Editore"s Note
Tilting at Windmills

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April 21, 2011

BUDGET FACTS ARE STUBBORN THINGS.... Many of you are no doubt familiar with the classic Monty Python sketch from 1972 called the "Argument Clinic," which, as regular readers know, is one of my favorites. It goes like this: a man who enjoys a good, substantive debate goes to a business that ostensibly provides one, but after paying his fee, he quickly discovers that the man on the other side of the desk simply contradicts literally everything he says.

The customer, exasperated, eventually tries to explain, "An argument is a connected series of statements intended to establish a proposition." His adversary replies ,"No, it isn't." He tries again, saying, "Argument is an intellectual process. Contradiction is just the automatic gainsaying of any statement the other person makes." After a short pause, the antagonist responds, "No, it isn't."

A little too often, the "Argument Clinic" sketch reminds me of efforts to engage conservative Republicans in any kind of discourse. Take the debate over the House budget plan, approved last week.

Reasonable observers note that the plan privatizes Medicare. "No, it doesn't," the right responds. Those relying on reality add that Medicare would be replaced with vouchers. "No, it wouldn't," conservative reply.

And the GOP budget plan slashes taxes for the wealthy. "No, it doesn't," the right responds. Take this recent Charles Krauthammer column, for example.

The final charge -- cutting taxes for the rich -- is the most scurrilous.... Ryan's plan is classic tax reform -- which even Obama says the country needs: It broadens the tax base by eliminating loopholes that, in turn, provide the revenue for reducing rates.

Now, there's ample evidence that the House Republican budget plan actually cuts taxes to the tune of $2.9 trillion over the course of the next decade, benefiting the wealthy almost exclusively. Krauthammer and others effectively argue, "Don't worry, it's deficit neutral because for every dollar in tax cuts, the GOP closes a tax loophole."

Which tax loopholes? Well, Republicans haven't really said. Are there really $2.9 trillion in loopholes just waiting to be closed? They haven't answered that one, either.

If we're going to proceed with a connected series of statements intended to establish a proposition, the fact that the GOP plan cuts taxes for the rich really isn't in dispute.

Jon Chait had a lengthy item on this yesterday, which is well worth reading.

First, the argument simply reflects a legitimate difference in baselines.... When President Obama accuses Ryan of cutting taxes for the rich, he's using the post-2012 baseline. I consider that the best point of reference because the most important force in our political system is inertia. Given our multiple veto points, it takes great effort to enact a policy change that the parties disagree upon. Ryan proposes to make that change. Therefore, I think it's fair to describe him as "cutting taxes," even if revenues did remain at present levels (which I dispute, but more on that later.) I do think there's merit in both baselines. The argument that Obama is lying about Ryan -- that calling him a tax-cutter is, in Krauthammer's characteristically understated phrasing, "scurrilous" -- rests upon the assumption that the current-policy baseline is not only more preferable but the only remotely honest point of reference. That seems like a huge stretch.

Second, even if we accept Ryan's preferred baseline, his description of his plan is hard to accept at face value. Tax reform is a trade where you take away deductions (that's hard) and use the money to reduce rates (that's easy.) The rate reductions are specified. The reduced deductions aren't. Another way to put this is that Ryan has proposed a specific tax cut that would benefit the affluent, accompanied by utterly vague promises to find offsets. At the very least, the rate-lowering portion ought to carry more weight than the deduction-closing portion.

Third, even if we accept both Ryan's baseline and assume he will match every dollar in lost revenue from the rate cuts with another dollar in reduced deductions, he will almost certainly wind up cutting taxes for the rich relative even to the post-Bush tax code.

And this doesn't even count the tax increases that would kick in if Republicans repealed the entirety of the Affordable Care Act, which is another part of the budget plan.

If Ryan and his allies want to argue that these tax cuts are a good idea anyway, we can have the debate. If they want to argue that the vast majority of Americans, who want taxes on the wealthy to go up, are wrong, we can argue about that, too.

But simply insisting that a massive package of tax cuts isn't a massive package of tax cuts isn't part of any intellectual process.

Steve Benen 8:30 AM Permalink | Trackbacks | Comments (28)

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Comments

Facts may be stubborn, but they're also largely irrelevant.

What's important is that tax-and-spend socialists led by an illegitimate Muslim Kenyan are trying to destroy American freedoms; therefore, anything they suggest is bad, QED.

Also Michelle is fat.

Posted by: bleh on April 21, 2011 at 8:36 AM | PERMALINK

Used to be that Republicans would brag about cutting taxes for the rich, now they are trying to hide it.

I guess that's progress.

Posted by: Stephen on April 21, 2011 at 8:36 AM | PERMALINK

"But simply insisting that a massive package of tax cuts isn't a massive package of tax cuts isn't part of any intellectual process."

Yes, it is!
:-)

Posted by: c u n d gulag on April 21, 2011 at 8:44 AM | PERMALINK

Maybe they could start by telling us which loopholes they plan to close. The reduced capital gains tax? Nope, they want to eliminate it altogether! Mortgage interest exemption? Ding ding ding! And I bet every cent I own that they will wliminate or greatly reduce the mortgage interest exemption for primary homes, but keep it in place for secondary homes. You know, to keep the real estate market moving.

The loopholes they close would hurt the middle class, which will end up paying the bulk of income taxes, while the rich have zero taxes on capital gains, yet still enjoy tax breaks for secondary homes. John McCain will be thrilled!

This is classic Republican bait and switch. They're full of sh*t.

Posted by: Stetson Kennedy on April 21, 2011 at 8:52 AM | PERMALINK

I must disagree this is less Python and more Orwell. This is a perfect example "Blackwhite" Orwell  defines it as follows:

“ ...this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this.  

But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink. ”

—Orwell, 1984 (From  Wikipedia)

Ps.  It's also pure Lenin, "A lie told long enough becomes the truth." This tactic worked to help scare the public during the health care debate,  it remains to be seen if this naked transfer of money to the pockets of the über rich will have the same resonance.

Posted by: KurtRex1453 on April 21, 2011 at 8:53 AM | PERMALINK

The beauty of right-wing polemics involves the willingness to say - or shout - anything that advances the home team's interest. Whether it's true or not is secondary to winning. Politics is war, the nation is a battlefield, and the other guys want to kill you. I wish it were more complicated than this but it isn't.

Posted by: walt on April 21, 2011 at 8:56 AM | PERMALINK

Now that the Middle Class is destitute, there is only one thing we still have that Republicans want. Our VOTE. They will say and do anything to get it.

Posted by: DAY on April 21, 2011 at 8:59 AM | PERMALINK

On the bright side, Ryan's budget proposal has kicked the bucket, it's shuffled off this mortal coil, rung down the curtain and joined the bleedin' choir invisible!! THIS IS AN EX-BUDGET PLAN!

Posted by: hells littlest angel on April 21, 2011 at 9:00 AM | PERMALINK

Tax "reform" is simply another Republican load of horseshit. Hasn't experience shown over and over that as soon as the process of "eliminating loopholes" begins, the lobbyists for the rich, the bankers, the coroprations, etc. immediately swoop in to at least water them down to nothing if they can't eliminate them outright?

Hell, with Republicans, the lobbyists actually write the bills!

A simple rule to put almost all issues in perspective:

Republicans are lying, thieving bastards.
People who vote for them are misinformed idiots.

Posted by: marty on April 21, 2011 at 9:06 AM | PERMALINK

While we're going there :
"Spot the Loony"
A fun game the republicans have made all too easy.

Posted by: John R AKA Mr. Serf Man on April 21, 2011 at 9:08 AM | PERMALINK

The loopholes that will be closed are detailed in the plan for reforming health care. I mean, duh.

Posted by: Jeff In Ohio on April 21, 2011 at 9:12 AM | PERMALINK

Which tax loopholes? Well, Republicans haven't really said.

By loopholes, they mean the things that allow people to get food stamps, Pell grants, minimum wage,etc.

Posted by: Danp on April 21, 2011 at 9:14 AM | PERMALINK

Just to second KurtRex above, but I'd like to see Orwell mentioned and corresponded much more often, since his is EXACTLY the playbook that the Republicans have been exploiting, in their quest for power toward a state of pure ideology. Every tactic - and motive! - is straight out of 1984.

I've been thinking often lately that the Dems are the party of problems, and the Thugs the party of *enemies*. And for all practical purposes, the Thugs have declared not only the liberals as their enemy, but facts themselves.

Posted by: jTh on April 21, 2011 at 9:16 AM | PERMALINK

Meanwhile, the Democrats remind me of "The Royal Society for Putting Things on Top of Other Things."

Posted by: wvmcl2 on April 21, 2011 at 9:34 AM | PERMALINK

Steve, are you sure you were not just posting the conversation you had with US Rep Walsh, (R-IL)? "No, it isnt'" appears to be the mindset for this newly elected TPer.

Posted by: berttheclock on April 21, 2011 at 9:40 AM | PERMALINK

Intellectuals on the Right have been blind to the gibberish globbing within their economic ideas, understandings, and ultimately, failed policies for so long, they can only operate rhetorically in such bullshit!

At a townhall meeting, Mr. Ryan came face to face with knowledgeable constituents who know if his budget ever became reality, whale oil, beef hooked!

All sentient Americans need to attend townhall meetings, and engage Republicans directly, as we all know, no true democratic people will ever allow themselves to be bullied into accepting another man's advantage once we are on him. Currently, the Koch Bros. come to mind, and Dick Army is also among the short list of the snake oil salesmen among us!

AFP is how they roll! Communities concerned with the perseverance of small d democracy need to know when this outfit is scheduled to show up in their town, and get out to face them! -Kevo

Posted by: kevo on April 21, 2011 at 9:41 AM | PERMALINK

Except the Ryan plan isn't a voucher plan. It's a "premium support" plan using insurance exchanges:

"For younger workers, when they reach eligibility, Medicare will provide a
Medicare payment and a list of guaranteed coverage options from which recipients can choose
a plan that best suits their needs. These future Medicare beneficiaries will be able to choose a
plan the same way members of Congress do."

http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf

page 44.

This is, of course, exactly what the Obama administration supports. This is a Third Way approach. Henry Aaron describes it here:

http://bit.ly/g1RXxl

He does make a howling attempt to say that his premium support is not a voucher, while Ryan's is, because, ahem:

The defining attribute of the plans that Reischauer and I christened “premium support” was that the amount of support was to be indexed to average health care costs, not, as in voucher plans, to a price index or per person income.

The GOP and the ruling democratic elites are in agreement on the approach. They may disagree about the amount of premium support,or how it's indexed, or how much adjustment should be made for people with hideously expensive life threatening conditions like renal failure. (That is, my father would die in a week without dialysis.) Or a serious auto accident.

But the plans are the same in structure, and design. And they are not Medicare as we know it.

Moreover, as Aaron wrote in 1995, the plan is to save money by making medical care more expensive, out of pocket, to the recipients.

The ultimate response to the budget and demographic pressures could
take more extreme forms. The nation could establish a separate national
health care system for the aged and the disabled, with its own network of
providers and its own limits on use. At the other end of the spectrum,
Medicare could be transformed into a pure voucher system, in which the
elderly and disabled receive a voucher and are told to fend for themselves in
an unregulated or lightly regulated marketplace. We believe that both of
these approaches are politically unacceptable and programmatically flawed.


The approach we have presented represents a middle ground. It builds on
the strengths of the current program while converting it into a system
similar to the employer-sponsored insurance now available to most Americans.
A major argument in its favor is that it would strengthen participants’
incentives to seek services from cost-effective delivery systems and providers’
incentives to operate efficiently. This plan would enable Congress to
directly control the per capita budget cost of Medicare. This feature is
critical in view of the certainty that the gap between Medicare costs and
revenues will be narrowed as part of efforts to balance the budget.

But it is important to acknowledge that our plan also facilitates significant savings
by shifting costs to Medicare enrollees
, a channel that will have to be used
if large reductions in Medicare spending growth are to be achieved.

My bolding.

Posted by: jayackroyd on April 21, 2011 at 10:16 AM | PERMALINK

Hmm. My comment is in moderation. Too long, too many links, probably.

So just a quick summary. Ryan's plan is not a voucher plan:

Save Medicare for current and future generations while making no changes for those in and
near retirement. For younger workers, when they reach eligibility, Medicare will provide a
Medicare payment and a list of guaranteed coverage options from which recipients can choose
a plan that best suits their needs. These future Medicare beneficiaries will be able to choose a
plan the same way members of Congress do. Medicare will provide additional assistance for
lower-income beneficiaries and those with greater health risks.

(page 44 of the path to prosperity pdf)

It's also the same as the Third Way plan that we'd expect Obama to support--moving Medicare recipients into exchanges, while providing them with "premium support." The differences are in the details--how the support is indexed in particular.

Henry Aaron developed this approach.

http://content.healthaffairs.org/content/14/4/8.abstract

And it relies on shifting costs onto the elderly, just like Ryan's plan and Bowles-Simpson. (Did you know Bowles-Simpson illegalizes Medigap insurance? Forcing much higher out of pocket costs for the elderly.)

Posted by: jayackroyd on April 21, 2011 at 10:27 AM | PERMALINK

This is a much bigger deal among the stooges in the Beltway press/congress, and people like us who follow politics closely, but most voters(sadly) don't have a clue about this stuff. Jobs are their main concern, with gas prices now a close second now. Obama needs to make a coherent macroeconomic argument, and start talking about jobs.

As an aside, there was another jump in unemployment claims last week(second week in a row); and rumors of an abysmal GDP number for the first quarter of this calendar year are everywhere. The republicans on the state level are trying to kill the weak bit of recovery we've seen thus far; and Obama better start framing the macroeconomic debate, or he isn't going to get reelected.

Posted by: Holmes on April 21, 2011 at 10:29 AM | PERMALINK

Charles Krautheimer calls the kettle black? Scurrilous is the best one word to describe Kroutheimer.

Posted by: Pterosonus on April 21, 2011 at 11:03 AM | PERMALINK

I'm more inclined to believe we're trapped in the Abuse Clinic:

Ryans budget plan benefits the well-off at the expense of the least advantaged.

You socialist scum! Youre too cowardly to make the hard choices we need to fix the deficit! Go back to Kenya!

Posted by: Sasha on April 21, 2011 at 11:22 AM | PERMALINK

What everyone overlooks is Ryan's double top-secret plan absolutely to balance the budget posthaste: the unicorn tax!

-Z

Posted by: Zorro on April 21, 2011 at 12:41 PM | PERMALINK

@jayackroyd

Except of course for a few slightly pertinent facts such as:

- The Ryan plan moves from existing single payer coverage, already payed into by the future medicare recipients themselves, towards an underfinanced exchange voucher. Thereby making their current outlook on their medical future much worse. To pay for taxbreaks for the rich.

While Obamacare (the "Afordable Care Act"):

- Moves from no coverage at all for 30 million americans to free single payer (through medicaid) or heavily subsidized (by the fed) insurance from the exchanges thereby making their change for affordable health care much better. While paying for it by taxing the rich.

So yeah, the Ryan plan and Obamacare are exactly alike if you ignore that:

- One is wildly progressive and the other wildly regressive.

and

- One takes money from the rich and helps poor people in need while the other takes money from poor people in need to help the rich.

But, of course, ignoring such bothersome minor details is what a Tru Librul Firebagger (c) is all about, isn't it?

Posted by: Danny on April 21, 2011 at 1:48 PM | PERMALINK

Today, Bob Somerby labelled Ryan a "a prissy little nut-cake".

I just thought it was worth repeating.

Posted by: Squeaky McCrinkle on April 21, 2011 at 4:19 PM | PERMALINK

Does anyone actually pay any attention to Tales-from-the-Crypt-Krauthammer?

Posted by: Vicente Fox on April 21, 2011 at 4:57 PM | PERMALINK

I was writing about the Medicare proposals, Danny.

Why are you changing the subject?

Posted by: Jay Ackroyd on April 21, 2011 at 10:26 PM | PERMALINK

@Jack Ackroyd
You wrote:

This [Premium Support/Vouchers] is, of course, exactly what the Obama administration supports. This is a Third Way approach.

Can you support that statement in any way whatsoever, if you were not referring to the subsidies that are part of Obamacare?

Posted by: Danny on April 22, 2011 at 4:20 AM | PERMALINK

WONDERFUL Post.thanks for share..more wait .. …

Posted by: Edmundo Moog on May 6, 2011 at 11:39 AM | PERMALINK
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