Tuesday Reads: Daniel Inouye, Richard Engel, and Fiscal Slope Trial Balloons and Lead Balloons

Sen. Dan Inouye reads with children

Sen. Dan Inouye reads with children

Good Morning!!

Senator Dan Inouye, who died yesterday at age 88 was a Japanese American who fought for the U.S. in World War II. From Time Magazine:

On Dec. 7, 1941, high school senior Daniel Inouye knew he and other Japanese-Americans would face trouble when he saw Japanese dive bombers, torpedo planes and fighters on their way to bomb Pearl Harbor and other Oahu military bases.

He and other Japanese-Americans had wanted desperately to be accepted, he said, and that meant going to war.

“I felt that there was a need for us to demonstrate that we’re just as good as anybody else,” Inouye, who eventually went on to serve 50 years as a U.S. Senate from Hawaii, once said. “The price was bloody and expensive, but I felt we succeeded.”

Inouye had wanted to become a surgeon, but he lost his right arm in a firefight during the war. He was elected to the House in 1959 after Hawaii became a state. Inouye became well known nationally as a member of the Senate Watergate Committee and later as chairman of the Congressional committee that investigated the Iran Contra scandal.

In one of the most memorable exchanges of the Watergate proceedings, an attorney for two of Nixon’s closest advisers, John Ehrlichman and Bob Haldeman, referred to Inouye as a “little Jap.”

The attorney, John J. Wilson, later apologized. Inouye accepted the apology, noting that the slur came after he had muttered “what a liar” into a microphone that he thought had been turned off following Ehrlichman’s testimony.

Inouye achieved celebrity status when he served as chairman of the congressional panel investigating the Iran-Contra affair in 1987. That committee held lengthy hearings into allegations that top Reagan administration officials had facilitated the sale of weapons to Iran, in violation of a congressional arms embargo, in hopes of winning the release of American hostages in Iran and to raise money to help support anti-communist fighters in Nicaragua….

The panel sharply criticized Reagan for what it considered laxity in handling his duties as president. “We were fair,” Inouye said. “Not because we wanted to be fair but because we had to be fair.”

NBC foreign correspondent Richard Engel and his production team have been released after five days in captivity in Syria. The Guardian reports:

The group disappeared shortly after crossing into north-west Syria from Turkey last Thursday (13 December). NBC had no contact with the kidnappers and asked for a news blackout about the incident, which was observed by mainstream news outlets.

There was no request for a ransom during the time Engel and his crew were missing.

After being abducted they were put into the back of a truck and blindfolded before being transported to an unknown location, believed to be near the small town of Ma’arrat Misrin.

Throughout their captivity they were blindfolded and bound, but otherwise not physically harmed, said the network.

Read more at the link.

According to Beltway Bob (AKA Ezra Klein), a deal between President Obama and Speaker Boehner is in the offing, and it isn’t a good deal for old ladies who are trying to survive on Social Security.

Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.

On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.

Now how is that a win for Democrats? If we go over the cliff, Republicans are going to be blamed, and taxes will go up on everyone until Republicans give in to public outcry in early January. But Social Security, Medicare, and Medicaid cuts will inevitably be blamed on Democrats, who are supposed to fight for the social safety net. Then in 2014, Republicans will attack them for those cuts, and it will work–just as it did when Romney and Ryan falsely accused Obama of cutting Medicare benefits in the recent presidential campaign. Back to Beltway Bob:

The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I’m told that the details on this next sequester haven’t been worked out yet, but the governing theory is that it should be more reasonable than the current sequester. That is to say, if the two parties can’t agree on something better, then this should be a policy they’re willing to live with.

On stimulus, unemployment insurance will be extended, as will the refundable tax credits. Some amount of infrastructure spending is likely. Perversely, the payroll tax cut, one of the most stimulative policies in the fiscal cliff, will likely be allowed to lapse, which will deal a big blow to the economy.

Again, that doesn’t sound like a win for Obama at all. Let’s hope Beltway Bob is wrong again.

Dean Baker on the chained CPI: He argues that the chained CPI is not really applicable to seniors.

The Bureau of Labor Statistics (BLS) has constructed an experimental elderly index (CPI-E) which reflects the consumption patterns of people over age 62. This index has shown a rate of inflation that averages 0.2-0.3 percentage points higher than the CPI-W.

The main reason for the higher rate of inflation is that the elderly devote a larger share of their income to health care, which has generally risen more rapidly in price than other items. It is also likely that the elderly are less able to substitute between goods, both due to the nature of the items they consume and their limited mobility, so the substitutions assumed in the chained CPI might be especially inappropriate for the elderly population.

Baker explains for the umpteenth time that it is wrong to use Social Security cuts to lower the deficit.

It is important to remember that under the law Social Security is supposed to be treated as a separate program that is financed by its own stream of designated revenue. This means that it cannot contribute to the budget deficit under the law, because it is only allowed to spend money from the Social Security trust fund.

This is not just a rhetorical point. There is no commitment to finance Social Security out of general revenue. The projections from the Social Security trustees show the program first facing a shortfall in 2033 after which point it will only be able to pay a bit more than 75 percent of scheduled benefits. While this date is still fairly far in the future, at some point it will likely be necessary to address a shortfall.

It is reasonable to expect that the changes needed to keep the program fully funded will involve some mix of revenue increases and benefit cuts. However if the chained CPI is adopted as part of a budget deal unconnected to any larger plan for Social Security then it effectively means that there will have been a substantial cut to Social Security benefits without any quid pro quo in terms of increased revenue. This hardly seems like a good negotiating move from the standpoint of those looking to preserve and strengthen the program.

There is much much more at the link. Digby has been writing about this issue for months, and she had another good post on it yesterday.

There has always been some fantasy, mostly held by people who are about to be fleeced by Wall Street sharpies, that this country should be run like a cash business. It cannot and should not be done that way. (Ask Mitt Romney about the role of debt in a modern economy.) The problem is that this focus on debt is making it impossible to do the things we need to do to spur economic growth in the short term, which would close the deficit, and apparently the only way anyone in Washington can see to get around that is to sell off the future security of American citizens as some sort of human sacrifice for no good reason. It simply is not necessary, as Krugman shows.

John Boehner came up with a new “offer” this week-end to raise the rates on those who make a million or more each year and also agreed to take the debt ceiling off the table for the next year. Krugman thinks this is a bad deal which Obama has no good reason to take — and I would agree with him if I didn’t still see a very dangerous possibility that the administration wants to pursue some unacceptable spending cuts in order to deliver on that “balanced approach.” A looming debt ceiling fight is a very good excuse for them to do that. If kicking the can down the road another year will stop them from cutting more spending, then I’m inclined to say take the deal.

Obviously, this whole thing is ridiculous. They should get rid of this idiotic debt ceiling vote altogether: after all once they appropriate the funds they’ve agreed to pay for them whether through taxation or borrowing. This yearly vote allows them to get credit for the goodies and then later refuse to pick up the tab. But unless they are willing to give it up completely, I’d be glad to at least see it be delayed until the White House stops talking about cutting vital programs.

And yes, the taxes should go up for all income over $250,000. They can afford it. But not if the price is changing to the Chained CPI which will take the food out of the mouths of 90 year old women and squeeze veterans and disabled people who can’t afford it. In other words, the devil is in the details. If Obama hangs tough as Krugman prescribes and wins on all these points without giving up the store (also known as “making tough choices ” his own base “won’t like”) then I say go for it. I’m just not sure I have much faith that’s the game plan. If it isn’t, then maybe he should take Boehner’s offer, repeal the sequester and put this to bed for the time being. There’s been more than enough cutting already to drag this economy down. Let’s see what happens if we stop the austerity insanity for a while.

Dr. Dakinikat would probably agree with that.

Meanwhile, most Americans disapprove of the the proposed cuts to safety net programs, so maybe this will turn out to be another trial balloon that goes over like a lead balloon.

Most Americans want President Obama and congressional Republicans to compromise on a budget agreement, though they, too, are unhappy about the options that would avert the “fiscal cliff,” according to a new Washington Post-ABC News poll.

The strong support for compromise belies widespread public opposition to big spending cuts that are likely to be part of any deal.

Most Americans oppose slashing spending on Medicaid and the military, as well as raising the age for Medicare eligibility and slowing the increase of Social Security benefits, all of which appear to be on the table in negotiations. Majorities call each of these items “unacceptable.”

Wow. I’m running out of space already? Suddenly, a week before Xmas there’s more happening in the news. We’ll have to discuss other items in in the comments. So what’s on your reading list today?

57 Comments on “Tuesday Reads: Daniel Inouye, Richard Engel, and Fiscal Slope Trial Balloons and Lead Balloons”

  1. Pat Johnson says:

    I voted for Obama AGAINST the hated GOP and its idiotic nominee Mitt Romney.

    But I admit I did so holding my breath that Obama would actually “lead” since past experiences with him always left me disappointed.

    If what is being reported as a “deal in the making” is true then my fears about him holding strong on these proposed cuts are about to come true.

    Singling out the poorest and most vulnerable in their old age as a means to “balance the budget” yada, yada, yada, is his way of finding a “middle ground” is what is on the table, we don’t seem to have progressed very much in the long run.

    Cenk Urygur said last night that he does not “trust” Obama on anything and would be surprised if he ended up “doing the right thing” and I have to admit I am close to sharing this admission.

    Just as those of us who follow the Red Sox have little to hope for in this upcoming season with the decisions that have been made during the off season negotiations, I am beginning to feel the same about Obama’s rhetoric when it comes to “protecting’ the 98%.

    Time will tell if this becomes a reality. But I admit to not holding my breath with the idea of another round of “disappointment” more than likely to occur.

    It’s amazing how much I have learned to live with my cynicism over the last 12 years of “leadership” that has done little to advance the role of the needs of the nation when it comes to political “oneupmanship”.

    • bostonboomer says:

      I don’t trust him either, but I do think this may be another trial balloon. If there is another public outcry, they may go back to the drawing board. Sorry for the mixed metaphors…

    • RalphB says:

      I don’t trust him either, but this is Beltway Bob and the beltway howlers second attempt at announcing a “deal in the making”. Number one crashed and burned and number two could have the same fate one hopes.

      Changing to Chained-CPI has an even large effect on future increases in the tax rate than on SS payouts. Maybe someone should let the Republicans know that.

      • ANonOMouse says:

        Like you Ralph, I trust the beltway pundits even less than I trust Obama.

        I also agree with BB that this looks to be another trial balloon.

        We’re all so sick & tired of being sick & tired, but if these pols go this route it WILL quickly go from sick & tired to outright backlash. Pushing down our economic problems onto the Middle Class, Seniors & the Poor is and will be seen by the masses as an Austerity Measure.

        Obama better not sell us down the road to save Boehners tanned hide. Fuck the Tan Man. 🙂

      • quixote says:

        I hear tell that the Repubs know it’ll cause nasty tax bracket creep. Their solution? Chained-CPI should not apply to tax brackets. Only to benefits.

        Whee, as Atrios would say.

  2. Pat Johnson says:

    We all know what a “pessimist” I am but I am again troubled by the loss of two Dem senators in this upcoming new congress.

    The Senate seats of both Inouye and Kerry will be open and possibly calling for another election to fill them. Scott Brown may very well win his again and Hawaii is another one up for grabs.

    This will change the dynamic in the Senate once more if these seats do not remain in the Dem column.

    Should that happen the Dems will have even less leverage going forward. Oy vey!

    Ed Markey would be a good candidate but Brown has more name recognition in this part of the state.

    • bostonboomer says:

      Inouye will be replaced by a Democrat appointed by the Governor based on three recommended choices from the Hawaii Democratic Party. So that takes care of Hawaii. I don’t know what will happen in Mass., but I do think Brown hurt his supposed “good guy” reputation a lot in his last campaign. I think Markey would win.

    • RalphB says:

      The Senate seat in Hawaii is not “up for grabs”. Gov Neil Abercrombie will appoint the successor to Dan Inouye and Abercrombie is a true liberal, as evidenced by his service in the House.

      The electorate now is a far cry from 2010. If Scott Brown can win in MA, I’ll be very surprised.

      • bostonboomer says:

        I will too.

      • jawbone says:

        But what if Obama and the Dems enact his crap SocSec desires? Barry has talked about cuts to SocSec since 2007. That’s a long, long time for a pol to talk about something — and now Obama has the chance to do it. And make the Dems the scapegoats.

        He may be trying to outdo St. Ronnie, and, along with that, destroy the Dem Party.

        He acts like a Republican in so many ways, so why not try to give the R’s a fighting chance by ruining the Dem brand image?

        Scott just might get the anger vote from some Dems, plus many will, again, be disheartened. So Scott just might win…again.

    • ANonOMouse says:

      I heard Deval might run, is that true?

    • Pat Johnson says:

      What a different world we would live in if this horriffic tragedy in CT brought about the end of Fox News, the Religious Right, the nutso Tea Partiers, the NRA, A.L.E.C., Rush, Coulter, and Glenn Beck for starters.

      It’s crazies like these groups and individuals who promote this toxicity in appealing to the paranoid and like minded fools who sell this stuff wholesale.

  3. bostonboomer says:

    The difficult road ahead for siblings of children who died at the Sandy Hook school.

    Six-year-old Arielle Pozner was in a classroom at Sandy Hook school when Adam Lanza burst into the school with his rifle and handguns. Her twin brother, Noah, was in a classroom down the hall.

    Noah Pozner was killed by Lanza, along with 19 other children at the school, and six adults. Arielle and other students’ siblings survived.

    “That’s going to be incredibly difficult to cope with,” said Dr. Jamie Howard, a clinical psychologist at the Child Mind Institute in New York. “It is not something we expect her to cope with today and be OK with tomorrow.”

    • BB, what do you think about the decision to make the Monroe school the SHES kids will be going to look like the one they just survived? And the decision to make the kids go back to school so soon? you know, christmas break is just a few days away…I don’t know. With the latest threat at another elementary school in Newtown, I wouldn’t let my kids out of my sight.

    • Also, what do you think of this question from Cannonfire: CannonfireWhy do our young go violently mad?

  4. bostonboomer says:

    Paul Krugman responds to Beltway Bob’s report on the “fiscal cliff” deal.

    He’s not quite sure if the deal would be better than going off the “cliff.”

    • RalphB says:

      I’m in this camp to but leaning toward no deal, unless there is some good stimulus attached to it. The inflation measure used now isn’t real either, so far as I can tell.

      I want to see more — and also want to see whether the Republican crazies scuttle the whole thing before it even gets off the ground. If they don’t, there will be some serious agonizing for progressives, yours truly included.

      • bostonboomer says:

        According to Klein, the proposed deal doesn’t include much stimulus–it cuts off the payroll tax holiday and offers negligible infrastructure spending.

      • RalphB says:

        Beltway Bob may have leaned too far out over his skis again.

        Tiger Beat: John Boehner moving to Plan B on fiscal cliff

        House Republicans, discouraged by the pace of negotiations with the White House, will move their own bill that would hike tax rates on income above $1 million, according to several sources familiar with the plan.

      • ANonOMouse says:

        “Beltway Bob may have leaned too far out over his skis again.”

        LOL!!!! Well that splains it Lucy!!

    • dakinikat says:

      Dr. Dakinikat does indeed agree with Digby and Krugman here. I have no idea what the fixation is with social security. It has no issues and is not part of the deficit problem at all. This is ridiculous.

      • RalphB says:

        Cutting any ‘useful’ spending in order to get tax increases seems to be self-defeating and kind of dumb. The whole concept of that is wrong to me.

      • jawbone says:

        Obama has wanted to get at SocSec and Medicare since before he announced for the Dem nomination, way back in 2007. I think he gets it from his Uberwealthy buddies and sponsors. He wrote about it in one of his books, about how hearing things from the viewpoint of these rich and successful people made him rethink and begin to support their views of how the world should be.

      • bostonboomer says:

        He wrote about privatizing federal programs in The Audacity of Hope. He never actually said he meant Social Security or Medicare. The suggestion was there, especially since he had been involved in privatizing public housing and public education as a legislator in Illinois. But now that Obama has seen the public reaction to cuts in social programs, he has to know that if he does it, he will go down in history as the Democrat who destroyed the New Deal and Great Society programs. And we need to constantly remind him of that.

  5. RalphB says:

    Good for him.

    WAPO: Obama asks Cabinet members for proposals to curb gun violence

    President Obama on Monday began the first serious push of his administration to attempt to reduce gun violence, directing Cabinet members to formulate a set of proposals that could include reinstating a ban on assault rifles.

  6. Fannie says:

    I just got off the phone with our local Dick’s sporting store, and yes they have pulled the semi-automatic weapons off the shelves, and will no longer be selling them……………..and reading about Cereberus selling their stake in firearms company, Freedom. I don’t know alot about them except that many teachers have invested in them, and part owners and they are selling out.

  7. RalphB says:

    Nice chart showing how badly Chained-CPI polls. People really don’t like the idea.

    Yglesias: CPI Chaining Is Unpopular

    In addition to the substantive objections that members of congress may have to any kind of fiscal deal, you should never forget about the politics part of politics. Cutting Social Security benefits slightly is wildly popular with Pete Peterson, Pete Peterson’s son, the Peter G. Peterson Foundation, and a broad array of groups funded in whole or in part by the Peter G. Peterson Foundation. But as today’s Washington Post poll shows, it’s broadly unpopular with the American people since as a pure cash transfer it’s essentially a waste-free program and since retirement programs—unlike targeted programs from the poor—gain public support from white ethnocentrism rather than losing support.

    • jawbone says:

      Not that Obama respects what we the people think about things. Such as single payer or even the weak tea public option…

      Glenn Greenhouse did lay out the steps to shafting us recently, and we’re in about Step 3 in which those who asserted most strongly something would happen only over their dead bodies find that they must support Dear Leader and swallow disappointment and screw the lower economic quintile public.

      • bostonboomer says:

        IMHO, Glenn Greenwald (I assume that’s who you mean) has gone over the rainbow. I agree with him about torture and drones, but if he thinks we can stop the military he’s dreaming. On the other hand, Greenwald has never shown the slightest interest in poverty, the safety net, or women’s issues, so I’m very surprised to hear he’s writing about them now.

  8. RalphB says:

    Kevin Drum, who thinks that some kind of compromise is necessary on Social Security, doesn’t like the chained CPI “compromise”.

    The only proposal being offered right now is to adopt chained CPI, full stop. As far as I’m concerned, that’s unacceptable, and no Democrat should even think about endorsing it. We can argue all day about whether Social Security needs rescuing in the first place, and if we decide it does, we can then argue about exactly which combination of measures would be fairest and best. But some things should be completely off the table, and passing a package that’s 100% benefit cuts is one of them. It’s ridiculous. This is really a no-brainer.

    • dakinikat says:

      The biggest problem with this is that the CPI basket–and hence the chained basked of goods/services–that is used to calculate inflation is not a good basket for seniors. Their expenses are more heavily concentrated in health items and things that have a lot of price change. Senior budgets are not representative of typical family budgets if that makes sense. The CPI takes a budget of a typical US consumer and weights price changes by it.

      • bostonboomer says:

        They must spend a very large percentage of their money on food too, since they don’t have that much income.

        • dakinikat says:

          exactly … and they usually aren’t out buying houses.

        • dakinikat says:

          Dick Durbin: No cut in Social Security benefits


          This may cheer liberals who are worried that the White House is giving too much ground to Republicans by proposing “Chained CPI” for Social Security as part of a final fiscal cliff deal — in effect agreeing to a cut in Social Security benefits.

          In an interview with me this morning, Senator Dick Durbin, a top ally of the White House, told me he opposes including Chained CPI for Social Security in the final deal. He said it would be difficult for Democrats to support Chained CPI for Social Security if it ended up in the deal, though he said it was premature to say anything definitive about how they would vote.

          “We ought to deal with Social Security in a separate conversation that is not part of deficit reduction,” Durbin told me. “To do it at this stage is the wrong way to go.”

        • dakinikat says:

          The Nation ‏@thenation

          The chained CPI proposal in Obama’s fiscal cliff offer will hurt impoverished elderly women: http://tnat.in/gcwTn

      • RalphB says:

        I am fully aware of the difference in Chained CPI. Good for Durbin! Now if they can hold out we will all be better off.

      • bostonboomer says:

        Maybe Obama has assigned Durbin the bad cop role.

      • jawbone says:

        The chained CPI will also mean lower wage increases for Federal workers, Post Office workers, and for surviving spouses and children on Survivors’ Benefits and for the disabled on SSI.

        It’s a mean thing Dear Leader proposes.

      • bostonboomer says:

        Obama didn’t propose the chained CPI, Boehner did. Obama hasn’t said he’d support it, when the trial balloon blows up, he won’t.

      • jawbone says:

        Re; Durbin’s comments on Chained CPI–

        This could well be a distractions, to lessen the flood of calls, emails, anger against Obama’s giving this to the Repubs.

        Durbin will never vote against his fellow Illinoisian.

        Plus, hasn’t Dubin said SocSec and Medicare have to take hits? Now I have to google that….

  9. ANonOMouse says:

    Bumfuckerville has the solution, makes me so proud, NOT:

    Tennessee Considers Training And Arming Schoolteachers To Protect Against Shootings

    • jawbone says:

      And what happens when the first gun gets into the hands of a child or…who knows who…and kills or wounds someone in the school? Imagine what happens to a school district’s liability insurance!

      Plus, having taught in a high school with large classes, I can assure you it’s impossible to keep one’s eyes on every student, especially when small groups are working together and the teacher has to attend to each group’s needs.

      But, worse, were could the guns be stored safely and still be available for the “sudden” emergency?

      I would not teach in such a school, nor would allow my child to attend such a school.

      • jawbone says:

        Oh, and packing heat in crowded hallways?

        I had my wallet pickpocketed in a nice crowded hallway…and guns can’t be that much harder to steal.

  10. RalphB says:

    Dave Weigel: Graham, McCain and Collins Retain Their Veto Power Over Obama Nominees

    Has the successful tarring and feathering of Susan Rice calmed down Republican opposition to Obama nominees? What an adorable question. The answer is “no.” As they went to and from caucus lunches today, the Republicans who helped controversialize the Rice nomination (or pre-nomination) made reporters know that they had real concerns about the possible attempt to put Chuck Hagel atop DOD. A Weekly Standard reporter asked Graham to respond to Hagel quotes now making the rounds, in which the former senator criticized the influence of the “Jewish lobby” in Washington.
    And then came Sen. John McCain, who initially brushed off a question about John Kerry going to State because he didn’t want to pre-judge a nominee. (He really did say this.) When pressed, McCain said that Kerry’s Senate service and qualifications made him a serious contender. Alas: “He said Desert Storm would not succeed. He said, get out of Vietnam. Those things will, of course, be re-examined if he’s the nominee.”

    This is what Obama got for not nominating Susan Rice for SOS and fighting for her confirmation. Bullies are not satisfied when you back down. They only push harder.

    • bostonboomer says:

      I’m not the least bit surprised. When will Obama and his advisers ever learn?

      • RalphB says:

        He doesn’t seem like a stupid man but doing this over and over makes me wonder.

      • jawbone says:

        Why not assume he is intelligent and knows damn well what he’s doing.

        As in not even making nominations for the huge number of empty benches of the Federal judiciary?

        Is he waiting for a Repub senate or Repub prez?

    • Fannie says:

      I don’t think anybody will be listening to McCain.

  11. RalphB says:

    Matthew Yglesias finds the sweet spot. Let SS fully replace defined benefit pension plans.

    We Should Probably Be Increasing Social Security Benefits, Not Cutting Them

  12. janicen says:

    Just got this on FB from Planned Parenthood Action

    Great news! You did it!

    Together, you sent more than 118,000 letters urging Congress to protect the rights of military women by supporting the Shaheen amendment. They listened. A bipartisan committee just agreed to include it in the final defense bill! Thank you all for taking action, and thanks to Senator Jeanne Shaheen for leading the way. Huge!!