Leading congressional Democrats immediately recoiled Tuesday from a new proposal to cut $600 billion in Medicare spending over the next decade ? in part by raising the eligibility age.Cutting Medicare and Social Security is a top priority for the GOP. Democrats should not only NOT be talking about cutting those programs, period, but it certainly shouldn't even be discussed at all while the GOP continues to say "no tax increases." This budget negotiation has been on their terms from day one. It needs to stop. This is a good first step. My favorite part of the Post story:
Sens. Joseph I. Lieberman (I-Conn.) and Tom Coburn (R-Okla.) unveiled the proposal as part of a bipartisan effort to produce the kind of savings necessary to achieve the $2 trillion in debt reduction both parties say is needed to convince reticent lawmakers to vote to raise the debt ceiling. It would raise Medicare?s eligibility age from 65 to 67 and assess higher premiums on wealthier seniors.
The proposal echoes Republican demands that entitlement reform ? especially deep cuts in Medicare spending ? be a part of any agreement to raise the nation?s debt ceiling.Yes it does.
The Republican race is looking like one of those old mail-order book clubs that thrive on negative option. Once you sign up and send a buck for the first three or four choices, they automatically start shipping you each month?s new selection, unless tell them to stop.
This month, ready or not, we get Michele Bachmann for a coffee table already piled high with Romney, Pawlenty, Cain et al, a summer reading list of anti-Obama screeds with little or no sexy conflict in their own stories.
The Gingriches at least provided a ?Breakfast at Tiffany? subplot for a while, as Trump teased us with ?DaVinci Code? revelations about Hawaiian archives that never materialized and Palin still keeps hinting at a ?Going Rogue? sequel with a promotional tour but fails to deliver a product.
The old saying ?You can?t beat somebody with nobody? recurs as Republicans keep ?Searching for Mr. Goodbar? (or Ms.) to excite a fractured audience of Tea Party true believers, skeptical Independents and disaffected Democrats to take over the top spot on their best-seller list.
For beach reading, voters could do worse than pull Barack Obama?s old tomes from the shelves and try to remind themselves (and him) of what excited them so much back then.
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Richard Wolf for USA Today has a useful look at what kind of immediate program cuts we’ll be looking at if Congress doesn’t agree to raise the debt ceiling in a timely manner. Long story short, the Treasury Department will be facing difficult choices between slashing programs for seniors and trying to run wars without paying the people doing the work of keeping armies in the field:
It shows that in August, the government could not afford to meet 44% of its obligations. Since the $134 billion deficit for that month couldn’t be covered with more borrowing, programs would have to be cut.
If Social Security, Medicare, Medicaid, unemployment benefits, payments to defense contractors and interest payments on Treasury bonds were exempt, that would be all the government could afford for the month. No money for troops or veterans. No tax refunds. No food stamps or welfare. No federal salaries or benefits.
Want to protect the social safety net? That would be possible ? but only if Treasury stopped paying defense contractors, jeopardizing national security. Plus virtually every federal agency and employee.
The best way to handle this, in the first instance, is to pay contractors with IOUs. The firms that supply the United States military aren’t cash-constrained and they don’t want to give up the Pentagon as a customer. If we ask them to keep doing the work and just promise to pay them after congress raises the debt ceiling, they’ll almost certainly keep paying the troops. And on a symbolic level, the high-level officials of the Obama Administration can agree to work without pay even though this won’t save very much money. Failing to pay out tax refunds, Social Security benefits, food stamps, and other cash and cash-like transfers would, by contrast, be catastrophic leading to the kind of historic collapse in nominal economic activity that Michael Ettlinger and Michael Linden have warned against. The better option is to stop paying doctors and hospitals who treat Medicare and Medicaid patients, and hope that most health care providers are willing to keep doing work and accept delayed payments. The hope would have to be that after a week or two of this, the various government contractors and health care providers who are losing money would twist Congress’ arm enough to get the debt ceiling increased. But if that doesn’t work, then you need to start looking at only partially paying troop salaries, Social Security benefits, and civilian federal employee salaries. At that point, the consequences for the macroeconomy start going from “uncomfortable” to “potentially catastrophic” because people who aren’t getting paid aren’t going to be able to buy goods and services from others, kneecapping private sector employment.
Democrats and Republicans are working to implement the health insurance exchanges in the Affordable Care Act, but are looking to different states for guidance in how to best structure a marketplace that would allow consumers to compare and purchase comprehensive insurance beginning in 2014. Red states are typically guided by Utah’s flea-market type approach, in which almost any insurer can offer coverage in the exchange and is held to few standards or regulations, while blue states are following the Massachusetts model of prudent purchasing and price negotiation.
Today, the U.S. Pirg has published a blueprint “for creating a strong, pro-consumer exchange that lives up to its promise of a better marketplace” that could offer a more comprehensive guide to the states:
– It should be run and overseen by representatives drawn from the consumer and small business communities that the exchange is designed to serve, not insurers or providers who could benefit financially from the exchange’s decisions.
– That means it must have the authority to exclude plans that fail to deliver robust consumer protections, quality care, and reasonable costs, particularly if the plan has a history of unreasonable rate increases. And because the bigger the exchange, the greater its negotiating power, the state should plan to open the exchange to employees of large businesses as soon as possible, and work to enroll as many eligible consumers as possible.
– The exchange should provide a special ?seal of approval? for the plans that do the best job at providing high quality care, and provide consumers with easily understandable information about what these reforms mean and how consumers can best make use of them.
– The state should prohibit insurers or brokers from steering people either onto or off of the exchange, through setting different broker commissions, adopting targeted marketing strategies, or by any other method. And because a larger exchange will have more stability, states should conduct strong outreach and enrollment and widen the eligibility rules for the exchange.
– The state?s system should obtain updated information from enrollees in both public programs and the exchange each year, and if the enrollee?s eligibility has not changed, their coverage should be automatically renewed.
As the CBPP’s Dave Chandra has pointed out, “virtually every state has made at least some progress toward setting up [the] health insurance marketplaces,” including states like Indiana, Mississippi, and Alabama — which are also challenging the the constitutionality of the health law. In total, 16 states have “passed exchange-related legislation,” 39 states have introduced exchange legislation this year, and “48 states (all except Louisiana and Florida) plus the District of Columbia are engaged in some level of exchange planning.” So far, “only Louisiana has publicly announced that it won?t set up an exchange.”
The Department of Health and Human Services is expected to release its exchange regulations sometime around July 7.
Easily the most disturbing trend in constitutional law is the reemergence of tentherism, a states’ rights doctrine more radical than anything America has seen since George Wallace stood in a schoolhouse door. In its most radical form, tentherism would declare everything from Social Security, to Medicare, to child labor laws, to the ban on whites-only lunch counters unconstitutional, and tenthers have so successfully infiltrated the Republican Party that the House GOP’s so-called Pledge to America promised to honor the tenthers’ strange understanding of the Constitution.
Tentherism could receive its first big test in front of the Supreme Court next year, when the justices will be asked to decide whether to overrule nearly 200 years of precedent in order to declare the Affordable Care Act unconstitutional. In the mean time, however, there is little reason to believe that even many of the Courts most conservative members are eager to rewrite the balance between the federal and state governments.
For one thing, the Roberts Court’s conservative wing shows little interest in protecting the sovereign interests of the states. In one of its most important decisions this term, the five conservatives declared that federal law sweeps away state laws protecting many consumers who take potentially dangerous generic drugs through a doctrine known as “preemption.” Moreover, four of these conservatives would have erased a longstanding doctrine saying that most state laws come to the Court with a presumption against preemption. This kind of decision would certainly please corporate interest groups eager to see state consumer protection laws preempted, but it is the opposite of a decision respecting states rights.
In and of itself, this love of preemption isn’t terribly significant. Tentherism is almost certainly motivated by a desire to handicap government generally than it is by a real philosophical bent towards states rights, but the Roberts Court also handed down what is probably the most expansive interpretation of congressional power in American history. In last year’s United States v. Comstock, the Court upheld a law — with Roberts in the majority and Kennedy and Alito writing concurring opinions — allowing the federal government to detain “sexually dangerous” individuals long after they had completed a criminal sentence. Such a law has no connection to the national economy, a factor that casts the law’s constitutionality into grave doubt, yet the Court upheld this law. It is difficult to see how the justices could strike down the ACA after deciding the way they did in Comstock.
The ACA’s opponents tout a minor opinion called Bond v. United States as evidence the justices hate the ACA after all, but their argument claims far too much. Bond contains a great deal of flowery language explaining why individuals benefit from the 10th Amendment, but it says nothing whatsoever about just what the 10th Amendment actually does. More importantly, Bond was a unanimous opinion — so the only way to read the case as conservatives suggest would be to conclude that Justices Ginsburg, Breyer, Sotomayor, and Kagan are itching to kill two centuries of law to strike down Obamacare.
In other words, while radical states’ rights conservatism has become the defining feature of constitutional debates in Congress and on the cable news shows, this trend appears to have passed the Supreme Court by for now (at least outside of Justice Thomas’ chambers, that is). This fact shouldn’t prove surprising — all of the Court’s conservatives were appointed years before tentherism became the new black at Republican cocktail parties — but it reflects a very real divide between the GOP’s very public radicalism and the minds of the nine individuals empowered to interpret the Constitution. Hopefully, they will remember that neither the law nor many of their own previously expressed views justify rewriting the Constitution if the Affordable Care Act reaches their bench next year.
Several Republicans have poo-pooed the need to raise the debt ceiling when the nation hits its legal borrowing limit sometime around Aug. 2. ?I doubt that it would be disruptive to the economy,? said Sen. Pat Toomey (R-PA). Republican National Committee Chairman Reince Priebus said yesterday that Americans will say “well, good” if the U.S. defaults on some obligations.
Depending on how long the stalemate lasts, hitting the nation’s debt ceiling could do real damage to the nation’s economic growth, harm the fragile housing market, and even reignite the financial crisis. And as a new report from the Bipartisan Policy Center found, seniors may be among the first harmed if the debt ceiling isn’t raised because the country almost immediately wouldn’t be able to pay all Social Security benefits:
The Bipartisan Policy Center studied Treasury Department receipts and expenditures for August 2009 and 2010 and determined that the government likely would not have enough revenue to pay the full $23 billion payment to Social Security recipients due on Aug. 3.
On that day, according to the analysis, the government would take in about $12 billion in taxes and other revenue but would owe $32 billion, creating a $20 billion shortfall. It happens to be the first Wednesday of the month — the day a majority of Social Security recipients get their checks.
That Social Security would take such a heavy hit right away is a quirk of the calendar (in that payments are due literally the day after Treasury estimates that the ceiling will be hit), but the point is that an immediate 44 percent cut in government spending, which is what would be necessary if the debt ceiling isn’t raised, is going to adversely affect large and important government programs. As the BPC wrote, if the debt limit isn’t increased, “handling all payments for important and popular programs (e.g., Social Security, Medicare, Medicaid, Defense, active duty pay) will quickly become impossible.”
At the moment, the GOP has blown up negotiations over raising the debt ceiling in order to protect the rich and oil companies from tax increases, and to preserve corporate tax accounting gimmicks. And it seems that seniors will be the first ones to face the consequences of that decision.
A few points on the Greek austerity package that passed today. One is that this is a real austerity package seriously designed to reduce the Greek budget deficit. That means, yes, cutbacks in government spending. But it also means big tax increases. That’s because when you’re genuinely seized with terror about the need to reduce the deficit, you need both more revenue and less spending. The proposals being floated by congressional Republicans for spending cuts plus extensions of the Bush tax cuts aren’t austerity programs, they’re programs to make tax cuts for the rich affordable by reducing spending.
A related point is that sensible and self-interested politicians don’t normally vote for a giant package of spending cuts and tax hikes. That’s unpopular stuff. The Greeks were being forced into it by powerful forces. Financial markets are charging exorbitant rates for Greek borrowing. There’s no way they can pay what they owe absent a bailout. And the only way to get the bailout is to agree to austerity. They had a gun to their head. The only alternative to austerity would be a default that would lead to bank runs, the collapse of the Greek financial system, Greece’s humiliating ejection from the euro, and years of semi-isolation from global financial markets. Even more astounding, notwithstanding all of the above there’s a very credible argument that Greece’s politicians are doing the wrong thing here and choosing respectability for themselves amongst the global elite over the real objectives of its population.
Now compare all this to the United States. Interest rates are not only not spiking, they’re at historic lows. There’s no need for congress to enact an unpopular mix of spending cuts and tax hikes. If Republicans don’t want to increase revenue and Democrats don’t want to gut entitlement programs, then there’s excellent news since for now there’s no need to do either. Just raise the debt ceiling and we can move on.
Via Chris Cillizza: Priorities USA is up with ads in Iowa, North Carolina, Virginia, Florida and Colorado for the next two weeks, arguing the GOP budget will ?essentially end Medicare for future retirees,” “slash education,” and “tear down the middle class”:
Our guest blogger is CAP Visiting Fellow Pratap Chatterjee.
The number of contractors in Afghanistan is likely to increase significantly in the next year as the Obama administration pulls back some of the extra 68,000 troops that it has dispatched there since January 2009.
Typically, the U.S. pays one contractor to support every soldier that has deployed to Afghanistan and Iraq. The ratio of contractors to troops increases dramatically during a military surge as well as during a drawdown, and often stays higher than troop levels when military numbers are low, i.e. down to 30,000-50,000.
The reason is simple — the military needs extra workers to build new bases as well as to shut them down. Just like a hotel or restaurant, a military base also needs a minimum number of people to do the basics like janitorial or food service work. And as troops withdraw, U.S. diplomats are likely to hire extra security contractors as they are doing now in Iraq.
Using a range of 1.3 to 1.4 (based on what Afghanistan needed before the surge and Iraq needed after the drawdown), I would project that if the Obama administration draws down to 68,000 troops in Afghanistan by September 2012, they will need 88,400 contractors at the very least, but potentially as many as 95,880:
The majority of these workers do maintenance and other support tasks. But the one group that has seen demand explode since Obama became president is the number of private security contractors (men or women with guns), which spiked from a flat line of about 4,000 to almost 19,000 today. Given the attack on the Intercontinental in Kabul yesterday, that number seems very unlikely to drop:
To be sure, there are two reasons that might change — a dramatic slowdown in reconstruction activity or if President Karzai decides to disband the private security contractors in the country as he has threatened to do in the past.
Despite the killing of Osama bin Laden in May, violence in Afghanistan is on the rise. If this potential surge in private security contractors sparks any violent incidents like the shootout in Nissour Square in Baghdad in 2007, the U.S. could see an increasing drumbeat from Afghan politicians like President Karzai to leave the country altogether.
Photo: UFWForget anything you heard about California Gov. Jerry Brown as a champion of farmworkers. After 12 days of rallies imploring him to sign the Fair Treatment for Farm Workers Act, with one hour left to make a decision, Brown vetoed the bill.
Opposition came from the usual suspects:
Opponents of the bill included a large coalition of business and agricultural interests, including the California Chamber of Commerce, the California Grocers Assn., the California Restaurant Assn. and the Western Growers Assn.
Arturo Rodriguez, president of the United Farm Workers, said in a statement:
"What never changes in politics is power. Governor Brown accepted the arguments made by the powerful agribusiness lobby and rejected the cause of powerless farm workers."
So much for Gov. Moonbeam. Now he's Gov. Lickspittle.