Tag Archives: Andrew Samwick

Updates On The Cheeseheads

Andrew Sullivan rounds up reacts

Christian Schneider at The Corner:

On Wednesday night, Wisconsin Senate Republicans did what most people thought impossible — they passed Governor Scott Walker’s budget-repair bill virtually intact, without having to split out controversial provisions that limited the ability for government employees to collectively bargain.

A letter Democrat Senate Minority Leader Mark Miller sent the governor today, indicating Miller’s unwillingness to further negotiate any details of the bill, was what prompted the GOP’s decision to take the bill to the floor.

“It was like, ‘I’m in the minority, and I’m going to dictate to you what your options are,’” said one GOP source about Miller’s letter. It was just three days ago that Miller had sent Fitzgerald a letter urging more negotiations, despite the fact that Governor Walker had been negotiating with at least two Democrat senators for nearly a week. “With his recent letter, it became clear that all he wanted to do was stall,” said the GOP source.

Another action that provoked the GOP senators to act was Democrat Senator Lena Taylor’s very public decision to have a spring election absentee ballot sent to her in Illinois. The spring election is scheduled for April 5th, which indicated Taylor’s desire to stay out of the state for another month. “That sure didn’t help,” said one GOP source.

The Wisconsin Constitution requires a quorum of three-fifths of the Senate in order to pass a bill that “imposes, continues or renews a tax, or creates a debt or charge, or makes, continues or renews an appropriation of public or trust money, or releases, discharges or commutes a claim or demand of the state.” For weeks, it had been known that Republican senators could separate the fiscal provisions of the bill from the proposed collective-bargaining changes, which were seen as non-fiscal. However, there was speculation that, if a bill was brought to the Senate floor that contained only the collective bargaining changes, it might not have the votes to pass.

On Wednesday night, the bill passed with a number of provisions that could be considered “fiscal,” such as the requirement that many government employees contribute 5.8 percent of their salaries to their pensions and pay 12.6 percent towards their health-insurance premiums.

Conn Carroll at Heritage:

The courage of the Wisconsin Senate conservatives cannot be understated. Before the vote, lawmakers were threatened with death and physical violence. After the vote, thousands of protestersstormed into the capitol building, ignoring announcements from police that the building was closed. Once inside, and at great risk to the public welfare, activists handcuffed some doors to the capitol shut. When security escorted the Senators to another building, a Democrat tipped off the mob, which then surrounded their cars and tried to break their windows as Senators returned home.

Senate Democrats, who are still hiding in Illinois, are now claiming that the majority’s committee meeting that broke up the budget-repair bill violated Wisconsin’s Open Meetings Law. But the Open Meeting Compliance Guide clearly states that when there is “good cause,” only two hours’ notice is required. The Senate majority did provide the two hours’ notice. If the Senate Democrats’ 19-day refusal to show up for work wasn’t “good cause” enough, certainly minimizing the opportunity for union mob violence is.

The passion coming from liberal activists is understandable only if one believes in their apocalyptic rhetoric. Democratic Senator Timothy Cullen said the bill will “destroy public unions.” And Senator Chris Larson has said, “collective bargaining is a civil right” that if removed will “kill the middle class.” This is all false. First of all, since unions care more about seniority than good government, public-sector unions kill middle-class jobs; they do not protect them. Second, collective bargaining is not a right. And finally, Walker’s bill will in no way “destroy public unions.” Government unions are still perfectly free to practice their First Amendment rights to freedom of association, and in fact still retain more bargaining power than all unionized federal employees. They only difference is that now they will have to actively recruit members instead of forcing government employees to join them, and they will have to collect their own dues instead of getting the state government to take them directly out of workers’ paychecks. And there are many more benefits as well. Governor Walker writes in today’s Wall Street Journal:

When Gov. Mitch Daniels repealed collective bargaining in Indiana six years ago, it helped government become more efficient and responsive. The average pay for Indiana state employees has actually increased, and high-performing employees are rewarded with pay increases or bonuses when they do something exceptional.

Passing our budget-repair bill will help put similar reforms into place in Wisconsin. This will be good for the Badger State’s hard-working taxpayers. It will also be good for state and local government employees who overwhelmingly want to do their jobs well.

Even in good economic times, the case for government subsidies for radio stations, cowboy poetry, and union dues is very weak. But in a time of fiscal crisis, all of these subsidies are patently absurd. Taxpayers throughout the country should be inspired by Walker’s stand for common sense. We need more leadership like this in every state capitol and here in Washington.

E.D. Kain at Forbes:

And now conservatives have chosen public-sector workers and teachers as their hill to die on. They have followed the most radical voices in the party and the movement, and elected Scott Walker, Rick Scott, and various other Tea Party candidates. Heavily funded by big campaign donors like the Koch brothers and other corporate interests, the Republican party has made a concerted effort across the country to take on unions, public pensions, and social services for the poor.

Enabled by a strong school-reform movement within the Democratic party, emboldened Republicans have waged an all-out assault on teachers, public education, and public unions and masked it all in the language of school choice and accountability. And now, in Wisconsin, they have side-stepped the Democratic process and ended collective bargaining rights for public sector employees, even amidst huge protests and popular condemnation.

Republicans have a long history of union-busting and anti-labor rhetoric, but taking on teachers and cops is a big mistake. This blatant effort to weaken the Democratic party will have precisely the opposite effect.

The healthcare debate gave Republicans a chance to capture the narrative, spin the entire debate into one about fiscal ruin and deficits. Now Scott Walker has given progressives their chance. This is the Democrats chance to recapture that narrative, to turn the discussion back to the dignity of the middle class, to the importance of policies that do not simply push power and capital ever upward. This is the Republican’s Waterloo.

Nate Silver:

The quality of polling on the Wisconsin dispute has not been terrific. But there’s a general consensus — including in some polls sponsored by conservative groups — that the Republican position was unpopular, probably about as unpopular as the Democrats’ position on health care. And the most unpopular part of their position — limiting collective bargaining rights — was the one that Republicans passed last night.

Nor is the bill likely to become any more popular given the circumstances under which it passed. Yes, there’s some hypocrisy in claims by Democrats that the Wisconsin Republicans used trickery to pass the bill — they did, after all, approve it with an elected majority, just as Democrats did on the Affordable Care Act. Nevertheless, polling suggested that Wisconsinites, by a two to one majority, expected a compromise on the bill, which this decidedly was not.

One question is how much this might hurt Republicans at the state level. As David Dayen notes, Democrats will have opportunities to fight back almost immediately, including in an April 5 election that could swing the balance of the Wisconsin Supreme Court, as well as in efforts to recall Republican state senators. Essentially all of Wisconsin outside of the Madison and Milwaukee metropolitan areas is very evenly divided between Democrats and Republicans, so there could be a multiplier on even relatively small shifts in turnout or public opinion.

Andrew Samwick:

I refer to the passage of this bill as the end of the beginning — the opening salvo was to write the bill and find a way to pass it.  The next phase is to see if it can withstand legal challenges and recall efforts to change the legislative balance.  There will be some drama in that phase, but that’s not what really interests me.  The real issue comes in the next phase, assuming the law survives.  There will be two important questions:First, what will the strike that follows the implementation of the law look like?  Narrow or general?  How much support will the public sector unions get from other unions and non-union workers?  Will the disruptions to commerce be enough to get taxpayers and their representatives to fold?  Now that’s drama.

Second, what will happen in specific cases of local public sector employers negotiating with a stronger position?  Governor Walker defends his efforts partly as follows:

Local governments can’t pass budgets on a hope and a prayer. Beyond balancing budgets, our reforms give schools—as well as state and local governments—the tools to reward productive workers and improve their operations. Most crucially, our reforms confront the barriers of collective bargaining that currently block innovation and reform.

Suppose his intentions are borne out — teachers regarded as ineffective are not renewed, teachers regarded as effective are rewarded, or some combination of higher quality and lower cost emerges for people to see.  I am a strong believer that in a well functioning market, workers are protected by their ability to take their talents to another employer (Free to Choose, Chapter 8).  The key question will be whether the markets for public services at the local level function well enough for this to happen.  For an economist, that’s even more dramatic.

mistermix:

If the Wisconsin Republicans’ plan was to jam through the defeat of collective bargaining with a sketchy parliamentary move, they should have done it the minute that Democrats vacated the state. If that had happened, the howls would have been loud but fairly short-lived, since it’s easier to energize people when they’re trying to prevent something from happening, rather than complaining after the fact.

Instead, we have today’s trainwreck. Walker got his number one item, but he paid a huge price. He’s almost certainly a one-term governor. There’s a dissenting Republican in the Senate, and presumably we’ll hear more from him. If there’s a general strike, the union’s side of the case is now clearly outlined in the public mind. If the unions don’t strike, they look like paragons of restraint. And what about the recalls? No matter the outcome, they’ll occupy the press and public attention for the next few months.

The Democrats and unions took a sad song and made it better, as far as I can tell. One of the side-effects of our distraction-oriented media and low-information voters is that only one issue can be front-and-center in the public debate. Unions haven’t had much attention recently, so the slippery lies that blame them for all of our many ills have gone unchallenged. In Wisconsin, that’s not going to be the case for the next year or so.

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Bureau Of Labor Statistics, Work Your Magic On Us

Calculated Risk:

From the BLS:

Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).

Census 2010 hiring decreased 114,000 in August. Non-farm payroll employment increased 60,000 in July ex-Census.

Both June and July payroll employment were revised up. “June was revised from -221,000 to -175,000, and the change for July was revised from -131,000 to -54,000.”

Ryan Avent at Free Exchange at The Economist:

GIVEN the consistently disappointing data we’ve seen out of the American economy in recent weeks, the outlook for this morning’s August payroll employment report was uncomfortably uncertain. Initial jobless claims have risen ominously of late, and a number of indicators of economic activity have edged downward, leading some to believe that the Labour Department would provide evidence of a sharp retrenchment in labour markets for the month.

In fact, the figures aren’t that bad. The headline number is negative—off 54,000 for the month—but that’s overwhelmingly due to the continued drawdown in temporary census employment, which subtracted 114,000 jobs from the August report. Ex-census, the economy added 60,000 jobs in August. Private employment rose by 67,000 for the month. Since December of 2009, private employment has grown by a total of 763,000.

Meanwhile, revisions to previous months’ data indicated a better labour market performance than was previously believed. The June employment change was revised from a drop of 221,000 to a decline of 175,000, and the change in July was revised from a decline of 131,000 jobs to a dip of just 54,000. (In both cases, the headline negative figures were also attributable to the unwinding of temporary census hiring). July private employment growth was revised up to 107,000 jobs.

Daniel Indiviglio at The Atlantic:

So why did the unemployment rate manage to rise when most of the news is mildly good? First, because Census job losses are still hurting the overall numbers. Luckily, only 82,000 Census workers were left employed at the end of August. So subsequent months won’t be as affected as the past three, which registered six-digit job declines from this population of temporary workers.

The other factor here was seasonality. August is a month during which the seasonally-adjusted rate generally rises above the unadjusted rate. In fact, the unadjusted unemployment rate declined from 9.7% to 9.5%. Here’s how those two lines interact:

unemp seasonal 2010-08.png

Also, although it’s not shown here, the unadjusted U-6 rate also declined significantly, from 16.8% to 16.4%.

While it’s hard to get excited about a month when 54,000 more Americans were unemployed and the seasonally adjusted rate ticked up slightly, there’s definitely some reason for optimism in this report. The private sector continues to add jobs and most sub-sectors had more workers. There were also fewer long-term unemployed Americans.

Steve Benen:

Indeed, we’ve now seen eight consecutive months of job growth in the private sector, a streak we haven’t seen in a long while.

Also note, the job numbers for June and July were revised in a positive direction. While previous estimates showed the economy losing 221,000 jobs in June, the updated total was a loss of 175,000. In July, last month’s reporting showed a loss of 131,000 jobs, while the revised total was a loss of 54,000.

To be clear, it’s not my intention to sugarcoat the jobs report. The economy needs to be adding jobs — lots of them — right now, and as the chart below shows, the employment landscape’s head is not yet above water. Just to keep up with population growth, the economy needs to add about 150,000 jobs a month. To bring down the unemployment rate, the figure would have to be about double. We’re not even in the ballpark.

But for those looking for good news — or at least less-bad news — today’s jobs report offers at least a glimmer of hope. Things aren’t good, but nearly everyone expected them to be worse. (Dear Dems, don’t use that as a campaign slogan.)

Tim Cavanaugh at Reason:

What is to be done? Robert Reich stands on his desk and calls for — what else? — a second stimulus. Easy for him to say! Los Tiempos de Nueva York explains that nobody’s interested in buying another ticket for the Royal Nonesuch:

President Obama on Monday said his administration was weighing new steps to bolster the economy, but any measures are likely to be small. His options are limited given that Congress has shown little appetite for more spending before the midterm elections in November, in which Republicans are hoping to reclaim both the Senate and the House.

And nobody will ever invest in the stock market again.

Andrew Samwick

Ernest Istook at Heritage:

Credibility plummeted as well as White House happy talk didn’t match the stubbornly inconvenient facts.  Christina Romer, chairwoman of the White House Council of Economic Advisers, amazingly said the lousy August numbers “are reassuring that growth and recovery are continuing.”

Efforts to reach out to its usually-responsive youth audience were stymied by a National League of Cities’ report that began, “Summer jobs prospects for teenagers have been diminishing steadily over the past decade, but early data for June 2010 show that employment rates for the nation’s 16- to 19-year-olds have fallen to stunning new lows.”

It all prompted normally supportive liberal economist Paul Krugman to write, “This isn’t a recovery, in any sense that matters.”

The President had promised allies in Congress that the summer barnstorming tour would trumpet success and turn around the rotten poll numbers for him and his party.  He and the Vice-President made stops that included Ohio, Missouri, Michigan, Kentucky and Illinois, coinciding with fundraisers that included California, Illinois, Wisconsin, Florida, New York, Washington and Ohio.

But the message on Obama’s teleprompter differed dramatically from what everyday Americans were experiencing.  The New York Times put a “Welcome to the Recovery” title on a Pollyanna op-ed by Treasury Secretary Timothy Geithner.  But it was more believable when Geithner admitted to ABC News, “U.S. unemployment may rise again before it falls.  And the economy isn’t recovering rapidly enough.”

The White House and its allies bally-hoo their claims, but the contrast with the personal experience of most Americans is stark.  That’s unlikely to change even with the “re-education” efforts proposed by Health and Human Services Secretary Kathleen Sibelius about the vastly-unpopular Obamacare law.

Those re-education efforts may fall as flat as the classic question, “Who are you going to believe?  Me or your own lying eyes?”

Doug Mataconis:

The stock market seems to be reacting positively to these numbers based on pre-market trading, but there isn’t much good news politically here for the Obama Administration and Democrats. If nothing else, it pretty much confirms what’s in the mind of the public already, and there’s very little chance that the September jobs numbers will be all that better.

We may not be in a double dip recession, but it’s not much of a recovery either, and that’s bad news for the incumbent party

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We All Need Something To Write About In August

James Pethokoukis:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.

Daniel Indiviglio at The Atlantic:

First, this could really happen. The Treasury has unlimited discretion to plow as much money as it pleases into Fannie and Freddie. So adding several hundred billion dollars to the $150 billion already provided through their bailout would be as easy as the stroke of a pen. Moreover, the government’s other foreclosure efforts, particularly the HAMP program, have had lackluster success. This would provide the principal reductions that many progressives have been calling for to make for more effective modifications — but even for those who aren’t in danger of foreclosure.

Consequently, it would act as a stimulus. Let’s say your mortgage was based on original principal of $250,000. At 6% fixed interest, that would make your payment around $1500. But let’s say the housing bubble dropped your property value by 30%, so the home is only worth $175,000. Now, let’s say that you had paid off $25,000. That leaves $50,000 in principal that the GSEs could potentially write down. Suddenly, your payment would drop to as low as $1,050. What would you do with that extra $450 per month? The Obama administration would hope that you spend it!

This would effectively transfer wealth from all taxpayers to middle class homeowners, since it would only benefit those who have mortgages with the GSEs. The upper class generally has either very large (“jumbo) mortgages that don’t qualify for Fannie and Freddie’s backing or they own their home outright. Poorer Americans, however, don’t have mortgages at all — they rent. So they wouldn’t benefit either.

Whether or not this proposal would successfully stimulate the economy depends on the psychology of those lucky homeowners. We have seen recently that saving has been quite high. So it’s certainly conceivable that much or most of that mortgage payment reduction would be saved or used to pay down other debt. If the recipients spent it, however, then it would stimulate the economy.

Ryan Avent at Free Exchange at The Economist:

Such a move would raise some significant questions concerning issues of governance and the use of previously-private firms to support administration ends. Republicans would be furious. At the same time, it could be a nice shot in the arm for the economy (and, it goes without saying, the White House). But there are few good details to go on, and even less in the way of official substantiation. Who knows what the policy would actually look like or whether it’s truly on the table. But it’s August! Gotta write about something.

Annie Lowrey at The Washington Independent:

The question is whether this really is a good move politically if housing has stabilized. It will be expensive, very, very expensive. And my guess is that Republicans would love to campaign on this, easily and rightly characterized as a mass taxpayer bailout of underwater homeowners. For that reason, I would be surprised to see the administration do it. Forcing the banks to enact cramdown or changing bankruptcy laws would be one thing. But doing this through Treasury, politically, would be quite another.

Moe Lane:

You know, I happen to have an underwater mortgage: we bought our house at exactly the wrong moment in time. Do you know what we’re doing about it? WE’RE MAKING OUR MORTGAGE PAYMENTS, that’s what we’re doing about it. Because we sat down and worked out how much we could afford to spend beforehand, then we stuck to that number like glue.  In other words, I don’t need a handout to pay my bills, and I really don’t need to spend another insanely large sum of money (Hot Air thinks that it could reach 100 billion, which is a large sum of money, even today) that my kids are just going to have to repay later, after the President retires to the global cocktail circuit.  And I know that people are going to argue that the majority of Americans can be short-termed bribed in this fashion, but you know something?  I don’t think it’ll work.  Particularly when it comes to people who have kids.

At some point the Democrats are going to have to accept the fact that you cannot finesse your way out of some situations, and that this is one of those times.  Yes, it is going to be incredibly painful for long-term, still-serving federal politicians who can be linked to the crisis.  Yes, thanks to 2006 and 2008 that’s going to disproportionately hurt Democrats.  Yes, Republican and conservative operatives like myself will (deservedly) mock their pain for it.

Andrew Samwick:

If it happens, it will be just another example of why the government should not be involved in running business enterprises that could be done, even if imperfectly, in the private sector.  It will also be another example of how we have moved a bit further away from democracy in allowing such a move solely by the executive branch of government.

Calculated Risk:

The blog post includes the poorly considered proposal from Morgan Stanley (that Tom Lawler responded to last week), and an excerpt from a July 16th Goldman Sachs research note that suggested “while there are ways in which the GSEs could provide support through policy, the effects on the broader economy would ultimately be fairly modest.”

Not exactly foretelling a “gigantic bailout”.

This nonsense is part of the silly season. Sure, some small changes could be made to Fannie and Freddie, but nothing like this post would suggest.

Not. Gonna. Happen.

Alert Drudge and the tinfoil hat sites – they will run with this story. It is a political post … I’m already sorry I mentioned it.

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Lend Me Your Ears, And I’ll Sing You A Song

Andrew Taylor at Real Clear Politics:

In an election-year appeal to voters frustrated with Washington, House Republicans promised Thursday not to stuff any of this year’s spending bills with pet projects for their districts.

The promise comes a day after House Democrats banned earmarks to for-profit companies, ending a practice that in many cases created a cozy “pay-to-play” culture involving lawmakers and businesses whose Washington lobbyists often use campaign donations to help assure access.

Earmarks send taxpayer dollars to projects in lawmakers’ districts outside the competitive process required for other federal spending.

The House members’ actions follow a House Ethics Committee investigation of seven lawmakers for taking campaign donations from those who benefited from earmarks. The seven were absolved of wrongdoing, but the two parties are seeking political high ground with voters unhappy with Washington and out-of-control spending.

The effort may run into trouble in the Senate, where many lawmakers have made clear they have no interest in House Republicans’ self-imposed moratorium or House Democrats’ ban on earmarks to for-profit companies. That could set up contentious negotiations later this year, when the House and Senate must combine their versions of spending bills.

Instapundit:

Fewer earmarks are better earmarks.

Moe Lane at Redstate:

Rep. Pence calls it a ‘clean break,’ which it is: I forget who out there has noted that this has been at least partially brought about by it being an election year. Which is fine by me; fear of the consequences of ticking off the voters is a perfectly good motivational tool for keeping legislators in line, as the upcoming Congressional elections are going to demonstrate. There’s going to be a goodly number of Democratic object lessons Congressmen who are going to wish that they had trusted their instincts in that regard, in fact.

Brian Riedl at Heritage:

This is a strong positive development. Earmarks distribute government grants by politics rather than by merit. Instead of submitting a strong application to a federal agency, grant-seekers are often forced to hire lobbyists and make campaign donations. This corrupting process has resulted in multiple federal investigations, one of which concluded with a Member of Congress going to prison.

Reducing earmarks will not directly reduce the amount of money available for grantees. Instead, it will empower federal agencies to select grantees through a merit-based application process. For other programs, it means more funding will instead be distributed to state and local governments, who can better decide where to repair a road or how to revitalize a neighborhood than politicians in Washington D.C.

However, more work must be done. House Democrats still must agree on their earmark plan. Their plan should also be expanded to include non-profit organizations (who would also benefit from a system that distributes grants by merit rather than politics) as well as state and local governments (who should be able to receive their federal funds without the micromanagement of earmark instructions). The Senate should follow suit with a moratorium as well.

In addition, President Obama should sign an Executive Order banning all “phone-marks.” Phone-marking occurs when a lawmakers tries to circumvent an earmark ban by directly calling federal agencies and demanding that certain favored groups receive federal grants. Because they leave no paper trail, phone-marks are even less accountable than earmarks.

John Cole:

It makes no sense giving no-bid contracts via earmarks, so this is a welcome attempt at change, but I still find all the attention given to the relatively small amount of money spent on earmarks to be amusing. Hell, the Army spends more on diesel fuel and JP8 every year than congress spends on earmarks, and in a lot of cases, earmarks are completely legit.

Jim Antle at The American Spectator:

For a long time, I’ve viewed the campaign against earmarks as misguided. They represent about 1 percent of federal spending, making them a minuscule part of government growth. Eliminating them all wouldn’t even directly reduce any spending, it would merely affect how the spending is disbursed. It’s not clear that government spending controlled by unaccountable bureaucrats would be less wasteful. Attacking the log-rolling that is central to the legislative process seemed like barking at the moon.

A better approach to the earmarks issue, I’ve always argued, is to use them to demonstrate the absurdity of much of what government does and defeat much larger spending bills. My favorite example is the Clinton-era crime bill. Many conservatives argued against that piece of legislation, which contained billions of dollars in new social spending, on the basis of midnight basketball. Use midnight basketball to defeat the crime bill. Don’t take midnight basketball out of the bill and declare victory.

Having said all that, I think the time has come for the Republicans to adopt a moratorium on earmarks. It is simply a threshold issue for fiscal credibility. How many times have we heard that Republicans are taking a bold stand on this or that spending bill only to learn that they requested better than 40 percent of the earmarks? If Republicans have their names next to too many pork barrel projects, they will never be trusted to rein in more serious spending programs like entitlements.

Ezra Klein:

And Republicans haven’t sworn off earmarks. They’ve sworn them off for a year in which they are out of power and thus are not able to pass many of them. It’s good politics, but neither here nor there so far as the deficit is concerned.

Michelle Oddis at Human Events:

Heads turn now to the Senate where several Republicans have proposed a similar moratorium, but Sen. James Inhofe (R.-Okla.) says that he is against a ban on earmarks challenging many of his fellow conservative colleagues.

If you kill an earmark… it doesn’t save one cent, not a cent, it is merely ceded to the Executive Branch,” says Inhofe.

Inhofe then used an example from the Bush administration explaining that President Bush only passed two out of 12 appropriation bills in 2007. “All they did [with the failed bills] was take the amount of money that would have been appropriated and put it into grants, and used the present budget and, of course, unelected bureaucrats were the ones making the distributions.”

Andrew Samwick:

I am all for eliminating earmarks to for-profit companies and for extending it to non-profits as well.  All discretionary money should be awarded on an open, competitive basis, with oversight of the executive branch agencies by appropriate Congressional committees.  Earmarks have no place in federal spending, as a matter of principle.

Stan Collender:

But there are three reasons why no one should get too excited about the recent developments:

1.  As Andrew notes and I’ve remarked on previously, eliminating earmarks doesn’t actually reduce spending; all it does is change who makes the decision from Congress to an executive branch agency.  Unless the appropriation is reduced at the same time the earmark is eliminated, which no one is suggesting, the amount that will be spent will remain the same.

2.  Also as Andrew points out, even if all earmarks were eliminated and appropriations were cut by a corresponding amount, the amount that spending would be reduced would be relatively small and certainly not enough to make an appreciable difference in the deficit outlook.  It’s not that $20 billion or so isn’t a great deal of money.  It’s just that $20 billion a year less in discretionary spending is barely a rounding error compared to the magnitude of what will need to be done when deficit reduction is the correct fiscal policy.

3.  The earmark limits are only being proposed in the House.  So far there has been no corresponding effort in the Senate…and none is expected.  That almost certainly means that there will be earmarks in fiscal 2011 but they’ll emanate from the north rather than the south side of Capital Hill.

Bruce Bartlett:

It’s obviously true that earmarks are not a significant cause of rising federal spending; eliminating all of them will save at most one percent of the budget. I’ve always suspected that this is the main reason why right wingers focus on them so obsessively–it makes them look tough on spending while actually doing nothing meaningful to cut it.

That said, I think earmarks are underrated in terms of their contribution to corruption. It’s really poisonous when members of Congress can so easily direct federal spending to a favored business in order to attract campaign contributions or just the mistaken belief that they are doing something for their district by helping out a local company.

Furthermore, I think the idea that if Congress stops earmarking that they will somehow disappear is ludicrous. It will just increase congressional pressure on the administration to include favored projects in the president’s budget, which for some reason is always treated as being earmark-free.

Kevin Drum:

Everyone assumes that they raise spending, but they don’t. They just redirect it. I don’t understand why earmark opponents endlessly get away with pretending otherwise.

In fairness, if earmarks were eliminated and the related budget authority were eliminated too, it would cut spending a bit. But that’s not what anyone is proposing. Until they do, the posturing is even worse than Bruce suggests.

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No Change Of Mind Left Behind

Diane Ravitch’s new book The Death and Life of the Great American School System here.

NPR:

In 2005, former Assistant Secretary of Education Diane Ravitch wrote, “We should thank President George W. Bush and Congress for passing the No Child Left Behind Act … All this attention and focus is paying off for younger students, who are reading and solving mathematics problems better than their parents’ generation.”

Four years later, Ravitch has changed her mind.

“I was known as a conservative advocate of many of these policies,” Ravitch says. “But I’ve looked at the evidence and I’ve concluded they’re wrong. They’ve put us on the wrong track. I feel passionately about the improvement of public education and I don’t think any of this is going to improve public education.”

Ravitch has written a book about what she sees as the failure of No Child Left Behind called The Death and Life of the Great American School System. She says one of her biggest concerns is the way the law requires school districts to use standardized testing.

Tyler Cowen:

Her bottom line is this:

The more uneasy I grew with the agenda of choice and accountability, the more I realized that I am too “conservative” to embrace an agenda whose end result is entirely speculative and uncertain.  The effort to upend American public education and replace it with something market-based began to feel too radical for me.  I concluded that I could not countenance any reforms that might have the effect — intended or unintended — of undermining public education.

Ravitch of course was once the number one advocate of these very ideas; read this excellent article on her intellectual evolution.

Overall it is a serious book worth reading and it has some good arguments to establish the view — as I interpret it — that both vouchers and school accountability are overrated ideas by their proponents.  (Short of turning the world upside down, some school districts will only get so good; conversely many public schools around the world are excellent.)  But are they bad ideas outright?  Ravitch doesn’t do much to contest the quantitative evidence in their favor.  There are many studies on vouchers, some surveyed here.  Charter schools also seem like a good idea.

Jessica Olien at The Atlantic:

An interview with Ravitch followed a story about Central Falls High in Rhode Island which recently fired its entire staff of teachers because of low achieving students.

An emphasis on test scores can make it hard for teachers in poorer schools to get ahead. When their entire performance is based on the tests and they are rewarded or punished accordingly it can seem like the system gives wealthier schools an automatic advantage. As a result, Ravitch says that the testing encourages schools desperate for funding to game the system.

When asked whether it was healthy to have some competition in the education marketplace, Ravitch countered that “there should be no education marketplace,” emphasizing that education for children is not meant to be run like a business.

“Schools operate fundamentally — or should operate — like families. The fundamental principle by which education proceeds is collaboration. Teachers are supposed to share what works; schools are supposed to get together and talk about what’s [been successful] for them. They’re not supposed to hide their trade secrets and have a survival of the fittest competition with the school down the block.”

Alan Gottlieb at Huffington Post:

Ravitch raises red flags about charter schools and the foundations that promote them. While it might not be these foundations’ intentional agenda to destroy American public education, she says, their pushing of charters, choice and accountability are doing just that.

Echoing many of the arguments of teachers’ unions across the country, Ravitch says that charters drain the best, most motivated students from regular public schools, leaving those schools in a death spiral, for which they are then blamed.

“As currently configured, charter schools are havens for the motivated,” Ravitch writes. “As more charter schools open, the dilemma of educating all students will grow sharper. The resolution of this dilemma will determine the fate of public education.”

The problem with this argument, of course, is that it implies that ‘motivated’ students from low-income families should be denied the opportunity for a better education so that the institution of public education, which has served them badly, survives to fail another day.

Here I side with Howard Fuller, who on a recent Denver visit proclaimed: “I am from the Harriet Tubman school of education reform.” Every kid who escapes a bad educational environment is one more kid with a better chance at a fulfilling life.

Ravitch excoriates the Bill and Melinda Gates Foundation, the Walton Family Foundation and the Eli and Edythe Broad Foundation for being unelected policy-making monoliths, utterly unaccountable, that are shaping the direction (or as she would argue, dismantling) of public education.

“There is something fundamentally antidemocratic about relinquishing control of the public education policy agenda to private foundations run by society’s wealthiest people,” she writes.

…The foundations demand that public schools and teachers be held accountable for performance, but they themselves are accountable to no one. If their plans fail, no sanctions are levied against them. They are bastions of unaccountable power.I ask Ravitch: To whom, then, should we cede control over public education? An answer as banal as “the people” won’t cut it. Elected school boards? Their failures, especially in big cities, are the stuff of legend.

Andrew Samwick:

Competition and collaboration are not mutually exclusive.  Far from it — almost everywhere you look in nature, the winners of “survival of the fittest competition” are the entities that found ways to collaborate and succeed.  (Cue Richard Dawkins.)  But what does not occur in nature or society, because it is not viable over any reasonable length of time, is a strategy of making a “family” out of disparate actors just by placing them near each other.  (Cue F. A. Hayek?)  Families involve tremendous amounts of sacrifice of the selfish interests of one member for those of another.  The willingness to do that systematically does not occur without strong bonds of kinship.

It is in fact a mistake to think that choice and accountability by themselves will be enough to improve performance, without the other elements of a competitive marketplace.  The most important of those elements is freedom of entry by any producer who thinks he can do a better job than the current producers.  Consider Ravitch’s disappointment with NCLB to date, as quoted in Chapter 6 of her book:

But what was especially striking was that many parents and students did not want to leave their neighborhood school, even if the federal government offered them free transportation and the promise of a better school. The parents of English-language learners tended to prefer their neighborhood school, which was familiar to them, even if the federal government said it was failing. A school superintendent told Betts that choice was not popular in his county, because “most people want their local school to be successful, and because they don’t find it convenient to get their children across town.” Some excellent schools failed to meet AYP because only one subgroup — usually children with disabilities — did not make adequate progress. In such schools, the children in every other subgroup did make progress, were very happy with the school, did not consider it a failing school, and saw no reason to leave.

Schools have many characteristics.  So-called performance, as measured by standardized tests, is only one such characteristic.  What the paragraph reveals is that location is important as well.  And in most cases, the school district has not allowed an alternative provider to come into the market and match the existing school on all of its non-performance characteristics while improving performance.  There is, in most cases, still a local monopoly on enough of the characteristics that matter.  Unless you break that monopoly, until you do in fact allow direct competition with “the school down the block,” you should not expect to be treated to service that is any better than what you typically get as a member of a captive audience.

Monica Potts in Tapped:

The idea of school choice fuels the charter school and voucher systems, and the hope is schools become better through a sense of competition. A steady, if unproven, criticism of school choice systems is that the best schools simply enroll the best students. Even if they don’t actively do so, there could be a self-selection bias in the parents who actively seek out better schools to send their children to. But research found the biggest problem was that parents who were offered the chance to enroll students in better schools often did not do so. They liked the idea of the school as being part of the community. After looking at the data, Ravitch now feels that’s an idea worth going back to.

UPDATE: Robert VerBruggen at NRO

Ramesh Ponnuru at The Corner

Austin Bramwell at The American Conservative

UPDATE #2: Jim Pinkerton and Robert Wright on Bloggingheads

E.D. Kain at The League

Kevin Drum

Ryan Avent

More Kain

UPDATE #3: Kain again

Even More Kain

Rick Hess at Education Week

UPDATE #4: Kevin Carey at TNR

Rod Dreher

Sonny Bunch at Doublethink, here and here

UPDATE #5: DiA at The Economist

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Filed under Books, Education

A Children’s Primer To The Various Points Of The Reconciliation Debate

Julie Rovner at NPR:

To reconcile or not to reconcile — when it comes to a health overhaul bill, that seems to be the biggest argument of the moment.

At issue is a process called budget reconciliation. By writing Obama’s health care plan as a budget bill, Democrats can prevent a Republican filibuster in the Senate and advance the bill with a simple majority instead of the 60-vote supermajority they no longer have.

Not surprisingly, that has Republicans crying foul. Budget reconciliation, Sen. John Kyl (R-AZ) told reporters Tuesday, “was never designed for a large, comprehensive piece of legislation such as health care, as you all know. It’s a budget exercise, and that’s why some refer to it as the ‘nuclear option.'”

“The use of expedited reconciliation process to push through more dramatic changes to a health care bill of such size, scope and magnitude is unprecedented,” Sen. Orrin Hatch (R-UT) wrote in a letter to President Obama on Monday, urging him to renounce the possibility of trying to pass a bill using the procedure.

But health care and reconciliation actually have a lengthy history. “In fact, the way in which virtually all of health reform, with very, very limited exceptions, has happened over the past 30 years has been the reconciliation process,” says Sara Rosenbaum, who chairs the Department of Health Policy at George Washington University.

For example, the law that lets people keep their employers’ health insurance after they leave their jobs is called COBRA, not because it has anything to do with snakes, but because it was included as one fairly minor provision in a huge reconciliation bill, she says.

“The correct name is continuation benefits. And the only reason it’s called COBRA is because it was contained in the Consolidated Omnibus Budget Reconciliation Act of 1985; and that is how we came up with the name COBRA,” she says.

COBRA, which confusingly did not become law until 1986, was actually a much larger bill, including many nonhealth provisions and many other important health provisions as well (see chart). Among them was the so-called Emergency Medical Treatment and Active Labor Act (EMTALA), which requires hospitals that accept Medicare or Medicaid payments to at least screen patients who arrive for emergency treatment, regardless of their ability to pay.

Tim Noah in Slate:

“You know, we’ve witnessed the Cornhusker Kickback, the Louisiana Purchase, the Gatorade, the special deal for Florida,” Senate Minority Leader Mitch McConnell said Feb. 22 on Fox News.* “Now they are suggesting they might use a device which has never been used for this kind of major systemic reform.” Sen. Orrin Hatch, R.-Utah, wrote Feb. 23 on USA Today’s Web site that the Obama White House is engaged in “an all-out push for the highly partisan ‘nuclear option’ of reconciliation, special rules to circumvent bipartisan Senate opposition, to jam this bill through Congress. To be clear, this procedure was never contemplated for legislation of this magnitude.” Sen. Chuck Grassley, R.-Iowa, said Aug. 23 on CBS News’ Face the Nation, “If you have reconciliation, it’s a partisan approach.” Sen. Olympia Snowe, R.-Me., said much the same in April. “If they exercise that tool,” she told the Washington Post, “it’s going to be infinitely more difficult to bridge the partisan divide.”

But look at the Senate roll call on the conference report for the 1996 welfare reform bill, the most momentous piece of social legislation to become law in the last 20 years. The bill’s formal name was the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (italics mine). It was called that because it passed the Senate through budget reconciliation, even though the bill’s purpose (“ending welfare as we know it”) was only peripherally about trimming the federal budget. Yet McConnell voted for the bill. So did Hatch, Grassley, Snowe, and every other Republican in the Senate. So, for that matter, did most Democrats.

Why did the Republican-controlled Senate use reconciliation to pass welfare reform? Interestingly, when I posed that question to several welfare-reform experts—including one person (Ron Haskins, senior fellow at the Brookings Institution) who’s published a narrative history of it—none could immediately remember why. Why couldn’t they remember? Because the decision to use reconciliation was one of the least remarkable things about the bill.

Ezra Klein:

Elsewhere, political scientist Joshua Tucker found a Congressional Research Service report (pdf) listing every time reconciliation was used between 1981 and 2005, and he built a rough model testing which party used the process more frequently. During that period, there were 19 reconciliation bills, 11 of which were signed by Republican presidents, five of which were signed by Democratic presidents, three of which were vetoed by Democratic presidents, and none of which were vetoed by Republican presidents. “By my admittedly simple classification scheme,” Tucker concludes, “this would suggest that 14 of the 19 times reconciliation was used between FY1981 – FY2005, it was used to advance Republican interests.”

The real story lurking in these arguments is that reconciliation has become the normal process for many of the most important bills in recent years. The Bush tax cuts went through reconciliation. Welfare reform went through reconciliation. The Balanced Budget Act of 1997 went through reconciliation. We’ve never really discussed the fact that we have a majority-rules process tucked inside the supermajority Senate (in part because the realization that we have a supermajority Senate is relatively recent), but it’s been key to getting anything done for at least 20 years now, and it will be an even more constant presence in the next 20 years.

Jay Cost at Real Clear Politics:

Reconciliation bills have a privileged status on the Senate floor. There is no debate on whether to begin consideration of a reconciliation bill. Proposed amendments must be germane to the bill. Debate on the bill and any amendments to it is limited to 20 hours. If you’ve ever heard the phrase “vote-a-rama,” this is where it comes from: when the time limit for debate on a reconciliation bill has been reached, remaining amendments are voted on in quick succession.

All of this is designed to facilitate Congress in making a budget plan, then actually sticking to it. Of course, determined congressional majorities, especially when given clear guidance by a determined President, have used reconciliations rules for purposes beyond the original intent. The first notable event in this history occurred in 1981 when President Reagan and the GOP Senate majority used it to cut spending and taxes by a significant amount. As legislative expert Walter Oleszek has written, “Never before had reconciliation been employed on such a grand scale.”

Liberals like Klein will suggest that this justifies, in some ethical sense, the use that Harry Reid is now apparently planning for budget reconciliation. Conservatives will use words like “jam” and “ram” and phrases like “the nuclear option” to argue that there is no such justification.

When it comes to legislative procedure, I am a strict Hobbesian. There is what a Senate majority can do, and what it can’t do. “Appropriate” or “inappropriate” are not applicable phrases. Congress is sovereign over its own procedures, which are the product of self-interested members working to secure reelection and/or policy goals. Morality doesn’t enter into it. (See the note at the bottom of this post for another thought on this topic.)

I’ll go a step further to suggest that people with strong policy preferences should rarely be listened to in a debate about appropriate procedure. People who care intensely about the final vote tally often don’t care how the votes are counted, so long as they get their preferred outcome. This is why there was no hue and cry coming from most of these born-again majoritarians on the left when the Democrats were looking to filibuster judicial nominees in 2005. It is easy to find numerous examples of conservative hypocrisy on this subject, too.

Michael Gerson in WaPo:

Obama now approaches the Rubicon. The Senate is in disarray. Its procedures frustrate his purposes. Before crossing the river with his army, Julius Caesar is reported to have said, “Let the dice fly high!” For what stakes does Obama gamble?

First, the imposition of a House-Senate health-reform hybrid would confirm the worst modern image of the Democratic Party, that of intellectual arrogance. Parties hurt themselves most when they confirm a destructive public judgment. In this case, Americans would see Democrats pushing a high-handed statism. It is amazing how both parties, when given power, seem compelled to inhabit their own caricatures.

Second, this approach would almost certainly maintain conservative and Republican intensity through the November elections. In midterm elections, it is intensity that turns a trend into a rout. It is one thing to pour gasoline on a populist bonfire. It is another thing to pour gasoline on a populist bonfire while one is already being roasted.

Third, this action would undermine Obama’s own State of the Union strategy, which seemed like a shift toward the economy and away from health-care reform. The White House finds it impossible to settle on a strategy and stick with it. Democrats keep being drawn back into debates — Reid is now proposing the return of the “public option” — they have lost decisively, as if one more spin of the roulette wheel will recover their losses.

Fourth, a reconciliation strategy would both insult House and Senate Republicans and motivate them for future fights. The minority would not only be defeated on health reform but its rights would be permanently diminished — a development that would certainly be turned against Democrats when they lose their majority. Each side would have an excuse for decades of bitterness, creating a kind of political karma in which angry spirits are reincarnated again and again, to fight the same battles and suffer the same wounds.

Fifth, Obama would manage to betray many politically vulnerable members of his own party, proving himself a party leader of exceptional selfishness. Because the legacy of his presidency is at stake, or because of his pride, or because he is ideologically committed to an expanded public role in health care, Obama is pressuring Democratic members to join a suicide pact. When a president doesn’t care about his party, his party eventually ceases to care about him.

Democratic leaders respond: Since we have already taken the damage for proposing health reform, we might as well get the benefit for passing something. But there is always more damage to be taken on a self-destructive political path. And, in this case, there is a respectable alternative: approve and take credit for incremental reforms while blaming Republicans for blocking broader changes.

Obama’s decision on the use of reconciliation will define his presidency. If he trusts in his charmed political fortunes and lets the dice fly, it will raise the deepest questions about his judgment.

Breitbart.TV

Ed Morrissey:

Or maybe God just figured that Joe Biden wasn’t terribly serious about this 2005 prayer, unearthed by Breitbart TV and Naked Emperor News today. He was not the only Democrat bemoaning “majoritarian, absolute power,” either, or complaining about unilateral rules changes at that time. Barack Obama and Hillary Clinton join Biden as current administration officials who have suddenly seen the light of majoritarian power:

[…]

“I pray God when the Democrats take back control we don’t make the kind of naked power grab you are doing.”

Dianne Feinstein said on the Senate floor that “it begins with judicial nominations, next will be executive appointments, and then legislation.” Now, Democrats want to skip over the first two — which never happened — and leap right to legislation. Chuck Schumer called the 2005 suggestion to exempt judicial nominations from the filibuster as “almost a temper tantrum”; if that was the case in 2005, what does 2010 represent? A psychotic break from reality? Strauitjacket time?

It smells like desperation from a political party groaning under the heavy burden … of an eighteen-seat majority.

UPDATE: Ezra Klein

Jonathan Chait at TNR

UPDATE #2: Greg Sargent

Orrin Hatch in WaPo

Andrew Samwick

Atrios

UPDATE #3: Rachel Maddow:

Michelle Malkin

Jonathan Cohn at TNR

Ezra Klein

Daniel Foster at NRO

Brian Darling at Redstate

Ana Marie Cox and Rich Lowry at Bloggingheads

UPDATE #4: EJ Dionne in WaPo

UPDATE #5: Mike Allen at Politico

Jonathan Chait at TNR

Paul Krugman

Brad DeLong

John Cole

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Filed under Health Care, Legislation Pending