Kevin Drum

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.

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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.

The Public Mood

| Tue Jan. 26, 2010 8:59 PM EST

Our story so far: rich people brought the global economy to a near meltdown in 2008. We were saved from a repeat of the Great Depression only by massive interventions from a big, activist government. Today, a year later, the public is in a seething rebellion against.....the big, activist things that the big, activist government did to save us from collapse.

At least, that's the current narrative. But it does not compute.

The Audacity of Gimmicks

| Tue Jan. 26, 2010 6:37 PM EST

From the Washington Post today:

With lawmakers eager to pivot to economic legislation, Senate Democratic leaders have drafted an initial version of an $80 billion-plus job-creation bill that will be heavy on tax breaks designed to spur businesses to make new hires....Though that number may change as the process moves forward, it is clear Senate Democrats have no intention of moving a jobs package as large as the $154 billion measure the House passed in December on a narrow, party-line vote. The House measure included money to extend unemployment benefits and COBRA health insurance coverage, items that aren't in the draft Senate bill but may move in the chamber separately.

"There is 'big bill fatigue' in the Senate right now," said a Senate Democratic aide....A primary goal of the Senate bill will be to encourage employers to add to their job rolls. "We are looking at a form of wage tax credits that would provide an incentive to put people back to work more quickly," Dorgan said.

So we're going to try to pass a jobs bill too small to create many jobs,1 and then offset the cost with a spending freeze too small to really affect the deficit. Do I have that right?

1And, apparently, deliberately designed to exclude any policies that actual ordinary people might understand and support.

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The Myth of the Independent

| Tue Jan. 26, 2010 1:35 PM EST

John Sides is annoyed at yet another outbreak of "independent" fever: the obsession of political pundits and analysts with the supposedly growing and influential group of nonpartisan independents in the electorate. So today he links to a post on the subject that he wrote a few months ago:

Here is the problem: Most independents are closet partisans. This has been well-known in political science since at least 1992, with the publication of The Myth of the Independent Voter (here).

When asked a follow-up question, the vast majority of independents state that they lean toward a political party. They are the “independent leaners.”....The significance of independent leaners is this: they act like partisans. Here is the percent of partisans and independent leaners voting for the presidential candidate of their party. There is very little difference between independent leaners and weak partisans. Approximately 75% of independent leaners are loyal partisans.

Bottom line: only about 10% of voters are true independents, and that number hasn't changed much over the past three decades. Independents matter, but they don't matter nearly as much as pundit mythology would have you believe.

Email From the Base

| Tue Jan. 26, 2010 1:20 PM EST

Email from a reader my age in the the Midwest:

Trouble with the base comes and goes for a variety of reasons. Even in the troubled periods, there are people (like me) who will work hard. I stumped hard in 1984 — of all years — and actually ran for the state legislature against an incumbent Republican in 1994 (duh).

Last weekend after the [xxx], I gave up my County Central Committee seat (which was hard because no one wanted it) for the first time in fifteen years. And before that I was on the Central Committee from a different precinct and before that in two different [xxx] counties. And that decision was based on my reaction to the health care nonsense. The spending freeze is actually dumber. Now I’m just one guy, but I’m one of the ones traditionally telling Democrats not to give up. In 1984, I was door knocking before the polls closed to get people out for Mondale. If the party loses a bunch of me’s, it is in trouble. If they have to spend time motivating me the party is in bigger trouble.

But by the time you wrote that you had never been more embarrassed to be a Democrat, I had already said similar things, though less eloquently and using terms that my children should not hear.

This is a very big mess. And I feel like I’ve wasted thirty-two years of political work. We are the majority party for crying out loud. In the prophetic words of Bugs Bunny, “What a bunch of maroons!”

No comment. I'm just sharing.

Spending Freeze Kabuki

| Tue Jan. 26, 2010 12:10 PM EST

So what's the point of Obama's spending freeze proposal? Noam Scheiber wrote about this back in December and offered up this precis of budget director Peter Orszag's thinking:

There is a logic to Orszag’s gambit, which runs roughly as follows: It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus.

The Orszag approach just might accomplish that. Given the amount of domestic discretionary spending in the federal budget — about $700 billion this fiscal year — we’re talking about cuts of, at most, several tens of billions of dollars if Orszag holds the line on spending (and probably less once Congress weighs in). Which means the cuts wouldn’t come close to offsetting the likely stimulus. But they just might buy some credibility in the bond market, which could defer the day when the real deficit cutting has to start. “It’s a little bit of form over substance,” says Michael Granoff, a money manager who served on the advisory council of the Brookings-based Hamilton Project when Orszag ran it. “But, if you show resolve, that you care about this stuff, it gets into the psychology of bond traders.” The laws of psychology may prove easier to finesse than the laws of economics.

I guess anything is possible. But this sure doesn't sound very likely. It's true that market traders haven't proven themselves very bright over the past couple of years, but does anyone really think they're this dim? Proposing a discretionary spending freeze is one of the oldest chestnuts in the book; the amount of money at stake is paltry; and the whole reason it's called "discretionary" in the first place is that Congress is highly unlikely to let it stand over the long term. Bond markets would have to be remarkably credulous to react positively to this announcement.

A Little Night Music

| Tue Jan. 26, 2010 2:42 AM EST

It's getting harder and harder for us progressives to stay chipper these days, isn't it? Today's deflating news for lefties was Obama's spending freeze proposal, and conservative Rich Lowry shows via Twitter that he understands why, even if the White House doesn't: "spending freeze, no matter how notional, is a huge ceding of rhetorical grnd by WH. will give GOP more leverage in makng anti-hcr, stim case." Sigh.

But I don't want to sign off for the night on a grim note. So here are a couple of things to brighten your day a bit. First off, it seems there's trouble brewing in America's fastest growing bunch of wackos:

A Tea Party convention billed as the coming together of the grass-roots groups that began sprouting up around the country a year ago is unraveling as sponsors and participants pull out to protest its expense and express concerns about “profiteering.”

....Erick Erickson, the editor of the influential conservative blog RedState.com, wrote this month that something seemed “scammy” about the convention. And the American Liberty Alliance withdrew as a sponsor after its members expressed concerns about the convention’s finances being channeled through private bank accounts and its organizer being “for profit.”

“When we look at the $500 price tag for the event and the fact that many of the original leaders in the group left over similar issues, it’s hard for us not to assume the worst,” Eric Odom, the executive director of the American Liberty Alliance and an organizer of the tax day rallies last April, wrote on the group’s Web site.

So sad. I know that schadenfreude is sort of an ugly thing, but right now I could use some. So I thought I might as well share. It turns out that when you put together a movement of cranky paranoids, they tend to be as suspicious of each other as they are of everyone else. Who knew?

And for a bit of more innocent fun, here's "Fear the Boom and Bust," a rap video from George Mason University's Mercatus Center featuring a showdown between John Maynard Keynes and F.A. Hayek. It's astonishingly good — though I confess I don't actually understand what it's for. It's not educational, really, since no one who doesn't already understand what Keynes and Hayek are about will really figure it out from watching this. So I guess it's just for pure, nerdy, highbrow entertainment. Works for me! Watch and enjoy.