Rep. Ryan's Roadmap

Jonathan Chait has a cogent analysis of the budget proposal from Republican Congressman Paul Ryan.

The roadmap clarifies the essence of the Republican Party's approach to domestic policy issues. The essence is opposition to the downward redistribution of income. The principle first emerged under Ronald Reagan, but only in fits and starts--Republican presidents agreed to a tax reform in 1986 and a deficit reduction in 1990 that did redistribute income from rich to poor. Over the last twenty years, though, opposition to downward redistribution has hardened into the sacred tenet of Republican policymaking. Ryan's plan both codifies this principle and shows just how far the party is willing to go in its service.

Every major element of Ryan's plan reflects this commitment. Begin with his proposed tax changes. Ryan would not only retain the Bush tax cuts for the highest earners, he would further lower the top tax rate to 25%. On top of that, he would repeal all taxes on corporate income, inherited estates, capital gains, and dividends. In other words, he would completely eliminate the most progressive elements of the tax code, and slash the next most progressive element. In their place he would impose a value-added tax, which would not bring in nearly enough revenue to replace the revenue lost from his tax cuts, but would fall much more heavily on the poor and middle class.
 
It's worth keeping in mind that the current tax system in this country is only very slightly progressive. State and local taxes are regressive, federal taxes are somewhat progressive, and the net effect redistributes income, very slightly, from the rich to the not-rich:
 
Ryan's plan would make the federal tax code regressive, especially at the top, on top of an already-regressive state and local tax base. According to the Tax Policy Center, the richest 1% of all taxpayers, who earn more than 21% of the national income and currently pay about 25% of federal taxes, would pay 13% of federal taxes under Ryan's plan. (Ryan's response argues that the corporate income tax he'd eliminate is already born by consumers anyway, a contention most economists including the CBO reject, and even if true would only chip away slightly at the overall critique of his plan's regressive nature.) Ryan's tax plan alone would amount to the greatest shift of resources from the non-rich to the rich in the history of the United States, by far.

And that is just the beginning. Ryan would impose a series of dramatic social policy changes that would all push in the same direction. He would blow up the employer-based health care system, pushing workers into an under-regulated individual market. Instead of sharing medical risk with their fellow employees, they'd bear it entirely by themselves, which would be good for the healthy but bad for the sick. He would convert Social Security into primarily a network of individual investment accounts--meaning that some workers would do well and others poorly. And he would convert Medicare into a voucher system, capping the value of each voucher at well below the rate of medical inflation, which would make the elderly bear a far greater share of medical risk.
 
All these changes push in the same direction. The basic thrust of liberal public policy over the last century is to keep in places the market system but use government to slightly mitigate against risk--the risk of getting sick, the risk of outliving your savings, the risk that you just won't make much money in the first place. The downside of these policies is that, in order to mitigate the downside risk, you also have to mitigate the upside benefit. If you're unusually rich, you have to pay a somewhat higher tax rate than most people. If you're unusually healthy, you have to subsidize medical care for people who aren't. If you were able to invest well enough to cover your entire retirement, some of your good fortune will be siphoned off to those who weren't. The rewards for getting rich, or merely being born rich, will remain enormous, just slightly less so than in a completely free market.

Why They Oppose Health Care Reform

Ezra looks at a recent Gallup poll showing Americans opposing Health Care Reform by a narrow 48-45 margin (consistent with most other recent polls) and goes behind the numbers to see what the opponents actually oppose.

The country is closely divided on health-care reform, with a slight plurality in opposition. Moreover, health-care reform is actually getting a bit more popular as it nears passage. Presumably, that's because people are hearing more about the bill and less about why the bill is failing.

But Gallup did something interesting and asked respondents who disapproved of the bill why they disapproved. The top reason was that the bill "will raise the cost of insurance or make it less affordable." It's understandable why people say that. But the best evidence we have is that it's not true.

When the Congressional Budget Office looked at this question (pdf), they found that for Americans in the large-group market (134 million of us), premiums would go down by 1 to 3 percent. For Americans in the small-group market (25 million of us), the change in premiums would be between an increase of 1 percent and a decrease of 2 percent -- so the likeliest outcome was a savings of about 1 percent. And they found that people in the individual market (32 million of us) would find that a given insurance product would become 7 to 10 percent cheaper, but that they'd purchase much better insurance under the bill (that meant their premiums would go up, but because they could now buy something better). And that's before accounting for subsidies, which make things even more affordable for small businesses and people in the individual market.

The next most common objection was that the plan "doesn't address real problems." I'm not really sure what this means, so I can't comment on it. But it's followed by people who simply want more information on how this would all work. I'm not certain this can properly be called opposition. Later in the series, you have 3 percent of people who don't like the plan naming the public option as their problem. The public option, of course, isn't in the plan any longer. Some people think the plan is "socialism." By definition, it is not. Some people simply think we should take more time with the legislative process. They are hardy souls.

The argument over reconciliation was always a distraction. If you follow the rules, you're following the rules. The GOP's more salient objection was that it's somehow unethical to pass a bill that polls show doesn't have support. That wasn't the party's position during George W. Bush's administration, but that doesn't make it wrong.

But it only works if you think that Americans are really against this bill. If you think they don't know much about it, or have been misinformed about it, then it is not only proper, but core to how our government was structured, for the representatives of the people to assess the legislation and make the decision they think to be in their constituents' best interest. Then, of course, an election will happen, and those representatives will have a chance to defend their decision and their constituents will have the opportunity to render a verdict. Gallup's poll is evidence, first, that the public is closely divided on health-care reform, and second, that many of those in opposition do not know that much about the bill.

When Republicans Ruled the Roost

Ezra recalls the glorious days of parliamentary rigour when the Republicans controlled Congress and were trying to pass the Medicare prescription drug bill in November 2003.

A 15-minute vote was scheduled, and at the end of 15 minutes, the Democrats had won. The Republican leadership froze the clock for three hours while they desperately whipped defectors. This had never been done before. The closest was a 15-minute extension in 1987 that then-congressman Dick Cheney called “the most arrogant, heavy-handed abuse of power I’ve ever seen in the 10 years that I’ve been here.”

Tom DeLay bribed Rep. Nick Smith to vote for the legislation, using the political future of Smith's son for leverage. DeLay was later reprimanded by the House Ethics Committee.
The leadership told Rep. Jim DeMint that they would cut off funding for his Senate race in South Carolina if he didn't vote for the bill.

The chief actuary of Medicare, Rick Foster, had scored the legislation as costing more than $500 billion. The Bush administration suppressed his report, in a move the Government Accounting Office later judged "illegal.”

Rep. Jo Ann Emerson, a "no" vote, spent the night "hiding on the Democratic side of the floor, crouching down to avoid eye contact with the Republican search team."

Rep. Butch Otter, who provided one of the final votes after hours of arm-twisting from the Republican leadership, said, “I thought there was a chance I would get sick on the floor.”

Under The Tea Party

Matt Taibbi uses a segment on CNBC that featured Rick Santelli arguing that there was no such thing as predatory lending prior to the real estate crash to go off on the Tea Party movement.

This whole scene sort of encapsulates what’s wrong with the Tea Party movement. The movement, and let’s admit this, has some of its roots in legitimate grievances about government waste and some not-entirely-inaccurate observations about what’s left of the American welfare state. Of course what resonates most with the suburban whites who mostly make up the Tea Party are stories about minorities and immigrants using section 8 housing, food stamps, Medicaid, TANF and other programs, with the Obama stimulus being for them a symbol of this ongoing government largess. The heat of the Tea Party movement comes from the racial frustrations that actually exist out there, in the real world outside New York and LA, as urban expansion and immigration increasingly throw white and nonwhite communities together, with white Tea Party types more and more often blowing gaskets over increased crime rates, declining school standards, and mislaid or wasted tax revenue.
 
That this perception that minorities are the prime or sole consumers of government entitlement programs is absurdly inaccurate — white people, for instance, are overwhelmingly the largest nonelderly recipients of Medicaid, making up 42.8% of the program’s rolls nationwide, compared to 22.2% for blacks and 27.9% for Hispanics — is beside the point. The point is that the Tea Party is built largely on this narrative of “personal responsibility,” where the central demons are unwed black and Hispanic mothers and absent black and Hispanic fathers, who are, let’s face it, not uncommon characters in the American melodrama.

Which is another subject for another time, but let’s just say this: the Tea Party movement contains a lot of people who are far more impressed by what they can see with their own eyes than with what, for instance, they read about. I’ve been to Tea Party events where global warming was dismissed by speakers who, without irony, pointed to the fact that there was snow on the ground outside. And while very few people have ever actually seen a CDO manager or a Countrywide executive, or were aware if it when they saw them, the Tea Party folks sure as hell have seen who their neighbors in foreclosure are.

The Fox/CNBC types have very cannily latched on this narrative to rewrite the history of the financial crisis. They know that Tea Partiers will go for any narrative that puts blame on poor (and especially poor minority) homeowners, because the idea of poor blacks and Hispanics borrowing beyond their means fits seamlessly with their world view. But this is a situation where poor minorities were really incidental to a much larger fraud scheme that culminated in a welfare program — the bank bailouts — that dwarfs the entire “entitlement” infrastructure. But the millions of people who are actually in the Tea Party movement seem to have absolutely no idea that their so-called leaders, the Santellis of their world, are shilling for tax cheats and crooks and welfare bums of the sort they would despise (perhaps even more than their black and Hispanic neighbors), if they could actually see them.

It's Different for Democrats

Ezra comments on the difference in approach to the media by Democrats and Republicans.

People say the media is more viscerally sympathetic to Democrats than Republicans. But working in the other direction is the fact that Republicans understand the media much better than Democrats do. Take the reconciliation process. The media is giving blanket coverage to this "controversial" procedure being used by the Democrats. But using reconciliation for a few fixes and tweaks isn't controversial historically, and it's not controversial procedurally. It's only controversial because Republicans are saying it is. Which is good enough, as it turns out. In our political system, if Democrats and Republicans are yelling at each other over something, then for the media, that is, by definition, controversy. This is something Democrats did not understand when George W. Bush was in power.

He then reviews the near total absence of media coverage of a reconciliation debate and vote in May 2003 and goes on to point out some of the reasons.

And why was there nothing? Because Democrats weren't complaining. The tax cuts  might have been controversial, but they weren't creative enough to polarize the procedure the Bush administration was using to pass them.

But some of the credit for that has to go to the Bush administration, which took seriously the need to institutionalize reconciliation when they were strong and popular rather than weakened. When Bush came into office, he used reconciliation for his first tax cuts. That was a sharp break with precedent: Reconciliation had never been used to increase the deficit, and the process was so poorly suited to the purpose that the Bush administration had to let all of them sunset after 10 years. It was a bizarre, bizarre bill. But by using it for his popular first round of tax cuts, Bush normalized it such that Democrats couldn't really complain when he used it for his much more controversial second round of tax cuts.

Reconciliation Bipartisanship? Not!

Ezra looks back at reconciliation in the past.

Among the odder arguments Republicans are making against the reconciliation process is that the process should only be used for bipartisan bills, and since they refuse to vote for health-care reform, Democrats can't give their package of fixes an up-or-down vote.
 
But reconciliation hasn't been limited to bipartisan bills. Here's the recent record: The 1995 Balanced Budget Act was passed in reconciliation. The final vote was 52 to 47. The 2001 Bush Tax Cut was passed in reconciliation. The final vote was 58 to 33. The 2003 Bush Tax Cut was passed in reconciliation. The final vote was 50 to 50, with Dick Cheney casting the tie-breaking vote. The 2005 Deficit Reduction Act was also passed in reconciliation with a 50 to 50 vote and a Cheney intervention. The 2006 Tax Relief Extensions Act was passed in reconciliation. The final vote was 54 to 44. This is as you'd expect: If bills had overwhelming bipartisan majorities, they wouldn't need to go through reconciliation.

As it happens, Republicans controlled the Senate during each and every one of these bills. And they got less votes than Democrats will likely get for the health-care fixes. It's also worth reminding people that it's harder for Democrats to get Republican votes because voters elected a lot more Democrats in the past two elections. Republicans had a number of moderate Democrats who could be brought into a 58-vote majority, and Democrats don't have as many moderate Republicans who can do the same.

IOKIYAR

In the category of Its OK If You Are Republican, Josh made this comment today.

Mike Kinsley once had a great line to the effect that what really irked Republicans about Bill Clinton's fundraising tactics was that he'd violated the cardinal rule of Washington which was that Democrats only get to use the latest and brassiest campaign tactics after the GOP has already been using them for several cycles.

And it seems like we've got something similar with reconciliation. What's outrageous is that Democrats have decided to avail themselves of the rules that Republicans have been using consistently for almost thirty years.

The only bizarre thing is how many reporters (though, candidly, fewer than I'd anticipated) really do think this is an immutable law of the universe.

Obama Takes Ownership

Ezra sums up the purpose of today's health care summit.

The big story out of the summit is not that Republicans and Democrats extended their hands in friendship, but that the White House has dug its heels into the dirt. The Democrats are not taking reconciliation off the table, they are not paring back the bill, and they are not extricating themselves from the issue. They think they're right on this one, and they're going to try and pass this legislation.

Today was a boost for that effort. The Democrats got hours to make their case, at an event they planned, with one of their own controlling the discussion. For that reason, I imagine that this will be the last bipartisan summit we see for awhile. The format is simply too kind to the president, and he takes advantage of it ruthlessly. When the camera panned, you could almost see Republicans wondering why they'd accepted the invitation.

The people who came off best were those who knew the most about the issue. Paul Ryan and Tom Coburn on the Republican side. Dick Durbin and Chris Dodd for the Democrats. But above all of them, the president, who got to enter, adjudicate and conclude discussions at will -- not to mention say when others didn't know that much about the issue, or weren't offering comments in good faith. That willingness to put himself above Congress, combined with the structure of the event, allowed Obama to fully dominate the proceedings, and he used the opportunity to firmly assert ownership over the health-care bill. This is now his legislation.

Old and In the GOP

Jonathan Chait comments on the success of the GOP in gaining support among the over-65 crowd.

Daniel Larison flags a Pew Survey showing that the Republican party's recent gains have come overwhelmingly among the elderly. Specifically, since 2006, Baby boomers, Generation X and Millenials have all moved 5-6 percentage points away from the Democratic Party and toward the GOP when asked which party in Congress they intend to vote for. (Though all those groups still, on the aggregate, plan to vote Democratic over Republican.) The oldest cohort, the "Silent Generation," has shown a staggering 17 point shift toward the GOP.

This seems to suggest that Republicans have successfully stoked fears of fears of "redistribution of health" -- cutting expenditures on Medicare and shifting resources toward the uninsured. (Lamar Alexander: "[D]on't cut grandma's Medicare and spend it on some new program. If you can find some savings in the waste, fraud, and abuse of grandma's Medicare, spend it on grandma.") It also explains why President Obama's health care proposal now completely fills in the Medicare "doughnut hole." The Democrats need most of all some deliverable to show to the elderly.

I would go one step further and suggest that Democrats can reverse this trend by highlighting Republican budget proposals that are based on privatizing Social Security and Medicare, hardly a pro-oldster policy.

A Tortured Defense

Keven Drum examines the tortured logic used by the former Bush Administration torture apologists.

A few days ago, Jonathan Bernstein pointed out that former Bush/Rumsfeld speechwriter Marc Thiessen was continuing to claim that the torture of Khalid Sheik Mohammed in 2003 helped foil a terrorist plot to crash an airplane into a Los Angeles skyscraper. This was obviously a lie. Why? Because the cell leaders of the LA plot were arrested a year before KSM was captured.

Apparently this kind of crude, low-rent deception isn't limited to Thiessen. It turns out that the same sort of clumsy lying was also part of the CIA's classified "Effectiveness Memo," which the Bush administration relied on to bolster its legal case for torturing terrorist suspects. In Newsweek yesterday, Michael Isikoff reported that the recently released Justice Department report about the lawyers who approved the CIA's interrogation program spilled the beans on what this memo said. In particular, the memo defended torture by claiming it was critical to the capture of al-Qaeda operative Abu Zubayda:

One key claim in the agency memo was that the use of the CIA’s enhanced interrogations of Zubaydah led to the capture of suspected “dirty bomb” plotter Jose Padilla....“Zubaydah’s reporting led to the arrest of Padilla on his arrival in Chicago in May 2003 [sic].”

But as the Justice report points out, this was wrong. “In fact, Padilla was arrested in May 2002, not 2003 ... The information ‘[leading] to the arrest of Padilla’ could not have been obtained through the authorized use of EITs.” (The use of enhanced interrogations was not authorized until Aug. 1, 2002 and Zubaydah was not waterboarded until later that month.)....As Newsweek reported last year, the information about Padilla’s plot was actually elicited from Zubaydah during traditional interrogations in the spring of 2002 by two FBI agents, one of whom, Ali Soufan, vigorously objected when the CIA started using aggressive tactics.

If torture were really as effective as the Thiessen/Cheney wing of the conservative movement thinks, they'd hardly risk resorting to such obvious lies to defend it. They'd have so much good evidence in favor of it that they wouldn't need to bother. But apparently they don't.