Kevin Drum - February 2010

The Excise Tax Takes Center Stage

| Tue Feb. 23, 2010 1:31 PM EST

Second only to the public option, probably the biggest intra-Democratic healthcare feud is over the excise tax, a tax on high-value healthcare policies that's designed to rein in the "Cadillac plans" favored as tax-free compensation by corporate executives, but that also takes a bite out of the high-end plans negotiated by blue-collar unions over the years in lieu of big raises. President Obama's plan, unveiled yesterday, cuts back the excise tax considerably but doesn't get rid of it completely. So how are liberal Dems likely to react to this? David Corn reports:

At that meeting with columnists a few weeks ago, Pelosi estimated that at most there were 20 Democrats in her caucus who might support an excise tax. The White House appears to be banking on a wholesale conversion of House Dems. But it's unclear whether Obama's alterations to the tax—which also include not counting dental and vision benefits as taxable and easing the tax for firms with higher health-care costs due to the age or gender of their employees—will win over Democrats on the House side. According to White House press secretary Robert Gibbs, the White House did not brief the House Democrats regarding its intentions on the excise tax until after the plan was devised. And during a White House conference call about the overall proposal, economic aide Jason Furman was asked if the administration had attempted to work out an excise tax deal with the House Democrats before releasing the plan. He replied that "everyone would appreciate it" if the Obama proposal led to lower premiums. In other words, no.

If this is true, it's surprising — and a little disturbing. There's no reason the White House has to agree to everything that House Dems want, but it would be nice to think that they at least have an idea of what might be a deal killer and what isn't. My own take is that House Dems got a lot of other things they wanted and that the excise tax has now been so weakened that it's no longer much of a threat. (For one thing, under Obama's plan it won't take effect until 2018. That gives liberals a lot of time to try to kill it entirely.)  Still, I wonder if the folks who have to vote on it agree? And more to the point, I wonder if the White House knows?

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Our Small Bore Senate

| Tue Feb. 23, 2010 1:00 PM EST

Harry Reid won his first battle on the jobs creation front yesterday:

The Senate voted Monday to advance a $15 billion jobs-creation measure, giving Democrats a key victory as they seek to reverse their declining political fortunes by emphasizing legislation to boost the economy. The chamber is now poised to pass the measure later this week.

Five Republicans, including new Sen. Scott Brown (Mass.) joined 57 Democrats in voting to proceed on the jobs bill, after a suspenseful buildup in which members of both parties wondered whether Senate Majority Leader Harry Reid (D-Nev.) could cobble together enough votes to proceed.

This is....just sad. Compared to a "normal" level of unemployment, there are currently something like 10 million more jobless people than we ought to have. Without action, that number will still be around 8 million next year. And we're screwing around with a payroll tax cut that might, with a tailwind, create around 100,000 jobs per year. It's not that this a bad policy choice, it's that the scope of the action is so plainly inadequate compared to the size of the problem.

Why so small? Because Republicans won't agree to a bigger bill, so Harry Reid has decided to push through a bunch of smaller measures instead. His thinking, apparently, is that he's going to dare Republicans to vote against these bills. If they cave, he wins. If they don't, it becomes good campaign fodder for November.

This is pretty unlikely to work, though. Reid managed to lasso a few Republicans for a tax cut, but he probably won't be able to do even that for the rest of his package. They'll filibuster and defeat even these small bore proposals.

Will they pay a price for this? Get serious. Suppose you're a Democrat running against some Republican who voted against Monday's bill. "You'd all have jobs today," intones your attack ad "if only Senator Wingnut hadn't voted against a moratorium on payroll taxes." Will anyone believe it? I don't see it. It's too abstract and people are too jaded about this kind of stuff actually having an effect. Sen. Wingnut will just say the bill was another Washington boondoggle that wouldn't have created a single job, the tea partiers will all cheer, and that will be that. It's just too hard to make the case for obstruction unless you can point to something that's both big and concrete.

The payroll tax bill is better than nothing. But it's also a sad commentary on the ability of Congress to tackle actual problems.

The Torture Tapes

| Tue Feb. 23, 2010 12:00 PM EST

Guess what? According to a CIA memo, Republican senator Pat Roberts was told in 2003 about the agency's plan to destroy interrogation tapes that provided graphic evidence of the widespread use of torture against detainees, and he thought it was a fine idea:

At a closed briefing in 2003, the chairman of the Senate Intelligence Committee raised no objection to a C.I.A. plan to destroy videotapes of brutal interrogations, according to secret documents released Monday.

....According to a memorandum prepared after the Feb. 4, 2003, briefing by the C.I.A.’s director of Congressional affairs, Stanley M. Moskowitz, Scott Muller, then the agency’s general counsel, explained that the interrogations were reported in detailed agency cables and that officials intended to destroy the videotapes as soon as the agency’s inspector general completed a review of them. “Senator Roberts listened carefully and gave his assent,” the C.I.A. memo says.

....The same document says that Senator Bob Graham of Florida, the Democrat who had preceded Mr. Roberts as chairman, had proposed that the committee “undertake its own ‘assessment’ of the enhanced interrogation,” the C.I.A.’s term for coercive methods. Agency officials told Mr. Roberts that they would oppose allowing any Senate staff members to observe interrogations or visit the secret overseas prisons where they were taking place.

“Quickly, the senator interjected that he saw no reason for the committee to pursue such a request and could think of ‘10 reasons right off why it is a terrible idea,’ ” the report says.

Roberts says there's more to the story, but apparently he didn't feel inclined to explain exactly what that "more" might be. Stay tuned for what's sure to be an entertaining explanation one of these days.

Quote of the Day: Climate Change and the Media

| Mon Feb. 22, 2010 6:28 PM EST

From Matt Steinglass, on a Daily Mail headline claiming that a top climate scientist now admits there has been no global warming since 1995:

What's truly infuriating about this episode of journalistic malpractice is that, once again, it illustrates the reasons why the East Anglia scientists adopted an adversarial attitude towards information management with regard to outsiders and the media. They were afraid that any data they allowed to be characterised by non-climate scientists would be vulnerable to propagandistic distortion. And they were right.

The reality is that climate scientists need to be open with their data and methods regardless of what others are going to do with it. But yes, the incident Matt describes is exactly what they're afraid of if they do this: laymen with an axe to grind (and money at stake) are going to inundate them with bogus criticisms. They ignore this stuff at their peril, but if they respond to all of it they'd essentially have to stop doing real work. One part of the answer is for the media to insist on a certain level of rigor before they publish stuff from the skeptics, but obviously that's not going to happen. In lieu of that, maybe we need a new kind of rapid-response think tank devoted solely to climate change: one staffed by both experts and communicators, who can deploy quickly to address climate criticisms in a deep and fairminded way and then promote their findings in TV-friendly ways. Anybody got a few million dollars to spare to start one up?

Big New Ideas

| Mon Feb. 22, 2010 5:45 PM EST

Towards the end of a short essay about the low aspirations of modern think tanks, which he thinks are more interested in being better mouthpieces than in shaking up a stodgy establishment, Matt Bai says:

Perhaps the pace and shallowness of our political culture — the echo chamber of pundits and bloggers in which the shelf life of some new slogan can be measured in weeks or even days — makes it all but impossible to sustain a serious public argument over a period of years. Something like Francis Fukuyama’s 1989 essay on the “end of history,” which influenced a generation of conservative foreign policy, probably wouldn’t resonate today beyond the next news cycle or partisan branding session. Which is a shame, really, because there is an urgent need, on both the left and the right, to modernize rusting ideologies.

Tim Fernholz is unamused:

Bai makes a living as a political writer who takes ideas seriously, but the limit of his engagement with "serious public argument" is clear if he thinks that blogs aren't a venue for serious discussion. He obviously ignores political scientists, he's clearly never taken up with deeply wonky blogs like Credit Slips or read budget expert Stan Collender's work. As for pursuing arguments over years, how long has Ezra Klein been writing about health care? How long has Matt Yglesias been critiquing U.S. foreign policy? How long as Andrew Sullivan explored his own long-standing themes?

Now, I happen to partly agree with this. I thought Bai's book, The Argument, was terrific (and I still do), but here's what I said about his contention that the blogosphere doesn't produce any big new ideas:

Liberal political bloggers generally view the blogosphere as split into two halves: the netroots activists on one side and the "wonkosphere" on the other. They aren't separate groups so much as two halves of a single brain. Both sides want to win, and both sides want to push the Democratic Party moderately to the left, but it's the wonkosphere that likes to gab about policy big think. If the blogosphere is ever likely to produce a big new idea in an ideological sense, this is where it's going to come from.

But you'd never know that, because Bai doesn't waste any time with the wonkosphere, an omission that's unfortunate. It's not that the wonks have necessarily gotten a firm handle on the future [...], but at least they're talking about it. I usually think of the wonkosphere's discussions as "policy lite," but even at that they're frequently more penetrating and more honest than the 300-page white papers from the think tanks. And they make policy interesting and digestible to a huge number of people who wouldn't otherwise hear anything about it at all.

So, yes: Bai needs to get out more. And yet, reading Tim's post I'm left wondering again why we bloggers seem so often to be so thinskinned. Bai's criticism was just the lightest of glancing blows, and he obviously meant it to encompass not just the blogosphere, but also the rise of cable news, the permanent campaign, the dumbing down of think tanks, the MSM's endless horserace journalism, and so forth. What's more, he's right. There are plenty of policy-oriented blogs that do excellent work — often better work than the mainstream media — but they have their downsides too. And one of those downsides, obviously, is that even wonky blogs tend to be reactive, quickly written, and not especially prone to developing deep conversations about genuinely big new ideas. Ezra and Matt do a fine job of explaining and teasing out policy issues as they flit across our radar screens, but I don't remember either one of them ever making a sustained argument for a genuinely novel and transformative idea.

That's not a criticism, either. I mine the same territory, after all. It's just an acknowledgment of what the blogosphere is good at and what it isn't. So even though I think Bai's obsession with policy innovation tends to be both misplaced and slightly incoherent, it's hardly outrageous to suggest that our quick-cut media culture — of which blogs are a part — is making it harder for big new ideas to find a home where they'll promote a transformative, long-term conversation. Agree or disagree, it's an argument worth having without getting defensive about the blogosphere's role in it, for both good and ill.

An Old Party Getting Ever Older

| Mon Feb. 22, 2010 3:40 PM EST

Daniel Larison points out that young people still hate the Republican Party, which owes its recent resurgence almost entirely to a huge shift in voting preference among senior citizens. Ross Douthat correctly reads the tea leaves but doesn't go far enough:

These figures should make small-government conservatives a lot more nervous than they make partisan Republicans. After all, you can win an awful lot of elections just by mobilizing the over-65 constituency — they’re well-informed, they turn out to vote, and there are more of them every day. But the easiest way to do it, as the Democrats proved for years and years and years, is to defend Medicare and Social Security.

....If the Republican Party depends too heavily on over-65 voters for its political viability, we could easily end up with a straightforwardly big-government party in the Democrats, and a G.O.P. that wins election by being “small government” on the small stuff (earmarks, etc.) while refusing to even consider entitlement reform. That’s a recipe for one of two things: Either the highest taxes in American history and a federal government that climbs inexorably toward 30 percent of G.D.P., or a Greece or California-style disaster.

This goes a long was toward explaining the recent Republican U-turn on Medicare and Social Security spending. Defending every last dime allocated to Medicare was, of course, a tactical move designed over the summer to gin up opposition to Democratic healthcare reform measures. But beyond that, it was also a metamorphosis that was almost inevitable. The 20-something generation has been trending Democratic so strongly for the past decade that Republicans have no choice anymore but to cater to seniors, the same way that the rise of the Christian right gave them no choice but to cater to religious fundamentalism. And catering to seniors means, above all else, defending Social Security and Medicare.

In the long run, contra Ross, this is a disaster not just for small-government conservatives but for the GOP as well. Their earlier embrace of social fundamentalism was largely responsible for driving away young voters in the first place, and now, left only with a core of middle-aged and elderly voters that they need to keep loyal, they're likely to pursue policies that push the young even further away. This might produce occasional victories, but no political party can survive this kind of vicious cycle in the long run. Having long since alienated blacks, Hispanics, and virtually the entire Northeast, Republicans can hardly afford to permanently lose young voters as well. The white South and the elderly just aren't enough to sustain a national party.

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Ron Paul and the Future of Conservatism

| Mon Feb. 22, 2010 2:45 PM EST

As Justine Sharrock reports in our current issue, the hottest new conservative organization under the sun is Oath Keepers, a group that recruits uniformed soldiers, police, and veterans and urges them to disobey "unconstitutional" orders from what they view as an increasingly tyrannical government. Their founder is Stewart Rhodes, a former aide to Rep. Ron Paul.

So does this mean that Paul's star is on the rise? After spending the weekend at CPAC, the annual conservative shindig in Washington DC, Dave Weigel thinks it is. Paul easily won the straw poll of attendees with 31% of the vote, and although the Republican establishment did its best to downplay this, Dave sees more going on:

The importance of minimizing Paul’s win united conservative activists like almost nothing else that came from the three-day conference. Even Brad Dayspring — who, as a spokesman for GOP whip Rep. Eric Cantor (R-Va.), counts on Paul for “no” votes — fired off two tweets dismissing the result. But the 2,395 ballots cast were a CPAC record, up from the 1,757 cast in 2009, when Mitt Romney scored his third conservative win. And moments after the Paul results were booed, the crowd gave a roaring ovation to radio and Fox News host Glenn Beck, who rewarded it with a 56-minute lecture on “progressivism’s” war on American values with historical lessons — the evil of the Federal Reserve, the destructiveness of Woodrow Wilson, the folly of “spreading democracy” — that had featured prominently in Paul’s speech, too.

....Paul’s victory [...] provided a look at the ideological hardening going on within the conservative movement as it girds for the 2010 elections....The far-right John Birch Society, of which Paul has been a longtime supporter, made a showy return to the mainstream conservative fold with a co-sponsorship and booth at CPAC; because the organization helpfully offered free, spacious merchandise bags, plenty of CPAC attendees walked around sporting JBS logos. Oath Keepers, a year-old coalition of right-wing military veterans, helped distribute copies of the Paul documentary — a favor to Paul activist Michael Moresco, who had won the organization’s “citizen activist of the year” award for biking from the Statue of Liberty to Alcatraz Prison.

....Outside of the conference, some critics accused activists of a kind of nihilism that wouldn’t be productive for Republicans. “CPAC has becoming increasingly more libertarian and less Republican over the last years,” grumbled Mike Huckabee on his Fox News show, “one of the reasons I didn’t go this year.” Huckabee would only allow that the Paul win reflected “the anger and the mood” that was fueling Tea Party protests and Democratic losses in some key elections.

Now, Dave is a libertarian and (I assume) a Ron Paul fan. So there's some special pleading here. Paul's views on civil liberties, torture, and overseas wars, after all, make him a perpetual outcast from mainstream conservatism no matter how much press the tea partiers get. Still, this year's CPAC spectacle, fueled largely by Ron Paul's worldview, might spell more trouble for the GOP than its leaders think. Dave's piece may oversell Paul's appeal, but it's worth keeping in the back of your mind as the meltdown of the Republican Party careers along.

No Joking Please, We're British

| Mon Feb. 22, 2010 1:58 PM EST

On Friday I twittered:

If my browsing speed doesn't improve soon, I'm going to fly a plane into the internet. Don't pretend you weren't warned.

Just joking! But a reader emails me a warning that if you live in Britain, you'd better be careful with stuff like this. Paul Chambers was arrested last month for twittering a not dissimilar joke:

Yesterday, the court heard that the message read: "Crap! Robin Hood Airport is closed. You've got a week and a bit to get your shit together otherwise I'm blowing the airport sky high!"

Rob Desira, prosecuting, told the court: "The message was posted on the Twitter social networking site. He admitted posting the message into the public domain but never intended the message to be received by the airport or for them to take it seriously."

....After his arrest, Chambers was suspended from work pending an internal investigation. Detectives also confiscated his iPhone, laptop and home computer...."I would never have thought, in a thousand years, that any of this would have happened because of a Twitter post. I'm the most mild-mannered guy you could imagine."

OK, maybe it was a dumb thing to do. But arrested, suspended from work, laptop and phone confiscated, and now facing possible jail time? Come on.

Credit Cards: The Good, the Bad, and the Ugly

| Mon Feb. 22, 2010 1:31 PM EST

The CARD Act takes effect today. Hooray! No more retroactive interest rate increases! Overdraft protection is opt-in! Fees have to be clearly labeled!

But the hills are alive with reports of what credit card companies are doing to make up for this. The New York Times reports that fees on international transactions are likely to go up without anyone telling you. Felix Salmon reports that banks are now pushing reward cards heavily because they have higher interchange fees. The Argus Leader in Sioux Falls (ground zero for credit card companies) reports that subprime cards now carry interest rates of 79.9%. The Washington Post reports that clever new fees are proliferating to make up for the old ones. And of course, as MoJo and a cast of thousands have reported, card companies have been busily raising rates on everyone for months in preparation for the great day.

Bottom line: don't take your eye off the ball yet. Some of the most egregious abuses are gone, but new ones are bound to spring up. If you have any good stories of your own to tell, leave 'em in comments.

Obamacare Unveiled!

| Mon Feb. 22, 2010 12:24 PM EST

President Obama unveiled his compromise healthcare plan today, and it's almost exactly what everyone expected. Here's the White House list of the "key changes" he's proposing to the Senate bill that passed last December, along with annotations:

  • Eliminating the Nebraska FMAP provision and providing significant additional Federal financing to all States for the expansion of Medicaid [i.e., the end of the "Cornhusker Kickback," essentially by making the same deal available to all states];
  • Closing the Medicare prescription drug “donut hole” coverage gap;
  • Strengthening the Senate bill’s provisions that make insurance affordable for individuals and families [i.e., higher subsidies for low-income families];
  • Strengthening the provisions to fight fraud, waste, and abuse in Medicare and Medicaid;
  • Increasing the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and starting it in 2018 for all plans [i.e., removing the special deal unions got on the excise tax and instead making their deal available to everyone];
  • Improving insurance protections for consumers and creating a new Health Insurance Rate Authority to provide Federal assistance and oversight to States in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans [i.e., allowing HHS to prevent gigantic premium increases like the 39% rise recently announced by Anthem in California].

These are modest changes, but they ought to be enough to bring everyone back to the table. Wonks get to keep the excise tax, but it's scaled back considerably to keep unions happy. However, in order to keep it from being a "sweetheart deal," the change applies to all high-cost health plans, not just those for unions. Increased subsidies and increased federal Medicaid financing also ought to make everyone happy.

This will cost money, of course, but the White House insists that its plan will cut the deficit by $100 billion over ten years, just like the current Senate bill. How? It cuts payments to Medicare Advantage a bit more than the Senate bill, it expands the Medicare payroll tax on high-income individuals to cover investment income as well as wage income, and increases assessments on the pharmaceutical industry a bit.

(Plus, in a fascinating little aside, it rasies a bit of money by eliminating the "black liquor" tax credit loophole. See here for details on this ingenious little tax system ripoff.)

Anyway, no big surprises here. There's no public option, and Obama's plan threads the needle between the House and Senate bills pretty carefully. He's obviously hoping for a low-drama compromise that both sides can agree to pretty quickly. Next stop: the Thursday "conversation" with Republicans on C-SPAN. Should be interesting stuff, especially if the Democratic caucus gets its act together and decides to support Obama's plan without too much squawking and infighting. Stay tuned.