Obummer: Freezing pay for federal employees

by: Doug Coffin

Tue Nov 30, 2010 at 02:45:18 AM MST

http://www.denverpost.com/news...

A pay freeze for public employees at a time of record corporate profits, expiring unemployment benefits and paying $700 billion for extension of a huge tax cut for wealthy Americans.....is obscene.

In doing so, the President is guilty of a rookie mistake from a collective bargaining perspective i.e. he continually bargains against himself. He did the same thing with health care when he took "single payer" and then the "public option" off the table for nothing in return.

No doubt that he's expecting the GOP to respond in-kind by agreeing to pass the much needed unemployment extension or giving in on extending tax cuts for the wealthy. They won't.... and he'll be stuck screwing his constituents one more time. It looks more and more difficult for him to rebuild the coalition that got him elected. He's angered teachers, labor and now federal employees.

The worst part is that pay freezes run like a virus, no doubt that state government and business leaders will be looking to follow his example. All this in a time when wages for the middle class are stagnant and health care costs are exploding (in spite of "health care reform"). I do hear some folks say "they deserve a pay cut, they make too much money". That is middle class cannibalism. Public employees are the cops, forresters, firemen, teachers, etc. that live next door. They have the same dreams and aspirations as you. The problem is on Wall street, not Main street. Don't point the finger next door, point it at the hedge fund mananger who creates nothing, builds nothing, and then bails out of paying their fair share of taxes by bribing congress to extend their tax cuts.

Obama needs to restock his political corps to get away from corporatism and get back to the populism that got him elected and come to realize that:

AMERICA NEEDS A PAY RAISE!!!

They Talk, We Listen

by: Rob Kailey

Wed Nov 17, 2010 at 15:59:50 PM MST

Rep. Jan Schakowsky (D-Ill.) is co-chairman of the House Progressive Caucus and a member of the fiscal commission. But she's not particularly happy with how the commission is playing out. In fact, participating in their process and products spurred her to release her own deficit reduction plan -- a plan, she says, that brings the budget into primary balance by 2015 with money leftover for stimulus and with policies that protect the poor and middle class.

Congressman Deficit Redink Freaking Out About Projected 2013 Shortfall

by: Matt Singer

Fri Apr 23, 2010 at 16:02:08 PM MST

The health reform bill that I voted against included $5 billion for a temporary high risk pool for people with preexisting conditions.  That money was supposed to last through the 2014.  But this money is expected to run out by 2012.

Meanwhile, an attempt to verify Congressman Rehberg's claims results in one story...in the Clark Fork Chronicle...with a byline from...Jed Link, Rehberg's communications staffer.

Hmmmmmmm.....

Regardless, I don't think any of us are eager about there being a shortfall in those funds, but it does seem like it would be hard to know if the shortfall will happen before it is clear how many states are going to use them. And I'm not sure that we'd be better off eliminating high risk pools.

But forget about that. I'm just curious what Rehberg has done in the past ten years about the deficit other than basically create it by voting for tax cuts for rich people (or, as Rehberg calls them, his peers), two wars, or an unfunded prescription drug benefit.

Tackling Demand and Deficits

by: Matt Singer

Mon Apr 19, 2010 at 08:41:48 AM MST

We even have good data on what forms of government spending trigger the most aggregate demand -- aid to state and local government (in large part by preventing additional rounds of layoffs), etc. The main complaint, the one the GOP is making, is that this stuff racks up the deficit. The part of me that has functioning memory thinks they're the worst pack of hypocrites I've ever met. The part of me that studied economics thinks that concerns over the short-term deficit are overhyped. The part of me that works in politics thinks that maybe we need to figure out something about this.

But here's the other thing. We know there are government expenditures and revenues that have far weaker effects on aggregate demand, like top marginal tax rates, the estate tax, and a lot of military spending. Essentially, we can offset stimulus spending with changes in these areas, stay closer to deficit neutral, and still induce more aggregate demand, increasing output and decreasing unemployment.

Congressman Rehberg Calls for Reducing Deficit by Increasing the Deficit

by: Matt Singer

Sun Feb 14, 2010 at 12:40:06 PM MST

Congressman Denny Rehberg
HAS A SOLUTION TO OUR DEBT PROBLEM:
STOP SPENDING AND BALANCE THE BUDGET!

Congress can decrease the deficit and decrease the debt by:

   * Freezing non-defense discretionary spending
   * Reforming "entitlement" spending
   * Increasing tax incentives for small businesses
   * Lowering taxes for hard-working Americans

Obviously, some practitioners of voodoo economics will argue that resulting improvements in economic growth will make up for any loss of revenue, but the math here is quite fuzzy and, at the tax rates currently levied in the United States, almost certainly inaccurate. There are policy arguments for cutting taxes and accepting the deficits, but we're almost certainly on the wrong stretch of the Laffer curve to have tax cuts actually increase revenue.

But let's look at the other two proposals, starting with the discretionary non-defense spending freeze. First, this is an Obama proposal. Second, in terms of the budget, it's virtually meaningless. Check out this interactive budget graphic from The New York Times. Look at the overall budget, then click on the "Hide Mandatory Spending" button. Now, pretend that the National Security and Veterans Benefits (I'm presuming Rehberg isn't advocating freezing spending on Veterans). Look at what a small share of the budget is left. Now remember that we're not slashing this, we're freezing its growth.

So, not really a big deal.

What's the last proposal? Entitlement reform.

Where to begin with this one? Entitlement reform is GOPese for "cutting Medicare and Social Security," often through privatization. Depending on the particular privatization scheme with Social Security, there's a good chance that Rehberg's proposal would actually increase costs.

But let's just keep in mind that any savings on the Social Security front are likely to be minimal. The real driver of costs within the long-term budget is Medicare (which is one of the big reasons I favor health care reform). Rep. Paul Ryan, the House Republicans' point person on the budget, solves this problem by voucherizing Medicare and freezing its spending, a proposal that has the virtue of balancing the budget solely through spending cuts. Of course, Rehberg has also played politics by pretending to oppose any reduction in Medicare services. Instead, he'll just destroy the program in wholesale fashion.

One last point, despite Paul Ryan's ability to balance the budget solely with spending cuts, it is worth knowing that he had to instruct the CBO to assume no revenue reductions, which means no tax cuts.

In short, Montana's Congressman is pushing fiscal snakeoil. No surprise there. As Tyler Gernant put it a few weeks ago:

While Rehberg claims that fiscal responsibility is at the core of his being, Gernant said he voted for "a massive tax cut for the wealthy that completely eliminates our budget surplus and returns us to deficits."

Gernant said Rehberg voted to put two wars on the country's credit cards and voted for a pharmaceutical drug plan that lets the big drug companies charge the U.S. government whatever they want.

Sadly, politicians rarely explain the federal budget to constituents. Neither, really, does anyone else. That means we're left with misleading crap like this being peddled instead.

Happy Valentine's Day!

The Most Important Deficit Reduction Move Jon Tester Could Make

by: Matt Singer

Tue Jan 26, 2010 at 14:51:49 PM MST

"For a decade, both parties have swept America's debt problem under the carpet.  And like most Montanans, I'm fed up with the mess.

"The only way to get our fiscal house in order is to put politics aside and work together to create good-paying jobs, making Wall Street work for Main Street."

"That's why I crossed party lines to vote against the bailouts of Wall Street and the U.S. auto industry.  And that's why I voted today to create a bipartisan panel to recommend spending cuts."

The basic idea is that most of the real solutions for dealing with the deficit -- bending the health care curve, raising taxes, or seriously rethinking the defense budget -- are politically difficult votes. That's why a health care bill that does two of those three is currently stuck in Congress with some small chance left to pass. On the third issue -- the defense budget -- it means actually building some sort of willingness to stand up to military contractors, their significant lobbies, and the "weak on security" storylines that they and their Congressional lackeys will spin if you seriously evaluate their spending.

How does any of this get easier with a bipartisan commission whose recommendations require a super-duper-pooper majority? It doesn't.

Reality is that fixing America's fiscal outlook isn't at this point a policy problem. We have a bill in Congress that will seriously reduce the long-term deficit. We can write additional bills tomorrow to do the same. The problem is that Judd Gregg, for all his hemming and hawing about budget deficits won't do anything about it. The problem is that Evan Bayh and Blanche Lincoln crow about deficits but continue to vote for massive tax cuts that will worsen the long-term deficit picture (Jon has cast some of these votes, as well).

Governing is occasionally about making hard choices. Those hard choices are compounded by a press corps whose understanding of the federal budget often seems downright abysmal. But there's no reason to believe that a blue ribbon panel will convince a single GOP member of Congress to vote for a tax cut or meaningful health care cost controls or the kinds of defense cuts that don't really threaten national security.

For now, anyone seriously interested in long-term deficit reduction should be acting to get the health care bill moving again. If that means reaching across the rotunda and pledging to work with House members on sidecar provisions to move through budget reconciliation or publicly or privately stepping up pressure to get something passed, that's what it will take to get this deficit reduced.

Virtually everything else is basically a game of kick the can.

Takings Initiative Backburnered

by: Matt Singer

Mon Jan 25, 2010 at 14:57:59 PM MST

For more details on how this initiative could have hosed the state to the tune of $5 billion, check out this blast from the past.

Chuck Deficit's Takings Initiative and Its Cost to Montana: $500 million or $5 billion?

by: Matt Singer

Tue Dec 15, 2009 at 15:38:18 PM MST

Near as I can tell, the initiative is very similar to 2006 effort that mobilized an amazing amount of dishonesty and fraud, eventually being thrown off the ballot.

Already, Montanans ought to be wary supporting this new version. The fiscal note headlines that the anticipated cost of the bill is $600 million over six years, but consider the reasoning that leads to that number and realize just how conservative it is. The Governor's Budget office used Washington State's estimates of a similar measure and Oregon's actually filed claims under the initiative to determine the price.

In Oregon, actual claims filed came to $19.8 billion (with a b). In Washington, estimated claims came to $8.15 billion. Adjusting the Oregon figure for population, the budget director says that a similar program in Montana would result in over $5 billion in claims. Adjusting the Washington figure, we still end up with over $1 billion in claims. So how do we end up with a dollar figure of just $600 million? The following sentence explains:

Using the comparison to the analysis done for the Washington initiative and taking into account the uncertainties that exist because of the differences between the Montana and Washington initiatives; a 50% discount has been applied to this analysis.

But let's think about this again, the adjustment in cost from Washington State is done based on the populations of Washington and Montana. It fails to adjust for the fact that the initiative language in Montana is actually broader than the initiative language in Washington. It also ignores the fact that Montana has a hell of a lot more land than Washington State. We may have fewer people, but I'm not sure we have significantly fewer assets in the state (would love to hear otherwise).

In other words, the anticipated $600 million price tag is an optimistic interpretation of an optimistic interpretation of an optimistic interpretation. The Governor's office appears to be bending over backwards here to avoid criticism of cooking the books for political purposes. That's all well and good, but Montanans need to be aware that this initiative could easily destroy Montana's fiscal situation -- something already seriously threatened by the economic slowdown.