The President's Budget Proposal — Cuts to Spending, Cuts to Medicare

America's Achilles Heel: Withholding from the "Undeserving" Poor

by Gaius Publius

President Obama released his budget recently, and there's a lot in it, both to like and to not like. Rather than give an overview of its many provisions, let's focus on just two. For something of an overview, one person's anyway, see Robert Greenstein at the Huffington Post. His values may not be yours, but he covers the bases.

The budget carries through on Obama's tax proposals, child care proposals, and so on, as previewed in the State of the Union address. Our discussion is here, so I won't review them again. Let's look at just two pieces of Obama's new budget, overall spending and changes to Medicare.

The President's Budget Reduces Federal Spending

From the Greenstein piece mentioned above:

Despite its investments, however, this is not a "big-spending budget," contrary to some claims. Total federal spending over the next ten years would average 21.75 percent of gross domestic product (GDP) -- identical to the average for the Reagan years. In fact, despite the budget's proposals to ease the sequestration budget cuts, discretionary spending would fall by 2019 to its lowest level on record as a share of GDP, with data back to 1962. So would non-defense discretionary spending.

Is this a good thing? Since I think Obama considers this a "bold" budget (Greenstein's characterization), we can say it reflects his values, in the same way we could say the budget's child care proposals, or Earned Income Tax Credit proposals (he wants to make recent improvements permanent), reflect his values. And those values are and have been Clintonian — less federal "discretionary" spending, with targeted decencies.

Yes, there are sweeteners in the budget, as there were in Clinton's proposals. Less federal spending is one of the unsweets, as I see it, as it both hobbles the non-military good that our government can do and confirms the "frame" that less government is more ... something ... at least as the wealthy see it. Reagan would be proud.

The Budget Hurts Medicare Recipients

That unsweet, less spending, reaches into his Medicare proposals. Greenstein's overview first, then a closer look:

On the fiscal responsibility front, the budget does more than some initial commentary has assumed, in part because some of its proposals -- such as its Medicare beneficiary changes (which are more significant than is widely realized) and its reforms in the tax treatment of unrealized capital gains -- would produce savings that grow after the first decade. ... [S]tabilizing the debt over the next 25 years -- a fiscally dangerous period in which the vast baby-boom generation will enter retirement, driving up costs for Social Security and Medicare -- would represent no small accomplishment.

Ignore Greenstein's values for a moment and just consider the principle. Do you want the debt "stabilized" — in a zero-interest-rate environment no less? Or would you prefer to see our oldest and medically-neediest citizens well taken care of? Only the wealthy, who don't need a dime from the government (but get it anyway) and people like Greenstein want the former. This really is about values.

Now some detail via the New York Times:

Budget Plan Sees Savings in Changes to Medicare
[note framing by the headline writer]

In his new budget, President Obama proposed on Monday to squeeze $399 billion over the next 10 years out of Medicare, Medicaid and other programs run by the Department of Health and Human Services.

Under the proposals, many Medicare beneficiaries would have to pay more for their care and coverage. The president would, for example, introduce a co-payment for new Medicare beneficiaries who receive home health care services, and he would collect $4 billion over 10 years by imposing a surcharge on premiums for new beneficiaries who buy generous private insurance to supplement Medicare.

In addition, Mr. Obama’s budget would reduce scheduled Medicare payments to teaching hospitals, hundreds of small rural hospitals, nursing homes and health maintenance organizations that care for older Americans and people with disabilities. ...

There's more in the article, but you get the drift. Note that Medicare payment to doctors and hospitals is already too low. As the Times says, "many [hospitals] lose money on their Medicare patients." I can say anecdotally the same is true of many doctors, who complain that they have to overcharge patients with private insurance to cover the net expense of treating Medicare patients.

In addition, the budget accelerates the process of converting Medicare from insurance to welfare by expanded means-testing:

The president’s budget would collect $66 billion over 10 years by charging higher premiums to higher-income Medicare beneficiaries, for coverage of doctors’ services and prescription drugs. A relatively small number of high-income beneficiaries already pay more than three times the standard monthly premium.

If the powerful mainstream "left" — meaning people like Obama, Clinton and the broad swath of "centrists" (corporatists) in Congress — continue to convert social insurance programs into welfare, as this budget proposal does, it becomes far more easy for the right to insist these programs be reduced, privatized or cut entirely because the population they serve is no longer "us," but "them."

The article mentions some good news for Medicare in the budget — small changes to drug pricing policy and continued support for CHIP (Children’s Health Insurance Program), for example. But overall, on the Medicare front, this budget offers more austerity for the many so the few won't have to pay taxes.

See what I mean? In this respect, the president is being true to his values, true to his 2006 self. As he said in the first clip at the link in this paragraph:

"Too many of us have been interested in defending programs the way they were written in 1938."

The dog-whistle reference is to Social Security, but as his new budget shows, he clearly means all social programs. An odd legacy for America's first black president, but there it is. Still, he's true to his values — I will give him that.

Our History of Racism Will Do Us In

As journalist Helaine Olen wrote recently, "Some days I believe that when they write the history of the United States after it is all over, they will say slavery and racism did us in." She's right. This history and its mindset, which lives with us today, is our Achilles Heel, the one place the arrow will always sink deep, the go-to spot for any politician or billionaire wanting to appeal to the "center" of the country.

Unfortunately, here the word "center" properly applies. This doesn't characterize us all by any means, but it's true, one way or another, of way too many. Even some of my kind, intelligent, low-info "liberal" friends are openly uncomfortable with the baggy pants in Ferguson, or on the "other side of Troost Avenue" in Kansas City, which moves them to support the police. (Troost is the "dividing line" there, but I think you got that.)

If we are killed as a nation by our billionaires, this is how they will do it, cynically using our Achilles Heel and appealing to our historical need to punish the "undeserving." Today, membership in the "undeserving" is much more broadly defined. No matter; as a nation we still want to "go there," to do the punishing.

Without saying so, the president's budget does much the same, if in a lighter way — it withholds from the modern "undeserving" to preserve the perqs of the wealthy. Punishing the "undeserving" is an odd legacy for America's first black president. Not a choice I would make if I were him, but there it is.

GP​

So Which Budget-- Or, More To The Point, Which Vision Of Governance-- Is Best For Ordinary Americans?

Ryan's Wall Street-hatched plot to turn back the clock is nothing short of catastrophic and, even as a jumping off point, Simpson-Bowles is just barely tangentially better, while still being awful. Yesterday President Obama presented a less dysfunctional, more than a little fairer vision of a brighter path forward. But it was still based on Republican talking points and fallacies. If we were stuck with these three choices, Obama's would be livable... barely. But considering his record of negotiating, if this is the starting point, we are screwed. UNLESS, the starting point for negotiations, if not the end point, is the People's Budget that the Congressional Progressive Caucus proposed.

The Economic Policy Institute did a thorough analysis and then endorsed it. They conclude that the working family-oriented People's Budget "would reduce primary spending by $868.9 billion, increase general revenue by $2.8 trillion, and increase payroll tax receipts by $1.2 trillion over a decade relative to the adjusted CBO baseline. Responsibly ending the wars in Afghanistan and Iraq and recalibrating Department of Defense priorities would save $2.3 trillion. Roughly $1.7 trillion would simultaneously be invested for general public investment and a surface transportation reauthorization bill, including an I-Bank. Health care savings would decrease deficits by $308.1 billion from 2012 to 2021, more than offsetting the 10-year cost of maintaining the current rate of Medicare physician reimbursements, adjusted for inflation. Based on all of these policy adjustments, net interest payments are projected to fall by $856.3 billion over 2012-21.53 In total, the People’s Budget would reduce deficits by $5.6 trillion over 2012-21 relative to the adjusted CBO baseline."
Alternatively, just forget anything reasonable ever coming out of the Beltway. It's just too damn tied up with special interests money. In next week's Rolling Stone Matt Taibbi asks the pertinent questions about the budget, starting with "Why isn't Wall Street in jail?" And if you follow Taibbi's writing-- you're crazy if you don't-- you know he's got the answers as well.

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size-- a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."

...And then there are the bailout deals that make no sense at all. Republicans go mad over spending on health care and school for Mexican illegals. So why aren't they flipping out over the $9.6 billion in loans the Fed made to the Central Bank of Mexico? How do we explain the $2.2 billion in loans that went to the Korea Development Bank, the biggest state bank of South Korea, whose sole purpose is to promote development in South Korea? And at a time when America is borrowing from the Middle East at interest rates of three percent, why did the Fed extend $35 billion in loans to the Arab Banking Corporation of Bahrain at interest rates as low as one quarter of one point?

Even more disturbing, the major stakeholder in the Bahrain bank is none other than the Central Bank of Libya, which owns 59 percent of the operation. In fact, the Bahrain bank just received a special exemption from the U.S. Treasury to prevent its assets from being frozen in accord with economic sanctions. That's right: Muammar Qaddafi received more than 70 loans from the Federal Reserve, along with the Real Housewives of Wall Street.

Perhaps the most irritating facet of all of these transactions is the fact that hundreds of millions of Fed dollars were given out to hedge funds and other investors with addresses in the Cayman Islands. Many of those addresses belong to companies with American affiliations-- including prominent Wall Street names like Pimco, Blackstone... It's one thing for the federal government to look the other way when Wall Street hotshots evade U.S. taxes by registering their investment companies in the Cayman Islands. But subsidizing tax evasion? Giving it a federal bailout? What the fuck?

As America girds itself for another round of lunatic political infighting over which barely-respirating social program or urgently necessary federal agency must have their budgets permanently sacrificed to the cause of billionaires being able to keep their third boats in the water, it's important to point out just how scarce money isn't in certain corners of the public-spending universe. In the coming months, when you watch Republican congressional stooges play out the desperate comedy of solving America's deficit problems by making fewer photocopies of proposed bills, or by taking an ax to budgetary shrubberies like NPR or the SEC, remember Christy Mack and her fancy new carriage house. There is no belt-tightening on the other side of the tracks. Just a free lunch that never ends.

Oh, I almost forget to mention, corporate Democrats led by Chris Van Hollen, the ranking ineffectual Democrat on Ryan's Budget Committee, proposed some silly little of this/little of that nonsense as well. It's 100% based on Ryan's table settings and, it's not any more worth looking at than Ryan's is. It will be defeated today as a Motion to Recommit just before Ryan's budget passes.

Ryan's budget... I was thinking about it today in terms of the sociopaths in the corporate headquarters when I used to be president of Reprise Records. The most important thing I could do for shareholder value was to help build artists for the future. I saw that as one of my primary jobs. Our A&R staff would identify talented artists and work to develop that talents, sometimes over years and years. It took Depeche Mode 6 albums before they broke through. It took Barenaked Ladies 6 as well. The whole time we were being pressured from the corporate guys to drop the bands. I recall one time, when I was a junior VP, the chairman of the company signaled me to come into his office and listen silently to a conversation he was having. It was with a high ranking corporate finance guy who was demanding-- threateningly-- that we drop Eric Clapton. 24 Nights had sold poorly, as had Behind the Sun, August and Journeyman, but none of them were poor quality-wise and the company, at least on the creative side, was still firmly behind Eric. But the corporate guys wanted him off the roster. The chairman showed m how to be both polite and firm in telling them to go screw off. The next record Eric delivered was Unplugged, which sold over 10,000,000 albums, in the U.S. and far more overseas and basically kept the company running for a year. I'm sure the corporate executive congratulated himself for not forcing us to drop him. That was millions of dollars in shareholder value. These corporate guys only think about the quarterly bottom lines-- and their bonuses (based on that) or, the real far-thinking ones, actually have a whole year time horizon. The Republicans are like that. Their perspective is corporate and disastrous. It doesn't take the future into account. Had we dropped Depeche Mode and the Barenaked Ladies before they were fully developed, tens of millions of dollars would never have been realized for the shareholders. It was a never-ending battle. It's worse with the Republicans, especially because they have Fox and the right-wing echo chamber blaring their short-sighted foolishness day in and day out. I wish Obama had what it takes to stand up to them... the way the chairman of Warner Bros Records did.

Paul Ryan And The Audacity Of Dopes

Wall Street never keeps all its eggs in one basket. While the bankster community was making certain Democrats-- think Rahm Emanuel, Harold Ford, Jr, Charlie Rangel, Steve Israel, Chris Dodd and Joe Lieberman for example-- financially invincible enough to keep anti-bankster elements in the Democratic Party in check, it was also finding champions in the GOP to move the ball forward on the field of world domination. Among the Republicans singled out for special Wall Street love-- Members whose upward career trajectories they agreed to finance-- are the new senator from Illinois, Mark Kirk ($5,104,216), the former and current chairman of the House Financial Services Committee, Spencer Bachus ($4,644,824), the Majority Leader of the House Republicans ($4,643,385), the new senator from Missouri, Roy Blunt ($4,470,664), the new Speaker of the House, John Boehner ($4,190,440), the new senator from Ohio Rob Portman ($3,622,738)... and relatively young up-and-comer from Wisconsin they have pegged as a future governor, senator, vice-president... but who sits as the head of the Budget Committee today, Paul Ryan ($2,229,897).

Ryan has already taken more money from the banksters than anyone in the history of Wisconsin politics. Fellow Wisconsinite, David Obey, who retired as Chairman of the House Appropriations last year, was already in Congress when Ryan was born. Obey's total haul from the banking sector was $691,893 (and that's ten times more than the banksters gave Peter Barca, Ryan's immediate predecessor as the Representative for WI-1). No, Wall Street has Ryan's future very much in mind. We should too. As Blue America has been warning and the Washington Post confirmed yesterday, Ryan-- an ignorant and intellectually immature Ayn Rand acolyte-- poses an existential danger to America's middle class. In a swipe at even stupider teabagger freshmen, Ryan is preaching Wall Street's message that Social Security and Medicare need to be dismantled. Offering no details or specifics, he "will propose fundamental changes to Medicare and Medicaid, the giant health care programs that cover 100 million Americans."

House Republicans will "lead with our chin" and offer politically explosive cost curbs this spring on programs like Medicare, Medicaid and perhaps Social Security, the party's point man for curbing crippling budget deficits said Thursday.

...Ryan has been calling for big changes to the social safety net for years. Known as "the roadmap," his approach calls for individuals to take on more of the financial responsibility for retirement, including the costs of health care. The government would provide a floor of protection for everyone, particularly the poor and those in failing health, but middle-class people who desire more than a basic plan would have to pay extra.

He's also proposed allowing younger workers to divert part of their Social Security taxes to personal investment accounts, an idea that's lost currency among other Republicans given President George W. Bush's failed 2005 Social Security overhaul and the recent swoon in the stock market.

The plan Ryan rolled out last year for Social Security would gradually increase the full retirement age, from 67 to 70. It would also reduce initial benefits for middle- and high-income retirees.

Ryan said Social Security is the easiest entitlement program to fix - though it is the most dangerous politically to touch-- and he was disappointed that Obama didn't address it in his budget proposal.

"Give me a cocktail napkin and I can write you a plan on the back of it," Ryan said. "It's not that hard."

Under the roadmap, Medicare would be converted into a voucher system that offers seniors a fixed payment to pick their coverage from a range of private insurance plans overseen by the government. Today's Medicare recipients and those nearing retirement would remain under the current system, in which the government determines what's covered and sets payments for providers.

...Republicans this week conceded that the government's budget can't be balanced this decade without cutting into current retirees' Medicare and Social Security benefits, something they've indicated they're unwilling to do. But many tea-party activists and junior lawmakers still believe the red ink can be reduced to zero with just a bit more pain, according to Ryan.

"They literally think you can just balance it, you know, (by cutting) waste, fraud and abuse, foreign aid and NPR (National Public Radio)," Ryan said. "And it doesn't work like that."

But as economics professor and Nobel laureate Paul Krugman has pointed out again and again, Ryan's ideological mania shows a keen lack of basic understanding of economics. The only actual job the spoiled Ryan ever had was as a so-called "marketing consultant" in his grandfather's construction business, Ryan Incorporated Central. In a column that slapped Ryan down badly last August, The FlimFlam Man, Krugman comes right out and calls him a charlatan

One depressing aspect of American politics is the susceptibility of the political and media establishment to charlatans. You might have thought, given past experience, that D.C. insiders would be on their guard against conservatives with grandiose plans. But no: as long as someone on the right claims to have bold new proposals, he’s hailed as an innovative thinker. And nobody checks his arithmetic.

Which brings me to the innovative thinker du jour: Representative Paul Ryan of Wisconsin.

Mr. Ryan has become the Republican Party’s poster child for new ideas thanks to his “Roadmap for America’s Future,” a plan for a major overhaul of federal spending and taxes. News media coverage has been overwhelmingly favorable; on Monday, the Washington Post put a glowing profile of Mr. Ryan on its front page, portraying him as the G.O.P.’s fiscal conscience. He’s often described with phrases like “intellectually audacious.”

But it’s the audacity of dopes. Mr. Ryan isn’t offering fresh food for thought; he’s serving up leftovers from the 1990s, drenched in flimflam sauce.

Mr. Ryan’s plan calls for steep cuts in both spending and taxes. He’d have you believe that the combined effect would be much lower budget deficits, and, according to that Washington Post report, he speaks about deficits “in apocalyptic terms.” And the Post also tells us that his plan would, indeed, sharply reduce the flow of red ink: “The Congressional Budget Office has estimated that Rep. Paul Ryan’s plan would cut the budget deficit in half by 2020.”

But the budget office has done no such thing. At Mr. Ryan’s request, it produced an estimate of the budget effects of his proposed spending cuts-- period. It didn’t address the revenue losses from his tax cuts.

The nonpartisan Tax Policy Center has, however, stepped into the breach. Its numbers indicate that the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers the Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.

And that’s about the same as the budget office’s estimate of the 2020 deficit under the Obama administration’s plans. That is, Mr. Ryan may speak about the deficit in apocalyptic terms, but even if you believe that his proposed spending cuts are feasible-- which you shouldn’t-- the Roadmap wouldn’t reduce the deficit. All it would do is cut benefits for the middle class while slashing taxes on the rich.

And I do mean slash. The Tax Policy Center finds that the Ryan plan would cut taxes on the richest 1 percent of the population in half, giving them 117 percent of the plan’s total tax cuts. That’s not a misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95 percent of the population.

Krugman is hardly the only economist blowing the whistle on the ideological fervour that has incubated in the oven of Ryan's intellectual dishonesty. Even if the Wall Street-financed DCCC has given Ryan a 100% pass on every single reelection bid-- despite the fact that WI-1 is a traditionally Democratic district that was won in 2008 by Obama-- the Center For American Progress has kept a wary eye on Ryan. They've warned about his schemes and the harm they would do to the economy:

• Block-granting Medicaid (as the Road Map does and GOP governors want) would cost three million jobs.

• Voucherizing Medicare (as the Road Map does) would raise Medicare premiums more than thirty percent by 2021.

The political reawakening in Wisconsin is likely to sweep Republicans out of office in that state. It would be tragic if Wall Street and their partners at the DCCC are once again able to protect Paul Ryan's seat. It's time to end his pretense and his political career and send him back to the family construction business in Janesville... where because of the policies he's supported for years, there isn't much construction going on. This is the most recent ad Blue America ran against Ryan in his district. We have plans to tread quite a lot between now and November 2012... in places where the DCCC has been unwilling to ever go. Americans need to hear what Paul Krugman wrote, even if the DCCC (and Obama) refuse to care: "The Ryan plan is a fraud that makes no useful contribution to the debate over America’s fiscal future."

We Won't Let Leonard Lance's Shenanigans Take The Focus Off Paul Ryan's Determination To Turn Us All Into Ayn Rand Zombies

Fasten your seat-belts

I love two counter-strikes NY Rep. Jerry Nadler is offering to Ryan's irresponsible slashing and burning. One, Amdt 232, would cut $90 billion from the war in Afghanistan, leaving enough to fund an orderly withdrawal-- essentially ending the tragic occupation of that country. I have a feeling Ryan and Obama will be on the same page there. They'll also both oppose what amounts to a Nadler stand-alone bill, a re-introduction of the Say No to Drug Ads Act, a bill that would end tax perks to pharmaceutical companies for their direct-to-consumer advertisements. "There is absolutely no reason for the federal government to provide major tax breaks to pharmaceutical companies creating advertisements for their own financial enrichment,” said Nadler. “It’s bad enough that TV drug ads mislead consumers and tout benefits of high-priced drugs without properly conveying the risks, but the drug companies don’t need extra subsidies to do so. My legislation would end this undeserved perk for the industry, while generating billions of dollars to support much more essential health care programs."
 
The Administration must have been very happy to have gotten USAToday's Paul Davidson to do a story yesterday called Obama Budget Plan Could Create Millions Of Jobs. It's great -- if hollow-- p.r. for a widely panned plan.

President Obama's proposed fiscal 2012 budget is potentially a massive job-creation engine, with plans to generate millions of them by repairing and expanding highways, bridges and railways.

But the spending plan also heralds an outsize political battle as it reignites the type of Republican skepticism over the effectiveness of such outlays that characterized the 2009 economic stimulus.

And that outsized political battle is something the White House feels it can win, not with a full frontal attack using progressive values and standing tall for the kind of approach FDR used when the GOP drove the economy into depression last time they had the chance-- Obama doesn't even believe in the FDR approach himself-- but by letting the Republican reactionary policies stand against his own conservative policies. The progressive perspective on this is straightforward-- end the pointless wars in Afghanistan and Iraq, cut back on Pentagon holy cows, end the payroll tax ceiling for the wealthy and cut back on corporate tax loopholes. Obama's budget at least tries a few progressive ideas among the whole potpourri of conservative ones. Yesterday the Center For American Progress used the reactionary agenda of a top Blue America target as a punching bag: Higher Tolls on the Roadmap: The Ryan Roadmap would increase Medicare premiums by more than thirty percent in 2021. Maybe he thought no one would notice... or care (outside of his corporate donors who are planning for the future more intensely than most American families who are just struggling to get by month to month, thanks to the very policies Reagan and the Bushs forced onto the country over decades, the policies Ryan is advocating once again.

While conservatives garner public attention with their effort to repeal the Affordable Care Act, other conservative proposals to undermine our nation’s health care system are receiving less attention. Most notably, Rep. Paul Ryan (R-WI), the chairman of the Budget Committee in the House of Representatives, advocates in his “Roadmap to America’s Future” replacing today’s Medicare program with a federal voucher that future Medicare-eligible seniors could use to purchase health coverage. This proposal will force Medicare beneficiaries to spend significantly more than they do today to maintain coverage equivalent to today’s Medicare program.

This issue brief estimates the new costs that Americans with Medicare coverage will bear under Ryan’s budget proposal-- costs that will be largely borne by everyone under the age of 56.

...Ending Medicare as we know it would leave seniors facing significantly higher health care premiums. With a voucher that fails to keep up with increases in health care costs, Medicare beneficiaries would not be able to purchase coverage equivalent to today’s Medicare benefit. Their new premium-- the amount above the voucher they would have to pay to purchase that coverage-- would far exceed their expected Medicare premiums under current law.

Under current law, people with Medicare coverage can expect to pay $2,730 per year ($228 a month) in 2021 for total Part B and Part D premiums, which will provide them with full Medicare benefits. Under Rep. Ryan’s proposal, new Medicare enrollees will pay an average of $3,579 for equivalent coverage-- a 31 percent increase in their premium for this year. This “Roadmap” premium increase will grow over time, as the voucher’s value fails to keep up with increases in health care costs.

Indeed, the Ryan plan will mean that seniors and people with disabilities who receive the “Roadmap” voucher would face an average increase in premiums of almost $850 in 2021, which will grow to nearly $1,060 in 2025, to purchase a benefit package equivalent to today’s Medicare program.

The Wisconsin Democratic Party is finally focusing on Ryan. They have him by the scruff of the neck and they're snaking him up good. I hope it leads to a real challenge to him next year; it would be his first ever. They have their hands full with a Republican legislature and arguably the worst governor in America, but they made some time for Ryan as well yesterday:

Janesville Hypocrite Paul Ryan, who has voted to increase the size of the federal deficit by trillions, is doubling down on budget lies that were refuted last year.

Speaking out against President Obama's proposed budget, which makes tough choices but protects investments in America's modern economy, Ryan repeated claims that independent fact-checkers have refuted.

Among his debunked claims:

-That the Obama nearly budget doubled spending (he refuses to account for the successful stimulus, which he opposed, and which he incorrectly counts in 2010 when it passed in 2009).

-That President Obama gave America a $2 trillion tax increase. In fact, President Obama and the Democrats gave the middle class its biggest tax relief in history, without any help from Ryan.

- That the president's policies have benefited the public sector more than the private one. In fact, the private sector has seen 1.258 million jobs added in the past 11 months. The last day George W. Bush was in office, the economy was losing jobs at a rate of nearly 800,000 per month.

"As he preens for national exposure, Paul Ryan has a hard time covering his tracks when he voted to increase our budget deficit by trillions and supported the policies of greed and speculation that nearly ruined our economy to begin with," Democratic Party of Wisconsin Chair Mike Tate said Tuesday. "But for him to come out and repeat outright lies about President Obama's budget shows how ambition has corrupted what integrity he had left."

And Ryan has his perch because Boehner put him there, Boehner the orange twerp who told reporters yesterday that if hundreds of thousands of jobs are lost because of Ryan's road map, "so be it." What the hell is wrong with these Republicans? What are they trying to do to this country? Please help stop Ryan before it's too late. Wall Street has big plans for this puppet.

Rachel Maddow thinks John Boehner is very bad at his job. Ezra Klein says he may not be even nearly as good as Pelosi but he's not as bad as Maddow thinks. Watch this great clip from last night and decide for yourself:

With No Obstructionists Sabotaging Its Stimulus Program, China Takes Advantage Of The Worldwide Economic Slowdown

With Obama contending with obstructionists like Palin, DeMint & Bayh, China poses grave threats to the country

When Robyn Meredith wrote her NY Times best selling The Elephant and the Dragon about the rise of India and China, Bush was still playing at being president and the catastrophic results of years and years of ideological Republican governance hadn't yet manifested as the economic meltdown Obama inherited. In fact, when Meredith was writing, anyone who talked about an impending economic meltdown was ignored or derided as a kook. But her book was about China and India and how their developing roles would impact America and the rest of the world, so no one paid much attention to her prescience when it came to our current financial crisis. Her crystal ball sure was working:

With the brisk growth the global economy has enjoyed since 2002, these should be the best of times. As in past expansions, the U.S. unemployment rate was expected to fall-- and it did. American workers have become more productive each year, which normally leads to widespread raises. But the swelling economy has not led to fat paychecks this time; instead median hourly wages after inflation declined 2 percent from 2004 to mid-2006. For Americans, the missing link in a suddenly internationalized economy is improved pay. Much factory work has already moved overseas or has been automated, and America's blue-collar workers are earning less than they did in 1973. The migration of white-collar jobs [to India] has begun. Those who have lost jobs frequently must accept pay cuts when they find new work. Most of those who have kept their jobs aren't getting raises that run ahead of inflation, much less ahead of productivity increases. The reality is that many workforce changes have already begun and are likely to accelerate in coming years as more and more companies move jobs offshore and otherwise adjust to the rise of India and China.

Unfortunately, most households are unprepared for the turmoil: during the 1990s, the American savings rate began its plunge from over 8 percent to negative 1 percent in 2006. Americans didn't register much of the pain of smaller savings, first because stock prices soared in the 1990s, then because house prices began to zoom upward about the time the stock bubble burst. Housing prices have halted their powerful run-up, so many Americans may soon feel the weight of their unprecedented, credit-fueled spending binge.

Those looking closely see that American standards of living are already being pinched for all but the richest Americans. Middle-class expenses are way up, largely because of increased health care and college costs. Unless Americans make big changes, keeping up with the Joneses may mean going backward and downsizing the American standard of living. Some indicators show that Americans have in the past decade already begun to slide, but many haven't yet begun to feel it.

When all the pieces of the global economy work together smoothly, all the players involved benefit. In this decade a clear pattern has emerged: China became factory to the world, the United States became buyer to the world, and India began to become back office to the world.

But there are risks to both East and West as the strands of the global economy intertwine. As the world economy interconnects, the United States, China and India become more vulnerable to local disruptions in each other's economies. For instance, if the U.S. housing bubble bursts as quickly as the American stock rally ended in 2001, home prices in the country could plunge. Many Americans who had been feeling flush would suddenly feel poor, and many would be saddled with payments for home loans worth more than their houses. If that happened, a broad economic slowdown would follow, and many Americans would be forced to tighten their belts drastically, spending less on everything-- including made-in-China goods stacked on store shelves. A U.S. recession could force Chinese factories to shut down or lay off workers, most for the first time ever. Indeed, worries about a U.S. slowdown push stories about the U.S. housing market to the front page of newspapers half a world away in China. At the same time, India's army of computer programmers and call-center employees could also feel the ripple of a downturn in the U.S. economy. Indians wouldn't be answering so many 800-number calls from shoppers buying plane tickets or other goods. On the other hand, because service jobs can move across the globe quickly, American companies fighting to stay afloat might accelerate their movement of white-collar jobs overseas in a downturn that desperately crimps their profits.

China is a partner in capitalism but not in democracy, not by any stretch of the imagination. A rare upside to their authoritarian government is that their is no formal obstructionism permitted to hamper the government in a crisis. They have no Grand Obstructionist Party in China. They have plenty of corruption on all levels, including at the highest U.S.-like levels, but without a political party actively working to see the government fail-- regardless of how that hurts the nation-- China has been able to act with far greater speed, agility and purpose to take defensive action against the global depression. While partisan hacks of dubious patriotism-- like Jim DeMint (R-SC), John Cornyn (R-TX), Mitch McConnell (R-KY), Evan Bayh (D-IN), Richard Burr (R-NC), David Vitter (R-LA), John Boehner (R-OH), Eric Cantor (R-VA), Paul Ryan (R-WI) and Jeb Hensarling (R-TX)-- act with single-minded intensity to sabotage President Obama and prevent his program to rescue the country's economy from being enacted, China's government has acted with requisite haste to head the worst of the effects of the downturn off at the pass. This augers poorly for the United States, although not for China's unofficial chief American lobbyist, Mitch McConnell.

The global economic downturn, and efforts to reverse it, will probably make China an even stronger economic competitor than it was before the crisis... China’s leaders are turning economic crisis to competitive advantage, said economic analysts.

The country is using its nearly $600 billion economic stimulus package to make its companies better able to compete in markets at home and abroad, to retrain migrant workers on an immense scale and to rapidly expand subsidies for research and development.

Construction has already begun on new highways and rail lines that are likely to permanently reduce transportation costs.
And while American leaders struggle to revive lending — in the latest effort with a $15 billion program to help small businesses-- Chinese banks lent more in the last three months than in the preceding 12 months.

“The recent tweaks to the stimulus package indicate a sharper focus on the long-term competitiveness of Chinese industry,” said Eswar S. Prasad, a former China division chief at the International Monetary Fund. “Higher expenditures on education and research and development, along with amounts already committed to infrastructure investment, will boost the economy’s productivity.”

The international economic slowdown is also doing some things that Chinese authorities had tried and failed to do for four years: slow inflation, reverse what had been an ever-growing dependence on exports and pop a real estate bubble before it could grow even bigger.

The recession in most of the large economies in the world is inflicting real pain here-- causing a record plunge in Chinese exports, putting 20 million migrant workers from within China out of their jobs and raising the potential for increased and sustained social unrest. But as President Hu Jintao told the National People’s Congress last week, “Challenge and opportunity always come together-- under certain conditions, one could be transformed into the other.”

To that end, Chinese companies are shopping for foreign businesses to acquire. The commerce ministry announced late Monday that it was greatly easing the government approval process for Chinese companies seeking permission to make foreign acquisitions.

Over the past two weeks we've seen blatantly partisan, self-serving moves made by ambitious Republican governors Mark Sanford (SC), Rick Perry (TX) and Bobby Jindal (LA) to stand in the way of Obama's Stimulus package. Yesterday a cold wind blew down from Alaska: "Gov. Sarah Palin is refusing to accept over 30 percent of the federal economic stimulus money being offered to Alaska, including dollars for schools, energy assistance and social services."

The news Thursday drew anger from those who accused Palin of putting her national political aspirations ahead of the state's interests, and admiration from others who say she has courage to turn down money that would expand government. The state Legislature will have an opportunity to override her decision.

...Palin first told the news media that she's turning down nearly half the federal stimulus money -- but later conceded that does not count the Medicaid money she is accepting. That brings down what she's refusing to 31 percent of what the state government could get. Local governments and nonprofits could still compete for stimulus grants.

The biggest single chunk of money that Palin is turning down is about $170 million for education, including money that would go for programs to help economically disadvantaged and special needs students. Anchorage School Superintendent Carol Comeau said she is "shocked and very disappointed" that Palin would reject the schools money. She said it could be used for job preservation, teacher training, and helping kids who need it.

The clueless soccer-mom is feeling intense anger from both sides of the aisle and it is likely that the Republican-dominated state legislature will override her with Democratic help. But why should she care about special needs students when she is far more qualified to parrot negative attacks on the president's humanity than on accomplishing anything for the poor residents of her state. At least she'll have two Senate allies in undermining Obama now that Begich has declared himself a member of Bayh's anti-Obama bloc. I wonder if Palin can see China from her front porch too. The DNC will launch a nationwide campaign today to combat Republicans and their right-wing Democratic allies who are trying to destroy Obama's program by sabotaging his budget. Lets hope it works-- and that we don't wind up with Sarah Palin and Evan Bayh stumbling around trying to figure out which way is up... for all of us.

"What we're really saying," said a Democratic strategist involved in the campaign, "is that this is a budget here, but all of these pieces...they're so central to function the economy, and this budget is a downpayment on any substantive reform that the president seeks on those - in those areas. If President Obama doesn't get a significant placeholder for health care reform, what are the prospects that you're going to get that going forward?" 

The same is true, the strategist said, of Obama's energy and education reform proposals.

And if the obstructionists keep up their partisan warfare against the president and he's unable to contend with the biggest threat we're now facing as a nation-- the world ditching the dollar as its reserve currency, which is a distinct possibility-- the game's over for us in terms of living beyond our means. This country will be barely recognizable a decade from now. DeMint, Cornyn, Burr, Palin, Bayh, Sanford, Boehner... the whole lot of them couldn't hurt America more if they opened the front gates to bin-Laden.

Many Reactionary Democrats Are Blinded To The Benefits Of Emergency Deficit Spending

Ellen Tauscher-- lurking in the darkness

Monday D-Day wrote about New Democratic Coalition leader Ellen Tauscher's insatiable appetite for more homeless people. The former Wall Street stock broker and fiscally conservative (though socially moderate) Democrat led the reactionary/Blue Dog revolt against Nancy Pelosi's attempt to pass "cram down" legislation that would have allowed bankruptcy judges to modify terms of mortgages on primary residences to prevent more of this kind of destruction of social cohesion across the country. Tauscher isn't a Blue Dog but she works closely with them to drag the Democratic House caucus away from pro-working family positions and towards her the special interests of her sleazy corporate patrons. She certainly cares more about the banksters than about her own constituents. Her New Democrat Coalition-- which is much bigger than the Blue Dog caucus-- isn't considered quite as venal as they are. But they share many members and when it comes to protecting special interests (of their corporate donors) they can be just as fierce as Blue Dogs and Republicans.

The NDC-- like the Blue Dogs-- has grown wary of "outing" their new members. Neither group has updated its membership lists to include freshmen and both still include right-wing Democrats who followed their reactionary precepts are were defeated in November, Nick Lampson and Tim Mahoney. The last available NDC membership list:

Ellen Tauscher (CA), Chair
Ron Kind (WI), Vice-Chair
Artur Davis (AL), Vice-Chair
Adam Smith (WA), Vice-Chair
Joseph Crowley (NY), Vice-Chair/Whip
Jason Altmire (PA)
Michael Arcuri (Blue Dog-NY)
Brian Baird (WA)
John Barrow (Blue Dog-GA)
Melissa Bean (Blue Dog-IL)
Shelley Berkeley (NV)
Bruce Braley (IA)
Lois Capps (CA)
Russ Carnahan (MO)
Chris Carney (Blue Dog-PA)
André Carson (IN)
Travis Childers (Blue Dog-MS)
Joe Courtney (CT)
Henry Cuellar (TX)
Susan Davis (CA)
Rahm Emanuel (IL)
Eliot Engel (NY)
Bob Etheridge (NC)
Bill Foster (IL)
Gabby Giffords (Blue Dog-AZ)
Kirstin Gillibrand (Blue Dog-NY)
Charles Gonzalez (TX)
Jane Harman (Blue Dog-CA)
Stephanie Herseth (Blue Dog-SD)
Brian Higgins (NY)
Baron Hill (Blue Dog-IN)
Rush Holt (NJ)
Darlene Hooley (OR, retired)
Jay Inslee (WA)
Steve Israel (NY)
Ron Klein (FL)
Nick Lampson (defeated Blue Dog-TX)
Rick Larsen (WA)
John Larson (CT)
Tim Mahoney (defeated Blue Dog-FL)
Carolyn McCarthy (NY)
Mike McIntyre (Blue Dog-NC)
Kendrick Meek (FL)
Gregory Meeks (NY)
Charlie Melancon (Blue Dog-LA)
Harry Mitchell (AZ)
Dennis Moore (Blue Dog-KS)
Jim Moran (VA)
Chris Murphy (CT)
Patrick Murphy (Blue Dog-PA)
Ed Perlmutter (CO)
David Price (NC)
Loretta Sanchez (Blue Dog-CA)
Adam Schiff (Blue Dog-CA)
Allyson Schwartz (PA)
David Scott (Blue Dog-GA)
Joe Sestak (PA)
Debbie Wasserman Schultz (FL)
David Wu (OR)

This morning's Hill reports on conservative Democrats' yipping and yapping about the deficit, playing right into Republican strategy for derailing President Obama's ambitious plans to start down the road to restructuring American society in a more equitable direction. They're grousing that although Obama's plans for bringing down the Bush deficit by more than two-thirds, it could start growing again in 2014. It shocks me when naive Democrats join with corporate shills to empower treacherous Republican partisans.

In this new Republican strategy there is an incongruity. GOP lawmakers have said the stimulus bill heaps too much debt on the next generations. Where were these reborn fiscal conservatives when the prior administration ran a war-- whose costs now rival World War II-- on a credit card?

One of President George W. Bush's most damaging and self-destructive choices was to make the war on terrorism a partisan issue. It was a Karl Rove tactic designed to produce "a permanent majority." By doing that and by shunning the sympathy of other nations, Bush turned a golden moment into a dead-end strategy. And now the diminished Republican numbers in Congress are making the nation's economic recovery a partisan issue. Indeed, they are betting on calamity.

The congressional Republican profession of horror at the site of deficit spending resembles the feigned surprise of the police chief in the movie Casablanca who was "shocked" there was gambling at Rick's Cafe and then was handed his winnings. The GOP's new deficit spending mantra is a lot like congressmen and senators who shun certain health care funding scenarios because they "don't want to see health care rationed." In truth, we ration health care now. In fact, every culture has rationed health care. It's simply a matter of how we choose to ration it. Will some of us get health care, or will a broader swath of Americans get it?

Deficit spending is worth it if a nation gets something for its money. The infrastructure elements of President Obama's stimulus package are especially worthy. It is the largest such package since the Eisenhower administration, when America built the interstate highway system. This is a good marriage of an urgent need and a pressing moment.

CQPolitics reported this morning that the Democratic culprits working with the Republicans to derail Obama include Utah and Arizona reactionaries Jim Matheson and Gabby Giffords. And they're not alone. Almost 50 Blue Dogs and NDC members are skulking around plotting with the GOP about eviscerating Obama's plans to help the middle class. These are all members of Congress who always put the special interests first and their own constituents last. It's what got us into the mess we're in in the first place.

A dozen of them were among 20 House Democrats who voted against the $410 billion discretionary fiscal 2009 spending package (HR 1105) on Feb. 25. Another group later forced House leaders to sideline a contentious bill (HR 1106) to allow bankruptcy judges to modify home loans.

Although only a handful of moderate and conservative Democrats abandoned their leaders during party-line votes on the economic stimulus law, the group of vulnerable Democrats branded the omnibus spending bill as a budget buster and questioned whether the mortgage bill would raise interest rates on average home-owners and cause some struggling homeowners to rush to bankruptcy.

The defections could cause heartburn for Democratic leaders charged with ushering through Obama’s three biggest priorities: a health care overhaul, a cap-and-trade system to curb carbon emissions and his fiscal 2010 budget blueprint. The president might also have trouble winning their votes for an anticipated second financial bailout package.

...Many of the 49 Democrats in the group have particular concerns about Obama’s call for allowing the Bush-era tax cuts for wealthy families to expire.

“I don’t agree with the administration about letting all those tax cuts expire for upper-income families,” said Harry Mitchell, D-Ariz. He argues for retaining the current 15 percent rate on capital gains and for permanent reductions in the estate tax.

Sounds exactly like a Republican, doesn't he? He called me when he was running for office in 2006 against an incredibly worse Republican, J.D. Hayworth, and even then I had to choke back the stench of reactionary shit-brains to not warn Arizona voters that they were trading in an "F" for a "D-minus." On key substantive issues, Mitchell has voted like a Republican from the moment he got into office. Let's hope the folks at Accountability Now are watching.

Will Even One Republican Vote For Obama's Rescue Plans Or Is It All Limbaughesque Obstructionism All The Way?

The TV's on in the other room and I'm not paying close attention. But I just heard some Republican talking head predicting that not a single Republican in the House would vote for Obama's budget and that even the 3 mainstream Republicans in the Senate would vote no too. Well, Obama doesn't need them in the House and if Harry Reid invokes budget reconciliation, Republicans can't filibuster it and not only will they not need Specter, Collins and Snowe, they also won't need Ben Nelson and the two Arkansas reactionaries.

But I have a suggestion. Six of the ten biggest Senate earmarkers are Republicans. Surprised? Thad Cochran (R-MS) was the #1 ear mark whore of the omnibus spending bill he voted against last week. Miss McConnell (R-KY), Richard Shelby (R-AL) and Kit Bond (R-MO) also added tons of ear marks-- and then voted against the bill. There were 8,570 earmarks worth $7.7 billion. How about if those who vote no, get their earmarks excised? It's fair and it makes sense.

Obama's budget isn't just a delineation of how to spend some money. It's the embodiment of the platform he ran on-- the change that will reverse the well-planned rightist project to redistribute wealth upward. There will be a small effective increase (from 35-39,6%) for people earning over $250,000 year by allowing the Bush tax cuts for the wealthiest Americans to expire in 2011. And capital gains taxes will increase from 15% to 20% (when it should be taxed as regular income).

Increasing the top tax rates and the capital gains tax rate and making the tax credits permanent would increase average effective tax rates on upper income Americans and lower them for middle and lower income families.

It should be no surprise that President Obama seeks to reduce income inequality in the United States.

OMB Director Peter Orszag: "...basically what's happened over the past twenty years is that, uh, income at the very top of the income distribution has increased very rapidly. According to data from the congressional budget office, the top one percent of income distribution between 1979 and 1997 increased their income by over a hundred and fifty percent, in real, inflation adjusted terms. The bottom twenty percent witnessed a decline in income of about three or four percent... [T]he problem has to do with the social fabric of society. As the rich get much richer and the poor get only a little bit richer, you-- you pull at the social fabric that holds together society, part of which is irrational or psychological. People just-- if you look at surveys, they don't like-- they would prefer not to have an income gain, than to have a little income gain and have someone else get a much larger income gain.”

Tonight at dinner I finished reading Thomas Frank's The Wrecking Crew-- How Conservatives Rule. His conclusion is pretty pessimistic.

Throwing the rascals out is no longer enough. The problem is structural... it is built into the systems og governance themselves.

...A century ago, in the classic period of business government, an epidemic of public theft persisted despite a long string of reformers in the White House, Republicans and Democrats, each one promising to clean the place up. Nothing worked, and for this simple reason: democracy cannot work when wealth is distributed as lopsidedly as theirs was-- and as ours is. The inevitable consequence of plutocracy, then and now, is bought government, As Justice Louis Brandeis said at the time, "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." It is a bitter lesson that we will have to re-learn all over again.

Rachel Maddow and Peter Orszag try making it all comprehesible: