GOP Wins Big in War Over Spending Cuts

Last week perhaps the biggest policy war in the country was quietly settled with the outright defeat of one side – the Democrats.

Despite President Obama, their standard-bearer, and their apparent control of the Senate, the Democrats lost their struggle with the Republicans over whether to reduce the deficit by spending cuts or higher taxes on the wealthy.

They lost quietly and without complaint.

The two parties have long been unable to find a compromise on how to cut an additional trillion dollars or more from federal spending over the next ten years.

In an effort to force the parties to make a deal, Congress agreed to the sequester, a cut in federal spending that would affect all programs to the same degree.  Obama and Congress thought that the prospect of such reductions, affecting everything from defense to food kitchens, would be so unacceptable that an agreement would have to be reached.

Wrong.  The parties did not agree, and on March 1, the across-the-board cuts went into effect.

Obama and the media waited for the public outcry.  It never came, probably because this year’s sequestration cuts of $85 billion were not large enough to hurt.

But then, one of the reductions did hurt.  When some air traffic controllers had to be furloughed, flights were delayed.  Travelers were unhappy, and the media displayed pictures of disgruntled crowds at airline terminals.

Then, the Republicans saw their opportunity.  In the House of Representatives, they easily passed a bill allowing the head of the Federal Aviation Administration to shift funds from some agency services to air traffic control, ending the plan for equal reductions for all functions.

Senate Democrats, eager to avoid any blame for travelers’ delays, went along without a single negative vote.  So did Obama.

The result was that the GOP achieved a cut in spending, while avoiding some of its unpleasant consequences.  That almost certainly means that for this fiscal year at least, no serious attempt will be made to end the sequester and come up with a compromise.

GOP Sen. Susan Collins hailed the deal as a triumph of bipartisanship, when it really was a straight GOP victory.

The Republicans are likely now to be in a position to force spending cuts without giving ground on tax increases.  As a result, the deficit may be somewhat reduced, though not enough, and public services will have to be scaled back.

The GOP policy of maintaining as much of the Bush tax cuts as possible and repealing as much as possible of the social welfare programs sponsored by Democrats seems to be working.

It was probably not by chance that the trigger for the GOP to modify the sequester was air traffic control, which mostly affects middle- and upper-income people and not cuts to welfare or other low-income programs.

The Republicans have masterfully employed their control of the House and their almost constant use of the filibuster in the Senate to set national policy.

Contending with the GOP, a party widely thought to have been rebuked by the voters in the 2012 elections, Obama and Harry Reid, the Democrats’ Senate leader, have given ground.

They have been faced by Republicans, who ignore polling data showing they are held in low repute by the electorate and show remarkable determination and discipline in pushing their policies.

In contrast, the Democrats seem to like holding office more than using their control to take some political risks to achieve gains for their policies. 

In a television interview last week, a top Reid aide, when asked about what makes a politician successful, answered: “Getting re-elected.”  Absent was any sense that accomplishing something for the country while in office was a sign of success.

Europe, which adopted austerity as the way of overcoming recession, is beginning to realize that slashing spending imposes too heavy a penalty on people and that some government spending is needed to stimulate the economy.  The United States is moving in the opposite direction.

Reducing taxes has not yet stimulated more business investment that in turn would create more jobs, as the GOP maintains.    

While what government can do is limited, because of the size of the deficit, its spending cutbacks have slowed recovery, at least according to most economic commentators.  Government’s historic role in pushing growth has been ignored.

Voters may be impatient with both parties for their failure to find workable compromises that would, over time at least, both reduce the deficit and provide some stimulus to the economy.

But why should the GOP compromise when it’s winning?

Guns may become a ‘wedge issue’ cutting both ways

Shootings from Connecticut to Colorado have caused a new national debate about safeguards on gun sales.

The debate has raised the possibility that gun legislation could become a so-called wedge issue, but one that cuts both ways, providing political opportunity to people on both sides.

What’s a wedge issue?  It is a political matter used to cause a deep enough split among members of an opposing party that the party’s ability to win elections is undermined.

If a single issue becomes important enough in the minds of at least some voters that they vote based on that issue alone, they may end supporting a party with which they usually disagree on many other issues.

Often social issues have been used as wedges, usually by Republicans seeking to pry Democratic voters away from their traditional allegiance.  Same sex marriage and abortion are perhaps the best known, but flag burning and prohibition have been used.

Wedge issues can produce great political value.  For example, a Democrat votes for a Republican with whom the voter disagrees on foreign military intervention, because of the candidate’s position on same-sex marriage.

Of course, even if a wedge issue does not produce that kind of a political payoff, it can influence office holders of the opposing party. 

Until now, opposition to virtually any proposal to place limits on the sale of guns has been used successfully as a wedge issue. 

The National Rifle Association has traditionally led this opposition, pouring funds into the political debate to ensure that, in many parts of the country, only candidates favorable to its views and those of gun manufacturers will be able to win elections. 

Many Democrats have worried enough about the effectiveness of NRA opposition to adopt its positions.  When they didn’t, the GOP candidate’s chances improved.

Recent U.S. Senate votes rejecting efforts to increase background checks on potential gun purchasers demonstrates the effectiveness of the NRA efforts.  Democratic senators from states evenly divided by party would not support any gun safeguards.

Some conservative commentators had openly worried that, if the Senate voted for increased background checks, gun laws could become a wedge issue for the Democrats in 2014.  With Senate inaction, their concern melted away.

Wedge issues begin to lose their effect when public opinion changes.  In 2004, a major national poll showed that 62 percent opposed same-sex marriage.  Now, only 42 percent hold that position, and 53 percent favor same-sex marriage.

This change has had its effect on politicians.  Recently, several leading senators have moved from opposition to support.  More states, including Maine, have voted to legalize it.

The Sandy Hook school killings in Newtown, Connecticut, and the movie theater shooting in Aurora, Colorado, seemed to have awakened public concern about the easy availability of guns.  But opponents of regulation believe that such concern will quickly decline, just as it has in the past.  

That may be true, but there is a possibility that, contrary to expectations caused by the Senate’s failure to overcome a filibuster on background checks, gun safeguards could be a wedge issue for Democrats

Polls show that a majority of Americans has almost continuously supported increased gun regulation since 1990.  Republicans and Democrats, gun owners and non-gun owners have been among those favoring stepped-up controls. 

But the NRA has mobilized its supporters no matter their affiliation.  Guns have never been a wedge issue that could peel Republican voters away from their traditional allegiances.

Two factors may be different this year.  First, the series of shootings, in relatively rapid succession over the past year, may keep the issue alive in the minds of many voters.  In other words, enough gun atrocities may have occurred to sustain public concern.

And two new leaders have emerged to face off with the NRA.  Billionaire New York Mayor Michael Bloomberg, an independent, has enough money to duel politically with that organization on at least an equal basis.  He seems determined.

Gabrielle Giffords, the former Arizona Democratic member of Congress who was gunned down in Tucson, has also launched an effort to support new regulation.  She, too, seems determined to keep pressing the issue.

Rather than seeking gun control, they have more realistic goals.  They have limited their focus to a relatively modest effort for more and better background checks. 

 
Whether guns can be made a wedge issue for the Democrats, allowing them to attract GOP voters, remains in question.  If Bloomberg and Giffords keep the issue in front of voters, there is a chance for Democrats to benefit from it in the 2014 congressional elections.

Energy policy blocked by those who ‘just say no’

Because almost every energy resource comes under attack, making energy policy seems to be impossible.

Each time a new possibility is proposed, opponents appear and warn about the catastrophe it could cause.

Take a look at the list of resources and what opponents say.

Oil from the Middle East or Venezuela makes the United States vulnerable to political pressure from countries that oppose our policies and threaten our allies. The word “blackmail” pops up when talk turns to imported oil.

The alternative is oil from North America. In the United States, its exploitation can lead to massive leaks or spills or invasion of pristine national preserves.

Oil from Canada is drawn from Alberta sands, but the process is harmful to air quality. Woe be to us if a pipeline carrying such oil, like the proposed Keystone XL line or the Portland Pipeline, ever springs a leak.

There’s no point in talking about coal. Coal mining is dangerous and burning it can seriously harm air quality. It’s doubtful if there is any such thing as clean coal.

Natural gas is coming on strong. It has a less harmful effect on air quality than oil or coal. 

And it turns out there’s a lot of it in the United States.

But to get at natural gas, or oil for that matter, increasingly the industry uses hydraulic fracturing – fracking. That process can endanger drinking water quality, so many communities want it banned.

As for nuclear, Chernobyl or Fukashima were enough to scare the world. And we still cannot agree on how to store spent fuel so that it does not pose a radioactive danger to the world.

Perhaps the solution would be renewable resources that don’t cause any pollution and relieve our dependence on outside suppliers.

Hydro can produce more energy than any other renewable, and it has been used successfully for more than two centuries.

But dams prevent fish from swimming upstream. So we have had a policy in recent years of turning back the clock by tearing dams down, even some that have been functioning for ages.

And no new dams are being built except in countries like China that don’t mind what they flood or places like Labrador, which are so remote that opponents leave them alone.

Then there’s wind. It has been coming on strong with the kind of enthusiasm that was formerly associated with hydro.

But some people don’t like seeing wind turbines on ridgelines or strewn across the landscape. And, unfortunately, they are not reliable enough to provide a steady supply. 

What do you do when the wind doesn’t blow?

Solar seems to have relatively few problems to go along with the relatively few places where it can be used effectively.

And we will have to recognize that the development of renewables will increase our costs.

Recently, Maine regulators proved that point, when they approved offshore wind generation. They agreed electric rates could increase to cover development costs.

Perhaps the best solution is to use energy more efficiently, which means that we could get more done with less energy.

If homes were better insulated or cars could use electricity at hours when it was readily available maybe we would need less of resources we don’t really like. Though government subsidies for efficiency have increased, more tax dollars go to developing more supply.

Smart electric meters might be an effective way of helping use energy efficiently. But some worry about the radio frequency waves they use, and others think that any external control of home energy use would be an invasion of privacy.

By now, the picture is clear. There’s always somebody ready to oppose any proposed element of energy policy.

There are lessons to be drawn from this depressing picture.

With 5 percent of the world’s population, the United States uses 20 percent of its energy. We must conserve, but there’s no chance Americans will reduce their living standards or productive capacity to the point of only using a fraction of current consumption.

We are going to have use a mix of resources plus conservation and accept some downsides. If we choose resources that have the least environmental impact, we will need some way to prioritize those impacts and accept some of them instead of allowing opponents to pick them off one at a time.

We have to ask the question, “If you don’t like this resource, which mix of energy supply, adequate to meet our needs, are you willing to accept?

In short, when it comes to energy policy, "Just Say No" won't work.

Medicare reform comes to the fore

When it comes to trying to reduce federal government spending, the biggest issue is the ever-increasing cost of Medicare and Medicaid, the two largest government health care programs.

Recently, President Obama proposed reducing payments to health care providers and increasing copayments for wealthier recipients. But a lot more reform is needed.

Obama and some Republican leaders are considering making Medicare less complicated and having people pay more of their own health care costs.

Medicare involves four different kinds of insurance. Part A is hospital insurance. Part B is coverage for doctors’ costs. Part D deals with prescriptions. Medigap is supplemental insurance to deal with what’s not otherwise covered.

Part C is Medicare Advantage, a government-subsidized program that replaces some or all of the other parts. Its future is uncertain.

Medicare could be simplified by combining Part A and Part B. That makes increasing sense, because most doctors are becoming hospital employees.

A single program would have one deductible to be paid by the individual. That deductible could be higher than is usually the case with the two separate programs.

When people meet more of their medical care costs, it supposedly will make them more careful in deciding to get care. If today’s low patient payments promote wasteful and unnecessary usage, this approach could reduce program costs.

Obama goes even further. He dislikes private Medigap options that also may relieve the insured of any medical costs, because they encourage overuse. Even though such policies have high price tags, he would impose a special tax on them, either leading people to avoid them or pay even more for using them.

By increasing deductibles, Obama and some Republicans believe that people would have what House GOP Leader Eric Cantor calls “reasonable and predictable expenses.”

In fact, by setting fixed limits on total Part A and Part B outlays required of individuals, people might not even need to purchase Medigap coverage, according to the proponents of these reforms. If that proves to be true, total health care costs for the insured could decline.

Merging programs could lead to the eliminating a couple layers of insurance currently needed. Interestingly, for those eligible for Medicare, it would make the health care coverage look more like the single payer system.

Democrats could support cutting down on the number of insurers, while Republicans seem to like the idea of getting people to have an increased stake in their medical costs as a way of reducing the size of Medicare.

This concept has extended into the discussion of Medicaid, the program for lower-income people, which covers both seniors and younger people.

As part of the Affordable Care Act known as Obamacare, states were required to expand Medicaid, which they administer. The federal government would cover all costs of the program’s expansion for three years and 90 percent afterwards.

In approving Obamacare, the Supreme Court said the federal government lacked authority to force states to accept this change in Medicaid. But the Court said it could be offered as a voluntary program. Most states are finding it politically difficult to turn it down.

The federal Department of Health and Human Services and Arkansas have been negotiating an approach designed to make Medicaid expansion more appealing to reluctant states.

Instead of the new federal money going into Medicaid, it would be used to pay insurance premiums of newly covered people. The coverage would be provided by the new state insurance exchange, which is intended to provide a lower-cost alternative to traditional private health insurance.

This approach would require the participant to pay some costs and would support a market system for Medicaid rather than more direct government operation.

The problem with this idea is that the health exchange approach could be more costly than what Obamacare would pay for Medicaid. The reason? Like Medicare, Medicaid pays less reimbursement to health care providers than does a private insurer, even an exchange.

Some studies suggest that, over an extended period, the cost of the proposed alternative way of expanding Medicaid would be about the same as the state program. But, if those studies prove to be wrong, who will make up the shortfall?

Whatever the outcome of these discussions on Medicare and Medicaid, it is a positive development to see both parties and the federal government and some states talking about common solutions to reforming Medicare and Medicaid.

 
The question remains how to control hospital costs, which is the real driving force behind the rising cost of government health care programs.