Opinion

The Great Debate

The end of white affirmative action

ILLUSTRATION: MATT MAHURIN

Former GOP presidential nominee Mitt Romney said in a Wednesday conference call to donors that President Barack Obama won re-election because he promised “big gifts” to voters, “especially the African-American community, the Hispanic community and young people.” Romney singled out healthcare reform as a “huge” gift to these voting blocs and the working poor.

This echoes what the conservative commentator Bill O’Reilly has been saying. “The demographics are changing,” O’Reilly lamented on election night. “This is not a ‘traditional America’ anymore.” Latino, black, and women voters, he noted, were turning out for Obama. They did so, O’Reilly said, because “they want stuff.”

The audacity of these claims is breathtaking. The Romney campaign promised $5 trillion in tax cuts and a pile of regulatory and other favors to the wealthiest Americans. Over the past three decades such conservative “gifts” have helped the top 1 percent of earners – the likes of Romney and his donors – to nearly triple their incomes and double their share of the national income.

Now, Romney has the steely nerve to tell his bankrollers that he won’t be able to deliver on more tax goodies because Obama made promises to black, Latino and poor voters.

How can Romney and O’Reilly be so blind to the irony of their claims? Both men belong to the $20 million a year crowd, so it could be that they already had a lot of “stuff” in play.

The economy needs a ‘unity Cabinet’

The election left us with a status quo political lineup, one that failed to make any meaningful fiscal progress over the past two years. So is it realistic to expect that we can avoid the fiscal cliff and achieve some sort of “grand bargain”? Yes, it is possible, and here is how to do it:

First, President Barack Obama should form a “unity Cabinet” to demonstrate to the public and Congress that he wants to bring the nation together and accelerate progress on key challenges. It should include Democrats, Republicans and independents. All should be respected in both parties, have meaningful private-sector experience and credibility within and outside the Washington Beltway.

These criteria are especially critical when it comes to the president’s top economic team. Obama will almost certainly change the leadership at the Treasury Department, since Treasury Secretary Timothy Geithner has talked about leaving after the first term, and the Office of Management and Budget. Smart appointments could help reboot Obama’s relationships with Congress and increase the chance of success.

Why left should seek a fiscal deal

“I am looking forward to reaching out,” President Barack Obama said Tuesday night after he had won reelection, “and working with leaders of both parties to meet the challenges we can only solve together.”

The progressive community must understand this and put aside its rigidity to help him meet this goal. As Obama also said early Wednesday morning, “We’ve got more work to do.”

Yet a network of liberal groups, on Thursday, plan to demand a national day of action against a balanced, grand bargain that could pull the nation back from the fiscal cliff it faces. The beef of this progressive coalition is that a real budget deal would almost certainly cut Medicare spending and may possibly include a proposal to make Social Security solvent through the century.

The war over ‘entitlements’

It’s all in the wording. Throughout this presidential campaign, voters have heard a stream of claims and counterclaims about “entitlements” – payments the federal government makes to individuals.

The power of words to frame political ideas can’t be overemphasized. How we label specific practices and proposals affects the ways we think about them. Decades ago statisticians and economists used a neutral phrase, “transfer payments,” to describe various government disbursements: unemployment assistance, old-age pension support, food for the hungry, disbursements to veterans and federal employees.

By calling these “transfer payments,” they sought to focus on accounting techniques. They wanted to avoid the kind of charged labeling and stigmatization that we see today -‑ which prevents thoughtful discussion of the effects and benefits of these practices.

The sham of Simpson-Bowles

Erskine Bowles and former Senator Alan Simpson deserve some kind of medal for creating the widely held perception that their plan for reducing the deficit and debt is anything other than a bad proposal.

It has been nearly two years since the commission they chaired, which I served on, finished its work. The duo’s proposal has attained almost mythical status in Washington as the epitome of what a “grand bargain” should look like.

But everyone look again. They will discover that it is far less than meets the eye.

from Reuters Money:

Budget wars: The middle class loses big time

President Barack Obama talks about the budget in the White House press briefing room in Washington, April 5, 2011.   REUTERS/Larry Downing Now that federal government shutdown has been averted, it's a good time to examine what's at stake for most of America in the crucial next round of budget talks.

Not doing anything to reduce the size of government debt will be catastrophic. Not much quibble there. But acting hastily and cutting the wrong things can be even more costly to social and economic welfare.

Neither the Republican nor the Democrat's budget plans for 2012 will meet the major challenge of sustaining social programs while cutting the most egregious waste.

from Reuters Money:

Deficit cutting need not be cruel

SPAIN-ECONOMY/Congress needn't be cruel to be kind in cutting the U.S. budget deficit while saving popular programs like Social Security and Medicare.

That's not to say that taxes don't need to rise, deductions pared and giveaways to corporations eliminated. That all needs to be considered, although the recent deficit commission report doesn't do the dirty work in an equitable manner. It places far too much emphasis on paring Social Security benefits, a system that works and won't be in deficit mode for several decades.

There's plenty of pain to go around in the deficit commission's proposal. The most compelling trade-off is based on the idea that lowering personal income-tax rates will achieve some long-term economic stimulus. That thinking hasn't worked in the past and won't work now.

from Rolfe Winkler:

A healthcare failure could save Obama

The rising costs of Medicare and Medicaid threaten to destroy the nation's fiscal future, but President Obama is pushing for healthcare reform that would increase costs. Instead, he should refocus his presidency on paying down debt.true-national-debt-updated1

America's obligations over the next 75 years now surpass $62 trillion, up 8 percent since last year. And a new report released today by the Peterson Foundation suggests that total will go even higher if the House's health care legislation is passed.

(Click table to enlarge in new window)

With today's pliant bond market, it's easy to pretend we can have things that can't be paid for. But that's the kind of attitude that led California into the fiscal abyss. We have to get serious about bringing our expenses in line with our income. Now.

from Commentaries:

Debt on autopilot

At first glance this week's budget projections paint President Obama as a spendthrift. The White House itself offered a grim glimpse of a future in which U.S. debt more than doubles to $17.5 trillion in a decade -- an increase of nearly $10 trillion.

Merely servicing the U.S. debt will cost more than America currently spends on either defense or social security.

But the yawning deficit can't be blamed on Obama -- or for that matter, on Bush or on the financial crisis. Instead the government's finances are locked on autopilot, with entitlement programs driving the country towards a fiscal crisis.

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