Ryan's Budget: A Frontal Assault on the New Deal

Wisconsin GOP Congressman and Chair of the House Budget Committee Paul Ryan has an op-ed in today's Wall Street Journal in which he outlines $6.2 trillion in spending cuts from the President's budget over the next ten years. According to Rep. Ryan, his plan would put the country "on the path to prosperity." Clearly, we must have a different definition of prosperity.

The Ryan budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. It also would demolish Medicaid by privatizing the most successful and beloved safety net for the elderly and the poor. Of the $6.2 trillion in proposed cuts, about a fifth would come from decimating Medicaid. Jonathan Allen of Politico offers the background on why Ryan thinks he can get away with this:

Think of it like this: Medicare and Social Security are like money hidden inside locked boxes behind a vaulted door, while Medicaid is a stack of money laying on the teller’s table. Medicare and Social Security are protected by two layers. There’s the political danger of going after programs that serve Republican and “swing” voters, and GOP leaders have promised not to alter benefits for folks who are within 10 years of retirement.

“It is difficult to construct significant budget savings for the Medicare program in a five or 10 year time frame of a normal budget resolution, particularly if fundamental changes to the program — such as converting to a defined contribution plan — would not impact any individuals who are currently 10 years from qualifying for Medicare,” says Bill Hoagland, the longtime top Senate budget aide who now lobbies for Cigna. “On the other hand, federal budget savings are more easily obtained in the Medicaid program within the time frame of a budget resolution, where the policy is simply to limit the federal grant program to the states.”

Indeed, Medicaid is flush with new cash. Last year’s health care law adds $627 billion to the Medicaid and Children’s Health Insurance Programs (Medicaid for kids) over the next decade, according to the Joint Tax Committee. That money hasn’t been spent yet, so it’s just sitting there for the taking.

The Ryan budget also aims to lower taxes bringing the top marginal rate from 35 percent to 25 percent. It hopes to maintain a revenue-neutral approach "by clearing out a burdensome tangle of deductions and loopholes that distort economic activity." Specifics, I assume, will come at a later date but the insanity of repeating a failed economic mantra comes now.

Congressman Ryan asserts in his op-ed that "no one person or party is responsible for the looming (fiscal) crisis." Perhaps not. But the Ayn Rand-loving acolyte that is Paul Ryan should perhaps realize that his approach has been tried before and that such an approach has only engendered a deepening cleavage that has torn at the social fabric of this country. It was the New Deal that built the middle class in America ensuring a broad-based prosperity for most though certainly not all. Today's GOP with its nefarious budget is leading a final frontal assault on the New Deal and should they succeed they will plunge the country into a severe depression and tear the country apart. 


Democrats Winning Strategy

History isn't on the GOP's side, either. If keeping the top marginal tax rate at 35 percent—the rate under Bush, and the rate that Republicans are fighting to preserve—spurs so much hiring, why didn't America experience any job growth at all during Bush's time in office? And if a top marginal tax rate of 39.6 percent—the rate under Bill Clinton, and the rate that Democrats are fighting to restore—is such a job killer, why did payrolls grow by 20 percent during the 1990s?Newsweek Blog

I have become so tired of the gloom and doom of the Democrats in the upcoming mid-term elections. It seems everywhere you turn the news keeps getting worse. Based on these reports there won’t be any Democrats left in the Congress following November. I believe that the Democrats can not only survive November but can also prosper. In order for this to happen they will have to do a number of things that Democrats historically don’t do very well.

The first thing they will have to do is to craft a coherent message that they all unite behind. Because of their lack of a national message the Democratic caucus is plagued by rogue members who feel little if any national allegiance to the party. Because so many of their members are products of local issues and electorates too often Democrats are left with the type of majorities we’ve had the last two years. The Dems have been a majority in name only and incapable of crafting a cohesive governing philosophy. What we don’t need and I am certainly not suggesting are litmus tests like teabaggers or wing-nuts, but instead we need to have certain principles that make us Democrats. I know that we have the general terms of working for the middle-class and for the downtrodden, but that is so open to interpretation that it provides little structure in times of great calamity like the ones we are in. As a party the Dems should craft a set of principles that all members of their caucus agree to work and fight for. And once accepted it should be provided to the American people as a contrast to the Republicans. This message should be honed and offered by all candidates as the governing philosophy of this party. Those who are unable to uphold these principles are free to run as independents or Republicans.

The second thing they should do is at every interview, town hall, and campaign stop carry a chart of the federal deficits under all presidents dating back to Eisenhower. This chart should appear in all of the ads and should become the mantra of the party. They should all provide the American public with an image of the failed policies of these fiscal conservatives who have always preached one thing and done another. This would be a symbol to all but the truly partisan of the duplicity of this party and their unrelenting assault on the middle-class. This is the type of symbol that resonates with the independent voters. This President and these Dems were elected by drawing just such a sharp contrast between their policies and the policies of the wing-nuts. Unfortunately, in America it is not enough to just talk about the lack of consistency and the hypocrisy of the Republicans many of our citizenry need an illustration to drive home points. The success of the bumper sticker rhetoric of the wing-nuts will bear this fact out. This point of preaching austerity and yet every chance they get to govern they raise the deficit to record highs must be repeated over and over. The Dems should take a page from the wing-nuts and that is if you repeat something long enough and loud enough people begin to accept it as fact.

Finally the Dems should propose sweeping public improvement and infrastructure projects to attack the intransigent unemployment that is gripping this nation. It is time to force the Republicans to either support the American people or be seen for the hypocrites they are. Regardless of anyone’s political persuasion few can argue against the historical truth of the “New Deal”. It is time for the American people to get another new deal. Just as FDR recognized the economy had been shanghaied by the wealthy of his time so it is again today. Instead of hoping to negotiate with those seeking short-term greed, it is time for this President to call them to task for the sake of the country. No group, no single person’s agenda can be allowed to supersede the greater good of the majority of Americans. It is time for the Dems to go on the offensive. If they truly believe that they have the best minds with the best plan for America then now is the time to show it. The time has come to craft a set of programs that will actually stimulate the economy and reduce unemployment and at the same time they must demonstrate how implementing these initiatives will in the long run reduce the long-term deficit by fueling the expansion of the economy. Just as the New Deal laid the foundation for the greatest expansion of the American economy in our history so it must be done again.

If the Dems are going to survive and keep the momentum now is not the time for timidity, instead it is the time for bold visions and actions. The Republicans have shown that they are devoid of any new ideas to address the major challenges we face as a nation. So rather than cowering in the corner waiting for the day of reckoning the Dems must provide the American people with a stark contrast of the future of America. If the Dems cannot defeat the rehashed ideas of the past then they are not worthy to lead into the future.

“When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.” - John M. Richardson, Jr.

The Disputed Truth

Deficit Politics In A Nutshell

Republican economists like to quote Milton Friedman:

Inflation is always and everywhere a monetary phenomenon.

I submit that the following is more truthful:

Government deficits are always and everywhere a political phenomenon.

Depending on which interests control the debate in a particular society, conventional wisdom will hold that deficits are either benign or apocalyptic.  In the United States, the corporate media takes its cues on this issue from the Republican Party. 

The corporate right-wing wants to roll back the New Deal in order to make it easier for economic elites to run the country as they see fit.  Republican politicians are their employees.  Fear of the deficit is used to manipulate voters into supporting policies designed to dismantle the government programs that mitigate the inequities of unchecked capitalism.

Thus endeth the lesson.

(From my blog http://partisandawn.wordpress.com/)



Weekly Pulse: FACE the Facts

by Lindsay Beyerstein, Media Consortium blogger

In 1993, anti-choice extremists murdered a doctor, burned 12 buildings, set off a bomb, and blockaded 66 abortion clinics. The following year, President Bill Clinton signed the Freedom of Access to Clinic Entrances (FACE) Act. FACE made it a federal crime to obstruct a clinic or intimidate patients and providers.

Wendy Norris of RH Reality Check reports that, in the intervening 16 years, the Justice Department has only prosecuted 19 civil and 45 criminal cases under FACE. Abortion provider Dr. George Tiller was assassinated last year by a hardcore clinic protester, and many asked if the FACE Act was being enforced.

Norris’s story is part of a series on FACE published by RH Reality. The next installment will explore how one radical anti-choice protester has managed to terrorize the same clinic for 30 years with apparent impunity. Kudos to the Guggenheim foundation for funding this important and timely series, and to the John Jay College Center on Media, Crime and Justice for providing editorial input.

The Pill and I

May 9th is the 50th anniversary of the FDA’s approval of Enovid, the first birth control pill. Care2 contributor Ann Pietrangelo, who recently celebrated her own 50th birthday, reflects on how the Pill changed history:

I went through my entire reproductive life in a way that my female ancestors, indeed my own mother, could scarcely have imagined. The Pill and other contraceptive choices were always available to me. I have never had to face the dreaded abortion decision, but throughout my reproductive years, I had the peace of mind of knowing that such a decision, difficult though it would be, was mine to make. I, and millions of women of my age group and younger have been most fortunate. We’ve lived a different kind of life than would have been possible in another time and another place.

Anti-”personhood” coalition kicks off

A new group has united to fight Colorado’s proposed “egg as person” ballot initiative, Joseph Boven of the Colorado Independent reports.  The organization calls itself Protect Families, Protect Choices (PFPC). If Amendment 62 passes, it would effectively outlaw abortion, stem cell research, and even some forms of contraception. Women who drink, use drugs, or attempt suicide could face criminal charges if the ballot initiative becomes law.

The Colorado measure is one of of many similar measures proffered by anti-abortion activists in state legislatures around the country. The last time Coloradans voted on whether to give fertilized ova the full complement of rights under state law, 73% voted against the measure. If the bill passes, will frozen embryos be able to own property? Could Coloradans evade their creditors by signing their houses over to zygotes?

Will health care reform save Democrats?

In The Nation, Katherine S. Newman and Steven Attewell tackle the question on everyone’s mind: Will health care reform change the political fortunes of President Barack Obama and the Democrats? They warn that Democrats shouldn’t expect short-term political gains, even if reform is ultimately regarded as a success story:

For some time to come we can expect the firestorm of opposition to health care reform that is unfolding today to persist, even from people who stand to benefit from the provisions of the new law. The rose-colored glasses through which we sometimes view the legacy of the New Deal and the Great Society often obscure how contentious the debates were or how long they continued after the passage of key legislation. We should not be deterred by the noise coming out of the Tea Party. The weight of history is against them.

Passive aggressive red states

Suzy Khimm of Mother Jones sees trouble ahead: So far, at least 15 states have refused to create high-risk health insurance pools. The refusniks are red states hostile to health care reform. High-risk pools are a stopgap to provide coverage for people with preexisting conditions. Insurers are free to discriminate against sick people until 2014, and high risk pools are supposed to cover those who can’t buy coverage in the meantime.

Khimm explains that the federal government will have to step in and create high-risk pools if states aren’t willing to do so. Health care reform left a great deal of power in the hands of states. The stage has been set for a grim power struggle, a bureaucratic battle of attrition.

This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.



Weekly Audit: Too Big to Fail is Just Too Big

by Zach Carter, Media Consortium Blogger

Last week, President Barack Obama released key legislation designed to fight the banking industry's too-big-to-fail problem. But Obama's plan doesn't actually address too-big-to-fail at all. It reinforces a broken system in which economically dangerous companies are bailed out whenever they drive themselves to the brink of failure.

If we want the economy to support all people, we have to break up the big banks and start treating the creation of good jobs as an economic priority on par with Wall Street rescues.

The editors of The Nation break the political debate over banking into three camps:

  • The first camp is composed of bank lobbyists, Republicans and conservative Democrats and wants to do nothing.

  • Camp two, endorsed by the White House and influential Rep. Barney Frank (D-MA), would impose tougher regulations on too-big-to-fail banks to keep them from getting out of control.

  • The third camp wants to go even further: If a bank is too-big-to-fail, it is also too-big-to-regulate. Companies that pose a danger to the economy have to be split up into smaller firms that cannot induce economic ruin.

The Nation editors rightly see the third strategy as the most sensible. While the "break-up-the-banks" policy is being portrayed as a left-wing pipe dream by cable news networks, the policy actually relies on an age-old observation of conservative economists. Regulators make mistakes, and they often get co-opted by the very industries they are supposed to be supervising.

The practical policy is to impose structural limits on what activities banks can participate in and how big they can get. Just look at the list of high-profile supporters: former Federal Reserve Chairman Paul Volcker, former Citigroup Chairman John Reed, Bank of England Governor Mervyn King. I don't remember seeing any of those guys at the Iraq War protests.

Many of the regulatory blind spots that brought down the economy were obvious to some policymakers for years. Back in 1994, Sen. Byron Dorgan (D-ND) wrote an article for The Washington Monthly warning that derivatives trading was putting the economy in grave danger. Commodities Futures Trading Commission Chair Brooksley Born tried to take action on these derivatives, but was overruled by other regulators, including then-Fed Chair Alan Greenspan, and then-Treasury Secretary Lawrence Summers, now the top economic adviser to President Obama. Summers and Greenspan even convinced Congress to pass a law banning the regulation of key derivatives, including credit default swaps, which ultimately brought down insurance giant AIG.

Fifteen years after Dorgan's article first ran, The Washington Monthly is featuring it again, along with a recent speech by Dorgan that details massive failures in Wall Street and Washington.

"We had regulators come to town in recent years and willfully boasted that they wanted to be blind as regulators," Dorgan says.

There are good elements of Obama's plan to deal with too-big-to-fail. It gives policymakers the option of putting a too-big-to-fail institution through a special bankruptcy process administered by the executive branch, thus avoiding the problems created in bankruptcy court when Lehman Brothers failed. But the bad part is really bad: Officials would also have the option to provide unlimited bailouts to Big Finance via loans, guarantees and even asset purchases.

As Mike Lillis notes for The Washington Independent, some responsible Democrats like Rep. Brad Sherman (D-CA) have been objecting to this aspect of the legislation for months. Sherman, in fact, calls it "TARP on steroids," noting that the bank bailout at least came with some meager oversight and a limit on the program's actual size.

The bank lobby is spending money like mad to maintain their stranglehold on the economy. Neither Congress or the administration will change course without intense public pressure. So it was very reassuring last week to see thousands of people protesting the annual meeting of top bank lobby group, the American Bankers Association. David Moberg chronicles the protest in a blog post for Working In These Times that covers speeches by both key union leaders and ordinary people facing foreclosure after watching their tax dollars go to the very bankers who wrecked the economy.

"There was broad agreement on anger at the banks for providing so little, if any, public benefit for the massive bail-out, and for so quickly returning to the greed and abuse that precipitated the crisis," Moberg writes.

Laura Flanders covers the protests for GRITtv, including video of protesters chanting "Bust up big banks!" In a roundtable discussion with Christina Clausen of the United Food & Commercial Workers Union, George Goehl of National People's Action and Rob Robertson of the Right To The City Alliance, Rolling Stone journalist Matt Taibbi explains the overriding impotence of the regulations Congress is about to approve. Regulators will not be able to crack down on abusive derivatives, a full 8,000 of 8,200 banks will be exempt from Consumer Financial Protection Agency oversight, while the same agencies that screwed up heading into this crisis will be charged with preventing the next one.

"They've had sweeping powers to do whatever they wanted," Taibbi says. "They've had this regulatory power all along."

What we need are good jobs, and lots of them. Obama's economic stimulus package has made tangible economic progress. It's saved hundreds of thousands of jobs, and is clearly responsible for the turnaround in gross domestic product (GDP) we saw in the third quarter. But a full 17% of the workforce remains unable to find full-time work, as Julianne Malveux explains for The Progressive.

When Wall Street crashed in 1929 and unleashed the Great Depression, the government eventually stepped in as an employer-of-last-resort. The Works Progress Administration (WPA) and Civilian Conservation Corps (CCC). built schools, parks, roads and bridges which still serve our communities today. Both the WPA and the CCC employed literally millions of people--in the 1930s. It's a model that could work very well today.

As the current recession makes clear, ending too-big-to-fail and guaranteeing a good job for everyone in our society who wants one are the two most critical structural reforms our economy needs. Don't let lawmakers forget it.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

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