Should the federal government’s balance sheet be treated the way a family approaches household finances? That’s the question at the heart of the renewed debate over Paul Ryan’s budget, President Obama’s spending, and the idea of balancing the federal budget. Conservatives argue that keeping a balanced budget is a basic expression of fiscal responsibility, and they point out that states have balanced budget requirements. Whether this makes it more or less compelling for the federal government to have a balanced budget requirement is up for debate, and the New York Times offers an in-depth survey of economists and experts on what the president derides as balancing the budget for its own sake.
Republicans seem to think that balancing the budget is a good political message to get behind, but they should be wary of how reasonable the other side comes out in stories like today’s Times piece, and they should also take into consideration the sometimes perverse unintended consequences of some efforts to force a balanced budget. Here is how the Times summarizes the two views:
The administration and its media allies are ramping up the pressure on Republicans determined not to vote for another hike in the debt ceiling without a meaningful agreement from the White House about entitlement reform and cutting spending. The president is refusing even to talk to the GOP about any deal in order to gain their assent for expanding the government’s ability to keep running up the debt and trying to paint them as insensitive misers who want sick children to suffer. In response, some conservatives have argued that the apocalyptic talk about the impact of a failure to reach an agreement about the debt ceiling is absurd hyperbole since what would follow would not be a default in any real sense. But now some of his allies in the media are going one step further by branding those who have said such an eventuality can be managed without the government failing to meet its obligations as “debt deniers.”
The term denier is a loaded one in contemporary political discourse. In common usage these days, deniers aren’t merely people who say something that others believe is not true. They are troglodyte reactionary haters who don’t accept the scientific community orthodoxy about global warming or, even worse, claim the Holocaust never happened or that 9/11 was an U.S. government or Israeli plot. Yet “Default Deniers” is the headline Politico placed on an article devoted to examining the views of people Like Pennsylvania Senator Pat Toomey or Utah Representative Jason Chaffetz. Conservatives were allowed to defend their thesis about the consequences of not raising the debt limit in the article even though the thrust of the piece was aimed at portraying Toomey, Chaffetz and those who agree with them as extremists determined to ruin the country for the sake of their ideology. But the use of this sort of language about their views is about an effort to avoid discussion about the merits of the arguments on this issue and to cast aspersions about the motives of those who oppose the president’s desire for a blank check to keep spending.
President Obama isn’t likely to have much trouble getting the Senate to confirm Jack Lew as his new treasury secretary. Though Senator Jeff Sessions has vowed to try and stop Lew, there is nothing in the nominee’s long record of service to Democratic presidents that would disqualify him for the office. Given the fight that is brewing over the nominations of Chuck Hagel and John Brennan for the Department of Defense and the CIA, there is little appetite on the Hill for any further effort to deny the president his choice to run an important department.
But even though Lew will probably be easily confirmed, his nomination is one more signal that there may be no way to avoid more bitter and counter-productive confrontations with Congress over the budget. Lew is well known to be a hard-core progressive who, during the negotiations with Republicans over the debt ceiling and the fiscal cliff, made it clear that he opposes any true reform of entitlement spending. Having run to the left and won re-election, President Obama is entitled to try and govern from the left. Lew’s selection illustrates that this is his intention. But though he may have a mandate to govern, that doesn’t give him the power to alter reality. If he isn’t prepared to start thinking about cutting spending, then no amount of rhetorical excess will prevent this country from going further down the road to insolvency.
There may be a last-minute compromise reached today in the negotiations over the fiscal cliff, but not if President Obama has anything to say about it. Even as Vice President Joe Biden and Senate Minority Leader Mitch McConnell were believed to have led the effort to have the structure of a deal in place for the two houses of Congress to vote on later today, the president emerged to make a statement that seemed geared to scuttling the negotiations.
In a campaign-style event, the president spoke of a possible accord between the two parties that would avert the immediate effects of the fiscal cliff being reached. But the bulk of his remarks were devoted to goading the Republicans into backing away from any deal. Not only did he gratuitously insult the GOP about their stands on the budget to the great amusement of the hand-picked audience of supporters, he also made it clear that the tax increases in any compromise would just be the start of what he hoped to accomplish. Even worse, he implied that spending cuts, especially the entitlement reform that is necessary for any long-term solution to the nation’s problems, are not really on the table as far as he is concerned.
Given the tone of his comments and the timing, Republicans should be forgiven for suspecting that his real purpose was to send the country over the cliff in the belief that only the GOP would be blamed for the disaster.
For the past few days, the focus of coverage of the budget negotiations has been on the House Republicans who torpedoed Speaker John Boehner’s Plan B proposal. The hardliners determined to fight any tax increases, including those on millionaires, have helped create a situation where the deadline may well expire before Congress and the president can agree on a deal that will avoid an across-the-board tax increase as well as devastating spending cuts. Though their argument that the country’s problem is about spending, not taxes, is right, allowing the country to go over the fiscal cliff is irresponsible and will cost the GOP dearly in terms of public support. But now that the House has failed to advance Boehner’s compromise measure, it is up to the Senate to act and that means the media needs to turn its attention from the intransigence of a minority of House Republicans to the equally unproductive behavior of the majority of Democrats in the upper house.
For all of the country’s justified concern about the inability of the Republicans to make a deal, the fact remains that the Democratic-controlled Senate is even more of an obstacle to an accord. For Majority Leader Harry Reid and his party to act to avoid the fiscal cliff, he will have to do something that he has failed to do in the last three years: pass a budget plan of any kind. The Democrats have sat back and enjoyed the brickbats thrown at the GOP for their dysfunctional behavior, but have done nothing themselves to make a deal other than to play the role of cheerleaders for the White House’s class warfare rhetoric. With only days left for action to avoid the automatic enactment of measures that could potentially devastate an already weak economy, it’s time to for Reid and his caucus to put forward a bill that could actually pass. If not, their reliance on public opinion only blaming Republicans for the impending debacle may ultimately wind up a colossal misjudgment.
One of the arguments some intelligent conservatives are making is that if Republicans agree to increase rates on the top earners in America, it will do irreparable damage to the GOP. The basic case goes like this:
If Obama succeeds and ends up getting a confession from Republicans that tax cuts are the problem, tax cuts are the cause, what happens to the next Republican who campaigns on tax cuts? Not going to have a prayer.
Now it may well be that raising tax rates will do significant damage to the Republican Party. It may be substantively unwise. And I’m certainly sympathetic to Republicans not wanting to play a role in something they think is bad policy.
But here’s where I think this analysis is wrong.
With negotiations over how to avoid going over the “fiscal cliff” intensifying, there’s a lot of attention on Grover Norquist and his “Taxpayer Protection Pledge,” in which lawmakers who sign it pledge to taxpayers that they will (a) oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and (b) oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.
On the pledge, I have several thoughts.
1. Mr. Norquist has basically been a force for good, since he raises the price of tax increases and allows Republicans to get more in return for them. That said, I have never liked the idea of politicians signing pledges beyond their oath to support and defend the Constitution. It locks a person into a position that may seem reasonable at the time but eventually becomes unwise. I support lower tax rates, but they are not a talisman. And whether or not one should agree to higher taxes depends on what one is able to get in return.
There’s no doubt that a president who has just been re-elected has a lot more leverage in a negotiation than the House Republican leadership. But if President Obama is feeling confident that he can have his way in any deal that prevents the country from heading over the fiscal cliff, it’s not just because of his victory over Mitt Romney earlier this month. The spectacle of House Republicans starting to snipe at each other and tax activist Grover Norquist is evidence that the campaign to pressure Congress into backing tax increases being orchestrated by the White House appears to be working.
While the pushback against Norquist’s heavy-handed attempts to bludgeon Republicans into obedience is understandable, both the anti-tax purists and those more amenable to compromise are playing right into Obama’s hands. Rather than the debate centering on whether tax increases will hurt the economy and the need for Democrats to put entitlement spending on the table in any deal to prevent the country from heading over the fiscal cliff, right now the debate seems to center on a growing civil war within GOP ranks. Rather than sticking with House Speaker Boehner and strengthening his hand in negotiations, many Republicans are allowing themselves to be panicked into a stand that would effectively allow the president’s plans for tax increases to go forward without any commitments about reforming the tax code or entitlement spending. If the trend continues and a critical mass of Boehner’s caucus breaks, the result will not just be a tactical defeat on a point where Obama may have the country’s support, but a rout that will enable the president to avoid any commitment to significant spending cuts.
As President Obama reaches out to progressive activists to get their temperature on budget compromises, Politico reports that the Democratic Party may have an even more difficult time unifying their members around a deal than the GOP:
Yet getting a deal that raises tax rates for the wealthy may not be so easy for the party, and not just because of inevitable GOP resistance.
Senate Majority Leader Harry Reid (D-Nev.) will have to find 60 votes to extend just the middle-income tax rates — far from a given when a swath of the Senate’s moderate Democrats are up for reelection in 2014.
Reid and the White House will also need to navigate a hardening Democratic divide on entitlements. Progressives don’t want any deep cuts that Republicans will insist on for a deal. But a Third Way poll of 800 Obama voters set for release Tuesday found that efforts to fix Medicare and Social Security enjoy broader support than liberals suggest.
Even if Speaker John Boehner (R-Ohio) were to risk his job by backing a tax-rate increase, there are Democrats who think a $250,000 income threshold is too low. So finding 218 House members to pass a bill that would extend the lower tax brackets isn’t exactly a cakewalk. Want Boehner to raise taxes? Republicans privately say the entitlement changes would have to be unimaginably sweeping.
The New York Times editorial that Jonathan referenced this morning is really quite an amazing document, a window into the utter policy bankruptcy of modern-day liberalism. It’s a classic example of the somebody-somewhere argument. Any change in entitlements or federal government largesse to states and cities, this argument holds, will mean that somebody somewhere will be hurt by the change and that therefore everything must stay the same, even though the world has not stayed the same.
To give just one example, the Times writes, “Mr. Ryan plans to take away their new sewage treatment plant, the asphalt for their streets, and the replacements for retiring police officers and firefighters.” Why any of that is a federal responsibility I know not, but anyway, do we need as many, say, firemen as we have had in the past? The number of house fires has fallen by half during the last 35 years, thanks to better building codes, smoke alarms, the decline of smoking, etc. Firemen these days spend much of their time responding not to fires but to accidents and medical emergencies to which the police and EMS also respond. That’s make-work. Firemen are heroes, for sure, but fire departments are not WPA projects. They exist to fight fires, not employ firemen. Budgetary discipline forces governments to look for ways to do the job at lower cost. Is there any fat in government? Is there any water in the Pacific Ocean? The federal government has 47 different job-training programs run by 9 different agencies. But the New York Times and the choir to which it preaches want none of it changed.
As John wrote earlier today, liberals are convinced that Mitt Romney’s choice of Paul Ryan to be his running mate offers them a golden opportunity to savage the Republicans about the Wisconsin congressman’s budget plans. Predictably, the New York Times delivered one of the first such salvos in its editorial posted hours after Romney announced his pick in which it slammed Ryan as “callous” and claimed his attempt to control the nation’s out-of-control entitlements would leave the poor and the elderly sicker while also harming the unemployed and students. Not considering it advisable to even make a pretense of noting the GOP veep candidate’s strengths, the Times thought it advisable to go for the jugular first and worry about nuance later. We can expect the rest of the liberal mainstream media to do no less in the days and weeks that will follow.
However, it must be noted that the expectation by liberals that they can get away with such blatant demagoguery is not entirely without foundation. The pick of Ryan should energize the Republican base and will lend intellectual heft to a Romney campaign that has often seemed intent on merely waiting for the voters to fire Barack Obama rather than putting forward its own vision. But we know that “Mediscare” tactics employed by the Democrats have worked sometimes. And, as Times political blogger and statistical analyst Nate Silver pointed out on Wednesday, Ryan brings no obvious or immediate tactical political advantages to the Republicans. If Romney’s choice does anything it is to provide a test for the electorate. Are they prepared to listen to reasoned arguments articulated by Ryan about the need for entitlement reform, or will they succumb to simplistic liberal cant about pushing grandma over the cliff? As much as conservatives want to believe the American public is not so foolish or shortsighted as to simply accept the left’s defense of the status quo, we won’t know the answer to that question until November.
As Jonathan noted yesterday, the left doesn’t want to admit that the entitlement system built up since the New Deal is collapsing under unrelenting and ineluctable fiscal and demographic pressures. But there is another reason that the medical part of the system is in such a mess: the utter lack of market forces to bring down prices and inspire innovation and efficiency.
The New York Times has an article this morning on the wildly varying prices for standard medical procedures, such as an appendectomy:
Hospital charges are all over the map: according to the report published Monday in the Archives of Internal Medicine, fees for a routine appendectomy in California can range from $1,500 to — in one extreme case — $182,955. Researchers found wide variations in charges even among appendectomy patients treated at the same hospital.
“We expected to see variations of two or three times the amount, but this is ridiculous,” said Dr. Renee Y. Hsia, the study’s lead author and an assistant professor of emergency medicine at the University of California, San Francisco. “There’s no rhyme or reason for how patients are charged or how hospitals come up with charges. There’s no other industry where you get charged 100 times the same amount, or 121 times, for the same product,” she said. Though she is an emergency room doctor herself, Dr. Hsia said, she has no idea what the hospital charges for various procedures. When patients ask her, she has to tell them she doesn’t know.