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Posted at 8:39 AM ET, 01/ 3/2011

The Morning Plum

By Greg Sargent

* First question of the new year: Are Dems really going to go on offense against health reform repeal? And we're off and running! With the new House GOP leadership vowing to vote to repeal health reform before Obama's State of the Union address, the looming question is: How aggressively will Dems respond?

The New York Times assures us Dem leaders plan to go on offense in a big way, viewing the debate over repeal as a second chance to make the case for health reform:

Democrats, who in many cases looked on the law as a rabid beast best avoided in the fall elections, are reversing course, gearing up for a coordinated all-out effort to preserve and defend it.

Good news, if true. Another reason Dems need to be aggressive and proactive in pushing back against repeal: Obama will make health reform, his signature domestic achievement, a centerpiece in the case for reelection. In this sense, the repeal wars -- which will stretch far beyond this one vote into battles over GOP efforts to defend the law -- represent the first real skirmishing of the 2012 presidential race. So Dems need to fight this one on all cylinders.

* But will some "moderate" Dems play footsie with repeal?: A key House GOPer leading the repeal charge says Repubs may secure a veto-proof repeal majority for repeal with the help of Democrats who voted against reform -- though as Sam Stein points out, this is a rather "optimistic consideration of the congressional landscape."

Either way, "moderate" Dems flirting with the GOP repeal push is definitely something to keep an eye out for.

* Meanwhile, the fabled "government takeover" proceeds apace: Amid all the talk of repeal, creeping socialism continues to creep: Two of the most frightful provisions of health reform begin to take effect this year.

* Boehner to avoid pitfalls that claimed Gingrich? Perhaps mindful of the perils of throwing too much weight around early on, new House Speaker John Boehner plans to keep a low profile, setting a tone of austerity and modesty by reading the Constitution aloud and undertaking a symbolic 5 percent cut in Congressional office spending.

* Darrell Issa's choice: Will the GOP Congressman leading probes into the Obama administration avoid partisan bomb-throwing and focus mostly on accounting and government waste, or will he become the Don Quixote of the House GOP leadership, tilting his lance at "scandals" in every direction?

The early signs are mixed: He claims he'll focus mostly on ways to save taxpayers $200 billion, but he also continues to describe the Obama administration as "one of the most corrupt."

* Dems already gearing up for 2012 Congressional elections? New DCCC chairman Steve Israel says Dems are already targeting 68 GOP-held House districts won by Barack Obama in 2008, and predicts "buyers remorse" will enable Dems to take back at least the 25 they need to recapture the House. But: Redistricting!

* Political constraints on GOP majority? Relatedly, E.J. Dionne notes this morning that House GOPers in Obama districts will be reluctant to follow the Tea Party brigade over a cliff, suggesting some political constraints on the new GOP majority, at least in theory.

* Dem leaders to cut deal with GOP on filibuster reform? ICYMI, Jonathan Bernstein has a useful roadmap to what lies ahead, including the possibility that Harry Reid and Mitch McConnell could privately cut a deal on more modest measures than those sought by younger Dem reformers.

Atrios gently suggests that perhaps Dem leaders should be wary of reaching such a "deal," since so doing would inevitably be more in the interests of Republicans.

* Meanwhile: One of those reformers, Senator Tom Udall, insists momentum is building for a package of reforms that would eliminate "secret holds" and force senators to actually filibuster.

This will be a big story this week; we'll be blogging it right here.

* Public workers are the new welfare queens, ctd: Michael Powell has an interesting look at the national war on public workers, including the reality check that "public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers."

* Reality check of the day: For all the recent optimism about various indicators suggesting an economic turnaround, Paul Krugman warns that it won't amount to diddly, politically or otherwise, if unemployment doesn't come down significantly, which looks unlikely.

Also key: With Republicans and even some "moderate" Dems insisting that government spending is our main problem, "the best we can hope for from fiscal policy is that Washington doesn't actively undermine the recovery."

* Coming political skirmish of the week: The debt ceiling! Tea Party chieftain Jim DeMint is demanding a "big showdown" with Dems over increasing the debt ceiling, suggesting the Tea Party is dead serious about making this happen.

But top Obama economic adviser Austan Goolsbee is warning that "playing chicken" with the debt ceiling risks the "first default in history caused purely by insanity."

* Media dynamic worth watching: Steve Benen wonders when commentators will venture a few suggestions to the new GOP majority in order to reach compromise with Obama and Dems, rather than the other way around.

* And the public still favors higher taxes on the rich: A new 60 Minutes/Vanity Fair poll finds that a solid 61 percent favors higher taxes on the wealthy as the best means to curb the deficit. So let's hope Obama makes good on his vow to refight this battle in 2012.

Apparently the silly American public still hasn't gotten the memo explaining that tax cuts for the rich don't cost anything.

What else is happening?

By Greg Sargent  | January 3, 2011; 8:39 AM ET
Categories:  2012, Health reform, House GOPers, Political media, Senate Dems, Senate Republicans, filibuster, taxes  
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Next: The dumbest "American exceptionalism" attack on Obama yet

Comments

Yeah tax cuts for the rich are paid for by their investments.

In India and China, that is.

Posted by: caothien9 | January 3, 2011 8:58 AM | Report abuse

Yeah tax cuts for the rich are paid for by their investments.

In India and China, that is.

Posted by: caothien9 | January 3, 2011 8:58 AM | Report abuse

I think if tax reform doesn't happen in the next two years that "tax cuts for the rich" to help cut the deficit is going to be a winning formula for Democrats in 2012.

Posted by: maritza1 | January 3, 2011 9:04 AM | Report abuse

Hi Greg. Happy new year.

From Yglesias...

"-When budget surpluses were projected 10 years ago, this was described by Republicans as a policy problem to be solved by tax cuts.
-When Republicans controlled the government, they consistently acted to make deficits larger.
-Republicans opposed the deficit-reducing Affordable Care Act.
-Republicans opposed the deficit-reducing American Climate and Energy Security Act.
-Republicans opposed the deficit-reducing DREAM Act.
-When Barack Obama proposed some deficit-increasing tax cuts, Republicans insisted that they would go along if and only if he added additional deficit increasing tax cuts.
-Republicans are planning to replace deficit-mitigating PAYGO rules with deficit increasing CUTGO rules.

Note that this is not a new development. There was a major battle within the Republican Party in the 1970s between a moderate faction associated with Dwight Eisenhower and Gerald Ford and a conservative faction associated with Ronald Reagan. One key issue at that time was whether the focus should be on deficits or on low tax rates for rich people. And the conservatives won the battle. That’s why since 1980, the more conservatives you elect the bigger the deficit you get."

http://yglesias.thinkprogress.org/2011/01/mankiws-strange-advice/

Posted by: bernielatham | January 3, 2011 9:05 AM | Report abuse

When is David Plouffe entering the White House? I really like him for he is extremely disciplined, is a message guru, and has ties to the Democratic grassroots.

Hopefully he can whip the White House into shape on messaging.

Posted by: maritza1 | January 3, 2011 9:07 AM | Report abuse

Welcome back, Greg.

Posted by: clawrence12 | January 3, 2011 9:09 AM | Report abuse

Harry Reid should step down now as majority leader if he is willing to compromise away meaningful reform of Senate procedure. Every Democratic senator must support the Udall plan.

Greg, can you please give us a run-down of which Democratic senators are supporting Udall and which are not?

Posted by: paul65 | January 3, 2011 9:30 AM | Report abuse

paul 65 -- good question. let me try to nail that down.

and thanks Bernie and clawrence. Happy New Year to all of you -- good to see you're still here, maritza and cathothien9!

Posted by: sargegreg | January 3, 2011 9:33 AM | Report abuse

Re public workers as the new welfare queens... you bet. This continuation of the "starve the beast" set of strategies looks to be the prime push by movement conservatives (penultimate only to strategies designed to increase electoral gains). It's now underway at state and federal levels.

The force behind this ideological battle is some forty years of propagandizing against unions and government, strong organizational systems set up by Norquist and others, and big big money from Koch, Scaife and other corporate types who see government as a constraint on their activities.

But now this is a tough project to continue further as people broadly become less secure and increasingly poor. Koch nor Norquist nor Limbaugh are going to be seen helping out at a food bank but they might be seen boarding their private jets enroute to one of many mansions in the tropics. There's a point where, inevitably, the consensus on the valuable functions of government will reassert itself and we're likely close to that point now.

Further, while policemen and firemen and (though less so for a number of interesting reasons) teachers are well-regarded by citizens, Congress is held to be somewhere between car salesmen and child molesters. This will be a Republican congress and those negatives connotations (largely the consequence of Republican propaganda) will now tend to fall back on those Republicans.

One news story each week of a fireman saving a puppy or a policeman risking his life to safe a shop-keeper along with a callous/insane remark from an extremist congressman or a photo of Limbaugh's private Boeing...as peoples' suffering gets increasingly worse... ought to have some salutary effects.

America is becoming an ugly place for its citizens, a place increasingly cruel and uncaring. It doesn't have to be this way. It wasn't always this way.

Posted by: bernielatham | January 3, 2011 9:34 AM | Report abuse

Dear Harry Reid:

Half-way through Obama's first term, it's time. It's time.

Every single one of Obama's existing 145 political appointees and 45 judicial nominees needs to be approved. Now. It's time.

And a new process needs to be put in place, not negotiated behind closed doors but promulgated in the form of Senate rules, by which all FUTURE nominees also will receive up-or-down votes without delay and without having to sacrifice everything else on the Senate's agenda.

Don't screw this up, Harry. It's time.

Posted by: paul65 | January 3, 2011 9:36 AM | Report abuse

Greg, thanks for the response. Really glad to have you back. Happy New Year.

Posted by: paul65 | January 3, 2011 9:39 AM | Report abuse

Happy New Year, Greg.

Now the bullseye is on public workers. It is teachers, firemen, cops, sanitation workers, EPA staff, FBI agents and mail carriers who must be punished in the name of fiscal discipline. Now that we have added 850B to the debt for tax cuts for the Rich, the Middle Class must pay for it. Private unions are nearly destroyed in this country and now the public unions are about to get savaged. Obama has already fired the first shot with his federal wage freeze. Once the government cum employer agrees that its workers are parasites the bottom is near. Every impediment to the capitalists treating human beings as international, fungible labor is being removed. The race to the bottom accelerates. The Middle Class will suffer. The Poor will suffer. The Rich will prosper. The Rich are on the brink of winning the Class War once and for all. Public unions are one of the final obstacles.

Every American worker should be in a union. And we should have a National Union comprised of all unions linked under an umbrella. It is the only way for the American Middle Class to lay claim to what it deserves and protect itself. It is the only way to protect the Poor. It is the only way to save the nation. Because the Rich won't do it and the Plutocrats won't either. They'll just find better opportunities elsewhere after they gouge the life out of America.

Posted by: wbgonne | January 3, 2011 9:42 AM | Report abuse

I think you have the wrong link for the DeMint debt ceiling story.

Posted by: NoVAHockey | January 3, 2011 9:43 AM | Report abuse

One of the two provisions that takes effect this year, the regulation of medical insurance industry profits, is a central provision in the effectiveness of this bill. It will have a political consequence in 2012 that has been overlooked.

The enforcement of the provision is after the fact. When 2011 P&Ls are published in March, 2012, most health insurers will be forced to write rebate checks to policy holders. During an election year. Think about it.

Posted by: mark_in_austin | January 3, 2011 9:49 AM | Report abuse

Thanks NoVAHockey, fixed. and hey wbgonne and Bernie, agree with you both on the larger implications/goals in the war on public workers...

Posted by: Greg Sargent | January 3, 2011 9:50 AM | Report abuse

It is great to have you back Greg. Keep on the filibuster reform topic, that is the one that could really change things. I am new to commenting but I read you first every day.

Posted by: LEFTYLADIG | January 3, 2011 10:13 AM | Report abuse

@bernie: "When budget surpluses were projected 10 years ago, this was described by Republicans as a policy problem to be solved by tax cuts."

When, exactly, and by whom? I entirely missed budget surpluses being described as a "policy problem" by Republicans (which presumably implies more than one). But I don't remember hearing that from any Republican, unless suggesting that the best thing to do with a budget surplus is give the money back to the tax payers constitutes describing budget surpluses as a "policy problem".

"-When Republicans controlled the government, they consistently acted to make deficits larger."

Yup.


"-Republicans opposed the deficit-reducing Affordable Care Act."

Because they don't believe in magic. Or unicorns.

"-Republicans opposed the deficit-reducing American Climate and Energy Security Act."

Well, I don't think any of them believe it would reduce the deficit, at all. But, okay.

"One key issue at that time was whether the focus should be on deficits or on low tax rates for rich people."

If by rich people he means "everybody", including rich people, then, sure.

"And the conservatives won the battle."

Or American liberals continue to voluntarily shoot themselves in the foot. Depends on how you look at it.

"That’s why since 1980, the more conservatives"

Republicans. Many of whom are ostensibly conservative, but not acting consistently with those principles, and many of them who are not particularly conservative, at least when it comes to government spending. George W. was a "big government" conservative, and it was well known. He was not ever a deficit hawk.


"you elect the bigger the deficit you get."

Um, did the deficit grow under Obama and a Democratic house and senate? It did.

Posted by: Kevin_Willis | January 3, 2011 10:32 AM | Report abuse

The GOP strategy, as ever, is distraction and scapegoating, so that they can continue to make the middle class feel they have a voice for their frustrations while they are being fleeced by those who are getting richer at their expense.

This time, as many have observed, the mechanisms are demonizing public sector workers and the public sector in general and acting like drama queens about the deficit, debt ceiling, and the ultimate scam job, the supposed Social Security crisis.

One more time: There is no Social Security crisis. Social Security has run surpluses; it does not add to the deficit. The "entitlement problem" is exclusively with Medicare. But it is infinitely easier to take $100 from tens of millions of Social Security recipients than to cut payments to doctors and hospitals for unnecessary treatments, excessive costs and overbilling, because doctors and hospitals are powerful interest groups and friends of and donors to the GOP (and the Dems too).

Besides, with the GOP and its global warming deniers in charge, any problem of too many elderly will be solved when there are a few massive heat waves and a shortage of emergency personnel (those pesky public employees). Under the GOP regime, every climate-related (and other) natural disaster will prune the SS and Medicare (and Medicaid) rolls, to the eventual satisfaction of the GOP and their rich patrons like Pete Peterson.

Posted by: Mimikatz | January 3, 2011 10:36 AM | Report abuse

Obama Admin "corrupt". Laughable, but, anything to please the Teahadis.

Posted by: ChuckinDenton | January 3, 2011 10:37 AM | Report abuse

What should be the Democratic talking point on the debt ceiling vote: "Republicans are putting our economy in HOSTAGE just so that they can cut Social Security benefits for the middle class".

Posted by: maritza1 | January 3, 2011 10:40 AM | Report abuse

"There is no Social Security crisis. Social Security has run surpluses; it does not add to the deficit"

Sure it does. You have to stop thinking that there are dedicated funds. There are revenues and expenditures. that's it. we spend more than we take in. Don't care whether it's for social security, Medicare, war, roads, NASA or anything else. Social Security is just another revenue stream for the government.

Posted by: NoVAHockey | January 3, 2011 10:46 AM | Report abuse

mark_in_austin writes
"When 2011 P&Ls are published in March, 2012, most health insurers will be forced to write rebate checks to policy holders. During an election year. Think about it."


Interesting.

Posted by: bsimon1 | January 3, 2011 10:46 AM | Report abuse

All, check out Bill Kristol's amazingly dumb attack on Obama over "American exceptionalism":

http://voices.washingtonpost.com/plum-line/2011/01/the_dumbest_american_exception.html

Posted by: Greg Sargent | January 3, 2011 10:47 AM | Report abuse

@Kevin Willis

"When, exactly, and by whom? I entirely missed budget surpluses being described as a "policy problem" by Republicans (which presumably implies more than one). But I don't remember hearing that from any Republican, unless suggesting that the best thing to do with a budget surplus is give the money back to the tax payers constitutes describing budget surpluses as a "policy problem"

I believe that Alan Greenspan in testimony to Congress prior to the enactment of the original Bush Tax Cuts described the projected surpluses as causing a policy problem vis-a-vis the Federal Reserve's ability to manage interest rates through the purchase of Federal Government debt, given that the projections in 2000/2001 had the entire Federal Debt being paid off in the foreseeable future.

I.e. they needed to ensure that there was a sufficient amount of Federal Debt available as a tool for them to use on interest rates, or they would have to find other tools, or stop (attempting) to manage interest rates.

I may have the details off a bit, it was ten years ago, but I do remember that Greenspan had some technical concerns in his testimony to Congress.

Posted by: jnc4p | January 3, 2011 10:47 AM | Report abuse

@NoVAHockey ""There is no Social Security crisis. Social Security has run surpluses; it does not add to the deficit"

Sure it does. You have to stop thinking that there are dedicated funds. There are revenues and expenditures. that's it. we spend more than we take in. Don't care whether it's for social security, Medicare, war, roads, NASA or anything else. Social Security is just another revenue stream for the government.
"

Another way to think about this is the fact that Social Security runs surpluses is true, but irrelevant. The Social Security surpluses are entirely invested in Federal Government debt. In order for this debt to be paid back when Social Security goes from surplus to deficit, other Federal spending will have to be cut other Federal taxes will have to be raised, or more deficit spending will have to be accepted.

Posted by: jnc4p | January 3, 2011 10:58 AM | Report abuse

"* Public workers are the new welfare queens, ctd: Michael Powell has an interesting look at the national war on public workers, including the reality check that "public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers.""

Regarding the public workers issue, the thing to watch here is the proposals to have the states declare bankruptcy in lieu of Federal bailouts and then restructure their pension obligations in Federal Bankruptcy court. I don't know if new Federal legislation will be needed here.

http://blogs.reuters.com/james-pethokoukis/2010/12/07/secret-gop-plan-push-states-to-declare-bankruptcy-and-smash-unions/

It may be time to have the state & municipal employee pensions fall under the Pension Benefit Guarantee Corporation in terms of funding compliance and having a Federal backstop if the states or localities have to declare bankruptcy.

More significantly, for those advocating for the public employee unions there is no appetite among the broader electorate to raise taxes to provide public employees with better benefits than the taxpayers themselves now enjoy.

What has really done in the public employee pensions is not the benefit levels, but the early retirement provisions coupled with the increases in life expectancy. You now have people who are on pensions longer than they actually worked for the states/localities. It's simply not a sustainable model.

And here is the price for over-promising:

http://www.nytimes.com/2010/12/23/business/23prichard.html?scp=1&sq=alabama%20pensions&st=cse

Posted by: jnc4p | January 3, 2011 11:13 AM | Report abuse

@jnc4p: Thanks for that. I was not aware (or did not remember) that. Although that sounds like an argument for perpetual deficit.

Posted by: Kevin_Willis | January 3, 2011 11:18 AM | Report abuse

@Kevin_Willis "@jnc4p: Thanks for that. I was not aware (or did not remember) that. Although that sounds like an argument for perpetual deficit. "

It's an argument for having a certain minimal amount of U.S. Federal Government debt outstanding because that's what the financial markets have come to expect.

Posted by: jnc4p | January 3, 2011 11:27 AM | Report abuse

B: "-Republicans opposed the deficit-reducing Affordable Care Act."

K: "Because they don't believe in magic. Or unicorns."

Or accounting.

KW: "Um, did the deficit grow under Obama and a Democratic house and senate? It did."

Actually, it didn't. The $1.4T 2009 deficit was a legacy of the Bush administration (and a Democratic House and Senate). Reduced last year to $1.3T and projected to drop further in out years.

Incidentally, CBO projected a $1.85T deficit for 2009 (http://www.bloomberg.com/apps/news?sid=a3FY84ILxIUc&pid=newsarchive)

I project some interesting times ahead with gridlock blocking Republicans from the idiocy of CutGo and Democrats from expanding programs. Let the economy grow and concentrate on limiting the growth of the Big Three (SS and the Medis).

BB

Posted by: FairlingtonBlade | January 3, 2011 12:35 PM | Report abuse

@FairlingtonBlade

"Actually, it didn't. The $1.4T 2009 deficit was a legacy of the Bush administration (and a Democratic House and Senate). Reduced last year to $1.3T and projected to drop further in out years."

Which budget year did the American Reinvestment and Recovery Act (aka the stimulus) fall under, 2009 or 2010, or some combination of the two?

Posted by: jnc4p | January 3, 2011 1:41 PM | Report abuse

@Kevin_Willis:

Precise Greenspan testimony:

Jan. 25, 2001

http://www.federalreserve.gov/boarddocs/testimony/2001/20010125/default.htm

Interesting quotes:

"The most recent projections from the OMB indicate that, if current policies remain in place, the total unified surplus will reach $800 billion in fiscal year 2011, including an on-budget surplus of $500 billion. The CBO reportedly will be showing even larger surpluses."

"The most recent projections, granted their tentativeness, nonetheless make clear that the highly desirable goal of paying off the federal debt is in reach before the end of the decade. This is in marked contrast to the perspective of a year ago when the elimination of the debt did not appear likely until the next decade.

But continuing to run surpluses beyond the point at which we reach zero or near-zero federal debt brings to center stage the critical longer-term fiscal policy issue of whether the federal government should accumulate large quantities of private (more technically nonfederal) assets. At zero debt, the continuing unified budget surpluses currently projected imply a major accumulation of private assets by the federal government. This development should factor materially into the policies you and the Administration choose to pursue."

"The time has come, in my judgement, to consider a budgetary strategy that is consistent with a preemptive smoothing of the glide path to zero federal debt or, more realistically, to the level of federal debt that is an effective irreducible minimum."

"In general, as I have testified previously, if long-term fiscal stability is the criterion, it is far better, in my judgment, that the surpluses be lowered by tax reductions than by spending increases."

"But let me end on a cautionary note. With today's euphoria surrounding the surpluses, it is not difficult to imagine the hard-earned fiscal restraint developed in recent years rapidly dissipating. We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake."

Posted by: jnc4p | January 3, 2011 5:34 PM | Report abuse

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