Commentary Magazine


Topic: Congressional Budget Office

The Tragedy of the Times Editorial Page

The New York Observer ran an article yesterday not only on how awful the New York Times editorial pages have become (hardly a stop-the-presses news item), but how fed up and in “semi-open revolt” the news side of the Times is about the editorial side. Referring to Andrew Rosenthal, the Times’s editorial page editor, one Times reporter said, “Andy’s got 14 or 15 people plus a whole bevy of assistants working on these three unsigned editorials every day. They’re completely reflexively liberal, utterly predictable, usually poorly written and totally ineffectual. I mean, just try and remember the last time that anybody was talking about one of those editorials.”

For obvious reasons, the reporter was speaking not for attribution. The article is not-to-be-missed reading, as Times reporters eviscerate the likes of Tom Friedman (“an embarrassment”) and Maureen Dowd, (“[she’s] been writing the same column since George H. W. Bush was president”).

Today, the Times’s lead editorial demonstrated just what the news-side guys are talking about. Entitled “Freeing Workers From the Insurance Trap,” it is nothing more than a slight restatement of what Jay Carney peddled yesterday at the White House news briefing. Had it been issued as a White House press release (and maybe it was, just sent only to Andrew Rosenthal), I doubt anyone would have doubted its authenticity.

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The New York Observer ran an article yesterday not only on how awful the New York Times editorial pages have become (hardly a stop-the-presses news item), but how fed up and in “semi-open revolt” the news side of the Times is about the editorial side. Referring to Andrew Rosenthal, the Times’s editorial page editor, one Times reporter said, “Andy’s got 14 or 15 people plus a whole bevy of assistants working on these three unsigned editorials every day. They’re completely reflexively liberal, utterly predictable, usually poorly written and totally ineffectual. I mean, just try and remember the last time that anybody was talking about one of those editorials.”

For obvious reasons, the reporter was speaking not for attribution. The article is not-to-be-missed reading, as Times reporters eviscerate the likes of Tom Friedman (“an embarrassment”) and Maureen Dowd, (“[she’s] been writing the same column since George H. W. Bush was president”).

Today, the Times’s lead editorial demonstrated just what the news-side guys are talking about. Entitled “Freeing Workers From the Insurance Trap,” it is nothing more than a slight restatement of what Jay Carney peddled yesterday at the White House news briefing. Had it been issued as a White House press release (and maybe it was, just sent only to Andrew Rosenthal), I doubt anyone would have doubted its authenticity.

It argues, like Carney, that the destruction of 2.5 million jobs over the next ten years, as predicted by the non-partisan (but liberal-leaning) Congressional Budget Office, is wonderful news because it will mean that 2.5 million wage slaves have decided, thanks to ObamaCare, to opt for a life of elegant leisure instead of working. How that squares with the universally held opinion that robust job growth, not shrinkage, is the key to a robust recovery, or the fact that 7.8 million Americans are working part-time because they can’t find full-time jobs, is blithely ignored.

Virtually no one agrees with the White House or the Times on this, of course. The Wall Street Journal writes that, “now we learn that the law is a job destroyer that is removing rungs from the ladder of upward economic mobility.” As Peter Wehner noted, John Podhoretz thinks the CBO report is a “death blow” to ObamaCare. Even Dana Milbank of the Washington Post, not exactly a right-wing zealot, writes that “This is grim news for the White House and for Democrats on the ballot in November. This independent arbiter, long embraced by the White House, has validated a core complaint of the Affordable Care Act’s (ACA) critics: that it will discourage work and become an ungainly entitlement. Disputing Republicans’ charges is much easier than refuting the federal government’s official scorekeepers.”

The descent of what was once by far the world’s most influential editorial page into banal irrelevance and party-line predictability is a journalistic tragedy. It reminds me a bit of King Lear.

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Do We Want to Free Americans from Work?

The response from the White House and liberal outlets to yesterday’s Congressional Budget Office report that predicted a loss of a staggering 2.3 million full-time jobs as a result of the implementation of ObamaCare was every bit as astonishing as the report itself. Rather than facing up to the sobering news and acknowledging that the job loss was a disastrous, if unintended consequence of the misnamed Affordable Care Act, liberals cheered. Or at least pretended to cheer.

We were told the loss of all these jobs is good because it means Americans who maintained full-time employment in order to keep their health insurance no longer need be “tied” to their jobs. ObamaCare now gives them the “freedom” to work less, pursue their dreams, or just kick back and enjoy life without the drudgery involved in productive employment thanks to the president’s signature health-care legislation. Viewed this way, it’s not job loss but a glorious liberation from the burdens of “job lock.”

A White House economic adviser put it this way: 

It reflects the fact that workers have a new set of options and are making the best choices that they can choose to make for themselves given those options.

More articulate, if no less problematic, was this explanation from the New York Times editorial page:

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

This transparent partisan spin is unconvincing, not only because it is rooted in a reality that has less to do with the plight of most working people than of elites who look forward to prosperous retirements once their company goes public. The true disaster here is the reality of another massive government program that not only burdens employers and makes them less inclined to offer benefits but has also created a widespread disincentive for people to work. The CBO numbers illustrate once again that ObamaCare is primarily a redistributionist program that helps a small group of people but penalizes an equal or greater number while placing an intolerable burden on the economy.

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The response from the White House and liberal outlets to yesterday’s Congressional Budget Office report that predicted a loss of a staggering 2.3 million full-time jobs as a result of the implementation of ObamaCare was every bit as astonishing as the report itself. Rather than facing up to the sobering news and acknowledging that the job loss was a disastrous, if unintended consequence of the misnamed Affordable Care Act, liberals cheered. Or at least pretended to cheer.

We were told the loss of all these jobs is good because it means Americans who maintained full-time employment in order to keep their health insurance no longer need be “tied” to their jobs. ObamaCare now gives them the “freedom” to work less, pursue their dreams, or just kick back and enjoy life without the drudgery involved in productive employment thanks to the president’s signature health-care legislation. Viewed this way, it’s not job loss but a glorious liberation from the burdens of “job lock.”

A White House economic adviser put it this way: 

It reflects the fact that workers have a new set of options and are making the best choices that they can choose to make for themselves given those options.

More articulate, if no less problematic, was this explanation from the New York Times editorial page:

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

This transparent partisan spin is unconvincing, not only because it is rooted in a reality that has less to do with the plight of most working people than of elites who look forward to prosperous retirements once their company goes public. The true disaster here is the reality of another massive government program that not only burdens employers and makes them less inclined to offer benefits but has also created a widespread disincentive for people to work. The CBO numbers illustrate once again that ObamaCare is primarily a redistributionist program that helps a small group of people but penalizes an equal or greater number while placing an intolerable burden on the economy.

As our John Podhoretz said in a column published today in the New York Post, the impact of ObamaCare on work choices is no different from any other “government handout” in that it can give people a good reason not to work since doing so would actually result in a loss of income rather than a net gain. But since this financial assistance is underwritten by higher taxes as well as increased health-care costs for those not receiving the subsidy, the result also discourages productive economic activity at the other end of the spectrum.

One of the president’s evergreen themes is that the goal of his health-care legislation and his entire economic program is to help hard-working Americans. But, as the CBO demonstrates, ObamaCare’s impact on the economy reveals is that it will punish those who work and encourages some to stop. This will, as Ross Douthat argues elsewhere in today’s Times, hurt far more than it helps:

Given the current economic landscape, especially — in which persistently high unemployment coexists with a growing population of workers too discouraged to even look for work — the size and scope of a work-discouraging effect matters a great deal: The bigger the effect, the more likely that the people dropping out aren’t just, say, parents cutting hours to spend more time at home while the other spouse works full time, but people we should want to be attached to the workforce, for their own long term good and the good of the economy as well.

While liberals are lauding an economic disincentive to work, for weeks they have also been arguing that precisely this outcome is inapplicable when discussing legislation to indefinitely extend unemployment benefits indefinitely. When conservatives pointed to economic studies that proved that creating a system under which benefits were transformed from a temporary measure to a permanent subsidy would mean that the long-term unemployed would be less likely to search for work, liberals dismissed this as a slander against the unemployed. But economic facts are not as pliable as liberal talking points would have them. One cannot simultaneously explain ObamaCare job losses as a beneficial result of a disincentive to work while simultaneously insisting that there is no such effect when discussing the unemployed.

As the CBO made clear, we are just now starting to comprehend how disastrous the unintended consequences of ObamaCare will be. The job loss numbers paint a picture of a country where work will be discouraged and productivity penalized. A proper understanding of the long-term problems this will create for the nation goes beyond the political impact of ObamaCare. Americans don’t need to be freed from work. A government that sees this as a beneficial development is one that has not merely lost touch with the basic middle class values it claims to champion but is also one that feels no compunction at putting the nation on a path to certain economic ruin.

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CBO Political Dynamite: OCare Job Losses

Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

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Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

The CBO report isn’t all bad news for Democrats as it predicts lowered deficits in the years to come. But try as they might, the job loss numbers are a body blow to the president’s party heading into a midterm election cycle in which the odds were already stacked against them. With ObamaCare enrollment numbers significantly below where they must be for the system to pay for itself and state exchanges burdened by “glitches” that also imperil the law’s success, the outlook for the misnamed Affordable Care Act is grim.

Since the law’s passage in 2010 critics feared the employer mandate would result in massive cuts in full-time employees as small companies reduced workers to part-time status in order to avoid the costs and the regulatory headaches of complying with the statute. It has also led to the decisions of major companies such as Target, Trader Joe’s, and Home Depot to reduce insurance coverage for part-time employees pushing them into the exchanges to purchase ObamaCare.

All this adds up to a situation in which the number of ObamaCare losers is starting to outnumber the total number of Americans who benefit from the law. The assumption all along by both hopeful Democrats and worried Republicans was that once it was in place the law’s distribution of benefits would make it impossible to significantly amend or repeal it. But with each passing month as the disastrous rollout of the law continues, and more details of its catastrophic effects on the economy become apparent, it becomes clearer by the day that the problems it is creating for millions of Americans who have seen their existing plans canceled and replaced with more expensive coverage or are faced with the loss of full-time employment cannot be ignored.

Democrats who plan to face the voters in November by trying to change the subject to discussions of the minimum wage or vague talk about inequality must think again. Ignoring the devastating impact of ObamaCare on an economy that is still not fully recovered from 2008 is not a winning strategy. Faced with voters who know from their own experience they are paying a heavy price in jobs, increased health-care costs, and poorer coverage, Democrats are going to have to do better than to tell the people that ObamaCare is off-limits for discussion or debate.

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Immigration Foes Don’t Care About CBO

Supporters of the bipartisan immigration reform bill being debated in the Senate got a shot in the arm yesterday when the Congressional Budget Office issued a report that did no more than verify what has always been the commonsense position on the issue. Fixing a failed system that could bring millions of much needed workers out of the shadows and into the federal tax regime will be a net plus for the government’s bottom line. Reform will bring in hundreds of billions in revenue to Washington due to a work force that will be bolstered by a new guest worker program as well as the ability of currently undocumented aliens to take part in economic activity in ways currently impossible. Even in the second decade after adoption of the reform package when currently illegal residents become eligible for government benefits, their positive impact on the country’s fiscal health will outweigh any outlays. As Representative Paul Ryan said today, immigration is vital to America’s future economic health as our population ages, making passage of a reform package—whether the gang of eight’s Senate bill or a House version—imperative.

But don’t expect the CBO to influence the conservative activists deluging Republican senators and House members with messages urging them to defeat the plan. Much of the party’s grass roots are so committed to the idea that any path to citizenship is an outrage that they are not likely to listen to reason about immigration’s impact on the economy any more than they are to those that point out that it is foolish to think the 11 million illegals in the country can be deported. The gang of eight’s bill may not be perfect, but it is rooted in a decision to face reality about our current situation that has not been matched by any compelling points in the responses being mustered against it. Whatever the outcome of this debate, the willingness of so many Republicans to associate themselves with arguments that seem to align them with those who oppose immigration in principle is a huge potential problem for the party. If gang members are reluctant to alter the bill to make it more acceptable to opponents, it’s because it’s increasingly clear that a lot of those complaining about it wouldn’t be satisfied with anything but the construction of a 700-foot-tall ice wall along the border with Mexico just like the one in the popular Game of Thrones show on HBO whose purpose is to keep out zombies.

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Supporters of the bipartisan immigration reform bill being debated in the Senate got a shot in the arm yesterday when the Congressional Budget Office issued a report that did no more than verify what has always been the commonsense position on the issue. Fixing a failed system that could bring millions of much needed workers out of the shadows and into the federal tax regime will be a net plus for the government’s bottom line. Reform will bring in hundreds of billions in revenue to Washington due to a work force that will be bolstered by a new guest worker program as well as the ability of currently undocumented aliens to take part in economic activity in ways currently impossible. Even in the second decade after adoption of the reform package when currently illegal residents become eligible for government benefits, their positive impact on the country’s fiscal health will outweigh any outlays. As Representative Paul Ryan said today, immigration is vital to America’s future economic health as our population ages, making passage of a reform package—whether the gang of eight’s Senate bill or a House version—imperative.

But don’t expect the CBO to influence the conservative activists deluging Republican senators and House members with messages urging them to defeat the plan. Much of the party’s grass roots are so committed to the idea that any path to citizenship is an outrage that they are not likely to listen to reason about immigration’s impact on the economy any more than they are to those that point out that it is foolish to think the 11 million illegals in the country can be deported. The gang of eight’s bill may not be perfect, but it is rooted in a decision to face reality about our current situation that has not been matched by any compelling points in the responses being mustered against it. Whatever the outcome of this debate, the willingness of so many Republicans to associate themselves with arguments that seem to align them with those who oppose immigration in principle is a huge potential problem for the party. If gang members are reluctant to alter the bill to make it more acceptable to opponents, it’s because it’s increasingly clear that a lot of those complaining about it wouldn’t be satisfied with anything but the construction of a 700-foot-tall ice wall along the border with Mexico just like the one in the popular Game of Thrones show on HBO whose purpose is to keep out zombies.

Part of the reaction to the CBO report is based in understandable skepticism. Republicans are used to taking the CBO’s pronouncements with a grain or two of salt and trusting what groups like the Heritage Foundation take as gospel. But there was a reason why Heritage’s report that attempted to claim that immigration reform would bury the government in debt wasn’t taken seriously by most observers. As Seth noted last month, Heritage’s claims—which are being echoed again today by some reform opponents—were mainly an argument about entitlement reform, not immigration. Heritage’s numbers didn’t make sense. There is a reason why the business community has always favored immigration. It’s always been good for the economy and no amount of grousing about the details of this bill or about an entitlement system that is in desperate need of reform changes that.

But, like the unfortunate tendency of some on the right to claim that the real problem with immigration reform is that it will create more Hispanic voters who will become Democrats, the reaction to the CBO is revealing the discomfort that some people have with legal immigration. If, as the Daily Caller reports, some on the right are scared by the idea that reform will create a wave of immigration that they wrongly think would be bad for America, then this debate is turning on sentiments that are neither defensible nor logical.

Reform skeptics have a strong case when they ask for the bill’s provisions on border security to be strengthened. But if this issue is driven not so much by concern that illegal immigration will continue but about the identity of those who are in this country legally in the years to come, then those Republicans who buy into this line will be venturing out onto thin ice.

Let’s be honest, if you are scared by the idea of a large number of immigrants coming to this country in the future, even if the vast majority of them are arriving legally, then it’s time to admit that this dispute isn’t about the rule of law or amnesty, but something else than isn’t nearly as attractive. What Republicans like Paul Ryan and Marco Rubio are putting forward is a positive, pro-growth vision of the American economy that has always been part of the GOP vision. If, as seems increasingly likely, Republicans sink immigration reform because of fears about it giving the Democrats a political advantage or because they are just not comfortable with expanding America’s population, then that is both bad policy and bad politics.

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New Study Blows Apart Obama’s Imaginary World

A new study by Chuck Blahous, public trustee for Medicare and Social Security, blows to smithereens the claim that the Affordable Care Act (aka ObamaCare) will cut the deficit. According to Blahous, President Obama’s health care law unambiguously worsens the nation’s already unsustainable fiscal path. Among its key findings are these:

· Even under an optimistic scenario, the health care law will add more than $1.15 trillion to federal spending over the next decade.

· The law will add more than $340 billion and as much as $530 billion to federal deficits over the same period, and increasing amounts thereafter.

· To ensure the health care law doesn’t worsen the nation’s fiscal outlook, two-thirds of the subsidies must be repealed or other fiscal offsets found before benefits begin in 2014.

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A new study by Chuck Blahous, public trustee for Medicare and Social Security, blows to smithereens the claim that the Affordable Care Act (aka ObamaCare) will cut the deficit. According to Blahous, President Obama’s health care law unambiguously worsens the nation’s already unsustainable fiscal path. Among its key findings are these:

· Even under an optimistic scenario, the health care law will add more than $1.15 trillion to federal spending over the next decade.

· The law will add more than $340 billion and as much as $530 billion to federal deficits over the same period, and increasing amounts thereafter.

· To ensure the health care law doesn’t worsen the nation’s fiscal outlook, two-thirds of the subsidies must be repealed or other fiscal offsets found before benefits begin in 2014.

The Obama administration is employing intellectually shallow arguments to counter the findings of the study. “Opponents of reform are using ‘new math’ while they attempt to refight the political battles of the past,” an anonymous White House budget official told the Washington Post. “The fact of the matter is, the Congressional Budget Office and independent experts concluded that the health-reform law will reduce the deficit. That was true the day the bill was signed into law, and it’s true today.”

That is because the Obama administration relies on what’s known as double counting, something even the CBO admits. The Post story, as well as this analysis by Yuval Levin, explains the matter in detail. So does Richard Foster, chief actuary of Medicare, who in 2010 wrote, “In practice, the improved [Medicare trust fund] financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.” What Foster was telegraphing is that while he was bound by accounting rules to double count, he knows it provides a terribly misleading picture of the fiscal effects of the Affordable Care Act. That is quite an admission by a man who works for the president.

The conclusion by Blahous is, from the Obama administration’s perspective, brutally straightforward:

Taken as a whole, the enactment of the ACA has substantially worsened a dire federal fiscal outlook. The ACA both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law. This is an unambiguous conclusion, as it would result regardless of the degree of future success attained in upholding various cost-saving provisions now embedded in the law.

Once again, reality is blowing apart the imaginary world created by Obama. More and more, it seems, the various claims made by the president should begin with these four words: “Once upon a time.”

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ObamaCare Gross Cost Expected to Double

ObamaCare’s gross cost during the next ten years is expected to nearly double the $940 billion price tag projected in 2009. Phil Klein reports on the Democratic Party’s sketchy math that resulted in the discrepancy:

Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10-year cost would be far higher than advertised once projections accounted for full implementation.

Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion.

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ObamaCare’s gross cost during the next ten years is expected to nearly double the $940 billion price tag projected in 2009. Phil Klein reports on the Democratic Party’s sketchy math that resulted in the discrepancy:

Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10-year cost would be far higher than advertised once projections accounted for full implementation.

Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion.

However, the projected net cost of ObamaCare is actually down, though not for a particularly encouraging reason. The CBO estimates that many more Americans will lose private insurance coverage under ObamaCare than previously thought, which means the federal government will rake in more revenue from fining uninsured individuals and businesses that don’t provide coverage. IBD reports:

The projected rise in revenue is ironically largely due to the increase in the uninsured and the decline in employer-based coverage.

The government will fine individuals $45 billion — up from $34 billion — for failing to have insurance. Businesses are expected to pay $96 billion for not providing coverage, an increase of $15 billion.

Another $81 billion in higher net revenues comes largely from employees no longer getting tax-exempt health insurance but instead being paid more in taxable wages.

So ObamaCare will cost more than thought, but make up for it by increasing the number of Americans who are uninsured, and thus fineable. And remember, this is all happening because the Obama administration wanted to lower insurance costs and provide more coverage for the uninsured.

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Another Reminder of the Misery of the Obama Years

Here’s the opening paragraph of a new report, “Understanding and Responding to Persistently High Unemployment,” published by the Congressional Budget Office:

The rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this country since the Great Depression. Moreover, the Congressional Budget Office (CBO) projects that the unemployment rate will remain above 8 percent until 2014. The official unemployment rate excludes those individuals who would like to work but have not searched for a job in the past four weeks as well as those who are working part-time but would prefer full-time work; if those people were counted among the unemployed, the unemployment rate in January 2012 would have been about 15 percent. Compounding the problem of high unemployment, the share of unemployed people looking for work for more than six months —referred to as the long-term unemployed —topped 40 percent in December 2009 for the first time since 1948, when such data began to be collected; it has remained above that level ever since.

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Here’s the opening paragraph of a new report, “Understanding and Responding to Persistently High Unemployment,” published by the Congressional Budget Office:

The rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this country since the Great Depression. Moreover, the Congressional Budget Office (CBO) projects that the unemployment rate will remain above 8 percent until 2014. The official unemployment rate excludes those individuals who would like to work but have not searched for a job in the past four weeks as well as those who are working part-time but would prefer full-time work; if those people were counted among the unemployed, the unemployment rate in January 2012 would have been about 15 percent. Compounding the problem of high unemployment, the share of unemployed people looking for work for more than six months —referred to as the long-term unemployed —topped 40 percent in December 2009 for the first time since 1948, when such data began to be collected; it has remained above that level ever since.

Combined with President Obama’s budget released earlier this week — with the continuation of his record-breaking deficits and debt — we’re reminded once again of just how bad the Obama era has been for America.

 

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What Obama Promised and Didn’t Deliver

Jeffrey Anderson, writing in The Weekly Standard, makes an excellent point:

In President Obama’’s first budget, entitled (with no apparent sense of irony) “A New Era of Responsibility,”” he projected that the federal budget deficit in 2012 would be a rather hefty $581 billion. Fast-forwarding three years, the Congressional Budget Office (CBO) now projects that it will instead be $1.079 trillion, meaning that, if the CBO is right, Obama was wrong by $498,000,000,000. To put that into perspective, that roughly half-trillion dollar margin of error is more than Obama allocated in this year’’s budget for Medicare. Medicare could magically have become free for 2012, and the deficit would still have exceeded Obama’’s earlier estimate.

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Jeffrey Anderson, writing in The Weekly Standard, makes an excellent point:

In President Obama’’s first budget, entitled (with no apparent sense of irony) “A New Era of Responsibility,”” he projected that the federal budget deficit in 2012 would be a rather hefty $581 billion. Fast-forwarding three years, the Congressional Budget Office (CBO) now projects that it will instead be $1.079 trillion, meaning that, if the CBO is right, Obama was wrong by $498,000,000,000. To put that into perspective, that roughly half-trillion dollar margin of error is more than Obama allocated in this year’’s budget for Medicare. Medicare could magically have become free for 2012, and the deficit would still have exceeded Obama’’s earlier estimate.

It strikes me that President Obama isn’t simply vulnerable when it comes to the objective conditions of the country (though he is); it’s that he’s vulnerable based on what he promised versus what he has delivered as president. That’s true on a range of issues, including the unemployment rate (which we were told wouldn’t go above 8 percent if his stimulus package was passed; December was the 35th straight month with unemployment above 8 percent); health care costs (he promised to bend the health care cost curve down; it’s gone up); poverty going down (it’s gone up); cutting the deficit in half (it’s exploded); fixing the housing crisis (it’s gotten worse); improving America’s image in the world (we’re less popular in the Muslim world now than we were under Obama’s predecessor); and improving the political culture in Washington (the divisions have gotten deeper and Obama has set a record for polarization in each of his first three years in office).

Time and time again, Barack Obama has not only not done what he promised; his policies have moved things in the opposite direction.

He is a man who rode to office on his words and promises. In November, Obama might well be given a one-way ticket back to Chicago for the same reason.

 

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America’s Lost Decade Continues

According to a new report by the Congressional Budget Office (CBO), “In part because of the dampening effect of the higher tax rates and curbs on spending scheduled to occur this year and next, CBO expects that the economy will continue to recover slowly, with real GDP growing by 2.0 percent this year and 1.1 percent next year (as measured by the change from the fourth quarter of the previous calendar year). CBO expects economic activity to quicken after 2013 but to remain below the economy’’s potential until 2018.”

America’s Lost Decade continues.

 

 

According to a new report by the Congressional Budget Office (CBO), “In part because of the dampening effect of the higher tax rates and curbs on spending scheduled to occur this year and next, CBO expects that the economy will continue to recover slowly, with real GDP growing by 2.0 percent this year and 1.1 percent next year (as measured by the change from the fourth quarter of the previous calendar year). CBO expects economic activity to quicken after 2013 but to remain below the economy’’s potential until 2018.”

America’s Lost Decade continues.

 

 

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After the Happy Talk: A $1.5 Trillion Deficit

According to a new report by the Congressional Budget Office (CBO), the federal budget deficit is on course to reach nearly $1.5 trillion this year, the biggest budget gap in history and one of the largest as a share of the economy since World War II. This year’s deficit would be the highest on record and would equal about 9.8 percent of the economy, the CBO said, slightly smaller than the 2009 budget gap, which at $1.4 trillion amounted to nearly 10 percent of the gross domestic product. The CBO forecast is on track to remain well above $1 trillion in 2012, the fourth year in a row. As a result, “debt held by the public will probably jump from 40 percent of GDP at the end of fiscal year 2008 to nearly 70 percent at the end of fiscal year 2011.”

These numbers are alarming. And today’s report highlights just how irresponsible President Obama is by not seriously addressing our exploding debt, which means addressing our entitlement crisis, which means (above all) reforming Medicare.

Long after last night’s State of the Union happy talk is forgotten, these fiscal realities will still be with us. The president has a moral obligation to confront this problem rather than deny it, to deal with the world as it is rather than as he wishes it to be.

According to a new report by the Congressional Budget Office (CBO), the federal budget deficit is on course to reach nearly $1.5 trillion this year, the biggest budget gap in history and one of the largest as a share of the economy since World War II. This year’s deficit would be the highest on record and would equal about 9.8 percent of the economy, the CBO said, slightly smaller than the 2009 budget gap, which at $1.4 trillion amounted to nearly 10 percent of the gross domestic product. The CBO forecast is on track to remain well above $1 trillion in 2012, the fourth year in a row. As a result, “debt held by the public will probably jump from 40 percent of GDP at the end of fiscal year 2008 to nearly 70 percent at the end of fiscal year 2011.”

These numbers are alarming. And today’s report highlights just how irresponsible President Obama is by not seriously addressing our exploding debt, which means addressing our entitlement crisis, which means (above all) reforming Medicare.

Long after last night’s State of the Union happy talk is forgotten, these fiscal realities will still be with us. The president has a moral obligation to confront this problem rather than deny it, to deal with the world as it is rather than as he wishes it to be.

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Another Good Entitlement-Reform Plan

James Capretta explains why the entitlement-reform proposal put forth by Rep. Paul Ryan and former Fed vice-chairman Alice Rivlin is so important:

In Medicare, the Ryan-Rivlin proposal would be transformative. It picks up on a key feature of Rep. Ryan’s “Roadmap” budget plan, which is that new enrollees in Medicare after 2020 would receive their entitlement in the form of a fixed contribution from the federal government rather than today’s defined benefit program structure. …

For Medicaid, Ryan and Rivlin propose moving toward a fixed block grant payment from the federal government to the states. The block grant payments would be indexed to grow with the size of the Medicaid population as well as per capita GDP growth plus one percentage point. …

Beyond Medicare and Medicaid, the plan would also impose limits on noneconomic and punitive damages in medical liability cases as well as repeal the ill-advised long-term care program (called the “CLASS Act”) that was created in the recently passed health care law.

The Congressional Budget Office (CBO) has already issued a preliminary assessment of the budgetary implications of Ryan-Rivlin, and the results are impressive. Over the next decade, Ryan-Rivlin would cut federal deficit spending by $280 billion, and by 2030, federal spending on the major health entitlement programs would be about 1.75 percent of GDP below a reasonable baseline projection.

But Capretta is right that the importance of the plan is more political — the emergence of a responsible Democratic voice willing to work with the GOP’s guru on entitlements (Ryan) in a productive way. This will diffuse to a degree the alarmist rhetoric coming from the Dem side of the aisle. Moreover, it recognizes that we need to pursue “an across-the-board move toward more fixed federal financial support for coverage.”

In conversations I have had over the past week, Republicans on the Hill seem to recognize that there are important elements in both the debt commission plan and the Ryan-Rivlin plan. Neither is perfect, but parts of both represent some key concessions by the Democrats involved in formulating each. A flatter tax code, a lower corporate tax rate, and market-based entitlement reforms? Some would sign on the dotted line, warts and all. The Democrats? Well, by launching an assault on the debt commission, they risk appearing unserious about deficit control and real fiscal reform.

At the very least, the Ryan-Rivlin and debt commission plans will jump-start a key debate. If Republicans want to prove they are sober and mature lawmakers, they will start crafting proposals that extract the best from both plans.

James Capretta explains why the entitlement-reform proposal put forth by Rep. Paul Ryan and former Fed vice-chairman Alice Rivlin is so important:

In Medicare, the Ryan-Rivlin proposal would be transformative. It picks up on a key feature of Rep. Ryan’s “Roadmap” budget plan, which is that new enrollees in Medicare after 2020 would receive their entitlement in the form of a fixed contribution from the federal government rather than today’s defined benefit program structure. …

For Medicaid, Ryan and Rivlin propose moving toward a fixed block grant payment from the federal government to the states. The block grant payments would be indexed to grow with the size of the Medicaid population as well as per capita GDP growth plus one percentage point. …

Beyond Medicare and Medicaid, the plan would also impose limits on noneconomic and punitive damages in medical liability cases as well as repeal the ill-advised long-term care program (called the “CLASS Act”) that was created in the recently passed health care law.

The Congressional Budget Office (CBO) has already issued a preliminary assessment of the budgetary implications of Ryan-Rivlin, and the results are impressive. Over the next decade, Ryan-Rivlin would cut federal deficit spending by $280 billion, and by 2030, federal spending on the major health entitlement programs would be about 1.75 percent of GDP below a reasonable baseline projection.

But Capretta is right that the importance of the plan is more political — the emergence of a responsible Democratic voice willing to work with the GOP’s guru on entitlements (Ryan) in a productive way. This will diffuse to a degree the alarmist rhetoric coming from the Dem side of the aisle. Moreover, it recognizes that we need to pursue “an across-the-board move toward more fixed federal financial support for coverage.”

In conversations I have had over the past week, Republicans on the Hill seem to recognize that there are important elements in both the debt commission plan and the Ryan-Rivlin plan. Neither is perfect, but parts of both represent some key concessions by the Democrats involved in formulating each. A flatter tax code, a lower corporate tax rate, and market-based entitlement reforms? Some would sign on the dotted line, warts and all. The Democrats? Well, by launching an assault on the debt commission, they risk appearing unserious about deficit control and real fiscal reform.

At the very least, the Ryan-Rivlin and debt commission plans will jump-start a key debate. If Republicans want to prove they are sober and mature lawmakers, they will start crafting proposals that extract the best from both plans.

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When Will Voters Stop Throwing the Bums Out?

Scott Rasmussen makes a convincing case that the “tidal shift” we will see at the polls tomorrow is the Democrats’ own darn fault:

While most voters now believe that cutting government spending is good for the economy, congressional Democrats have convinced them that they want to increase government spending. After the president proposed a $50 billion infrastructure plan in September, for example, Rasmussen Reports polling found that 61% of voters believed cutting spending would create more jobs than the president’s plan.

Central to the Democrats’ electoral woes was the debate on health-care reform. From the moment in May 2009 when the Congressional Budget Office announced that the president’s plan would cost a trillion dollars, most voters opposed it. Today 53% want to repeal it. Opposition was always more intense than support, and opposition was especially high among senior citizens, who vote in high numbers in midterm elections.

The Democrats ridiculed the Republicans as the “party of no,” insisting that the GOP’s own relative lack of popularity would be enough to keep the Democrats in power. That thinking was wrong in 1994. It was wrong coming from the GOP in 2006. And it’s just as wrong in 2010. The opposition party, when the majority party is messing up, need only be resolute in its opposition. And that — even their critics admit — the Republicans certainly have been for two years. Anticipating Tuesday’s tsunami, Rasmussen concludes:

This reflects a fundamental rejection of both political parties. More precisely, it is a rejection of a bipartisan political elite that’s lost touch with the people they are supposed to serve. Based on our polling, 51% now see Democrats as the party of big government and nearly as many see Republicans as the party of big business. That leaves no party left to represent the American people.

Well, unless one of the parties decides to do just that. It’s not set in stone that both will continue to defy the voters. I am less optimistic that Obama will toss aside his statist agenda or become less antagonistic toward the private sector. There is, I think, a greater opportunity for the Republicans not only to oppose Obama but also to offer their own reformist agenda, which is in sync with the public’s desire for fiscal sobriety, smaller government, and personal responsibility (reestablishing the principle of “moral hazard” in the business context). GOP governors can opt out of ObamaCare’s individual mandate. Congress can pass an extension of the Bush tax cuts. Both Senate and House Republicans can work on real tax and education reform, take a David Cameron–like approach to slashing government spending, and get serious about domestic energy production.

You say that Obama won’t go along with most of this? Well, probably not. Still, the GOP shouldn’t, if it wants to end the cycle of “throw the bums out” elections, shirk from offering the public a taste of a conservative alternative to Obamaism. Senate Democrats may filibuster spending cuts or a repeal of ObamaCare, and Obama may veto these and other measures. But that will set the table for 2012 and provide voters with a clear choice. And it might just be that those Democrats who fear another tsunami in 2012 would join with Republicans on a number of measures – leaving the White House with few allies. After all that Obama did for (to?) them, I imagine some Democrats would be more than happy to return the “favor” and look out for their own political futures.

Scott Rasmussen makes a convincing case that the “tidal shift” we will see at the polls tomorrow is the Democrats’ own darn fault:

While most voters now believe that cutting government spending is good for the economy, congressional Democrats have convinced them that they want to increase government spending. After the president proposed a $50 billion infrastructure plan in September, for example, Rasmussen Reports polling found that 61% of voters believed cutting spending would create more jobs than the president’s plan.

Central to the Democrats’ electoral woes was the debate on health-care reform. From the moment in May 2009 when the Congressional Budget Office announced that the president’s plan would cost a trillion dollars, most voters opposed it. Today 53% want to repeal it. Opposition was always more intense than support, and opposition was especially high among senior citizens, who vote in high numbers in midterm elections.

The Democrats ridiculed the Republicans as the “party of no,” insisting that the GOP’s own relative lack of popularity would be enough to keep the Democrats in power. That thinking was wrong in 1994. It was wrong coming from the GOP in 2006. And it’s just as wrong in 2010. The opposition party, when the majority party is messing up, need only be resolute in its opposition. And that — even their critics admit — the Republicans certainly have been for two years. Anticipating Tuesday’s tsunami, Rasmussen concludes:

This reflects a fundamental rejection of both political parties. More precisely, it is a rejection of a bipartisan political elite that’s lost touch with the people they are supposed to serve. Based on our polling, 51% now see Democrats as the party of big government and nearly as many see Republicans as the party of big business. That leaves no party left to represent the American people.

Well, unless one of the parties decides to do just that. It’s not set in stone that both will continue to defy the voters. I am less optimistic that Obama will toss aside his statist agenda or become less antagonistic toward the private sector. There is, I think, a greater opportunity for the Republicans not only to oppose Obama but also to offer their own reformist agenda, which is in sync with the public’s desire for fiscal sobriety, smaller government, and personal responsibility (reestablishing the principle of “moral hazard” in the business context). GOP governors can opt out of ObamaCare’s individual mandate. Congress can pass an extension of the Bush tax cuts. Both Senate and House Republicans can work on real tax and education reform, take a David Cameron–like approach to slashing government spending, and get serious about domestic energy production.

You say that Obama won’t go along with most of this? Well, probably not. Still, the GOP shouldn’t, if it wants to end the cycle of “throw the bums out” elections, shirk from offering the public a taste of a conservative alternative to Obamaism. Senate Democrats may filibuster spending cuts or a repeal of ObamaCare, and Obama may veto these and other measures. But that will set the table for 2012 and provide voters with a clear choice. And it might just be that those Democrats who fear another tsunami in 2012 would join with Republicans on a number of measures – leaving the White House with few allies. After all that Obama did for (to?) them, I imagine some Democrats would be more than happy to return the “favor” and look out for their own political futures.

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Flotsam and Jetsam

There’s an understatement: “Juan Williams said Friday morning that NPR fired him this week because the radio network had become ‘vindictive’ over his appearances on Fox News.” Exhibit A: “NPR CEO Vivian Schiller on Thursday said that Williams should have kept his comments between himself and ‘his psychiatrist or his publicist.’ Schiller later apologized for the comment.” As a recovering labor lawyer, I can tell you that’s a plaintiff’s dream come true.

There’s a signal here: “The average of these states show that early voting has shifted from a D+16.6 partisan split to a D+1.7 partisan split for a Republican gain of +14.9% since 2008.” So many voters operating with the lizard brain, aren’t there?

There’s another reason to repeal ObamaCare. “Congressional Budget Office director Doug Elmendorf said Friday that ObamaCare includes work disincentives likely to shrink the amount of labor used in the economy.”

There’s no indication as to how they feel about Juan Williams. “Al-Qaeda Troubled by Helen Thomas’s Firing.”

There’s no indication that Jews agree with the tut-tutters that Israel is too “divisive” a campaign issue. JTA reports: “The National Jewish Democratic Council is running a ‘Day of Action,’ a get out the vote effort, nationwide on Sunday. The Republican Jewish Coalition is  chockablock with events in the coming days, including an appearance by former Bush administration spokesman Ari Fleischer in Chicago, where a lot of RJC attention has been focused, backing candidates Rep. Mark Kirk (R-Ill.) for the Senate and Joel Pollak and Bob Dold for the House. The RJC is running TV ads in the Philadelphia area targeting Rep. Joe Sestak (D-Pa.), the candidate for the state’s open U.S. Senate seat — not for J Street deviations from dogma, as in the past, but for backing civilian trials for terrorists.”

There’s not a single one predicting the Democrats will hold the House (number of predicted losses are in parenthesis): Larry Sabato (47), RCP (“up to 57″), Charlie Cook (52), Jay Cost (61), and Nate Silver (51).

There’s a headline for Peter Sellers’s fans: “Not Even Clouseau Could Make Panthers Disappear.” Quin Hillyer cites the Washington Post front-page story from yesterday and explains, “[Eric] Holder’s stonewalling can’t work. The truth will out. The truth appears to involve a pattern of race-based enforcement decisions at DOJ. Such a policy is unlawful. Period.” Actually, “Exclamation point!”

There’s no hotter Republican than Chris Christie. “He quickly has positioned himself as a politician in tune with an angry and impatient electorate, and he’s already mentioned as a 2012 presidential candidate. He’s well aware that the fate of his fight with the teachers union could determine his own. ‘If I wanted to be sure I’d be re-elected, I’d cozy up with the teachers union. … But I want far-reaching, not incremental, change.’”

There’s a lot of hype in the reporting on the WikiLeaks documents, says Tom Joscelyn. But, he explains, the documents do confirm “that Iran was, and remains, a principal sponsor of Shia extremist groups in Iraq. These same groups helped bring Iraq to the brink of chaos — along with al-Qaeda, which was also happy to fuel the sectarian violence. … They killed far more civilians than the American-led coalition ever did.”

There’s probably been a more counterproductive ad than Jack Conway’s attack on Rand Paul’s religion. But I just can’t think of one.

There’s an understatement: “Juan Williams said Friday morning that NPR fired him this week because the radio network had become ‘vindictive’ over his appearances on Fox News.” Exhibit A: “NPR CEO Vivian Schiller on Thursday said that Williams should have kept his comments between himself and ‘his psychiatrist or his publicist.’ Schiller later apologized for the comment.” As a recovering labor lawyer, I can tell you that’s a plaintiff’s dream come true.

There’s a signal here: “The average of these states show that early voting has shifted from a D+16.6 partisan split to a D+1.7 partisan split for a Republican gain of +14.9% since 2008.” So many voters operating with the lizard brain, aren’t there?

There’s another reason to repeal ObamaCare. “Congressional Budget Office director Doug Elmendorf said Friday that ObamaCare includes work disincentives likely to shrink the amount of labor used in the economy.”

There’s no indication as to how they feel about Juan Williams. “Al-Qaeda Troubled by Helen Thomas’s Firing.”

There’s no indication that Jews agree with the tut-tutters that Israel is too “divisive” a campaign issue. JTA reports: “The National Jewish Democratic Council is running a ‘Day of Action,’ a get out the vote effort, nationwide on Sunday. The Republican Jewish Coalition is  chockablock with events in the coming days, including an appearance by former Bush administration spokesman Ari Fleischer in Chicago, where a lot of RJC attention has been focused, backing candidates Rep. Mark Kirk (R-Ill.) for the Senate and Joel Pollak and Bob Dold for the House. The RJC is running TV ads in the Philadelphia area targeting Rep. Joe Sestak (D-Pa.), the candidate for the state’s open U.S. Senate seat — not for J Street deviations from dogma, as in the past, but for backing civilian trials for terrorists.”

There’s not a single one predicting the Democrats will hold the House (number of predicted losses are in parenthesis): Larry Sabato (47), RCP (“up to 57″), Charlie Cook (52), Jay Cost (61), and Nate Silver (51).

There’s a headline for Peter Sellers’s fans: “Not Even Clouseau Could Make Panthers Disappear.” Quin Hillyer cites the Washington Post front-page story from yesterday and explains, “[Eric] Holder’s stonewalling can’t work. The truth will out. The truth appears to involve a pattern of race-based enforcement decisions at DOJ. Such a policy is unlawful. Period.” Actually, “Exclamation point!”

There’s no hotter Republican than Chris Christie. “He quickly has positioned himself as a politician in tune with an angry and impatient electorate, and he’s already mentioned as a 2012 presidential candidate. He’s well aware that the fate of his fight with the teachers union could determine his own. ‘If I wanted to be sure I’d be re-elected, I’d cozy up with the teachers union. … But I want far-reaching, not incremental, change.’”

There’s a lot of hype in the reporting on the WikiLeaks documents, says Tom Joscelyn. But, he explains, the documents do confirm “that Iran was, and remains, a principal sponsor of Shia extremist groups in Iraq. These same groups helped bring Iraq to the brink of chaos — along with al-Qaeda, which was also happy to fuel the sectarian violence. … They killed far more civilians than the American-led coalition ever did.”

There’s probably been a more counterproductive ad than Jack Conway’s attack on Rand Paul’s religion. But I just can’t think of one.

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A Thatcherite Moment in America

President Obama, in attempting to gain traction just ahead of the midterm election, has homed in his message on taxes – and most especially, on “tax cut for the wealth.” Here is how Obama is framing his argument:

Ninety-seven percent of Americans make less than $250,000 a year — $250,000 a year or less. And I’m saying we can give those families — 97 percent permanent tax relief. And by the way, for those who make more than $250,000, they’d still get tax relief on the first $250,000; they just wouldn’t get it for income above that. Now, that seems like a common-sense thing to do. And what I’ve got is the Republicans holding middle-class tax relief hostage because they’re insisting we’ve got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy. That doesn’t make sense, and that’s an example of what this election is all about.

Let’s examine what the president said, starting with this observation: Obama’s sudden interest in the pernicious effects of large deficits is curious. There is no apparent limit to what Obama is willing to spend – yet when it comes to taxes, and almost only taxes, the president professes to be alarmed about the deficit. With that in mind, here’s a useful reference point: the $700 billion over 10 years that Obama is so eager to save is considerably less than Obama’s first (failed) stimulus package, which alone is estimated to have cost more than $860 billion. It would help Mr. Obama’s credibility if, in opposing taxes on fiscal grounds, he was not the most profligate president in American history. Read More

President Obama, in attempting to gain traction just ahead of the midterm election, has homed in his message on taxes – and most especially, on “tax cut for the wealth.” Here is how Obama is framing his argument:

Ninety-seven percent of Americans make less than $250,000 a year — $250,000 a year or less. And I’m saying we can give those families — 97 percent permanent tax relief. And by the way, for those who make more than $250,000, they’d still get tax relief on the first $250,000; they just wouldn’t get it for income above that. Now, that seems like a common-sense thing to do. And what I’ve got is the Republicans holding middle-class tax relief hostage because they’re insisting we’ve got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy. That doesn’t make sense, and that’s an example of what this election is all about.

Let’s examine what the president said, starting with this observation: Obama’s sudden interest in the pernicious effects of large deficits is curious. There is no apparent limit to what Obama is willing to spend – yet when it comes to taxes, and almost only taxes, the president professes to be alarmed about the deficit. With that in mind, here’s a useful reference point: the $700 billion over 10 years that Obama is so eager to save is considerably less than Obama’s first (failed) stimulus package, which alone is estimated to have cost more than $860 billion. It would help Mr. Obama’s credibility if, in opposing taxes on fiscal grounds, he was not the most profligate president in American history.

Second, according to the Congressional Budget Office, the cost for extending the Bush tax cuts to married taxpayers with income below $250,000 and single taxpayers with income below $200,000 – which Obama supports – would reduce revenues by almost $2 trillion over the 2011–2020 period. If Obama’s argument is that he should oppose tax cuts because of their adverse effect on the deficit, then presumably Obama should oppose extending any of the Bush tax cuts he has demonized for the better part of three years. Instead, Obama favors extending them to individuals making less than $200,000 per year.

Obama cannot have it both ways. He cannot on the one hand castigate Bush’s tax cuts as reckless, irresponsible, and ineffective while at the same time extending them for all but the highest income earners.

Third, Democrats assert that the Obama tax increase will hit only 3 percent of small businesses. “There aren’t 3 percent of small businesses in America that would qualify for that tax cut [one for families making more than $250,000],” Vice President Biden has said. Speaker Nancy Pelosi has chimed in as well, declaring that the tax increase on higher income earners would exempt “97 percent of small businesses.” In fact, it will hit fully half of all small-business income, since 85 percent of small-business owners are taxed on profits at individual tax rates.

Twenty months into his presidency, Barack Obama’s problems extend far beyond this particular tax debate. His problem is, in my estimation, conceptual and philosophical. He is trying to spur growth through extravagant government spending, which he believes will increase demand with its magic “multiplier effect.” If that theory worked, of course, we would not be experiencing economic deceleration with unemployment stuck at nearly 10 percent, the collapse of sales of new homes earlier this year, consumer confidence at an alarmingly low level, a “recovery summer” that saw us lose more than a quarter of a million jobs, and economic growth that is far lower than past post-recession recoveries. Yet Obama continues to double down, as if unchecked government spending, onerous new regulations, and higher tax rates on small businesses and our most productive workers is the road to prosperity.

The president is quite wrong about all of that – and it may be that Obama’s failures, for all their economic and human cost, serve a useful pedagogical function. Obama is reminding people, in fairly vivid ways, what works when it comes to economics – things such as rewarding effort and enterprise, recognizing the importance of incentives, creating certainty and stability that encourages investment and entrepreneurship, and honoring success and achievement.

In that sense, we might be reaching a moment similar to the one Margaret Thatcher faced when she was leader of the Opposition in Great Britain. The failures of the “old” Labour government were obvious to almost everyone – and that created a moment for Thatcher to become prime minister and for Thatcherism to take root.

“Where the state is too powerful,” Mrs. Thatcher told the Zurich Economic Society in 1977, “efficiency suffers and morality is threatened. Britain in the last two or three years provides a case-study of why collectivism will not work. It shows that ‘progressive’ theory was not progressive. On the contrary, it proved retrograde in practice. This is a lesson that democrats all over the world should heed.”

“Yet I face the future with optimism,” Thatcher went on to say. “Our ills are creating their own antibodies. Just as success generates problems, so failure breeds the will to fight back and the body politic strives to restore itself.”

It looks to me like we are seeing something similar taking place in America today. We’ll know more in seven weeks.

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The Good-Things-Only Health-Care System

Back in August 2009, Bill Clinton pled with Democrats not to lose their nerve and let a health-care bill die. He offered two comforting predictions:

I’m telling you no matter how low [Republicans] drive support for this with misinformation, the minute the president signs a health care reform bill his approval will go up. Secondly, within a year, when all those bad things they say will happen don’t happen, and all the good things happen, approval will explode.

What seems about to explode, in 49 days, is the same cigar that blew up in the Democrats’ face when they tried this in 1994. Back then it was simply a failed attempt, planned in secret by the president’s wife and a committee of experts; this time it was legislation, rammed through on a party-line vote, by legislators who six months after are unwilling to advertise their “historic” vote. The electorate seems considerably more angry this year.

The public instinctively knew that the endlessly-repeated promises about ObamaCare – it would be deficit-neutral; not affect those satisfied with their existing plans; not limit the quality or availability of medical care; and not produce (in Bill Clinton’s terms) any “bad things” but only “good things” — were false assurances. But the public was constantly told that CBO projections showed ObamaCare would reduce the deficit — and who were you gonna believe, the CBO or the Republicans’ “misinformation”?

In “Health Care: The Disquieting Truth” in the current issue of the New York Review of Books, Arnold Relman, a professor emeritus at Harvard Medical School, writes that:

The seemingly optimistic reports of the Congressional Budget Office (CBO), which were important in supporting the Democrats’ legislative proposals, should not be misunderstood. The deficit reduction predicted by the CBO referred to covering only the added costs of the legislation for the first ten years, not to the likelihood of stemming the continuously rising costs of existing federal programs.

Relman further notes that the CBO was concerned only with the federal budget, not state budgets or the financial condition of the entire public and private health-care system, which, he concludes, seems headed toward bankruptcy. He ends by describing a new study predicting ObamaCare will, in fact, add $562 billion to the federal deficit in the first ten years.

It is clear from Relman’s article that the Obama administration’s approach to health care is the same it adopted with respect to the budget. In the latter case, it massively increased spending — and is now arguing that a huge increase in taxes is necessary to cure the resulting “unsustainable” deficits. In the former, it pushed through changes and mandates that will dramatically increase health-care costs — and will next argue that health care must be government-controlled to cure the coming cost crisis.

Relman’s own cure is a dramatic restriction or elimination of private insurance and imposition of more government regulation and health care – which he says would “undoubtedly” result in “huge savings” while “making medical care more efficient and effective” at the same time. His approach would apparently produce only good things and not bad things.

Back in August 2009, Bill Clinton pled with Democrats not to lose their nerve and let a health-care bill die. He offered two comforting predictions:

I’m telling you no matter how low [Republicans] drive support for this with misinformation, the minute the president signs a health care reform bill his approval will go up. Secondly, within a year, when all those bad things they say will happen don’t happen, and all the good things happen, approval will explode.

What seems about to explode, in 49 days, is the same cigar that blew up in the Democrats’ face when they tried this in 1994. Back then it was simply a failed attempt, planned in secret by the president’s wife and a committee of experts; this time it was legislation, rammed through on a party-line vote, by legislators who six months after are unwilling to advertise their “historic” vote. The electorate seems considerably more angry this year.

The public instinctively knew that the endlessly-repeated promises about ObamaCare – it would be deficit-neutral; not affect those satisfied with their existing plans; not limit the quality or availability of medical care; and not produce (in Bill Clinton’s terms) any “bad things” but only “good things” — were false assurances. But the public was constantly told that CBO projections showed ObamaCare would reduce the deficit — and who were you gonna believe, the CBO or the Republicans’ “misinformation”?

In “Health Care: The Disquieting Truth” in the current issue of the New York Review of Books, Arnold Relman, a professor emeritus at Harvard Medical School, writes that:

The seemingly optimistic reports of the Congressional Budget Office (CBO), which were important in supporting the Democrats’ legislative proposals, should not be misunderstood. The deficit reduction predicted by the CBO referred to covering only the added costs of the legislation for the first ten years, not to the likelihood of stemming the continuously rising costs of existing federal programs.

Relman further notes that the CBO was concerned only with the federal budget, not state budgets or the financial condition of the entire public and private health-care system, which, he concludes, seems headed toward bankruptcy. He ends by describing a new study predicting ObamaCare will, in fact, add $562 billion to the federal deficit in the first ten years.

It is clear from Relman’s article that the Obama administration’s approach to health care is the same it adopted with respect to the budget. In the latter case, it massively increased spending — and is now arguing that a huge increase in taxes is necessary to cure the resulting “unsustainable” deficits. In the former, it pushed through changes and mandates that will dramatically increase health-care costs — and will next argue that health care must be government-controlled to cure the coming cost crisis.

Relman’s own cure is a dramatic restriction or elimination of private insurance and imposition of more government regulation and health care – which he says would “undoubtedly” result in “huge savings” while “making medical care more efficient and effective” at the same time. His approach would apparently produce only good things and not bad things.

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Defining Recovery Down

What are we to make of the most recent jobs report, which shows that (a) unemployment increased from 9.5 percent to 9.6 percent and (b) nonfarm payrolls fell by 54,000 last month? If you’re White House press secretary Robert Gibbs, you tweet, “Don’t be fooled — the economy added 67,000 private sector jobs, 8th straight month of added private sector jobs, job loss came in Census work.” Picking up on this, David Mark, Politico’s senior editor, writes this:

At the White House Friday morning President Obama praised the private sector addition of 67,000 jobs in August, the eighth straight month of job growth. “That’s positive news, and it reflects the steps we’ve already taken to break the back of this recession. But it’s not good enough,” the president said. And Christina Romer, outgoing chair of the president’s Council of Economic Advisors, said the jobs figures were “better than expected.” Do they have a point about a slowly-but-surely improving jobs situation?

The answer is “no.” To understand why, it might be helpful to put things in a wider perspective. Read More

What are we to make of the most recent jobs report, which shows that (a) unemployment increased from 9.5 percent to 9.6 percent and (b) nonfarm payrolls fell by 54,000 last month? If you’re White House press secretary Robert Gibbs, you tweet, “Don’t be fooled — the economy added 67,000 private sector jobs, 8th straight month of added private sector jobs, job loss came in Census work.” Picking up on this, David Mark, Politico’s senior editor, writes this:

At the White House Friday morning President Obama praised the private sector addition of 67,000 jobs in August, the eighth straight month of job growth. “That’s positive news, and it reflects the steps we’ve already taken to break the back of this recession. But it’s not good enough,” the president said. And Christina Romer, outgoing chair of the president’s Council of Economic Advisors, said the jobs figures were “better than expected.” Do they have a point about a slowly-but-surely improving jobs situation?

The answer is “no.” To understand why, it might be helpful to put things in a wider perspective.

For one thing, the so-called underemployment rate, which includes workers who are working part-time but who want full-time work, increased from 16.5 percent to 16.7 percent. During our supposed “Recovery Summer,” we have lost 283,000 jobs (54,000 in June, 171,000 in July, and 54,000 in August). And for August, the employment-population ratio — the percentage of Americans with jobs — was 58.5 percent. We haven’t seen figures this low in nearly three decades. As Henry Olson of the American Enterprise Institute points out, “Since the start of this summer, nearly 400,000 Americans have entered the labor force, but only 130,000 have found jobs. … America’s adult population has risen by 2 million people since [August 2009], but the number of adults with jobs has dropped by 180,000. The unemployment rate declined slightly despite these numbers, from 9.7 percent to 9.6 percent, because over 2.3 million people have left the labor force entirely, so discouraged they are no longer even looking for work. ”

Keep in mind that all this is occurring during a period when job growth should be considerably higher, at least based on past post-recession recoveries. Former chair of the Council of Economic Advisers Michael Boskin points out that “compared to the 6.2% first-year Ford recovery and 7.7% Reagan recovery, the Obama recovery at 3% is less than half speed.” Bear in mind, too, that today’s jobs report comes a week after the GDP for the second quarter was revised downward, from 2.4 percent to 1.6 percent. Economists generally agree that the economy needs to grow 2.5 percent to keep unemployment from going up, and a good deal better than that to begin to bring it substantially down.

What all this means, I think, is that we’re not in a recovery at all, at least not in any meaningful sense. And those who insist otherwise are (to amend a phrase from Daniel Patrick Moynihan) Defining Recovery Down.

The most recent GDP figures also have harmful fiscal ramifications. For example, estimates for the deficit this year (more than $1.3 trillion) are based on both the Congressional Budget Office’s and the Obama administration’s assumption of roughly 3 percent growth. If growth is well below that, government revenues are going to be lower than estimated. And so this year’s deficit and net increase in the debt are going to be worse than even the (already quite troubling) projections. Meanwhile, the Federal Reserve has very few, if any, arrows left in its quiver. It has done just about all that can be done.

The narrative the Obama administration is trying to sell is that we were on the edge of another Great Depression but avoided it and are now, in the president’s oft-repeated phrase, “moving in the right direction.” If we persist in following Obama’s policies on spending, taxes, and regulations, Obama assures us, we will build on this recovery and turn a sluggish one into a strong one. At the end of Obamaism lies the land of milk and honey.

This is wishful thinking. The economy right now is sick and, in some important respects, getting sicker. And the president is pursuing policies that are not only not helping; they are downright counterproductive.

Robert Gibbs can tweet away, but he cannot tweet away reality.

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The Economic and Budget Issue Brief: Read It and Weep

The CBO’s July 27 Economic and Budget Issue Brief, “Federal Debt and the Risk of a Fiscal Crisis,” is short (8 pages), accessible, and worth reading. It covers past and projected federal debt held by the public, some of the consequences of growing debt, the increased chance of a fiscal crisis (including a brief review of fiscal crises in Argentina, Ireland, and Greece), and how a fiscal crisis might affect the United States. Among the many interesting data points, you’ll find is this:

According to the Congressional Budget Office’s (CBO’s) projections, federal debt held by the public will stand at 62 percent of GDP at the end of fiscal year 2010, having risen from 36 percent at the end of fiscal year 2007, just before the recession began. In only one other period in U.S. history—during and shortly after World War II—has that figure exceeded 50 percent.

Read the whole thing — and weep. (h/t: Yuval Levin/NRO)

The CBO’s July 27 Economic and Budget Issue Brief, “Federal Debt and the Risk of a Fiscal Crisis,” is short (8 pages), accessible, and worth reading. It covers past and projected federal debt held by the public, some of the consequences of growing debt, the increased chance of a fiscal crisis (including a brief review of fiscal crises in Argentina, Ireland, and Greece), and how a fiscal crisis might affect the United States. Among the many interesting data points, you’ll find is this:

According to the Congressional Budget Office’s (CBO’s) projections, federal debt held by the public will stand at 62 percent of GDP at the end of fiscal year 2010, having risen from 36 percent at the end of fiscal year 2007, just before the recession began. In only one other period in U.S. history—during and shortly after World War II—has that figure exceeded 50 percent.

Read the whole thing — and weep. (h/t: Yuval Levin/NRO)

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Misinformation, Disinformation, and ObamaCare

In a recent story in the New York Times, we learned this:

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

The story goes on to explain that under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

DOJ argues that the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to the Congressional Budget Office. And according to the Times, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns “as an addition to income tax liability.” Because the penalty is a tax, the department says, no one can challenge it in court before paying it and seeking a refund.

Well, well, well, this does pose a problem for our president, doesn’t it?

In addition to being yet one more violation of his pledge not to tax families making less than $250,000, Obama, during the health-care debate, insisted that a mandate to buy insurance, enforced by financial penalties, was not a tax.

In an exchange with ABC’s George Stephanopoulos last September (h/t Ed Morrisey), Stephanopoulos pressed Obama on admitting that what he was advocating was a tax increase. “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama assured us. Elsewhere in the interview, Obama said, “George, you — you can’t just make up that language and decide that that’s called a tax increase.” And when Stephanopoulos read the definition of a tax increase from Merriam Webster’s Dictionary, Obama came back with this condescending and foolish response:

George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. Otherwise, you wouldn’t have gone to the dictionary to check on the definition.

It turns out the truth is exactly the opposite of what Obama said. Jack M. Balkin, a professor at Yale Law School who supports the new health-care law, stated the obvious at a meeting last month: “[Mr. Obama] has not been honest with the American people about the nature of this bill. This bill is a tax.”

This is just one example of a systematic pattern of misinformation and disinformation related to the health-care campaign. We have seen similarly dishonest claims related to funding abortion (ObamaCare is doing exactly that), bending the cost curve down (it will bend it up), lowering premiums (they will rise), and to allowing Americans to keep the coverage they currently have (many won’t).

In many respects, the Obama administration has shown itself to be thoroughly postmodern; words have no objective meaning. Reality can be molded to the whims of the most powerful. We can each construct our own narrative.

In the case of the president, the narrative is fairly simply: whatever advances his own aims and objectives is defensible. The ends justify the means. If false claims have to be used to advance a larger truth, so be it.

This attitude pervades the Obama administration and appears to be especially concentrated in the chief executive. He thinks he can get away with almost anything, including the corruption of language. He can’t, and if he isn’t careful, this kind of distortion of truth and reality is going to cost him a very great deal.

In a recent story in the New York Times, we learned this:

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

The story goes on to explain that under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

DOJ argues that the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to the Congressional Budget Office. And according to the Times, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns “as an addition to income tax liability.” Because the penalty is a tax, the department says, no one can challenge it in court before paying it and seeking a refund.

Well, well, well, this does pose a problem for our president, doesn’t it?

In addition to being yet one more violation of his pledge not to tax families making less than $250,000, Obama, during the health-care debate, insisted that a mandate to buy insurance, enforced by financial penalties, was not a tax.

In an exchange with ABC’s George Stephanopoulos last September (h/t Ed Morrisey), Stephanopoulos pressed Obama on admitting that what he was advocating was a tax increase. “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama assured us. Elsewhere in the interview, Obama said, “George, you — you can’t just make up that language and decide that that’s called a tax increase.” And when Stephanopoulos read the definition of a tax increase from Merriam Webster’s Dictionary, Obama came back with this condescending and foolish response:

George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. Otherwise, you wouldn’t have gone to the dictionary to check on the definition.

It turns out the truth is exactly the opposite of what Obama said. Jack M. Balkin, a professor at Yale Law School who supports the new health-care law, stated the obvious at a meeting last month: “[Mr. Obama] has not been honest with the American people about the nature of this bill. This bill is a tax.”

This is just one example of a systematic pattern of misinformation and disinformation related to the health-care campaign. We have seen similarly dishonest claims related to funding abortion (ObamaCare is doing exactly that), bending the cost curve down (it will bend it up), lowering premiums (they will rise), and to allowing Americans to keep the coverage they currently have (many won’t).

In many respects, the Obama administration has shown itself to be thoroughly postmodern; words have no objective meaning. Reality can be molded to the whims of the most powerful. We can each construct our own narrative.

In the case of the president, the narrative is fairly simply: whatever advances his own aims and objectives is defensible. The ends justify the means. If false claims have to be used to advance a larger truth, so be it.

This attitude pervades the Obama administration and appears to be especially concentrated in the chief executive. He thinks he can get away with almost anything, including the corruption of language. He can’t, and if he isn’t careful, this kind of distortion of truth and reality is going to cost him a very great deal.

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Flotsam and Jetsam

AP reports: “Egypt’s government on Tuesday extended the country’s controversial emergency law for another two years, saying it would limit its use, a promise dismissed by human rights activists who warned the law would continue to be used to suppress dissent.” Will Obama be “deeply concerned” or zoom all the way to “profoundly troubled”?

Alan Dershowitz on Richard Goldstone’s “I was just following the law” defense of his record as a “hanging” apartheid judge: “It is interesting that Goldstone made a similar argument to friends as to why he accepted the chairmanship of the investigative commission offered to him by the United Nations Human Rights Council. He acknowledged that the Council was biased against Israel. Indeed, it treats Israel much the way Apartheid courts used to treat Black Africans: Just as there was special justice (really injustice) for blacks, so too there is special justice (really injustice) for Israel. Goldstone claims he took the job ‘to help Israel,’ just as he took his previous job to help blacks. In both cases he cynically hurt those he said he wanted to help while helping only himself. In both cases he was selected to legitimate bigotry. In both cases, better people than him refused to lend their credibility to an illegitimate enterprise. But Goldstone accepted, because it was good for his career.” Read the whole thing.

Dan Gerstein on the Kagan sales pitch: “This week, with their over-hyped and off-key ‘real world’ sales pitch for Supreme Court nominee Elena Kagan, the president’s team is doing a bang-up job of outing their blinds spots themselves. In doing so, they are providing a big open window into why Obama continues to struggle in connecting with working-class voters.”

Megan McArdle on Kagan’s “pitch-perfect blandness”: “What’s disturbing is that this is what our nomination process now selects for: someone who appears to be in favor of nothing except self-advancement. Then we complain when the most passionate advocates for ideas are the lunatic fringe.”

Steve Kornacki asks, “Should Specter have run as an independent?” He still can!

Charles Krauthammer on Specter’s dilemma having voted against Kagan for solicitor general: “You almost feel sorry for Arlen Specter. I mean: Almost. This is a guy of so many twists and turns and retreats and swerves and reverses. It reminds me of a line in a Graham Greene novel where he speaks of his protagonist who says: ‘I prefer to tell the truth. It’s easier to memorize.’ Specter‘s got a lot of memorizing to do.”

Oops: “Congressional budget referees say President Barack Obama’s new health care law could potentially add another $115 billion over 10 years to government health care spending. If Congress approves all the additional spending, that would push the 10-year cost of the overhaul above $1 trillion — an unofficial limit the Obama administration set early on. The Congressional Budget Office said Tuesday the added spending includes $10 billion to $20 billion in administrative costs to federal agencies carrying out the law, as well as $34 billion for community health centers and $39 billion for American Indian health care.”

But most voters have already figured that out: “The number of U.S. voters who expect the recently passed health care bill to increase the federal deficit is at its highest level yet, and most voters continue to favor its repeal. The latest Rasmussen Reports national telephone survey of Likely Voters shows 63% now believe the health care reform legislation signed into law is likely to increase the federal deficit. That’s up four points from last week.”

AP reports: “Egypt’s government on Tuesday extended the country’s controversial emergency law for another two years, saying it would limit its use, a promise dismissed by human rights activists who warned the law would continue to be used to suppress dissent.” Will Obama be “deeply concerned” or zoom all the way to “profoundly troubled”?

Alan Dershowitz on Richard Goldstone’s “I was just following the law” defense of his record as a “hanging” apartheid judge: “It is interesting that Goldstone made a similar argument to friends as to why he accepted the chairmanship of the investigative commission offered to him by the United Nations Human Rights Council. He acknowledged that the Council was biased against Israel. Indeed, it treats Israel much the way Apartheid courts used to treat Black Africans: Just as there was special justice (really injustice) for blacks, so too there is special justice (really injustice) for Israel. Goldstone claims he took the job ‘to help Israel,’ just as he took his previous job to help blacks. In both cases he cynically hurt those he said he wanted to help while helping only himself. In both cases he was selected to legitimate bigotry. In both cases, better people than him refused to lend their credibility to an illegitimate enterprise. But Goldstone accepted, because it was good for his career.” Read the whole thing.

Dan Gerstein on the Kagan sales pitch: “This week, with their over-hyped and off-key ‘real world’ sales pitch for Supreme Court nominee Elena Kagan, the president’s team is doing a bang-up job of outing their blinds spots themselves. In doing so, they are providing a big open window into why Obama continues to struggle in connecting with working-class voters.”

Megan McArdle on Kagan’s “pitch-perfect blandness”: “What’s disturbing is that this is what our nomination process now selects for: someone who appears to be in favor of nothing except self-advancement. Then we complain when the most passionate advocates for ideas are the lunatic fringe.”

Steve Kornacki asks, “Should Specter have run as an independent?” He still can!

Charles Krauthammer on Specter’s dilemma having voted against Kagan for solicitor general: “You almost feel sorry for Arlen Specter. I mean: Almost. This is a guy of so many twists and turns and retreats and swerves and reverses. It reminds me of a line in a Graham Greene novel where he speaks of his protagonist who says: ‘I prefer to tell the truth. It’s easier to memorize.’ Specter‘s got a lot of memorizing to do.”

Oops: “Congressional budget referees say President Barack Obama’s new health care law could potentially add another $115 billion over 10 years to government health care spending. If Congress approves all the additional spending, that would push the 10-year cost of the overhaul above $1 trillion — an unofficial limit the Obama administration set early on. The Congressional Budget Office said Tuesday the added spending includes $10 billion to $20 billion in administrative costs to federal agencies carrying out the law, as well as $34 billion for community health centers and $39 billion for American Indian health care.”

But most voters have already figured that out: “The number of U.S. voters who expect the recently passed health care bill to increase the federal deficit is at its highest level yet, and most voters continue to favor its repeal. The latest Rasmussen Reports national telephone survey of Likely Voters shows 63% now believe the health care reform legislation signed into law is likely to increase the federal deficit. That’s up four points from last week.”

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The Ticking Debt Bomb

Journalists often fixate on the absolute size of a government’s debt, coming up with imaginative ways to make it visible. My favorite (perhaps because I calculated it myself) is the American national debt in silver dollars. Lay the debt ($12,932,913,325,200.66 as of last Thursday) out in a line of silver dollars. Ignore the fact that there is not enough silver on planet Earth, mined and unmined, to mint that many silver dollars and that the silver content of an old silver dollar (0.7736 troy ounces) is now worth $14.12 as bullion. That line would stretch from the sun to the earth, back to the sun, back to the earth, and with enough left over to wrap around the equator 1,132 times.

But while this sort of thing is amusing, it doesn’t tell us much. Instead, there are two relative measures that are important for assessing government debt. One is the size of the debt relative to the GDP. Having been at 57 percent in 2001, the national debt at the end of the first quarter of 2010 was 87.3 percent. While we have to take 9/11 and the recession that began in 2007 into account, that is a breathtaking climb in a decade that has seen no great war or great depression. The Congressional Budget Office (CBO) estimates that the debt under current fiscal plans will double by the year 2020, putting us back, at the least, to where we were in 1946, right after World War II, when the debt peaked at 129.98 percent of GDP.

The other measure to keep a firm eye on is the percentage of total government revenues that goes to pay interest on the national debt. As you can see here, that measure is, as well, on a very worrisome trend, with the CBO predicting that the interest, now about 8 percent of government revenues, will amount to 18 percent of revenues by 2018;  18 to 20 percent is the point where Moody’s and, presumably, other rating agencies would strip the U.S. of its AAA rating. That, in turn, would cause the price of borrowing money to go up sharply.

However, both the CBO estimates are predicated on the economy recovering fairly briskly from the recession and on interest rates remaining low. Those two predicates are, to a certain extent, contradictory. With the current sovereign-debt crisis, it’s entirely possible that all governments will have to start paying more to borrow new money and roll over maturing bonds. Moody’s projects that the cost of federal-debt service could reach 22.8 percent of government revenues as soon as 2013.

That would not only threaten our credit rating and drive up still further the cost of borrowing, but also increasingly constrain the ability of the government to pursue American interests. In the 1920s Britain was paying over 40 percent of revenues to service its debt from World War I, gravely limiting its ability to function as a Great Power. In the 1780s France was spending over 80 percent of revenues to pay interest on its debt, no small reason why the 1780s didn’t end well for the French monarchy.

The people seem increasingly aware of this looming threat. Just ask Senator Bob Bennett of Utah, denied nomination to a fourth term yesterday largely because he voted for the TARP bill in 2008. But do the political class and the Washington media? They had better, and soon.

Journalists often fixate on the absolute size of a government’s debt, coming up with imaginative ways to make it visible. My favorite (perhaps because I calculated it myself) is the American national debt in silver dollars. Lay the debt ($12,932,913,325,200.66 as of last Thursday) out in a line of silver dollars. Ignore the fact that there is not enough silver on planet Earth, mined and unmined, to mint that many silver dollars and that the silver content of an old silver dollar (0.7736 troy ounces) is now worth $14.12 as bullion. That line would stretch from the sun to the earth, back to the sun, back to the earth, and with enough left over to wrap around the equator 1,132 times.

But while this sort of thing is amusing, it doesn’t tell us much. Instead, there are two relative measures that are important for assessing government debt. One is the size of the debt relative to the GDP. Having been at 57 percent in 2001, the national debt at the end of the first quarter of 2010 was 87.3 percent. While we have to take 9/11 and the recession that began in 2007 into account, that is a breathtaking climb in a decade that has seen no great war or great depression. The Congressional Budget Office (CBO) estimates that the debt under current fiscal plans will double by the year 2020, putting us back, at the least, to where we were in 1946, right after World War II, when the debt peaked at 129.98 percent of GDP.

The other measure to keep a firm eye on is the percentage of total government revenues that goes to pay interest on the national debt. As you can see here, that measure is, as well, on a very worrisome trend, with the CBO predicting that the interest, now about 8 percent of government revenues, will amount to 18 percent of revenues by 2018;  18 to 20 percent is the point where Moody’s and, presumably, other rating agencies would strip the U.S. of its AAA rating. That, in turn, would cause the price of borrowing money to go up sharply.

However, both the CBO estimates are predicated on the economy recovering fairly briskly from the recession and on interest rates remaining low. Those two predicates are, to a certain extent, contradictory. With the current sovereign-debt crisis, it’s entirely possible that all governments will have to start paying more to borrow new money and roll over maturing bonds. Moody’s projects that the cost of federal-debt service could reach 22.8 percent of government revenues as soon as 2013.

That would not only threaten our credit rating and drive up still further the cost of borrowing, but also increasingly constrain the ability of the government to pursue American interests. In the 1920s Britain was paying over 40 percent of revenues to service its debt from World War I, gravely limiting its ability to function as a Great Power. In the 1780s France was spending over 80 percent of revenues to pay interest on its debt, no small reason why the 1780s didn’t end well for the French monarchy.

The people seem increasingly aware of this looming threat. Just ask Senator Bob Bennett of Utah, denied nomination to a fourth term yesterday largely because he voted for the TARP bill in 2008. But do the political class and the Washington media? They had better, and soon.

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