Tuesday, December 30, 2014

Beware: Republicans Reprise That Old Black Magic To Deal With The Budget


The wealthy have never allowed the idea of democracy-- stuff like majority rule-- stand in the way of their greed and power. There were times when politicians have been brave enough to stand up to them-- but not since FDR, at least not on a presidential level. It's part of what Elizabeth Warren means when she says the system is rigged against us. And it's what Bernie Sanders' campaign for president is all about. And it's what a true true believers in Congress-- like Alan Grayson, Mark Pocan, Donna Edwards, Barabara Lee, Raul Grijalva-- are always talking about. But one of the problems with the wealthy is that their power allows them to change the rules when the rules threaten them, even a tiny bit. Gerrymandering is part of that. Michigan Republicans' plans to count their electoral votes in such a way to help GOP presidential candidates is another. Sunday, Robert Reich wrote about another one, the 1% has their political party doing for them-- firing Doug Elmendorf.

You may not have ever heard of Elmendorf. His the director of the strictly non-partisan Congressional Budget Office, the CBO. Elmendorf is an economist who worked closely with Reagan's director of the Council of Economic Advisers, Martin Feldstein, at Harvard. He first went to work at the CBO is 1993 and his economic analysis of Clinton's health reform bill is what killed it. He left soon after that it work for Alan Greenspan at the Fed and then for Larry Summers at Treasury. He became the director of the CBO in 2009 soon after Peter Orszag left. He was appointed by John Boehner and Daniel Inouye, then president pro tempore of the Senate, on the recommendation of the two Budget Committees.

In his column, Reich explains the issue as GOP demands to further rig the system for the 1% by the use of trickle down theory-- "dynamic scoring"-- in economic projections.
It’s based on the belief that cutting taxes unleashes economic growth and thereby produces additional government revenue. Supposedly the added revenue more than makes up for what’s lost when Congress hands out the tax cuts.

Dynamic scoring would make it easier to enact tax cuts for the wealthy and corporations, because the tax cuts wouldn’t look as if they increased the budget deficit.

Incoming House Ways and Means Chairman Paul Ryan (R-Wis.) calls it “reality-based scoring,” but it’s actually fantasy-based scoring-- which is why Elmendorf, as well as all previous CBO directors have rejected it.

Few economic theories have been as thoroughly tested in the real world as the asserted revenue effects of supply-side economics, and so notoriously failed.

Ronald Reagan cut the top income tax rate from 70 percent to 28 percent and ended up nearly doubling the national debt. His first budget director, David Stockman, later confessed he dealt with embarrassing questions about future deficits with “magic asterisks” in the budgets submitted to Congress. The Congressional Budget Office didn’t buy them.

George W. Bush inherited a budget surplus from Bill Clinton but then slashed taxes, mostly on the rich. The CBO found that the Bush tax cuts reduced revenues by $3 trillion.

Yet Republicans don’t want to admit supply-side economics is hokum. As a result, they’ve never had much love for the truth-tellers at the Congressional Budget Office.

...The budget plan Paul Ryan came up with in 2012-- likely to be a harbinger of what’s to come from the Republican congress-- slashed Medicaid, cut taxes on the rich and on corporations, and replaced Medicare with a less well-funded voucher plan.

Ryan claimed these measures would reduce the deficit. The Congressional Budget Office disagreed.

Ryan persevered. His 2013 and 2014 budget proposals were similarly filled with magic asterisks. The CBO still wasn’t impressed.

It’s one thing to cling to magical thinking when you have only one house of Congress. It’s another when you’re running the whole shebang.

Now that Elmendorf is on the way out, presumably to be replaced by someone willing to tell Ryan and other Republicans what they’d like to hear, the way has been cleared for all the magic they can muster.

In this as in other domains of public policy, Republicans have not shown a particular affinity for facts.

Climate change? It’s not happening, they say. Even if it’s happening, humans aren’t responsible. Even though almost all scientists studying the issue find that humans are the major cause, such findings are “controversial,” says the GOP, and should be given no greater weight than findings on the other side.

Widening inequality? Not occurring, they say. Even though the data show otherwise, they claim the measurements are wrong.

Voting fraud? Happening all over the country, they say, which is why voter IDs and other checks are necessary. Even though there’s no evidence to back up their claim (the best evidence shows no more than 31 credible incidents of fraud out of a billion ballots cast), they continue to assert it.

Evolution? Just a theory, they say. Even though all reputable scientists support it, many Republicans at the state level say it shouldn’t be taught without also presenting the view found in the Bible.

Weapons of mass destruction in Iraq? America’s use of torture? The George W. Bush administration wasn’t overly interested in the facts.

The pattern seems to be if you don’t like the facts, make them up.

Or have your benefactors finance “think tanks” filled with hired guns who will tell the public what you and your patrons want them to say.

If all else fails, fire your own experts who tell the truth, and replace them with people who will tell falsehoods.

There’s one big problem with this strategy, though. Legislation based on lies often causes the public to be harmed.
Mark Pocan (D-WI) and Barbara Lee (D-CA) are the most progressive members of the House Budget Committee. Neither is happy seeing the Republicans making this move. Yesterday, Pocan told us that "Dr. Elmendorf was a perfect choice for a non-partisan agency; fair, unbiased and trusted by all. As the Republicans realize the facts aren't on their side when it comes to budgeting, their solution seems to be to get rid of the facts and try to replace them with distorted ones from a shill they select to spin their view of the world. That's a completely wrong way to start out the 114th Congress." Congressman Lee had a similar perspective she shared with us: "As a member of the Budget Committee, it is imperative that the Congressional Budget Office (CBO) remains independent and objective. The CBO’s objectivity provides needed assurances to Congress and the American people about the impacts of legislation. Conservative attempts to influence CBO and undermine its independence, especially by forcing the CBO to fudge the numbers by using 'dynamic scoring,' is outrageous."

And because the conservatives now control both houses of Congress, they can do just that.

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