Fraud and Waste Mike Johnson

Appearing on Sunday's Meet the Press, House Speaker Mike Johnson was asked about imprisoned sex trafficker Ghislaine Maxwell, accomplice of the late Jeffrey Epstein. Of course, he did a tough on law and order bit, remarking

If you're asking my opinion, I think 20 years was a pittance. I think she should have a life sentence at least. I mean, think of all these unspeakable crimes. And as you noted earlier, probably 1,000 victims. I mean, you know, this is, it's hard to put into words how evil this was. And that she orchestrated it and was a big part of it, at least under the criminal sanction, I think is an unforgivable thing.

Of course, he also left himself maximum flexibility on the issue, having stated a moment earlier "Well, I mean, obviously that's a decision of the President. He said he had not adequately considered that.  I won't get in front of him. That's not my lane." After host Kristen Welker followed up, Johnson added "so again, not my decision...."

Look for the Speaker to be upfront defending the President when Trump ultimately extends a measure of leniency to Maxwell because Johnson is so far up Donald Trump's rear end that.... (You finish the punch line.)

Still, the Epstein saga is a scandal not for the House of Representatives but for the White House and the Justice Department, who are working a strategy to pin any blame for the crimes of Epstein's best friend not on that best friend but on Democrats. However, the House leader does bear considerable responsibility for the disastrous impact the Administration's recently enacted megabill will have on the American people.

 

WELKER: Why would Josh Hawley introduce a bill to roll back cuts in Medicaid if there are not cuts in Medicaid? He says the people in his state are going to suffer

MIKE JOHNSON: I will tell you that the one big beautiful bill safeguards the program pic.twitter.com/ikT8XeVxB4

— Aaron Rupar (@atrupar) July 27, 2025

Welker led off with

Two more critical topics to get to with you, Mr. Speaker. Let's talk about what has been called the Big Beautiful Bill. In June, you told me the bill would not cut Medicaid. But two Republican senators ultimately voted against it because of what they thought were cuts to Medicaid. And Senator Josh Hawley is already out proposing legislation to actually roll back some of the Medicaid cuts that he just voted for. Did the Medicaid cuts go too far, Mr. Speaker?

Oh, dear Lord. Why must the mainstream media, most of whose members (Welker among them) left-of-center, consistently adopt Republican messaging? Call it President Trump's, or the Administration's, or the Republican megabill of tax-and-spending bill. "Big Beautiful Bill" is obviously Trump's branding, an effort to manipulate the media, which was eager to accommodate him.

Johnson replied

The bill does not cut Medicaid. The One Big Beautiful Bill does not cut Medicaid. What it does is strengthen the program. And we talked about this, Kristen, is that the problem is there's a high degree of fraud, waste and abuse in that program. I'm talking about 10s of billions of dollars every year. What we did is we went in to go in and fix that.

He followed with fourteen sentences, none of which answered the question. But when in doubt, simply say "fraud, waste, and abuse," even though fraudsters would be prosecuted and abuse can mean anything in the world, though its most direct and accurate application is to violence against a member of a family and/or household, as in domestic abuse.

In early July, NPR reviewed the likely impact of the cuts Johnson says will "strengthen the program" and explained

The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.

In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. The new requirement will start as early as January 2027.

The bill's requirement doesn't apply to people in the 10 largely GOP-led states that have not expanded Medicaid to nondisabled adults.

Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don't receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, according to KFF, a health information nonprofit that includes KFF Health News.

State experiments with work requirements have been plagued with administrative issues, such as eligible enrollees' losing coverage over paperwork problems, and budget overruns. Georgia's work requirement, which officially launched in July 2023, has cost more than $90 million, with only $26 million of that spent on health benefits, according to the Georgia Budget & Policy Institute, a nonpartisan research organization.

 "The hidden costs are astronomical," said Chima Ndumele, a professor at the Yale School of Public Health.

Briefly: Onerous reporting requirements will result in many millions of Americans losing their health coverage, in a country in which "(54%) of Americans between the ages of 16 and 74 read below the equivalent of a sixth-grade level."

Additionally, "belt-tightening that targets states could translate into fewer health services, medical professionals, and even hospitals, especially in rural communities." As in will translate. And Affordable Care Act

marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They'll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

That is to "strengthen the program" in a country in which a majority of Americans read no better than does an 11-year old.

Co-pays will increase for many Medicaid enrollees in states which have expanded Medicaid, thus discouraging individuals from seeking primary care. More people will get sick, then get help only when their situation is dire, boosting overall health care costs. 

Welker then asked

Josh Hawley says he is worried about cuts to payments and Medicaid reimbursements. Why would he be introducing a bill to roll back cuts to Medicaid if there were no cuts to Medicaid? He says the people in his state are going to suffer.

And Johnson responded

I haven't talked to my friend Josh Hawley about his legalization. I'm not sure what that's directed to. But I will tell you that the One Big Beautiful Bill safeguards the program. It strengthens it.

The Speaker responded with seven more sentences in which the question was not answered. However, the accurate answer would be: as he opined in The New York Times, "slashing health insurance for the working poor" would be "both morally wrong and politically suicidal."  That was in May, a few week before Hawley voted for the bill 

The "strengthens the program" or "safeguard the program," applied to Medicaid, is a chapter in the old GOP playbook. It is a variation- a slight variation- of the argument Republicans have invoked against Medicare and Social Security in which they promise to "preserve and protect" what they term "entitlement programs," i.e., Social Security and Medicare.

Mike Johnson once defended President Trump by rationalizing "Yeah, he may be breaking the rules but he's doing it where I can see it. So who cares?" That may be naivete about someone who is involved in a herculean effort to hide the report detailing his sexual and economic involvement with arguably the most prolific pedophiles ever. Or it may reflect on the Speaker's disdain for rules when it suits him. He's not the very worst thing the modern Republican Party is giving the country but he deserves (dis)honorable mention.

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Another Willing Conscript

Seema Verma has been administrator of the Centers for Medicare and Medicaid Services since March of 2017. Previously, she worked directly for Indiana governor Mitch Daniels and thereafter as a consultant working for Daniels' successor, Mike Pence.

As outlined here, throughout her stint in Indiana and in Washington, D.C. Verma has been hostile to the Affordable Care Act and Medicaid.  And now we learn that her knowledge of comparative government is roughly equal to her concern for health care for the poor and the uninsured. She was asked on Trump TV "What is the Vice President referring to when he's saying the best model we have is what's happening in Italy?" Verma responded

Well, I think if you look at these other countries, if you look at China and South Korea, right, those have very different approaches . Uh, we're a free country, we're giving recommendations to the American people and hoping they adhere to those.

The governments of mainland China and South Korea are approximately as comparable as the government of the Phillipines is to that in Australia.  According to Wikipedia

The Government of South Korea is a centralized democratic republic with the three primary branches of government; executive, legislative and judicial. The president acts at the head of state and is the highest figure of authority in the country, followed by the prime minister and government ministers in decreasing order....

As with most stable three-branch systems, a careful system of checks and balances is in place. For instance, the judges of the Constitutional Court are partially appointed by the executive, and partially by the legislature. Likewise, when a resolution of impeachment is passed by the legislature, it is sent to the judiciary for a final decision....

Elections in South Korea are held on national level to select the President and the National Assembly. South Korea has a multi-party system, with two dominant parties and numerous third parties. Elections are overseen by the Electoral Branch, National Election Commission (Republic of Korea).

Not free?! Yet South Korea recently managed to impeach their president for abuse of power and put the head of their largest corporation behind bars for corruption. Perhaps a model in more than one way! https://t.co/npJnY9u83Y

— Garry Kasparov (@Kasparov63) April 3, 2020

Once "selected for the American Enterprise Institute Leadership Network," Verma is probably performing as expected for President Trump. She is helping advance the mission of Ronald(6) Wilson(6) Reagan(6) and Grover Norquist, to destroy government in service of the barons of the private sector. ignorance is not a bug but a benefit. Like most of the Trump Administration, she is not there to make government work but to impel its failure and ultimate destruction.

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Same Old, Same Old

The New York Times asked twenty-two Democratic candidates the same eighteen questions, including such pertinent ones as "how many hours of sleep do you get a night"; "describe the last time you were embarrassed: why?:";what is your comfort food on the campaign trail?": and "what do you do to relax?" (They forgot "if you were an animal, what animal would you be?")

As long as they went to all this effort, the Times should have included "what were the failings of President Obama- if there were any?"  It's even money a popular answer would have been "none- why would you even think such a thing?"

Matt Stoller has labeled Barack Obama "a bad President" and hence could never get out of the gate in a Democratic primary campaign. However, he has good advice for the general election campaign:

Trump is a weak candidate and I don't think he'll win reelection. But the strongest attack line is one the Democrats won't use, which is that Trump is a weak and corrupt politician who breaks his promises, just like Bush, Obama and Hillary.

— Matt Stoller (@matthewstoller) July 29, 2019

If we give them enough time, Democrats probably will point out that Donald Trump has been a corrupt President. But they will assiduously avoid identifying Trump as weak, and probably will little note that he continuously breaks his promises (video below from 3/17).

Oh, they- or at least a surrogate or two- will ridicule the President because Mexico has not paid for a border wall. Nonetheless, that will be drowned out by condemnation of Trump because of his immigration policies, including his effort to get a wall built. Democrats thereby will miss an opportunity to remind voters on the (figurative) fence that Trump has let them down because he can't get anything done.

They will castigate the President because he is a racist, as evidenced by his vicious attack upon Representative Cummings and the people of Baltimore. What they will not do, though, is to inform voters that before he became President, Donald Trump vowed that he would transform the city into a veritable heaven on earth.  Nor will Democrats emphasize that the President is failing the people of southern Ohio, southeastern Pennsylvania, and of other places by the opiate epidemic which rages on under his watch.  (Most of such areas are represented by Republicans, and we cannot offend the other side. It's just not done.)

There are other promises broken by President Trump. But arguably the most important in terms of policy, and virtually inarguably the most powerful strategically, is in the matter of earned benefits and Medicaid. In March Vox explained

President Donald Trump’s 2020 budget breaks one of his biggest campaign promises to voters: that he would leave Medicaid, Social Security, and Medicare untouched.

“I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” Trump told the Daily Signal, a conservative publication affiliated with the Heritage Foundation, in 2015.

Over the next 10 years, Trump’s 2020 budget proposal aims to spend $1.5 trillion less on Medicaid — instead allocating $1.2 trillion in a block-grant program to states — $25 billion less on Social Security, and $845 billion less on Medicare (some of that is reclassified to a different department). Their intentions are to cut benefits under Medicaid and Social Security. The impact on Medicare is more complicated...

Addressing the President's policies on Social Security and Medicare highlights Trump's habit of breaking promises, reinforces the position of the Democratic Party as the protector of the old and the infirm, and exposes Donald Russia as just another politician who says one thing while campaigning and then does another.

The Democratic Party can add that Trump does so with a heaping topping of bigotry. However, it should emphasize that the President's pattern of duplicity is a continuation of a pattern of presidential behavior that includes our 44th President,  a concession to reality that- as Stoller understands- is sadly unlikely.

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Sorry. The Money Is All Gone.

In floor debate in late November, Senate Finance Committee chairperson Orrin Hatch, who worked with the late Senator Edward Kennedy to create the Children's Health Insurance Program, assured Ohio Senator Sherrod Brown "We're going to get CHIP throught. There's no question about that. I'm going to see that it gets through."

Politico's Haberkorn reported Friday that the Utah Republican stated “We’re going to take good care of CHIP. I can’t tell you exactly when, but we’ll get it done.”

With Republicans in favor of the program and Democrats completely committeed to it, CHIP will sometime in the near future be reauthorized.

Still, Haberkorn added

House Republicans on Wednesday released a spending bill that would fund CHIP for five years but pay for it with cuts to Obamacare and other programs that Senate Democrats would not support. The bill would need Democrats' help to get through the Senate.

Nice little program you got there- it would be a shame if something happened to it.  The GOP is quite willing to fund children's health care- provided that it can chip away at the social safety net elsewhere.

The hostage may be released, but the GOP is bound and determined that a heavy price is paid. It is, after all, the secondary motive for a disastrous tax bill, the primary motive being to please the Party's donors.  Hatch himself gave it away when in the largely empty chamber with Brown, he contended

We're going to do CHIP. There's no question about it in my mind. And it's gotta be done the right way. But- the reason CHIP's having trouble is that we don't have any money anymore. We just add more and more spending and more and more spending and you can look at the  rest of the bill for more and more spending.





"It has to be done the right way... we don't have any money anymore," remarked the Senator who unreservedly voted for the GOP tax plan, targeted to increase the debt by something north of $1 trillion. Excited at the pospect of slashing Medicaid, Speaker Paul Ryan at a conservative event in March bragged to the editor of the National Review "Sending it back to the states, capping its growth rate. We have been dreaming of this since I have been around, since you and I were drinking at a keg.”

Shortly before triumphantly pushing through his chamber the Corporate Tax Cut Sham of 2017, Ryan maintained at a town hall meeting "You cannot get the national debt under control, you cannot get that deficit under control, if you don’t do both — grow the economy, cut spending."  Ryan had commented in a radio interview . "Frankly, it's the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that's really where the problem lies, fiscally speaking."

Frankly, the Speaker dares not utter the words "Medicaid" or "Medicare," and while more detached than Hatch, he's a little more subtle, or at least wonkier. So carrying water for Ryan, Politico's Alberta and Bade characterize the Speaker's goal as "entitlement reform," in which he "tackles what he sees as the systemic problems with Social Security, Medicare and Medicaid." Charlie Pierce recognizes “'what he sees as being systemic problems' with Social Security, Medicare, and Medicaid are that those programs exist at all."

Senator Marco Rubio echoes Ryan's call that Congress "structurally reform" earned benefits. More candid than the Speaker or Hatch, the Florida Republican stated

The only way you are going to deal with the debt is you have to do two things. ... You have got to generate economic growth because growth generates revenue. But you also have to bring spending under control. And not discretionary spending. That isn’t the driver of our debt... The driver of our debt is the structure of Social Security and Medicare for future beneficiaries.

The good news is that individuals currently elderly probably will be left somewhat, relatively, unharmed. Perhaps Hatch and his merry band of oligarchs with a daddy complex will "take care" of people now in retirement age or close to it because elderly people vote. Health care for children also- to whatever extent- will be provided. But all those people in between better hold onto their wallets. The Republican Senate and Republican Senate are coming for you- unless, of course, your parents leave their $11 million estate to you when they die.




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Republican Wet Dream

Marco Rubio, perhaps best known for publicly debating penis size with future President of the United States of America Donald J. Trump, last week:

"The only way you are going to deal with the debt is you have to do two things. ... You have got to generate economic growth because growth generates revenue. But you also have to bring spending under control. And not discretionary spending. That isn’t the driver of our debt," Rubio said.

"The driver of our debt is the structure of Social Security and Medicare for future beneficiaries. We still have time, not just to save those programs, but to responsibly structure them in a way that doesn’t impact current retirees or people about to retire. But it would probably impact it for me and people younger than, in ways that quite frankly you wouldn’t really notice and you wouldn’t really object to because it’s reasonable."

Credit the Florida senator for speaking out-of-turn. Thus, Charlie Pierce observes 

Jesus, Marco, get with the program. You’re supposed to sell this Abomination of Desolation as a boon to “the middle class.” Then, when it blows up the deficit, you’re supposed to come sadly before the nation, blame the Democrats for not “compromising,” and mournfully tell millions of the elderly and disabled that it’s time for those lazy moochers to kick in.

Lacking patience, Senator Grassley has said "I think not having the estate tax recognizes the people that are investing as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.” So, too, Orrin Hatch, who puts President Trump in the class of Saint Reagan, rationalizing why Congress can't afford $8 billion for the Children's Health Insurance Program over the next five years because "Unfortunately, the liberal philosophy has created millions of people that way, who believe everything they are or ever hope to be depend on the federal government rather than the opportunities that this great country grants them.”

Rubio- and maybe even Grassley and Hatch- realizes they can merely wait.  The Tax Policy Center explains that the congressional PAYGO rule requres "that (using current law as the baseline) tax cuts as well as increases in entitlement and other mandatory spending must be covered by tax increases or cuts in mandatory spending."  Probably worse yet: "It does not apply to discretionary spending (spending that is controlled through the appropriations process)."

Congress will not be able to reduce the Pentagon budget (commence laughing) to cover the roughly $1.3 trillion increase in the debt from the Corporate Tax Scam of 2017. So Medicare and Social Security will be automatically slashed, by $400 billion in the next ten years, according to Social Security Works.  Or as Bruce Bartlett calmly noted on "AM Joy"

And I believe that the minute the ink is dry on this tax cut, all of the fiscal responsibility groups and the Office of Management and Budget and the White House will all be saying "I'm shocked,shocked to discover that the national debt is rising very, very rapidly. We must do something about it" and it will all take the form of cuts to Social Security, Medicare, and Medicaid.





Or as he less calmly has tweeted, "every Republican senator is a whore. Some just took longer to get their price."




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Whatever It Is, It's Not Courage

It was bad enough when Joe Scarborough on his "Morning Joe" on April 20  said " I wonder whether Chris Christie’s problems have put him in position where he has to go for broke and do what all the other candidates are not doing — and that is tell the truth about our fiscal house."  Recognizing the lack of substance of the governor's proposal,  Charles  Pierce five days earlier had noticed

The really hilarious part is that Christie is pitching his personal form of granny-starving as a boon to younger Americans, because what is a more obvious solution to the problem of unemployed American youth than to propose a policy that guarantees that American workers will stay on the job until they are nearly 70, and that only works if you assume that every human-resources department in the country will be raptured off to cost-cutting heaven and not notice the line of septuagenarians working on the factory floor? 

Following the display of ignorance by the program's host, Nicole Wallace (video below) made matters worse when she commented "I hate the term finding his voice, but he knows his voice and he knows his mind, He’s already helping the race by being the adult in the room. Entitlement reform is a huge issue. It’s not the sexiest issue. But New Hampshire voters can handle the straight talk.”  Pierce, five days earlier, had written

Bold! Again! There is something entirely sick about the desire among our political elites to make the lives of the poor and elderly worse so as to demonstrate how important and serious those elites are. There is a consensus here that exists some place outside the world in which most people live.








Hanging out with GOP presidential hopefuls at the First in the Nation Republican Leadership Summit in New Hampshire, Jim Newell reports

Another plank of Christie’s big plan is to reform Social Security disability benefits. There are too many working-age people out there falsely claiming disability and we need to get them back in the workforce. Grr! During his Q&A segment, a woman took issue with this part of the plan. She told him that she has a 24-year-old son with Asperger’s syndrome and he can’t keep a job, so he really needs disability benefits. Christie assures her that her son’s case is legitimate and he has no intention of harming him

The woman, having secured a pledge from Christie to protect her son’s bennies, then asked Christie what he’s going to do about all the illegals immigrants coming to take our jobs. Near the end of his answer Christie acknowledged, in another one of his hard truths, that the 11 or 12 million undocumented immigrants in the country cannot be relied upon to all “self-deport.” (Poor Mitt Romney.) Was this the part where humanity’s truthiest truth-teller was going to go all-in for amnesty? Not quite. He merely suggested that leaders of both parties are going to have to come together to find a solution for that. The reason it hasn’t happened already, according to Christie, is that there’s been “no leadership from the White House.” You might think that pushing with its political might a bipartisan comprehensive immigration reform bill would count as some kind of leadership on this issue, but apparently not. That’s just another hard truth from Chris Christie.

There is a difference between straight talk and pandering to Ken Langone, Pete Peterson, and investment bankers. There is, too, a difference between telling the truth and being unwilling to tell a mother with a disabled son that that he's targeting the young man's benefits. Some people call Chris Christie a bully. He should be thankful- that wins votes in a Repub primary. Cowardly is more like it.





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Boldness Must Be In The Eye Of The Beholder

"Bold leadership" is defined by the defenders of the likes of Governor Brownback and New Jersey Governor Chris Christie as exercising the courage of pursuing policies transparently harmful to the voters (i.e., constituents) of the state governed.  That isn't only by the right. In an analysis by the Kansas City Star's Brad Cooper, director of Public Policy Polling Tom Jensen is quoted as asserting "Being a bold leader will come back to bite you if the bold things you do are things that voters don't like."  Cooper summarizes

Brownback has slashed income taxes, cut thousands off welfare, curbed abortion rights, tried gaining control of judicial appointments and made a failed attempt to cut arts funding.

When the moderate wing of his party stood in the way, Brownback successfully campaigned for conservatives more in step with his political philosophy so he could exert a tighter grip on the statehouse.

Cooper admits "the state’s credit rating was downgraded partly because of income tax cuts he signed into law."   Early last month Reuters had reported

Standard & Poor's Ratings cut the credit score for Kansas to AA from AA+ on Wednesday in another blow to the deep income tax cuts championed by Republican Governor Sam Brownback, who is struggling to keep his post in upcoming elections.

In a report explaining the downgrade, S&P said the Kansas budget is not structurally balanced and described a fiscal situation with very little breathing room.

S&P noted Kansas relied on a "substantial drawdown" of its general fund balance in fiscal 2014, which ended in June, to cover a revenue shortfall.

Pandering to voters by cutting their taxes today and drawing down a general fund, courting serious repercussions once the governor leaves office. How bold!

Cooper notes "the Brownback administration’s decision to move Medicaid services for the developmentally disabled into a managed-care program run by private insurers." He does not mention that in upon considering Medicaid expansion (map below from The Advisory Board Company; click here for interactivity ability), the Governor in May, 2013

punted the decision to the Republican-controlled state legislature, which has largely kept the topic under study during a legislative session dominated by the topics of taxes, abortion and guns. With lawmakers reconvening this week, it appears likely that the legislature will further delay a decision on expanding Medicaid by requiring any such expansion be approved by lawmakers.

Brownback is one of three governors not to take a definitive postion on Medicaid. 

The legislature later included a provision in the budget "that would require a legislative vote for the state to expand its Medicaid program," according to the Wichita Business Journal.  A year later, there still has been no action. Consequently, Brownback is able to deny that he squelched extension of  health care coverage to needy Kansans while his strategy is well understood by his political benefactors, the Koch brothers.

It is a strategy reminiscent of that of New Jersey Governor Chris Christie, who in June 2013 indicated he was

planning to expand Medicaid eligibility for low-income New Jersey residents, but he doesn’t want the expansion to be backed up by state law.

On Friday, Christie vetoed a bill (S-2644/A-4233) that would have made the expansion he announced in February permanent.

While he didn’t spell out why he vetoed the bill, he said when originally announcing the expansion that if the fiscal and public health benefits ever change “because of adverse actions by the Obama administration, I will end it as quickly as it started"...

Under the 2010 Affordable Care Act, the federal government is committed to paying 100 percent of the cost of the expansion through 2016, with the state share rising to 10 percent of the cost by 2020.

The ACA is Obama's baby, his signature legislation.  Any "adverse actions" would be undertaken not by the Administration, but by the House of Representatives, controlled by Christie's own party. But never mind:.while he can't be attacked in the largely liberal state of New Jersey for blocking Medicaid expansion, the governor made sure the right people got the right message, for

Christie’s veto was immediately praised by Mike Proto of Americans for Prosperity, a group that opposed the ACA. Proto suggested that the veto would prevent the expansion, but Christie administration officials have indicated that the expansion will move forward without the legislation.

“This is a win for the taxpayers of the state of New Jersey,” Proto said in a statement. “As AFP has stated time and again, this expansion would have put even greater pressure on an already strapped state budget, and forced more Americans onto a broken healthcare program.

“Americans for Prosperity would like to thank all of those in the Assembly and Senate who realized that Medicaid is bad medicine and voted no on its original passage and once again thanks Gov. Christie for doing the right thing,” the statement added.

There they are, Republican governors posing as "bold leaders" for the mainstream media and giving a whole new meaning to cowardice.

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This Has Nothing To Do With Cost

It got Barack Obama past the 2012 election.  That is not insignificant:  it kept Paul Ryan from being a heartbeat from the presidency and as in the previous presidential election, the vice-presidential nominee posed a much more serious threat to the future of the Republic than did the presidential nominee.

Make no mistake about it: it is very unlikely President Obama would have been re-elected if Supreme Court Justice John Roberts had sided with the four right-wing Justices on the constitutionality of the Affordable Care Act.  Republicans- and not just tea partiers- had been claiming for a couple of years that Obamacare demonstrated that its namesake is a despot who wants to destroy the Constitution. If the Court had ruled against the ACA, the right would have been emboldened while many moderate independents would have bought into the specious charge.

You may remember the self-contented applause and breast-beating after the Court decided National Federation of Independent Business v. Sebelius.  ABC News quoted extreme conservative Steve King (R-Iowa) labeling the ruling "a chilling thing" and

found Rep. Jan Schakowsky, D-Ill., who had just left a House Democratic Whip leadership meeting, where party leaders  took in the news together.

As the news broke, she described “cheers in the caucus."

“I was so thrilled to hear that John Roberts wrote the opinion for the majority five-four decision upholding the Affordable Care Act, or as I like to call it, finally, ‘Obamacare,’ establishing in the United States of America … the law of the land that health care, affordable quality health care is a right for all Americans,” Schakowsky said beaming. “It is the right decision for the American people. That’s the important thing.”

Schakowsky also described the reaction of House Democratic Leader Nancy Pelosi as the decision became clear to the Democratic gathering.

“As a proponent of this legislation, one of the strongest that helped it pass, she was absolutely thrilled,” she said. “I’m so proud. I’m so proud of Nancy Pelosi, who was speaker of the House, guided it through the Congress, and I look forward to her being there as speaker to implement it in the next session.”

Roberts- disturbingly joined by the four liberal justices- struck a blow against use of the Commerce Clause as he ruled that the individual mandate could not be upheld by that constitutional provision, and bizarrely concluded that the mandate is a tax, rather than a penalty.

The long-range implications of rejection of the Commerce Clause have yet to be determine.  But at least, most of us thought, that portion of the decision striking down the requirement that states exp;and their Medicaid program would be of limited consequence because few if any states would turn down the opportunity to increase coverage of the poor when 100% of the cost would be borne by the Federal government the first three years, 90% thereafter.

Most of us would have been wrong.  As of May 22, 20014, 27 states had expanded coverage, three were considering expansion, and 20- 19 of them with GOP governors- were not then expanding coverage (map below from The Advisory Board Company).

The 20th state would be Virginia (whose governor is the recently elected Terry McAuliffe) in which the

General Assembly adopted a long-delayed state budget late Thursday, acting after an hours-long debate among newly ascendant Senate Republicans who fought among themselves over whether the plan threw up sufficient barriers to Medicaid expansion.

The Republicans, who gained control of the Senate Monday when a Democrat resigned from what had been an evenly split chamber, approved a spending deal hashed out by a bipartisan group of House and Senate negotiators.

But they first amended it in a way intended to make it harder to expand the federal-state healthcare program for the poor under the federal Affordable Care Act — Gov. Terry McAuliffe’s top legislative priority.

As midnight approached, the plan moved over for consideration by the House of Delegates, where it quickly passed. It was expected to then head to McAuliffe’s desk, but with no certainty that he would approve it and avert a government shutdown before July 1.

McAuliffe quickly issued a statement after the House vote: “When this budget reaches my desk I will evaluate it carefully and take the actions that I deem necessary, but this fight is far from over. This is the right thing to do for Virginia, and I will not rest until we get it done.”

The Senate vote came after Republicans huddled behind closed doors and argued — at times yelling, two participants said — over whether they should tinker with the budget deal and risk undermining it.

Some were incensed that legislators had returned to the Capitol from the farthest reaches of the commonwealth, expecting to pass a spending plan in time to avert a July 1 government shutdown, only to risk sinking the deal by amending it.

Well, of course, they had to "delay" passage.  They first had to bribe (successfully) a Democratic senator.  A few days earlier, The New York Times had reported

The resignation of a Democratic state senator in Virginia that flipped control of the Senate to Republicans set off charges on Monday of an unseemly deal and threatened Gov. Terry McAuliffe’s chances of expanding Medicaid under the president’s health care law.

State Senator Phillip P. Puckett’s sudden decision to step down from his seat after serving 16 years may tip a stalemate in favor of Republicans opposed to expanding Medicaid to 400,000 poor and disabled residents.

Democrats accused Republicans of masterminding Mr. Puckett’s resignation by promising him a plum job and speeding the appointment of his daughter to a state judgeship.

Over the weekend, reports that Mr. Puckett was resigning to take a job on the Virginia tobacco commission enraged his fellow Democrats, who saw behind it the hand of Republican officials who control the commission.

The chairperson of the tobacco commission is a Repub member of the state's other legislative chamber, the House of Delegates.  Senator Puckett in effect admitted he accepted a bribe when

There was such an uproar that Mr. Puckett withdrew his name from consideration for the job late Monday.

Mr. Puckett said he had resigned because of family matters, including clearing the way for approval of his daughter, Martha Ketron, as a juvenile court judge. As a matter of policy, the Senate has declined to confirm direct relatives of lawmakers.

“At this point in my life, I feel that I cannot allow my political career to hamper my daughter’s future,” Mr. Puckett said in a statement.

Better to accept a bribe.  Republicans in the Commonwealth are so determined to prevent poor people from obtaining health care that they would offer a bribe to get more poor people to die.  In their defense, they did know who "the weakest link in the chain," as another Democratic state senator put it, is. David Atkins of There Is No Spoon/Hullabaloo/Ventura County Democratic Central Committee notes

Keep in mind that there is no fiscal advantage to Virginia whatsoever in rejecting the Medicaid expansion. Virginia Republicans simply despise the idea that underprivileged people might get health insurance. They really do want the poor to wither and die.

Or as Florida Representative Alan Grayson put it (video below) presciently over four years ago

The Republican health care plan: don't get sick.    The Republicans have a back up plan in case you do get sick ... This is what the Republicans want you to do. If you get sick America, the Republican health care plan is this: Die quickly! That's right, the Republicans want you to die quickly if you get sick.














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A Threat, Challenge, Or Something

In a speech to the International Foundation of Employee Benefit Plans on Monday, AFL-CIO president Richard Trumka issued a challenge for individuals who try, as it's called, to "reform entitlements." The Huffington Post reports

"No politician … I don’t care the political party … will get away with cutting Social Security, Medicare or Medicaid benefits. Don’t try it...

"This warning goes double for Democrats," he said. "We will never forget. We will never forgive. And we will never stop working to end your career."

As House and Senate negotiators work over the next couple of months to reconcile the budgets the two chambers  have proposed, we may find out whether the labor organization is bluffing.  If not, it may well be taking on major figures in the Democratic Party.

Based on pessimistic economic projections, the Congressional Budget office and the Social Security Trustees expect Social Security benefits to be reduced in 20-25 years to 78% of current levels.  But that didn't stop Senate Majority Whip Dick Durbin from repeating on Fox News Sunday the lie fast becoming a classic: "because Social Security is going to run out of money in 20 years. I want to fix it now, before we reach that cliff."

Only slightly less dishonestly, he continued

Medicare may run out of money in 10 years, let's fix it now. And that means addressing the skyrocketing cost of health care. That's what ObamaCare is focused on, and yet, the Republicans want nothing to do with it.

If we don't focus on the health care and dealing with the entitlements, the baby boom generation is going to blow away our future. We don't want to see that happen. We want to make sure that Social Security and Medicare are solid.

Earned benefits, maligned as "entitlements" (which people interpret as  "things others believe they have a right to just because they're breathing") by conservatives, neo-liberals, and the media establishment, is the politically correct way of referring to Social Security, Medicare, and (sometimes) Medicaid.  Though Social Security is distinct and separate from the budget and Medicare is not "going to blow away our future," Dick Durbin is one of only many claiming he wants to cut Social Security benefits so Social Security benefits don't end.

One of the GOP's Senate's conferees, Pat Toomey of Pennsylvania, has

said he hopes both sides set "sensible and realistic" goals. He laid out three of his aims Tuesday:

Preserving the savings included in a 2011 deal and carried out in the automatic spending cuts known as the "sequester;" allowing new flexibility for those cuts, which have worried both Republicans (because of the impact on defense) and Democrats (because of the impact on domestic programs) (and) shifting some of the cuts to the Government's big "mandatory spending" programs, such as social security, medicare, and medicaid.

"That's something that we absolutely ought to be able to find some common ground on," he said, saying President Obama has proposed changes to those programs in the past.

And so he has, most recently claiming "The challenges we have right now are not short-term deficits; it’s the long-term obligations that we have around things like Medicare and Social Security.  We want to make sure those are there for future generations."

Curbing Medicare and Social Security benefits are critical to debt reduction, the President suggested, immediately after he noted "remember, the deficit is getting smaller, not bigger.  It’s going down faster than it has in the last 50 years." And so with the deficit heading downward, incomes flat, much of the elderly dependent on Medicare for their health and Social Security for their survival, earned benefits must be cut so that the deficit is reduced.  Makes sense in ObamaWorld, apparently.

The President and his allies, including Dick Durbin, really do want to cut entitlements in because of the deficit, though it is cruel to the poor and the elderly, and is an inefficient way to reduce the debt burden.  But Republicans, masters at exploding the deficit when a Repub holds the White House, seek to undermine Social Security, Medicare, and Medicaid in order to undermine the programs. With the GOP's goal, and the leader of the Free World and allies anxious to alter the debt curve in ways which won't offend Republicans, Richard Trumka has his work cut out for him.



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Strategic Confusion


Slamming health care reform on Thursday, Rush Limbaugh stated "Daniel Henninger in the Wall Street Journal today says that next Tuesday when Obamacare begins its final and full implementation, what will happen is ''the discrediting of the entitlement state.'

Henninger's primary contention may be that the Affordable Care Act is bound to collapse on its own. But along the way he claims

Going back at least to the Breaux-Thomas Medicare Commission in 1999, endless learned bodies have warned that the U.S. entitlement scheme of Social Security, Medicare and Medicaid is financially unsupportable. Of Medicare, Rep. Bill Thomas said at the time, "One of the biggest problems is that the government tries to administer 10,000 prices in 3,000 counties, and it gets it wrong most of the time." But change never comes.

You will not be surprised that the deputy editor of the Wall Street Journal editorial page, whose aim it is to defend corporate America at every point, is short of facts.  He does not mention any of the "endless learned bodies (which) have warned" that Social Security, Medicare and Medicaid are "financially unsupportable."

Well, aside from the Breaux-Thomas Medicare Commission in 1999.  Inconveniently, however, the Commission did not issue any warning about "the U.S. entitlement scheme."   On April 14, 1999 Representative Jan Schakowsky noted on the floor of the House of Representatives

The Bipartisan Commission on the Future of Medicare nearly approved a plan to save Medicare. But a fundamental consideration was strangely missing from the proposal by Medicare Commission Chair Senator John Breaux (D-LA) and co- chair Representative Bill Thomas (R-CA): the detrimental effect this plan would have on the millions of seniors and persons with disabilities who rely on Medicare.  The simple fact is the proposal nearly passed by the Medicare Commission is a disaster.

That bears a striking resemblance to the spin given the National Commission on Fiscal Responsibility and Reform.  The Commission's co-chairpersons, Republican Alan Simpson and "Democrat" Erskine Bowles, did issue a report but the commission itself did not, owing to insufficient agreement among members. Nevertheless, the proposal offered by Mr. Simpson and Mr. Bowles are often, erroneously, referred to as "the commission's report."

Unaware that something is labeled an "entitlement" by the federal government merely if appropriations need not be renewed annually, most individuals hear "entitlements' and think it's lazy people who believe they're owed something for simply breathing.  (Fortunately,  people otherwise still think of them primarily as Medicaid, Medicare, and Social Security.) Henninger's reference to Medicaid, Medicare, and Social Security as "entitlements" not surprisingly mirrors the glee of other Repubs when they use the term.

As described by Crooks and Liars' Heather, CNN's Crossfire on Wednesday featured U.S. senators Lindsey Graham and Bernie Sanders.   The South Carolina Repub at one point maintained

Well, no. What I'm trying to do is save the country from bankruptcy. And when the president of the United States, who I usually don't agree with, put CPI on the table, I thought it was a very courageous thing to do. And I am willing to flatten that tax code. I can go to the rich people in America and all the corporations, say, "We're going to take deductions off the table you now enjoy. Take that money back for the many, not just the few."

But if you don't help me reform the entitlements, there's no way to get there by taxing people.

Sanders called Graham out, stating "I want everybody to understand, when Lindsey talks about reforming entitlements, what he means is cutting Social Security and cutting Medicare."  Co-host Newt Gingrich then made his own reference to "bankrupt."

An organization, person, or a country is considered "bankrupt" when it is "declared in law unable to pay outstanding debts."  But commenting upon the C&L post, the insightful "Paul" observed "The country is not going bankrupt, and if it is in financial straights the way to start getting out of troubles is not by destroying the social safety nets."

Many Repubs don't want the nation to be able to pay its outstanding debts, given they don't want the debt ceiling raised, which would possibly lead to a downgrade of the nation's credit status and a jump in the interest rates hampering its ability to pay down thes debt.  Good strategy, though; claim the country is bankrupt, work toward it, and then point to the economic calamity you've created as affirmation of your policies.

"Paul" also points the way to a more accurate branding of Medicare and Social Security, explaining "They are fully pre-funded, because social security is a fully prepaid annuity that pays earned benefits, not entitlements."  They are better understood as earned benefits, rather than entitlements, and Medicaid as perhaps "survival insurance."

Graham considers himself, "Paul" observes, the "underling" of the rich.  That represents, at least, valuable self-insight on the part of the South Carolina senator who, with Henninger and many other Republicans, are comfortable in their roles as lackeys of the corporate sector.


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Die Quickly, Or At Least Get Lost

They were all over Alan Grayson.  In September, 2009,  U.S. Representative Alan Grayson said (video immediately below the quote) on the House floor

It’s my duty and pride tonight to be able to announce exactly what the Republicans plan to do for health care in America… It’s a very simple plan. Here it is. The Republican health care plan for America: “don’t get sick.” If you have insurance don’t get sick, if you don’t have insurance, don’t get sick; if you’re sick, don’t get sick. Just don’t get sick. … If you do get sick America, the Republican health care plan is this: “die quickly.”





Righteous outrage erupted.  Typical were the reactions of two Tennessee Republicans. Jimmy Duncan charged "That is about the most mean-spirited partisan statement that I've ever heard made on this floor and I, for one, don't appreciate it."  Marsha Blackburn maintained "It's fully appropriate that the gentleman return to the floor and apologize."

Republicans and members of the media were aghast but Grayson did not apologize and, after being defeated in 2010, was returned two years later by voters in his district.   And he still is unapologetic.  In an appearance with John Fugelsang (picked up by Susie Madrak) on Current TV, he noted "As I pointed out three years ago, their health care plan is: 'Don't get sick. And if you do get sick, die quickly.'"

Grayson pointed that the GOP response to periodic massacres and extreme, extraordinary weather events (e.g., Hurricane Sandy) is similar to that of the health care needs of Americans.    And he probably didn't even know about Kathryn Playford (hat tip to Hullabaloo's Digby):

Working full time and yet not being able to afford health insurance coverage literally sticks in Kathryn Playford’s throat.

The office manager for a self-storage facility and office park in North Augusta says she has put off surgery for an enlarged thyroid for years because she lacks health care coverage.

“Eventually, it may enlarge to the point where I can’t breathe,” Playford said.

The governors of Georgia and South Carolina have decided not to expand Medicaid coverage to more uninsured despite high rates of working families with no coverage.

In South Carolina, nearly half of the 766,304 uninsured, or 359,107, are working and 19.3 percent of people employed in the state lack insurance, according to the U.S. Census Bureau’s American Community Survey 2011.

In Georgia, 22.7 percent of the employed lack health insurance, and working families make up 48.3 percent of the uninsured.

The states turned down the expansion under the Affordable Care Act despite the fact that it would be fully funded for the first three years and would not dip below 90 percent federally funded in subsequent years.

In Georgia, the expansion would offer Medicaid coverage for individuals making nearly $16,000 a year and for families of four making around $32,000 a year. Within that adult population, 50.6 percent are uninsured, according to Census data.

“I would argue that those are the people that are really getting the burden of the state not investing more of its state dollars” in Medicaid, said Tim Sweeney, the director of health policy for the Georgia Budget and Policy Institute.

Advocates in a coalition called Cover Georgia will gather Tuesday at the state Capitol to rally for the state to reconsider Medicaid expansion.

Georgia Gov. Nathan Deal has said the state cannot afford it and that the federal government might not be able to continue funding it in the future.

It's not only Kathryn Playford, and it's not only Georgia and South Carolina.  In all, according to the map below, 13 states have decided not to participate in Medicaid expansion and four states (including New Jersey under the leadership of media darling Christopher J. Christie) are leaning against participating.

At worst, a few years down the road, states which extend health care to additional poor individuals will have to put up one (1) dollar for every nine (9) donated by the federal government.  Alan Grayson was- and is- right, though with a twist.  The states which reject expansion (most dominated by the G.O.P.) are adopting their own program:  "don't get sick- and if you do, don't bother us."

Via: The Advisory Board Company

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Kick 'Em To The Curb



Oh, he's good... very, very good.  In his address on Tuesday emphasizing his opposition to implementation of the budget sequester, President Obama remarked

I just want to repeat; the deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table.
I’ve offered sensible reforms to Medicare and other entitlements and my healthcare proposals achieved the same amount of savings by the beginning of the next decade as the reforms that have been proposed by the bipartisan Bowles-Simpson fiscal commission.

These reforms would reduce our government spending bill. [mechanical noise interruption] What’s up cameramen? [laughter] Come on, guys. They’re breaking my flow all the time.
These reforms would reduce our governments bills by reducing the cost of healthcare, not shifting all those costs onto middle class seniors or the working poor or children with disability but nevertheless achieving the kind of savings that we’re looking for.

But in order to achieve the full 4-trillion dollars in deficit reductions, that is the stated goal of economists and our elected leaders, these modest reforms in our social insurance programs have to go hand in hand with a process of tax reform so that the wealthiest individual and corporations can’t take advantage of loopholes and deductions that aren’t available to most Americans.

While recommending "modest reforms in our social insurance programs," the President emphasized his offer of "sensible reforms to Medicare and other entitlements."

It's hard to be opposed to "modesty" and "sensible" anything.  It's especially difficult when the President promises it "would reduce our government's bills by reducing the cost of healthcare, not shifting all those costs onto middle class seniors or the working poor or children with disability."

Use of effective buzzwords is critical to winning a political (or perhaps any) argument.  (Frank Luntz has built a very lucrative career around it.) Modest, sensible, and reform gets Obama halfway there.  But these "reforms" are cuts, notwithstanding the clever framing: "reducing the cost of healthcare, not shifting all those costs..."

Unfortunately, President Obama is not aiming to reduce the cost of healthcare overall but, as a careful reading of his message indicates, is aiming to reduce the cost of the government bill for healthcare.  This sleight-of-hand is effectuated when Obama says his plan "would reduce our government's bills by reducing the cost of healthcare."

This is no mere technicality.  It would be sheer folly for a President to state "I'm going to reduce benefits to the elderly, the poor, and the sick by cutting the most popular and effective government programs enacted since World War II."  Instead, he implies- but does not say, for it would be untrue- that slicing Medicare (a health care vehicle demonstrably more cost-effective than private insurance) would lower the cost to the American public of healthcare, but merely the government's bill.   Then he assures us that he is "not shifting all those costs onto middle class seniors or the working poor or children with disability."   For he is not shifting all those costs; only some.

A recent poll of sentiment toward Social Security found most respondents opposed to raising the retirement age or means testing benefits, but in favor of eliminating the payroll tax cap, increasing the tax rate, and applying a more generous inflation index to determine benefits.Yet, to President Obama this means his "balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction. The overwhelming majority of the American people Democrats, Republicans and Independents have the same view."  Reality, it seems, is sometimes ignored even by Democrats. Or in this case, President Obama.

"The greediest generation" former Senator Alan Simpson calls them, while the more subtle critics of earned benefits, including the Peter G. Peterson Foundation and the Washington Post editorial page, pose as supporters of the younger generation against the pampered, old cranks. But as The New York Times recently reported

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security— have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

Other than promoting the use of chained CPI to underestimate the true cost of inflation and thus reduce Social Security benefits, the proposals to cut Social Security would exclude individuals above a certain age.  Opposition by the oldest cohort to weakening the program, then, reflects a concern for the younger generation, as well as an understanding of the value to the country of a program which enhances inter-generational equity and national cohesion.

In case anyone was uncertain that the President wants most of the sacrifice to be borne by recipients of Social Security, Medicare, and Medicaid, Obama maintained "deep and indiscriminate cuts to things like education and training, energy and national security, will cost us jobs and it will slow down our recovery."   Viewing his approach and the GOP's sudden willingness to consider letting the sequester occur, Digby comments

The Republicans have been winning at every step along the way and they just keep demanding more, more, more.   And they will again, even if they agree to the President's proposals. And that's because the President's proposals at every step of the way have also been Republican proposals.



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Quality Mythmaking



If ever you wonder how to separate the honest and the dishonest claims about earned benefits, here is one way:  if the speaker implies that the same factors apply to all of them, he or she is trying to play you for a fool.  Monday, Joe Scarborough, whose column in Politico should be entitled "The Wisdom of Conventional Wisdom," noted that Paul Krugman had appeared on Morning Joe with the temerity to claim that failure to slash the deficit immediately would not lead to the downfall of the nation.   The former GOP congressman wrote

But maintaining calm was not as easy for Council on Foreign Relations president Richard Haass, who agrees with former Joint Chief chairman Michael Mullen, that long-term debt poses the greatest threat to America 's national security. Richard took exception to the suggestion that deficits don't matter and that longterm debt can be pushed to the side for years to come . Mr. Haass, Admiral Mullen and former Clinton chief of staff Erskine Bowles all believe that entitlements and debt are the most pressing challenges we face as a country over the next few decades.

You can add my liberal co-host, Mika Brzezinski, to that group. Mika let out a gasp when Mr. Krugman suggested Medicare and Medicaid shortfalls should be ignored. She compared Krugman's "head-in-the-sand" approach to the one taken by climate change deniers. Krugman took exception, saying that no one could predict the future of entitlements so there was no need to worry until the programs became insolvent.

That response drew a spirited email from former Treasury official and “Morning Joe” regular Steve Rattner in defense of Mika's analogy, who wrote the following:

"We are putting millions of tons of carbon in the air every day; we are also adding billions of dollars to our future entitlement obligations every day. We are borrowing (stealing?) from our children to pay far more in benefits to seniors than we are paying into the system.
We have something like $60 trillion in unfunded liabilities to Medicare and Social Security. Paul Krugman would like us to just wait until those programs run out of money, at which point those unfunded liabilities would be just that much larger."

I know it will cause Steve, Mika and Richard much duress but I couldn't agree with them more.

And I know it will cause Steve, Mika, Richard, and Joe much duress but the Social Security, Medicare, and Medicaid programs differ from one another, including in target audience, funding, and solvency.  Still, the idea that "future entitlement obligations" (i.e., assistance for the ill, the elderly, and the poor) are the same as climate change is intriguing, if ludicrous.   Eleven days before his appearance on MSNBC's morning drive-time program, Krugman explained the difference, which begins

with climate change. Serious people are and should be deeply worried, indeed horrified, by the lack of action on greenhouse gases. But why? Why not just assume that when climate change becomes undeniable, we’ll do whatever is necessary?

The answer, first and foremost, is that each year we fail to act has more or less irreversible physical consequences. We’re pumping around 35 billion tons of carbon dioxide into the atmosphere annually; this stuff will stick around for a very long time, and its consequences for warming and sea level rise will last even longer. So each year that we fail to act has a direct physical impact on the future.

There’s also an investment aspect: each year that we fail to get the incentives right, people commit limited resources to the wrong technologies, especially coal-fired power plants instead of wind, solar, conservation, whatever. Again, these choices have a physical impact on the world of the future.

Now ask, what in the debate about “entitlements” corresponds at all to this kind of impact? Nothing physical, clearly. You could argue that it would have helped to prepay some of our future costs by paying down debt and indeed having the government acquire assets while the demography was favorable – not because this would have directly increased future resources (debt is money we owe to ourselves) but because it would have reduced the need for higher taxes, and hence the distortionary effect of those taxes. And this argument was, indeed, the reason people like me wanted to protect the Social Security lockbox way back when.

But we didn’t; Bush squandered the surplus on tax cuts and unfunded wars (and was, with notably rare exceptions, cheered on by the very people now lecturing us solemnly on the need to cut entitlements). Now the baby boomers are retiring fast, and as far as I can tell none of the deficit scolds are pushing for a big effort to pay debt down over the course of the next few years.

Instead, they’re pushing for things like a gradual rise in the retirement age and a change in the formulas used to compute benefits – things that will cut future rather than present outlays. Or to put it differently, they aren’t really trying to cut debt; they’re simply trying to lock us in now to the spending cuts they think we’ll eventually have to make anyway. And they never, as far as I can tell, really ask why it’s important to do this now.

But think about it; use Social Security as the example, although much the same argument applies to other programs. It seems probable if not certain that we will eventually either have to cut SS benefits (relative to current law) or raise additional revenue. So the threat, if you like, is that future benefits will fall short of what people now expect. To avert this threat, the usual suspects insist that we must gradually reduce the program’s generosity. That is, in order to guard against cuts in future benefits we must … cut future benefits. Huh?

Social Security is an easy call, given that it is projected to be solvent until 2033, would remain solvent forever if income caps on the payroll tax are eliminated, and does not contribute at all to the national deficit.  (Arguably, it did so briefly, while the payroll tax cut was in effect because the trust fund was reimbursed by money from the general treasury for revenues lost.  That ended with the fiscal slope deal.)    However, although Medicare- more efficient than the private market- does not itself add to the deficit, rising health care costs most emphatically do.

Nonetheless, critics of Medicare (as with Social Security) imply that its founders, and legislators thereafter, were ignorant of the demographic changes which would imperil the program. Not so, noted Sarah Kliff of Ezra Klein's Wonkblog, who found there is no reason to panic over Medicare when she noted last April

In 1970, when the Medicare Trustees projected the fund would be exhausted in 1972, Congress reduced payments to providers, primarily physicians and hospitals. The same thing happened in 1997, when the trustees projected the funds would run out in 2001. Then, Congress quickly passed the Balanced Budget Amendment, which again cut into doctors’ reimbursements.

“The appeal to ‘insolvency’ as a danger,” Marmor, Spencer and Oberlander write, “needs to be recognized for its symbolic and strategic value in framing the debate over Medicare.”

Their bottom line is that there’s a big difference between the Trust Fund running out of money and the death of the Medicare program. In fact, no one quite knows what would happen if the Trust Fund actually ran out of money. “There are no provisions in the Social Security Act governing what would happen in such an event,” the Congressional Research Service report concluded.

What it would not mean, however, is that Medicare would screech to a halt. Programs covering doctors’ visits and prescription drugs could continue on pretty much unfazed. As for hospital coverage, Congress could look for other revenue sources, or it could borrow, or it could move money over from other parts of the budget. Given Medicare’s political popularity, it’s difficult to imagine legislators letting the program go underwater.

Medicare and Social Security were put "on the table" by a President anxious to be the most responsible adult in the room.  But reductions as part of a grand bargain sold as a means to curb the deficit would be nearly impossible to undo.  And when at some point there is a GOP president, taxes will be slashed, defense spending will remain exorbitant, and the party in power will speak little of the deficits which so dominate their rhetoric today.



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After All, He's Only Your Party's Leader In Congress



It was widely reported that Joe Biden engaged in fiscal slope negotiations with Senate Minority Leader Mitch McConnell only after the latter tired of dealing with Senate Majority Leader Reid and demanded to talk directly to the Vice President.  Details, however, were sketchy until this report in The National Journal in which Shane Goldmacher reported in part

We know that when McConnell has hit a wall with Reid, he calls Joe Biden to get some more candy,” said a senior Senate Democratic aide, who requested anonymity to speak candidly about the vice president.

It was a good-cop, bad-cop routine that Reid wanted no part of. “We thought it was unnecessary,” the aide said of Biden’s involvement. “We had a lot of leverage.”

Reid and McConnell had been bargaining about how to avert the cliff ever since a White House summit on Friday, when they agreed to take charge of negotiating an accord. Talks between President Obama and House Speaker John Boehner had collapsed by then. The president and congressional leaders had agreed that a last-minute compromise, if there was to be one, had to be forged in the Senate.

The opening Senate GOP offer from McConnell to Reid came at 9:30 p.m. on Friday night, only hours after the White House meeting, according to congressional officials with knowledge of the negotiations.

Reid’s team sent back its first counteroffer at around 3 p.m. on Saturday. A flurry of activity followed as McConnell was cloistered in his office on Capitol Hill. Aides shuttled between the leaders’ offices, as a GOP counterproposal was drafted by 4 p.m. A Democratic reply to that arrived only an hour and a half later, according to the sources. At 7:10 p.m. on Saturday, McConnell said he sent yet another offer to Reid and the Democrats.

Then, radio silence.

Reid’s office had suggested that another counteroffer would come in the morning, but the clock ticked to afternoon without one. Instead, Reid’s office told McConnell’s at about 1 p.m. that the majority leader was done with the back and forth. “At this stage, we are not able to make a counteroffer,” Reid announced soon after on the Senate floor.

Reid was playing hardball. With polls showing that the public was far more likely to blame congressional Republicans than the president if the nation jumped off the fiscal cliff – and billions in automatic tax hikes and spending cuts went into effect – Reid rightfully knew that McConnell wanted a deal – and badly.

Reid felt that he’d compromised enough, according to a senior Senate Democratic aide with knowledge of the discussions and the senator’s thinking. Besides, if no accord was reached, Obama and Reid had said they would push the president’s plan to stop tax hikes for those earning below $250,000 and extend unemployment insurance to the floor. Republicans could block that and be responsible for everyone’s taxes spiking at their own peril.

About the same time on Sunday, a story popped about a “major setback” in talks – that McConnell had demanded that a reduction in the Social Security benefits formula, known as “chained CPI,” be included in a deal. True, that had been part of the 7 p.m. Saturday GOP offer. But Reid was now using it as political cover to withdraw from talks. “We are not going to have any Social Security cuts. At this stage, that just doesn't seem appropriate,” the Democratic leader announced later Sunday on the floor.

McConnell’s negotiating options with Reid had narrowed. He could either let Congress veer off the cliff, take Reid’s latest offer, or accept the president’s tax-hike package for those earning more than $250,000. Instead, McConnell sought a familiar and friendlier face across the negotiating table – his old colleague Joe Biden. He called and left a message to open talks with the vice president.

“We have yet to receive a response to our good-faith offer. I am concerned about the lack of urgency here. I think we all know we are running out of time,” McConnell said on Sunday of his talks with Reid. Then he revealed on the floor that he’d called Biden “to see if he could help jump-start the negotiations on his side.”

“I need a dance partner,” McConnell said.

Those words appeared to be a swipe at Reid, echoing Reid’s comments the day after the election when he had said, “It's better to dance than to fight. It's better to work together.” McConnell was saying that Reid wasn’t willing to dance, after all.

In his negotiating two-step, McConnell had found a willing partner in Biden. The call to Biden set off a fresh round of offers, counteroffers, and concessions. They spoke as late as 12:45 a.m. on Monday, retreated for a few hours of sleep, before another call that began before 7 a.m. Within about 24 hours, Biden and McConnell had settled on what amounted to the framework for an agreement – although they never engaged face to face.

Harry Reid was faithfully promoting Barack Obama's line in the sand to end tax increases only for those earning below $250,000, which would make at least a small dent in the deficit which greatly concerns the President.  He had McConnell cornered- until, of course, the Administration decided to let the Minority Leader off the hook- because, as a former Reid aide explained, McConnell "is far more comfortable cutting deals with the vice president than he is with Senator Reid."

As the Administration accommodated the guy who once put commitment to defeating Barack Obama above commitment to country, the $250,000 limit became $400,000, which will be greater than $400,000, once it is indexed for inflation.     And the vast majority of those "Bush tax cuts" are permanent, as engineered by a Democratic Administration.   Additionally, the offshore tax loophole, which expired at the end of 2011, was extended, and is projected to decrease economic growth by 1.3% this year.    The exemption was born in the 1997 Taxpayer Relief Act and has been renewed every few years by Congress.  Citizens for Tax Justice explains

A U.S. multinational corporation is taxed on its worldwide earnings. If the income is also taxed by a foreign jurisdiction, the company receives a credit against its U.S. tax for any foreign taxes paid. Tax on “active” income from a U.S. corporation’s foreign subsidiaries is not imposed until those earnings are brought back (“repatriated”) to the United States.

A U.S. multinational corporation generally cannot defer paying tax on the income of its foreign subsidiaries that is considered “passive,” such as interest, dividends, rents, and royalties. A section of the tax code, known as “Subpart F,” requires multinational corporations to include this type of income in their taxable income each year even if the income is not repatriated.[5] Congress has determined that deferral is not appropriate for this type of income because it is highly fungible and the entities that earn it are very mobile.

Subpart F was designed to prevent companies from manipulating their U.S. tax obligation by the simple act of moving intangible assets that earn this type of passive income offshore.

Once upon a time, Barack Obama's commitment to reducing the deficit centered on eliminating the Bush-era tax cuts.   In 2008, the Illinois Senator criticized John McCain because (he) "promises to make those same tax cuts permanent, embracing the central principle of the Bush economic program."  Even after his re-election, President Obama declared

Option one, if Congress fails to act by the end of the year, everybody’s taxes will automatically go up -- including the 98 percent of Americans who make less than $250,000 a year and the 97 percent of small businesses who earn less than $250,000 a year.  That doesn’t make sense.  Our economy can’t afford that right now.  Certainly no middle-class family can afford that right now.  And nobody in either party says that they want it to happen.

The other option is to pass a law right now that would prevent any tax hike whatsoever on the first $250,000 of everybody’s income.  And by the way, that means every American, including the wealthiest Americans, get a tax cut.  It means that 98 percent of all Americans, and 97 percent of all small businesses won’t see their taxes go up a single dime.  The Senate has already passed a law like this.  Democrats in the House are ready to pass a law like this.  And I hope Republicans in the House come on board, too.

Democrats in the House were ready to pass "a law like this"  once Congress stepped over the curb on January 1, and Republicans would have resisted only at severe political peril.  However, Obama pulled the rug out from under Reid, ended his own party's leverage, and sent in McConnell's sugar daddy.  The Minority Leader now warns

I have news for (Obama): the moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes. That debate is over. Now the conversation turns to cutting spending on the government programs that are the real source of the nation’s fiscal imbalance. And the upcoming debate on the debt limit is the perfect time to have that discussion.

 " I hear you're interested in raising the debt limit,"  McConnell hints.  "Nice little entitlement programs you have there. It would be a shame if something happened to them."

When he lobbied Democratic Senators to support the deal he had engineered with McConnell- who now is targeting earned benefits- the Vice President reportedly told them “This is Joe Biden, and I’m your buddy."  (They bought it!) However,  the Daily Kos' Joan McCarter cautions

What every elected Democrat other than President Obama needs to remember is that they have to run for reelection, and he doesn't. Obama doesn't have to worry about Republicans running against him (again) for cutting Medicare and Social Security. He can secure his grand bargain, his legacy, without putting any of his own political skin in the game. Every other Democrat who wants to stay in office isn't in such an enviable position. What's more, they don't have to worry about providing cover for him anymore; he's a lame duck.




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