Congress – Page 13 – The Wrongologist

Monday Wake Up Call – January 31, 2022

The Daily Escape:

Mount Saint Nicholas, Glacier NP, MT – January 2022 photo by Jack Bell Photography

Anyone else thinking that our national party bus is about to stall out in the slow lane on America’s Boulevard of Broken Dreams?

Here’s an under-the-radar story: In 2020, the Trump administration hatched a plan to gradually transition traditional Medicare over to private firms. It’s called Direct Contracting (DC) and is operated by Direct Contracting Entities (DCEs). Currently, there are 53 of them in Phase One of an experimental program operated by the Centers for Medicare and Medicaid Services (CMS).

Under the program, the DCEs receive a fixed amount of money annually to cover care for each traditional Medicare enrollee whose primary care doctor (or group) has signed up with that DCE. The DCEs must pay for all of the care of those people assigned to them. To date, the CMS has auto-assigned hundreds of thousands of people to DCEs.

Since no one on Medicare has voluntarily signed up to work with a DCE, it’s unlikely they know of, nor understand what’s happening. And the CMS doesn’t require DCEs to tell people that they have the right to opt-out.

The idea behind DCEs is to shift a portion of the financial risk of the elderly’s medical care away from traditional Medicare by capping the payments to a third party that’s responsible to pay for it. This is the latest in many efforts by CMS and Congress to control the rising costs of healthcare.

Wrongo and Ms. Right have recently noticed a blizzard of direct mail offers to convert our traditional Medicare to an all-in insurance program. It’s probable that some of these are from DCEs.

The anticipated advantage of the DCE experiment is that Medicare’s out-of-pocket costs will be capped. The DCEs contract with CMS is for an agreed-upon annual payment. They have to pay for care and also make a profit based on that fixed revenue amount from the government. In addition to the normal profits from providing services, DCEs can keep as much as 40% of the money they don’t spend on care.

But there’s no such thing as a free lunch, and it seems to Wrongo that this creates yet another financial incentive to deny otherwise necessary treatments. It’s possible that the DCEs could pay doctors to steer patients away from specialty care. This means that someone enrolled in a DCE has reason to worry that their primary care doctor might limit their access to more costly care.

Direct contracting is supposed to be a pilot program, yet Medicare has no plans to limit the number of people it enrolls in these new plans. Instead, Medicare has announced plans to enroll 100% of traditional Medicare members into DCE-like programs by 2030.

Congress did not authorize the wholesale overhaul of traditional Medicare, so why is this happening? And so far, the Biden administration appears to be willing to continue playing Trump’s cards.

Many of the DCEs are owned by Private Equity (PE) firms. It doesn’t take a chess master to see that the PE firms will ultimately sell out to the insurance industry. And it wouldn’t be a big leap from that to fully privatize Medicare.

Time to wake up America! Did we elect Biden to privatize Medicare? The word “privatize” should scare the hell out of Americans. But unfortunately they’ve been fooled into believing that by some magic miracle of economics, it’s to their benefit.

To help you wake up, today we spend a few minutes with Neil Young. Wrongo appreciates Neil Young saying he wanted his music removed from Spotify if Joe Rogan is allowed to continue spewing his anti-Vaxx trash there.

This was an easy business decision for Spotify. They picked the popular podcaster Rogan with the $100 million-plus exclusive deal, over the cranky 76-year-old rocker whose last gold album was nearly two decades ago. Someone who hasn’t been on the Billboard charts since 1982.

Joni Mitchell and Dave Grohl have now said they will follow Young in leaving Spotify.

Let’s watch and listen to Neil Young playing “Hey Hey, My My” at Farm Aid in Champaign, Illinois on September, 1985. Young is a co-founder and board member of Farm Aid, along with Willie Nelson and John Mellencamp:

Neil won’t burn out or fade away.

Sample Lyric:
Out of the blue
and into the black
You pay for this,
but they give you that
And once you’re gone,
you can’t come back
When you’re out of the blue
and into the black.

“You pay for this, and they give you that”. Listen up Medicare!

Monday Wake Up Call – November 15, 2021

The Daily Escape:

Autumn, Seven Lakes Basin, OR – October 2021 photo by Valledweller33

With Congress’s dancing around (and not passing) Biden’s social welfare bill, we’re now to the point where there are less than 20 days until the government’s funding runs out in early December. There are other issues that must be dealt with as well. The federal debt limit needs to be raised. The National Defense Authorization Act must be passed.

The Democrats and Biden are entering yet another critical time. Wrongo wrote about this two months ago, and since then, just about the only thing that Congress accomplished was passing the infrastructure bill. That wasn’t chump change, but the 2021 legislative calendar has only three weeks left to accomplish a long list of must-pass items.

But this is far from the only concern for Dems. With the 2022 mid-terms looming, they need to take a careful look at their policies on immigration, crime, and inflation. These will all be issues that Republicans use against them at election time. The Dems response is usually to deny that an issue is a problem for them, or for the country.

The Dems start by saying there’s nothing to the problem. They reframe it as a different and more complex issue, and say that the White House is already on top of it. This is what Ruy Texeira calls the Fox News Fallacy.

“This is the idea that if Fox News…criticizes the Democrats for X then there must be absolutely nothing to X and the job of Democrats is to assert that loudly and often. The problem is that an issue is not necessarily completely invalid just because Fox News mentions it. That depends on the issue.”

If there’s something to the issue and persuadable voters have real concerns, Democrats won’t assuage those concerns simply by embracing their Fox News Fallacy of denial and deflection. Texeira offers a few examples including the debate over CRT, border security, and crime:

“Start with crime. Initially dismissed as simply an artifact of the Covid shutdown that was being vastly exaggerated by Fox News and the like for their nefarious purposes, it is now apparent that the spike in violent crime is quite real and that voters are very, very concerned about it.”

Clearly this includes the Democrats’ traditional base of Black and Hispanic voters. A Pew poll found that Black and Hispanic Democrats are significantly more likely than white Democrats to favor more local police funding.

This is more of the disconnect that Wrongo wrote about last week. Democrats need to deal with how their pet issues may play differently to different parts of their coalition. As blog reader D. Price said in comments, we assume that our liberal values and the language we use to frame those values must fall on others’ ears just like it does on ours. He points out that Dems need to listen more and take seriously the different perspectives in the Democratic coalition.

Some Democrats, like NYCs mayor-elect Eric Adams, openly highlight their commitment to cracking down on crime and criminals. Consider a recent NBC poll that shows Republicans are favored over Democrats on the crime issue by 22 points.

And in heavily Black Detroit, a USA Today/Suffolk University//Detroit Free Press poll found that Detroit residents, by an overwhelming 9-1, say they would feel safer with more cops on the street, not fewer. On a list of eight concerns, police reform ranked last, at 4%.

The poll also found a significant racial divide on the question. Black residents ranked crime at the top of their list of concerns: 24% cited public safety, and just 3% named police reform, while White residents were only slightly more concerned about police reform than public safety, 12% compared with 10%.

Democrats have to stop saying that they suck at messaging, as if there’s nothing that can be done about it. They must create messaging that emphasizes what Americans have in common and their right not just to economic prosperity but to public safety, secure borders and a world-class (and maybe) non-ideological education for their children.

That’s much more likely to work than simply denying that these issues are problems.

Time to wake up Democrats! There’s no time to lose. Despite the messaging from DC that all will be fine in the mid-terms if the Dems just pass a few pieces of legislation, their problems are much deeper. To help them wake up, listen and watch Della Mae, an all-woman American bluegrass band perform their 2021 tune, “The Way It Was Before“.

Sample lyric:

I left my home and rolled the dice
Followed the promise of a better life
Now I work at the factory
On the third shift while my kids sleep
They say our job’s a necessity they turn the lock and hide the keys
They call us heroes on the killing floor but a day off is something that I can’t afford

We can’t go back to the way it was before
While some profit off the ones who just endure
We all know what’s broken won’t get fixed by wishin and hopin
We can’t just go back to the way it was before

Saturday Soother – November 13, 2021

The Daily Escape:

Coral Pink Sand Dunes State Park, UT – November 2021 photo by Byron Jones

This week’s Veteran’s Day apparently isn’t finished with Wrongo just yet. It’s important to remember that when the US war in Afghanistan ended in August after nearly 20 years, there were both hard and soft costs that had been paid, and much that remains to be paid.

The Pentagon reports the hard costs of our Afghanistan adventure to be $825 billion. However, the “Costs of War” project at Brown University estimates those costs at $2.313 trillion. But it gets worse: They estimate the costs of all US post-9/11 war spending at $8 trillion, including future obligations for veterans’ care and the cost of borrowing on the associated federal debt for roughly 30 years. They also estimate the human costs of the “global war on terror” at 900,000 deaths.

Those are all truly staggering numbers.

And Congress is now considering next fiscal year’s military budget. Defense One is covering this so you don’t have to. They’re saying that the proposed 2022 defense budget will be another bipartisan effort by the old-timers in the House and Senate to add more money than was asked for into the pot. And it’s part of a long history of hiding flimsy arguments behind dramatic rhetoric: (parenthesis by Wrongo)

“This year, both the Senate Armed Services Committee (SASC) and House Armed Services Committee (HASC) have displayed a similar unwillingness to distinguish between needs and wants in their versions of the National Defense Authorization Act, which recommend adding $25 billion and $24 billion, respectively, to President Biden’s recommended $715 billion Pentagon budget.”

“It is difficult to imagine how either the SASC or HASC could convincingly demonstrate the necessity of such military spending increases when none of the most urgent crises facing the United States today have military solutions. Furthermore, the credibility of both the Pentagon and Congress on this subject is, to put it mildly, underwhelming: one has an extensive history of budgetary boondoggles, and the other is openly cozy with the U.S. arms industry.”

Defense One says that the most frustrating aspect isn’t the exorbitant amounts, but the lack of any substantive strategic justification for the increased spending by either Chamber. In specific, Defense One argues that there’s been no effort to demonstrate that the Senate’s billions are funding needs instead of simply political wants.

Remember this is from Defense One, a stalwart defender of America’s military.

We shouldn’t assume legislators think carefully about the public’s interest when crafting the defense budget. Over the years, the defense budget process is driven partly by what the administration and the Pentagon ask for, and by what the defense industry wants for its bottom line. (Full disclosure, Wrongo holds a significant number of shares in a large defense contracting firm.)

US military spending in 2020 was $778 billion. The next closest nation was China, at $252 billion. In third place was India at $72.9 billion. Another perspective is to compare what we spent to fight in Vietnam to the costs of our Apollo moon landing. Apollo 11 got to the moon in July of 1969. That feat cost the US about $25.8 billion.

During the same era, it’s estimated that the Vietnam War cost the US $141 billion over 14 years. That means that we spent about as much in two years in Vietnam as we spent on the entire space race!

When we think about accountability for the costs of the Pentagon, we should remember that the Pentagon has never passed an outside expense audit. Waste is endemic; and the Pentagon simply fabricates numbers, but receives nearly zero pushback from Congress.

There’s so much corruption in the halls of Congress that we will never know how little we could spend on defense. Maybe we should just make some deep cuts to the defense budget and force real strategic decision-making down their throats.

Enough! It’s Saturday, and we need to take a break from trying to figure out whether Steve Bannon or Kyle Rittenhouse will ever go to jail. It’s time for our Saturday Soother.

With a soaking rain in Connecticut today, we’re limited to indoor sports. Most of our fall clean-up is still ahead, but today, let’s grab a seat by the window and listen to pianist Max Richter’s “Mercy” with Richter on piano and Mari Samuelsen on violin. Richter originally wrote the piece 10 years ago for violinist Hillary Hahn. For Richter, “Mercy” places the need for mercy and compassion firmly within our view:

Monday Wake Up Call – October 25, 2021

The Daily Escape:

Anza-Borrego Desert SP, Borrego Springs CA – October 2021 photo by Anthony Pilny.

According to Politico, Joe Biden hosted Sen. Joe Manchin (D-WVA) in Delaware on Sunday, where Biden was spending the weekend. They’re trying to find common ground on the Biden social spending plan. Senate Majority Leader Schumer also attended.

As of now, nothing has been released about the substance of the meeting, or whether they’ve made any progress towards bringing a revised bill forward in the Senate.

The meeting comes at a critical time for Biden, who is seeking to clinch a deal with both Manchin and Sen. Kyrsten Sinema (D-AZ) on his social spending plan this week. And it has to happen soon. Democrats have to pass something, or they risk being as dysfunctional as the press says they are.

The Progressive Caucus had a plan: the social spending bill passes the Senate via Reconciliation, and then the infrastructure bill passes in the House. Both pass in lock step. Now, if both stay linked, both could easily fail. Is the House Progressive Caucus prepared to sink the infrastructure bill? We’ll soon find out.

The Democratic House and Senate caucuses have been largely behind the president’s agenda, but that’s been obscured by Manchin’s and Sinema’s foot dragging. The cruel fact is that without substantive movement by both Senators, they could be on the verge of killing Biden’s signature programs.

Why Manchin is doing this is easy to see. He is the only Democrat holding statewide office in West Virginia, as well as the only Democrat in West Virginia’s congressional delegation. He won reelection in 2018 by just 19,400 votes. According to FiveThirtyEight, Manchin has voted with Biden 100% of the time up to May 2021, but now his constituents are pressuring him to leave the Democrats, and he’s feeling the heat.

Sinema also has a strong Democratic voting record. However, there isn’t a reliable view of what would bring Krysten Sinema to vote for the social spending bill, although she did vote to bring the Freedom to Vote Act forward for debate. Arizona is in the midst of demographic change that may insure a durable Democratic majority, but Sinema doesn’t appear to be near the center of where the Arizona Democrats are heading.

The Democrats’ problem with these two Senators also highlights that zero Republicans are willing to defect from Mitch McConnell’s anti-Biden position. It has been at least a decade since there was a credible possibility of Republicans crossing the aisle in these circumstances.

Fifty seats +1 in the Senate was never going to be a position of political strength for Democrats, and they’re lucky to have avoided being in the minority in both Houses after the 2020 elections. Biden needs both Senators to stop obstructing, and to stand with the Party, although Sinema may be a one-term Senator, she will hold the seat until January 2025.

In the past, Manchin and Sinema would have gotten some extra money or projects for their states, the bill would have passed, and we would have moved on to talking about something else. But it’s been clear from the start that isn’t Manchin’s and Sinema’s game.

Manchin is wealthy. He’ll be 77 at the end of his current term. Fear of an investigation into his coal holdings might motivate him to think differently about his vote. Sinema is new to politics, and seems not to be looking towards her re-election, but to a future on the corporate gravy train.

Given Manchin’s and Sinema’s intransigence, there may be no political endgame available for Biden. Without a compromise, they could cost Biden a second term.

It is now completely clear that the entire US political system is corrupt and sclerotic, broken from top to bottom, and it has been for decades. Political reform needs to happen, but the crux of the current problem is that the Democratic Party’s leadership must change also. If that were to happen, a Trumpist wave could end democracy as we know it long before a new Democratic Party leadership could secure a working majority.

It’s time to wake up Democrats! Take a small win now, and then work to reform the Party. Losing seats in the 2022 Mid-terms can’t be an option.

To help you wake up, listen to Maria Muldaur sing a brand new tune, “Vaccinated and I’m Ready for Love”, released this month:

Muldaur is an American folk-blues singer probably best known for her 1974 hit song “Midnight at the Oasis“. This is bluesy and fun!

DOD Could Save $1 Trillion Without Changing US Security

The Daily Escape:

Sea Street Beach East Dennis MA – October 2021 photo by Ulla Wise

Rather than adding to the current vibe of general despair, a new report from the nonpartisan Congressional Budget Office (CBO) offers a number of interesting perspectives on how the US defense budget could sustain a $1 trillion cut over the course of 10 years.

The CBO report says that national defense programs could absorb a well-structured $1 trillion cut while still protecting the homeland and America’s allies from foreign adversaries.

From Responsible Statecraft:

“The new report outlines three different options for cutting the Pentagon budget by $1 trillion over the next decade — a 14 percent reduction. Doing so would still leave the department with $6.3 trillion in taxpayer dollars over the next ten years, in inflation-adjusted 2022 dollars.”

The report’s mandate was to look at how to adjust the size and focus of US military under smaller federal budgets. It created three broad options to illustrate the range of strategies that the United States could pursue under a budget that would be cut gradually by a total of $1 trillion, or 14%, between 2022 and 2031. They developed the options using their Interactive Force Structure Tool.

Here are the CBO’s three options for military force reduction:

Maintain the existing national security strategy but with fewer personnel.
Change the existing national security strategy to focus more on countering adversaries with international allies and coalitions.
Change the existing national security strategy to focus more on protecting America’s access to sea, land, and air and space.

In all three options, the CBO slashed full-time active forces, while leaving the less expensive reserves at their current levels. While acknowledging that “none of the plans are without risk,” they concluded that the Pentagon could reduce spending without sacrificing our security.

According to the report, in all three of CBO’s options, units would be staffed, trained, and equipped at the same levels as they are today, but there would be fewer units, or different combinations of units. The CBO chose to retain fully staffed units because, while personnel are expensive, partially staffed units would not be able to execute their missions. That would make the US more of a paper tiger than we are currently.

The CBO report also put the potential cut in historical perspective. While significant, a $1 trillion cut (14%) over a decade would be far smaller than the cuts America’s military spending in 1988 to 1997 (30%), and the 25% cut we had in 2010-2015. A 14% cut from fiscal years 2022 to 2031 would also still leave annual defense spending at more than it was at any point from 1948 through 2002.

Lindsay Koshgarian, program director at the Institute for Policy Studies (IPS) said:

“The US military budget is now higher than it was at the peak of the Vietnam War, the Korean War, or the Cold War….We are spending far too much on the Pentagon, and too little on everything else…”

A $1 trillion saving isn’t chump change. Those funds could be used to prevent future pandemics, address climate change, or reduce economic injustice. None of those are small matters. And they are all matters of political priorities.

No self-respecting Republican war hawk would have anything to do with cutting the military’s budget. And with the exception of a handful of left leaning Democrats, every other Democrat will shrink from the idea of reducing the military budget. It’s too risky politically.

We actually need Congress to solve three problems: Our revenue problem, our social spending/cost inflation problem, and our defense spending problem.

The CBO idea tackles the defense spending, but we need to consider taxes and revenue along with spending. We need to raise taxes on corporations and the wealthiest individuals while cutting that defense spending.

Turning to social spending, if you ask Americans what spending they want to cut, they will never say that we ought to ravage people’s retirement security. And 90+% of entitlement spending goes to the elderly, the disabled, or people who worked at least 1,000 hours in the past year. The big savings should come from reducing the growth in the cost of medical services.

Taking $1 trillion from Pentagon spending would be a great start, but we have other work to do.

Saturday Soother – October 9, 2021

The Daily Escape:

Truro, MA – August 2021 photo by Tom Baratz

(Wrongo and Ms. Right have temporarily relocated the house of Wrong to Truro, MA for two weeks.)

With all of the talk about debt limits and infrastructure, America hasn’t focused on Sen. Ted Cruz’s (R-TX) delaying the nomination of 59 would-be US ambassadors. He’s said he’ll block dozens more. From the NYT:

“Democrats call Mr. Cruz’s actions an abuse of the nomination process and the latest example of Washington’s eroding political norms. They also say he is endangering national security at a time when only about a quarter of key national security positions have been filled.”

Cruz has put sand in the gears of the nominating process by objecting to the Senate’s traditional practice of confirming uncontroversial nominees by “unanimous consent.” His delaying tactic means that each nominee requires hours of Senate floor time while other major priorities, including Biden’s domestic spending agenda, compete for the Senate’s attention.

Cruz has had help from some of his Republican colleagues. Only 12 State Department nominees have been cleared for a full Senate vote by the committee, because Republicans on the committee have assisted in the foot-dragging.

Cruz says that he’s doing this to protest Biden’s stand in favor of Nord Stream 2, a gas pipeline project from Russia to Germany. In May, Biden waived congressionally imposed sanctions on the project. Nord Stream 1 got started in 1997. Nord Stream 2 was finished last month. There has been criticism of both projects since the 1990s because they provide Russia with some leverage over European energy security, while also circumventing Ukraine, which operates a competing pipeline for Russian gas.

But the project helps Germany, and Biden decided to prioritize our relations with Germany.

Cruz isn’t alone. Noted Republican weenie Sen. Josh Hawley, (R- MO), is vowing to block all national security nominees over the Biden administration’s handling of Afghanistan. He wants Secretary of State Blinken, Secretary of Defense Austin, and national security adviser Jake Sullivan to resign.

Cruz also delayed the debt limit deal negotiated between the Dems and the Republicans this week. A deal emerged on Thursday in which Senate Minority Leader Mitch McConnell (R-KY) agreed to support a short-term debt extension, giving Democrats time to pass a full extension in December.

The Parties had planned to let the fix go through with a simple majority vote, but Cruz overturned that arrangement by insisting on a filibuster, meaning that the deal needed to find 60 votes for cloture in the Senate. That caused McConnell to find ten Senate Republicans to vote for it. In the end, 11 Republicans voted for cloture, and then the Dems passed it on a party-line vote.

But EVERYBODY knows that ending the filibuster would be wrong because the filibuster ensures bipartisanship.

There isn’t a clearer example of how the Senate filibuster has become a tool, not to protect the minority, but simply to sow chaos. Today, it is used to stop Biden’s appointments, or to slow down his legislative priorities. Historically, it was used to block civil rights legislation.

Never before has the filibuster been used so cavalierly.

Democrats have discussed filibuster carveouts for the debt ceiling and voting rights. McConnell’s agreement to allow Republican votes for cloture on the debt ceiling was largely a message to Democratic Sens. Manchin and Sinema, showing that the system still works. He’s saying to them that they can count on McConnell and the Republicans when the Democrats can’t muster the votes they need if the vote is in the national interest. So they shouldn’t vote for a filibuster carve-out.

The clever McConnell has made Schumer’s job over the next few months even more difficult.

The weekend is upon us, so it’s time for our Saturday Soother. Tomorrow, we will be enjoying the Wellfleet Art & Oyster Crawl, where you walk between art galleries that offer wine and oysters to the an increasingly tipsy crowd of potential buyers of local art.

For you, take a few minutes to leave the machinations of Cruz, McConnell, and Schumer behind. Grab a seat by a window and listen to Yo-Yo Ma and Kathryn Stott play “Over the Rainbow” from 2020’s “Songs of Comfort and Hope“.

The album was inspired by the series of recorded-at-home musical offerings that Ma began sharing in the first days of the COVID-19 lockdown in the US:

While this performance is instrumental, here’s a sample of the lyrics:

When all the clouds darken up the skyway
There’s a rainbow highway to be found
Leading from your windowpane
To a place behind the sun
Just a step beyond the rain

Somewhere, over the rainbow
Way up high
There’s a land that I heard of
Once in a lullaby

Biden Invites Sinema and Manchin to Talks

The Daily Escape:

Sunset, Cape Disappointment, WA – September 2021 photo by Rick Berk Photography. The lighthouse was built in 1856 and was the first in the Pacific Northwest.

In politics as in business, there’s theater, and then there’s the real work. Biden outlined his goal of raising taxes on the wealthy to strengthen the middle class and boost the economy in remarks on Thursday afternoon at the White House.

On Wednesday, Biden met with Sens. Joe Manchin (D-WVA) and Kristen Sinema (D-AZ), looking to find a path forward on the infrastructure bill, along with the big social spending package and Machin’s voting rights bill.

Democrats will use budget reconciliation for the social spending bill, bypassing Republican opposition. It allows them to win Senate passage with 51 votes, with VP Harris casting the tie breaking vote, rather than the 60 votes that would otherwise be required.

But that means Manchin and Sinema need to vote for the big bill, something they have said they won’t do. No one who was in the room when the talks took place came out and said that a deal was pending. But there’s still time for that to emerge.

The House Ways and Means Committee unveiled a tax proposal this week to pay for the $3.5 trillion package, which includes Democrats’ plans for universal pre-K, expanding Medicare, child and elder care, and the environment. The committee approved its portions of the big bill in a near party-line vote Wednesday, which included the new tax provisions.

Predictably, the WSJ’s editorial board weighed in on the proposed tax plan, saying:

“…this bill looks like a House Democratic suicide note.”

More from the WSJ: (Emphasis by Wrongo)

“If Americans are successful, Democrats want to tax more of their income. The top individual tax rate will rise to 39.6% from 37%, as Mr. Biden promised. But wait: The higher tax rate will kick in at a mere $400,000 for individuals and $450,000 for married couples. That’s down from $523,600 and $628,300 under current law.”

A mere $450,000. They trot out their “pity the poor rich” trope any time the possibility that tax rates might be raised shows up. Let’s unpack this:

The 98th percentile of household income is $387,116 and the 99th is $531,020,

This opens the possibility that there will be some families that are below the 99th percentile of household income and above the 98^ththreshold. Under the new law, they would be forced to pay about $700 more in taxes than they do now. That’s assuming the Democrats’ latest effort at socialism in America is enacted. This paltry tax increase might cut into the nanny’s Christmas bonus. Why are Democrats so cruel?

Don’t Forget the Debt Limit

The Daily Escape:

After Hurricane Ida, Grays Beach, Cape Cod MA – photo by Casey Chmieleki

With all the screaming headlines about Afghanistan, Texas anti-abortion laws and the march of the Delta variant, you probably missed that the US government is running out of money. Reuters explains it:

“Leaders of the Democratic-led Senate and House of Representatives are expected to force votes to lift the $28.4 trillion debt limit in late September. The limit was technically breached on July 31 but is being circumvented by Treasury Department “extraordinary” steps.”

This is an unavoidable political issue for both Parties, because while people dislike the idea of more government debt, they really like the goodies that come along with that debt.

This is happening while the Democrats are jousting with each other, trying to find 50 Dem votes for the bipartisan infrastructure bill, a budget resolution, and a budget reconciliation bill. But they also need to work on increasing the debt limit. From Ed Kilgore:

“The debt limit was suspended in 2019 as part of a two-year budget deal between Congress and the Trump administration intended to postpone major fiscal fights until after the 2020 elections. The deal expired on August 1, 2021, with the effect that the debt ceiling was adjusted upwards to the level of debt as it exists right now.”

Accruing debt above $28.43 trillion requires an increase in, or suspension of, the debt limit. At current levels of expenditure, the government’s checking account, called the Treasury General Account (TGA) at the Federal Reserve Bank of New York, will hit zero in mid-October. It can be extended by “extraordinary measures” into November, which is when the US government would begin defaulting on its bills.

The politics of government funding and increasing the debt limit are always a farce, and it’s no different this time. Republican Senate Minority Leader Mitch McConnell has already announced that Democrats cannot expect a single Republican vote for a debt limit measure right now.

That’s a political problem for Democrats, because a debt limit increase or suspension is subject to the Senate filibuster, requiring 60 Senate votes unless there’s some way around — like including it in a filibuster-proof budget reconciliation measure.

McConnell helpfully suggested that Democrats should just include a debt limit increase in the Fiscal Year 2022 budget-reconciliation bill. But that would guarantee Republicans could “blame” Democrats in the 2022 mid-term election for an increase in government debt.

The foul Republican tradition of trying to hold Democrats hostage when an increase in the debt limit is required, only goes back to the odious Newt Gingrich in 1996. We all know how the farce ends: Congress will avoid default at the last possible minute, just as it has done 78 times without fail since 1960, after concessions are extorted from the other side.

It’s a farce because Congress has already appropriated the funds to be spent and to be borrowed. It has told the Administration in detail how to spend those funds. Now Republicans in Congress want to say (again): “Nope, you can’t borrow the money to cover what we told you to spend”.

Republican Congress critters know we must pay our bills, but for myriad cynical reasons ̶ or just plain political incompetence, they keep the issue alive budget year after budget year, and vote after vote.

The debt limit shouldn’t be increased; it should be repealed. The passage of a budget or any other legislation has an implicit expectation that the government will need to raise x and/or spend y. It’s really that simple. Congress should bite the bullet, and never again need to fight about it.

When they debate the debt ceiling, remember the only reason it’s happening is because one half of our government is good at politics but has no ethics, morals, or sense of patriotism, while the other half of our government is breathtakingly bad at politics.

Eventually, it will be obvious that the Republicans are really fighting about increasing taxes on corporations and the ultra-rich.

We all would be better off if this bullshit ended, and Congress got on with real work.

Monday Wake Up Call – August 16, 2021

The Daily Escape:

Bear Sculpture, Kent CT – August 2021 iPhone photo by Wrongo

ProPublica reported that: “Secret IRS Files Reveal How Much the Ultrawealthy Gained by Shaping Trump’s Big, Beautiful Tax Cut”. The article shows how billionaire business owners deployed lobbyists to make sure Trump’s 2017 tax bill was tailored to their benefit: (emphasis by Wrongo)

“In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings….Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family…and the heirs of the late Houston pipeline billionaire Dan Duncan.”

Trump’s Tax Cuts and Jobs Act was the biggest rewrite of the tax code in decades. It is arguably the most consequential legislative achievement by any one-term president. It was crafted in secret, with lobbyist input, and then rushed through the legislative process.

ProPublica says that as the draft of the bill made its way through Congress, lawmakers and hired lobbyist friendly to billionaires were able to shape the bill’s language to accommodate special interests. The final version of the bill led to a vast redistribution of wealth to the pockets of a few wealthy families.

This siphoned away billions in tax revenue from the nation’s coffers. Here’s a chart of the tax savings of the big winners:

This gets a little technical. Corporate taxes are paid by what are known as C corporations, including large firms like AT&T or Amazon. But most businesses in the US aren’t C corporations, they’re what are called pass-through corporations. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, the profits “pass through” directly to the owners, who pay taxes on the profits on their personal returns.

Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, #2 on the list above, a packaging distributor with thousands of employees.

Republicans touted the Trump tax cut as boosting “small business” and/or “Main Street,” and it’s true that many small businesses got a modest tax break. But a recent study by the Treasury Department found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%.

That’s because most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies. The tax break is due to expire after 2025, and Democrats in Congress want to end the provision early.

Senate Finance Chair Ron Wyden, (D-OR), has proposed legislation that would end the tax cut early for the ultrawealthy. He wants to end the gravy train for anyone making over $500,000 per year. It would be extended to the business owners below that threshold. Wyden’s proposal would make the policy both fairer and less complex, while also raising $ billions for priorities like childcare, education, and health care.

Time to wake up America! The current complaints by Republicans about the Biden efforts to rebuild the economy say that we shouldn’t have the nice things Biden has promised. They now (again) complain about the federal deficit. They continue to sit on their hands about raising taxes on their donors, despite those same donors reaping most of the benefits not only from the Trump tax cut, but from the surge of the national economy since it bottomed while Trump was managing the pandemic.

To help you wake up, watch and listen to “Patria Y Vida” (homeland and life) the song that has defined this summer’s uprising in Cuba. The title is a take-off on the slogan used by Fidel Castro, “Patria O Muerte” (homeland or death) for 62 years, since the start of the Cuban revolution.

This song of summer is also a deep protest song:

This is a rough time in Cuba. Trump’s sanctions policy sharply restricted the foreign remittances on which many Cubans rely. Then came the pandemic, which decimated the tourism industry. Cuba’s GDP has dropped roughly 11% since 2019.

In response to a recurring chorus saying, “It’s over now,” the singers call to Cuban officials and tell them: “Your time is done, the silence has been broken…we’re not afraid, the trickery is over now, 62 years of doing damage to our country.”

They add, “Let’s start to build what we’ve dreamed of; of what they destroyed by their own hand.”

Census Data Shows Big Changes Coming

The Daily Escape:

Big Balanced Rock, Chiricahua National Monument, AZ – photo by Arnaud Barré

From the WaPo:

“For the first time in the history of the country’s census-taking, the number of White people in the United States is widely expected to show a decline when the first racial breakdowns from the 2020 Census are reported this week.”

The headline news includes these facts: For the first time, the portion of White people could dip below 60%, and the under-18 population is likely to be majority non-White. In 26 states, the number of Whites has declined. Up to six states and DC could have majorities of people of color.

In case anyone was wondering what was motivating all the Republican voting restrictions, this is it.

The actual data will be released later today. So there’s at least some chance that the WaPo and Wrongo are well, wrong about the census results. That’s unlikely, since the numbers have been moving in this direction for years. More from the WaPo:

“Estimates from 2016 to 2020 show that all of the country’s population growth during that period came from increases in people of color. The largest and most steady gains were among Hispanics, who have doubled their population share over the past three decades to almost 20% and who are believed to account for half of the nation’s growth since 2010. They are expected to drive about half the growth in more than a dozen states, including Texas, Florida, Arizona, New Mexico and Nevada.”

The WaPo quotes William Frey, a demographer at the Brookings Institution: (brackets by Wrongo)

“The trend is projected to continue, with Whites falling below 50% nationally around 2045…[and] at that point, there will be no racial majority in the country. Between 2015 and 2060, the Hispanic and Asian populations are expected to approximately double in size, and the multiracial population could triple due to both immigration and births.”

America is heading into uncharted territory. Our older generations will be much Whiter than younger ones. Racial minorities will drive the growth in the US labor force as White Boomers retire. Frey calls what’s about to happen a “cultural generation gap”.

This could mean that both groups may compete for resources. For example, public spending on services for seniors versus spending on schools or job training.

The new data are also expected to reflect continuing ethnic diversification of the suburbs. Now, more minorities live in suburbs than live in cities. Frey says that the vast majority of the nation’s more than 3,000 counties and its more than 350 metropolitan areas became less White in the past decade.

All of this has tremendous implications for social cohesion. Cities and states that want to sustain economic growth will need strategies to attract minorities. That’s already happened in places such as Kansas, the Philadelphia metro area, Miami-Dade County, and Prince George’s County, MD.

How predominantly White boards of directors manage predominantly diverse management teams and workers could be a big challenge.

The data release comes amid concerns over its accuracy. The 2020 count had huge problems, including the Trump administration’s attempts to add a citizenship question and block undocumented immigrants from being counted. On top of that, the pandemic caused major delays for the survey.

This release also provides the first look at whether last year’s count missed significant numbers of minorities. Arizona, along with Texas and Florida, each fell short of expectations with smaller gains in Congressional seats than projected.

The big event is that release of the Census data kicks off this decade’s Congressional seat redistricting. The clock is now ticking for states to draw new Congressional maps. The fact that the data are already late creates a scramble among most states to finish their maps before primaries begin next year.

In addition to questions about data accuracy, get ready for a new round of “white replacement” tirades from the Right. Expect to see a revival of the debate over whether the undocumented should be counted in the Census. Expect a fresh wave of Right-Wing anger directed against America’s minority populations.

Our ugly politics will probably get uglier, at least for a while.

It’s ironic that Republicans are both completely resistant to more support for families, although they complain loudly about the declining share of the White population.

It isn’t only people of color who need better policies – like more parental leave; control of healthcare costs; housing affordability; and better and cheaper childcare. It’s also those Millennials and GenZ’ers who are of child-bearing age who can’t afford kids.

Protecting voting for all Americans is the most important priority for Congress. Particularly now, as it seems clear that Republicans are trying to bail on democracy.

Why? Because it’s hard to promote White supremacy to non-white people.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Congress

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