Tuesday, April 26, 2011

When Voters' Reality Trumps GOP Ideology

In his speech on the budget and priorities, President Obama made a very clear distinction between Democrats and Republicans, particularly when it comes to Medicare. As it turns out, the public agrees, with large majorities being against cuts in Medicare or Medicaid:
Americans clearly don't want the government to cut Medicare, the government health program for the elderly, or Medicaid, the program for the poor. Republicans in the House of Representatives voted last week to drastically restructure and reduce those programs, while Obama calls for trimming their costs but leaving them essentially intact.

Voters oppose cuts to those programs by 80-18 percent. Even among conservatives, only 29 percent supported cuts, and 68 percent opposed them.
Which a number of Republican representatives found out the hard way, as they headed home and met with their constituents. Their "ideology based" and party line vote for the Ryan budget proposal went over poorly, and they suddenly faced tough questions.

But Dold couldn't even get to the end of the presentation before audience members began peppering him with questions about the Ryan budget, named after House Budget Committee Chairman Paul Ryan, a Republican from Wisconsin.
Even Ryan himself had problems when his own constituents started jeering him on it.
CONSTITUENT: The middle class is disappearing right now. During this time of prosperity, the top 1 percent was taking about 10 percent of the total annual income, but yet today we are fighting to not let the tax breaks for the wealthy expire? And we’re fighting to not raise the Social Security cap from $87,000? I think we’re wrong.

RYAN: A couple things. I don’t disagree with the premise of what you’re saying. The question is what’s the best way to do this. Is it to redistribute… (Crosstalk)


CONSTITUENT: You have to lower spending. But it’s a matter of there’s nothing wrong with taxing the top because it does not trickle down.

RYAN: We do tax the top. (Audience boos). Let’s remember, most of our jobs come from successful small businesses. Two-thirds of our jobs do. You got to remember, businesses pay taxes individually. So when you raise their tax rates to 44.8 percent, which is what the president is proposing, I would just fundamentally disagree. That is going to hurt job creation.


It's not popular at all, and with seniors being one of the "swing votes" for many of these areas, it's something that is coming to the fore even in "red" states:

The Arkansas News talked to voters this weekend in the districts of three House GOPers who voted for the proposal — Rick Crawford, Tim Griffin and Steve Womack — and found that this is basically what they’re thinking:


“I think that the sickest people would not get the health care that they need,” said Pam Barton of Jonesboro, a pawn shop manager. “I think (Medicare) definitely needs to be tweaked, I think it needs lots of overhaul, but I don’t think the voucher system would work.
The Republican plan, which they are attempting to spin as "not being a voucher" or "not ending Medicare, really" and trying other ways of avoiding the subject, is not going over well with the public. The DCCC has a nice beginning list of the members already getting flack, and that number is sure to grow in the near future.

In a recent town hall, the Republican who beat Alan Grayson, Dan Webster, faced an angry crowd reminiscent of the Tea Party town halls of last year, except that a Republican was on the receiving end:
Others in the crowd began yelling at Webster's critics to quiet down, at one point with the chant "Let him talk!" But the meeting frequently devolved into multiple arguments — some of them heated — between members of audience.

When one man who said he was a veteran yelled that he wanted to know why Webster was cutting Medicare and veterans' benefits, his answer came from the audience instead.

"We can't afford it, you moron!" a red-faced man screamed.

We're seeing the realization by the public of just what the Republicans are really after. The Tea Party is fading as "anger" fades, particularly as people realize that the world has not ended with the passage of the Affordable Care Act, and as they realize the danger to programs which are important to them. The new Representatives who rode the Tea Party ideology to victory are now on the receiving end. They may have thought that the voters gave them a mandate, but now they're finding out something quite different. One of the first tests is the special election to replace Chris Lee in NY-26.
Kathy Hochul is the Democrat, and she doesn't have the advantages that Bill Owens had when he narrowly won the 2009 free-for-all in NY-23 -- her opponent, Jane Corwin, has locked up the Conservative Party's nomination, denying it to a Tea Party candidate.

So Hochul tries to make the race about the Ryan budget.

This has been a "safe Republican" district for a while, but it's an aging district. This message is resonating, and it may turn what was an "easy win" for the Republicans into a loss. Next year, they may all be looking for a new job, and deservedly so.

Saturday, April 23, 2011

Ohio: Governor Kasich Follows Tea Party Pattern Of Cutting Education

In the states that elected "Tea Party favorites" to the governor's mansion in 2010, one of the things that voters are learning to their dismay is that the candidates were not serious about "protecting" education. Although they made claims of being against education cuts, one of their first actions is often just that - cutting education.

Among those candidates was John Kasich of Ohio. He had an absolute conniption fit when he was "accused" of wanting to force school consolidations:
In fact, in order to try to bury any notion that Kasich was tied to school consolidation policies, Kasich continued to throw a hissy even after the election. Remember how Kasich demanded that the teachers’ unions take out a full-page apology ad for the “vicious smears" they told about him during the campaign? Well, that was mostly to do with the allegation that Kasich supported eliminating school districts through consolidation.
There was just a slight problem with the allegation: It was true.
Four individuals produced by the Strickland campaign said that in September, Kasich addressed them at a meeting of the Ohio Association of School Business Officials and said:
"Congressman Kasich said he favored school consolidation as a way to reduce state spending," the statement reads. "Congressman Kasich’s claim that he does not support consolidation, just shared services, directly contradicts what we heard him say during the September meeting."
And even more so, his newest budget ... calls for consolidation of school districts and that it would be "acceptable" to have a 50:1 student:teacher ratio in classrooms.
Sommers suggested that in a "blended learning environment" class sizes could go to a 50-to-1 ratio. "We have schools, both in the urban centers and in other settings, that have found how to get high-performance results, treat staff very well and do it for less than what we currently do."
That's because of the total cuts in the school budgets. While the state financing contains an "increase" in state funding, the amount lost from federal funding through the stimulus act amounts to a major cut.
Kasich’s own budget shows that the TOTAL funding for education in the State budget is therefore decreasing education funding 11.5% from FY2011, followed by another 4.9% decrease in FY 2013 from FY2012. That’s over a 16% decrease in funding over two years. That’s $1.28 BILLION in less funding for K-12 education.
It's not just the K-12 funding that Gov. Kasich is looking at. He's also aiming at the colleges and universities. He's asked them to come up with a "3 year degree program" to cut costs. Not, mind you find ways to have students do the 120 hours in 3 years, which is already possible, but to cut the curriculum.
Kasich's proposal is one of a number of measures he is pushing to cut the cost of higher education, including a limit on tuition increases. The Republican governor also says faculty members should spend more of their time teaching. Matt Mayer of the Buckeye Institute, a free-market think tank, says a three-year degree would help make higher education more efficient.
Ah, business talk. The problem? That little thing called accreditation.
But the education council would be opposed to reducing the number of credit-hours so someone could graduate in three years, said Terry Hartle, senior vice president for government and public affairs at the trade association for college and university presidents.
"The notion of saying 'We will give you a four-year degree with three years of work' would inevitably devalue the degree," he said. "We want students to have a degree that represents a significant level of learning and accomplishment. Unilaterally cutting the amount of workload required is unachievable and undesirable."
Sadly, none of this is surprising. Even though it's well-known that education is important to the country, that our competitiveness in a global economy depends on a highly-educated population, and it's something that businesses need, the Tea Party Republicans have been cutting education in every state where they've gained power.


We've already seen their assaults on unions, women's rights, and the environment. Now they're showing that they really don't care about education as well.

Did You Know There Are Millions of Jobs Hiding in Your Uterus??

I'm guessing you were unaware that your uterus was the key to fixing the unemployment crisis and putting 16 million Americans back to work. Thankfully the Republicans were aware of this miracle - and they've been doing everything in their power to focus like a laser on controlling, regulating, and getting the government inside your uterus in order to foster job creation.

The Guttmacher Institute is reporting that "legislators have introduced 916 measures related to reproductive health and rights in the 49 legislatures that have convened their regular sessions."
As a whole, the proposals introduced this year are more hostile to abortion rights than in the past: 56% of the bills introduced so far this year seek to restrict abortion access, compared with 38% last year. Three topics—insurance coverage of abortion, restriction of abortion after a specific point in gestation and ultrasound requirements—are topping the agenda in several states. At the same time, legislators are proposing little in the way of proactive initiatives aimed at expanding access to reproductive health –related services; this stands in sharp contrast to recent years when a range of initiatives to promote comprehensive sex education, permit expedited STI treatment for patients’ partners and ensure insurance coverage of contraception were adopted. For the moment, at least, supporters of reproductive health and rights are almost uniformly playing defense at the state level.
Eliminating insurance coverage of abortion, restriction on abortion after a certain point in the pregnancy, forced unnecessary ultrasounds, and absolutely no effort to help prevent unwanted pregnancy - boy, that's some awesome job creation!! Can you just see all of the money this is putting into the economy? The GDP is growing by several percentage points with every hundred laws introduced!

Ladies, our uteri are powerful. Not only do we have the ability to bring life into the world when we choose, but we also have the ability to create millions of jobs. We should thank Republicans for pointing out the power - which they are SO excited to take control of. It's amazing how much Republicans love government intrusion when it involves them crawling back up into a woman's uterus. This is one creepy obsession they've got.

Here in Florida, the ACLU has a campaign to fight against government intrusion of your uterus - it's called Incorporate My Uterus.

Coast to coast, conservatives get elected by promising smaller government and less business regulation but as soon as they get elected, they rush to put big government regulations on the personal freedom and privacy of your body.
It’s a clear double standard. To them, there are too many regulations on pharmacies and fruit stands but not nearly enough government rules about your uterus.
Since they seem to agree that government has no business in business, it’s time to make your uterus into a business.
Maybe then your uterus can get the same treatment corporations get – fewer rules, fewer government searches and more personal freedoms.
Next time you hear a Republican talking about "personal freedom" and "liberty" and demanding that the government stay out of their business, remind them that it's their party that wants to control the uteri of 50% of the population.

And ladies, please do your part to fix this economy - your uteri is needed in the fight to create jobs - exactly what kind of job a uterus creates, I'm not sure, but we need 16 million of them, so as FL Governor Rick Scott likes to say, "let's get to work!"

Friday, April 22, 2011

Republicans Fail History - Again

Example 4,897,332 that Republicans have no clue what the Constitution says, or what the founders of our country thought.
TPM brings us the story of Minnesota's State House Speaker, Kurt Zellers (R), who wants to pass a voter ID law in his state. This week he actually said, "I think it's a privilege, it's not a right."
"When you go to even a Burger King or a McDonald's and use your debit card, they'll ask you to see your ID," Zellers said during a late-night interview, the Star Tribune reports. "Should we have to do that when we vote, something that is one of the most sacred -- I think it's a privilege, it's not a right. Everybody doesn't get it, because if you go to jail or if you commit some heinous crime your rights are taken away. This is a privilege."
Zellers doesn't seem to understand what a right is - or what he's saying - since he says in the middle of his statement that voting is a right that gets taken away when you "commit some heinous crime." If only Zellers had ever read the Constitution! Then he might actually understand what he's talking about. There are some really helpful government websites that can help teach Zellers what he doesn't know - like this one.

AMENDMENT XV

Passed by Congress February 26, 1869. Ratified February 3, 1870.

Section 1.
The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude--

Oh look, here's another one!

AMENDMENT XIX

Passed by Congress June 4, 1919. Ratified August 18, 1920

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.

Congress shall have power to enforce this article by appropriate legislation.


Did you think we were done? Not yet!

AMENDMENT XXIV

Passed by Congress August 27, 1962. Ratified January 23, 1964.

Section 1.
The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any State by reason of failure to pay poll tax or other tax.
And another...

AMENDMENT XXVI

Passed by Congress March 23, 1971. Ratified July 1, 1971.

Note: Amendment 14, section 2, of the Constitution was modified by section 1 of the 26th amendment.

Section 1.
The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age.
Republicans claim to love the Constitution - when they're not trying to completely change it, repeal a dozen amendments in it, or ignore it. I'm sure Zellers isn't the only Republican who would prefer to rewind the clock back to 1869 - a time when only white men had the right to vote. In fact, the President of the Tea Party Nation thinks we should restrict voting to property owners.

It's not shocking to me that Republicans don't know our history, don't know the Constitution, and don't understand what the founders envisioned. What is shocking to me is that people actually elect these ignorant clowns to represent them.

Tuesday, April 19, 2011

Boehner: "We're Broke," But Not So Broke We Can't Hire Expensive Lawyer to Defend DOMA

U.S. Speaker of the House John Boehner has been emphatic over the past few months in insisting, "We're broke." He's said it everywhere - on Fox News, on Meet the Press, in speeches. He's not alone, of course. Lots of GOP politicians have been giving "We're broke" a workout this year, most notably rightwing extremists such as governors Scott Walker and Chris Christie. And of course, none of these budget-obsessed GOP folks is ever willing to consider that entities that are "broke" probably need to look into raising revenues, because "tax cuts" are a perennial fixture on the list of Republican catchphrases. No, the answer to our "broke" problem, they say, always and forever will be to "cut spending."

So you may understandably be flabbergasted by John "We're Broke" Boehner's decision to have the House of Representatives hire an attorney to defend the Defense of Marriage Act (DOMA) - which defined marriage as being between one man and one woman - after the Department of Justice announced that it will no longer defend the law in court. And he didn't hire just any ol' lawyer - he got George W. Bush's former solicitor general Paul Clement, and the price tag is going to be huge.
Although Clement’s firm is charging less than the $900 an hour they typically bill for their top attorneys’ work, Clement will still leave the American people with a massive legal bill:
2. The General Counsel agrees to pay Contractor for all contractual services a sum not to exceed $500,000.00. … Furthermore, it is understood and agreed that should the $500,000 cap be reached before the Litigation is complete, and if the cap has not then been raised by written agreement…contractor shall not be obligated to continue providing legal services under this Agreement.
3. The General Counsel agress to pay Contractor at a blended rate of $520.00 per hour for all reasonable attorney time expended in connection with the Litigation, and at 75 percent of the Contractor’s usual and customary rates for all reasonable non-attorney time…and to reimburse Contractor for all reasonable expenses incurred by the Contractor in connection with the Litigation[.]
So the good news is Clement's firm is giving the American people a discount. The bad news is that it was completely unnecessary to hire any outside attorney for this job, let alone one this expensive. As ThinkProgress points out:
The U.S. House’s Office of General Counsel already employs a team of exceptionally competent lawyers who are all perfectly capable of drafting and filing a legal brief, and none of these lawyers earn more than a fraction of Clement’s multi-million dollar salary.
Now, remember, Boehner has repeatedly claimed that the U.S. is "broke." As ThinkProgress noted yesterday, this is the same guy who claimed he was willing to shut down the government unless President Obama agreed to massive spending cuts from the 2011 budget. Yet we are apparently solvent enough to justify spending possibly $520 an hour on an unnecessary private sector lawyer to defend a law that the DOJ has stopped defending because it believes it will be found unconstitutional.

While there is clearly an ideological component to Justice's decision not to defend DOMA anymore, there is also sound fiscal reasoning behind it. One federal judge has already struck down the law, and given that DOMA's sole purpose is to deny a right to one segment of the population that the rest of the population enjoys, it is plausible to assume it will eventually be struck down by the Supreme Court. Therefore, allocating scarce human and financial resources to defending the law is wasteful. The DOJ is acting in a fiscally responsible manner on this issue.

Boehner, on the other hand, is acting on ideology alone as he countermands the DOJ and spends money he has repeatedly insisted we don't have and can't afford in pursuit of a conservative social agenda item. And make no mistake - denying LGBT Americans equal rights to marriage is solely a conservative social agenda item, as a CNN/Opinion Research poll released today makes clear. in that poll, Americans polled favored recognizing same-sex marriages with the same rights as traditional marriages 51-47%. But look at the breakdown of that finding ideologically (click images to enlarge):

As you can see, it's not just Democrats and liberals who favor recognition of same-sex marriages - independents and moderates favor it as well. Only Republicans and conservatives oppose it. And tea party supporters, who frequently claim to be solely motivated by fiscal conservatism (a claim perpetuated by the media) are nevertheless overwhelmingly opposed to same-sex marriage, despite the lack of any fiscal advantage to that position.

So given the fact that there is no fiscal gain in denying gays and lesbians the right to marry, the fact that only the conservative "base" opposes it, and the additional fact that it's going to cost the American taxpayers big money to fight it, there can be only one reason that Boehner is choosing this course of action.

He's pandering to the bigoted conservative base.

Monday, April 18, 2011

Tea Party 'Honesty' & 'Civility' Look an Awful Lot Like Tea Party DIShonesty & INcivility

"Let's be honest, friends," Andrew Breitbart said in a loud voice, in a tone that didn't sound very friendly. "Let's be honest [about] what happened here."

Breitbart was talking about the February pro-union protests that took place at the state capitol in Madison, Wisconsin in February and March, and he was addressing two groups of people. The first was a rather small crowd of tea party enthusiasts who had braved the mid-April snow and cold to attend a tax-day rally at which Sarah Palin was the headliner. Breitbart was there to introduce Palin, but he was visibly angered by the presence of the second group in attendance - a large crowd of pro-union counter-protesters that completely surrounded (and dwarfed) the rally crowd.

As my colleague Norbrook reported here yesterday, Capitol police officially estimated the crowd at the capitol Saturday at about 6,500. However, that figure refers to all the people who were at the capitol that day for the tea party event and for an organized labor rally that took place on the opposite side of the capitol. One poster at Democratic Underground who was at the capitol that day provided a photograph and description of the crowd at the tea party rally and outlined in red the part of the crowd that was made up of actual tea partiers.

I've outlined the appx areas that were mostly occupied by the teabaggers. It was 99% OUR SIDE everywhere else. There were a few sprinkled among our crowd, as close as they could get to the stage. The bagger organizers put up a tall partition on the left side (in this pic) of the sidewalk leading up to the Capitol. This was to block off the counter protestors. For awhile we hung out there and put our signs up above the partition. Then we moved over to the other side. ALL DAY more protestors were marching around the square, and many more were hanging out on the opposite side of the square for the organized labor rally. The unions encouraged their members not to go to the Palin side, but many still did.

The police estimate of the crowd was 6,500. Despite what is being said, I don't believe the baggers made up more than about 10%.

The counter-protesters were chanting and shouting at the rally speakers, and Breitbart couldn't quite keep his cool. (I have transcribed his entire remarks, available at this link.) When the chanting began as he took the podium, making it difficult for him to make himself heard, he took a snide pot-shot.

Good to see ya, guys! Good to see you. Do you know what you just, you’re seeing on the periphery of here and what you’re hearing? The death of community organizing!

Most of Breitbart's short speech was delivered in the same scathing, disrespectful tone. And what he wanted to "be honest" about was the "fact" that the pro-union protests of February were the work of President Obama joining forces with AFL-CIO president Richard Trumka rather than a grassroots uprising of the people.
Let's be honest what happened here. Richard Trumka, the AFL-CIO's been to the White House about a thousand times and cynically have tried to divide Americans against each other and used Wisconsin to try and pit Americans against each other, and the silent majority won.
"Cynical" is apparently on the rightwing buzzword list this month; Breitbart used it twice in his three minutes at the podium and Palin mentioned cynicism during her fifteen-minute diatribe, which primarily alternated between inaccurate characterizations of Barack Obama's presidency and baseless attacks on his character. But she also picked up Breitbart's mischaracterization of the pro-union demonstrations at Madison and ran with it wholeheartedly. (Palin's entire speech is transcribed here.)
Well, I am in Madison today because this is where real courage and real integrity can be
found. Courage is your governor and your legislators standing strong in the face of death threats and thug tactics. Courage is you all standing strong with them! You saw the forces aligned against fiscal reform. You saw the obstruction and the destruction. You saw these violent rent-a-mobs trash your capitol and vandalize businesses.
Now, bear in mind that there is ZERO evidence that there were "violent rent-a-mobs" involved in any of the Madison pro-union protests. There were, in fact ZERO police reports of violence, period. As of March 9, there had only been 16 arrests made during the protests, and they were all for disorderly conduct - and according to the Capitol police chief, "seven or eight of those were people who insisted on being arrested." Despite local GOP efforts to circulate rumors of death threats against Republican legislators, the chief of the Capitol police flatly denied that he'd been made aware of any such threats.

Perhaps it was the knowledge that the enormous crowds of "union thugs" who turned out in Madison in the past two months were, in fact, orderly and non-destructive that made Breitbart so viciously angry at the counter-protesters Saturday. Or maybe he was just pissed that they both dwarfed the tea partiers and drowned out the speakers. Either way, the fact that he addressed the people "on the periphery" as often as he addressed his own rally-goers showed just how far under his skin the pro-union people had gotten. And there was no mistaking the potent venom in his voice when he said:
The Tea Party has been the most peaceful, law-abiding, clean-up-after-themselves group in the history of American protest. And to be lectured by you in the periphery who have lied in getting the doctor’s notes – you have no right to lecture us on civility. You have no right to lecture us on
language. Your “Koch-suckers” business… Go to hell! No, serious. Go to hell! Go to hell!
Yes, clearly, Andrew Breitbart doesn't need to be lectured on civility.

More on all this later.

Sunday, April 17, 2011

Signs That The Tea Party is Losing Strength

While various politicians in the Republican Party still spend a lot of time pandering to the Tea Party elements in the party, and the media still treats them as a "major force to be reckoned with," more recent events are showing a decline in the Tea Party's ability to mobilize people into their media-friendly events.

One of the best examples of this was Sarah Palin's recent appearance in Madison Wisconsin headlining a Tea Party rally to support Governor Scott Walker.
Sarah Palin defended Wisconsin's governor at a tea party tax day rally Saturday, telling hundreds of supporters that his polarizing union rights law is designed to save public jobs.
Yes, I bolded the important part. Hundreds of supporters. Not tens of thousands. The total crowd was estimated at 6500, most of whom seemed to be counter-protestors.
The pro-Palin crowd filled only part of the King Street entrance, from the steps to about 50 feet from the Hans Christian Heg statue. And although there was some spillover of tea partiers to either side, the rally was dwarfed by the counter-protesters who filled the back end of the entrance and spilled into the street.
Was this rally publicized? Did the right wing groups fail to push it? No, they put forth quite an effort.
The Koch Brothers threw their front group Americans For Prosperity into the effort to hold an anti-union rally in Madison headlined by Sarah Palin. All the resources were deployed, Palin fans were begged to attend, Americans For Prosperity had no less than 13 buses lined up, and despite all of this, the crowd never came.
Despite their best efforts, with one of the "biggest draws" they had, they couldn't even get 10% of the crowd that turned out to protest the Wisconsin anti-union law, and that's including the counter-protestors in the turnout. This is just the latest in a series of Tea Party events that have drawn far less than was planned. Instead of the projected large numbers, the "mass turnout" which draws media coverage, they're ending up being a low turnout, not very interesting events.

While the Tea Parties still have sway in Republican circles, and are a factor in primaries, as a mass far-right movement with have staying power, it's not. It's beginning to fade, as people start to see the actual impact of the policies the Teapublicans have promoted, and as people start to actually think about what they mean. While various Republican presidential candidates will pander to them, the problem they're going to face is that they're betting on a movement which is losing strength. In embracing the radical right, the Republicans may have gotten a short term gain, but long-term disaster. It couldn't happen to a better bunch.

Wednesday, April 13, 2011

President Obama's Speech on Fiscal Policy - Full Text and Video

President Obama gave a wonderful speech today at George Washington University entitled "The Country We Believe In: Improving America's Fiscal Future." In it, he laid out his vision for reducing the budget deficit while holding fast to those elements of American policy that our society holds dear. He also managed to shred Paul Ryan's budget "plan" while never once uttering the man's name.

Here's the full video and a transcript of the speech as delivered.



THE PRESIDENT:  Thank you very much.  (Applause.)  Please have a seat.  Please have a seat, everyone.

It is wonderful to be back at GW.  I want you to know that one of the reasons that I worked so hard with Democrats and Republicans to keep the government open was so that I could show up here today.  I wanted to make sure that all of you had one more excuse to skip class.  (Laughter.)  You’re welcome.  (Laughter.)  

I want to give a special thanks to Steven Knapp, the president of GW.  I just saw him -- where is he?  There he is right there.  (Applause.) 

We've got a lot of distinguished guests here -- a couple of people I want to acknowledge.  First of all, my outstanding Vice President, Joe Biden, is here.  (Applause.)  Our Secretary of the Treasury, Tim Geithner, is in the house.  (Applause.)  Jack Lew, the Director of the Office of Mangement and Budget.  (Applause.) Gene Sperling, Chair of the National Economic Council, is here.  (Applause.)  Members of our bipartisan Fiscal Commission are here, including the two outstanding chairs -- Erskine Bowles and Alan Simpson -- are here.  (Applause.) 

And we have a number of members of Congress here today.  I'm grateful for all of you taking the time to attend.

What we’ve been debating here in Washington over the last few weeks will affect the lives of the students here and families all across America in potentially profound ways.  This debate over budgets and deficits is about more than just numbers on a page; it’s about more than just cutting and spending.  It’s about the kind of future that we want.  It’s about the kind of country that we believe in.  And that’s what I want to spend some time talking about today.

From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity.  More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.
But there’s always been another thread running through our history -– a belief that we’re all connected, and that there are some things we can only do together, as a nation.  We believe, in the words of our first Republican President, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.

And so we’ve built a strong military to keep us secure, and public schools and universities to educate our citizens.  We’ve laid down railroads and highways to facilitate travel and commerce.  We’ve supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire new industries.  Each of us has benefitted from these investments, and we’re a more prosperous country as a result.
Part of this American belief that we’re all connected also expresses itself in a conviction that each one of us deserves some basic measure of security and dignity.  We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff may strike any one of us.  “There but for the grace of God go I,” we say to ourselves.  And so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, those with disabilities.  We’re a better country because of these commitments.  I’ll go further.  We would not be a great country without those commitments.

Now, for much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens.  As a country that values fairness, wealthier individuals have traditionally borne a greater share of this burden than the middle class or those less fortunate.  Everybody pays, but the wealthier have borne a little more.  This is not because we begrudge those who’ve done well -– we rightly celebrate their success.  Instead, it’s a basic reflection of our belief that those who’ve benefited most from our way of life can afford to give back a little bit more.  Moreover, this belief hasn’t hindered the success of those at the top of the income scale.  They continue to do better and better with each passing year.

Now, at certain times -– particularly during war or recession -– our nation has had to borrow money to pay for some of our priorities.  And as most families understand, a little credit card debt isn’t going to hurt if it’s temporary.

But as far back as the 1980s, America started amassing debt at more alarming levels, and our leaders began to realize that a larger challenge was on the horizon.  They knew that eventually, the Baby Boom generation would retire, which meant a much bigger portion of our citizens would be relying on programs like Medicare, Social Security, and possibly Medicaid.  Like parents with young children who know they have to start saving for the college years, America had to start borrowing less and saving more to prepare for the retirement of an entire generation.

To meet this challenge, our leaders came together three times during the 1990s to reduce our nation’s deficit -- three times.  They forged historic agreements that required tough decisions made by the first President Bush, then made by President Clinton, by Democratic Congresses and by a Republican Congress.  All three agreements asked for shared responsibility and shared sacrifice.  But they largely protected the middle class; they largely protected our commitment to seniors; they protected our key investments in our future.

As a result of these bipartisan efforts, America’s finances were in great shape by the year 2000.  We went from deficit to surplus.  America was actually on track to becoming completely debt free, and we were prepared for the retirement of the Baby Boomers. 

But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed.  We increased spending dramatically for two wars and an expensive prescription drug program -– but we didn’t pay for any of this new spending.  Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts -– tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

To give you an idea of how much damage this caused to our nation’s checkbook, consider this:  In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

But that’s not what happened.  And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place.  When I took office, our projected deficit, annually, was more than $1 trillion.  On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more.

In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pocket.  It was absolutely the right thing to do, but these steps were expensive, and added to our deficits in the short term.

So that’s how our fiscal challenge was created.  That’s how we got here.  And now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s.  We have to live within our means.  We have to reduce our deficit, and we have to get back on a path that will allow us to pay down our debt.  And we have to do it in a way that protects the recovery, protects the investments we need to grow, create jobs, and helps us win the future.

Now, before I get into how we can achieve this goal, some of you, particularly the younger people here -- you don't qualify, Joe.  (Laughter.)  Some of you might be wondering, “Why is this so important?  Why does this matter to me?”

Well, here’s why.  Even after our economy recovers, our government will still be on track to spend more money than it takes in throughout this decade and beyond.  That means we’ll have to keep borrowing more from countries like China.  That means more of your tax dollars each year will go towards paying off the interest on all the loans that we keep taking out.  By the end of this decade, the interest that we owe on our debt could rise to nearly $1 trillion.  Think about that.  That's the interest -- just the interest payments.


Then, as the Baby Boomers start to retire in greater numbers and health care costs continue to rise, the situation will get even worse.  By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs -- Medicare and Medicaid -- Social Security, and the interest we owe on our debt.  That’s it.  Every other national priority -– education, transportation, even our national security -– will have to be paid for with borrowed money.

Now, ultimately, all this rising debt will cost us jobs and damage our economy.  It will prevent us from making the investments we need to win the future.  We won’t be able to afford good schools, new research, or the repair of roads -– all the things that create new jobs and businesses here in America.  Businesses will be less likely to invest and open shop in a country that seems unwilling or unable to balance its books.  And if our creditors start worrying that we may be unable to pay back our debts, that could drive up interest rates for everybody who borrows money -– making it harder for businesses to expand and hire, or families to take out a mortgage.

Here’s the good news:  That doesn’t have to be our future.  That doesn’t have to be the country that we leave our children.  We can solve this problem.  We came together as Democrats and Republicans to meet this challenge before; we can do it again.

But that starts by being honest about what’s causing our deficit.  You see, most Americans tend to dislike government spending in the abstract, but like the stuff that it buys.  Most of us, regardless of party affiliation, believe that we should have a strong military and a strong defense.  Most Americans believe we should invest in education and medical research.  Most Americans think we should protect commitments like Social Security and Medicare.  And without even looking at a poll, my finely honed political instincts tell me that almost nobody believes they should be paying higher taxes.  (Laughter.)

So because all this spending is popular with both Republicans and Democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse.  You’ll hear that phrase a lot.  “We just need to eliminate waste and abuse.”  The implication is that tackling the deficit issue won’t require tough choices.  Or politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1 percent of our entire federal budget.

So here’s the truth.  Around two-thirds of our budget -- two-thirds -- is spent on Medicare, Medicaid, Social Security, and national security.  Two-thirds.  Programs like unemployment
insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20 percent.  What’s left, after interest on the debt, is just 12 percent for everything else.  That’s 12 percent for all of our national priorities -- education, clean energy, medical research, transportation, our national parks, food safety, keeping our air and water clean -- you name it -- all of that accounts for 12 percent of our budget.

Now, up till now, the debate here in Washington, the cuts proposed by a lot of folks in Washington, have focused exclusively on that 12 percent.  But cuts to that 12 percent alone won’t solve the problem.  So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget.
A serious plan doesn’t require us to balance our budget overnight –- in fact, economists think that with the economy just starting to grow again, we need a phased-in approach –- but it does require tough decisions and support from our leaders in both parties now.  Above all, it will require us to choose a vision of the America we want to see five years, 10 years, 20 years down the road.

Now, to their credit, one vision has been presented and championed by Republicans in the House of Representatives and embraced by several of their party’s presidential candidates.  It’s a plan that aims to reduce our deficit by $4 trillion over the next 10 years, and one that addresses the challenge of Medicare and Medicaid in the years after that.

These are both worthy goals.  They’re worthy goals for us to achieve.  But the way this plan achieves those goals would lead to a fundamentally different America than the one we’ve known certainly in my lifetime.  In fact, I think it would be fundamentally different than what we’ve known throughout our history.

A 70 percent cut in clean energy.  A 25 percent cut in education.  A 30 percent cut in transportation.  Cuts in college Pell Grants that will grow to more than $1,000 per year.  That’s the proposal.  These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget.  These aren’t the kinds of cuts that the Fiscal Commission proposed.  These are the kinds of cuts that tell us we can’t afford the America that I believe in and I think you believe in.

I believe it paints a vision of our future that is deeply pessimistic.  It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them.  If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them.


Go to China and you’ll see businesses opening research labs and solar facilities.  South Korean children are outpacing our kids in math and science.  They’re scrambling to figure out how they put more money into education.  Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but on biofuels.  And yet, we are presented with a vision that says the American people, the United States of America -– the greatest nation on Earth -– can’t afford any of this.

It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors.  It says that 10 years from now, if you’re a 65-year-old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today.  It says instead of guaranteed health care, you will get a voucher.  And if that voucher isn’t worth enough to buy the insurance that’s available in the open marketplace, well, tough luck -– you’re on your own.  Put simply, it ends Medicare as we know it.

It’s a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit.  Who are these 50 million Americans?  Many are somebody’s grandparents -- may be one of yours -- who wouldn’t be able to afford nursing home care without Medicaid.  Many are poor children.  Some are middle-class families who have children with autism or Down’s syndrome.  Some of these kids with disabilities are -- the disabilities are so severe that they require 24-hour care.  These are the Americans we’d be telling to fend for themselves.

And worst of all, this is a vision that says even though Americans can’t afford to invest in education at current levels, or clean energy, even though we can’t afford to maintain our commitment on Medicare and Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.  Think about that.

In the last decade, the average income of the bottom 90 percent of all working Americans actually declined.  Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each.  That’s who needs to pay less taxes?

They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs.  That’s not right.  And it’s not going to happen as long as I’m President.  (Applause.)

This vision is less about reducing the deficit than it is about changing the basic social compact in America.  Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan.  There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.  And I don't think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.  That's not a vision of the America I know.

The America I know is generous and compassionate.  It’s a land of opportunity and optimism.  Yes, we take responsibility for ourselves, but we also take responsibility for each other; for the country we want and the future that we share.  We’re a nation that built a railroad across a continent and brought light to communities shrouded in darkness.  We sent a generation to college on the GI Bill and we saved millions of seniors from poverty with Social Security and Medicare.  We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.  That’s who we are.  This is the America that I know.  We don’t have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country.

To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices.  But we do not have to sacrifice the America we believe in.  And as long as I’m President, we won’t.

So today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over 12 years.  It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission that I appointed last year, and it builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget.  It’s an approach that puts every kind of spending on the table -- but one that protects the middle class, our promise to seniors, and our investments in the future.

The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week.  That step alone will save us about $750 billion over 12 years.  We will make the tough cuts necessary to achieve these savings, including in programs that I care deeply about, but I will not sacrifice the core investments that we need to grow and create jobs.  We will invest in medical research.  We will invest in clean energy technology.  We will invest in new roads and airports and broadband access.  We will invest in education.  We will invest in job training.  We will do what we need to do to compete, and we will win the future.

The second step in our approach is to find additional savings in our defense budget.  Now, as Commander-in-Chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America’s interests around the world.  But as the Chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America’s national security is America’s debt.  So just as we must find more savings in domestic programs, we must do the same in defense.  And we can do that while still keeping ourselves safe.

Over the last two years, Secretary Bob Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending.  I believe we can do that again.  We need to not only eliminate waste and improve efficiency and effectiveness, but we’re going to have to conduct a fundamental review of America’s missions, capabilities, and our role in a changing world.  I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it’s complete.

The third step in our approach is to further reduce health care spending in our budget.  Now, here, the difference with the House Republican plan could not be clearer.  Their plan essentially lowers the government’s health care bills by asking seniors and poor families to pay them instead.  Our approach lowers the government’s health care bills by reducing the cost of health care itself.

Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion.  My approach would build on these reforms.  We will reduce wasteful subsidies and erroneous payments.  We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.  We will work with governors of both parties to demand more efficiency and accountability from Medicaid.
We will change the way we pay for health care -– not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results.  And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.

Now, we believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional $1 trillion in the decade after that.  But if we’re wrong, and Medicare costs rise faster than we expect, then this approach will give the independent commission the authority to make additional savings by further improving Medicare.

But let me be absolutely clear:  I will preserve these health care programs as a promise we make to each other in this society.  I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs.  I will not tell families with children who have disabilities that they have to fend for themselves.  We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.

That includes, by the way, our commitment to Social Security.  While Social Security is not the cause of our deficit, it faces real long-term challenges in a country that’s growing older.  As I said in the State of the Union, both parties should work together now to strengthen Social Security for future generations.  But we have to do it without putting at risk current retirees, or the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.  And it can be done.

The fourth step in our approach is to reduce spending in the tax code, so-called tax expenditures.  In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans.  But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society.  We can’t afford it.  And I refuse to renew them again.

Beyond that, the tax code is also loaded up with spending on things like itemized deductions.  And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize.  So my budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans -- a reform that would reduce the deficit by $320 billion over 10 years.

But to reduce the deficit, I believe we should go further.  And that’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple -- so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.

I believe reform should protect the middle class, promote economic growth, and build on the fiscal commission’s model of reducing tax expenditures so that there’s enough savings to both lower rates and lower the deficit.  And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive.

So this is my approach to reduce the deficit by $4 trillion over the next 12 years.  It’s an approach that achieves about $2 trillion in spending cuts across the budget.  It will lower our interest payments on the debt by $1 trillion.  It calls for tax reform to cut about $1 trillion in tax expenditures -- spending in the tax code.  And it achieves these goals while protecting the middle class, protecting our commitment to seniors, and protecting our investments in the future.

Now, in the coming years, if the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress than I’ve pledged here.  But just to hold Washington -- and to hold me --- accountable and make sure that the debt burden continues to decline, my plan includes a debt failsafe.  If, by 2014, our debt is not projected to fall as a share of the economy -– if we haven’t hit our targets, if Congress has failed to act -– then my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code.  That should be an incentive for us to act boldly now, instead of kicking our problems further down the road.

So this is our vision for America -– this is my vision for America -- a vision where we live within our means while still investing in our future; where everyone makes sacrifices but no one bears all the burden; where we provide a basic measure of security for our citizens and we provide rising opportunity for our children.

There will be those who vigorously disagree with my approach.  I can guarantee that as well.  (Laughter.)  Some will argue we should not even consider ever -- ever -- raising taxes, even if only on the wealthiest Americans.  It’s just an article of faith to them.  I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.  I don’t need another tax cut.  Warren Buffett doesn’t need another tax cut.  Not if we have to pay for it by making seniors pay more for Medicare.  Or by cutting kids from Head Start.  Or by taking away college scholarships that I wouldn’t be here without and that some of you would not be here without.

And here’s the thing:  I believe that most wealthy Americans would agree with me.  They want to give back to their country, a country that’s done so much for them.  It’s just Washington hasn’t asked them to.

Others will say that we shouldn’t even talk about cutting spending until the economy is fully recovered.  These are mostly folks in my party.  I’m sympathetic to this view -- which is one of the reasons I supported the payroll tax cuts we passed in December.  It’s also why we have to use a scalpel and not a machete to reduce the deficit, so that we can keep making the investments that create jobs.  But doing nothing on the deficit is just not an option.  Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.

Finally, there are those who believe we shouldn’t make any reforms to Medicare, Medicaid, or Social Security, out of fear that any talk of change to these programs will immediately usher in the sort of steps that the House Republicans have proposed.  And I understand those fears.  But I guarantee that if we don’t make any changes at all, we won’t be able to keep our commitment to a retiring generation that will live longer and will face higher health care costs than those who came before.

Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have an obligation to prove that we can afford our commitments.  If we believe the government can make a difference in people’s lives, we have the obligation to prove that it works -– by making government smarter, and leaner and more effective.

Of course, there are those who simply say there’s no way we can come together at all and agree on a solution to this challenge.  They’ll say the politics of this city are just too broken; the choices are just too hard; the parties are just too far apart.  And after a few years on this job, I have some sympathy for this view.  (Laughter.)

But I also know that we’ve come together before and met big challenges.  Ronald Reagan and Tip O’Neill came together to save Social Security for future generations.  The first President Bush and a Democratic Congress came together to reduce the deficit.  President Clinton and a Republican Congress battled each other ferociously, disagreed on just about everything, but they still found a way to balance the budget.  And in the last few months, both parties have come together to pass historic tax relief and spending cuts.

And I know there are Republicans and Democrats in Congress who want to see a balanced approach to deficit reduction.  And even those Republicans I disagree with most strongly I believe are sincere about wanting to do right by their country.  We may disagree on our visions, but I truly believe they want to do the right thing.

So I believe we can, and must, come together again.  This morning, I met with Democratic and Republican leaders in Congress to discuss the approach that I laid out today.  And in early May, the Vice President will begin regular meetings with leaders in both parties with the aim of reaching a final agreement on a plan to reduce the deficit and get it done by the end of June.
I don’t expect the details in any final agreement to look exactly like the approach I laid out today.  This a democracy; that’s not how things work.  I’m eager to hear other ideas from all ends of the political spectrum.  And though I’m sure the criticism of what I’ve said here today will be fierce in some quarters, and my critique of the House Republican approach has been strong, Americans deserve and will demand that we all make an effort to bridge our differences and find common ground.

This larger debate that we’re having -- this larger debate about the size and the role of government -- it has been with us since our founding days.  And during moments of great challenge and change, like the one that we’re living through now, the debate gets sharper and it gets more vigorous.  That’s not a bad thing.  In fact, it’s a good thing.  As a country that prizes both our individual freedom and our obligations to one another, this is one of the most important debates that we can have.

But no matter what we argue, no matter where we stand, we’ve always held certain beliefs as Americans.  We believe that in order to preserve our own freedoms and pursue our own happiness, we can’t just think about ourselves.  We have to think about the country that made these liberties possible.  We have to think about our fellow citizens with whom we share a community.  And we have to think about what’s required to preserve the American Dream for future generations.

This sense of responsibility -- to each other and to our country -- this isn’t a partisan feeling.  It isn’t a Democratic or a Republican idea.  It’s patriotism.

The other day I received a letter from a man in Florida.  He started off by telling me he didn’t vote for me and he hasn’t always agreed with me.  But even though he’s worried about our economy and the state of our politics -- here’s what he said -- he said, “I still believe.  I believe in that great country that my grandfather told me about.  I believe that somewhere lost in this quagmire of petty bickering on every news station, the ‘American Dream’ is still alive…We need to use our dollars here rebuilding, refurbishing and restoring all that our ancestors struggled to create and maintain… We as a people must do this together, no matter the color of the state one comes from or the side of the aisle one might sit on.”

“I still believe.”  I still believe as well.  And I know that if we can come together and uphold our responsibilities to one another and to this larger enterprise that is America, we will keep the dream of our founding alive -- in our time; and we will pass it on to our children.  We will pass on to our children a country that we believe in.

Thank you.  God bless you, and may God bless the United States of America.  (Applause.)

Cantor and the Big Red Countdown Clock

Cantor got slammed yesterday online by suggesting that the GOP would allow the United States to hit its debt ceiling, forcing the United States to not be able to meet it's obligations (some people, including the Obama Administration call this defaulting since the US can't meet it's obligations, other people don't since we're still paying interest. It's hard to tell how the markets will read it).

He later backtracked and said this:

The House will consider a debt limit increase within the window put forward by Treasury Secretary Geithner. Should he shift his estimation for necessary action based on revenues or outlays, we will move as well. However, as Republicans have made clear, we will not blindly raise the debt limit without meaningful spending cuts and binding budget reforms to ensure that we don't continue bad spending practices and max out the credit card in the future.

To consider what Cantor is threatening to do, consider this scenario:

There is a thermonuclear bomb sitting in Grand Central Station. Two bomb experts, who really don't like each other but are forced to work together, arrive at the scene. However, the bomb is so complex that it is impossible for just one of them to fix it, so they need to work together. When they arrive, the countdown clock on the bomb is at 5 minutes until detonation.

Basically what is happening is that Cantor is saying that, well, one of the bomb experts really hates the other. In fact, he hates him so much that he's willing to use the nuclear bomb crisis to essentially extort tons of money and whatnot from the other bomb tech. Now, the other bomb tech obviously sees this as completely unfair and criminal. However, the first bomb tech makes it abundantly clear that, hey, if he doesn't meet his demand, he'll let the bomb go off, not only killing both of them, but blowing away the rest of the city with them.

Not only this, but the extorting bomb tech decides that he's just going to sit around and not even discuss things or even try to defuse the bomb until the clock ticks to under 1 minute to go. In doing so, he's hoping to force the second bomb tech to give in to his demands lest be responsible for letting the city get blown up.

This is the situation we face when we have the possibility of a cataclysmic federal default combined with someone, who we are forced to work with, who is just fine with blowing everything up just so they can squeeze concessions out of the other side.

And the Democrat's problem with debt ceiling is similar to the poor innocent bomb tech above: not cutting a deal might have catastrophic consequences, but at the same time you don't want to validate their hostage taking because, after all, if you do then they'll just come back and do it again.

So what does one do?

Tuesday, April 12, 2011

What Happens If the Debt Ceiling is Reached?

This is the second of two posts about the debt ceiling. To read the first, see Why are People Opposed to Raising the Debt Ceiling?

We're still about a month away from the day when the debt ceiling deadline passes, but it's not too early to start talking about the end game if an agreement to extend the debt ceiling can't be reached. (This also wouldn't be the first time Congress delayed to raise the debt ceiling either.)

The first thing that will happen is that the Treasury will implement certain "extraordinary measures." These measures aren't really that uncommon when the debt ceiling is close, and essentially amount to the government shifting money around from certain accounts to other accounts to make up for the shortfall. The Treasury thinks that this will allow the government to keep functioning as normal until about July 8th.

But what if we still don't have an agreement?

There are three main courses of action that the Obama Administration could probably take in this case.

1) Shut Down Government

This scenario is basically the scenario that the Tea Partiers want to see happen: the government only spends what it takes in, and that's it. Virtually all discretionary spending would stop. Military spending would probably be halted except for necessary spending.

While interest on the debt would probably be paid, preventing a technical default, and Social Security payments would still go out due to it's own source of funding, at least for a while (pending funding for the Social Security Administration), payments for Medicare, Medicaid, Food Stamps, Pensions, Veterans Benefits, etc. could all be impacted. If things get bad enough, a technical default becomes a real possibility, though is unlikely to happen right away, depending on what payments Obama may be legally required to make and how much revenues may drop if the economy goes into a double dip recession or depression.

The sudden stop of over $100 billion into the economy per month would certainly harm the economy, and most economists and business leaders fully expect hitting the debt ceiling to be a "recovery ending event." Even if the United States doesn't default, it will probably take years, if not a decade, to clean up the mess that hitting the debt ceiling could cause.

2) Send out IOUs

This is essentially the "California Solution." This solution would probably cause a partial shutdown of non-essential government services, but the treasury may continue "spending" more money than it takes in by handing out IOUs to agencies and creditors that it doesn't have the money to currently pay.

The Treasury wouldn't technically be violating the debt ceiling since it isn't technically spending money - it's giving out IOUs. And the Treasury would argue that it has the authority to do this since the US Congress appropriated the authority for it to do so. Just because the Treasury doesn't have the money now doesn't mean that it can't continue funding programs. After all, Congress authorized them to.

Of course, there are some constitutional questions about this, such as can the Treasury promise to spend money it currently doesn't have, and do appropriations by Congress really authorize them to give out IOUs in those circumstances?

3) Declare that Congress Implicitly Extended the Debt Ceiling by Approving the Budget

This would almost certainly create a constitutional crisis, so it's not really the preferable solution, but it could finally decisively resolve one of the paradoxes of how the federal government runs: How can Congress appropriate money to be spent, and then prohibit the Treasury from borrowing to spend that very money?

The argument would essentially go like this:

There are two powers that the Constitution gives to Congress that are applicable here - the power to "borrow money on the credit of the United States" (Article I, Section 8, Clause 2) and the implicit power to appropriate money suggested both by Article I, Section 8, Clause 1 ("The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States") and Article I, Section 9, Clause 7 ("No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law")

The question here is this: would Congress appropriating more money to be spent than is brought in via revenue be an implicit approval that the Treasury should be able to borrow at least that much money?

In other words: wouldn't the very act of appropriating money in a way that would increase the national debt constitute an implicit approval to raise the debt ceiling on the part of Congress? Indeed, prior to 1917, Congress extended the borrowing authority of the United States with each budget. However, they then decided to approve the debt ceiling separately to giver the treasury more leeway in borrowing.

Republicans would certainly argue that the power to appropriate and the power to borrow are two separate and independent powers in the Constitution. However, are they really? All the power of Congress to extend debt does is allow the federal government to run an unbalanced budget. And, again, it seems logically inconsistent that the founders would believe that Congress had the ability to authorize money to be spent without simultaneously authorizing the Treasury to borrow the money needed to meet those obligations, if necessary. After all, it is ultimately Congress' responsibility to ensure that the debt gets paid down. Saying that Congress refuses to pay down the debt, but authorizes additional deficit spending, but then fails to authorize borrowing to allow that very deficit spending is silly.

I don't think anyone would argue that Congress doesn't have the authority to authorize more debt than it appropriates for. The question here is whether Congress automatically authorizes new debt when it passes a budget with deficit spending.

Monday, April 11, 2011

Why are People Opposed to Raising the Debt Ceiling?

I hope this to be the first in a series of at least two posts on the debt ceiling

Several recent polls have shown that the American people appear to be significantly opposed to raising the debt ceiling.

A recent NBC/Wall Street Journal Poll showed that people opposed raising the debt ceiling, even after being given pros and cons of it, by a 62 to 32% margin. Quinnipiac showed in February that on the question of whether failing to raise the debt ceiling was a good or bad thing, people were evenly split, with 46% saying it would be a good thing and 44% saying it would be bad. Ipsos/Reuters did a poll where people opposed raising the debt ceiling 71% to 17%.

These are numbers which very few policy positions get. It's in the range where even many Democrats must oppose raising the debt ceiling. But why is that?

The first problem might be a misunderstanding of what the debt ceiling is. I'm just conjecturing here, but the term "debt ceiling" isn't exactly clear, and in a time when people are increasingly concerned about the deficit, it is also scary sounding. It could sound like permission to increase our yearly deficit even more beyond the $1.5 trillion it already is. If that's what people think it means, then one could clearly see why people would oppose it, even many Democrats.

Other people might not understand what it is there for - that, even though Congress has appropriated money, the treasury still can't borrow more than Congress allows it to do. If the credit limit Congress has set on itself is less than the amount of deficit spending Congress has authorized, then we'll bump into the ceiling.

Others, again, may just have this nebulous thing about how debt is "bad" and therefore, of course we shouldn't have more of it.

The second problem is that people just aren't aware of the consequences of failing to raise the debt ceiling. The consequences are so dire than even people like John Boehner and Paul Ryan have said that there is no question we must raise it.

Some recent poll questions have tried to solve this problem, but frankly, have largely been lacking in their explanations.

For example, in the Quinnipiac poll, this was the question:

If Congress fails to raise the debt ceiling, the government will be shut down except for those workers deemed essential. Some people say shutting down the government except for essential personnel would be a bad thing because many federal services would be unavailable. Others say it would be a good thing because it would stop the government from going further into debt. Which comes closer to your point of view?

In fact, this description itself is wrong. We won't have a "government shutdown" per se, in the sense that money isn't appropriated and thus cannot be spent. We will have a government shutdown in the sense that we don't have the money.

The thing with the traditional government shutdown is that mandatory programs, more or less, keep on functioning since they're, well, mandatory. Congress doesn't have to reapprove spending every year, so they're not affected by a shutdown (though the administration of those programs might be). The President can also shift money around from various accounts to try to make sure that other essential services still operate. Congress can also do things like pass a law saying that soldiers can get paid.

In a debt ceiling crisis, the problem isn't that money isn't appropriated, but that we don't have the money to begin with, and the treasury isn't authorized to borrow more money. There is some question, but it would seem that Mandatory programs go out the door first. Social Security should still function because it is funded by its own source of income. Medicare and Medicaid come next, followed by other Mandatory programs (such as ag subsidies, food stamps, pensions, veterans benefits, etc.) and finally by interest on the national debt (at least, I believe this is the correct order).

All of those will be, in theory, fully funded, being mandatory programs. Using 2010 budget numbers, the entire remaining discretionary budget - including defense - would have to fight over the remaining 372 billion piece of the pie. Even if every cent went towards defense, it wouldn't even be half of the defense budget. And forget about everything else in discretionary, such as paying for Department of State, Department of Justice, Veteran's Affairs, and virtually all other parts of the visible government.

I think there is still some debate about exactly, how much leeway Obama might have to shift money around here since the United States hasn't really budgeted or made laws with the contingency that we wouldn't have the money to actually pay for the budget we appropriated for. It may be possible for Obama to play with numbers some here, but that's more meant for my next installment.

If you thought a government shutdown was bad, a debt ceiling crisis may be worse. And the deficit in FY2011 was even worse than FY2010, so they may not even have the 372 billion to play with.

As far as "defaulting," there are two ways to look at it. The first is that, if we can't pay for services that Congress has appropriated for, no matter what it might be, that could be considered a "default." This is essentially the line the Obama Administration has taken.

There may be some validity in that statement, depending on how the market reacts (which could be partly based on whether the media reports such an action as a "default" or not), but more technically, a government default would be if the United States can't pay interest on it's national debt. As of right now, we would have enough money to do that as income is greater than the cost of mandatory spending right now. However, if a debt crisis plunged the nation into a double-dip recession or even a depression, that could change. If we start getting less revenue than the cost of mandatory spending, it is quite possible that it could cause a technical default on the United States debt.

If the markets decide that we have defaulted on our debt, using whichever definition they choose to use (and I don't really have the appetite to find out which they would use), that would cause the cost of our debt to increase dramatically. That would mean that the amount we have to pay on interest, which is currently around $250 billion a year, would explode and make it even harder for us to dig out of the hole we're in. It would also make it much more expensive to get future debt. It could also set of a chain of events that could cause an economic death spiral. The United States economy could quite possibly be left in ruins.

All of these consequences, however, aren't really being portrayed to the public effectively. Look at the NBC News/Wall Street Journal poll. Here is their statement about what would be "good" about failing to raise the debt ceiling:

People say do not raise the debt ceiling because doing so will make it harder to get the government's financial house in order, will increase the U.S. debt that is held by other countries, and will increase the debt that will be passed on to the next generation.

While here is the argument in favor of raising the debt ceiling:

people say raise the debt ceiling because otherwise the government will be unable to pay the nation's bills, including making payments to people who participate in various government programs, government workers cannot be paid, and the government will default on its current debt payments

I have some serious problems with this. First off, the negatives of the debt ceiling are all portrayed as long term problems - debt burdened onto our children and more debt being held by scary foreign countries like China. Meanwhile, it says it will be "harder to get the government's financial house in order" when, in fact, given the fact that interest rates on US Debt may very well rise, NOT raising the debt ceiling may in fact be the costlier option.

Meanwhile, the arguments for raising the debt ceiling seem pretty minor. A few federal employees might not be paid, and the government may default, though it doesn't really say what that means or what the consequences of that are.

Somehow I think if you were to say that not raising the debt ceiling would essentially mean cutting off funding for half the military and may lead to economic Armageddon may give you a different result.

The third problem with the deft ceiling problem is that people misunderstand what it means or what the solutions are. Browsing twitter seemed to offer a pair of views, one for each side and both dangerously wrong.

The first was the more liberal view. This view was that basically all we needed to do was repeal the Bush tax cuts and end oil subsidies and voila! We don't have to worry about the debt ceiling anymore.

This is wrong. While those are steps that may help reduce the deficit, it only reduces it. The only way to prevent hitting the debt ceiling is to balance the budget. And again, that means finding $1.5 trillion in the yearly budget to cut. We just finished going to a government shutdown over about $50 billion. Not even the GOP budget that Ryan proposes balances the budget.

The second was the more conservative view, which seemed to go along the lines of "reaching the debt limit proves we are broke." Again, this is wrong.

The national debt limit is an arbitrary credit limit that Congress sets on the government. It is otherwise completely meaningless. It is not a statement of how much money the United States has or the ability of the United States to pay off it's debts.

It would sort of be like going to a bank, and having the bank tell us that we're approved for a $200,000 loan, but then we decide that, well, we are only going to allow ourselves a $40,000 line of credit. Just because we limited ourselves to that line of credit does not mean that we do not have the ability to pay off more debt nor does it mean that the bank isn't willing to give us more credit if we ask. It just means that we have chosen to limit ourselves at a certain number which may or may not have any relation to anything.

In the end, there is an awful lot of ignorance or misunderstanding out there, about what the function of the debt ceiling is, what the debt ceiling even means or is, and what the consequences might be if we fail to extend it.

Sunday, April 10, 2011

Why I Don't Listen or Give Money to NPR

Back when I was in high school and even in college, I could listen to NPR without screaming at the radio about their right wing bias and pandering. Today? Not so much. It seems every time I turn it on I have to hear Cokie Roberts talk about how tough things are for the Democrats right now, and "even with all his troubles, President Obama still has an approval rating over 50%." She actually said that. I remember the phrase because it made my blood pressure go up and I instantly changed the station.

Their ombudsman consistently argues in favor of the right wing - literally repeating Republican talking points and pointing out that conservative commenters are correct in pointing to a "liberal bias" in the station's reporting. The entire station seems obsessed with the Catholic church. I feel like every time the Pope sneezes, I have to hear about it. And in the last few years they've taken on this incredibly FOX News "we report, you decide" way of reporting the news - often interviewing only a conservative Republican and leaving the Democratic point of view summed up by the host of the program in the most poorly stated way that the Republican easily "wins" the argument.

Every time they mention "Entitlements" they talk about how Congressman Paul Ryan, who wants to eliminate all entitlements, is "the only grown-up" who is willing to even discuss how unfunded these programs are - despite the fact that Social Security is clearly solvent for the next 26 years and could easily be solvent for another 100 years if one simple tax change was made. Of course, during the health care debate they couldn't help but repeat the GOP talking point that the Democrats were working to "cut Medicare." Of course, the benefits for Seniors actually increased as a result of the Affordable Care Act and all of the "cuts" came in cost savings due to eliminating waste, fraud, and abuse, and in restructuring how hospitals and doctors work together in order to provide better care at a lower cost. Now that Paul Ryan wants to actually eliminate Medicare entirely, no one on NPR has said a peep about Republicans attempting to cut the program.

This is the final straw for me though - and I don't care that it's a local station. This is representative of NPR's problem nationwide. It's this mentality that makes the station bow to right wing demands in everything from the angle of the story to the sentence structure of the report.
Program Director Craig Curtis explained in a Friday memo to staff members, “given that the budget debate in congress is focusing today on abortion in general and Planned Parenthood by extension,” running the spots “might raise questions in the mind of the “reasonable listener” regarding our editorial and sales practices.”
A “reasonable listener” might now have questions about the journalistic integrity of the station.
The memo was published in LAObserved.com, a media-watch website edited by Kevin Roderick.
“There is nothing wrong with the spots per se,” Curtis said in his memo. It’s just that the station doesn’t want to make Republicans unhappy.
The "reasonable listener"? That's not your Republican audience, Mr. Curtis, and if you don't know that by now, then as far as I'm concerned, I don't care if you lose your federal funding and go out of business entirely. We have entirely too many radio stations that are already dedicated to pleasing Republicans and no one else, I don't need my tax dollars to pay for another one.

Also, why hold off on your Planned Parenthood spots when they are paying to underwrite your programming? Did you also suspend your Ally Bank spots when the mortgage crisis was ongoing? No, you didn't. How about Apple? How much is Apple paying you guys to mention ipods and ipads in practically every story you report on in a given day? I gave it a shot and listened one day a few weeks ago on my way to and from work, lunch, and then home. I heard 4 tech-related stories and every one of them mentioned an Apple product despite the fact that the stories were not specifically about Apple. Are those underwriting contracts more valued than the Planned Parenthood contract?

If this was solely a local decision, Mr. Curtis deserves a suspension of his own. If this was a national NPR decision, then it's just another example of NPR scrambling to please the right and leaving their journalistic integrity somewhere back in the mid 1990s. Local decision or not, Mr. Curtis's reasoning for suspending the spots comes from the top - it's just another example of NPR bowing to Republicans in order to what? Save themselves? Any idiot who pays attention to how Republicans work can tell you that you could put Sean Hannity in the place of Steve Inskeep and it wouldn't make you Republican enough for them to want to save your funding.

Want to know how you can save yourselves? Report the news - the actual news. Tell us what's going on in Iraq - and don't sugar coat it. Tell us what's happening in Afghanistan, Libya, Japan, Portugal, etc. - and stick to the facts. When Paul Ryan introduces legislation that will eliminate Medicare, report that. Don't tell me that Paul Ryan is "an adult" for putting forward an insane budget plan that will take health care access away from more than 55 million Americans. And when the GOP plans on shutting down the government because they want to take away health care access from millions of American women by eliminating Title X funding, don't pander to the GOP by suspending your Planned Parenthood ad spots. And definitely don't tell your listeners that it's because Republicans want to cut federal funds to abortion - because that's not a FACT, that's a lie straight from every Republican mouth - and anyone with journalistic integrity who did their homework would know that because the Hyde Amendment prevents federal funds for abortion.

NPR spends weeks every year begging their listeners for money. "Please fund our station! You won't get this news anywhere else! You won't hear these stories anywhere else!" Well, that's bullshit, NPR. There's this thing call the internet. It's where I get my news - and I find plenty of stories here -and if I want to hear them being reported, there's this thing called podcasting. There are plenty of journalists out there doing their jobs with integrity - and they aren't afraid of Republicans. They don't change the way they report a story because the GOP makes demands that they should.

 
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