Jeb Hensarling gives his version of events in re: the failed supercommittee:

All now know that the Joint Select Committee on Deficit Reduction has failed to reach an agreement. While there will still be $1.2 trillion of spending cuts as guaranteed under the Budget Control Act, we regrettably missed a historic opportunity to lift the burden of debt and help spur economic growth and job creation. Americans deserve an explanation.
President Obama summed up our debt crisis best when he told Republican members of the House in January 2010 that “The major driver of our long-term liabilities . . . is Medicare and Medicaid and our health-care spending.” A few months later, however, Mr. Obama and his party’s leaders in Congress added trillions of dollars in new health-care spending to the government’s balance sheet.

Y’know, Jeb, if you’re going to quote Obama, it would be good if you didn’t completely ignore the phrase ‘long-term.’ Because that’s why MM&SS isn’t the priority right now. Creating jobs and growth in the short-term is. And that ‘added trillions’ a few months later wasn’t just whim – it was the Patient Protection and Affordable Care Act (which you so endearingly refer to as ObamaCare), the major piece of legislation that your House of Representatives passed in large part because your party presented no other viable ideas.

Democrats on the committee made it clear that the new spending called for in the president’s health law was off the table. Still, committee Republicans offered to negotiate a plan on the other two health-care entitlements—Medicare and Medicaid—based upon the reforms included in the budget the House passed earlier this year.

Uh, yeah, that budget under which you held the debt ceiling hostage, and started your efforts to carve out the funding that would enable the Health Care provisions that BECAME LAW when ‘Obamacare’ passed. So, yeah, it passed, it’s legislated law, so it’s off the table.

The Medicare reforms would make no changes for those in or near retirement. Beginning in 2022, beneficiaries would be guaranteed a choice of Medicare-approved private health coverage options and guaranteed a premium-support payment to help pay for the plan they choose.
Democrats rejected this approach but assured us on numerous occasions they would offer a “structural” or “architectural” Medicare reform plan of their own. While I do not question their good faith effort to do so, they never did.

Private health coverage options = the same old song=and-dance – private ‘investment’ accounts, vouchers, starve-the-beast reimbursements, all of the greatest hits of the last two decades of Republican thought. That the supercommittee ‘Pubs actually think health care spending, let alone government spending, is what the American people want them working on here is mind-boggling to me.

Republicans on the committee also offered to negotiate a plan based on the bipartisan “Protect Medicare Act” authored by Alice Rivlin, one of President Bill Clinton’s budget directors, and Pete Domenici, a former Republican senator from New Mexico. Rivlin-Domenici offered financial support to seniors to purchase quality, affordable health coverage in Medicare-approved plans. These seniors would be able to choose from a list of Medicare-guaranteed coverage options, similar to the House budget’s approach—except that Rivlin-Domenici would continue to include a traditional Medicare fee-for-service plan among the options.
This approach was also rejected by committee Democrats.

Because if the Republicans were going to take Rivlin-Domenici seriously, they should have done that months and months ago. What’s the point of following that model now, knowing that the Republicans have every intention of chipping away its effectiveness just like they’re chipping away at Obamacare now, and just like they’ll renege on the ‘sequestration’ cuts in the coming weeks.

The Congressional Budget Office, the Medicare trustees, and the Government Accountability Office have each repeatedly said that our health-care entitlements are unsustainable.


Committee Democrats offered modest adjustments to these programs, but they were far from sufficient to meet the challenge. And even their modest changes were made contingent upon a minimum of $1 trillion in higher taxes—a move sure to stifle job creation during the worst economy in recent memory.

Because job creation isn’t being stifled NOW? “…tax receipts as a percentage of gross domestic product are lower than they’ve been since 1950.” I must have missed that Great Recession of the 1950s and 1960s. We must have been crippled as a nation back then…

Even if Republicans agreed to every tax increase desired by the president, our national debt would continue to grow uncontrollably. Controlling spending is therefore a crucial challenge. The other is economic growth and job creation, which would produce the necessary revenue to fund our priorities.

The tax increases proposed and rejected by you wouldn’t be the sole solution – it’s not zero-sum. The effects of the modest revenue hike would be beneficial to lower income consumers, i.e. it would help create demand. It would create projects that would create jobs, and get the whole extra-governmental supply chain moving again. It’s there that the economy will genuinely grow, not in government budget items. They’re just the catalyst. The Republicans, by the way, understand this perfectly – they’re just pretending it’s not true to keep YOU panicked.

In the midst of persistent 9% unemployment, the committee could have enacted fundamental tax reform to simplify the tax code, help create jobs, and bring in over time the higher revenues that come with economic growth. Republicans put such a plan on the table—and even agreed to $250 billion in new revenue by eliminating or limiting most of the deductions, credits, loopholes and tax expenditures mainly enjoyed by higher-income Americans. We offered this to avoid the even larger tax increases already written into current law that will intensify the pain Americans are feeling during these difficult economic times.
Republicans were willing to agree to additional tax revenue, but only in the context of fundamental pro-growth tax reform that would broaden the base, lower rates, and maintain current levels of progressivity. This is the approach to tax reform used by recent bipartisan deficit reduction efforts such as the Bowles-Simpson fiscal commission and the Rivlin-Domenici plan.
The Democrats said no. They were unwilling to agree to anything less than $1 trillion in tax hikes—and unwilling to offer any structural reforms to put our health-care entitlements on a permanently sustainable basis.

He’s referring here to the Pat Toomey plan, which, indeed, would have cut back on “most of the deductions, credits, loopholes and tax expenditures mainly enjoyed by higher-income Americans.” What he fails to mention is that this would have been attached to a.) making the Bush tax cuts permanent, and b.) an overall reduction of personal tax rates to 28%. A huge overall tax cut, which would have primarily benefited whom, would you guess? Uh huh…

Unfortunately, the committee’s challenge was made more difficult by President Obama. Since the committee was formed, he has demanded more stimulus spending and issued a veto threat against any proposed committee solution to the spending problem that was not coupled with a massive tax increase.

You say massive, I say proportionate and long overdue. So do most of the American people. But you know better, right, Jeb?

Despite the president’s disappointing lack of leadership (IT’S NOT HIS JOB! YOU ARE THE LEGISLATIVE BRANCH, BOZO!), I believe my co-chair, Sen. Patty Murray, and every Democrat acted with honor and integrity and negotiated in good faith to the end. It was, of course, difficult to negotiate with six Democrats who, as Democratic committee member Jim Clyburn said on Nov. 13, “never coalesced around a plan” themselves.

The Supercommittee was supposed to “coalesce around a plan,” not each party represented. Most of the reason this failed was because the ‘Pubs brought a plan they wouldn’t budge from, while the Democrats hoped to shape things within the committee. What a silly notion…

But I believe this failure was not due to lack of effort or commitment. Ultimately, the committee did not succeed because we could not bridge the gap between two dramatically competing visions of the role government should play in a free society, the proper purpose and design of the social safety net, and the fundamentals of job creation and economic growth.

A big reason it didn’t succeed is your listing those three priorities exactly backwards.People don’t give two shits about “competing visions of the role government should play” – where are the jobs? “The proper purpose and design of the social safety net” isn’t nearly as important now as job creation and economic growth. Get the damned economy moving, then fix MM&SS.

A great opportunity has been missed, but America’s fate will not be sealed by the failure of a temporary congressional committee. Spending cuts will begin anyway in 2013, but in a manner many of us, including our secretary of defense, believe could fundamentally harm our national security. I am committed to ensuring that full deficit reduction is realized, but Congress must work to achieve these savings in a more sensible manner that does not make us less safe.

In other words, you can count on me to try to screw up sequestration as much as possible.

As Winston Churchill said, “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” Despite my disappointment with the committee’s setback, I remain confident that we will yet again prove Churchill right.

Umm, Mr. Hensarling, he’s making fun of people like you.



Economics / Politics

I make a point to read arguments on the right; one of my favorite sites, Real Clear Politics, does a great job of showcasing the boundaries of European-style social democracy vs. Norquist-style free-market capitalism, and all points between. Of course, roughly half of it infuriates me, but at least I know I’m getting the information from thoughtful sources.

CNBC’s Lawrence Kudlow, as you may know, is a champion for the pro-corporate, unfettered-market, find-your-own-damn bootstraps-I’m-busy school of economics. The little-if-any-government corporate oligarchy is just fine with him; in fact, what the hell’s taking so long?

In fairness, I must also admit that Kudlow genuinely loves our country, and feels like his approach, if followed, will be in everyone’s best interest. I get to opine that he’s hypocritical in that belief, and that his view of Who-This-Will-Help is wildly, perhaps willfully, distorted, but I would never ascribe conscious malice to most of the things he supports.

For instance, Kudlow seems to have a permanent IV running, giving him substantial and consistent nourishment in what I (and others) refer to as The Myth Of Reagan – let the private sector keep as much of what they earn as possible, and we’ll never have to worry about having adequate government resources for the things we all agree the government needs to do (i,e., form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity). Most conservatives aren’t monolithically opposed to the providing of health care, family planning, support for the unemployed and the indigent, education, or corporate and/or financial oversight – they just don’t believe it’s the government’s job to materially provide those things. Planned Parenthood is OK, but the government shouldn’t pay for it if it can’t sustain itself. Umbrella programs like Medicare, Medicaid and Social Security should be private enterprises, not government programs – market forces will do a better job of making it affordable and keeping costs down than a closed-end government budget will. Americans donate lots and lots of money to charitable and religious institutions that care for the less-well-off. Take your tax savings and give more to them – they’re better at it than the government ever will be. Don’t bail out banks and industries – if they can’t sustain themselves, they should close, and profitable banks and industries will flourish if you lower taxes on people, giving them more liquidity, and solving the problem of consumer demand. Government shouldn’t police Wall Street – Wall Street should police itself; it will cost them too much money if they do it badly, so you can trust them. I could go on, but you get the gist.

Liberals, or progressives, or whatever label Ann Coulter is shitting on this week, contend that Planned Parenthood serves a greater good than what the capitalist market will profitably sustain, and that public investment, through taxes, is worth it. Medicare, Medicaid and Social Security “promote the general Welfare” in ways that capitalism isn’t structured to care about. And pumping up the private sector with money through lower taxes should theoretically result in ‘trickle-down’ to the rest of us – there’ll be lower tax rates, but more profits to tax, and more people will be inclined to pay them, so it’ll even out nicely – the problem is that historically, that’s never, ever happened. It remains theory, not fact. It only ‘worked’ during the Reagan years because the Reagan administration flat-out ignored the spiraling shortfall in government revenues. How many Republicans today will agree with Dick Cheney’s statement that “Reagan proved deficits don’t matter?” Government deficits are practically ALL that matter to the Boehner-McConnell school of economics these days. They’ll still defend the theory, arguing that Reagan, did, indeed, raise taxes, and that was a mistake. But they have no real precedent to point at and say “Here, look, that’s when it happened, and it all worked out”

So I have both respect, and deep dread, for the poor fuckers on the SuperCommittee who will be lauded or blamed for what they eventually come up with. Case in point:

“The Texan (Rep. Jeb Hensarling, R-Tx) was referring to the Sen. Pat Toomey plan, which would lower the personal tax rate to 28 percent and head down from there, while at the same time putting limits on personal deductions (such as mortgage interest) for upper-income taxpayers. In other words, flatten the rates and broaden the base.
“Net revenues would go up in this scheme for two reasons: First, the reduction in personal tax breaks; second, the economic-growth impact would be positive. This calls on the research of Harvard professor Martin Feldstein, who urged Congress to trade off lower rates with fewer deductions since the incentive effect of taking home more after-tax income would benefit the economy.
“Trouble is, Democrats don’t buy into it — at least not yet. Senate supercommittee members Patty Murray and John Kerry have opposed real tax reform.”

Do you see what Kudlow did there? Lowering the overall tax rates will create more revenue, as sure as there’ll be a Friday tomorrow. Uh, I would say nope. He supports ‘mortgage interest’ as a crucial target for adjustment, veering you away from capital gains taxes, estate taxes, carried-interest tax breaks and offshore-profit boondoggles that should be the real targets. I’m OK with those full mortgage deductions if it’s based on the true value of the real estate, whether it’s a two-bedroom bungalow or Xanadu. You can graduate them, but do it fairly, proportionately. Democrats ‘don’t buy into it’ out of spite – it’s because this stuff, ultimately, has never worked. And don’t even get me started on ‘revenue-neutral tax reform,’ which HuffPost’s Jason Linkins rightfully compares to ‘cake-neutral baking’ or ‘cocktail-neutral bartending.’ “Why go to the trouble to do all that work, and not produce a cake?” Murray and Kerry don’t oppose real tax reform – they just know Einstein’s definition of ‘insanity.’

Read it for yourself. Your mileage may vary. It’s OK to argue against this stuff as long as you’re making a real effort to understand it, rather than just shouting it down because it’s not serving your own self-interest.


Foreign Policy

The American and European press establishments are consistent in dismissing Argentina’s economic success over the last ten years. Writer Paul Katz has his own reservations about ‘kirchnerismo,’ but lays out an admirably objective defense of the policy.

“…Néstor Kirchner, an unknown governor of Argentina’s second-least-populous province, emerged to claim the presidency in 2003, promising to confront ”groups and sectors of economic power that benefited from unacceptable privileges during the past decade.” His budget stressed to the breaking point, Kirchner repaid the IMF, but he loudly ignored its demands for austerity and took a hard line renegotiating Argentina’s remaining debt. Western opinion leaders scolded, and global credit markets refused to lend.
“Kirchner cast these critics aside, pursuing his own heterodox recovery. He boosted government spending, subsidized fuel and transportation, and expanded manufacturing and exports. He distanced himself from the United State and kept the peso cheap to increase trade with other developing countries. Helped by rising commodity prices — especially for soy, the country’s new cash crop — Argentina experienced the sort of growth that even Tim Pawlenty wouldn’t dare to promise: nearly 9 percent a year between 2003 and 2007.
“In a ploy to avoid the constitution’s two-term limit, Kirchner decided to step aside in 2007 so that his wife (Cristina Fernandez de Kirchner) could run for the presidency in his stead. The boom times carried her to victory. Far from the political novice many of her critics portray, the former three-term senator has proven an adaptable leader. Two years ago, amid a temporary economic slowdown, kirchnerismo suffered a stark midterm defeat. In response — and especially since her husband’s unexpected death — Fernández moderated her combative tone, doubled down on her rhetoric of inclusion and strengthened her alliances, waltzing to easy reelection last week.”