2010 - %3, January

Amping Up the Response

| Wed Jan. 27, 2010 1:38 PM EST

When I heard that Virginia's shiny new GOP governor, Bob McDonnell, was going to deliver the response to the State of the Union address tonight, my first thought was, "Does he have a death wish? Why is he planning to wreck his career before it's even started?" After all, SOTU responses are famously stiff and crappy and almost never make their speaker look good. Speeches like this really need to be delivered in front of a crowd to be effective, instead of recited stiffly into a bare camera.

But it turns out McDonnell is a smart cookie. Via Matt Yglesias, here's his plan:

When the national spotlight turns to Gov. Bob McDonnell tonight as he delivers the Republican response to President Barack Obama’s State of the Union address, he’ll be surrounded by 300 people in the chamber of the Virginia House of Delegates. McDonnell plans to stand in the well of the House accompanied by family, supporters, administration officials, activists and lawmakers, some of whom will stand on risers set up for the live speech.

This is still less than ideal. It would be better to fill the whole chamber, rather than set up risers for a few hundred supporters. You need loud applause! You need cheers! But it's still a big improvement. It'll be interesting to see if McDonnell makes anything of it.

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SOTU: Obama's "Automatic IRA" Plan Could Make Bush's Wildest Dreams Come True

| Wed Jan. 27, 2010 1:20 PM EST

In tonight’s State of the Union address, President Barack Obama is expected to propose what’s generally being called an “automatic IRA.” This scheme for increasing individual retirement savings is being touted as a "common sense" approach to the pension crisis, a "third way" that enjoys broad bipartisan support. But lurking just beneath the surface of this popular proposal is a potentially massive gift to Wall Street--and possibly, a back-door route to undermining Social Security in favor of private investments.

Under the automatic IRA plan, the government would help set up a system of individual retirement accounts in which workers would be automatically enrolled if their employers don’t offer their own 401Ks. A minimum amount of pre-tax earnings–under current proposals, 3 percent–would automatically be deducted from employees’ pay and direct-deposited into their accounts. Individuals could increase the amount of the automatic deposits, or they could opt-out altogether. They would also have some choice about where to place their investments; otherwise, it would automatically be placed in what planners are calling a “diversified portfolio.” 

On the surface, it sounds like a sensible plan. AARP is supporting it, and says it could help some 50 million of the 75 million Americans whose employers offer no retirement plan.  It was developed through a rapprochement between the right and what passes for the left: The idea emanates from a group called the Retirement Security Project (RSP), led by David John of the Heritage Foundation, who hammered out a joint scheme with William Gale of the Brookings Institution. It’s supported by the White House, and expected to breeze through Congress. The publication Life and Pensions reported earlier this week:

The Fate of Healthcare

| Wed Jan. 27, 2010 12:40 PM EST

So is President Obama going to rally the nation behind the cause of ambitious, wide-ranging healthcare reform in tonight's State of the Union address? It sure doesn't sound like it. Here's what the nation's media has to say this morning:

In the Washington Posts' speech preview, healthcare isn't even mentioned until the 12th paragraph, and the message is bleak: "Despite the uncertain fate of health-care legislation — Obama's top domestic priority — the president is not expected to call for a precise way forward, although he will reiterate his commitment to the cause."

In the New York Times, you have to wait until the 8th paragraph: "Still undecided, advisers said, was how much of the address would be devoted to health care as the prospects of finding a lifeline for the legislation seemed to be diminishing."

And in the LA Times you need to slog down to the 14th paragraph: "Although it was not clear what Obama would have to say about the battle over healthcare, he does plan to lay out steps meant to change the way Washington does business."

This really doesn't sound like good news. If Obama isn't willing to step up and take ownership of passing the current plan, what chance is there that Congress is willing to get out on a limb and take the risk itself? Not much, I'm afraid. I sure hope Obama and his advisors screw up their courage on this and do the right thing before the end of the day.

UPDATE: More pessimistic tea leaf reading here and here from Ezra Klein.

Health Care Reform's Bleak Prognosis

| Wed Jan. 27, 2010 11:33 AM EST

After a meeting on Tuesday evening, House Democrats finally seem to be settling on a plan to move forward on health care reform. But there are some major roadblocks standing in the way of their preferred solution—including squeamish senators, uncompromising anti-abortion congressmen, the Democrats' own president, and, of course, the Republicans.

Here's the strategy that House Dems are coalescing around: First, pass the Senate bill. Then, attempt to address some of their members' concerns with that legislation through the reconciliation process—which would allow the Senate to pass adjusted legislation with a simple majority without the risk of a GOP filibuster.

The first big problem with this idea is President Barack Obama, who has so far refused to specifically endorse using reconciliation to move forward on health care. In fact, he has conspicuously refrained from pushing publicly for any particular strategy. All the administration has said is that passing some sort of reform is crucial. That leaves congressional Democrats wondering why they should stick their necks out for a gambit their own president won't endorse. And Robert Gibbs, the White House press secretary, refused to answer pointed questions on Tuesday about whether Obama would use his State of the Union address scheduled for Wednesday night to endorse any specific strategies for passing health care.

We're Still at War: Photo of the Day for January 27, 2010

Wed Jan. 27, 2010 8:45 AM EST

war photo of the day MJ

Spc. Franck Joseph, from Savannah, Ga., assigned to Echo Troop, 3rd Squadron, 17th Cavalry Regiment, runs to refuel and rearm an AH-64 Apache helicopter assigned to Task Force-Lighthorse at the Camp Wright Forward Armament and Refueling Point, Jan. 18, 2010. (US Army Photo from US Air Force Tech. Sgt. Brian Bolsvert.)

Corporate Political Speech

| Wed Jan. 27, 2010 8:15 AM EST

On Monday, I explained why the Supreme Court's recent decision legalizing unlimited corporate spending (or "speech") in elections based on the premise that corporations are legal "persons" deserving free-speech rights doesn't make sense:

Corporations can never take political action premised on genuine support for a politician's ideas or values. Corporate spending on elections must be predicated on corporate self-interest, because corporations are legally required to maximize profit for their shareholders. They will never be able to participate in elections in a "politically motivated" way. They can only participate in service of their own bottom lines. If a corporation acted against its own interests because their management thought it would serve the greater good (for example, by bankrolling an ad campaign supporting a clean-air law that would cripple the company), that would be literally illegal. 

Justin Fox, the new editor of the Harvard Business Review, agrees:

The "one and only social responsibility of business," economist Milton Friedman wrote back in 1970 in a New York Times Magazine essay that launched a thousand arguments, is "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game ..." Friedman contrasted this with the multiple responsibilities that an individual — such as a corporate executive — might have "to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country."

[...]

The individuals who make up the electorate in the United States are, as Friedman described, beings of many facets — their actions and their views shaped by pecuniary self interest but also by values, beliefs, and loyalties that might conflict with that self interest. The ideal for-profit corporation, on the other hand, is out to do nothing but make as much money as it can "within the rules of the game." It is supposed to behave in a fashion that for an individual would probably be described as psychopathic. And if corporations are allowed to play a decisive role in shaping the "rules of the game," we have effectively put the inmates in control of the asylum.

[...]

If corporations are persons, they are — if they behave as Milton Friedman wanted them to — persons with mental and emotional impairments so severe that any decent judge would feel entirely justified in declaring them incompetent.

Great stuff. Fox and Reuters' Felix Salmon have more.

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Need to Read: January 27, 2010

Wed Jan. 27, 2010 8:00 AM EST

 The must-read stories from around the web and in today's papers:

 

The Oregon Alternative

| Wed Jan. 27, 2010 1:26 AM EST

This morning's story about Oregon in the LA Times:

Over the years, voters here have capped property taxes (saddling the state with two-thirds the cost of running the schools) and passed a constitutional amendment requiring rebates whenever tax receipts come in 2% over budget. Nine times they have been asked to OK a sales tax — and said no. Proposals to increase the state income tax? Down in flames twice.

But now the Legislature is taking a tack that analysts think could finally pull the rug out from under the tax revolt: soaking the rich.

The Oregonian tonight:

It looks like Oregon corporations and high-income earners will pay higher state taxes as voters weighed in Tuesday on two hotly debated measures....Measure 66 raises the income tax paid by households earning at or above $250,000 a year or individual filers who make $125,000 or more. Measure 67 raises the state's $10 minimum corporate income tax.

I await the immediate immolation of Oregon's economy. That's what happened to America after Clinton raised taxes on the rich, after all.

Good News on Healthcare?

| Wed Jan. 27, 2010 1:00 AM EST

Brian Beutler says that House Democrats are coalescing around the idea of passing the Senate healthcare bill, and quotes Clyburn, Schakowsky, Waxman, and Weiner in support:

However, though the idea has begun to resonate with House members in theory, they're not willing to hang their hopes on the Senate, an institution they increasingly distrust. They want something concrete first, before they'll move ahead with the Senate health care bill.

"The idea of doing the Senate bill and then doing the reconciliation on spec just to see what happens — I don't think anyone really thinks that's a good idea," Weiner said. "I don't know if the Senate literally has to move first, but at least they have to give us the high sign on what it is that they can do and can't do. And we're not getting much guidance from them, and we're also not getting much guidance from the mothership about what the White House really wants, and what they're prepared to push for, etc."

If this is really the developing consensus, it's a very good sign. The notion of "sidecar reconciliation," where the Senate passes a set of modifications to its own bill and then lets the House vote on both the main bill and the modifications at the same time, has always struck me as problematic. Even under reconciliation rules I think this would take too long,1 and I'm convinced that healthcare reform really needs to be moved on fairly quickly. But if that path is too tortuous, then at a minimum the Senate leadership has to provide some credible assurances about what modifications it thinks it can pass later in the year. If a majority in the House is really willing to accept this, it's a big move forward.

But can Harry Reid deliver? Conference negotiations were far enough along before the Masschusetts meltdown that it seems as if coming to an agreement shouldn't be all that hard. Keep your fingers crossed. And call your senator to encourage them to get on board.

Oh — and it would be nice if Obama chimed in on this too. And if he does, it would be even nicer if the Democratic caucus in Congress were willing to treat him as the leader of the party and actually listen to him.

1Though I'm willing to be disabused of this notion by someone who really knows what he's talking about.

That Was Then

| Wed Jan. 27, 2010 12:27 AM EST

The conventional wisdom on Obama sure has changed in a heartbeat, hasn't it? Compare and contrast:

Yesterday: calm and cool. Today: flat and remote, doesn't show enough passion.

Yesterday: smart. Today: too cerebral for heartland.

Yesterday: analytical and lawyerly. Today: not connecting with voter anger.

Yesterday: needs to move quickly to take advantage of honeymoon. Today: tried to do too much.

Yesterday: plays the long game. Today: needs to pivot fast or lose his presidency.

Yesterday: policy driven. Today: too detached.

Yesterday: pragmatic. Today: not taking charge of process.

Yesterday: inspirational speaker. Today: uses teleprompter1 too much.

Yesterday: postpartisan. Today: has been crushed by partisanship.

So which was right: yesterday's conventional wisdom or today's? Personally, I preferred yesterday's except for the whole postpartisan thing. The public says they like it, but it was always doomed to failure. Time to move on.

1Sorry, I meant TelePrompTer™. And I have to admit that his reliance on it even in small settings is getting kind of weird.