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House approves budget deal, other fights loom

In a bipartisan 260-167 vote, the House of Representatives passed the compromise struck last week by President Barack Obama and congressional leaders to cut $38 billion in spending for the current fiscal year that ends September 30.

About one-fourth of House Republicans and more than half of Democrats opposed the deal, with Republicans arguing the cuts were not deep enough and Democrats fearing they would hurt lower-income Americans.

The Senate later passed the bill by an 81-19 vote and sent it to Obama for his signature, with 15 Republicans, three Democrats and one independent voting no.

The defections raised questions about the ability of Republican House Speaker John Boehner and Obama, a Democrat, to keep their party members in line during the next round of showdowns on raising the $14.3 trillion debt limit and passing a budget for the 2012 fiscal year budget.

Boehner had been under pressure to show he could get the 218 votes he needed to pass the budget deal without Democratic support, which would have strengthened his hand in the coming negotiations. But he fell short.


Both leaders have been whipsawed on the budget issue by conservative Republicans and liberal Democrats unhappy with the compromises made to reach a final deal.

“There are going to be some areas where we don’t agree, but we can get a process going,” Obama told ABC News in an interview. “And some of it will be settled by the American people in the election.”


How do $38.5 billion in cuts become $350 million?

Ezra Klein:

So how do the $38.5 billion in 2011 cuts become $352 million when the CBO looks at them? Well, they don’t, not really. They become more like $20-$25 billion. But that’s still a lot less than $38.5 billion. And to understand what happened, you need to understand an important quirk of the budget process.

There’s a difference between the amount of money an appropriations committee has to spend (their “budget authority”) and the amount of money they actually do spend (their “outlays”). The numbers you hear — $38.5 billion in cuts, if you’re measuring by what we spent in 2010, or $78.5 billion, if you’re measuring against the president’s 2011 budget request — are talking about “budget authority.” But some of that money wouldn’t have been used anyway. The Census Bureau, for instance, had $2 billion or so sitting around that it didn’t end up needing. That money got sucked back in this deal. But if it hadn’t gotten sucked back in this deal, it’s not like it would have gone to pizza parties. It probably just wouldn’t have been used. It’s like the philosophers always wondered: If a tree never grows in the forest, can it really be cut?

The authority/outlay distinction doesn’t get you down to $352 million, however. Rather, that’s what you get if you’re only looking at money saved by the end of this year. But a lot of the money will actually be saved next year, or in the years to come (the Pell Grant cuts, for instance, stack up over time). So the CBO took a longer view (pdf), too, and estimated that “federal outlays over the 2011-2021 period that are between $20 billion and $25 billion lower than the amount of outlays that would be expected from having 2011 appropriations set at the same level as 2010 appropriations.”

In other words, the real number of cuts isn’t $38.5 billion. It’s probably closer to $20-$25 billion. That’s not nothing. But it’s also not $38.5 billion, and Republicans are a) figuring that out and b) unhappy about it. In the end, the CR will probably pass because a lot of Democrats are going to vote for it, but as Republicans come to realize they got a rawer deal than they were initially told, I imagine there’s going to be a fair amount of anger at John Boehner, and a lot more resistance to cutting a bipartisan deal on the debt ceiling.


Budget Cuts Disappear in a Cloud of Smoke

So now we’re down to $8 billion in actual cuts, all of it offset by increases to the Pentagon budget. But what about future years? Surely these savings will start to add up down the road? Not really:

In response to multiple requests for estimates of the effects of post-2011 outlays from H.R. 1473, CBO has developed additional information about the budgetary impact of H.R. 1473 in years beyond 2011.

….CBO estimates that enactment of H.R. 1473 would produce federal outlays over the 2011-2021 period that are between $20 billion and $25 billion lower than the amount of outlays that would be expected from having 2011 appropriations set at the same level as 2010 appropriations.

That’s a cumulative number, which means the CBO estimates savings of about $2 billion per year over the next decade. Turns out that budget cutting is harder than it looks, even for Republicans. I predict that John Boehner is in a heap of trouble with the tea party wing of his caucus.


Negotiating or Playing Chicken

Many commentators have pointed out that the recent standoff in Washington resembled a game of chicken. Now that we’ve pulled back from the brink and the government is not in immediate danger of shutting down, perhaps this would be a good time to review what we know about the game.

Chicken, as it is played by teenage boys, is a useful way to cull the herd and reduce the number of people who are too stupid to live. Perhaps tellingly, it has also been an area of scholarly interest since the days of nuclear brinkmanship during the Cold War because of its value in modeling the behavior of our political leadership.

In its purest form, chicken is played by driving two automobiles directly toward each other at sufficient speed so that if neither driver swerves, the cars will collide head on and both drivers will be killed. Once this condition has been established, the first driver to swerve is a chicken, and the other is the winner.

Though no rational person would voluntarily play such a game, sometimes – such as when a budget is overdue and a government shutdown is imminent – the situation is unavoidable. So it is useful to inquire how a rational actor might play.

One way, the literature suggests, is to make sure the other driver is watching and rip the steering wheel off and throw it out the window. This action conveys the following message: “As you can see, I no longer have the ability to steer. In order to avoid certain death in the next few seconds, you are going to have to swerve. True, you will then be a chicken and I will win, but it is better to be a chicken than to be dead, don’t you think?”

In other, less dramatic contexts, this is known as the “limited authority” technique. It’s what’s being used when you make an offer on a car and the salesman disappears to go talk to his manager. When the salesman returns, he says: “I would like to help you out. I want to see you in this car. But my boss won’t let me do it at this price.” In other words, the salesman would have you believe he does not have the authority to give you what you want. He just can’t do it.

In most contexts, power is the ability to do as you like, but that’s not necessarily true in negotiation. If you want to buy a car and the salesman wants to sell the car, but he can’t move beyond his limited authority, then you are going to have to move toward his price to get the deal done.

The sales manager may or may not have nixed your car deal. He may or may not actually exist. The point is, if you believe that the salesman has limited authority, and you want the deal, you will do it on the salesman’s terms.

One way limited authority can be presented is to say my constituency won’t let me compromise. From the reporting, it appears that Rep. John A. Boehner, R-Ohio, and company used this method to get a record $38 billion cut from the national budget.

With respect to most negotiators and most issues, half a loaf is better than none. Principles, however, don’t work that way. There is no such thing as half a principle. So another way to signal that you will not move on an issue is to declare that it is a matter of principle. Negotiation theorists refer to nonnegotiable issues as “sacred.” If an issue is truly sacred, even the idea of negotiating about it is offensive.

Abortion is the mother of all sacred issues for both sides of the question. Introducing sacred issues into political negotiations adds intensity, but it correspondingly reduces the likelihood of settlement. This appears to have been the subtext when President Obama refused to budge on funding for Planned Parenthood. “Nope. Zero,” he said. Subtext: Don’t even ask.

Finally, the limited-authority technique can be played with judicious use of craziness. If I can convince you that I am so crazy I would rather be dead than chicken, you will swerve and I will win. We saw some of that in this last go-round. But there are problems with craziness. Like toothpaste, once it’s out of the tube, it’s hard to get it back in. And feigned craziness is less convincing and therefore less effective than the real thing. On the other hand, when a sane person plays chicken with a crazy person, the crazy person wins.

People don’t like to be told what to do. They don’t like take-it-or-leave-it deals, and they don’t like to be threatened. Disputes settled with threats and ultimatums do not tend to stay settled. That, and the many issues ducked in this round, means we’ll see this game again, sooner rather than later, and with no loss of ill will.


The Right Panics

Andrew Sullivan:

That’s all I can really glean from this hysterical WSJ editorial. They claim that the Ryan plan is not “some radical departure from American norms.” But severing public responsibility for seniors’ healthcare with a lump sum to buy private insurance (that is designed not to keep pace with healthcare inflation) surely is a radical departure from the post-1965 norm. It may be necessary but it sure is a radical reframing of the post-’65 social compact. Yes, they’re right that Obama essentially sets up a rationing board of experts to dictate what you can and cannot get under Medicare; but that’s because he is trying to work within the current system, rather than abolishing it, and cutting healthcare costs rather than simply transferring them. This is a weaker point:

Mr. Obama sought more tax-hike cover under his deficit commission, seeming to embrace its proposal to limit tax deductions and other loopholes. But the commission wanted to do so in order to lower rates for a more efficient and competitive code with a broader base. Mr. Obama wants to pocket the tax increase and devote the revenues to deficit reduction and therefore more spending. So that’s three significant tax increases—via higher top brackets, the tax hikes in ObamaCare and fewer tax deductions.

Note the sleight of hand: “deficit reduction and therefore more spending.” That’s an ideological reach. Finding a way to raise revenues by reforming the tax code is easily the least painful way of raising revenues. Devoting more of this to debt reduction than lower taxes does not inherently mean more spending. This Krauthammer outburst reveals the GOP’s nervousness that they may have overplayed their hand:

“I thought it was a disgrace. I rarely heard a speech by a president so shallow, so hyper-partisan and so intellectually dishonest, outside the last couple of weeks of a presidential election where you are allowed to call your opponent anything short of a traitor.”

But did he expect a Democratic president to treat the effective abolition of Medicare and Medicaid as if it were just a debating point? What Obama did was what any Democratic president would do: contrast the continuation and intensification of huge cuts in taxes for the haves with newly stringent limits on healthcare for the have-nots. If Republicans were in the same position, they’d be claiming imminent death for every senior in America. And telling us it’s all part of a “robust” (Cheney’s favorite word) debate.


During Bush Presidency, Current GOP Leaders Voted 19 Times To Increase Debt Limit By $4 Trillion

Database searches revealed no demands from the four legislators that debt increases come accompanied by drastic spending cuts, as there are now. In fact, the May 2003 debt limit increase passed the Senate the same day as the $350 billion Bush tax cuts for the wealthy.

When Bush was in office, the current Republican leaders viewed increasing the debt limit as vital to keeping America’s economy running. But with Obama in the White House, it’s nothing more than a political pawn.


As Revenues Plunge To 60-Year Low, GOP Congressman Claims ‘We Have Too Much Revenue’

The Republican message about a revenue vs. a spending problem is silly, as they are each flip sides of the same coin, but Rokita’s statement is just wrong. If the government spent only what it takes in in tax revenue, it would have to slash nearly half its funding to every program, from defense to Medicare, yet Rokita apparently thinks even that is too much. As a share of GDP, government revenue in 2009 (the most recent year available) was at its “lowest since 1950.” As this chart from the Congressional Budget Office demonstrates, the recession decimated the federal tax base:

But even before the recession, there simply wasn’t enough money coming into the federal government to cover costs, forcing the government to borrow 40 cents of every dollar it spends, as Republicans like to remind Americans so frequently.

It’s worth noting that the last time Republicans claimed there was too much revenue coming into the federal government, they ended up solving that problem by helping to create the deficits of today. “[M]ore than any other” reason, President Bush justified his 2001 tax cuts by claiming the budget surplus President Clinton created was actually bad. “A surplus in tax revenue, after all, means that taxpayers have been overcharged,” Bush explained. Of course, the Bush tax cuts are one of the largest contributors to today’s budget deficit by depriving the government of needed revenue.

There wasn’t “too much revenue” in 2001, and there’s far less today. As a member of the budget committee, Rokita should be aware of that.


Rank-And-File Republicans Disagree With GOP Leaders, Say Serious Approach To Deficit Must Include Revenues As Well As Spending Cuts

Boehner, McConnell Tried To Rule Out Revenues Yesterday, But All-of-The-Above Approach to Deficit Has Bipartisan Backing

Schumer: Grand Bargain Is ‘Next To Impossible’ If GOP Leaders Dig In On Protecting Millionaire Tax Breaks, Other Giveaways


Wall Street knowingly sells ‘crap’ deals: ‘This is an absolute pig’

The Senate Permanent Subcommittee on Investigations released a scathing 650-page report yesterday detailing some glaring examples of Wall Street’s malfeasance leading up to the 2008 financial crisis. Two of the highest-profile culprits in the report are Goldman Sachs and Deutsche Bank, as emails from both institutions reveal that they were selling securities that they knew were toxic and then shorting those same securities to turn a profit.


Aspects of the Dodd-Frank financial reform law were “designed to address and reduce these conflicts.” The most important of these provisions is known as the Volcker Rule, which would limit the ability of large investment banks like Goldman Sachs to trade for their own account, outside of doing business for their customers. But these very provisions are under attack by Republicans in Congress.

In a hearing today, House Republicans are expected to push the Financial Stability Oversight Council — the new body tasked with monitoring systemic risk in the financial system — to water down the Volcker Rule. Sen. Orrin Hatch (R-UT) said earlier this week that he is concerned that trading restrictions, including the Volcker rule, will simply be “unduly burdensome regulations.” Over at ThinkProgress, Ian Millhiser goes over the potentially criminal aspects of Goldman’s actions.



American people (wrongly) trust rich businessmen to do what’s right for the economy

I think people have stronger views of other people than they do of issues, so this is an interesting question from Gallup:

This seems to me like a huge problem for progressive politics. Imagine that you’re a rich businessman. You probably wish your taxes would be lower rather than higher. Under the circumstances, you’ll find it psychologically comfortable to believe that lower taxes on rich people will be good for the national economy. And if the public is more inclined to trust rich businessmen about the issue of what’s good for the economy than they are to trust the President of the United States, then it’s going to be hard for the President of the United States to win a high-profile argument on the subject.

9 Things The Rich Don’t Want You To Know About Taxes

Tax policy is something the framers left to politics. And in politics, the facts often matter less than who has the biggest bullhorn.

The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.

As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation-adjusted.)

1. Poor Americans do pay taxes….(more)

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.

2. The wealthiest Americans don’t carry the burden…(more)

It’s true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available). But people forget that the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.

Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners.  That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.

3. In fact, the wealthy are paying less taxes….(more)

Despite skyrocketing incomes, the federal tax burden on the richest 400 has been slashed, thanks to a variety of loopholes, allowable deductions and other tools. The actual share of their income paid in taxes, according to the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.

Compare that to the vast majority of Americans, whose share of their income going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent in 2007.

(By the way, during seven of the eight George W. Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama administration overturned almost instantly after his inauguration.)

4. Many of the very richest pay no current income taxes at all…(more)

Lots of other people live tax-free, too. I have Donald Trump’s tax records for four years early in his career. He paid no taxes for two of those years. Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.

Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.

5. And (surprise!) since Reagan, only the wealthy have gained significant income…(more)

The Heritage Foundation, the Cato Institute and similar conservative marketing organizations tell us relentlessly that lower tax rates will make us all better off.


Since 1980, when Reagan won the presidency promising prosperity through tax cuts, the average income of the vast majority—the bottom 90 percent of Americans—has increased a meager $303, or 1 percent. Put another way, for each dollar people in the vast majority made in 1980, in 2008 their income was up to $1.01.

Those at the top did better. The top 1 percent’s average income more than doubled to $1.1 million, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. The really rich, the top one-tenth of 1 percent, each enjoyed almost $4 in 2008 for each dollar in 1980.

The top 300,000 Americans now enjoy almost as much income as the bottom 150 million, the data show.

6. When it comes to corporations, the story is much the same—less taxes…(more)

7. Some corporate tax breaks destroy jobs….(more)

A corporate tax rate that is too low actually destroys jobs. That’s because a higher tax rate encourages businesses (who don’t want to pay taxes) to keep the profits in the business and reinvest, rather than pull them out as profits and have to pay high taxes.

The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than 800 companies to bring profits that were untaxed but overseas back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

The companies said bringing the money home—“repatriating” it, they called it—would mean lots of jobs. Sen. John Ensign, the Nevada Republican, put the figure at 660,000 new jobs.

Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately it started firing people. Since the law took effect, Pfizer has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed.

Now Congressional Republicans and some Democrats are gearing up again to pass another tax holiday, promoting a new Jobs Creation Act. It would affect 10 times as much money as the 2004 law.

8. Republicans like taxes too….(more)

President Reagan signed into law 11 tax increases, targeted at people down the income ladder. His administration and the Washington press corps called the increases “revenue enhancers.”  Reagan raised Social Security taxes so high that by the end of 2008, the government had collected more than $2 trillion in surplus tax.


In fact, thanks to Republicans, one in three Americans will pay higher taxes this year than they did last year.

9. Other countries do it better. ..(more)

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

Here is a question to ask yourself: We started down this road with Reagan’s election in 1980 and upped the ante in this century with George W. Bush.

How long does it take to conclude that a policy has failed to fulfill its promises? And as you think of that, keep in mind George Washington. When he fell ill his doctors followed the common wisdom of the era. They cut him and bled him to remove bad blood. As Washington’s condition grew worse, they bled him more. And like the mantra of tax cuts for the rich, they kept applying the same treatment until they killed him.

Luckily we don’t bleed the sick anymore, but we are bleeding our government to death.


Why is it so hard to raise taxes on the rich?

As budget solutions go, almost nothing polls better than asking the wealthiest to pay more

In his speech on the budget Wednesday afternoon, President Obama finally came out unequivocally in support of higher taxes for the rich. As many commenters have pointed out, taxing the rich is a no-brainer for progressives, the rare proposal that’s politically popular in addition to being good policy. So why has it taken so long for Democrats to make a push for increasing the highest marginal tax rates? And why is it that, as Jamelle Bouie writes, “vanishingly few elected Republicans are interested in anything approaching egalitarianism, but a non-trivial number of Democrats support deep spending cuts and oppose tax increases”?


To see how far the debate has shifted, you just need to look at what’s on the table in the current showdown: Progressives are asking to increase the top two tax brackets from 33 and 35 percent to 36 and 39.6 percent, while Paul Ryan’s “Pathway to Prosperity” proposes cutting taxes in the highest bracket to 25 percent. That is, Democrats are merely asking that taxes on the rich be returned to what they were at the beginning of the Bush administration, which is still just slightly more than half of what they were at the beginning of the Reagan administration, while Republicans are pushing for rates lower than they’ve been since immediately before the Great Depression.

As proposed tax rates get lower, so does the bar for being tarred a “tax-and-spend liberal,” that dreaded old moniker that’s many a liberal’s greatest fear — never mind the fact that taxing and spending are literally the most basic functions of government. Sure enough, House Speaker John Boehner told Fox News on Monday that “Washington has a spending problem, [it] doesn’t have a revenue problem,” while Alabama Sen. Jeff Sessions harrumphed in a statement on Sunday that “another Washington-style tax-and-spend plan will not be acceptable.” And just as predictably, liberals have run for cover, heralding the spending cuts as “historic,” as if they hadn’t spent the past few months fighting them.

But the politics of tax increases are particularly fraught in a country as unequal as America. As the Economist points out, in unequal societies, “social insurance is perceived as redistributing income over the population, rather than across time.” In European countries, which have much lower income inequality and largely depend on broad-based tax systems, people expect to utilize the services they’re funding at some point; in America, people think they’re writing checks to some deadbeat. Indeed, the right loves to point out that people in the highest tax bracket pay a disproportionately high share of taxes, which to them is evidence that the left is a party of welfare queens who feel entitled to “other people’s money.” Likewise, the New York Times’ survey of Tea Party supporters found a movement of relatively well-off people who believe the government favors the poor. And, of course, the racial undertones to discussions about welfare and entitlements in America serve to heighten tensions still further.

Thus, the budget crisis demonstrates yet another way in which income inequality hurts our country. Funding social programs largely through high taxes on high earners isn’t a problem because higher taxes are inefficient, job-killing or unfair, as conservatives often claim. It’s a problem because, with money and power concentrated the way they are now, the functioning of the government is essentially dependent on the acquiescence of the rich to higher taxes.

There are important arguments to make about the morality and justice of high upper-bracket tax rates — like that kids just shouldn’t go hungry in the world’s richest nation. But progressives can still make these arguments while agreeing with the right that the rich pay proportionately too much tax — because the rich make too much in proportion to the rest of the country. Don’t get me wrong — we should insist upon higher tax rates for the wealthy, and our tax system should remain strongly progressive. Yet at the same time, we must seriously confront the task of broadening the tax base — that is, of building a stronger, more egalitarian, more just economy.


Record number of Americans living in poverty

Census Bureau says 43.6 million people in 2009, up near 4 million in a year

The number of people living in poverty in America rose by nearly 4 million to 43.6 million in 2009 — the largest figure in the 51 years for which poverty estimates are available — the Census Bureau said Thursday.

The bureau said in a statement that the official poverty rate was 14.3 percent, or 1 in 7 of Americans, the highest proportion of the population since 1994.

It was the third consecutive annual increase, up from 39.8 million, or 13.2 percent, in 2008.

The bureau added that there were 8.8 million families living in poverty in 2009.

The poverty rate for under-18s rose from 19.0 percent in 2008 to 20.7 percent in 2009, but fewer people 65 and older were in poverty, with the percentage rate falling from 9.7 percent in 2008 to 8.9 percent in 2009.

The statistics cover President Barack Obama’s first year in office, when unemployment climbed to 10 percent in the months after the financial meltdown.

In a statement, Obama said that “even before the recession hit, middle class incomes had been stagnant and the number of people living in poverty in America was unacceptably high, and today’s numbers make it clear that our work is just beginning.

“Our task now,” he added, “is to continue working together to improve our schools, build the skills of our workers, and invest in our nation’s critical infrastructure.”



Los Angeles to slather its rooftops with solar panels

Here’s a crazy idea: apply the same incentives that have made Germany the world leader in rooftop solar power to a place that is actually sunny. Also, use the power generated from these panels to zero out the electricity costs of people in low-income housing, so the city has more money for education.

Those are the suggestions of a new study from the Los Angeles Business Council, which argues that just sticking solar panels on commercial buildings and multi-family dwellings could generate enough power for 30,000 homes. Extending the program to individual homeowners, the study’s authors estimate, could easily double that.

L.A.’s city council president Jan Perry is about to introduce a resolution to create a pilot Feed In Tariff program for the city, which means anyone generating power can sell it back to the local utility at an advantageous rate. This, coupled with up to $300 million in Federal incentives, should make scattering panels across Los Angeles an economically sound investment. Projected cost? As little as 19 cents a month for the average city household.


Excess Costs of Medicare Advantage Plans Declining

The excess costs of Medicare Advantage plans have been falling, making it more likely they will meet a goal in the healthcare reform law to end the excess in 2012, according to a report by the Commonwealth Fund.

The excess over traditional Medicare fell from 13 percent in 2009 to 8.9 percent in 2010, amounting to a federal subsidy of $8.9 billion in 2009.

That means Medicare Advantage rates are beginning to shift toward levels mandated in the healthcare reform law [Affordable Care Act], which mandates evening out Medicare Advantage and traditional Medicare payments in 2012.

To reach that goal, however, Medicare Advantage insurers said they would have to raise premiums or cut benefits such as vision care and gym memberships.



Liberty Dollars Creator Convicted of Federal Crimes

The U.S. government wants ownership of $7 million worth of coins manufactured and sold by Bernard von NotHaus, a 67-year-old antigovernment icon who became a “high priest” in his own marijuana-smoking church.

A federal jury in Statesville, N.C., decided on March 18 that the “Liberty Dollars” and other silver, gold and copper coins manufactured in North Idaho and sold throughout the United States by von NotHaus and his sales team violated federal laws. Von NotHaus, the founder of the National Organization for the Repeal of the Federal Reserve Act (NORFED), was convicted on charges of conspiracy and two counterfeiting-related charges.

No sentencing date has been set for von NotHaus, who could get up to 15 years in prison. Three other co-defendants are still awaiting a separate trial.


The Fraud Free Financial Crisis


They run through a lot of the nuance issues here. White collar criminal cases are very difficult to prosecute for a whole variety of reasons. And the very lax regulation that contributed to the crisis also made it difficult to prosecute, due to poor documentation. I might add that conservative hegemony in the federal judiciary makes the outlook dimmer. But as they say right up at the beginning of the piece, the key sentiment underlying the whole thing is that the Obama administration felt it was important to restabilize the global financial system. That meant, at the margin, shying away from anxiety-producing fraud prosecutions. And faced with a logistically difficult task, that kind of pressure at the margin seems to have made a huge difference. There simply was no appetite for the kind of intensive work that would have been necessary.

I’m not as persuaded as, say, Jamie Galbraith is that the failure to do this is a key causal element in our economic problems. Indeed, I’d say that if you look at the situation literally, Tim Geithner’s judgment was probably correct. But psychology and politics matter. I think I’ve said this before, but I think the country would be in a better place if the passage of TARP had been immediately followed by Nancy Pelosi punching a bank CEO in the face on live television then letting everyone who voted “yes” give him a nice hard kick while he writhed in agony on the House floor.

Eye Witnesses–Getting It Wrong: Convicting the Innocent

When he recently signed legislation abolishing the death penalty in Illinois, Gov. Pat Quinn noted a “grave danger” that the innocent could be executed. This past March, the U.S. Supreme Court decided, in Skinner v. Switzer, to expand the right to access DNA testing that could potentially prove a defendant’s innocence. Last week the New York Times published a firsthand account by John Thompson, an innocent man who came within hours of his own execution. Two weeks ago, the U.S. Supreme Court threw out a $14 million jury award compensating him for the years he spent in prison. Public opinion surrounding the death penalty has been shaped, in recent years, by the possibility of innocents being executed. And DNA exonerations continue to regularly occur, although with little rigorous assessment of what went wrong.

Eyewitness misidentifications were the single greatest cause of flawed evidence in the 250 innocent exonerations I studied. And no case better explains how eyewitness errors can occur than the best-known eyewitness false identification of them all: Ronald Cotton was exonerated by DNA tests in North Carolina after spending more than 10 years in prison.

Read the full article>>>


The executioner’s beer

The problem with trying to kill condemned prisoners is that you really are trying to kill them. With the fashionable method of lethal injection, states are finding it hard to get one of the necessary chemicals, sodium thiopental. That’s because the countries they import the barbiturate from don’t want to sell it for that purpose anymore.

Which leaves the death-penalty states trading the stuff around as they try to keep a steady supply. Scott Kernan, under secretary for operations for California’s Department of Corrections and Rehabilitation, went to pick some up from Arizona last year, the New York Times reports. Mr. Kernan sent a nice note afterward, the paper reports, using documents obtained by ACLU: “You guys in AZ are life savers,” adding, “by you a beer next time I get that way.”



Media establishment pronounces Obama’s plan serious

Greg Sargent:

There’s a bit of chatter out there this morning to the effect that the same media establishment that hailed Paul Ryan’s proposals as “serious” has been mostly dismissive of Obama’s speech. Mark Halperin, for instance, complained that Obama “failed to offer a bold, paradigm-shifting budget proposal.”And Politico charged that the speech was “one of the most overtly partisan broadsides he’s ever delivered.”

All of which led Steve Benen to drolly note this morning that the same media that “drooled all over itself” praising Ryan’s plan is suddenly proving “hard to please.”

I wholly sympathize with that sentiment. But there’s another angle here that’s also worth considering. Halperin and Politico don’t define the media consensus. And the fact is that many Beltway establishment media figures, while expressing some reservations, actually hailed Obama’s plan as very serious indeed.

The Post editorial board praised Obama for “an important and welcome contribution to the debate,” and said the President is “correct to call for new taxes.” Joe Klein hailed Obama’s “sense of proportion and sanity.” Marc Ambinder’s piece described Obama as “reasonable” and “courageous.” The Times editorial board pronounced Obama “reinvigorated.” Fareed Zakaria declared the speech “important” and “serious.” The Los Angeles Times editorial board said Obama’s plan “offered more concrete steps than the GOP did.” Chris Cillizza pronounced the speech “successful.”

There are exceptions: Ron Fournier flirted with the notion that Obama’s speech was overly political. Some news articles did describe it as “partisan.”

It’s true that some of the above voices hailing Obama’s performance are center left. But they represent an important chunk of the political media establishment. And the clear consensus among them was that Obama’s speech was eloquent and effective, and that his proposal was — yup — “serious.” Some of them even hinted that Obama’s plan is more serious than Ryan’s, if such a thing is possible.

Halperin and Politico are, if anything, in the minority. The important story here is that the Beltway media establishment by and large treated Obama’s speech with real seriousness of purpose, and in so doing, ended up giving it pretty high marks.


The Trump conundrum

Greg Sargent:

People, please: Can we stop pretending there’s any point to fact-checking Donald Trump’s increasingly buffoonish birther claims? He wants us to debunk them, preferably as loudly as possible. This gives him exactly what he wants: Enhanced credibility among the subset of Americans who think it’s a badge of honor to be called out for brave truth-telling by the mainstream media outlets who are conspiring to cover up the truth about Barack Obama’s illegitimacy as president.

Which gives rise to the Trump conundrum: Is there really any point in factchecking someone who trafficks in falsehoods in order to get attention?


I know Trump is a very busy man, and perhaps he forgot what he said two days ago. But look, the man trafficks in falsehoods for sport. Being cavalier with the truth is an integral part of the circus act, and even more crucially, getting called out for it is an integral part of the act, too.

This isn’t at all a knock on Kessler, whose daily fact-checks have become a must read. But really, given the internal logic, or lack thereof, that defines the self-contained media twighlight zone that Trump has created for himself, what’s the point in even bothering with quaint niceties like fact-checking? That’s what he wants us to do.

Fox & Friends Still Pushing Myth That Tax Cuts For Rich Create Jobs

KILMEADE: So OK, so you have the federal tax, outside states like Florida, then you have a state tax of another 10 percent. So you’re already giving — so you’re already working — you’re only getting 60 percent of what you earn.

And by the way, the stats also show that the most fortunate ones, you know, the ones that inherit all that money, they also start foundations and give more money than almost everybody else. So, in other words, they’re supposed to feel bad about this, feel humble about what they’ve earned, give more of it to the government as opposed to investing it in different areas, starting a different company, hiring more people. I mean, that to me — in one sense, you have 73 pages of a specific way forward to address a $14.2 trillion deficit, and this speech was, I’d like to be president again. That’s what this speech was. [Fox News, Fox & Friends, 4/14/11]

Tantaros: “You Can’t Argue That You’re Going To Hurt Joe Six-Pack’s Boss” Without Hurting “Joe Six-Pack.” Later on Fox & Friends, after Fox News contributor Juan Williams pointed out that under Rep. Paul Ryan’s (R-WI) budget plan “all the sacrifice goes to the seniors and the poor,” Fox contributor Andrea Tantaros claimed, “[Y]ou can’t argue that you’re going to hurt Joe Six-Pack’s boss without implying it’s going to hit Joe Six-Pack.” [Fox News, Fox & Friends, 4/14/11]


Media Chronically Wrong On Social Security And The Deficit



Wednesday Marked the Beginning of the Death of Reaganomics in America

Thom Hartmann:

In other words – let’s wait and see what Congress comes up with.  But what the President did that was so important yesterday – was for the first time offered a public rebuke of Reaganomics from the White House – throwing cold water on the idea that the government is the problem and rejecting the notion that the American way of life has to be fundamentally changed because of a budget crisis created BY the Republicans.

No President in 30 years has laid out a more thoughtful and sharp criticism of the direction that Reagan took our nation – and I hope that yesterday marked the beginning of the death of Reaganomics in America.

WaPo Analysis: Obama speech frames a 2012 choice for the country

Obama appeared to have two goals in mind. First, he sought to demonstrate that he is serious about solving the debt and deficit problems that threaten the country’s fiscal future. Second, he needed to prove to Democrats that he is prepared to take on the Republicans and fight for policies that his party has long stood for.


Limbaugh: Seating Of Rep. Ryan, Republicans In Front Row At Obama Speech Was A “Personal Bitch Slap”


The Only Thing More Ridiculous Than Donald Trump’s Hair is His Presidential Ambition—Forbes


Palin to hold big Tea Party rally at Capitol building in Madison, Wisconsin


Poll: Floridians Have Strong Buyers Remorse After Electing GOP Gov. Scott


A Different Take: Lawrence O’Donnell dissects Obama’s speech


Just the Simple Truth

Kevin Drum:

[Quoting from the President’s speech.]

Translation: Fuck you, Republicans.

And I’d say it’s a well deserved flip of the bird. Republicans, as you can imagine, are less enthusiastic, and this bit of the speech undoubtedly accounts for most of the bile being tossed around on Fox and elsewhere today. But hey — sometimes the truth hurts. And all Obama did was speak the simple truth. In the past decade, Republicans slashed taxes, started two wars, approved a big unfunded entitlement, and presided over an economic collapse that cratered tax revenues and required massive government spending to counteract. That’s pretty much 100% of our existing deficit problem right there. All we’re doing now is trying to clean up the mess the GOP has left us.


Public Policy Polling: Obama leads…but also shows weakness

Barack Obama continues to lead all of his top potential 2012 opponents for reelection…but his advantage over all of those Republicans might not really be quite as big as it looks.

Obama’s up 5 points on Mike Huckabee at 48-43, 6 on Mitt Romney at 47-41, 9 on Chris Christie at 48-39, 10 on Rand Paul at 48-38, 14 on Newt Gingrich at 52-38, and 18 on Sarah Palin at 54-36.

Here’s the catch though: in every one of those match ups the vast majority of undecided voters disapprove of Obama…they just either don’t yet know or not yet completely sold on the potential Republican candidates so they go into the undecided column. Chances are when push comes to shove those folks are going to vote against Obama if they don’t think he’s doing a good job. So we also calculated the numbers allocating the undecideds based on their approval or disapproval of Obama- when you do that Obama only leads Romney and Huckabee 51-49, is just up 52-48 on Paul and Christie, has a 54-46 advantage over Gingrich, and still wallops Palin if only by a 56-44 margin.

This is just one poll but my guess is that with the vast majority of 2012 horse race polls you’re seeing right now this phenomenon of most of the undecideds being Obama disapprovers is in place and that means the leads he’s posting in these surveys are perhaps not quite as comfortable as they might appear at first glance.

Obama has narrowly negative approval ratings with 47% of voters giving him good marks to 48% who think he’s doing a bad job. His saving grace continues to be the Republican candidate field, the universal unpopularity of which allows Obama to lead in head to heads despite his own weak numbers. Interestingly Christie has the best net favorability of the folks we tested this month at -2 (28/30). He’s followed by Huckabee at -6 (36/42), Romney at -11 (32/43), Paul at -19 (26/45), Gingrich at -27 (28/55), and Palin at -30 (31/61). Right now Republicans aren’t fully capitalizing on Obama’s unpopularity because all of their own candidates are so unappealing but if that changes things will be looking even dicier for Obama.

Obama is definitely weaker right now than he was in 2008- his leads over Huckabee and Romney here are smaller than this margin of victory over John McCain even before you allocate the undecideds. The big question just continues to be whether the GOP will nominate someone who can take advantage of Obama’s vulnerability or if they’ll nominate someone so extreme that voters with reservations about Obama end up voting for him anyway as the lesser of two evils.


After rash of sleeping incidents, FAA’s chief of air traffic controllers resigns.


Tea Party People Staying Home Today

No big tax day tea party rallies or misspelled sign regattas tomorrow. Awwwww.

For the first time since the tea party movement began two years ago, its members have not announced plans to storm the National Mall with “Don’t Tread on Me” flags on April 15. No tea party groups have applied for permits at the popular protest locale that day, according to the National Park Service.

By the way, the irony of a pack of Ayn Rand acolytes having a rally on National Park Service land is hilariously contradictory, but typical of these ignorant hypocrites.



Humpback whale songs spread eastward like the latest pop tune (Audio)

Humpback whales love a good hit single, and every year a new catchy pop tune spreads among the male underwater crooners, said an Australian study.


Military miracle turns fuel exhaust into water

Man, if there’s two things you don’t have enough of when you’re deployed in the desert and insurgents keep blowing up your fuel runs, it’s beer and Wii. Wait no, it’s diesel and water. Luckily researchers have devised a way for soldiers to turn one into the other. Membranes full of tiny tubes condense vehicle and generator exhaust, turning the vapor into liquid water and stripping contaminants along the way.

The average soldier needs about seven gallons of water a day — for drinking, but also for cooking and bathing and so forth. This new tech could make that amount from burning about seven gallons of diesel fuel. Some of the water would even be directly drinkable, and 65 to 85 percent of it would be usable for something.



This would explain WI

A frightening HBO documentary. Bev Harris, a Seattle grandmother, investigates
electronic voting machines, finding that they are vulnerable to undetectable
tampering. Printed poll results show huge discrepancies between votes cast and
votes tallied. An independent Finnish expert discovers a dangerous vulnerability
in Diebold’s precinct identification memory cards. Diebold’s CEO reveals his
strong political leanings. Check out Harris’ Black Box Voting site to learn more
and get involved. No matter who you’re voting for come November, this documentary
will add to your understanding of this controversey.


Scott Walker Bans Sick Days People of Milwaukee Voted For


Wis Dems Call For Further Investigation Of Waukesha County Elections

In a letter to the state Government Accountability Board, which oversees elections, state Dem chair Mike Tate is now raising doubts about the county’s tabulated votes in the narrowly decided 2006 state attorney general race.

Key quote from the letter:

The Waukesha County Clerk website Tuesday said there were 118,342 votes for Van Hollen and 55,608 votes for Falk, a total of 173,950 votes. (There are an additional 97 write-in votes tabulated for a total of 174,047 votes assigned to candidates from Waukesha County.)

However, at the top of the same page, the Waukesha County Clerk, under the heading “BALLOTS CAST – TOTAL,” the number of total ballots reported is 156,804. This is an under- reporting of 17,243 votes. I note with serious concern that this discrepancy is more than enough to have swung the statewide election against the Republican and for the Democrat.

The Web page that Tate refers to can be found here.

Tate notes in his letter that the county’s web site has been amended recently, in order to offer an explanation of how the number of “total ballots” reported is calculated, and how it can differ from the actual total number of votes.


Scott Walker Admits He Didn’t Campaign on Repealing Workers’ Rights



The Religious Right’s Merger With Apostolic Dominionism Continues Apace

Janet Porter lost her radio program after she became deeply involved in Dominionism … but that hasn’t in any way dissuaded her.  And why would it?  Dominionism is an increasingly accepted agenda within the Religious Right.

So, since losing her program, Porter has gone on to fully embrace the movement and its theology, bringing in Dominionist economists to testify on behalf of her “Heartbeat Bill” in Ohio and teaming up with Cindy Jacobs to pray that God will hand the government over to Christians.

So it is no surprise to find out that Porter will again be joining Jacobs for a “Sealed Conference” in August in Arizona where she will once again preach on “Reclaiming the Government”



Left Out

Francis Fukuyama:

The answer to the question “Is America a plutocracy?” might seem either trivial or obvious depending on how one defines the term. Plutocracy, says the dictionary, simply means “rule by the rich.” If the query is taken literally to mean that the non-rich—the vast majority of American citizens—have no influence in American democracy, or that the country is self-consciously ruled by some hidden collusive elite, the answer is obviously “no.” On the other hand, if the question is taken to mean, “Do the wealthy have disproportionate political influence in the United States?” then the answer is obviously “yes”, and that answer would qualify as one of the most unsurprising imaginable. Wealthy people have had disproportionate influence in most polities at most times in history.

Of course, one can argue endlessly over who qualifies as being rich, whether the rich constitute a social class capable of collective action, how open or closed that class is, what constitutes real political power in today’s America, and so on. But if the question remains as simple as those articulated above, the basic answer will not change or be of much interest.

This is not, however, what this issue of The American Interest means by plutocracy. We mean not just rule by the rich, but rule by and for the rich. We mean, in other words, a state of affairs in which the rich influence government in such a way as to protect and expand their own wealth and influence, often at the expense of others. As the introductory essay to this issue shows, this influence may be exercised in four basic ways: lobbying to shift regulatory costs and other burdens away from corporations and onto the public at large; lobbying to affect the tax code so that the wealthy pay less; lobbying to allow the fullest possible use of corporate money in political campaigns; and, above all, lobbying to enable lobbying to go on with the fewest restrictions. Of these, the second has perhaps the deepest historical legacy.

Much More>>>



Chin Up Progressives, Things are Happening! 5 Ways To Jump in and Get Involved

Even though sometimes it feels dire out there, it’s always good to remember that progressives across the world are working, fighting and protesting creatively to uphold justice and the basic tenets of democracy. Right now, more than ever, these happenings seem to be converging, and we can be heartened by domestic and international movements — such as US and UK Uncut — that push back at conservatives and confront corporate abuse. Here are great ways to join in and motivate for a more equal society:

US Uncut.’s Rolling Fasts.

Progressive Pranking.

• Let Your Money Do the Talking.

• Calculate Your Taxes.


Movements are built & sustained by ordinary people taking responsibility for organizing their communities.

About the Summer Organizer Program


What’s The Difference Between An American And A Corporation?


Texas kids walk out to protest teacher layoffs



Whatever one of us blames in another, each one will find in his own heart. ~ Seneca


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The Daily Planet, Vol. 51

The Daily Planet, Vol. 50

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KhiradPatsyTADONAIchasethisKQµårk 死神 Recent comment authors
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I think Dana Milbank is a douche.

But I vindicate him when he’s writing about a bigger one.

I thought this was a decent obit:

Why Glenn Beck lost it

If you did this already, I apologize, but then I’d need to browbeat you for linking a Milbank piece. 😆


Bernard von NotHaus is my new hero.

And a machine that turns fuel exhaust into water? Quite possibly the coolest thing I’ve heard in years.


OK, here’s a grass roots movement that might work.
The next time a candidate for elected office and especially to represent the people…and they tell you they promise to vote their conscience, you tell them straight up and right out loud that they can go to Hell.
Their conscience when not obviously nonexistent is no better than anyone else and they are seeking an office to represent the people.
That means they should, well in advance of any vote, be aware and responsive to what the pulse of this nation is and vote accordingly. No more blank checks hidden behind this empty and vacuous term of “conscience”, or worst yet the end run phrase of voting to represent just their constituency.
This house vote isn’t acceptable or in accord with what the majority of the people have in mind for these cuts or repairing this economy.
So there’s a grass roots movement for even those who don’t wish to get off the couch.
Let’s get back to electing people who genuinely want to represent all the people and this country and stop this “my constituency” and “vote my conscience” bullshit.
Take any 30 Congressmen/women and you might be lucky to put together one friggin’ conscience as far as the sick, elderly, or disenfranchised American is concerned.


Cher, after preparing this day’s Daily Planet, you deserved to tie one on! (Your typos last night were hilarious and I hope you’re feeling all frisky today.)

Question: Has there been a poll among the top 2% to determine what their tolerance is for a measly 4% tax increase? I’d be very interested to see that. It would be my fondest hope that those among us who have benefited most over the last few decades would be patriotic enough to step up to the plate and contribute back to the country that made their bounties possible.

KQµårk 死神

One of the big things that went under the radar in the budget talks was how the Repigs tried to get ride of one of the best parts of the ACA. They wanted to eliminate claims ratio language when insurance companies must put 80% of premiums towards provider claims. This is one of the big reasons Medicare Advantage is lower cost now.

Like I said in TimeOut for O/T the Ryan plan would not just end Medicare and Medicaid. It would end healthcare coverage for most seniors and the poor which would leave us with almost everyone uninsured save for the rich an people employed by companies that could afford the rocketing costs of healthcare insurance.

No time in history has any chamber of congress tried to take such a megastep backward. This Privatize Ryan budget travesty makes draconian welfare reform look like the nanny state.


Well, Cher- you just explained to FL how Rick Scott was elected.. grrr..


Cher, the President’s speech that we all admired for its clarity, strength and grace is apparently viewed differently by the Republics.

Anthony Wiener has a few tactful things to say about that:


kes, thanks for posting the interview! He is so good at saying what people are really thinking.
(I must confess though, when he said ‘President Weiner’ I laughed out loud..)

KQµårk 死神

Face it Kes Republicans are bullies and when they get smacked they respond in kind by whimpering and crying foul. They can’t accept that the president isn’t going to roll over for all their goon tactics. For all the shit the president takes from Republicans what I admire most is his ability to not let it affect him.


I like the advice: 1) stop making stupid proposals!


“Budget cuts disappearing in a cloud of smoke” sounds about right for a show based on smoke and mirrors, Cher.


As for Wisconsin, Walker, and his friends, are on a mission to save ____. Those people will consider the consequences tomorrow. If then.

These issues, as Obama says, will be settled in the election.
What the Democratic party and liberals have to do is clear: Organize. Recruit good, competent and honest candidates for HoR and Senate. Get them nominated. Get them elected. 218 in the House; 51 in the Senate.

As for the commentariat: Some of them, at times, make sense. But, making sense is a happy accident when they do. Most of it is tub thumping; or, polemical. Consider the source.

Fukuyama’s article made sense to me. I consider making sense to be a major accomplishment.


Yet ANOTHER wonderful submission, Cher… you do this site proud!

So far as Wisconsin is concerned…

It’s uncanny.

With every new assault on the rule of law..

With every new action…

With every new mugging of the people..

With every new attempt to take their elected office and create a personal fiefdom so as to lie, cheat, con and use the citizens as chattel to manipulate, negate, expropriate and preempt as they wish..

With every utterance emanating from their mouths like a putrescent, green fog they only amplify their breathtaking contempt for the electorate and their willful ignorance…

… and it only serves to illuminate their ingrained sociopathy…

With every, single step that they take, they are driving yet another nail into their own caskets… pounding them in harder with each blow…

Ready and eager to bury themselves and the entire, degenerate bagger agenda with them once and for all.

They’re almost finished.

Thank god.