The new “Chicken Hawks”

Dean Baker nails it, The Budget Deficit Chicken Hawks.

Most people are familiar with the concept of “chicken hawks.” Chicken hawks are the politicians who are anxious to send other people to risk their lives in war, but somehow managed to avoid service when they had the opportunity to fight themselves. Former Vice-President Dick Cheney and former President George W. Bush are the leading members of the chicken hawk society.

It turns out that we have a similar story with budget policy, where there appears to be a large contingent of budget deficit chicken hawks. The deficit hawks have been filling the news lately. These are the folks who are yelling that something terrible will happen if we don’t reduce the deficit. Most of them seem to have missed the fact that something terrible is now happening. We have almost 15 million people unemployed and 9 million underemployed, with several million facing the loss of their home in the next few years.

People of all ages are seeing their lives wrecked by a economic disaster that was entirely preventable, if the folks running economic policy were not too incompetent to notice an $8 trillion housing bubble. In fact, one of the reasons that this bubble did not get noticed was that, even before the bubble burst – creating large deficits – the deficit hawks were running around yelling about the deficits. These deficit hawks were able to get far more attention for their whining than the people who were warning about the dangers posed by the housing bubble.

Now that we have seen the collapse, rather than supporting action to get the economy back on its feet, the deficit hawks are again yelling about the long-term deficit. But what is really striking is that many of the people who whine loudest about the deficit are the most reluctant to take steps to reduce the deficit – at least when it involves powerful interest groups.

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It is not only Wall Street that is protected by the deficit chicken hawks. The insurance and pharmaceutical industries can also count on the deficit chicken hawks. As all budget analysts know, the country’s long-term budget problem is due to our broken health care system. We pay more than twice as much per person as the average in other wealthy countries.

But the deficit hawks are scared to talk about fixing the health care system. This would hurt the insurance industry, the pharmaceutical industry, and other powerful interest groups. When America Speaks came to health care, they said reform was off limits. They only wanted participants to talk about cutting Medicare and Medicaid. The elderly and the poor don’t have powerful lobbies like the industry groups.

Basically, the deficit chicken hawks want deficit reduction, but they only want it to be at the expense of the elderly and the poor, hence, their attacks on Social Security and Medicare. Of course, the public is not anxious to go along with gutting the programs on which they and their parents depend, which is why the deficit chicken hawks prefer to do their work through commissions that hold secret meetings.

The deficit chicken hawks also don’t have much commitment to honesty. When America Speaks reported its results to the public and President Obama’s deficit commission, it noted that one cut to Social Security, raising the retirement age, got majority support from participants. However, it turns out that this result was based on a software error. When the error was corrected, support fell to 39 percent.

Remarkably, America Speaks did not have the integrity to publicly acknowledge and correct this mistake. It just quietly changed the number on its web site. This is the sort of behavior we should expect from deficit chicken hawks, who want to attack the programs on which so many ordinary working people depend, while protecting the interests of the rich and powerful.

There is no crisis or deficit when it comes to Social Security. Every discussion about the deficit must start and end with letting the Bush Tax Cuts expire.

The deficit now and in the future, Social Security has nothing to do with it

Our deficit issue(s) in this country can be explained and fixed very easily. But one thing must be pointed out from the beginning. There is no crisis when it comes to Social Security.

Social Security now or in the future has nothing to do with the deficit.  Doing anything to Social Security or it’s benefits now or in the future will do nothing to fix our current deficit problems.

In the short-term our deficit is caused largely by three things. As this graph shows those are – the Bush Tax Cuts, two wars, and the economic slow down.

In the long-term the deficit problem is caused by the explosion in the cost of health care. Without some form of cost control, like a public option, health insurance corporations will not cut costs. The CBO released a letter yesterday stating that a public option for health care would cut the budget by $68 billion through 2020.

CBO estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges. The differences between the premiums of the public plan and the average premiums of private plans would vary across the country because of geographic differences in the plans’ relative costs. Those differences in premiums would reflect the net impact of differences in the factors that affect all health insurance premiums, including the rates paid to providers, administrative costs, the degree of benefit management applied to control spending, and the characteristics of the enrollees.

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The bulk of those budgetary effects would occur in the second half of the decade; the savings estimated for 2019 are about $14 billion. Although CBO and JCT have not yet extended to 2020 the models they use to estimate insurance coverage, the proposal would probably reduce the federal budget deficit by about $15 billion in that year, bringing the total budgetary savings through 2020 to about $68 billion. As discussed in CBO’s letter, those estimates are smaller than figures that have been previously reported regarding the savings from establishing a similar public plan because those previous estimates were related to legislation that differed in a number of ways from what was enacted.

It is obvious to anyone who takes the time to learn about the issue that Social Security has nothing to do with the deficit now or in the future. Also watch these tow videos. First this one from Strengthen Social Security.

There was also panel from yesterday at Netroots Nation titled “Obama’s Social Security ‘Death Panel’”. (Link to video here – scroll through related videos until you see the title). Here’s a liveblog of the panel. And

Hard to argue with

This is hard to argue with, Krugman, My Obama Problem.

John Boehner, March 2009:

It’s time for government to tighten their belts and show the American people that we ‘get’ it

Barack Obama, yesterday:

“At a time when so many families are tightening their belts, he’s going to make sure that the government continues to tighten its own,” Obama said. “

We’ll never know how differently the politics would have played if Obama, instead of systematically echoing and giving credibility to all the arguments of the people who want to destroy him, had actually stood up for a different economic philosophy. But we do know how his actual strategy has worked, and it hasn’t been a success.

Either is this, The revolving door spins faster on health care reform.

Beginning in 2001, Liz Fowler was the Chief Counsel for the Senate Finance Committee in charge of health and entitlement issues, i.e., legislation that primarily affected the health care industry.  As her own biography boasts:

In this capacity, she was responsible for overseeing health policy issues within the Committee’s jurisdiction, including Medicare, Medicaid, SCHIP, health tax issues and initiatives to provide health coverage for the uninsured. She played a key role in the 2003 Medicare Prescription Drug, Improvement and Modernization Act (MMA).

Her work in that government position on health care was apparently quite pleasing to the health care industry because, in 2006, she was hired by the health care giant WellPoint to serve as its Vice President for Public Policy and External Affairs — in other words, overseeing WellPoint’s lobbying and other government-influencing activities.  Then, in 2008, once it was likely that there would be a Democratic President and thus a new, massive health care bill enacted, Fowler left WellPoint and returned to the Senate, as top aide to Democratic Sen. Max Baucus, the Senate Finance Committee Chairman who would oversee the drafting of the health care bill (Baucus’s previous top health care aide, Michelle Easton, a former PhRMA official, left to become a lobbyist for the health care industry).  Now, as David Sirota noted last night, Fowler has a brand new job, as reported by The Billings Gazette:

Liz Fowler, a key staffer for U.S. Sen. Max Baucus who helped draft the federal health reform bill enacted in March, is joining the Obama administration to help implement the new law.

Fowler, chief health counsel for the Senate Finance Committee, which Baucus chairs, will become deputy director of the Office of Consumer Information and Oversight at the U.S. Department of Health and Human Services.

In other words, implementation of the massive health care bill just enacted by the Congress will be overseen by a former high-level executive of the nation’s largest private health insurer.  As Marcy Wheeler writes:  ”It’s a nice trick: send your VP to write a law mandating that the middle class buy shitty products like yours, then watch that VP move into the executive branch to ‘oversee’ the implementation of the law.”  Indeed, Fowler played a crucial role in shaping the health care bill to ensure there was no public option and to compel every single American to purchase the products of the private health care industry (including those of her former employer).  As Politico put it last year:  ”If you drew an organizational chart of major players in the Senate health care negotiations, Fowler would be the chief operating officer.”  It was Fowler who was literally writing the health care bills for Baucus which, at least at the time, progressives found so objectionable.

Or this.