What did Romney and Ryan Store in the Republican Safe?

 

Romney’s Pig in A Poke Tax Plan: Robin Hood In Reverse

Let’s be blunt and tactless about this — the numbers don’t add up. They have never added up. They never will add up.   We could be having a very honest debate about whether or not to privatize Social Security, or whether to transform Medicare into a voucher/coupon program in which Seniors would revert to buying their own private health insurance plans.  But, we won’t.  We could be having a discussion about spending for education, for nutrition programs, for veterans health care … but we probably won’t.  Let’s take a look at a handful of specifics.

Social Security

The Romney campaign won’t say “let’s privatize Social Security.”  Instead, he’s offering a plan which: “Would increase Social Security’s eligibility age by one month per year beginning in 2022 and index future program eligibility to life expectancy. He also wants to slow the rate of benefit growth for high-income recipients.”  [KCStar]

Who is living longer? The “people are living longer” theme is catchy.  However, it’s not a universal trend.  For example, we’ve known since 2006 that the life expectancy of most Americans is 77.9 years, but the life expectancy of a low income white person in Appalachia and Mississippi is 75 years.  For African-Americans in middle America the life expectancy is 72.9 years, however for African-Americans in high risk urban areas the life expectancy is 71.1 years.  Unfortunately, for Native Americans in South Dakota the life expectancy was reported at 58 years.  [DNCentral]   The trends are holding; a white male has a current life expectancy of 75.9 years, an African-American male 74.3 years. A white female can expect to live 82.4 years, but a black female can only expect 79.2 years.  [Census pdf] Thus, for white people in the U.S. the increasing longevity rate would tend to support raising the tables — however, for non-white citizens the numbers aren’t that congenial.

Then there’s the slow the rate of benefit growth for high-income recipients part — that’s a polite way to say means testing.   The AARP explains its opposition:

“The notion that the benefits are an earned right separates Social Security from means-tested income-support programs. Social Security can help everyone. Means testing is a feature of taxpayer-funded welfare programs designed to help the poor. A means test would inevitably erode the universal and contributory nature of Social Security and some of the popular support that has sustained it for nearly 75 years.”

Imposing new limits for the well-off could backfire in various ways. A means test could adversely affect retirement planning and lower the personal savings rate if people concluded the program would penalize them for having higher retirement incomes or larger nest eggs. It would discourage older persons from continuing to work beyond eligibility age, depriving them—and the economy—of additional money. It would create incentives for people to take lump-sum distributions from pension plans, strategies that could prove shortsighted and harmful.”

That just about sums it up.

Medicare

There’s nothing harder to analyze than a moving target.  If the Romney Campaign is incorporating “savings” into its tax formulation by assuming reductions in Medicare costs — good luck with that.  The campaign appears to have settled — for the moment — on the revisions made to the Ryan Plan for FY 2013.   However, the campaign hasn’t released the details necessary to make a thorough examination of the impact of the plan.  [Politifact]

“…there are two big differences between the new plan and the earliest one: The newer version allows beneficiaries under 55 a choice of using their payment to buy private insurance or a plan that acts like traditional Medicare. The amount of their payment would be set by the price of the second-cheapest plan.”  [Politifact]

Acts like traditional Medicare?  What is that?  Medicare Advantage?  Are Medicare Advantage really more cost effective — or do the plans tend to attract healthier (and wealthier) participants, and to avoid costs included in traditional Medicare such as supplemental payments to hospitals which take Medicare patients?  This is one topic in which numbers and terms are often massaged to present the ideology in the best possible light.  Enter the Free Market Fairy.

“Aides to the GOP candidate say the plan would rely on competition — without caps or a cost-cutting board — to control spending and avoid cost shifts to seniors.”  [ABC]

IF competition were the magic answer to cost savings in medical programs for the elderly — then why doesn’t the Medicare Advantage program (the free market alternative to traditional Medicare) eschew the federal subsidy paid to insurance corporations to offer health care insurance to elderly people?  IF the Free Market Fairy could dust our landscape with health care insurance at lower cost than the traditional Medicare, why have any subsidy at all?

However, when the Affordable Care Act (Obamacare) sought to reduce the subsidies to the Medicare Advantage offering corporations, Republicans squealed about “cutting Medicare” to every elderly audience who would listen.

Medicaid

The cuts to Medicaid are far more profound than those for Medicare.   The Romney/Ryan plan could slash $1.4 billion over the next ten years — a cut of approximately 34%.  [Philly.com]   The discretionary spending cuts in total would look like this:

The CBPP explains:

“Medicaid and the Children’s Health Insurance Program (CHIP) would face cumulative cuts of $1.5 trillion through 2022 if Medicare is subject to cuts and $1.9 trillion if Medicare is exempt.  Repealing health reform’s coverage expansions, as Governor Romney has proposed, would reduce Medicaid spending by $618 billion over the next ten years and account for 30 to 40 percent of the reductions.  Repealing health reform by itself would leave uninsured 30 million people who would have gained coverage under health reform, according to CBO.  Analysis by the Urban Institute suggests that the additional Medicaid cuts would likely add at least 14 million to 19 million more people to the ranks of the uninsured.”

Medicaid now provides health care coverage for approximately 52 million Americans.  Over 13 million of these are individuals who are elderly or disabled.  It pays about half of all nursing home expenses, about 60% of nursing home residents are covered by Medicaid. 26% of Medicaid spending is for services to the elderly, 43% is for low income disabled persons, 12% is for low income adults, and 19% is spent for low income children.  [Kaiser pdf]  Now, which of these categories do we want to cut? Do we want to cut pre-natal care for low income women?  Cut funds for the care of the elderly in nursing homes?  Cut funding for the care of the disabled?

This is the program confidently cited by Governor Romney as the “safety net” for low income Americans this week:

ROMNEY: Actually, we had health care in America before Obamacare came along. And we still have health care in America…Each of us today in America has a choice of the type of health care plan we might choose. People who are poor are able to get Medicaid, which is a government support effort for those who can’t afford to have insurance. And these things aren’t going to disappear without Obamacare. [emphasis in original] [TP]

Really?  There’s that 47% again?  With the discretionary spending cuts illustrated the little graph from CBPP what chance do we have to maintain program services for Medicaid?  How do we accomplish this by cutting $1.4 billion, or 34%, over the next ten years.

SNAP

Thus much for being a Food Stamp President, actually the number of people enrolled in the SNAP program has declined since the Recession ended.

This hasn’t stopped the Romney Campaign from suggesting that the way to preserve the income of the top 0.1% is to reduce the SNAP program further  by $135 billion, or 17% in the next decade.   Note that when the economy is growing, as it is now, the SNAP spending is reduced:

The CBPP has done an extensive analysis of what the Ryan Budget proposal would do to, not for, 99% of the American people.   Governor Romney’s rhetorical flourishes about wanting prosperity for 100% notwithstanding, the budget and tax plans he is advocating knock the props out from under families with an elderly relative in a rest home, children of a family with one or more wage earners unemployed at the moment, elderly Americans seeking basic cancer screenings, middle class families trying to keep their offspring in college.  Unemployed Americans seeking job training to upgrade their skills and employability.  Or, veterans’ health care services. [CBPP]

And all this to protect the incomes of the top 0.1% of American income earners…

 

Windsock Mitt: What Choice? Multiple Choice?

Multiple Choice Mitt is back today, with a position on abortion which lasted all of about an hour. The following is a collection of quotations from various sources going back to 1994 on Governor Romney’s many versions of his story:

“I believe that abortion should be safe and legal in this country; I have since the time that my mom took that position when she ran in 1970 as a U.S. Senate candidate.” His comments, made during a candidate debate, are unequivocal: “I believe that since Roe v. Wade has been the law for 20 years, that we should sustain and support it.”  1994

“I will preserve and protect a woman’s right to choose, and am devoted and dedicated to honoring my word in that regard.” He assured voters, “I will not change any provisions of Massachusetts’ pro-choice laws.” 2002

“And every action I’ve taken as governor of Massachusetts has been pro-life. This is a very difficult decision. We’re involved in the lives of two people: a mom and an unborn child. And yet I’ve come down on the side of saying I’m in favor of life.”  2007

“”My position has been clear throughout this campaign,” Romney said. “I’m in favor of abortion being legal in the case of rape and incest, and the health and life of the mother.” August 27, 2012

Those things I think are consistent with my pro-life position. And I hope to appoint justices for the Supreme Court that will follow the law and the constitution. And it would be my preference that they reverse Roe V. Wade and therefore they return to the people and their elected representatives the decisions with regards to this important issue. September 9, 2012

“Mitt Romney today said no abortion legislation is part of his agenda, but he would prohibit federally-funded international nonprofits from providing abortions in other countries. “There’s no legislation with regards to abortion that I’m familiar with that would become part of my agenda,” the GOP presidential candidate told The Des Moines Register’s editorial board during a meeting today before his campaign rally at a Van Meter farm.” Oct.9 2012

Anrea Saul, spokesperson on Romney’s abortion comment to DMR: Rom “wld of course support legislation aimed at providing greater protections for life.” Oct. 9, 2012

For a timeline of Governor Romney’s various positions click here. (with video)

Windsock Mitt

Graphs, Charts in The Fact Based Universe

There must be an alternate universe somewhere in which the following trends do not apply.  However, these are what they are.  The unemployment rate is down.  It’s interesting that while the unemployment rate was at least 8% the Republicans had no problem whatsoever vouching for the accuracy of the BLS reports, but once the number fell below their threshold for advertising purposes, then the numbers were questionable?  The main point isn’t the specific percentage of unemployed but the trend — which certainly looks better than when the deregulation fueled Recession was in full bloom.

It’s also interesting to note that there must be some other rationale for Gloom and Doom from the Wall Street crowd, because the stock market indices have been going up during the Obama Administration.

If an index of 500 stocks isn’t enough, why not take a look at an index of 5000?  Here’s the Wilshire 5000 total market index.  If new regulations on banks and their derivative trading is so deleterious to our financial health, then why these rather robust numbers?

Retail sales and food service numbers are looking better too, and the banks are doing well also.

Retail sales, food service, banks doing well. The stock market is back to trending upward, and the unemployment figures aren’t climbing up as they were during the Recession — So, are we better off than we were four years ago?  And, why did the Romney Campaign stop asking that question?

Romney Reveals Voodoo Economics and Fuzzy Math

In case you missed Chris Hayes’ “UP” this Saturday morning, please review the following segment.   It might be hard to find a more succinct summary of the Shell Game which Governor Romney is playing with his tax proposal — essentially the  “Bush Tax Cuts on Steroids.”   Governor Romney’s tax plan is a three part talking point scheme each part of which distracts from the mendacity of the other two.

As Mr. Hayes observed, they are actually mutually exclusive. For example, you can’t achieve revenue neutrality by lowering taxes for everyone.  Nor can you lower taxes for everyone without lowering them for upper echelon income earners.   If President George H.W. Bush was correct in labeling Supply Side economics as a form of Voodoo, then we might just as easily label Governor Romney’s tax proposals Sleight of Hand.

How to sell the notion that tax cuts for the extremely wealthy are Good for All of Us?  Haye’s points out the crucial element: “The wealthiest Americans will pay a higher percentage of taxes than they do today. Not a higher percentage of their income in taxes, since that would be an outright lie. This is a very common bit of conservative misdirection used to hide the distributional unfairness of their tax cuts.”  Here’s what the distributional effect of the Romney Tax Plan looks like if it were truly revenue neutral:

But, but, but “everyone’s taxes will be lower.”  However, NOT if the proposal is to be revenue neutral– you don’t get all three walnuts — pick one. If you firmly believe that lowering taxes for the upper level income earners in the United States will cause a tsunami of start up businesses and business expansion, then by all means pick the “everyone’s taxes will be lower” shell.  BUT, remember that all Governor Romney is promising is that the rich won’t pay a lower overall percentage of the revenue collected by the I.R.S. — NOT that they won’t see a reduction in their INDIVIDUAL tax liability.

There is no revenue neutrality in Governor Romney’s plan, at least not if you want one of the other two shells.   Something has to give, and this is the point at which his plan becomes extremely fuzzy.

“Romney said in the debate that his plan wouldn’t cut enough tax breaks to offset all of his tax cuts. Economic growth, he said, would be generated by his tax plan and make up the difference. He hasn’t specified how much.”  [BusinessWeek] (emphasis added)   So, how much would the U.S. economy need to grow in order to make up the difference between his plan’s reductions in tax breaks to offset the tax cuts?  Who knows?  And, Governor Romney’s not providing the information necessary to properly analyze the results.

The other problem with Governor Romney’s shell game fuzzy math is that he has yet to specify which deductions would be capped or eliminated under his plan.  Vague promises about “working with the Congress” to determine the final shape of his tax policy are all well and good, as in “the devil’s in the details but the angel is in the policy.”  However,  without specificity there’s no way to make his numbers add up to anything even roughly approximating revenue neutrality.

If we assume, rationally, that the lack of real revenue neutrality in the former Massachusetts Governor’s tax policy means what a reduction in revenue always means — program cuts — then the cuts might very well look something like this:

In other words, the American public is being asked to pick a shell, which ever one sounds the best to the undiscerning ear, disregard the other two, and the result will most likely be:

Reboots, Revisions, and Reality

President Obama addressed a rally in Las Vegas yesterday [LVSun] including the stump speech line: “In fairness, my opponent’s got a plan, too,” Obama said. “They think that somehow you can lower our deficits by spending another $5 trillion on tax cuts for the wealthy. No matter how many times they try to reboot their campaign and try to explain it, they can’t.”  It’s tempting to conjecture that the Romney campaign has rebooted more often than Microsoft has issued new versions of its operating systems.

One problem is simply that Trickle Down, or Supply Side, Economics is a hoax.  [DB] [Krugman] [Stewart] There’s no way to reboot, re-wrap, re-state, or re-launch an economic program predicated upon a fundamentally flawed economic proposition.  One with its origins in the 1970s:

A group of thinkers, including the economists Arthur Laffer and Robert Mundell and the journalist Jude Wanniski, became convinced that lower taxes and deregulation were the answer. If you lowered taxes, the thinking went, people would take the extra money and invest it in new enterprises, getting the economy started again. [The New Yorker]

Nor did the initial proponents envision the misuse of the theoretical framework they propounded as a foil for reducing government services to its population:

Laffer, whose inspired napkin scrawl was most responsible for popularizing supply side, warned its followers not to look to the theory as an all-encompassing outlook—economic or ethical. “A problem I have with people who follow us,” he told Brooks, “is that they don’t recognize the theory’s shortcomings. They go too far. I don’t think you cut Social Security or unemployment insurance in a down economy. To do that is—well, immoral.” [The New Yorker]

Since the notion that tax cuts and deregulation work to increase revenue is a proposition thoroughly debunked [EPI]; and, since tax cuts and deregulation aren’t effective in creating a stable economy, witness the Housing Bubble collapse in 2007-2008; and since no causal relationship can be demonstrated between tax cuts and employment.  [Bernstein] Then the only straw left in the stack is to decry the Deficit and Debt in order to justify a program predicated on lowering taxes for the wealthy.   It’s both a last straw and a thin reed.

Little wonder vice-presidential candidate Rep. Paul Ryan (R-WI) didn’t want to stand on it when he told Fox News he didn’t have time to explain their tax plan. [TP]  A person could spend a goodly part of the next millennium to attempt an explication of in the inexplicable and still not get the job done. “Revenue neutral” only works when its acknowledged that the money has to come from somewhere.  If taxes are lowered on corporations, wealth management executives, and wealthy individuals then the other side of the equation has to be addressed in the form of higher taxes on everyone else, draconian cuts to public services, or both.   This shouldn’t take much time to explain — any 8th grader in a pre-Algebra class can tell you both sides of an equation must have the same value.

A second problem is that de-regulation, especially in the financial sector, is an invitation to economic instability.  We tried that.  Combining high speed electronic trading with flawed risk management models with the securitization of assets with the creation of synthetic derivative instruments along with third party bets on asset based securities and those derivatives … created the financialist’s flash crashes and the Wall Street Casino.   A volatile financial market is a financialist’s dream — full of opportunities to make big bucks in the margins; it is a Main Street nightmare.

Even the tepid provisions of the Dodd-Frank Act, seeking to re-regulate the derivatives markets, to monitor the liquidity and solvency of the major banks, to require banks to development ‘living wills’ in the case of serious trouble, to impose rational orderly liquidation of banks if they fail — are too much for the confirmed financialists.  The question becomes how generously will financialist Governor Willard Mitt Romney embrace them.

In May 2012, Governor Romney pledged to repeal the Dodd Frank Act, but offered no specifics. [Boston.com] He was still hewing to that position as of May 26, 2012. [TDB] By August 17, 2012 Governor Romney was calling for “transparency and common sense regulations,” while his running mate was publicly supporting a reversion to the Glass-Steagall Act which prohibited banks from indulging in propriety trading. [Politico]  As of September 6, 2012 Bloomberg news reported:

“Mitt Romney has pledged to repeal the Dodd-Frank act. That’s not really going to happen—and that’s just fine with Wall Street. Instead, President Romney would likely try to give the financial industry something it wants more: a diluted financial reform law that would relax restrictions on some of its most profitable—and riskiest—investments but maintain enough government oversight to give the banks cover.”

Somehow, the idea that our government should be primarily concerned with “giving the banks cover,” doesn’t seem to be a particularly good campaign talking point while speaking to middle America.  The Etch-A-Sketch could move into over-drive?

Meanwhile back in the real American economy — the growth of which  President Obama would like to sustain –

Shows steady growth in the last year in the Real Gross Domestic Product

An economy with some good news for Main Street — retail sales and food service are trending into positive territory –

Shows continued improvement in private sector employment:

President Obama may be campaigning in Nevada’s largest urban area, but the economic message is right out of the First Rule of Ranch Management — If it ain’t broke, don’t fix it.

Follow The Money: How To Play The Traveling Money Game

I think I get it. How to play the Traveling Money Game — Romney Style.  Political Carnival provides the explanation, and because I tend to think in charts and graphs, this is my rendition of that explication.

Chalkboard Talk: Obama – Romney and Medicare

Sources and References:  An Economic Sense, “Romney’s and Ryan’s Confusion on Basic Accounting: Medicare Costs,” August 16, 2012.   The Hill, “Gibbs: Ryan should thank Obama for strengthening Medicare,” August 19, 2012.  Christian Science Monitor, “Romney says Obama robbed Medicare,” August 16, 2012.  New York Times, “Patients would pay more if Romney restores Medicare savings,” August 21, 2012.  Washington Post, “Van Hollen: The Romney Ryan Plan Medicare Plan would have immediate cost increases for Seniors,” August 18, 2012.  Kaiser Health News, “CBO: Seniors Would Pay Much More For Medicare Under Ryan Plan,” April 5, 2011.   Washington Post, “Paul Ryan’s budget keeps Obama’s Medicare cuts – full stop,” August 14, 2012.

The Vague Factor: “

On “60 Minutes,” Romney said: “I don’t want any change to Medicare for current seniors or for those that are nearing retirement. So the plan stays exactly the same.”

Still, it’s unclear if that means a guarantee of no future cuts for those remaining in traditional Medicare, or if Romney is merely saying that the overall design of the program will stay the same.”

Good question, especially since Governor Romney has managed to turn vague political rhetoric into a form of modern performance art.

Clips and Quotes: Tuesday Morning News

** Governor Romney is back on the hustings with his Coupon Conservatism in full sail — this time on education.  This topic has been covered before, Federal funding for K-12 education isn’t a single large pot portioned out on a per child basis. The Governor would like to have Nevada schools enmeshed in a highly, and unnecessarily, complicated system in which funding follows the individual child — want a bureaucratic nightmare of Brobdingnagian proportions? This would do it.  Explanation here.

** Good news, the NV Progressive reports Democrats have a 65,000 person lead in Nevada voter registration.   The Gleaner takes on the Nevada senate race here and here. Ralston’s Reality Check (video) has some interesting points to make about Rep. Shelley Berkley’s ad questioning Sen. Dean Heller’s relationship with felon — it gets an A-.  Sebelius adds some insight and video at Slash/Politics.   Berkley and Heller debate on September 27, and the Washoe County Democrats are hosting a watch party; details here.

** Nevada’s own Sheldon Adelson continues to set records for spreading money in the expressed intent to promote his personal interests:

“Adelson has made history: He is the first person to spend $70 million to sway a presidential election, and he plans to spend more — perhaps as much as $100 million — by Election Day. An estimated $20 million to $30 million of the giving went to groups that do not disclose their donors and had not been reported before.”  [LVSun]

Mr. Adelson would, no doubt, like to make those pesky investigations into his operations in Macau go very very far away.   Ed Kilgore has more about “Adelson’s Ideological Dollars.”  Highly recommended reading.

** Since we qualify as a battleground state for some reason defying our actual number of electoral college votes, The Examiner reports President Obama leads on the Medicare issue.   Here’s a picture:

** Suppression Congestion:  The Pennsylvania lower court, instructed to re-hear arguments in the vote suppression scheme in that state, will take the case today. More at Crooks and Liars.   The Atlantic has an excellent piece describing the impact the Pennsylvania law has on elderly voters.    As former President Clinton put it back on September 4th — vote suppression is an act of desperation.

** Arithmetic:  The conservative economist whose work Governor Romney is fond of citing to support his tax shaft shift to middle income Americans — not…so…much:

“Conservative economists have tried make the numbers work. Martin Feldstein — a Harvard professor and president emeritus of the National Bureau of Economic Research — released a paper arguing that the targets could be met if “middle class” is defined downward — specifically if Romney increases the tax burden on incomes between $100,000 and $250,000 to pay for tax rate cuts for everyone else. Feldstein’s report ratified the Tax Policy Center’s broad thesis that Romney’s 20 percent tax rate cuts could not be offset merely by unwinding deductions and credits for the wealthy — families typically defined by both parties as middle class would also have to take a hit.”  [TPM]

Arithmetic.