Why Exempt Seniors Over 55?

In their new budget plan, Republics plan to basically end Medicare, but not for people 55 or older. They say their rationale is that people 55 and older have made plans based on the current system and it wouldn't be fair to take Medicare away from them now.

I suspect their are a lot of people under age 55 who have also been counting on Medicare. Parents putting kids through college may be counting on catching a break on health care costs once they turn 65. Call me cynical, but I think this exemption for older people is probably an attempt to buy them off. If seniors aren't affected, maybe they won't be quite as mad about the proposal.

If privatizing Medicare will lower medical costs and reduce the deficit, why not start it today? We can protect seniors already enrolled in Medicare by giving them vouchers to pay for the full cost of private health insurance. Seniors wouldn't be hurt economically and the country would benefit.

Implementing vouchers for seniors health care now would also give us a chance to see if the idea really works. Come to think of it, has anyone asked insurance companies to develop the kind of insurance policies that the Republics say will be available for seniors under their plan? I'd like to see what they cost and what is covered.

Republic Plan To Ration Health Care

Republics screamed about rationing and death panels in the Democratic plans for health care reform. Of course there has been health care rationing forever. As I've written before, unless there are unforeseen changes to health care in the future, there will always be rationing of health care. The question in whether we can find rational, humane ways to ration.

Republics plan to save Medicare by giving people tax credits and having them buy insurance on the open market. From the reports we've heard, the plan is to control and reduce health care costs by giving people less in tax credits than insurance is expected to cost. Therefore people will have an incentive to buy only the coverage they need and use only the services they need. This is self rationing. In addition, the amount of tax credit the government will give will not be tied to the rising cost of health insurance. So as rates go up, individuals will have to pay ever more out of pocket costs or decrease their coverage.

From reports I've heard, Republics believe this difference between what people will have to pay and what the government will pay will incentivize private health insurers to control costs. It's nice to know Republics still have a sense of humor.

The Republic plan is guaranteed to work just as they plan. The costs to the government will go down and Medicare will be destroyed. Will the health of Americans be better?

Pass The Damn Bill

The stakes for the next budget battle are even greater than the one just completed. If Congress fails to authorize an increase in the debt limit the result could be devastating. History and current Republic statements indicate that many Republics will not vote for an increase without guarantees of drastic spending cuts.

There will be an agreement before the United States defaults. Banks and big business know that default is not an option. Even threats could damage the credit standing of the United States in the world. Business will jerk the leashes of Republics and make sure a bill is passed.

I would like to make a suggestion. Republics should agree to increase the debt limit enough to cover the debts projected for the next three years under the Ryan budget without any policy riders. That's right, for all their huffing, the Ryan plan has significant annual budget deficits for years to come.

Can Republics really destroy the credit of the United States when their own budget plans will require that the debt ceiling be raised significantly?

In three years, the Republics will have time to elect a Republic Senate and a Republic President. Then they can do whatever they want. In the meantime, raise the debt ceiling without bullying and threats so we can tackle other issues. Like the FY12 budget.

Responsible Chickens

The recent budget debates that threatened to shut down the government have been compared to a game of chicken. An example of this game was depicted in the movie "Rebel Without A Cause". Two young men race to run their cars off a cliff. The object is to see who jumps out of their car first and therefore is a "chicken".

The budget battle wasn't really a game of chicken. The two guys were risking their own lives in those cars. Politicians were risking the American people and economy.

The two guys in the car were willing participants. They may have been pressured into the game, but they could have said they wouldn't play. Republicans and Democrats had to play the game and reach an agreement or the government would have shut down.

The choice was over the stakes and what the other side would agree on. Republicans chose to set the stakes high and then force negotiations to the eleventh hour to see how far they could push Democrats. This wasn't a game of chicken, it was blackmail perpetrated by Republicans.

This wasn't so much a fight over the budget as a test by bullies to see how much Democrats were willing to compromise rather than hurt the country. Democrats jumped first and further. I guess they are the "chickens".

Look For Alternatives

Mark Halperin was on Hardball with Chris Matthews tonight. He wanted to give Representative Ryan credit for a plan to cut Medicare because if we don't cut it, costs will balloon and bankrupt the country.

Wait a minute. He has bought the Republican line. Medicare may need to be changed, but why isn't the possibility of adding revenue to the system an option? Couldn't there be parts of Medicare that are so valuable we might consider ways to increase funding to save them rather than cut service?

The Republicans only have two ways to solve a problem. Cut services or cut taxes. We probably will have to cut something, but there may be alternatives if we look for them.

Shared Pain

Representative Ryan has released his budget plan.

It cuts -
Social Security
Medicare
Medicaid
Taxes for business
Taxes for the rich

Give him credit. He makes sure everyone takes their share of cuts.

What would you pay for?

In the current debate over the deficit and budgets, Republics want to take any tax increase off the table. Their current framing is, we don't have a revenue problem, we have a spending problem. That is, cut spending; do not raise taxes.

It is clear that Republics and Democrats have a different philosophy about the purpose of government and how to pay it. In general, Republics believe that less government is always better (at least that is what they say, if not always what they do). Government is the problem, not the solution. Republics want to decide how much they are willing to spend on government (which is always less than what we spend today) and then determine how to distribute that money. Preference is always given to the generators of wealth.

In general, Democrats believe that government is about creating a civil society. Democrats would rather first decide what is important to do and then decide how to pay for it (sometimes). Preference is given to the less fortunate. The Democratic position is obviously harder to sell.

While Democrats have certainly authorized new spending without determining how the additional expenditures would be paid for, they managed to live under the PAYGO rules of the 1990's. Had these rules been extended, the budget busting 2003 tax cut, the Medicare prescription program and the wars in Iraq and Afghanistan might have had to have been paid for instead of just adding to the debt.

The two Bush era tax cuts added significantly to our debt. Let me state again, tax cuts when you are already running a deficit without the same dollar cuts in spending add to the long term debt! Republics constantly berate Democrats about spending more than we have revenue to pay far and passing that debt on to future generations. Fair enough. But cutting taxes without cutting spending has the same affect and is just as destructive. The math is simple. Revenue minus expenses equals surplus or debt. When you are already running a deficit, increasing spending without increasing revenue will increase the debt. Likewise, decreasing revenue without decreasing spending will increase the debt.

Contrary to popular belief, the Republics have actually been winning the deficit/debt debate. "Starve the Beast" has been Republic dogma since Ronald Reagan. This is the policy of always cutting taxes without concomitant cuts in spending in the belief that the eventual fiscal crisis will force drastic decreases in the size of government.

Republics have succeeded. The public believes we have a fiscal crisis generated by too much spending not a problem generated by a weak economy, tax cuts and spending. The discussion is how do we cut taxes, expenditures and the size of the government. Why aren't we also discussing what functions of government are worth paying taxes to support and how do we generate the revenue to pay for them?

Save My Marriage, Vote For Obama

Recently, to explain his infidelity and the failure of two previous marriages, Newt Gingrich basically said that his patriotism and love for this country caused him to work too hard for his country and not hard enough at maintaining his marriages.

What a novel explanation. What he is basically saying is, I'm so patriotic I was willing to sacrifice my marriages for the good of the country.

If Newt should win the Republican presidential nomination for 2012, do you think the current Mrs. Gingrich will vote for Newt or vote for President Obama and possibly save her marriage?

Chameleon Gingrich

Newt Gingrich has been making conflicting statements about Libya. He was emphatically for a no-fly zone before President Obama decided to support the UN resolution. Once President Obama expressed support for a non-fly zone, Newt was suddenly emphatically against it.

The argument's he uses to defend his flip-flop are tortuous. It is obvious his opinions are purely driven by a simple logic - I don't agree with Obama. A tactic he fully developed years ago when it was - I don't agree with Clinton. He should change his name from Newt to Chameleon. His opinions quickly change to match the current Republican political landscape.

Political Compromise

Click on image to enlarge.

Elephant Butts As Political Strategy

We need cooperation and compromise, butt this is what we get.

Click on image to enlarge.

Dilemma

Click on cartoon to enlarge.

Created at ToonDoo.com

National Security vs Politics

Senator Jon Kyle (R, AZ) and Republican Senators have put politics above our national interest by refusing to vote on the New START Treaty with Russia.

Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, was on ABC's This Week this morning where he was questioned by host Christiane Amanpour. He unequivocally supported the START Treaty. When asked repeated questions about whether this treaty was good for the country and should be passed, he made clear that it was in the best interests of National Security that the START Treaty be passed ASAP. Even in a lame duck session. He emphatically said "ASAP".

When asked if the Republican opposition was based on politics or policy, Admiral Mullen obviously refused to comment. But it was clear from all his other comments that he saw no national security reasons for delaying ratification of the treaty.

Sometimes is hard to tell when Republican obstructionism is principled or political. In this case it is obvious.

Repeal tax cuts for rich

Republicans want to extend all the Bush tax cuts, including the tax cuts for people making over $250,000. This would be $250,000 of taxable income, after deductions, etc.

Their argument is that many of the people affected are small business owners and the extra tax burden would cause them not to grow their businesses.

Let's think about this.

First of all the, these high income people would still get the tax cut on the first $250,000 of their income. Assuming that the current tax rates on income under $250,000 are extended, the higher rate after January 1 would only be on any income over $250,000.

So if I understand the rates correctly, the rate for income over $250,000 will change on January 1, 2011 from 35% to 39.6%.

Let's say you are a small business owner, have $250,000 of taxable income and starting 01/01/2011 you have the opportunity to grow your business and raise your income from $250,000 to $350,000. At the end of the 2011, your tax bill will be $4,600 greater if the Bush tax cuts for the rich are not extended. The federal tax on that $100,000 would be $35,000 if the tax cuts are extended and $39,600 if they are not.

So Republicans think this business person would not grow their business by $100,000 and increase their after tax income by roughly $60,000 because they would have to pay an extra $4,600 a year in federal taxes. That doesn't make sense.

I know that $39,600 in taxes on $100,000 sounds like a lot, but these rates would be the rates that were in effect in 2000. Not exactly a bad year for business.

When the current lower tax rates were passed:
1) They were not paid for. These tax cuts were paid for by increasing the debt. The Chinese and others loaned us the money to cover the increased debt these tax cuts caused. Everybody got a tax cut that would have to be paid for by tax payers in the future when that debt (plus interest) was paid off.

2) The tax cuts were not made permanent when they were initially passed as part of a political ploy. The tax cuts were designed to expire in 2011 because they were so damaging to the debt. Republics used a gimmick based on how the actual cost of the cuts were calculated and reported at that time. Politicians made the total effect of these tax cuts look lower than they would actually be by making them expire in 2011 rather than making them permanent. Secretly they figured politicians in 2010 would be politically forced to extend them.

We can debate whether or not a tax rate of 39.6% on adjusted income over $250,000 is reasonable or excessive, but to argue that this change would hurt job creation is Elephant Shit.

This will be a fight. We need to balance the budget and not extending the tax cuts for income over $250,000 can help us get there. Democrats need to clearly explain why it makes sense that we do not extend the tax cuts for the rich.

Are Republics Principled Or Just Political?

Senator McConnell has announced that one of the highest priorities of Republics is to repeal health care. I thought the number one priority was jobs. I guess I just haven't been listening over the last few months.

I've heard several Republics say that they favor complete repeal of the new health care law and then they would pass a series of common sense measures to replace it.

Bull. If they are really interested in making health care better, let's demand that they explain what they are going to replace the new health care law with before they try to repeal the current law.

Everyone agreed that we needed to reform health care. Well, almost everyone. Democrats finally got an imperfect bill passed. We all agree that the current health care law was not the best we can do. We knew this sausage would need some fixing. If Republicans have better ideas, I want to hear them. I really believe they have some ideas that would help. I just want to hear these ideas debated before they try to repeal the whole bill.

What we have is not perfect, but it is better than nothing. It is a starting point that we can modify and build on.

But just in case the Republicans have some ideas they have never told us about, let's hear what they propose to replace the current health bill with. Then we can decide if we agree before we throw out the current bill. Is that unreasonable?

This is a test for Republics. They will soon have control of the House. Republics in the House can propose and vote on any legislation they want.

If Republicans in the House and Senate show us their proposed legislation to reform health care before or when they propose legislation to repeal the Democrats health care plan, I will admit they are acting on their principles.

If Republicans propose legislation to repeal the Democrats health care plan without showing us legislation for how they will reform health care, their actions can rightly be labelled as purely political. This would prove they are more interested in scoring political points than helping people.

So we lost. Stay the course.

The voters have spoken. They've made it clear they are angry and are more interested in punishing someone rather than understanding the issues.

The president inherited the worst economy in decades and voters blame him and Democrats for not fixing it in 2 years. Do they really believe if it were at all in the president's power or Democrat's power to turn the economy around they wouldn't have done it? Instead, voters decided to give control back to the party that led us into this mess. Remember, Republicans and the Tea Party only got serious about budget deficits when it became a good way to attack the president.

Back in the early days of the last presidential campaign, before the economy tanked, I had a letter published in the local paper explaining to Senator McCain that you can't really cut taxes when you are running a deficit as he promised to do if elected. You can't really cut taxes when you are running a deficit, you are just deferring payment until some time in the future. Your tax reduction plus interest will be paid by someone later. Where were the Tea Partiers back then?

Were voters watching while the Republicans did everything to block the president for the last 2 years? Where were all the great ideas from Republicans to turn the economy around? Republicans didn't have any ideas or at least not any they would make public. By the way, if they had or have any great ideas, why didn't they offer them when they did have power in the first six years of the Bush administration?

Republicans have had no incentive to help make the economy better. If they had worked with Democrat's the past two years to make the economy better and they were successful, would Republicans have made such large gains in this week's election? Not likely.

Republicans have no incentive to help make the economy better over the next two years. They rightly believe that if the economy stays bad for the next two years, President Obama will be a one term president. Pay attention over the next two years. Are Republicans trying to help or just stalling for two more years?

The Republicans goals for the past two years have been to make things look as bad as they could and they lied whenever they needed. Remember death panels? A total lie. And either Republicans knew it was a lie or they are just stupid. Would you really vote for someone that stupid?

Republicans railed against the bail out of banks, automobile companies and the stimulus bill. A large number of voters believed the bail out was Obama's. Of course the bailout was passed under President Bush. People are crying about losing jobs, especially good paying manufacturing jobs. How much worse would the economy be if we had lost the automobile industry? Republicans act like helping the automobile companies was complete folly. Why?

All we hear from Republicans is how worthless the stimulus bill was. Of course economist tell a different story. And most people are unaware that many Republicans actively worked to get stimulus money to their states or districts. They never said it out loud, but there is a paper trail of letters they wrote asking for money and saying how many jobs that money would generate. We are not talking about a few Republicans. We are talking about dozens and dozens. The list is very long. The stimulus bill generated or saved millions of jobs. Republicans have been lying about it for political gain.

Republicans brag that they stopped “cap and trade”. Of course, many of these Republicans were for cap and trade until it became politically advantageous to be against it. We need to address global warming. It is real. The Department of Defense identified global warming as a national security threat years ago.

The Republican goal for the next two years will be to look like they are doing something, but hoping Democrat's will block them so they can get even more power in 2012. Be are smart voter. Pay attention. Whenever either party obstructs or is uncooperative, are they doing it for principle or political gain? Voters want jobs. Let us see who is working to make jobs and help the economy and who is not.

Republicans are saying the the President and Democrats need to heed the election results and cave into all Republican ideas. Do you remember the Republicans acknowledging the election the President and Democrat's won in 2008? Did they cooperate with the new president even a little? Not hardly. Hell, many of them still won't admit he is the president.

President Obama is too smart to think that Republicans will do anything that will make him look better. It is not in their self interests.

Republicans act like the entire country is behind them. But there are millions of people who want the president to stand up for his and our principles. We should stay true to our beliefs. If we lose again in 2012 so be it. I would rather lose defending my principles than lose trying to work with a party that has no incentive to cooperate.

Incentivize Good Behaviour

Unemployment benefits were extended this week when Democrats finally got enough votes to overcome Republican objections. The Republican's primary objection was that the roughly 30 billion dollars the extension would cost was not paid for. It would just be added to the debt. While that objection is factually correct, I believe their objections were actually based on political rather than balance sheet calculations.

I was particularly intrigued by another objection from some Republicans that extending unemployment benefits actually did more harm than good. They reasoned that many people were unemployed because it was easier and better to just stay home and collect the unemployment benefits. Cutting off the benefits would give these lazy people an incentive to get off the couch and get a job.

As I've said before, Republicans like simple ideas. Remember "Drill, Baby, Drill"? How about "Benefits Enable Indolence" or "Incentivize Work, Not Laziness"? No, too many syllables.

After I thought about this a while I decided maybe they were on to something. Some people probably do prefer unemployment benefits over a pay check.

The economy is still very sluggish. I've heard it said many times that the engine of growth is small business and they are just not creating many new jobs. Only when small business is creating jobs will unemployment come down and the economy really pick up. How do we incentivize small businesses to create new jobs?

Then the other day I heard a pundit say that we need to extend the Bush tax cuts to the very rich because many small business people are in this rich group and we don't want to hurt them. That's when the light bulb went off.

Small business is not creating new jobs because they have gotten lazy. They did very well under the Bush administration. If we don't extend their tax cuts, their income will go down. Just like the lazy unemployed, this decrease in income may be just what small business needs to get them off the couch and incentivize them to start growing their businesses. Small businesses that grow will recoup their lost income and create jobs for the few unemployed who prefer pay checks over unemployment checks. That in turn will fire up the economy.

I'm looking forward to seeing some Republican support for incentivizing small business growth by not extending the Bush tax cuts to the richest Americans. Finally something we can agree on.

Then again, maybe not. If Republicans and I are right and all we need are the right incentives for small businesses, then the economy will fire up and unemployment will go down. With the economy under control, President Obama and Democrats are more likely to get elected. Republicans are not going to like that.

So now we need to figure out an incentive for Republicans to help grow this economy.

Hell No We Won't

The Democrats and Republicans have each chosen the slogans they will use to guide their campaigns this fall. It is

"Yes We Can!" versus "Hell No!".

Health Care Hyperbole vs Voting

I’ve been reading and hearing a lot of comments from people who believe that Washington is not listening to the American people. I’ve heard a lot of complaints about a rushed process that didn’t allow people to see the details of the complicated health care proposals, 2,700 pages, back room deals, secret negotiations, trashing of rules and the Constitution.

I’ve been listening to these complaints daily for months. Months! So where was the rush?

I couldn’t tell you how many hours I’ve spent listening to or reading about ideas and comments from both sides of the health care discussion. I think I understand the major parts of this bill. I believe people who don't understand the basics of this bill have no one to blame but themselves. I listened and read a lot so I could understand the issues and arguments. Isn't that what you are supposed to do? Too many people are lazy and want someone else to do their thinking.

I suspect I understand health care reform at least as well as I understand my credit card agreements, my car insurance, the privacy statement from my bank, my health insurance policy, the 30 pages of documents I signed for my home loan or any other number of complicated documents we have to deal with. This is a complicated world. I’m sure I understand the health care bill better than those agreements I am constantly being forced to accept when I use my computer.

Back room deals. Secret negotiations. I think I’ve heard about all of them. I agree the “Cornhusker Kickback” was disgusting, but we all know that. What was secret about it? If it hadn’t been removed in the reconciliation bill, a simple bill next week could remove it. Why didn’t Republicans just write a bill to do that and then dare Democrats not to vote for it? (Answer: That solution is too reasonable. It is not inflammatory enough.)

Health care was passed by a majority in the House and a super majority in the Senate. Democrats correctly used the rules of the Congress to pass the bill. Democrats correctly used the reconciliation rules to make some changes to the health care bill that had just been passed. No rules were trashed.

There may be a debate about whether parts of the bill are unconstitutional. OK, if that is what you think, we have a way to deal with this. The courts.

As to Washington not listening to American, well I’m an American. I and millions of other Americans believe Washington has been listening. Now was the time to start making health care available to all Americans and to start the process to bring some rationality to how health care is provided. The bill that passed is not perfect and not what I would have liked to have, but it is a start. We now need to work to make it better.

I heard a woman on NPR yesterday complaining about the health care bill. She seemed very reasonable until she admitted that she was glad that at least conservatives had the Second Amendment and their guns since they might be needed. I wished someone had asked her how her guns would help resolve her concerns about the health care law.

One thing I know. If you believe that Washington is not listening to you, there is a way to make sure they get the message – vote. Leave the rifle over the fireplace.

Nuts and Dolts of the Republican Party

Did I just hear Republican strategist Todd Harris on Hardball call CPAC the "nuts and dolts of the Republican Party"?

HA!