Tuesday, November 27, 2012

The Republican Presidency Proceeds

Zeke Miller at Buzzfeed summarizes

Obama senior adviser David Plouffe predicted that the fiscal cliff negotiations are "going to get hairy" in the coming weeks, saying President Barack Obama is committed to achieving the elusive "big deal" on taxes and spending he and Speaker of the House John Boehner have tried to strike for more than 18 months.

In post-election remarks at the University of Delaware, Plouffe warned of "paralysis" if both parties remain beholden to their base, saying Obama is looking for a deal that sets the country on the right fiscal path for a 10- to 20-year period.

"The only way that gets done is for Republicans again to step back and get mercilessly criticized by Grover Norquist and the Right, and it means that Democrats are going to have to do some tough things on spending and entitlements that means that they'll criticized on by their left," Plouffe said at his alma mater in conversation with former McCain campaign manager Steve Schmidt.

The senior White House adviser repeated Obama's opposition to extending the Bush tax cuts on those earning more than $250,000 a year, but expressed openness to a tax reform deal that could potentially lower what the wealthy pay.

“What we also want to do is engage in a process of tax reform that would ultimately produce lower rates, even potentially for the wealthiest," he said, referring to benefits from corporate tax reform.

Plouffe added that while the White House wants to engage in comprehensive tax reform, they know they must also "carefully" address the "chief drivers of our deficit": Medicare and Medicaid.

It's ironic- or perhaps fitting- that Plouffe lectures (video, below) the left as the administration figures it is appeasing its liberal supporters by fixating on ending the Bush-era tax cuts on income above $200,000 ($250,000 for a household) per year.  Approvingly, Rachel Maddow yesterday noted

But he and his White House and even his presidential election campaign which theoretically has disbanded but still seems to be around, they have been more than clear that what the president is going to do first is work on getting the Bush tax cuts extended for all income levels below a quarter million dollars. Income above a quarter million dollars will go back to the Clinton era tax rates. That is the president`s first priority.And that is forced on him in part by the scheduled expiration of those tax cuts at the end of the year. But it also seems to be embraced as what he wants to work on. 

President Obama is not arguing for that tax cut expiration date to be extended, to be put off for awhile so he can work on something else in the meantime. He very much seems to want this fight. 

And he`s not only talking about it at every public opportunity, reminding everybody that it is what he campaigned on when he won reelection."The New York Times" is also now reporting that he`s employing the contact list and supporter information mega database that he built during his reelection campaign toward trying to win that particular policy fight.

The Administration evidently is all-in on eliminating the lower rate for the (above $200,000/$250,000) wealthy- but not for anything else.   Even as most on the left- including Maddow and most of the crew at the allegedly liberal MSNBC- accept Obama's priorities, Plouffe complains "There are some- maybe not so much in our party but some commentators on the left- that we should not deal with this at all."  This follows the misrepresentation- nay, lie that  "The notion that somehow these deficits and our debt are not a threat to our national security and our economic future is something that I could not disagree with more."

Plouffe did not specify who these folks "on the left" are because there are few liberals who don't acknowledge- generally, even emphasize- that the debt is a long-term problem.  They don't say, or write, or tweet, or anything that deficits or the debt should not be dealt with at all- only not now.  As Paul Krugman has explained

Household borrowing has plunged; businesses are sitting on cash because there’s no reason to expand capacity when the sales aren’t there; and the result is that investors are all dressed up with nowhere to go, or rather no place to put their money. So they’re buying government debt, even at very low returns, for lack of alternatives. Moreover, by making money available so cheaply, they are in effect begging governments to issue more debt.

And governments should be granting their wish, not obsessing over short-term deficits.

Obligatory caveat: yes, we have a long-run budget problem, and we should be taking steps to address that problem, mainly by reining in health care costs. But it’s simply crazy to be laying off schoolteachers and canceling infrastructure projects at a time when investors are offering zero- or negative-interest financing.

It is precisely in the long term that health care spending (not Medicare itself) is a serious threat to financial stability.   Short-term deficits and debt which so exorcise Plouffe and are (in his view) minimized by the left are huge now because of the tax cuts, an unfunded prescription drug mandate, two wars, and a recession.   It is long-term debt- which the left has emphasized since Plouffe was in diapers- which is exacerbated by health care spending.  And Medicare lowers, rather than raises, health care costs. Krugman again:

Studies by the Urban Institute and more recently by CBPP find that Medicaid is significantly cheaper than private insurance. This is partly because of lower administrative costs; also, Medicaid, more than Medicare, bargains hard, using things like a limited formulary that lets it drive a harder bargain over drug prices.

And there is, of course, the international evidence:   every other advanced country has a less privatized health insurance system than we do, and we have much higher costs than anyone else.

Summarizing his inner macho, Plouffe contended a favorable solution "means that Democrats are going to have to do some tough things on spending and entitlements that means that they'll criticized on by their left."   Message:  "we're going to 'get tough' on the left," which hardly would be news from a president never fond of the Democratic wing of the Democratic Party.   But it is significant; this is not any Democratic senator, even Dick Durbin, nor a policy wonk.  Plouffe is a political consultant and stategist by trade who was the chief delegate counter for Senator Obama in 2008.  So when he threatens to lower corporate tax rates and to cut Medicare and Medicare in order to allow tax rates on incomes above $200,000/$250,000 to rise as they already are scheduled to do under current law, he's serving a president who's serving the interests of the elite.

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