Home Mortgage Interest Deductions... On The Table?

The National Association of Home Builders didn't spend as much on elections this year as they normally do. The $2,290,068 they did spend on federal elections in 2012 was the smallest amount since 2000. This year their PAC gave $1,398,500 to federal candidates, 75% of it to Republicans, 25% to Democrats. A lot of the big dough they handed out went to other PACs-- $30,000 each to the DCCC, NRCC, DSCC, NRSC and the RNC-- and $10,000 pops to shady operations like the Blue Dog PAC, the New Dem PAC and personal leadership PACs operated by notoriously corrupt Members of Congress like John Boehner (R-OH), Miss McConnell (R-KY), Steve Israel (D-NY), Paul Ryan (R-WI), Steny Hoyer (D-MD), Dave Camp (R-MI), John Cornyn (R-TX), Eric Cantor (R-VA), Max Baucus (D-MT), Kevin McCarthy (R-CA), Pete Sessions (R-TX)... They also made direct payments to Members of Congress with well-earned reputations for always being willing to sell their vote to the highest bidder-- $10,000 legalistic bribes to John Barrow (Blue Dog-GA), John Boehner (R-OH), Fred Upton (R-MI), Mike McIntyre (Blue Dog-NC), Randy Neugebauer (R-TX), Greg Walson (R-OR), Kevin Yoder (R-KS), Mike Rogers (R-MI), Gary Miller (R-CA), Paul Ryan (R-WI), Eric Cantor (R-VA), Don Young (R-AK), Nick Rahall (D-WV), Reid Ribble (R-WI), Kristi Noem (R-SD), Mike Pompeo (R-KS), David McKinley (R-WV), Scott Garrett (R-NJ), Joe Heck (R-NV), Sean Duffy (R-WI), Shelley Moore Capito (R-WV), Dean Heller (R-NV), Joe Manchin (D-WV), Rick Berg (R-ND)... hundreds of thousands more.

And now they're worrying if all the bribery is going to do them any good. Their well-compensated whores, the Republicans and Blue Dogs, are starting to turn on them, opening the possibility of eliminating the home mortgage deduction, or at least some part of it. Jerry Howard is the head of the National Association of Home Builders and he's denouncing the very idea as "a ludicrous concept... This is the last thing Congress should be considering when what we're trying to do is stabilize the economy... It needs to be taken off the table." Howard warned that making any changes to the mortgage interest deduction as part of the Obama Boehner Grand Bargain would be catastrophic for his industry and for the economy as a whole.

Peter Orszag, formerly Obama’s chief budget adviser, said studies suggest that the mortgage interest deduction appears to do more to raise home prices than it does to encourage new owners to buy but he says it would be "awkward" to make any changes right now, given that the housing sector just now seems to be getting back on its feet.

During a "Twitter town hall" last week, President Obama responded to a question on the subject-- "As a homeowner, I worry deductions for homeowners are at risk. Is that the case?” Obama's answer": “Breaks for middle class [important] for families & econ. If top rates don’t go up, danger that middle class deductions get hit.” What Obama does favor, sensibly, is easing out the deduction for high net worth individuals.

During each year that he has been president, Mr. Obama has proposed clipping the mortgage interest deduction for taxpayers in the top two tax brackets. The proposal hasn’t gone anywhere.

Under that proposal, households that currently pay income taxes at the 33% and 35% rates would only be able to claim deductions at the 28% rate. In other words, for every $1,000 in deductions, a household would realize a tax savings of $280 instead of $350.

The White House hasn’t said whether it would support more aggressive measures that would limit the mortgage interest deduction, such as limiting the deduction on second homes, limiting the deduction to interest paid on, say, $500,000 in principal (the current cap is $1 million), or capping deductions across the board, an idea proposed by Republican nominee Mitt Romney.

So will Boehner and Cantor and the Blue Dogs come to the rescue of the Home Builders-- who have pumped millions into their careers-- or sacrifice them on the alter of keeping taxes on the obscenely rich low? Even Ben Stein thinks this is foolish:

Can You Be A Wall Street Baron And Still Be A Democrat? Let's Ask Peter Orszag

Whenever I send out a package through the post office I always write "Fragile" on it. And these days I also write "I hate Darrell Issa Too," knowing postal workers will take extra special care of my valuables. Turns out, though Darrell Issa isn't the only culprit in the USPS mess-- and neither are all the villains Republicans.

There's a lot of money to be made in privatizing the post office-- not for us, of course, but Wall Street drools at the prospect. And, of course, Republicans and their Blue Dog allies are doing everything in their power to undermine and sabotage the post office for exactly that reason. Many of us were sickened this week when former Obama OMB Director, Peter Orszag, currently cashing in as vice chairman of corporate and investment banking at Citigroup, the company that probably has the most to gain by running the financial aspects of a post office privatization, called for privatization. It's doubly ironic since the OMB worked with the GOP to cripple the Post Office to begin with, setting up the perfect scenario for exactly what Orszag is trying to do now!

Here’s the back-story. In 1970, after almost two centuries, the Post Office was transformed from a Cabinet agency to the quasi-independent US Postal Service (USPS). In keeping with its new status, Congress eventually moved its finances off budget. Yet, as I’ve discussed before, the OMB and the Congressional Budget Office (CBO) ignored Congress and continued to include the USPS in the unified budget, the budget they use for “scoring” legislation to estimate its impact on the deficit.

Fast forward to 2001. The Government Accountability Office put the Postal Service on its list of “high-risk” programs because of rising financial pressures resulting from exploding demand from both the residential and commercial sectors. Then in 2002 the anxiety level fell dramatically when the Office of Personnel Management found the Postal Service had been significantly overpaying into its retirement fund.

It seemed a simple matter to reduce future payments and tap into the existing surplus to pay for current expenses. And would have been if the OMB and the CBO did not insist on adhering to their make-belief accounting system.

Several times between 2002 and 2005 Congress did overwhelmingly approved tapping into the existing surplus. Each time the White House nixed the idea because it would increase the deficit.

Finally, in 2006 the Post Office and Congress agreed to literally buy off the CBO and OMB. Budget neutrality over a ten-year period was achieved by requiring the USPS to make ten annual payments of $5.4-5.8 billion. The level of the annual payments was not based on any actuarial determination. They were produced by the CBO to equal the amounts necessary to offset the loss of the escrow payments. Under the Postal Accountability and Enhancement Act of 2006 the USPS was forced to prefund its future health care benefit payments to retirees for the next 75 years in ten years, something no other government agency or private corporation is required to do.

The Postal Regulatory Commission noted that those payments “transformed what would have been considerable profits into significant losses.” Indeed, 90 percent or more of the current deficit is a result of these artificially created debts.

The Post Office is indeed in a financial crisis, but not one of its own making.

Enter Peter Orszag who still subscribes to the make believe world created by his old agency. His article lists three problems the USPS faces. The artificial debt is not among them. He lists three counterarguments people might use to oppose privatization. The artificial debt is not among them.

A real world solution to the USPS fiscal crisis would be to remove the artificially generated financial noose from its neck and then build on its two most important assets: its ubiquitous physical infrastructure and the high esteem in which Americans hold it. In combination, these assets offer the post office an enviable platform upon which to generate many new revenue-producing services.

But for Peter Orszag the solution is to ignore the fraudulent financial burden imposed on the USPS and sell off and dismantle its ubiquitous infrastructure. “In addition to its 32,000 post offices, it has 461 processing facilities, monopoly access to residential mailboxes and an overfunded pension plan,” he writes. “These assets would attract bidders. Consider, for example, that many processing facilities and post offices sit on valuable real estate, and it may be smarter to sell many of them than to keep them.”

Did I forget to mention that Peter Orszag is currently vice chairman of corporate and investment banking at Citigroup? Citigroup certainly be in the running to oversee the privatization of the post office, a process that would generate tens of millions of dollars in fees and undoubtedly handsomely benefit Mr. Orszag personally. Now that’s chutzpah.

People Who Can Afford This Offer From Delta To Travel By Private Jet Owe Obama Big Time-- But Won't Support Him Regardless

Over at TheAroundTheWorldBlog, the contention for years is that Delta is #1, the #1 worst airline in the entire known universe. And in the midst of an excruciating recession and a Republican Party filibuster of an unemployment insurance extension and a concerted move by conservatives of both parties to dismantle Social Security, Delta isn't winning many new friends with their brand new holiday offer:

Hello Mr. Klein,

This holiday season, treat family, friends and yourself to the ultimate gift of luxury and flexibility-- private jet travel.

The 5-hour Fleet Membership Card from Delta Private Jets makes the perfect present, and is now available starting at $27,500 for the light jet category.*

You don't have to travel with your party to use the card, so anyone you choose can enjoy the comfort and freedom of private jet travel. And with Delta Private Jets, you can always count on guaranteed availability, around-the-clock customer service, and the highest standards of operational excellence.

But hurry. The 5-hour Fleet Membership Card is only available through December 31st. Visit DeltaPrivateJets.com or call 1-877-323-JETS (5387) to purchase the 5-hour Jet Card today.

*Pricing includes fuel and taxes, and membership will be valid for 12 months from effective date of agreement.

The other day Ken suggested a picture of an empty bench could well be the emblem of the Obama judiciary. Delta private jets for rich people with extra tax refunds they don't know what to do with could be the emblem of his shockingly corporate "bipartisan" domestic agenda. It's an agenda so straight out of the Bush era that die-hard Obama supporters like NY Congressman Anthony Weiner and former Martin Luther King friend/attorney/speech writer Clarence Jones are coming to the same conclusion Paul Krugman wrote last week: progressives need to look elsewhere for leadership than the White House. Blue America has suggested Bernie Sanders. Jones endorsed the idea of a primary against Obama! First Weiner:

Governing is more than a series of transactions. This is a competition of ideas on how we make the country better."

"Middle class Americans need someone to fight for them. They see this deal as punting on 3rd down-- it seems the President is not seeing the value of being on offense."

"Democrats should welcome the chance to tell the American people what we will fight for. We should be standing up for the middle class and extending unemployment insurance for out-of-work Americans. If Republicans want to add to our deficit and defend the interests of billionaires, make them stand up in Congress and tell that to the public loud and clear."

"Deals come after we fight for ideals-- let's do that first.

Although my pal Roland works in an inner city school and has been telling me that the African-American women in the teachers union there are all sorry they ever supported Obama over Hillary Clinton, most progressives are afraid of African-American reaction if they start responding to Obama in the way they would respond to any other conservative. Perhaps Jones' post will wake a few people up in that regard. Once accused of being an apologist for Obama, Jones is disappointed by his abysmal lack of leadership on just about every issue facing Americans, including on specific ones he campaigned on.

It is not easy to consider challenging the first African-American to be elected as President of the United States. But, regrettably, I believe that the time has come to do this.

It is time for Progressives to stop "whining" and arguing among themselves about whether President Obama will or will not do this or that. Obama is no different than any other President, nominated by his national party. He was elected with the hard work and 24/7 commitment of persons who believed and enlisted in his campaign for "Hope" and "Change."

You don't have to be a rocket scientist nor have a PhD in political science and sociology to see clearly that Obama has abandoned much of the base that elected him. He has done this because he no longer respects, fears or believes those persons who elected him have any alternative, but to accept what he does, whether they like it or not.

It is time for those persons who constituted the "Movement" that enabled Senator Barack Obama to be elected to "break their silence"; to indicate that they no longer will sit on their hands, and only let off verbal steam and ineffective sound and fury, and "hope" for the best.

The answer is blowin' in the wind.

The pursuit of the war in Afghanistan in support of a certifiably corrupt Afghan government and the apparent willingness to retreat from his campaign commitment of no further tax cuts for the rich, his equivocal and foot dragging leadership to end DADT, his TARP for Wall Street, but, equivocal insufficient attention to the unemployment and housing foreclosures of Main Street, suggest that the template of the 1968 challenge to the reelection of President Lyndon Johnson now must be thoughtfully considered for Obama in 2012.

And, as Mike Konczal pointed out yesterday, Obama's policy thrust seems less about being forced to compromise with big bad Republicans-- who are still in the minority in both Houses of Congress-- as it is about an Administration conservative gameplan laid out very clearly over time by Peter Orszag, "the best barometer for what the Obama administration is currently doing in terms of the economy and budget." Yesterday Krugman tried again, practically begging Obama-- for his own sake, the sake of the Democratic Party and, most important, the sake of the American people-- especially the ones who elected him president, to Let's Not Make A Deal.

Back in 2001, former President George W. Bush pulled a fast one. He wanted to enact an irresponsible tax cut, largely for the benefit of the wealthiest Americans. But there were Senate rules in place designed to prevent that kind of irresponsibility. So Mr. Bush evaded the rules by making the tax cut temporary, with the whole thing scheduled to expire on the last day of 2010.

The plan, of course, was to come back later and make the thing permanent, never mind the impact on the deficit. But that never happened. And so here we are, with 2010 almost over and nothing resolved.

Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?

The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.

Think about the logic of the situation. Right now, the Republicans see themselves as successful blackmailers, holding a clear upper hand. President Obama, they believe, wouldn’t dare preside over a broad tax increase while the economy is depressed. And they therefore believe that he will give in to their demands.

But while raising taxes when unemployment is high is a bad thing, there are worse things. And a cold, hard look at the consequences of giving in to the G.O.P. now suggests that saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils.

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension-- but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis-- a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

...[I]f Democrats give in to the blackmailers now, they’ll just face more demands in the future. As long as Republicans believe that Mr. Obama will do anything to avoid short-term pain, they’ll have every incentive to keep taking hostages. If the president will endanger America’s fiscal future to avoid a tax increase, what will he give to avoid a government shutdown?

So Mr. Obama should draw a line in the sand, right here, right now. If Republicans hold out, and taxes go up, he should tell the nation the truth, and denounce the blackmail attempt for what it is.

Yes, letting taxes go up would be politically risky. But giving in would be risky, too-- especially for a president whom voters are starting to write off as a man too timid to take a stand. Now is the time for him to prove them wrong.

And the guys who can use their tax cuts for the Delta private jets? They all hate Obama anyway and have no intention of voting for him unless Palin is the only alternative. So who will vote for Obama? The people he's betraying on a daily basis? He shouldn't count on it because he's going to wind up as a one-termer just like Steve Driehaus did-- and for the same reasons-- and not as a one-termer who took a hit for doing the right thing for America, one termer for doing the bidding of the Big Business interests who financed his political career.

A Little Chat With A Congresswoman About Afghanistan Leads To The Real Problems Confronting Health Care Reform

Last night I went to a gathering of people interested in hearing from a member of Congress who had just returned from Afghanistan. After a frank talk-- that confirmed my feelings that our presence there is as completely hopeless as it was when Cheney was running the show-- she opened the floor to questions. One woman-- with whom I had co-hosted a fundraiser for state Senator Barack Obama many years ago when he was first running in a seemingly hopeless Democratic primary for the U.S. Senate-- prefaced her question like this: "Since you're the smartest member of Congress..."

Donna Edwards (D-MD) demurred. "I don't know what Barney Frank or Jerrold Nadler would think about that." And there are a number of other exceptionally bright and thoughtful members of Congress as well, probably more than a dozen. But no one who knows her would deny Donna Edwards fits right in with that crew. Many of them were on a short list that caused Rahm Emanuel's short fuse to blow 2 weeks ago-- the 4 dozen Democrats who refused to vote for the supplemental budget that would continue unmerited war funding in Afghanistan. Although Nadler fumed and decided to give Obama the benefit of the doubt at the last minute, most of the other best and brightest Dems in the House courageously voted "no"-- from Alan Grayson (D-FL), Dennis Kucinich (D-OH), Carol Shea-Porter (D-NH), Tammy Baldwin (D-WI), Jan Schakowsky (D-IL), Jared Polis (D-CO), Keith Ellison (D-MN), and Maxine Waters (D-CA) to Barney Frank (D-MA), Jim McDermott (D-WA), Steve Cohen (D-TN) and, of course, Donna Edwards.

But it wasn't her insights about the pathetic non-policy in Afghanistan that I walked away thinking about. It was something she said about the bitter battle over health care reform. One of the House's most outspoken and well-reasoned advocates of universal health care-- sidetracked by the puppets of the Medical Industrial Complex to a chance for a "public option"-- Donna is worried that Big Insurance will embrace the "public option." Embrace and then smother to death in a bear hug. They don't want the competition, so they have given their well-paid allies-- Republicans, Blue Dogs, members of the Evan Bayh anti-Obama Bloc of Senate Conservadems-- their orders: let it pass and then make it dysfunctional. They will gamble everything that their three highest paid shills-- Arlen Specter (R/D-PA- $4,026,933), Max Baucus (D-MT- $2,833,731) and Mitch McConnell (R-KY- $2,758,468)-- will be able to sabotage the public option sufficiently enough to ensure that it is not robust and not competitive.

Although Ted Kennedy is the Chair of the committee that deals with health issues, the Medical Industrial Complex hasn't been forthcoming with the "donations" to him the way they are with the career criminals who always support them, what I call the "over two million dollar men-- like John Cornyn (R-TX), Lamar Alexander (R-TN), Richard Burr (R-NC), and Orrin Hatch (R-UT), These 4 have also been tasked with guaranteeing that a public option will be non-functional. Unfortunately, no one can reasonably expect anything more from Republicans. They are the party that seems to live to torture-- including American working families.

We do, on the other hand, expect more from Democrats. Sometimes I wonder why. Truth be told, though, for every corporate whore like Max Baucus, Evan Bayh, Ben Nelson and Tom Carper, the Democrats have stalwart defenders of working families-- Bernie Sanders, Jeff Merkley, Dick Durbin, Sherrod Brown and, of course, the Lion of the Senate, Ted Kennedy. And today, despite the mealy-mouthed manipulations of turds like Baucus and Nelson, the Lion was roaring again.

Senator Edward Kennedy, chairman of one of two Senate panels drafting health-care overhaul plans, said he will include a government-run program to compete with private insurers in a measure to be considered in mid-June, asserting his role in the emerging debate despite his battle with brain cancer.

..."An important foundation of our legislation is the following principle: If you like the coverage you have now, you keep it," Kennedy wrote in an op-ed article in the Boston Globe. "But if you don’t have health insurance or don’t like the insurance you have, our bill will give you new, more affordable options."

This is the insurance companies worst nightmare, and the hope for millions of American families. And stopping this is why the Medical-Industrial Complex has spent hundreds of millions of dollars in legalized bribes to corrupt members of Congress-- basically the entire Republican Senate caucus plus Max Baucus, Ben Nelson, Evan Bayh, Blanche Lincoln and a few other untrustworthy bribe-hungry Democrats. And what about the White House?

Playing on the corporate side you'll always have Rahm Emanuel, the darkest force inside the Administration who went from being the Democrats' Tom DeLay in Congress to being their Karl Rove in the White House. But his isn't the only voice-- only the loudest, most insistent and most malevolent. On the other side of the issue, also vying for the president's ear is OMB Director Peter Orszag. Orszag is committed to real health care reform, exactly what the Baucuses and Nelsons are joining the GOP to prevent. And he's doubly dangerous to their cause because he makes his case in terms of fiscal discipline:

When I give public talks on health care reform, the question I receive most often is "given the government’s fiscal situation, how can it make sense for the government to take on new spending commitments as part of health reform?"  The answer is two-fold.  First, health care reform has two components: cost containment provisions and expanded coverage.  In the near term, the impact of expanded coverage will temporarily dominate, and health care reform will therefore temporarily increase government spending.   Over time, however, the impact of the cost containment provisions will accumulate, and the net impact will be a reduction-– and perhaps a dramatic one-– in government spending.  Second, while we are waiting for the cost containment provisions to take hold, we are insisting that health care reform be deficit neutral.  In other words, the Administration is committed to a health care reform that is at least deficit neutral over 10-years -- and deficit-reducing, potentially to quite a significant degree, over the longer term.

It's important to bolster the worthwhile voices inside the Administration despite the cloying relentlessness of the self-serving legendary Emanuel hype-machine.

MoveOn.org is running radio ads in Maine, North Dakota, Oregon, Delaware, Washington and Florida aimed at senators on Baucus' committee who are still on the fence about the public option. All of the ads but one target Democrats.

MoveOn.org has also organized “thousands” of members, including doctors, nurses and small-business owners, to visit senators’ district offices to call on them to support the so-called public plan option.

“President Obama and 70 percent of voters support healthcare reform that includes a public health insurance option to contain costs, increase competition and guarantee coverage,” the narrator in the ad states.

“The insurance industry says with new rules they can do it alone, but they’ll find a way to put profits first. We need a health insurance choice not run by the insurance companies to keep costs down and ensure access to quality, affordable care.”

The question over whether to make the public plan option available in all parts of the country has emerged as one of the thorniest of the healthcare debate. Republicans say a nationwide public plan option would be a “non-starter” and would represent a march toward a single-payer, socialized healthcare insurance system. They argue that government competition would drive private healthcare companies out of business.

It's important to remember that the real battle for real health care reform has nothing to do with the GOP. It will take place entirely inside the Democratic Party. Frank Luntz explained the strategy to his GOP clients a few weeks ago: "You're not going to get what you want, but you can kill what they're trying to do." They can-- but only if they can peel off enough corporate Democrats to water down Obama's plans. The Republican smear machine is full operating now and their front groups are operating as though they were in the middle of an election campaign. They're wallowing in the mud and sowing discord and confusion. MoveOn has succinctly distilled the thrust of the Obama plan down to 5 key point:

1. Choice, choice, choice. If the public health insurance option passes, Americans will be able to choose between their current insurance and a high-quality, government-run plan similar to Medicare. If you like your current care, you can keep it. If you don't-- or don't have any-- you can get the public insurance plan.

2. It will be high-quality coverage with a choice of doctors. Government-run plans have a track record of innovating to improve quality, because they're not just focused on short-term profits. And if you choose the public plan, you'll still get to choose your doctor and hospital.

3. We'll all save a bunch of money. The public health insurance option won't have to spend money on things like CEO bonuses, shareholder dividends, or excessive advertising, so it'll cost a lot less. Plus, the private plans will have to lower their rates and provide better value to compete, so people who keep their current insurance will save, too.

4. It will always be there for you and your family. A for-profit insurer can close, move out of the area, or just kick you off their insurance rolls. The public health insurance option will always be available to provide you with the health security you need.

5. And it's a key part of universal health care. No longer will sick people or folks in rural communities, or low-income Americans be forced to go without coverage. The public health insurance plan will be available and accessible to everyone. And for those struggling to make ends meet, the premiums will be subsidized by the government.

And in both Houses of Congress, the Democrats who were handsomely paid off to abandon their constituents' needs and work for the Insurance companies and HMOs are demanding a place at the table-- and veto power-- for their patrons. Blue Dogs are threatening to cross the aisle en masse and vote with the Republicans to kill the public option entirely unless they get assurances it will be a crippled and dysfunctional system. The Sunlight Foundation put together this chart of some of the Blue Dogs on the take who are throwing up the biggest problems for the people working seriously on mending the health care system.




UPDATE: The Deep Difference Between Kennedy And A Revolting Shill Like Baucus

Today's NY Times draws the clear distinction. Kennedy and all non-corrupt Democrats favor "a robust public health care plan, a government-sponsored entity that would compete with private insurers."

By contrast, Senator Max Baucus, the Montana Democrat who is chairman of the Finance Committee, has been working for months with the panel’s senior Republican, Charles E. Grassley of Iowa, in the hope of forging a bipartisan bill, which would probably play down the option of a public plan.

Mr. Grassley opposes creation of a new government insurance program and says “we cannot afford the public health plan we have already,” referring to Medicare.

The insurance companies have provided Baucus and other shills, notably Chuck Schumer, with a "fallback plan," that will feature a public option that is designed to not work.

Public opinion polls suggest that many consumers would like to have the choice of a public plan. But insurance companies and Republican lawmakers say a public plan could drive private insurers out of business and lead eventually to a single-payer system run by the government.

Supporters of a public plan have been putting pressure on Mr. Baucus. Mr. Kennedy and 28 other senators signed up last week as co-sponsors of a resolution supporting creation of a public insurance option.

“Health care reform must include insurance reform, and health insurance reform must include the option of a federally backed health insurance plan,” said Senator Sherrod Brown, Democrat of Ohio, the chief sponsor of the resolution.

The Grand Obstructionist Party Has Some Plans Too

Despite a barrage of high volume screeching and obfuscation from Hate Talk Radio, Fox and Wall Street's television shows and networks, it isn't complicated or mentally challenging to figure out what's been happening in our country over the past couple of decades. To put it simply, harebrained right-wing ideology has been unleashed on our country by a series of venal regimes dedicated not to public service but to public fleecing (with an 8-year interregnum, the Clinton years, where a compromised and gutless president was fighting for his political survival against these same venal forces instead of for his constituents). The Bush II years were a kind of apogee as a time of plunder and pillage during which the class the Regime represented was gigantically and systematically enriched and empowered at the expense of society as a whole and at the expense of every other family and individual in the country.

And now we've awoken from the nightmare and elected someone who has promised to reverse that trend, rejecting someone who had been promising-- and still promises-- to perpetuate it. The venal forces are attacking him with all their considerable might, on every front and with every weapon available to them. As Bob Herbert reminded us in Friday's NY Times, Miracles Take Time.

Barack Obama has only been president for six weeks, but there is a surprising amount of ire, anger, even outrage that he hasn’t yet solved the problems of the U.S. economy, that he hasn’t saved us from the increasingly tragic devastation wrought by the clownish ideas of right-wing conservatives and the many long years of radical Republican misrule.

This intense, impatient, often self-righteous, frequently wrongheaded and at times willfully destructive criticism has come in waves, and not just from the right. Mr. Obama is as legitimate a target for criticism as any president. But there is a weird hysterical quality to some of the recent attacks that suggests an underlying fear or barely suppressed rage. It’s a quality that seems not just unhelpful but unhealthy.

Mr. Obama is being hammered-- depending on the point of view of the critics-- for the continuing collapse of the stock market, for not moving fast enough to revive the suicidal financial industry, for trying to stem the flood tide of home foreclosures, for trying to bring health insurance coverage to some of the millions of Americans who don’t have any, for running up huge budget deficits as he tries to fend off the worst economic emergency since World War II and for not taking time out from all of the above to deal with-- get this-- earmarks.

On CNN yesterday, Obama's budget director, Peter Orszag, made much the same point about how miracles don't happen overnight. How many years of Reagan, and two Bushes did it take to bring the country to where it is now? Boehner, Cantor, Kyl, DeMint, Limbaugh, McConnell, Vitter and the rest of the hard-core obstructionists may be working 24/7 on how to bring down Obama, but the administration is just moving forward with its plans to rescue the country from all that the Republicans (and the sold out and/or cowardly reactionary Democrats who allied with them-- Max Baucus comes quickly to mind) have wrought.

"It's very clear the economy is facing some tough times. We are inheriting the most severe economic crisis since the Great Depression. Job loss began in January 2008. It's going to take some time for us to work our way out of this. But we acted quickly. Within the first month after the president took office, [we] enacted a recovery act to start back on the path to economic growth. But we acted quickly... The money is starting to flow. Let's give it some time to work."

He challenged host John King "to invite the Republicans on this show and ask for their specifics, and then compare them head-to-head... [W]e are proposing a change in course in which we are not only fiscally responsible, but we are investing in education, we are investing in energy, and we're investing in health care.” But all we get from the right are dangerously accelerating attacks on President Obama and his policies, on behalf of the special interests unwilling to give up their exalted positions-- despite leading the country to the brink of catastrophe-- are coming from their well-bribed handmaidens of our political class. The Republicans have now transformed themselves, once again, into the Grand Obstructionist Party and their shameless and treacherous leaders will stop at nothing-- no matter how much harm it does to the nation and to their own constituents-- to sabotage the president's rescue operations. They will continue to toss out every kind of attack they can think of until they find one that sticks. As citizens it's our duty to be ever vigilant and to always push back against their deprecations and lies.

To hear conservatives tell it, you'd think mobs of shiftless welfare moms were marauding through the streets of Greenwich and Palm Springs, lynching bankers and hedge-fund managers, stringing up shopkeepers, and herding lawyers into internment camps. President Obama and his budgeteers, they say, have declared war on the rich.

On Tuesday, Washington Post columnist (and former Bush speechwriter) Michael Gerson argued in an op-ed that "Obama chose a time of recession to propose a massive increase in progressivity—a 10-year, trillion-dollar haul from the rich, already being punished by the stock market collapse and the housing market decline." The plans are so radical, "there will not be enough wealthy people left to bleed." CNBC's Larry Kudlow wrote that "Obama is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds." Other segments on the financial news network warn of a tax on the rich, a war on the wealthy. My personal favorite was a piece from ABCNews.com, which had to be rewritten and reposted because the original was so poorly done. (The revised version isn't much better.) It quotes a dentist who is contemplating reducing "her income from her current $320,000 to under $250,000 by having her dental hygienist work fewer days and by treating fewer patients. [That way, she] would avoid paying higher taxes on the $70,000 that would be subject to increased taxation if Obama's proposal is signed into law."

It's hard to overstate how absurd these claims are. First, let's talk about the "massive increase in progressivity" that Gerson deplores. It consists largely (but not exclusively) of returning marginal tax rates to their levels of 2001, before Gerson and the epically incompetent Bush administration of which he was a part got their hands on the reins of power. Obama wants to let marginal rates for families with taxable income (not total income, but taxable income) of more than $250,000 revert from 33 percent to 36 percent, and to let the top rate-- currently 35 percent on family income above $357,000-- revert to 39 percent. (Here are the current tax tables.) There's also talk of capping-- not eliminating, but capping-- deductions on charitable giving and mortgage interest.
 
Obama's proposals don't mean the government would steal every penny you make above the $250,000 threshold, or that making more than $250,000 would somehow subject all of your income to higher taxes. Rather, you'd pay 36 cents to the government in income taxes on every dollar over the threshold, rather than 33 cents.

...[T]here has been a near total absence of discussion of what higher rates will mean in the real world. Say you're a CNBC anchor, or a Washington Post columnist with a seat at the Council on Foreign Relations, or a dentist, and you managed to cobble together $350,000 a year in income. You're doing quite well. If you subtract deductions for state and property taxes, mortgage interest and charitable deductions, and other deductions, the amount on which tax rates are calculated might total $300,000. What would happen if the marginal rate on the portion of your income above $250,000 were to rise from 33 percent to 36 percent? Under the old regime, you'd pay $16,500 in federal taxes on that amount. Under the new one, you'd pay $18,000. The difference is $1,500 per year, or $4.10 per day. Obviously, the numbers rise as you make more. But is $4.10 a day bleeding the rich, a war on the wealthy, a killer of innovation and enterprise? That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

Can she, or we, really be that stupid?

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:

The Obama Economic Team: Yes They Can?

Watching President-elect Obama put together his economic team has left me a little nervous. Some, like Lawrence Summers and Robert Rubin, are Clinton retreads who have always been more concerned with corporate interests than with working families. Geithner I'm not as sure about but judging by the exuberant reaction from Wall Street, he probably more one of them than one of the rest of us. I might be wrong; I don't know. That's why I'm nervous-- despite reassurances from even someone as inherently pessimistic as Nouriel Roubini. On the other hand, I do know Rahm Emanuel, another Clinton retread that Obama scooped up, and I know what a disaster that's going to be.

E.J. Dionne, in today's Washington Post writes that Obama's choices are sending a clear signal: "He wants his actions to be big and bold. He sees economic recovery as intimately linked with economic and social reform. And he is bringing in a gifted brain trust to get the job done." That sounds good but I'm not certain it's not 80% Dionne's wishful thinking and 20%... everyone else's prayers. Still, Dionne makes a good case:

Obama is also using the crisis to make the case for larger structural reforms in health care, energy and education-- "to lay the groundwork for long-term, sustained economic growth," as he put it. Obama clearly views the economic downturn not as an impediment to the broadly progressive program he outlined during the campaign but as an opportunity for a round of unprecedented social legislation.

"He feels very strongly that this is not just a short-term fix but a long-term retooling of the American economy," said one of Obama's closest advisers. "Obama has a holistic view of the economy. Health care is going to be part of it," the lieutenant told me, and so will green energy investments, education reform and a new approach to regulating financial markets.

Obama further underscored his decision to tether social and economic policy by linking his announcement of Melody Barnes as the director of the White House Domestic Policy Council to the unveiling of his economic team.

OK, I'm breathing a little easier. And a friend of mine who works on Capitol Hill made me actually feel good when Peter Orszag was named to head the Office of Management and Budget, who Ezra Klein had already assured us means Obama is serious about not putting off health care reform.

Orszag will be coming from the Congressional Budget Office, OMB's legislative cousin. There, he's shown an almost single-minded focus on health care reform. He's added dozens of health care analysts to the staff, reconstructed the health policy division's management structure, and is readying to release two major books on health policy options and CBO's health care scoring models that will be extremely central in how Congress looks at building a health care bill. Amidst all that, he's toured the country giving a slide show about the problems of the health care system, the overwhelming danger it poses to our fiscal condition, the incredible inefficiencies that beset the delivery, and the research that suggests reform could not only save money but also improve care. He's also acted as a powerful and credible counterweight to those who counsel incrementalism, or delay, on health reform. Indeed, when it became common to suggest that the bank bailout should displace ambitious agenda items like health care reform, Orszag took to his blog-- yes, he has a blog, did I mention that?-- to write:

Many ob-servers have noted that addres-sing the probl-ems in finan-cial markets and the risks to the economy may displace health care reform on the policy agenda... Although it may not seem immediately relevant given our current difficulties, it will be crucial to address the nation’s looming fiscal gap-- which is driven primarily by rising health care costs — as the economy eventually recovers from this current downturn. Indeed, our ability to address our current economic difficulties (through both financial market interventions and potential additional fiscal stimulus) would be severely impaired if investors were not so willing to invest substantial sums in Treasury securities without charging much higher interest rates. That willingness reflects the (currently accurate) view among investors that Treasury securities are extremely safe investments.

If we fail to put the nation on a sounder fiscal course over the next few decades, though, we will ultimately reach a point where investors would lose confidence and no longer be as willing to purchase Treasury debt at anything but exorbitant interest rates. If that were to occur, we would lack the kind of maneuvering room that we currently enjoy to address problems in the financial markets and the economy. So if you think the current economic crisis is serious, and it is, imagine what it would be like if we didn’t have the ability to undertake aggressive and innovative policy interventions because creditors were effectively unwilling to lend substantial additional sums to the Federal government…

That left me chanting "Yes, we can, Yes, we can" and thinking that Emanuel might not be as terrible a choice-- or at least one the nation will survive-- as I thought. And that's when my old pal-- and former Emanuel defender-- chimed in that he used to make a point of watching every hearing Orszag testified at. "He was like a human calculator in a way, kind of a ruthless competence, but the calculations were always around how things actually affected working people and those who needed help, had a way of shooting down Republican jibberish that left them slinking off."

OK, OK... I'm back off the limb and remembering how smart Obama is and that I had resolved to trust him. Whew. Cause we're not just talkin' about being a little-- or even a lot-- better than Bush or McCain now.