Monday, March 18, 2013

Budget FAIL x 2

Ryan budget - FAIL
Senate Democratic budget - FAIL


I could leave it at that, but the topic deserves serious consideration, so I'll tell why both budgets are rotten, and thereby do more honor to budgeting than either party did. The GOP budget is a return of the usual Ryan chicken scratch. If this budget was a TV character, it would be wandering around dazed and with amnesia, unaware that it was rejected in the 2012 election. It contains all the usual Ryan touches: repeal of Obamacare, block-grants in place of Medicaid, and voucherizing Medicare ten years from now. Yawn. No, wait, I think they dropped the additional tax cuts for "job creators." So maybe there's only pervasive amnesia.

The Democratic budget is fairly similar to Obama's budget of 1.5 years ago, but with less stimulus spending--only $100 billion instead of $400B. The Dems are feeling their oats after the election win so the ideal balance is no longer 1/3 tax increases to 2/3 spending cuts. Instead it's 50/50. But in fact, there are no spending cuts, just slower spending growth. The deficit eventually slims down below 3% of GDP, but only if growth is significantly robust. In fact, the spending grows on average 4.7% per year, so we better have strong growth, or we'll have some mighty large deficits.

Of course, we don't really have to worry about the Dems spending as much as they say in their budget. It's as likely to pass as the GOP version. They are both losers, dead-on-arrival partisan toilet paper. We are on track to follow the prediction I made early this month--a status quo Continuing Resolution. Bigger yawn.

I think I'll take a nap for a few years, then wake up and see if the same predictable fake budgets are walking around like unfulfilled specters haunting the Capitol. Then I'll vomit.


Extra. The WSJ sugar-coats the Ryan budget and invents a new euphemism for a Medicare voucher system:
 "The idea is to revamp Medicare's benefits and premium structure so these relics from 1965 work like normal insurance and give seniors the incentive to take a larger role in their own care."
Yes, I'm sure that medical insurance for seniors can be just like auto insurance. That will totally work.

And good news of just desserts. Obama's approval rating is considerably lower, especially with independents. I interpret this as unhappy moderates (like me).


Truth > Spin said...

MP - Allow me to make a small case for treating health insurance more like regular insurance, or as you put it, an auto policy.

We can read the stated goal of "give(ing) seniors the incentive to take a larger role in their own care" as meaning that the seniors need to put more skin in the game - especially early dollars - and maybe also routine care.

Now think of your auto policy. Does it cover oil changes? How about new tires? Aren't those things absolutely necessary? And wouldn't doing them in a timely manner be preventative and reduce larger costs down the road? So, if they save money, why aren't they included in auto plans? The answer is because they are knowable and plan-able events, which isn't the purpose of insurance.

This is why it is absurd to cover things like contraception (or Viagra) or similar things as part of the general health policy or teeth cleanings for a dental policy. If everyone is going to utilize it, what's the point? Among who have you spread risk?

I understand that cost may be a barrier for some routine treatments for some people, but that doesn't mean that insurance the right place to correct the understandable social desire to make it more affordable. Direct financial support or credits would be vastly better and less distorting than forcing insurance to be what it was never supposed to be.

And since health coverage contains the worst of these distortions, making it more like other (or auto) policies, would be a good thing.

T>S said...

And welcome back. I hope you had a nice vacation!

Dangerous said...

Nearly all healthcare "insurance" is as much prepaid medical care as it is protection against financial risks from specifically unforeseen health situations. Particularly for the elderly, the specific timing and nature of ailments are secondary to the coverage.

The auto insurance model is not a good choice for health insurance because preventative health issues are often directly related to more expensive necessary treatments. If someone isn't inoculated, they may get the far-more-expensive-to-treat disease. If someone doesn't use birth control, she is far more likely to become pregnant.

Auto insurance is actually two policies in one, most of the time. Collision/comprehensive -- which covers the car itself and the protects against the financial risk of the loss of the asset -- and liability which covers the financial risk of someone suing you or getting in an accident with someone without insurance or recoverable financial resources. Health "insurance" is very different in that regard.

Auto insurance covering the asset is also not a very fair deal. I'm paying the same premium for that portion of my policy today as the day I bought the car, although the car is worth less and I'd only be reimbursed for its actual value.

Health "insurance" doesn't have a corollary in any other type of risk abatement, particularly since health maintenance DOES have a direct impact on later experience, on an actuarial basis. It's actually advantageous for an insurer to pay for preventative and maintenance procedures since it reduces or delays possible later expenses, even if the insured would be wise to pay for those actions even without coverage.

In addition, for many people just routine medical expenses are prohibitive. Including them in sponsored coverage is necessary. In those cases, HSAs and FSAs are a good surrogate to produce the same positive outcomes: self-regulation of expense. If parties on Medicare or Medicaid received some financial incentive in being able to keep their unused HSA-based account, they would probably be more discerning on a) seeking care, and b) checking on pricing of various care options.

ModeratePoli said...


I heartily agree that I want people to behave as though they had skin in the game, and Medicare doesn't do that. However, I don't know how to do that while avoiding the denial of reasonable medical care when someone runs out of money. I don't really know how to design a health insurance for the elderly that works like auto insurance. If you have an idea, please describe it in more detail.

I like health savings accounts, government-provided credits, or out-of-pocket for regular care, but only HSAs that roll over. My HSA didn't (many years ago), I lost several hundred, and I never used an HSA again. I don't need it, so it was mostly a way to use pre-tax dollars until the year when it wasn't. So another loophole masquerading as good policy.

I'm not happy that Obamacare is going such a maximalist route, covering so much. I wish it would be somewhat restructured, but I still support it way more than the GOP alternative, which was more of those loopy tax-exempt HSAs that work for the well-off and ignore everyone else, IIRC.

My vacation was good. I took my daughter to see relatives she hadn't seen in a long time, and there were some special moments, such as watching ostrich races with my 80-something mother. Well, that was mostly weird, but there was something poignant about it if I squint hard enough.

Truth > Spin said...

@Dangerous - if covering birth control really did save the insurance companies money, they would do it willingly and without a mandate. That they don't tells me it costs more than it saves. Same with any other example you can name. If it really did reduce actual dollars out the door, they would, rightly, do it on their own. I recognize that there is a tragedy of the commons at here to some degree, in that an insurance company may conclude that it would save money, but it might not save them money, i.e. the customer switched carriers before the payback occurred. But in a large enough, and closed, system, that shouldn't change the basic calculation.

Also, if you are paying the same premium to cover a deprecating asset, you are using the wrong company. My comprehensive portion does go down each year, or at least the value that the premium is based on does.

@MP - I am glad you had a nice / memorable / weird time on your vacation. By comparison, none of this other stuff matter so much.

I like HSAs too, but I recognize their limitations. I don't have a better plan. Or at least one I'd consider given the level of distrust between current and future policy actors.

ModeratePoli said...

@truth, if you have any ideas for healthcare reform, please share. You don't have to worry about the distrust of party actors here. This blog is obviously not a power center.

Truth > Spin said...

MP - it's not that I think people here are untrustworthy. What I mean is that our policy makers can't make the creative, brave and thoughtful actions needed.

In the current environment, they will be attacked from within and without the power centers. A GOPer who stands up to talk about new revenue will be primaried, which is at this point a bigger risk to most Members of Congress than the general election. A Dem who talks about cutting benefits will face the same, although not in as organized a fashion as the GOP would.

It used to be that a bargain could be reached in DC and the national committee would agree to not allow challengers to campaign against the issue. Even if there isn't the paper trail to support such an explicit deal, I can tell you it has certainly been implicit in the past.

But with challenging candidates finding significant resources and expertise outside of DC and the national committees, such deals can't be struck even if the vast majority know that it must.

Can we really expect any legislator to walk the electoral plank because as voters can't or won't take our bitter medicine?

Allow me to add that the back room, DC-controlled world of candidates and campaigns carried its own parade of horribles and there is a lot to like about the demise of the good old boy system.

Yet, systemically we haven't caught up with where we are and it is going to take some doing to get there. AS of yet, I don't see the path.

Anastasios said...

I tend to agree with Truth on the problems faced by policy makers. Really and truly, if the American people want to know why DC does not work all they need to do is look in the mirror. Or else they can read the February polls from Pew. One poll found very high support for deficit reduction based on budget cuts. The very next day a poll dividing federal spending into nineteen categories found that there was no majority support for cuts in any category, not a single one. There was majority support for increases in spending on education and health care. Oh well.

In terms of health care I do think te GOP did something with the pooch during the ACA debate. Twenty house members and five senators might have gotten HSAs coupled with catastrophic insurance as part of the mix. Ten senators and forty house members could have gotten tort reform and more robust state variances for experimentation. Fifteen senators and fifty house members could have gotten Medicare reform of some significant variety. Buuuuuut they wanted to bellow and posture about freedom and death panels. Once again, oh well.

Truth > Spin said...

Anastasios - in addition to what you thoughtfully added, a small group of sincere GOPers who were willing to work toward a yes vote (hell, maybe even just Olympia Snow) in the House or Senate could have pushed back against the Death Panel scare and allowed us to start dealing with the fact that such a huge portion of our health spending is done in the late stages without adding much appreciable longevity or quality of life.

And, such an alliance would have given the bill architects the capacity to let the union beholden Dems walk away rather than give up ground on the so-called Cadillac tax.

Both of these items would have added significantly to the later abandoned goal of bending the cost curve.

Anastasios said...


I do not know about the Cadillac tax as part of an easy deal. In the end with regard to the House you were always going to be up against what Pelosi would go for. Tort reform and HSAs? Probably. The Cadillac Tax would have been tougher, but if the GOP brought enough to the table, they could have got it. Heck, like I said they probably could have gotten some kind of real Medicare reform had they brought enough in exchange (in that case probably some kind of robust public option for the exchanges).

The situation with Snow was a real tragedy. Had she really fought she might have had to retire, but she might have done great service, especially if she could have brought Collins and maybe Brown and Voinovitch and Grassley along. As it was she folded uttering a set of patent untruths that unfortunately confirmed what some of her detractors had been saying for years (i.e. great at playing the common sense Yankee until you ask her to cast a truly tough vote, then expect vapid excuses and an irrelevant Longfellow quotation). And then she retired anyway. Thanks very much, Olympia.

ModeratePoli said...

@Anastasios, Perhaps I wasn't clear, but I understand that many politicians have backed themselves into ideological corners, and the voters have certainly been involved in that also. We all deserve to suffer, and we will. [I felt like writing that I'll be the first to shoot the whiners, but that's quite an exaggeration of what I'd like to do.]

By the way, I believe in years to come there will be plenty of motivation to tweak health care, so we'll have other chances. Hopefully our reps will be more prepared to act effectively then. But that's me, the eternal optimist long-term.

T>S said...

MP - if by "in years to come there will be plenty of motivation to tweak health care" you mean the piper demanding his due and there being no further road upon which to kick the can, then we agree. :)

Anastasios said...


I just do not know. I hope you are right, but I have less confidence both in the system and in American rationality than you do. The system has far too many veto points and interest groups have gotten far too adept at exploiting them.

In addition, I fear our political culture is largely motivated by emotional animus. At root, politics is often about "I just DESPISE those people!" Rational self- interest has little to do with it, much less does rational desire to help the country as a whole. Neither are absolutely necessary for good policy, but their absence, combined with serious systemic problems, does not auger well

Anastasios said...


Once again, I just do not know. People were saying much the same thing with regard to the country's problems circa 1856. I am not predicting war and violence. But just because catastrophe is clear and time has run out does not mean that solutions can be found and enacted.

ModeratePoli said...

@truth, yes, that's another way to put it. Ironic how much we're agreeing, isn't it?

@Anastasios, eventually the partisanship will die down enough for more deals to be done. I also believe that the IPAB will do a lot of good by stealth, and it will be implicitly accepted. Plus, it must signify something that government hasn't been shut down yet in an impasse. Deals get done, even if they're not carefully crafted deals.

Anastasios said...


Eventually the partisanship will die down, I agree, because eventually the partisans will die. But we may not have that long to wait before some pretty bad things happen.

Having said that, it may well be that some pretty bad things are going to have to happen no matter how you frame it. We may just be in one of those situations where things have to get worse before they can get better. I'm not just talking politics. We may just have to make economic and cultural adjustments that a lot of people are going to find very, very painful. I'm not so sure that things like IPAB, however necessary they are (and I would agree that IPAB is necessary) can act be stealth in the modern age, or that they will be accepted without a lot of bitterness.

I was reading a review of Gary Wills the other day, and something in it struck me. It was that Wills understood the importance of small towns (and cities that were overgrown small towns) in the formation of the American political and social culture. What was interesting was that I was reminded of something said about Obama back in 2008 -- what was really important about him was not his race, but his culture. He was the first American President who honestly and truthfully did not have ties to that strand of American culture. One wonders if much of what we have seen in the past decade is not related to the fact that the small town strand of American culture, arguable dieing since about 1920, has not reached a point where its decline can no longer be ignored, especially by people who still belong to it and treasure it. So much, from rhetoric to voting patterns to the political geography of the House to preferences in health care policy to fights over federal spending, revolves around that fact. And if it is true, it means that things won't get better until they get worse, because we aren't going to see a small-town revival either in terms of demographics or culture, and our politics probably won't go more smoothly until that strand of American culture grows weak enough that its travails no longer wrack the entire system. Quite a tragedy, really. It's like having a beloved Aunt whose decline you regret, but whose pain and demands have grown so sickening that you secretly and quiltily wish she would just die and put herself out of her misery -- and you out of her misery.

Anastasios said...

Some modification to what I said above. Obviously George H.W. Bush was not from a small town. Neither was John F. Kennedy. However, they, and all other Presidents, were adept at the "small town liturgy" that is so prominent in that, Wills and others would argue long-dominant, strain of American political and cultural life. Obama, with his "exotic" background, is the first President who is simply alien to the small-town liturgy both in fact and appearance. His election was a powerful symbol of how something fundamental in America seems to be changing. I remember a report from a small town in Iowa on the eve of the 2008 election. The reporter mentioned something to the effect of "once Presidents came from places like this, and not so long ago someone who didn't at least seem to speak to small town values would not have been politically qualified to be President. Now all the residents of this town can do is watch in bewilderment and rage and wonder why the world has become so strange."

ModeratePoli said...


Thanks so much for these comments reflecting on an issue that is deeper than today's headlines.

You may be reporting accurately what some small-town people feel, but I'm suspicious of the reasons for that feeling. For all we know, Obama grew up in a small town, though it was a town in Hawaii. Would that make the town ineligible for small-town status? Sure, Hawaii is "not like here," but people can say that about anyplace, even one state away.

More likely people are suspicious of his mother (marrying to non-white foreigners, studying for a master's degree, having academic background and ambitions). That's compounded by Ivy league education, being a professor, etc.
Then there are the charges that he's an adherent of Saul Alinsky, and he was groomed by former radicals.

Yadda, yadda, yadda. I remember people saying that Bill Clinton couldn't be trusted because he left Arkansas for the Ivy League, married a preppy Northern liberal, even went to hoity-toity England for a fellowship. Grew too big for his britches, and started thinking liberal thoughts.

Obama gives them somewhat more to work with, but I've heard this type of stuff before. It's conveniently branding him as "other" while others get a pass. Romney is less "small-town" than Obama. So is Guiliani. But they can get a pass. The reason Obama doesn't get a pass is other issues, like they disagree with his political views or they resent the superior tone from various academics over the years. Bottom line: A bogus complaint.

A couple of posts on related topics: on">suspicion, on conservative suspicion.

Anastasios said...


What I am going to say sounds strange even to me, but here goes. The charges leveled at Obama are bogus, but they are also real. That is they are factually largely incorrect, but nevertheless emotionally genuine. That is what makes them, and the general political and cultural developments they represent, so hard to contain. Honest Republicans that I personally know were at first amused then worried and finally angered over the whole birth certificate thing. They insisted it was not about race, and I believe that they at least genuinely believed it was not. But when I pressed them for what it WAS about, they rhetorically cast down their eyes and shuffled their feet. It was just. ... something. Somehow, some way, Obama's election was a wound to them even they could not explain. Finally, one of them said "how could the American people have done that!". Once again I asked what was wrong. Once again the hemming and hawing. It was ... something.

This is a problem I don't think Dems had over Bush or Palin or Reagan. Oh, they hated them alright. But they could state why in terms that were readily clear, even if you thought them unfair. I think with Clinton the GOP's objections were also clear (I always thought the man was slime myself, and I voted for him). But Obama, and I now suspect any Democrat after Obama? We are up against that ... something, a something that seems to bespeak a wound much deeper than picky differences - especially when many of Obama's policies were favored by many in the GOP until about five minutes ago. Republicans bristle if you say it's racism, and I will gladly take them at their word if te could just explain, clearly enough, what it is.

ModeratePoli said...


I agree that the feelings are emotionally genuine, but the people are treating them as valid when they are actually bogus.

As for whether they are racism, let me say this reassuring perception:

Many more people hate all quasi-liberalish Democrats than hate just the black ones. This is hatred of Democrats. For a few people, it's juiced up with some racism too, but that's not the part we need to focus on. What matters is the intensity of the hatred, and how wide it spreads.

As for the people who can't say why they don't like someone, and start hemming, I wouldn't assume it's racism, but you're the person who knows them. However, couldn't it be that they can't really verbalize it? Maybe they don't want to admit how much they hate liberals. What are some explanations you can think of?

I hope you read my post on suspicion. It is beastly being unjustly accused, or being treated unfairly. Racism is deeply offensive, and calling someone a racist isn't a thing I'll do lightly. And as you've read, I'm not opposed to ranting or calling people out.

Anastasios said...

This is going to be a very long answer, MP, for which I apologize, but these are complicated issues. First of all, I do think racism plays a large role here. Americans are no more racist as individuals than anyone else, and probably less than some (just listen to a high-caste Indian sometime, or remember that little thing called the Holocaust), but I think it's hard to claim that the particular demographics and history of the US don't make racism a large, and in many ways, crippling issue for social and political system.

But there is something else as well. I think my GOP friends I mentioned above largely have an attitude of exasperation. Liberals just aren't supposed to still BE here! These problems are supposed to have been fixed! Blacks should be members of the hard-working middle class who don't think of themselves in racial terms. Incomes were supposed to be rising across the board. America was supposed to be proud and admired and strong.

The fact that this isn't so means that either 1) liberals and their supporters are just being perverse, they just simply REFUSE to take the path to prosperity and strength laid out be conservatives, or 2) conservatism of its more recent variety is a God that failed, a system that did not deliver what it promised in the Age of Nixon and Reagan. Option two is so painful to face that they are left with option one. But they are intelligent and honest enough to know that isn't the truth. So we come to the muttering the foot shuffling, the opining that they can't believe that people support Obama because of ... something.

And that is why, much as I would like to agree with your optimistic take, MP, I am very sceptical. It would require superhuman psychological honesty for many in the GOP to face the fact that their God has died. It isn't because they are evil or weak, it's just that people by and large can't do that. Like the Athenian jury that condemned Socrates to death, even though they could not really point to anything he had done wrong, they just can't face the fact that some of their most cherished beliefs have been measured and found wanting. Liberals have their blind spots as well, and so do Centrists. It's just that history and fate have combined to place Conservatives in a situation where their's are more obvious, and more detrimental to everyone.

ModeratePoli said...


No apology necessary, especially when something is written from the heart, as yours was.

One thing I notice: you say you think racism plays a large role, then you provide a compelling political/psychological explanation that doesn't include racism. I agree with what you're sensing. I've seen similar behavior and exasperation is a good word for it.

I don't have a solution for this other than to say that I continue to push back against these mistaken perceptions. What else can you do?

Anastasios said...

I do think, overall, that both racism (overt and covert) and psychological denial play large roles. However, I do not think they are necessarily equal in all cases. With my friends, I think it is more psychological. With others, like many of my relatives, it is more racism. However I do not think that the racism is primarily about Obama himself, but more about the kind of person the Dems are seen as representing, combined with a strong sense of threat and disinheritance. If Hilary Clinton were President, I doubt things would be much different.