare program.
We can’t afford the level of welfare we’re paying out now – and that included corporate welfare and subsidies. We are a compassionate people, but I end up shaking my head when I hear government officials claiming that people at “4 times the poverty level” need help? Really? So what’s the purpose of the poverty level as a measure and why are we now convinced we have to “help” people well above that level?
Then there are the twin third rails of politics, but areas where dramatic reforms are absolutely necessary to get us on the right fiscal track as a country. And those are Medicare and Social Security. The Ryan plan:
Health and retirement security: This budget’s reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.
Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.
In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America’s seniors.
I’ve already seen some on the left characterizing this as "privatizing" Medicare. And, of course, as we all know, that’s dangerous as government always does it better – look at the budgets for example. Look at the debt.
In fact, what Ryan is talking about is giving seniors a choice vs. automatically enrolling them in a government insurance program that averages about $60 billion a year in waste, fraud and abuse. There will be a subsidy – probably means tested. Is the the ideal libertarian answer? No. But as I’ve said before, freedom is choice and any legislation that expands that is at least a step in the right direction.
We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president’s bipartisan fiscal commission.
Perhaps raise the caps (I gave a certain percentage to my 401k regardless of how much I earned, so doing the same with Social Security doesn’t really bother me. And it will provide increased revenue for the fund. Again, ideal? No, but then I don’t consider either Medicare or Social Security to be “welfare” since most participants have paid into those systems for their entire working life. But there are changes which will have to be made. I don’t favor means testing if the cap is raised. But I do think that a hard look at the retirement age is necessary. My ideal outcome, obviously, would be getting government out of the retirement income business, but that’s not going to happen. So Social Security has to be made self-supporting and not a drain on the budget – as does Medicare.
Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles.
If we don’t get some restrictions on government spending, nothing is going to change. Nothing. We’ve watched Congress talk the talk for decades, ala Nancy PAYGO Pelosi. But they ignore their own legislation and policy at will. As Ryan says, there have to be “real, enforceable caps on spending”. I interpret that as “you cannot and will not spend more than you take in”. We’ll see how the Congress interprets that.
Tax reform: This budget would focus on growth by reforming the nation’s outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all.
Here is something that is going to be as hard to do as entitlement reform. Why? Because the tax system provides Congress with another way to wield its power. But the way it has wielded this power has done precisely what Rep. Ryan points too here – it has “distort[ed] economic activity.” Make the system simple, remove the loopholes, broaden the base (get some more “skin” in the game from those who now don’t pay taxes) and my guess is you’ll not only see an increase in revenue, but a far greater increase in economic activity.
Bottom line: We are in a “you can pay me now or you can pay me later” moment. And if we wait, we’re going to be paying a price we’re just not willing to pay, all because we chose to avoid the pain now. I’m sure the opponents of this proposal are going to call it “extreme” and something that will “hurt the children”. Trust me, if you want to see extreme, put it off until this house of cards collapses. And if you want to avoid “hurting the children”, man up and face the pain now to avoid it later when it really will “hurt the children”.
UPDATE: Chris Edwards at CATO gives his take on the Ryan budget. I’m pretty much agreed with everything Edwards says:
- Ryan doesn’t provide specific Social Security cuts, instead proposing a budget mechanism to force Congress to take action on the program. It is disappointing that his plan doesn’t include common sense reforms such raising the retirement age.
- Ryan finds modest Medicare savings in the short term, but the big savings occur beyond 10 years when his “premium support” reform is fully implemented. I would rather see Ryan’s Medicare reforms kick in sooner, which after all are designed to improve quality and efficiency in the health care system.
- Ryan adopts Obama’s proposed defense (security) savings, but larger cuts are called for. After all, defense spending has doubled over the last decade, even excluding the costs of wars in Iraq and Afghanistan.
- Ryan includes modest cuts to nonsecurity discretionary spending. Larger cuts are needed, including termination of entire agencies. See DownsizingGovernment.org.
- Ryan makes substantial cuts to other entitlements, such as farm subsidies. Bravo!
- Ryan would turn Medicaid and food stamps into block grants. That is an excellent direction for reform, and it would allow Congress to steadily reduce spending and ultimately devolve these programs to the states.
- Ryan would repeal the costly 2010 health care law. Bravo!
Here’s a chart Edwards includes in his post:
I’m a huge supporter of military spending in order to maintain our national security and technological edge, but I find it hard to believe that there aren’t many places where savings could be accrued in “Security”. And I’d also note under the broad “Security” umbrella fall many other programs that could be cut – like the entire TSA. But, in any event, it is an area that should also be looked at with an eye for cutting spending. It would get us to our goal of paying down the debt even sooner and it can be done without jeopardizing our security (cut costs not capability).
UPDATE II: Geoff over at Ace of Spades gives a little context to the Ryan proposal:
Now, where I come from, the “extremes” are on either side of a situation, right?
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Write it off to me being cynical about what any politician says, but while I like what I hear from Rubio in this WSJ op/ed, I wonder if, in fact, he’ll end up sticking to his guns:
Americans have built the single greatest nation in all of human history. But America’s exceptionalism was not preordained. Every generation has had to confront and solve serious challenges and, because they did, each has left the next better off. Until now.
Our generation’s greatest challenge is an economy that isn’t growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.
Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.
So to summarize, Rubio sees a need to find ways to help the economy grow and to keep the national debt from not growing. Okay, sold. Next he sees existing federal policies – those, one assumes, include taxes and regulations – as one of the main obstacles to economic growth and one of the main contributors to national debt. Again, check. I think, in the main, he’s right.
Here’s the QotD:
We’re therefore at a defining moment in American history. In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.
In fact, it’s nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting. This may be our last chance to force Washington to tackle the central economic issue of our time.
Well yes and no. The defining moment in American history seems to arrive every couple of years when Congress routinely raises the limit again and again. We’re now at a level that almost matches the yearly GDP with no end in sight if you look at the projected budgets for the next 10 years. So is this particular vote on the debt ceiling really a “defining moment in American history”? Only if Congress refuses to raise it. Otherwise, it is business as usual.
Wit ill it be business as usual or a “defining moment in American history”? I agree with Rubio that as it stands Congress and the president have obviously decided covertly that they’re not going to “tackle the central economic issue of our time” at the moment. So where does that leave Rubio?
Well, here’s his position:
I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.
No tax reform, regulatory overhaul, cuts to discretionary spending, balanced budget amendment as well as reforms to save Social Security, Medicare and Medicaid, no Rubio “yes” vote?
That’s what his statement says to me and anyone familiar with the “goings on” in Congress know -given Rubio’s list of “must haves” before he’d vote “yes” – it is a virtual impossibility. Not going to happen – at least not anytime soon.
I would then deduce that Rubio is a permanent “no” on any legislation coming along in oh, the next 20 years, that raises the debt ceiling. Because, watching politics in Washington for all these years has convinced me that until it all crashes and burns, those folks aren’t going to really do a thing.
And I think Rubio knows it too:
Whether they admit it or not, everyone in Washington knows how to solve these problems. What is missing is the political will to do it.
I’ve seen no indicator that there is now a real will to do it, even after the wave election washed over 60 Republican freshmen into the House and upped the minority numbers for the GOP in the Senate. Oh there’s talk, of course, but I see the usual turf protection and re-election concerns already beginning to cloud the once clear mandate that said “fix this mess”. I see knees becoming weak and spines beginning to buckle.
Rubio stakes out a pretty unambiguous position here – not that I think he’s going to be able to stop the debt ceiling from being raised. On the contrary, I think we’ll see it raised many more times in the coming years. But I’m wondering how true Rubio will remain to his pledge here. It will be an interesting exercise to watch a supposedly principle driven and incorruptible Tea Party candidate work in the atmosphere of Washington DC that almost demands “team play” and compromise to “get along” or advance. He and Rand Paul, along with Allen West (R-FL) in the House are my “white mice” in this Tea Party experiment. I want to see how true they stay to their pledges, how well they resist the Washington gravitational pull and resultant sell-out that usually occurs.
I, for once, hope my cynicism isn’t rewarded as it usually is.
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Much more so than does the President of this country apparently:
Chancellor George Osborne has announced a number of measures to try to help business in his Budget.
Corporation Tax will be reduced by 2% from April 2011, rather than 1% as previously intended, and fall by 1% in the next three years, to reach 23%.
Mr Osborne also said that he was looking to boost enterprise and exports, as part of a Budget "for making things".
He said he also wanted the UK to be the best place to establish a company.
"Cuts in the burden of corporation tax, that will be worth around £2bn per annum when implemented over the coming years, are likely to be particularly beneficial for big multinational companies," said BBC business editor Robert Peston.
"And a significant lifting of planning constraints will delight much of the corporate sector."
He added: "With the corporation tax changes – and the recent pledge by Vince Cable to slash red tape – they represent a loosening of alleged shackles on the corporate sector."
And business body the CBI said the Budget would help business grow and create jobs.
Wow … what a concept. Cut business taxes and attract businesses, create jobs and actually increase government revenue.
Now, there’s a “jobs bill” for you.
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If you thought President Obama was serious about his rhetorical appeals to fiscal responsibility, one only has to look at the latest CBO report to know better. There is nothing in the report to support any such contention by the administration. To the contrary it points to a level of fiscal irresponsibility that is unprecedented in the history of this republic. Obama’s budget would, if executed, double the public debt by 2021 to $20.8 trillion or 87% of the GDP. That is if our economic and financial systems, not to mention the dollar, last that long:
In 2012, the deficit under the President’s budget would decline to $1.2 trillion, or 7.4 percent of GDP, CBO estimates. That shortfall is $83 billion greater than the deficit that CBO projects for 2012 in its current baseline. Deficits in succeeding years under the President’s proposals would be smaller than the deficit in 2012, although they would still add significantly to federal debt. The deficit would shrink to 4.1 percent of GDP by 2015 but widen in later years, reaching 4.9 percent of GDP in 2021. In all, deficits would total $9.5 trillion between 2012 and 2021 under the President’s budget (or 4.8 percent of total GDP projected for that period)—$2.7 trillion more than the cumulative deficit in CBO’s baseline. Federal debt held by the public would double under the President’s budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021.
Given the outright deceit we’re regularly treated too by Democrats concerning their seriousness in addressing the problems we face, or their outright disinterest in actually doing so (Harry Reid’s recent “see me in 20 years about Social Security” or his whining about defunding “cowboy poets”), it shouldn’t really surprise anyone that we’re in the shape we’re in or that this administration is actually offering these budgets on the one hand while claiming to understand that we can’t continue spending as we are on the other.
We even have Nancy Pelosi claiming Democrats have always been for fiscal responsibility.
It boggles the mind to even consider these numbers and yet we have an administration offering them as the way to go for the future and doing so with a straight face.
Note the chart included here. The “baseline projection” is what we’d spend under current law. CBO claims one of the problems is a decrease in revenues under the President’s proposed policies with, you guessed it, an increase in outlays. And we’d also see – and this isn’t unexpected at all, given the amount of money we continue to borrow – an increase in the percentage of outlays required to service the debt:
In particular, net interest payments would nearly quadruple in nominal dollars (without an adjustment for inflation) over the 2012–2021 period and would increase from 1.7 percent of GDP to 3.9 percent. Total outlays under the President’s budget would equal 23.6 percent of GDP in 2012, decline slightly as a share of GDP over the following two years, and then rise for the rest of the 10-year projection period. They would equal 24.2 percent of GDP in 2021—about 0.3 percentage points above CBO’s baseline projection for that year and well above the 40-year average for total outlays, 20.8 percent.
So if the President’s budgets were enacted, we’d see government outlays – that’s spending for the rest of us – hit almost a quarter of the GDP and the debt in total about 87% of GDP in 10 years.
Meanwhile Democrats continue to fight against almost every cut for the most inane reasons while we see the debt numbers continue to climb. Republicans are at least are making an attempt at cutting spending, no matter how weak, but Democrats have given up all pretense. And all credibility. The President’s budgets are the final nail in the Dem’s faux “fiscal responsibility” coffin.
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