Budget

Phony Hawkery

Definitely not Paul Ryan. (Flickr/contemplicity)
This is something that other people have mentioned, and Jamelle brings up in his extremely helpful post about Paul Ryan, but it really needs to be emphasized: Paul Ryan is not a "deficit hawk." No matter how many times the news media tell us, it doesn't make it true. As I've said before , you can't call yourself a deficit hawk if the only programs you want to cut are the ones you don't like anyway. Show me someone who's willing to cut programs he favors (Ryan isn't), and would actually take potentially painful measures to balance the budget (Ryan wouldn't), and that's a deficit hawk. Ryan, on the other hand, is a conservative ideologue who couches what Newt Gingrich appropriately called "right-wing social engineering" in a lot of talk about making tough choices. But I've never actually seen Paul Ryan make a "tough" choice, at least one that was tough for him. There's nothing "tough" about a conservative Republican who tells you he wants to slash Medicare and Medicaid, increase defense...

Will Lobby for Food

The farm bill is set to expire, which is bad news for anyone who eats.

Flickr/cordery
Something happened today that, chances are, you know little about yet care about very deeply. It helps pay for the lovely farmers market you frequent every weekend. It’s behind all those corn-syrupy soft drinks you’ve been taught to avoid. It’s the reason you started hiking to that one artisanal shop for grass-fed beef after you read The Omnivore’s Dilemma . It helps feed America’s hungry, because it authorizes the federal food-stamp program, which feeds 46 million people. It’s the farm bill, usually the concern of only the corn, wheat, cotton, peanut, and soy-bean lobby, but it really should be called the food bill, and it has to be reauthorized every five years. The House Agriculture Committee debated and passed the reauthorization of the law this morning—and it includes $16 billion in cuts to food stamps and an amendment that will kill a program designed to help small chicken farmers. Now, the bill will likely die. Most observers don’t expect House Majority Leader John Boehner to...

Tom Corbett's Scary Plan for Pennsylvania Welfare

(Flickr/401K 2012)
Pennsylvania Governor Tom Corbett's first stab at a budget for this year left the education community shaking. The Republican had balanced the budget in part through deep cuts not only to the state's colleges and universities but also to school districts. That's terrifying news for a state where some districts are already considering ending kindergarten to balance budgets. Miraculously, thanks to unexpectedly high tax collections, the state's schools have been spared the chopping block. But Corbett's other proposal, major funding cuts for human services, still looks alive and kicking. State lawmakers only have until Saturday if they want to pass a budget on-time. Over the weekend, according to The Patriot News , the governor and GOP leadership agreed to spend $26.66 billion —$1.5 billion more than Corbett's initial draft. But the governor is pushing the legislature to approve a proposal that would combine several human services programs into single block grants. The change also come...

Lockheed Martin's Creative Lobbying

Lockheed Martin federal contracts.
When the Supreme Court handed down the Citizens United decision, many people predicted that big corporations would start buying elections, now that they were allowed to spend as much money as they wanted on campaigns. While that certainly might happen in the future, it hasn't happened so far, probably because they're worried about the PR backlash that could result from too much partisan activity. Instead, the ones donating millions have been extremely rich individuals, most of whom are Republicans. But that doesn't mean corporations don't have clever ways of playing the political game. To wit : Lockheed Martin is contemplating a pre-election move that could shake up the political landscape. Right before Election Day, the company is likely to notify the "vast majority" of its 123,000 workers that they're at risk of being laid off, said Greg Walters, the company's vice president of legislative affairs. Walters's comments are some of the most specific threats yet from an industry that's...

Tax Reform Silliness

Flickr/401K 2012
Barack Obama did a bunch of big things in his first term—passed health care reform and ended the war in Iraq, most notably. If he wants to do something big domestically in his second term (especially since he seems to have lost any inclination to do anything about climate change), one natural area to try would be tax reform. It might actually be possible to arrive at something both Democrats and Republicans could live with, if we put aside Republicans' desire to make sure he never accomplishes anything, ever (which will continue into his second term). Republicans already have their own tax plan, which lays out some goodies they'll give people (especially wealthy people, you'll be shocked to learn) while conveniently avoiding any specificity on how the goodies will be paid for. Some analyses have been done on the Republicans' plan, and they don't look too good : The tax reform plan that House Republicans have advanced would sharply cut taxes for the wealthiest Americans and could leave...

Sabotage Makes Sense!

Over at Talking Points Memo, Sahil Kapur reports that Senate Majority Leader Harry Reid has pulled the “sabotage” card on his House counterpart, Eric Cantor: “You have heard, as I’ve heard, that there’s a battle going on between Cantor and [House Speaker John] Boehner as to whether or not there should be a [highway] bill,” Reid told reporters. “Cantor, of course — I’m told by others that he wants to not do a bill to make the economy worse, because he feels that’s better for them. I hope that’s not true.” Cantor’s office made a speedy response, calling the charge “ridiculous and patently false,” and John Boehner’s office was even more succinct: “That’s bullshit,” said his spokesman Michael Steel. It’s impossible to know whether Republicans have a strategy to sabotage the economy ahead of the election, but it’s hard to fault Democrats for their suspicions. Not only is the GOP obstinate on the question of stimulus—despite wide agreement among economists that the economy needs an...

The Austerity Experiment

(Press Association via AP Images)
BRUSSELS—Depending on whose narrative you believe, the deepening economic crisis in Greece proves (a) that the dysfunctional and dissolute Greeks just couldn’t get their act together and keep the reform commitments that they made in exchange for debt relief from the European authorities; or (b) it only proves that austerity breeds more austerity. Cut public spending and wages, and raise taxes in a recession, and you just dig yourself a deeper hole. Since only about 20 percent of the Greek economy is exports and less than 40 percent of export costs are wages, slashing wages just doesn’t produce much of a bounce, especially when the rest of Europe’s economy is contracting too. Greece is a lousy test of the austerity-as-cure hypothesis, because left, right, and center agree that Greece has an encrusted system. When I recently interviewed former Prime Minister George Papandreou, he referred to Greece as a “clientist” state—meaning government by crony constituency. When the right governs,...

In Texas, Incumbents Suffer for Not Being Extreme Enough

(Flickr/daverugby83)
Yesterday I asked whether Texas voters would punish those incumbents who approved billions in state education cuts . I didn't even mention the billions of dollars in cuts to health and human services—or that despite these cuts, critical structural revenue problems remain in the state, which means this coming session will be worse. I just wondered whether incumbents would suffer for the session's austere approach. Well several incumbents suffered—but not in a manner you might expect. Take Rob Eissler, the Republican chair of the Public Education Committee who pushed for some of the big budget cuts. He lost his primary Tuesday night in a big upset. But he didn't lost his seat to a candidate pushing back against cuts. Nope. Eissler lost his seat to a Tea Party insurgent because—get this—Eissler had been too moderate and was too closely aligned with House Speaker Joe Straus. Nationally the focus may be on the Cruz-Dewhurst Senate race, but it seems insurgencies are alive and well when it...

Will Texas Voters Care About Billions in Education Cuts?

(Flickr/hpeguk)
Last year, during the biennial legislative session, Texas House Republicans approved a budget with a crippling $10 billion in cuts to public schools over the next two years—this despite warnings from educators that the results would be catastrophic. Several state senators fought to make the cuts only harmful rather than damning. In the end, Texas public schools lost $5.4 billion in the two-year budget, an unprecedented cut that's left districts and classrooms struggling to provide basic services. More than 10,000 teaching positions have been cut, and over 8,000 elementary schools have applied for waivers to go over the state's class-size cap, almost 6,000 more than last year according to the AP. Tuesday's Texas primaries beg the question: Will any incumbents pay? Texas educators haven't traditionally been a politically hard-line group. It's a conservative state, but since the current funding system went into place after World War II, there've been no deep cuts to education. Texas has...

The Cost of the Debt-Ceiling Fight

(Flickr/jacqueline.poggi)
For a moment last fall, it looked as if the last-minute debt-ceiling deal was all for nothing. Democrats had caved to Republicans’ demands to cut spending in order to keep the government funded. But Standard and Poor’s decided that the brinkmanship displayed by John Boehner and Republicans reflected poorly on the country’s ability to pay its bills, and decided to lower the U.S.’s credit rating anyway from AAA to AA+. Luckily, that decision was taken more as a reflection of the rating agency than a proper assessment of the country’s credit-worthiness. The U.S. continues to sell Treasury bonds at record low interest rates, a sign that investor confidence hasn’t been shaken. That doesn’t mean the tussle over the debt ceiling last summer came without cost. Economists Betsey Stevenson and Justin Wolfers have an op-ed in Bloomberg today assessing the impact of the debt-ceiling showdown: High-frequency data on consumer confidence from the research company Gallup, based on surveys of 500...

No Taxmageddon Solution Before November

(Flickr/Nasa hq photo)
Congress is deadlocked on a host of issues that will need to be solved before the end of the year lest the country plunge off a fiscal cliff at the start of 2013. If no action is taken, all of the Bush tax cuts will expire, the payroll tax will return to higher rates, and the full-sequester spending cuts will go into effect, with the debt ceiling hitting its limit shortly thereafter. Estimates from the Congressional Budget Office released early this week paint a horror story for the start of 2013, with the economy contracting by 1.3 percent. The New York Times tries to offer a bit of hope this morning, with a story detailing both Democrat and Republican intentions to tackle the tax cuts before the lame duck session: Both parties in the House and the Senate are eager, perhaps even giddy, at the prospect of voting for their respective versions of an extension of the cuts this summer, well before the due date. Speaker John A. Boehner, Republican of Ohio, has said there will be a House...

Unorthodoxies

Could Israel's new coalition get the ultra-Orthodox to go to work? Not by Netanyahu's methods.

(AP Photo/Emilio Morenatti)
In our last episode , dear viewers, we watched as Israel's main opposition party, Kadima, sold out its centrist voters and joined Benjamin Netanyahu's government—thereby providing the prime minister a reprieve of over a year before he must face the voters. This allows Bibi more time to raise regressive taxes, evade negotiations with the Palestinians, and deride diplomatic efforts to solve the Iranian nuclear issue. But perhaps there's a bright spot in this dark plot line. To paraphrase a question I've heard repeatedly over the last couple of weeks: Since the new coalition is broad enough to maintain its majority in parliament even if clerical parties walk out, can it finally end one of the strangest and best-known aberrations of Israeli life? Can it end the bizarre pork-barreling that allows most ultra-Orthodox men to spend their life in religious studies rather than working? After all, isn't the Israeli economy slowly sinking as the ultra-Orthodox community grows and the financial...

What Real Government Waste Looks Like

1,822,600 GSA conferences, in flight.
When it was discovered that the General Services Administration spent nearly a million dollars on a lavish conference in Las Vegas, the outrage thundered through Washington like a roiling tsunami. Congressional hearings were quickly organized, the scandal led the news every night for days, and you couldn't turn on a television or radio without hearing more horrifying details. The public trust was betrayed! Our tax dollars were wasted! Government was out of control! Yeah, maybe. But in the end, the whole thing was about $823,000, or .00004 percent of the federal budget for 2011. You want to talk real government waste? Get a load of the F-35 joint strike fighter : Although the plane was originally billed as a low-cost solution, major cost increases have plagued the program throughout the last decade. Last year, Pentagon leadership told Congress the acquisition price had increased another 16 percent, from $328.3 billion to $379.4 billion for the 2,457 aircraft to be bought. Not to worry...

A New Kind of Gold Standard?

(Flickr/tao_zhyn)
In the latest issue of the magazine, I have a piece examining a strange and growing trend in some conservative circles—pushing states to adopt alternative currencies to the federal dollar. The basic concern is one you've probably heard from Ron Paul: The Federal Reserve can't be trusted, the national debt is out of control, so the U.S. dollar, backed only by faith in the government, may become worthless. (The story outlines some of the more obvious economic problems with this theory.) To deal with the concern, problem-solving state lawmakers have started introducing bills to create a second currency, one of gold and silver. Sounds like a fringe concept right? Well, not entirely. In the 2011-2012 legislative cycle, 17 states saw some form of the legislation introduced, either implmenting a second currency or at least prompting a study of one. The famous (and failed) "doomsday bill" in Wyoming included one such study. Utah already passed its version last year, so you can now start...

Does Congress Even Need to Pass a Budget?

The last time the U.S. passed a real budget was in 1997. Does this mean we don't need one?

As much as the Internet might try to fool you, the 2012 political season is about more than just Etch A Sketches and sweater vests. We’re up crap creek in a leaky canoe when it comes to the economy, and as the country heads into the general election, the debt and budget will be at the fore of public debate. With competing budget proposals flying in from all sides, much of the political talk these days centers on the endless delays and extensions that Congress has thrown in the path of approving a long-term federal budget. Which might lead one to wonder: Would it matter if we never passed a budget plan ever again? What exactly is the federal budget? The federal budget is one big ’ol nasty bill thousands of pages long that determines the fiscal future of the country over the course of a year by allocating money to various programs like Medicare and Medicaid as well as to things like defense spending. When was the last time we had a budget bill that was approved? April of 2009. But...

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