Posts Tagged ‘
Health care ’
Thursday, April 14th, 2011
Will Marshall
Will Marshall is the president of the Progressive Policy Institute.
by Will Marshall
Entering the lists at last, President Obama delivered a stout defense of progressive values yesterday and checked the rightward drift of the deficit debate. For all its strengths, though, his speech also left open the question of whether he and his party are ready to grapple effectively with surging health and entitlement costs.
Obama started with a history lesson. As the Tea Party harks back to 19th century conceptions of limited government, he reminded Americans that the nation’s progress since then has been built upon a pragmatic synthesis of free enterprise and progressive governance. The extent of public activism required to create optimal conditions for shared prosperity is always a legitimate matter of debate, but the basic need for it shouldn’t be.
By insisting that deficit reduction leave room for strategic public investments in scientific research, modern infrastructure and education, Obama underscored a vital distinction that was being lost in the scramble to cut government spending: Reducing budget deficits is integral to reviving America’s economic dynamism. For most Americans, the priority is to get our economy moving again, not shrink government.
Obama also pushed back hard against Rep. Paul Ryan’s delusional budget, which asserts that the America’s path back to fiscal responsibility entails 100 percent spending cuts and 0 percent tax increases. In endorsing (finally!) his own fiscal commission’s plan, the president has set up a clear choice between the GOP’s fanatical devotion to shielding the rich from higher taxes and a bipartisan approach that exempts no one from sacrifice.
The president’s confident rejection of GOP tax dogma left House GOP Whip Eric Cantor sputtering. He was reduced to repeating the ridiculous Republican mantra that asking the wealthy to pay higher taxes is tantamount to killing America’s small businesses. Please Eric, bring it on: this is a debate progressives can win.
But Obama can’t just win debates. He needs to preside over passage of a comprehensive deficit-reduction package that, in a divided government, can only be achieved on a bipartisan basis. If he wants moderate Republicans to play on raising revenues – and a few intrepid souls like Sens. Tom Coburn and Saxby Chambliss have begun to do – he is going to have to convince Democrats to play on entitlement reform.
Here his speech fell short. Clearly mindful of President Clinton’s success in rallying the pubic behind his plans to protect Medicare and Medicaid during the 1995-96 budget battle, Obama categorically ruled out structural changes in how government finances those programs. That could prove to be a mistake.
It’s one thing for Democrats to reject the size of Ryan’s proposed cuts in the big public health care programs. But for both substantive and tactical reasons, they shouldn’t reject out of hand innovative devises to constrain entitlement costs.
It’s 2011, not 1996, and the baby boom retirement is underway, not over the horizon. This demographic surge, combined with health care costs that have been rising for decades faster than the economy has grown, are the real drivers of America’s debt crisis. To put a governor on the engine of federal health care spending, Ryan has proposed moving Medicare to a premium support model, and turning Medicaid into a federal block grant.
In his speech, Obama endorsed an alternative: strengthening provisions in his health reform bill to slow the unsustainable rate of health care cost growth. These provisions would encourage health providers to shift from fee-for-service to fixed fees for bundled services or capitated payments, which reward the value rather than volume of care delivered. These and other Obamacare provisions, including the independent commission set up to explore efficiencies in Medicare, are all good ideas. But even if they work, it will take a very long time for them to reach the scale necessary to break the back of medical inflation.
In the meantime, we need to protect public budgets from surging health care costs that threaten to soak up every dollar of revenue raised by 2040. If premium support and block grants are ruled out – even though some prominent liberals and Democrats have long supported one or the other — progressives need to come up with an alternative.
The political “grand bargain” Obama must strike couldn’t be clearer. It’s embedded in the fiscal commission plan: GOP support for raising revenues in return for Democratic support for constraining public health care and retirement costs. As the political action now shifts to the Senate, Obama needs to challenge his own party too.
Tags: Barack Obama, bipartisanship, Budget, deficit reduction, Economy, Fiscal Responsibility, GOP, Health care, Progressivism
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Friday, December 10th, 2010
Ed Kilgore
Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.
by Ed Kilgore
It’s been one of those weeks in Washington. Just a few days ago, it appeared the tax deal between the president and Senate Republican leader Mitch McConnell had broken the lame-duck session logjam, resolving the stickiest problem and paving the way for late-session action on issues like DADT and START.
Now votes on the tax deal have been pushed into next week amidst a resolution of disapproval by House Democrats, and the DADT repeal has lost a key Senate floor vote once again.
It’s hard to say whether the President’s very early signals that he’d be willing to strike a deal to avoid the expiration of Bush’s tax cuts made the ultimate liberal backlash more understandable or puzzling. The only surprises in the final deal were the inclusion of a payroll tax holiday, the one stimulative proposal with significant support in both parties; extension of the enhanced EITC and child tax credits created in the 2009 stimulus package, a total concession to Democrats; and revisions in the resurrected federal estate tax—which didn’t exist in this calendar year—to create lower rates and higher exclusions than was the case before the Bush tax cuts first took place.
Some progressives (though not many) profess to oppose the payroll tax holiday on grounds that it’s part of a collateral attack on Social Security. Some also express moral outrage over the proposed estate tax concessions, pointing out (quite properly) that they will have zero positive impact on investment and growth. But the main complaint is that Obama never really went to the mats to defend the consensus Democratic opposition to high-end Bush tax cuts and their extension, and the main beef seems to be retroactive as much as prospective.
The tax-deal rebellion reflects gradually building liberal anger towards the Obama administration on topics ranging from the public option in health care to the unwillingness to pursue prosecution of Bush administration figures over civil liberties violations and treatment of terrorism suspects; the expansion of the U.S. troop commitment in Afghanistan; and above all, the President’s continuing protestations of bipartisanship. Furious injunctions to the president to “fight” for progressive principles, regardless of the legislative consequences, have spread far beyond the blogosphere to a wide array of congressional Democrats.
What’s unclear at the moment is whether the House Democratic action represented just a symbolic measure that won’t get in the way of House approval of the tax deal next week, or a more serious protest that will require some sort of modifications in the package that progressives can claim as a trophy. The latter contingency, of course, will give conservative Republicans a new excuse to walk away from the package and try to impose their own tax policies in the next Congress with their enhanced numbers.
In any event, the intra-Democratic rhetoric has grown so strong that it’s revived the immediate-post-election chattering classes talk about a primary challenge to Obama in 2012, with journalist Robert Kuttner being the most outspoken about dumping Obama lest he become the “Democrats’ Hoover,” and with anyone who defends the tax deal getting a lot of heat as a sell-out.
The most certain thing about the tax deal is that it has obliterated the attention that was being given to the Bowles-Simpson commission report and a variety of other deficit reduction proposals, even as the two parties appeared poised to approve measures that would create added deficits in the neighborhood of a trillion dollars. The lack of resistance (so far) by Tea Party Movement figures is as good a sign as any that its alleged total focus on debts and deficits is, like that of the Republican Party it dominates, a mirage that quickly fades once high-end tax cuts are on the table.
In other words, deficit-talk seems most useful in Washington as a way for partisans to excoriate their opponents’ priorities—i.e., the Democratic resistance to “entitlement reform” and the Republican resistance to progressive taxation and restrained defense spending. Actual concern on the topic, however, is harder to find, even at the end of a year where it’s rarely out of the headlines.
Tags: Afghanistan, bipartisanship, Bowles-Simpson, Bush tax cuts, civil liberties violations, DADT, deficit reduction proposals, Deficits and debt, Democrats' Hoover, EITC, estate tax concession, Health care, Lame Duck, liberal backlash, Mitch McConnell, Obama, payroll tax holidays, progressive principles, progressives, Robert Kuttner, Social Security, START, Tax Compromise, Tea Party, Terrorism, U.S. troop commitment
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Tuesday, November 2nd, 2010
Will Marshall
Will Marshall is the president of the Progressive Policy Institute.
by Will Marshall
The punditocracy apparently cannot resist the tendency to personalize political trends and developments. It has turned the midterm election into a political melodrama starring Barack Obama as the redeemer-President who inspired such soaring hopes in 2008, yet unaccountably failed to transform America in his first two years.
The saga of Obama agonistes may be more interesting, but public angst about the economy is what is really driving today’s election.
Sure, the president’s approval ratings are down (though not as low as Ronald Reagan’s or Bill Clinton’s at the same juncture). The public believes that the administration’s policies have failed to revive the economy, even while plunging the nation deeper in debt and, in the case of health care, expanding government’s reach.
But if unemployment were, at say, seven percent and trending downward, voters probably would see things in a more optimistic light. What’s oppressing the electorate is not the specter of big government, it’s the hangover from the 2007-2009 economic crisis, the worst to hit America since the Great Depression.
It’s not just lingering unemployment (9.6 percent). Americans lost roughly $11 trillion in net worth in those years, including about $4 trillion in home equity. Though stock prices rebounded somewhat, foreclosures continue apace and sales of new homes are at a 50-year low. Hammered by this “negative wealth effect,” U.S. households are shedding debt instead of spending, which depresses economic demand.
Our big banks still carry hundreds of billions of troubled loans on their books, and small businesses still have difficulty getting loans. U.S. businesses are keeping payrolls lean to cut costs, while sitting on nearly $2 trillion in retained earnings.
The federal government, meanwhile, seems to have exhausted the usual countercyclical remedies. With the national debt swelling rapidly, there’s little appetite in Washington for another dollop of stimulative spending (and will be even less if Republicans take over the House). The Federal Reserve says it’s ready for another round of “quantitative easing” – aka, printing money – but interest rates are already near zero.
The truth is, an economic downturn triggered by a financial crisis is much deeper and prolonged than an ordinary recession. No wonder voters are in a sour mood. They are lashing out at the party in power because the real culprits – the Republicans who were asleep at the switch as the housing and financial bubbles formed – aren’t around anymore to catch the blame. That’s not fair, but politics seldom is.
And while conventional wisdom pillories Obama for pushing health care or financial regulatory reform rather than spending every waking hour focusing obsessively on jobs, it’s not clear that would have made much of a difference.
The supposedly awesome powers of the presidency don’t include any magic levers for creating private sector jobs or dramatically speeding up recovery. In 1982, unemployment was even higher – 10.4 percent – on Election Day. Rather than promise instant relief, Reagan said the pain was necessary to wring inflation out of the economy and lay a stronger foundation for future growth. He urged Americans to “stay the course” and ride out the downturn. Republicans lost 26 House seats that year, but the economy eventually sprang back to life and propelled Reagan to a thumping reelection.
So Obama is right to stay calm, rather than running around the country trying to do something that doesn’t come naturally to him – emoting and feeling peoples’ pain. Instead, he should be crafting a new and more compelling economic narrative focused on unleashing American entrepreneurship and innovation. Forget Paul Krugman; Obama’s challenge is not to press for more stimulus or whine about economic inequality or posture as an anti-business populist, it’s to propose structural changes that will assure a broader, more robust economic recovery. These include an infrastructure bank, a new clean energy roadmap, pro-growth regulatory and tax reform (including corporate taxes), and a credible plan to restore fiscal stability once the economy regains strength.
Such a plan also is the best way to assure Democrats’ political recovery from the drubbing they will take today.
Tags: accountability, anti-business populist, big banks, big government, Bill Clinton, clean energy, countercyclical, debt, economic crisis, economic demand, economic downturn, Economy, Election Day, entrepreneurship, federal government, Federal Reserve, finanacial regulatory reform, fiscal stability, Great Depression, growth, Health care, House, inflation, infrastructure bank, Innovation, Mid-Term Elections, midterm elections, national debt, Obama, Paul Krugman, private sector jobs, punditocracy, recession, recovery, Republican, Ronald Reagan, spending, stimulus, tax reform, unemployment, US household, Washington
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Tuesday, October 12th, 2010
Will Marshall
Will Marshall is the president of the Progressive Policy Institute.
by Will Marshall
President Obama’s call yesterday for $50 billion in new transportation spending is politically risky, given public worries about government spending and debt. But if linked to a strategic and sustained strategy for modernizing the nation’s infrastructure, it could signal the start of America’s economic comeback.
Even more important than the money, however, is an Obama initiative that didn’t get as much media play: a proposed National Infrastructure Bank. It is the key not only to leveraging business capital – U.S. companies are sitting on $2 trillion in potential “private stimulus” money – but also to making sure we invest that money wisely.
The president said he would ask the lame-duck Congress next month to approve the $50 billion measure, which would front-load money that otherwise would be spread over the life of a six-year surface transportation bill. He left little doubt his immediate goal is to goose the pace of the agonizingly slow economic recovery.
“Nearly one in five construction workers is still unemployed and needs a job. And that makes absolutely no sense when so much of America needs rebuilding,” Obama told reporters at the White House on Memorial Day. Attempting to preempt Republican objections that infrastructure spending is simply stimulus is drag, Obama noted that “Investing in infrastructure is something members of both parties have always supported.”
Maybe so, but it’s worth noting that the word “infrastructure” appears nowhere in the GOP’s 48-page Pledge to America. What’s more, Republicans are likely to over-interpret likely midterm gains as vindication of their attacks on Obama as a big spender, so good luck getting them to vote for infrastructure in the lame duck.
That’s a shame, because spending on infrastructure is both stimulus and investment. It could get more Americans working now, but it is also essential to building our country’s long-term capacity to compete in fast growing global markets for high speed rail, civilian nuclear energy, clean cars, intelligent transport systems and renewable fuels.
The federal government, of course, is constrained by enormous deficits and a growing national debt. That’s why we need a National Infrastructure Bank, which would structure public-private deals to fund big capital projects that can generate real economic returns. As noted by an economic analysis the White House released yesterday:
“There is currently very little direct private investment in our nation’s highway and transit systems due to the current method of funding infrastructure, which lacks effective mechanism to attract and repay direct private investment in specific infrastructure projects. … A National Infrastructure Bank would also perform a rigorous analysis that would result in support for projects that yield the greatest returns to society and are most likely to deliver long-run economic benefits that justify the up-front investments.”
An infrastructure bank, along with new public seed capital and a third element of the Obama infrastructure initiative – merging the many stovepiped “modal” transportation funding streams so public dollars can be used strategically – begin at last to push the economic debate in a constructive direction. The two great challenges America faces now are reviving our economic dynamism and shrinking a massive overhang of public debt. To meet them, the Obama administration needs to fashion an ambitious, “cut and invest” strategy aimed at slowing health care and entitlement spending generally, and using public dollars to leverage massive private investment in productivity-enhancing infrastructure.
That’s why President Obama should press ahead with his infrastructure plan, despite the political fallout from the midterm election. If Republicans want to frame the economic debate as a choice between more tax cuts and rebuilding the common foundations of American prosperity, so much the better. That’s one progressives can win.
Photo credit: Center for Neighborhood Technology
Tags: big capital projects, business capital, civilian nuclear energy, clean cars, cut and invest, debt, deficits, Deficits and debt, economic dynamism, economic recovery, federal government, global markets, GOP, government spending, Health care, high-speed rail, highway and transit systems, Infrastructure, infrastructure plan, intelligent transport systems, investment, long-term capacity, Memorial Day, midterm, midterm election, National Infrastructure Bank, new transportation spending, Pledge to America, President Obama, private stimulus, progressives, public-private, renewable fuels, Republican, stimulus, Transportation, transportation bill, White House
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Tuesday, October 12th, 2010
Scott Winship
Scott Winship is research manager of the Pew Economic Mobility Project and a recent graduate of Harvard's doctoral program in social policy. The views he expresses do not represent those of Pew.
by Scott Winship
The night that President Obama won the presidency, I was distracted by a looming deadline for New Republic piece I was already writing warning the left not to misinterpret the election results. Democratic Congressional victories were primarily the result of voters continuing to grow sour on the way Republicans ran the House and Senate. Obama’s victory owed its magnitude to the financial crisis and McCain’s response to it. Essentially, I warned that the 50-50 Nation was alive and well and that moving too aggressively could backfire.
The piece was largely ignored at the time, but it is looking pretty good today. Democrats successfully enacted landmark health care legislation, shepherded the financial system through a harrowing period when fears of another depression were widespread, passed an enormous stimulus package, and pushed through financial reform. In the process, the deficit soared to worrying levels, unemployment continued to rise, the government became the owner of FannieMae and FreddieMac and part owners of the automobile companies, the economy limped along, and public opinion turned against them.
In a sure sign that in its own way, the left is as out of touch as the conservative tea party activists, liberals lamented the supposed timidity and corporate-coziness of the Administration, and the base grew depressed. This despite the unprecedented scale of federal spending and intervention into the workings of the economy, the near death of health care reform (the biggest progressive victory since Medicare’s enactment), and loss of support among independents and moderates. Progressives thought they had a mandate for aggressive change. Apparently they still don’t realize that they didn’t.
Ironically, one of the left’s leading pundits, E. J. Dionne, argued in a sharp book in the 1990s called They Only Look Dead that the way to understand the 1992, 1994, and 1996 elections was to view the first two years as a period of liberal overreach and the second two years as a mirror image on the right. Despite all the evidence that the country is even more closely divided today, liberals such as Dionne cannot see the same dynamic of partisan overreach playing out over the past decade. But it was there during the Bush years on the right, and it has been there over the past two momentous years on the left.
Yes, the economy is surely the driving force behind voter dissatisfaction with Democrats, and Obama was damned if he did (spend hundreds of billions to avoid a depression) and damned if he didn’t. But health care was supposed to be a game changer—if voters were so keen on a massive disruption of the health care sector, as progressives have argued for twenty years now, why hasn’t this trumped the economy? The electorate is fundamentally moderate and as poorly served by liberals who want to circumvent that moderation as by tea-party conservatives who are convinced Obama is a socialist Muslim foreigner. It will be interesting to see which party—if either—gets it between now and 2012.
This article is cross-posted at No Labels.
Photo credit: Hyokano
Tags: 50-50 Nation, Bush, Campaigns and elections, conservative tea party activists, corporate-coziness, deficit, Democratic Congressional, depression, E. J. Dionne, Economy, FannieMae, federal spending, financial crisis, Financial reform, financial system, FreddieMac, Health care, House, independents, left, liberals, McCain, Medicare, moderates, New Republic, President Obama, progressive, Public opinion, republicans, Senate, socialist, stimulus package, They Only Look Dead, unemployment
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Thursday, August 19th, 2010
Scott Winship
Scott Winship is research manager of the Pew Economic Mobility Project and a recent graduate of Harvard's doctoral program in social policy. The views he expresses do not represent those of Pew.
by Scott Winship
Mike Konczal returned from vacation and promptly put up a post criticizing my take-down of Edward Luce’s horrible Financial Times piece on “the crisis of the middle class”. It’s become apparent to me over the past few years that I’ve been in D.C. that you can’t refute a specific empirical question about the situation of the poor or middle class (e.g., is it in crisis? as in much worse off than in the past?) without being attacked on much broader grounds than you staked out and being called an opponent of these groups or an insensitive jerk. I actually don’t disagree with much that Mike writes “against” my “views”.
What I do disagree with is the contention that the middle class is in crisis. And I think that it’s bad to believe (and assert for mass audiences) that that’s true because it hurts consumer sentiment, prolonging high unemployment, and diverts attention from the truly disadvantaged who really are in crisis. Mike can say that that pits me against the middle class (his post was titled, “Scott Winship versus the Middle Class”), but then let me ask Mike and others who would disagree with me a simple question: Why do you think Americans are deluded about their economic conditions, since in June, 7 in 10 American adults said their “current household financial situation” is better than “most” Americans’ (Q.25, disclosure: the poll was commissioned by my old employer)? Why are you against the middle class?
Mike says that when I say some problem affects a tiny fraction of the population, that’s like a hit man saying that he doesn’t kill that many people as a fraction of the population – the “Marty Blank gambit” as he calls it. But look, that’s not an apt analogy. If I were saying that we shouldn’t give a rat’s ass about the tiny share of the population that experiences a bankruptcy, that would be using the Marty Blank gambit. I never said that, and I wouldn’t. But if you convince everyone in the middle class that they are just one bad break away from bankruptcy, then you shouldn’t be surprised when they don’t spend their money and the recovery continues to stall. It’s important to convey the facts correctly. Mike is stalling the recovery! Why are you against the middle class, Mike??
Finally, I think the best chart I’ve seen that puts all of this into perspective (which I made myself) is the following showing health insurance trends:
Anyone who wants the data can email me at scott@scottwinship.com.
And contrary to Mike’s assertion, the fraction of under-insured has not increased. You can read the conclusion of my dissertation if you want to see what the facts show.
I’ll keep being concerned about the people who are in crisis, but I’m not going to buy in to the conventional wisdom among progressives that the middle class is in crisis.
*added note: Mike informs me that I missed the joke in his title, a Scott-Pilgrim-Versus-The-World nod. I like to think I’m clever and witty, but clearly my lack of sleep from parenting a newborn has left me not so quick on the uptake…)
This item is cross-posted at ScottWinshipWeb.
Tags: Edward Luce, Health care, Health insurance, Marty Blank gambit, Middle class, Mike Konczal
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Friday, June 18th, 2010
Jared Polis
Rep. Jared Polis represents Colorado’s Second Congressional District and is a member of the House Education and Labor Committee. He is a former chairman of the Colorado State Board of Education who founded and served as the superintendent of charter schools serving at-risk student populations.
by Jared Polis
The following is an excerpt from Rep. Jared Polis’s (D-CO) remarks at the PPI Capital Forum — Turnaround Schools: Rising to the Challenge:
Let me start by thanking the Progressive Policy Institute for their pioneering work, their work that led to the explosion of the charter school movement…as well as the support of PPI for education reform generally, which truly is a civil-rights issue. This is an issue of how does our society achieve equality, equality of opportunity, regardless of your race, your income bracket, your geography. The fact that you should have equality of free public education, regardless of your ZIP code, is the civil-rights issue and challenge for our current generation.
On the current blueprint for the administration: I’d give it an A-minus….If you’re asking me how to get it to an A, I would say, more of a focus on early childhood, as well as a focus on the continuum of early childhood all the way through higher education. And Colorado and other states are doing great things around access to higher education at the high-school level, moving to dual-enrollment options. I would love to see more of a federal emphasis on some of these programs that are successful on a state-by-state basis.
Two, I personally would like to see more explicit preservation and support for what had been done under No Child Left Behind with supplemental services and after-school programs, some of which have been proven effective, some of which haven’t been — but letting the data drive the process, in terms of making sure quality after-school programs are available in schools where the kids need it, be they provided by private providers or the school district itself.
…Personally, I would also like to see as much focus on career readiness as college readiness. I think that the plan gives short shrift to what we traditionally call vocational education in favor of college readiness, which, of course, is critical….But there is the reality that half of our kids or more will not necessarily be matriculating for a four-year university. Let’s look at what real, employable skills they can get from our public education system, even if those services are delivered by community colleges at our high school campuses or the kids are taking college courses while they’re there. Let’s look at that career-readiness piece at the same level as the college-readiness piece.
Kids really need to graduate and a diploma needs to mean both career and college readiness. They always put the career and college readiness piece in the verbiage, but really, everything below it is about college readiness, not career readiness. So that’s a personal issue that I would have….
Clearly, the turnaround area is one of the most topical and important areas. These provide a toolbox approach for capable and competent superintendents to take the reforms that they need at the schools that are persistently failing. Now, first of all, we need to acknowledge there is no excuse for a persistently failing school. People love to make excuses.
They say, well, they’re all – you know, none of them speak English or they’re all from poor communities or none of them have good home lives – and those are all very real challenges, and we all support a holistic approach to public policy. I think our health-care bill that the Congress recently passed will go a long way toward making sure that families from all economic background have the kinds of health care they need.
But again, we have seen models succeed with kids from diverse demographic backgrounds. We have seen schools in my district in Colorado, a charter school, Ricardo Flores Magon Academy, third-grade, 80 percent ESL, 90 percent free and reduced lunch, and yet, they reached 95 percent proficiency on the state test in reading and 100 percent proficiency in math. Again, you look at the demographics and you can say, why is this school succeeding, whereas another school that serves the exact same demographic – low-income, ESL, has almost, you know, the reverse, with only 10 to 15 percent of the kids proficient at grade level?
So no excuses. We know the kids can achieve. Let’s make sure that they have the opportunity to attend a school that allows them to fulfill their potential.
For a full transcript of the event, click here (PDF). For the video, click here.
Tags: Charter schools, civil rights, Colorado, Education, Education reform, Health care, Jared Polis, No Child Left Behind
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Friday, June 18th, 2010
Ed Kilgore
Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.
by Ed Kilgore
If, as appears likely, cap-and-trade legislation is not going to be enacted this year or any other time soon, it represents more than a setback for the Obama administration (or for the environment). It’s also another blow to the high concept of using market mechanisms rather than direct government control to address major public policy challenges.
Cap-and-trade was originally designed, after all, as an alternative to command-and-control environmental regulations, which is why it was once championed by Republicans, particularly during and after its successful use in reducing acid rain in the 1990s.
But as the New York Times‘ David Leonhardt (with an exclamation point from Jonathan Chait) explained this week, Republicans have abandoned cap-and-trade just when it might be most useful, with some former advocates, ironically, embracing command-and-control:
[T]he great economic strength of market systems like cap and trade also happens to be their political weakness. They set prices and allow people to react. In the process, market systems acknowledge that reducing pollution may actually cost a little bit of money.Politicians don’t like to admit this, because voters don’t like it. Accepting higher costs is especially hard when the economy is weak. So Congressional Democrats have been repackaging their energy bills to make them look less and less market-oriented. Senator John McCain, who supported a permit system for carbon as the Republican presidential nominee, no longer does. Senator Lindsey Graham, the South Carolina Republican, has reversed his position as well.
What does Mr. Graham now favor? A series of command-and-control regulations. He has introduced a bill with Senator Richard Lugar, an Indiana Republican, that would mandate specific standards for cars, trucks, homes and offices. It would also give the energy secretary the power to award loans to companies he thought could do a good job of setting up programs to retrofit buildings. State officials would do the same for factories. The bill, in short, puts more faith in government than the market.
Leonhardt clearly believes that the transparency of cap-and-trade when it comes to costs is its major political flaw. That’s definitely a factor, but I’d argue that something more fundamental is going on. Once Democrats embraced cap-and-trade, Republicans began retreating from it as a simple matter of politics. And this distancing effort has been immensely reinforced by the rightward trend in the GOP during the last few years, in which leaders who simply denied there was any climate change problem, and/or that government had any useful role to play on the issue, have been in the ascendancy. So “cap-and-tax” was demonized and essentially placed off-limits for Republican politicians, to the point where those like Sen. Lindsay Graham (R-S.C.) and Sen. Richard Lugar (R-IN) who weren’t quite in the “denialist” camp found it easier to just support direct federal regulation.
We saw a similar dynamic play out on health reform, where a market-based managed competition model long supported by Republicans, and championed quite recently by Mitt Romney, became toxic the moment it was fully advanced by Barack Obama. And even as they savaged ObamaCare as “socialized medicine,” Republicans saw little irony in posing as last-ditch defenders of Medicare, a relic of an earlier Democratic drive for a government-run single-payer system.
On both health care and climate change, it’s not surprising that many progressives are impatient with Obama’s determination to promote market-based approaches that the supposed party of market-based policy, the GOP, will no longer support. But nobody should for a moment mistake the identity of the prime mover in shifting the political ground away from the once-promising “centrist” convergence on using market mechanisms to address public sector challenges. The GOP could have declared partial victory and celebrated the Democratic Party’s abandonment of big government solutions, and then fought it out over the details. Instead, Republicans have burned down every structure on the potential common ground that Americans seem to crave. They may be able to succeed for a while in opportunistically deploring the inability of Democrats to get anything done. But if and when Republicans regain power, they may well discover that the GOP policy arsenal has been emptied by their own hands.
This item is cross-posted at The Democratic Strategist.
Photo credit: Magnera
Tags: Barack Obama, cap-and-trade, Climate change, David Leonhardt, demo, Environment, Health care, Lindsey Graham, Medicare, Mitt Romney, oil, Republican Party, Richard Lugar
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Monday, June 7th, 2010
Will Marshall
Will Marshall is the president of the Progressive Policy Institute.
by Will Marshall
Organized labor may be struggling to attract members, but it apparently has abundant cash to spend on a counterproductive campaign to impose ideological conformity on the Democratic Party.
A coalition of unions has targeted Sen. Blanche Lincoln, who stands accused of excessive moderation. Lincoln’s campaign says the unions have spent $10 million to defeat her in tomorrow’s Democratic primary in Arkansas. As Chris Cillizza reports in today’s Washington Post:
Ostensibly, Lincoln’s opponent is Lt. Gov. Bill Halter. But the practical reality is that she is running against a handful of major labor unions — the Service Employees International Union and the American Federation of State, County and Municipal Employees, to name two.
Labor accuses Lincoln of deviating from the party line on two key issues. She opposed the “public option” in health care and doesn’t support the Employee Free Choice Act (EFCA), labor’s top legislative priority. EFCA, aka “card check,” would make it easier for unions to organize.
It seems odd to make the public option a retroactive litmus test, especially since Lincoln joined with all the Senate Democrats to vote for the landmark health care reform bill. (She was a “no” on the “fixes” to the bill passed via reconciliation, but health reform was by then already law of the land.) And President Obama himself was less than passionate about the public option, making it clear that he wouldn’t let it get in the way of passing the bill.
As for EFCA, unions are incensed that the bill won’t move, despite endorsements from the president and Democratic congressional leaders. But Lincoln is hardly the only moderate Senate Democrat who has qualms about the bill, which is why it remains snagged. If progressives are honest with themselves, they will admit that EFCA’s provisions for card check elections and for binding arbitration will need tweaking to get through the Senate.
The unimpeachably liberal Sen. Tom Harkin (D-IA) has signaled his willingness to negotiate changes aimed at winning moderates’ support. But so far, labor seems more interested in having an issue than in having a bill.
Fine, but is labor’s pique with Lincoln over the public option and card check really worth the risk of whittling down the Democrats’ majority in the Senate, one likely to become even more precarious after the midterm elections?
According to the Post, some labor officials don’t really care if Lincoln loses – the very threat that she and other moderates can be “primaried” for ideological offenses is sufficient to keep them in line. This flexing of labor’s political muscles to intimidate friends may be gratifying, but it’s politically dumb. It ignores the reality that the progressive coalition needs both liberals and moderates to sustain a governing majority, and that if you target moderate Democrats running in moderate-to-conservative states, you’ll enhance the odds of getting a Republican.
Former President Bill Clinton gets it. He’s made several appearances for Lincoln, urging Arkansas Democrats not to get swept up in crusades by outside pressure groups to purge moderates. The curious role played by Halter in this Razorback saga also deserves attention. A card-carrying centrist who worked in the Clinton administration, Halter is no Joe Hill. In allowing himself to be labor’s instrument for punishing a fellow pragmatist, he’s raised questions about his own authenticity, even as he attacks Lincoln for being a captive of Washington.
Even if Halter wins and goes to the Senate, the public option will still be history, EFCA will still be stalled and Democrats will still need moderates from red states to hold onto a majority. Labor also has to operate within the broader progressive coalition, and it can surely find better ways to invest its money than in fomenting dissension within the ranks.
Photo credit: USDAgov’s Photostream
Tags: American Federation of State, Arkansas, Barack Obama, Bill Clinton, Bill Halter, Blanche Lincoln, Campaigns and elections, Chris Cillizza, Democratic Party, Employee Free Choice Act, Health care, Joe Hill, Politics and politicians, Service Employees International, Tom Harkin, Washington Post
Posted in
Daily Fix, Fixing Our Broken Politics |
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Friday, June 4th, 2010
Scott Winship
Scott Winship is research manager of the Pew Economic Mobility Project and a recent graduate of Harvard's doctoral program in social policy. The views he expresses do not represent those of Pew.
by Scott Winship
Mike Konczal’s inequality post as a guest blogger for Ezra is getting a bit of attention in the blogosphere. Konczal jumps off of an interesting post by Jamelle Bouie to argue that contrary to those who argue that “inequality isn’t so bad,” the unhealthy nature of the cheaper food that is purchased by the poor negates the fact that the poor face a lower inflation rate. Since he suggests I (and Will Wilkinson) think that “inequality isn’t so bad,” I wanted to correct a misconception that Konczal has about the argument of economist Christian Broda that he is responding to. Broda’s actual argument really doesn’t have anything to do with how healthy the things purchased by the poor are.
Here’s Konczal:
One argument that has become popular recently is that the increase in income inequality isn’t quite as bad because both the rich and the poor have different ‘inflation’ rates — the prices at which goods increase for the rich have been increasing much faster than the prices at which goods have been increasing for the poor. So even though the poor or median person hasn’t had any wage growth, he has much more purchasing power because of this effect.
This isn’t quite the argument that has become popular recently. What fans of the Broda research argue (i.e., what Broda and his colleagues argue) is that the apparent increase in income inequality may overstate the actual increase in inequality because the poor appear to have a lower inflation rate than the rich. If true, then it’s not that “the poor or median person hasn’t had any wage growth,” it’s that they have had wage growth because of their lower inflation rate — and the wage growth has been big enough that it has kept the ratio of rich-to-poor incomes roughly constant.
Think of it this way. Broda and his colleagues find that the prices of what the poor buy (that is, “price” when the satisfaction derived, or utility, is held constant) have risen less than the prices of what the rich buy. That’s because when prices of related goods change, the poor are more likely to switch to cheaper goods, all the while maintaining their overall level of satisfaction with their purchases. If it becomes cheaper to maintain a constant level of satisfaction, then one’s wages have effectively grown. So poor consumers may switch from Green Giant frozen veggies to generics when the latter go on sale, or they might buy their frozen veggies at the chain a couple of neighborhoods over rather than the local grocery store when the latter’s prices go up. Rich consumers, on the other hand, may be relatively unlikely to stop buying Whole Foods vegetables when the plebian chain’s prices are cut. They may not switch to generics as those products become cheaper relative to those on offer at the farmer’s market.
It’s not that we should be excited about how great the generic frozen veggies bought by the poor are compared with the Whole Foods produce. It’s that we should be excited that the poor are either more willing or more able to economize to maintain a constant lifestyle than the rich are, and so inflation eats into their quality of life to a lesser extent than it does among the rich, holding in check other forces that would increase inequality.
Now, Broda’s research is based on purchases of a limited number of commodities and over a limited number of years, but if his findings extend to other goods and services and to earlier periods (which he believes they do), then the implication is that inequality between the poor and the well-off — though not necessarily the richest of the rich — has not grown. We can still worry about the quality of the food purchased by the poor and their health outcomes, but that’s a story about poverty and deprivation, not about inequality or growth in inequality.
Tags: Christian Broda, Food, Health care, Inequality, Jamelle Bouie, Mike Konczal, Poverty, wages, Whole Foods, Will Wilkinson
Posted in
A New Framework for Growth and Equity, Daily Fix |
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Thursday, May 13th, 2010
Jim Arkedis
Jim Arkedis is the director of PPI's National Security Project.
by Jim Arkedis
This past weekend Secretary of Defense Bob Gates continued to talk his Kansas brand of sense about Pentagon spending. After a lecture on shipbuilding last week at the Navy League teed up tough questions to the Navy — like whether we can continue to afford $7 billion submarines — Gates took to the Eisenhower Library in his home state to expand that theme across his entire department. I’d bet you a crisp $20 bill that this is the line that caused an audible gasp in Reston and on the Hill:
The Defense Department must take a hard look at every aspect of how it is organized, staffed, and operated – indeed, every aspect of how it does business. In each instance we must ask: First, is this respectful of the American taxpayer at a time of economic and fiscal duress? And second, is this activity or arrangement the best use of limited dollars, given the pressing needs to take care of our people, win the wars we are in, and invest in the capabilities necessary to deal with the most likely and lethal future threats?
As a starting point, no real progress toward savings will be possible without reforming our budgeting practices and assumptions. Too often budgets are divied up and doled out every year as a straight line projection of what was spent the year before. Very rarely is the activity funded in these areas ever fundamentally re-examined – either in terms of quantity, type, or whether it should be conducted at all. That needs to change.
But then again, maybe the shock value has worn off — fiscal responsibility has been such a theme under Gates’ leadership that perhaps tough-minded rhetoric on defense spending now comes with little surprise.
Then Gates delved into specifics. And now it was the soldiers’, sailors’, airmen’s, and marines’ turn to get nervous:
[H]ealth-care costs are eating the Defense Department alive, rising from $19 billion a decade ago to roughly $50 billion – roughly the entire foreign affairs and assistance budget of the State Department. The premiums for TRICARE, the military health insurance program, have not risen since the program was founded more than a decade ago. Many working age military retirees – who are earning full-time salaries on top of their full military pensions – are opting for TRICARE even though they could get health coverage through their employer, with the taxpayer picking up most of the tab. In recent years the Department has attempted modest increases in premiums and co-pays to help bring costs under control, but has been met with a furious response from the Congress and veterans groups. The proposals routinely die an ignominious death on Capitol Hill.
The resistance to dealing with TRICARE stems from an admirable sentiment: to take good care of our troops, their families, and veterans – especially those who have sacrificed and suffered on the battlefield. This same sentiment motivates the Congress routinely to add an extra half percent to the pay raise that the Department requests each year. Furthermore, the all-volunteer force, which has been a brilliant success in terms of performance, is a group that is older, more likely to have spouses and children, and thus far costlier to recruit, retain, house, and care for than the Eisenhower-era military that relied on the draft of young single men to fill out its ranks.
Those are the political and demographic realities we face. To a certain extent they limit what can be saved and where. But as a matter of principle and political reality, the Department of Defense cannot go to the America’s elected representatives and ask for increases each year unless we have done everything possible to make every dollar count. Unless there is real reform in the way this department does its business and spends taxpayer dollars.
Two quick points here.
First, America’s armed personnel and their families represent an important political constituency. No administration wants the baggage that comes with reducing benefits for America’s fighting men and women. For the time being, that includes this one. If a serious restructuring of military pay and benefits ever occurs, it would likely be in about year six or seven of the Obama administration, safely after reelection.
Even then, it might prove impossible as Congress continues to feed the beast of fiscal irresponsibility. News broke just today that the Hill is about to vote on a 1.9 percent military pay raise. Guess what? That’s a half-percent more than the Pentagon recommended.
Second, in my mind, the structure of the benefits isn’t the problem. It’s the amount of care. I wrote a paper last year called “The Pentagon’s Most Expensive Weapon,” and I concluded that once you add up all outlays — including costs associated with the Department of Veterans Affairs — for military personnel, DoD spends not the $136 billion it tells you, but more than $300 billion.
Why are these costs skyrocketing? It’s a simple function of our foreign policy — America’s service members may be getting older and costlier, but since Afghanistan and Iraq, they’re also getting injured more frequently and in greater numbers. Here’s my conclusion:
The problem of rising personnel costs can only be addressed from higher up the chain. Extended deployments overseas invariably increase costs because of the strain they place on the force — in casualties, logistics, sustainability, and recruiting and retention costs. Once the force has recovered from Iraq and Afghanistan, it is incumbent on America’s civilian leadership to carefully weigh the extended cost burden placed on the Pentagon’s personnel account when plotting our global security strategy. In short, America must choose its wars and deployments carefully, as exploding personnel costs are the untold story of Pentagon spending in 2010 and beyond.
In other words, you can talk about trimming benefits and reducing the ever illusive “waste, fraud, and abuse,” and that is no doubt a good thing. And so is eliminating unneeded weapons systems.
But if we’re going inject real savings on personnel into the system, we can’t just talk about TRICARE, we have to stop fighting dumb wars. And ultimately, that decision is above Gates’ pay grade.
Photo credit: http://www.flickr.com/photos/eschipul/ / CC BY-SA 2.0
Tags: Afghanistan, Budget, Defense Department, Fiscal Responsibility, Health care, Iraq, Military, Robert Gates, spending
Posted in
A Progressive Security Strategy, Daily Fix, Fiscal Responsibility |
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Sunday, May 9th, 2010
Steven Chlapecka
Steven K. Chlapecka is the director of public affairs for the Progressive Policy Institute.
by Steven Chlapecka
PPI National Security Director Jim Arkedis argues that selective cuts on military benefits will not solve the defense personnel cost:
A November report prepared by Jim Arkedis of the Washington-based Progressive Policy Institute (PPI) put projected 2010 costs at $59.7 billion: defense health program ($28 billion); military health care ($21 billion); and retiree health benefits ($10.7 billion).
Arkedis of the PPI said the recent wars have helped push costs skyward.
“You can’t nit-pick the problem away through selective cuts to benefit programs because, first, there’s a core constituency of hard-working military members, families and retirees who depend on them,” he said. “And second, frankly, it wouldn’t solve enough of the problem anyway. The key cost drivers are large-scale military deployments abroad.”
To Arkedis, “The moral of the story is that if you want to control personnel costs, you have to be really careful about which wars you fight – they better be the right ones.”
Read the entire article.
Tags: Defense Department, Deficits and debt, Health care, Military, personnel cost
Posted in
PPI in the News |
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