2011 - %3, August

John Boehner Is Wrong: Deficit Supercommittee Can Raise Taxes

| Tue Aug. 2, 2011 11:17 AM EDT

When House Speaker John Boehner's office released an outline of the final debt deal he hashed out with President Obama, one message was clear: This plan would not raise taxes.

In the near term, Boehner was right. The Budget Control Act, as the debt ceiling deal is officially known, contains no outright tax increases and does not eliminate any tax loopholes or corporate subsidies, including $4 billion a year for large oil corporations. But Boehner and other Republicans say the debt ceiling bill goes even further: They claim it's "effectively...impossible" for the "supercommittee" of 12 lawmakers tasked with cutting the deficit by $1.5 trillion more to raise taxes at all, tipping further deficit reduction even more to-the-bone spending cuts.

But Jim Horney, an economist at the Center for Budget and Policy Priorities who analyzed the bill, has a message for Boehner: You're wrong.

Horney's argument gets pretty far into the fiscal policy weeds, but here's the gist. For starters, eliminating those oil company subsidies and tax perks for corporate jets is a quick and easy way for the government to bring in more money and, as Horney points out, doing so "is clearly allowed under the proposed agreement."

Next, to gauge how much you've trimmed the federal deficit, you've got to have a baseline from which to start. The GOP claims the debt ceiling bill's supercommittee uses what's called a "current-law" baseline; in plain English, a starting point in which the status quo reigns, in which laws governing Social Security, Medicare, Medicaid, and taxes remain untouched.

This matters because it puts Democrats seriously behind the 8-ball in demanding new revenues from the deficit supercommittee. Take the Bush tax cuts. The way the GOP sees it, their expiration at the end of 2012 would not be considered new revenue; after all, that's what the law already says. Why is this important? Because in the search for new revenue, under the GOP's rules, supercommittee members would be fighting an uphill battle to enact more tax increases on top of the Bush tax cuts' expiration. In short, it becomes really, really hard for Democrats to demand a balanced proposal out of the supercommittee, setting us up another lopsided round of cuts. And that's why, in the GOP's words, a current-law baseline "effectively mak[es] it impossible for [the] Joint Committee to increase taxes."

Wrong again, Horney argues. Nothing in the debt ceiling bill, he says, requires using a current-law baseline to measure deficit reduction and so blocking future revenue from tax increases. If the supercommittee's members want to use a different starting point, one that takes into the account the deficit-cutting effects of tax reforms, they're free to do so. "It is not the terms of the new agreement," Horney writes, "but rather the opposition of Speaker Boehner (who has promised to appoint to the Joint Committee only members who will refuse to consider any revenue increases) and other Republican leaders, that threatens to prevent the Joint Committee from considering a balanced approach to deficit reduction." And with the short-term mandates of the Budget Control Act centered entirely on spending cuts, the supercommittee is the only remaining opportunity for lawmakers to squeeze some balance into the deal.

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Gaming Out the Supercommittee

| Tue Aug. 2, 2011 11:05 AM EDT

With the debt ceiling deal all but assured of passage, Suzy Khimm moves on to the next big question: who's going to be on the Supercommittee that's tasked with cutting an additional $1.5 trillion from the deficit by November?

Republicans, for their part, are unlikely to appoint anyone who’s publicly supported including revenue as part of a debt deal, namely in the form of tax increases....“No one from the Senate Gang of Six, who proposed tax increases, need apply,” the Wall Street Journal opined. “The GOP choices should start with Arizona Senator Jon Kyl and House Budget Chairman Paul Ryan, adding four others who will follow their lead.”

On the Democratic side, fiscal hawks and centrists will probably back Senate Finance Committee Chairman Max Baucus, who reportedly pushed for cutbacks to Medicaid, food stamps and other entitlements....Liberals will want to see the likes of Sen. Tom Harkin and Sen. Sherrod Brown on the committee. “Unfortunately, I don’t think the leadership will allow this,” says Dean Baker, an economist at the Center for Economic Policy Research. “I worry that the Dems will be the usual suspects, starting with the Gang of Six crew.”

Unfortunately, this is my take too. Republicans will appoint nothing but tax hardliners (which shouldn't be too hard, since that's at least 80% of their caucus) while Democrats will appoint at least one or two centrist types. That's all it will take to get a majority in favor of yet another cuts-only plan. Whether this can pass in the Senate is unclear, but it might not matter. The entire debt ceiling agreement may have been negotiated under the presumption that no follow-on deal would be reached and the automatic trigger cuts were highly likely to go into effect. The Supercommittee might just be window dressing.

But maybe not. So given the reality that the Supercommittee exists, what would be my dream deal? Pretty simple: it would be an agreement to focus 100% of the plan on healthcare, split between benefit cuts and tax increases. Politically, this is a pipe dream, of course. And substantively, it runs into the fact that PPACA already made a lot of cuts in Medicare and we don't yet know how they're going to work out, which makes further cuts sort of dicey. That may not make additional reforms impossible, but it does make it especially important to choose the details thoughtfully. A slow phase-in of higher payroll taxes might be OK, for example, along with a little bit of means testing. Ditto for some reductions in provider payments, cuts in Medicare Advantage, and negotiating authority for prescription drugs. (Then again, these things might not be OK. I'd defer to smarter people than me over the details.)

But one way or another, if we're going to insist on obsessing over the long-term deficit, then we might as well obsess over the part of the federal government that's actually responsible for the long-term deficit. And that's all in healthcare.

PSA: How to Avoid Being Eaten by Lions

| Tue Aug. 2, 2011 6:16 AM EDT

This post courtesy BBC Earth. For more wildlife news, find BBC Earth on Facebook and Posterous.

Being eaten by lions is probably something we’d all like to avoid. Steve Backshall, the host of "Deadly 60" on BBC, shares his top tips to help us steer clear of the killer jaws of big cats.

 

1. Stay in the car. "Lions don’t see a car as prey, so you're safer inside," our director Giles insists. If you're in a vehicle, stay in it.

2. If you go tracking on foot be extra vigilant.

3. Always travel with a local guide. (Our team had two local guides with them at all times.)

4. Carry a big stick and a firearm. (But use them as a deterrent, never intending to inflict harm on the animal. A hurt lion is a very angry lion.)

5. Keep your eyes open: You'd be amazed how close a 500lb lion can get without you noticing.

6. Always have a "spotter." Just because you're filming one lion, doesn’t mean there isn't another behind you.

7. Travel in a group: Lions are less likely to attack a group. Our team always stuck together and no one ever went out alone.

8. Know the signs: a lion spoor (footprint) has one pointed and three oval parts.

9. Don't interrupt their lunch: If you get between them and a carcass, you could be next on the menu.

10. Know their behavior: Lions are more likely to be aggressive if there are cubs around or when they are mating. But a sleeping lion can spring up and attack in the blink of an eye, so never get complacent.

So remember, read the signs and keep your wits about you!

We're Still at War: Photo of the Day for August 2, 2011

Tue Aug. 2, 2011 6:00 AM EDT

Aviation Structural Mechanic 2nd Class Yan-Oliver B. Kouaokwa sands the wing of an F/A-18E Super Hornet assigned to the Tomcatters of Strike Fighter Squadron (VFA) 31 in the hangar bay aboard the aircraft carrier USS George H.W. Bush (CVN 77). George H.W. Bush is deployed to the US 5th Fleet area of responsibility on its first operational deployment conducting maritime security operations and support missions as part of Operations Enduring Freedom and New Dawn. (US Navy photo by Mass Communication Specialist 3rd Class Michael Smevog)

The Ever Shrinking Tea Party

| Tue Aug. 2, 2011 12:38 AM EDT

According to a recent poll, only 22% of Americans consider themselves tea party members or supporters, half the number of last November. And of that 22%, two-thirds supported a debt ceiling compromise and more than half thought it should include tax increases as well as spending cuts:

In a nationwide CBS News poll in mid-July, 66 percent of Tea Party supporters said that Republicans in Congress should compromise on some of their positions to come to an agreement with Democrats on the debt-ceiling increase. By contrast, 31 percent said Republicans should stick to their positions even if it meant not coming to an agreement....When Tea Party supporters were asked if the debt-ceiling agreement should include only tax increases, only spending cuts, or a combination of both, the majority — 53 percent — said that it should include a combination. Forty-five percent preferred only spending cuts.

So who was driving the absolutist view in Congress over the past few months? If it was the no-compromise wing of the tea party, that's less than 10% of the country. So riddle me this: how did we manage to let 10% of the country bring us to the brink of disaster? It is a remarkable thing.

Pentagon Not a Debt Ceiling Loser After All

| Tue Aug. 2, 2011 12:07 AM EDT

I've been reading all day that the Pentagon is the big loser from today's debt ceiling deal, and I just sort of vaguely accepted that as true. They're getting socked with a pretty big chunk of the initial $1 trillion in cuts, after all. But McClatchy's Nancy Youssef sets the record straight:

Rather than cutting $400 billion in defense spending through 2023, as President Barack Obama had proposed in April, the current debt proposal trims $350 billion through 2024, effectively giving the Pentagon $50 billion more than it had been expecting over the next decade.

...."This is a good deal for defense when you probe under the numbers," said Lawrence Korb, a defense expert at the Center for American Progress, a left-leaning research center. "It's better than what the Defense Department was expecting."

Now, if the follow-on deal includes lots of additional defense cuts, then the Pentagon might actually come out of this with some serious scars. But for now, apparently they're doing OK.

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Quote of the Day: Economists and the Great Recession

| Mon Aug. 1, 2011 11:48 PM EDT

From Scott Sumner, after reading a poll showing that there are virtually no economic forecasters anywhere in the world willing to concede that monetary policy is currently too tight:

If the public of the developing world actually understood the role of economists in this crisis, we’d all be lynched. They think we failed to predict it. But since monetary policy generally reflects the establishment view of the economics profession, it would be more accurate to say we caused the Great Recession.

Sumner has an idiosyncratic view of monetary policy, but that hardly matters. Even conventional economic models suggest that monetary policy is too tight right now. But we're doing nothing about it thanks to a groundless belief among policy elites that inflation in the future is more dangerous than sky-high unemployment right now. (And in the case of Europe, more dangerous than even the possible collapse of several eurozone countries.) And so, here the rest of us sit.

JJ Abrams and "Lost"

| Mon Aug. 1, 2011 7:44 PM EDT

The Guardian interviews JJ Abrams:

Do woebegone Losties give Abrams an earful about the finale?

"Oh my God, yes," he groans. "For years, I had people praising Lost to death, and now they say: 'I'm so pissed at you for the end of Lost.' I think a lot of people who were upset with the ending, were just upset that it ended. And I've not yet heard the pitch of what the ending should have been. I've just heard: 'That sucked.'"

WTF? He thinks we're pissed off because the series ended? And no one has ever held his attention long enough to explain just what it was that really annoyed us so much about the whole last season? Seriously?

I'm not the one to explain it, but honestly, I don't think it's all that hard. We weren't demanding that the whole series be wrapped up in a nice, neat bow, but we were hoping for at least most of the major plotlines to be resolved. We were hoping for at least most of the major mysteries to be explained. We were hoping that at least the whole thing didn't turn out to be a St. Elsewhere style fantasy world. And we were sure as hell annoyed when they pretended they had run out of time to tie this stuff up after wasting the entire first half of the final season with a brand new plotline that came out of nowhere, went nowhere, never got resolved, and had no purpose at all.

I was sort of hoping never to hear about Lost again. The contempt the creators showed for their audience pissed me off, as did having to concede victory to all the critics who kept saying the show runners had no idea what they were doing. But this is just too much. Abrams has no clue why so many fans felt cheated by the whole thing? Spare me.

POSTSCRIPT: Here's a question: has any show that generated such enormous buzz and such intense fan loyalty ever dropped out of sight so fast? About a week or two after the finale, it just disappeared and no one ever mentioned it again. I wonder what Abrams makes of that? Or is he still waiting for some fan to provide him with an ending to his own story?

POSTSCRIPT 2: On the other hand, I'm grateful for the chance to write about something other than the debt ceiling. Thanks, JJ!

HASC Chairman: Debt Bill Will Cause War

| Mon Aug. 1, 2011 7:38 PM EDT

House Armed Services Committee Chairman Buck McKeon, whose panel oversees a lot of defense pork, has spent much of the debt-ceiling debate fending off attacks on military spending. When the compromise bill emerged Wednesday, he put out another blistering press release that raged against its Pentagon-paring provisions:

Our senior military commanders have been unanimous in their concerns that deeper cuts could break the force.  I take their position seriously and the funding levels in this bill won’t make their job easier... There is no scenario in the second phase of this proposal that does not turn a debt crisis into a national security crisis. Defense cannot sustain any additional cuts either from the joint committee or the sequestration trigger.

McKeon then proceeded to vote "Yes" on the debt-ceiling compromise bill, calling it "the least bad proposal before us."

So, if you think a bill is certain to make America less safe, why would you vote for it? I asked an Armed Services GOP staffer that question on Twitter.

His full reply: "you get the press release?"

I'll have more tomorrow on the impact this debt deal will actually have on US defense. Assuming no one attacks us in the meantime, of course.

Organized Crime Whacks Lots of Cute Animals

| Mon Aug. 1, 2011 6:56 PM EDT
A slow loris caged at a Southeast Asian wildlife market.

Here's something that will make you loathe organized crime even more than The Godfather, Part III: Mobsters murder many adorable, beautiful animals to make huge profits.

Elizabeth Bennett of the Wildlife Conservation Society writes in a recent paper that underground wildlife smuggling operated by crime syndicates is "decimating the world's most beloved species including rhinos, tigers, and elephants on a scale never before seen."

The illegal sales of animal parts—slow loris appendages, elephant tusks, bear paws, freshwater turtle shells, tiger skulls—has exploded over the years, particularly in Africa and in countries like Vietnam and Thailand, posing an existential threat to various species. And if that weren't enough, the trade also helps ruin ecosystems and drain resources in poor countries.

The complexities of shifting smuggling routes, not to mention "e-commerce" and government corruption, have presented a daunting challenge to national efforts and international cooperation apparatuses like the ASEAN Wildlife Enforcement Network, even as certain crackdowns on illegal activities like poaching show some signs of intensifying.