Posts tagged whatkindofcountrydowewant?
The 2012 White House Budget Proposal. Who Will Survive In America?
Sigh. This is truly depressing.
In lieu of the doc, we’ve given you a handy data viz for the spending allocations. It’s illuminating.
So what’s the big deal? We reprint Jon Cohn in full…..
President Obama on Monday will release his budget request for the 2012 fiscal year. As you read commentary on it—or, if you’re as nerdy as I am, as you read the document itself—keep in mind that this is the first budget request he’ll be producing since the Republicans took over one house of Congress. It’s a huge difference and not merely in the obvious ways.
Obama’s previous budgets were the president’s way of signaling, to members of his own party, what initiatives he intended to pursue and roughly what resources he expected Congress to give him. He could expect some negotiation and pushback, from liberals on some issues and from centrists on others. But mostly he could count upon Congress, which Democrats controlled, to follow him.
The Republican House, of course, will do no such thing. They have their own, very different priorities and their own, very different ideas about how to pay for them. Accordingly, Obama’s budget is more of an opening bid in a tough, rancorous negotiation. That means you should evaluate the document as a signal of political strategy, not simply a statement of policy priorities. And that makes it tougher to judge.
Between the administration’s recent statements and a series of calculated leaks, we have a pretty good idea of what Obama is trying to do. He’s going to call for spending more money on education and other public investments, but he’ll also endorse enough cuts to keep overall non-defense discretionary spending at last year’s levels. Elementary and secondary school education, for example, should get a boost. But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one.* There will be more money for building high-speed rail but less for helping low-income families pay their heating bills.
Is this a good thing? In absolute terms, clearly, the answer is no. The demand for Pell Grants is unusually high right now; among other things, cash-strapped states are raising tuitions at state schools just as cash-strapped students and families have fewer resources to pay them. Energy costs for next winter, when the cut in heating assistance would take effect, are likely to be higher than at any time since 2008. Unless the economic recovery quickens very suddenly, plenty of people will struggle to pay those heating bills. And those are just two examples of program reductions that will leave needy Americans even more needy.
But everything is relative, and that means judging these cuts alongside both the modest increases you’ll find elsewhere in this budget and the much larger increases you saw in previous ones. Robert Greenstein, director of the Center on Budget and Policy Priorities, will spend the next few days dissecting the Obama spending request and, as he does, he will likely find plenty not to like. But, during an interview, he also put disappointments in context:
I think [Obama’s] record is very strong — major expansions in refundable tax credits for the working poor, major expansion of student financial aid for low-income students so that more of them can go to and complete college, and of course, major health reform that will extend coverage to 32 million uninsured people. This is the most impressive record of any president since LBJ.
Obama’s spending request looks even better when you consider what the Republicans would do if left to their own devices. They haven’t committed themselves to a 2012 budget just yet. But they’ve said they want a far deeper freeze than Obama’s, reducing non-defense discretionary spending to what it was in 2008. On Friday, they offered a preview of that vision when they announced their proposal for how to finance government for the remainder of the current fiscal year.
They want far more severe cuts to Pell Grants and home heating assistance, plus reductions to such essential services as food inspections and the elimination of programs like Americorps. They also want to reduce spending on the Special Supplemental Nutrition Program for Women, Infant, and Children. That initiative, known as WIC, provides nutritional assistance to expectant mothers and newborns. As Paul Krugman notes, that cut will hurt today and tomorrow, since kids who grow up malnourished are more likely to have problems later in life.
The most important question about Obama’s budget, then, is how well it positions him and his allies in the coming debate over these sorts of priorities.
You could make a case that, by embracing the Republican narrative on the size of government and calling for a five-year budget freeze at present levels, Obama has effectively bid too low in the negotiation over federal spending—that he’s committed himself, and the country, to less government than it needs. (It’s happened before!) Or you could make the case that, by making “tough” proposals to cut programs he supports, he’s establishing the credibility with voters that he needs in order to marginalize the Republicans and to preserve more spending than might otherwise be possible. (It’s happened before!)
I really don’t know which argument is right. I’m not a political strategist and, besides, not even the political strategists can be sure about this sort of thing. But I know I’ll be hoping that Obama prevails in the coming standoff with House Republicans, even though a victory would still leave the government perilously underfunded.
*The details of Obama’s Pell Grant proposal are complicated and worth an item of their own, which I’ll try to write shortly.
So on the one hand, Obama makes a political calculation, cuts spending on things people NEED (like higher ed grants, food inspectors, heating oil for the poor). On the other, the GOP stands for nihilism.
Who will survive in America? Besides the rich?
#letthemeatcake #whowillsurviveinamerica
Kabuki Democracy: Why a Progressive Presidency Is Impossible, For Now
Mike Allen’s Playbook (from Politico) is the best morning email out there (for now). Brace yourself. 17,000 words. I’d suggest printing this for the subway/bus home. Or the wknd. Redux below.
Eric Alterman — columnist for The Nation, and distinguished English and journalism professor — is up this morning with a 17,000-word agenda-setter, “Kabuki Democracy”: “Few progressives would take issue with the argument that, significant accomplishments notwithstanding, the Obama presidency has been a big disappointment. … Face it, the system is rigged, and it’s rigged against us. Sure, presidents can pretty easily pass tax cuts for the wealthy and powerful corporations. … But what they cannot do, even with supermajorities in both houses of Congress behind them, is pass the kind of transformative progressive legislation that Barack Obama promised in his 2008 presidential campaign. … Obama faces the conundrum of a system that … gives the minority party no strategic stake in sensible governance. … This is just the beginning of the problems Americans face in terms of disproportionate representation. The average age of a US senator is 69, while the median age of Americans … is just over 35. Women are a majority of the US population but only 17 percent of the Senate. … Financial power … can define potential alternatives, invent arguments, inundate with propaganda … Politicians do not need to ‘switch’ their votes to meet the demands of this money. They can bury bills; they can rewrite the language …
“[O]ne hypothesis … for the Obama administration’s willingness to compromise so extensively on the promises that candidate Obama made during the 2008 campaign would be that as president, he is playing for time. Obama is taking the best deal on the table today, but hopes and expects that once he is re-elected in 2012 … he will build on the foundations laid during his first term to bring on the fundamental ‘change’ that is not possible in today’s environment. This would be consistent with FDR’s strategy during his second term and makes a kind of sense when one considers the nature of the opposition he faces today and the likelihood that it will discredit itself following a takeover of one or both houses in 2010. For that strategy to make sense, however, 2013 will have to provide a more pregnant sense of progressive possibility than 2009 did, and that will take a great deal of work by the rest of us.
GREAT MOMENTS IN ELITIST HISTORY!
So the next time someone tells you that Obama brought on socialism, or that we’re soaking the productive rich, tell them GFY. From Mother Jones…
Sure, you already know this. But it never hurts to post a reminder with a nice graphical memory aid. Nickel summary: the richest of the rich have gotten even richer over the past two decades — 400% richer for the top 400, according to CBPP, in a nice bit of symmetry — and at the same time their federal income tax rates have gone down from 30% to 16%. Needless to say, this is further evidence that America’s heirs and Wall Street tycoons, the targets of endless class warfare from liberals and Democrats, deserves to have the estate tax eliminated. They’ve suffered enough already.
But you come here for more than snark. You want substance. So here’s some substance:
The low effective tax rate for the top 400 filers is largely due to the fact that capital gains and qualified dividends are taxed at much lower rates than ordinary income….It is not surprising that two of the largest reductions in effective tax rates for the top 400 filers occurred in two two-year periods (1996-1998 and 2002-2004) that coincided with the capital gains tax cuts enacted in 1997 and 2003.
The second half of this paragraph seems fine: tax rates for the wealthy really did fall starting in 2003, which is almost certainly due to the Bush tax cuts. But the Clinton capital gains cuts took effect in mid-1997. How could they be responsible for a drop that began in 1996? What happened in 1995 to get the ball rolling?
(In case you were wondering about what happened, that would be Newt Gingrich & Co 1994 Republican Revolution. Thanks guys- for nothing.)
Chanos: “I have a problem with private capital asking for lower tax rates on certain forms of income that I believe are income, not returns on capital, than say teachers, soldiers, fireman and policemen”
Chanos, by the way, is head of Kynikos Associates. He called Enron, and Lehman, among others.
Lunchtime Read: The 2020 Budget
Really stellar piece from Ezra Klein:
CBO Director Doug Elmendorf gave a presentation (pdf) at the American Association for the Advancement of Science’s 35th annual Forum on Science and Technology Policy. If you want to spend some time freaking out about America’s rising deficit, check out the ninth slide. But I was more interested in the very clear graphics showing the projected budget breakdown for 2020. First, the top-line view:
And in case you’re wondering what “other spending” actually refers to:
A couple of things worth noting. First, none of the big-ticket items here are easy to cut. They may be wasteful (though in most cases, they actually aren’t), but they sound good. Second, you’ll notice that the Affordable Care Act, despite being fully in place by 2020, isn’t obvious on these charts (though it is a contributor to Medicaid). That’s because it’s not projected to be very big in comparison to total government spending. Third, foreign aid isn’t present in any serious way, either.
Elmendorf’s conclusion: “The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.” Yep.
Facts are stubborn things.
Lunchtime Read: How a New Jobless Era Will Transform America
The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.
It’s long, but worth your time.
Lunchtime Read: The Rise and Fall of the G.D.P.
A great piece from last Sunday’s NYTimes Magazine. Excerpt below.
Whatever you may think progress looks like — a rebounding stock market, a new house, a good raise — the governments of the world have long held the view that only one statistic, the measure of gross domestic product, can really show whether things seem to be getting better or getting worse. G.D.P. is an index of a country’s entire economic output — a tally of, among many other things, manufacturers’ shipments, farmers’ harvests, retail sales and construction spending. It’s a figure that compresses the immensity of a national economy into a single data point of surpassing density. The conventional feeling about G.D.P. is that the more it grows, the better a country and its citizens are doing. In the U.S., economic activity plummeted at the start of 2009 and only started moving up during the second half of the year. Apparently things are moving in that direction still. In the first quarter of this year, the economy again expanded, this time by an annual rate of about 3.2 percent.
All the same, it has been a difficult few years for G.D.P. For decades, academics and gadflies have been critical of the measure, suggesting that it is an inaccurate and misleading gauge of prosperity. What has changed more recently is that G.D.P. has been actively challenged by a variety of world leaders, especially in Europe, as well as by a number of international groups, like the Organization for Economic Cooperation and Development. The G.D.P., according to arguments I heard from economists as far afield as Italy, France and Canada, has not only failed to capture the well-being of a 21st-century society but has also skewed global political objectives toward the single-minded pursuit of economic growth. “The economists messed everything up,” Alex Michalos, a former chancellor at the University of Northern British Columbia, told me recently when I was in Toronto to hear his presentation on the Canadian Index of Well-Being. The index is making its debut this year as a counterweight to the monolithic gross domestic product numbers. “The main barrier to getting progress has been that statistical agencies around the world are run by economists and statisticians,” Michalos said. “And they are not people who are comfortable with human beings.” The fundamental national measure they employ, he added, tells us a good deal about the economy but almost nothing about the specific things in our lives that really matter.
[T]he gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile
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