The Deafening Silence on Deficits

by: David Sirota

Wed Sep 09, 2009 at 08:48

"I'm not going to vote for a bill that's not deficit-neutral." - Sen. Blanche Lincoln (D-AR)

"I have also pledged that health insurance reform will not add to our deficit over the next decade - and I mean it." - President Barack Obama

In a health care debate whose lines have been moving in the ever-shifting sands, Democrats have drawn at least one immovable line in that sand: The health care bill, which will cost about $1 trillion over the next decade, must not add to the deficit. This is arguably the most confusing aspect of the entire health care discussion. I say that not because of any value judgment on the general concept of deficit neutrality, but because this line in the sand is not being drawn on any other piece of legislation, even those that are far more costly and deficit-expanding than health care.

If the deficit is so important, why aren't Democrats looking to cut the defense budget, which is rife with waste, and which costs $600 billion a year? If the deficit is so important, why aren't Democrats using their legislative power to stop Ben Bernanke from handing out trillions more in bailout cash, and where was Democratic opposition to the bank bailouts? If the deficit is so important, how come "budget hawk" Democrats are against the public option - a tool originally proposed as the primary way of driving health care costs/spending down? And if the deficit is so important, why aren't Democrats working to halt - rather than extend - the Bush tax cuts?

The Urban Institute's Howard Gleckman answers this last, most vexing question:

It is interesting, and perhaps worth noting, that while political opposition seems to be hardening against the $1 trillion, ten-year cost of the early versions of health reform, barely a peep of concern has been raised about the $3 trillion price tag for President Obama's plan to extend most of the Bush-era tax cuts. The message seems pretty clear: The President, congressional Democrats, and nearly all Republicans are fine with busting the budget to cut taxes for nearly everyone, notwithstanding a cumulative deficit over the next decade of $9 trillion. They are, by contrast, unwilling to spend one-third as much to provide medical insurance for those who cannot afford it.

The politics of this is easy to understand. When it comes to aiding industries and rich people (ie. special interests with lobbying armies in Washington), all counter-arguments, even those about the deficit, are ignored. But when it comes to aiding regular people who haven't bought Members of Congress, every argument - and especially deficits - are cited as reason to do nothing.

What's genuinely confusing is the media's complicity in this. Reporters and journalists are employed to report, analyze and clarify the political debates in Washington. Quite literally, that's what they are paid to do.

And yet, almost nobody has asked any simple questions about why the deficit argument being put up against health care reform isn't put up against anything else that Congress considers. All that is reported is that the deficit is the major obstacle to health care, and that we need a commission to slash Medicare and Social Security - but nothing else - to deal with the deficit.

Why haven't reporters asked Blanche Lincoln how she can cite her deficit concerns on health care only months after voting for the bailout? Why haven't reporters asked President Obama how he can promise a deficit-neutral health care bill after he renominated Bernanke - the ultimate deficit exploder - to the most powerful financial position in the government?

I really cannot come up with an explanation for this, other than sheer laziness, power-worshiping and the same hypocritical ideology in the media as in the Washington political establishment. The absolute silence from the press corps on the deficit issue seems like the most ironclad proof that political reporters have all but given up on the most basic tenets of journalism.

David Sirota :: The Deafening Silence on Deficits

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Another good point (0.00 / 0)
Just another anchor to tie to health care reform.

However, since the US pays 2.5-3 times as much per person for health care as most other developed countries, is it asking so much that while we're fixing a flawed system, can we fix one of its bigger flaws? Now, that money might come out of the government budget but save the average person more, so I'm happy with that tradeoff. But I'm not happy keeping our total expenses at 2.5-3 times/person or increasing that imbalance just to say we can cover all people. Our health costs vs. health treatment is a travesty.

Ergo the Left is reaching out Libertarians? (4.00 / 2)
Of course not.

20% of the population is not enough to govern in a democracy.

But the Left plus A huge chunk of independents is.

Also, we might get some Constitutional reform like the first Progressive Era did.

Thank you for saying that David... (0.00 / 0)
I guess it reveals two things: one, dinos will say anything to please their true patrons: fatcat lobbyists and their Albert Wynn/Tommy Daschle dream of becoming fatcat lobbyists. This is why they're not worried about reelection. They'll have a ton of cash to fight off those pesky accountability now runs and even if they lose they win. (It's also an argument for a third party. First rule of the Third Party: You and anyone in your immediate family can't take a fatcat lobbyist position after serving in public office...) Ask Al Wynn. Two, they think we're stupid and have nothing but contempt for us, with the emphasis on the latter more than the former.

Philip Shropshire

PS: Hey, is this Open Left or the New Left...? I get confused sometimes...

Philip Shropshire

Deficits only matter when it comes to helping people. (4.00 / 5)
When it comes to hurting and killing us, there's always money to be had - never mind questions of where it's going to come from.

You're correct. (4.00 / 1)
It's very depressing.  One can never underestimate the sagging intelligence of the American people, and the anibility to figure these things out!

[ Parent ]
Intelligence? We don't need no stinking intelligence! (4.00 / 1)
We got a book written by God.

"It sounds wrong...
     ...but its right."

[ Parent ]
And we'll support ANYONE... (4.00 / 1)
...regardless of their anti-progressive positions and record, hardcore neoliberalism, selection of warmonger and Wall Street advisers, support of NAFTA and its ilk, promises to escalate wars and expand military and police-state spending, long as they're the DP nominee.

[ Parent ]
and running against an Old Republican (0.00 / 0)
let's not forget that Obama was one of only 3 viable choices offered to us by the M$Ps. Back before the Soviet Union collapsed, I used to joke, "The USA is twice as good as the USSR, we get TWO choices for President!". From a nation of over 250 million souls, we are offered 3 middling opportunists. Sad as hell.

"It sounds wrong...
     ...but its right."

[ Parent ]
100% Correct (4.00 / 2)
While being studiously ignored by the M$M as an actual issue, this was a major topic of conversation waiting in line at the Town Hall that I attended. Most were simply stating it as a given and had only a look aof surprise when asked "Why?". Why must the overhaul of the national healthcare system be deficit neutral?

If it is such a good idea that any new program be deficit neutral, why not apply the same requirement to everything? Why don't we require the NIH to "pay for itself"?  

Or NASA?  Maybe the Pentagon should be expected to "pay for itself". If not the entire organization, maybe just the next war? Or maybe we need "warfare reform" and figure out how to make the wars we are fighting now deficit neutral.

Needless to say, more than a few folks were not kind to the idea of forcing the Pentagon to run a deficit neutral operation. So, the question then is:

"Why is it OK to run a deficit to rebuild other nations, but not OK when we are rebuilding our own nation?".

"It sounds wrong...
     ...but its right."

Why must we even re-build other nations, (4.00 / 1)
when our own is crumblng around us every day, and our own people are out of work?

[ Parent ]
Well, to some extent, we did help to ruin some of those countries (4.00 / 2)
so there is a case to be made for responsibility. I'm not saying that the US should become isolationist. Rather that the logic (if one can call it that) that underpins the "deficit neutral" requirement is tremendously flawed. Those flaws are made stark by placing the requirement on government institutions that most have tenatively agreed are important and worthwhile.

But, you are correct, that is a valid question. One that is not generally given any real analysis in the M$M.

"It sounds wrong...
     ...but its right."

[ Parent ]
You broke it, you own it. (0.00 / 0)
You don't want to pay for rebuilding nations? No problem. Simply get rid of your habit regularly starting wars. It may not be too late to prevent having to pay for Colombia and Venezuela.

[ Parent ]
The power of economic elites (4.00 / 1)
I suspect that economic elites don't care much about the welfare of us working stiffs, only to the extent that the work gets done. And since more of it is being shipped overseas, they care less and less.

The media is controlled by economic elites, and any reporter who focused on this issue would not last long in it. And the ones that do last are paid well and given a vested interest in preserving the status quo, becoming essentially a part of the elite structure. They will not rock the boat.

The entire media is essentially a propaganda tool to preserve the interests of the economic elites. They sweeten the pot for ordinary viewers by providing entertainment. (News is increasingly becoming just another form of entertainment.) The genius of this system is that they make people willing to pay for the poison they dispense (unlike totalitarian countries where propaganda is easily identifiable and rejected, even if "free").

While I believe there are some (maybe even many) Democrats who place the interests of the general populace before the economic elites, even they are largely unwilling to pay the price of openly confronting the system. They content themselves by working around the edges.

Finally, I have a genuine question for you. Are the massive bank bailouts formally "on budget", or have they found some way to hide them so that they do not immediately add to the federal deficit? When you compare about 1 trillion of bailout money in 1 year, with the cost of current healthcare proposals of 100 billion a year (1 trillion over 10 years), you know the economic elites are in firm control.  

"the same hypocritical ideology... (4.00 / 3) the media as in the Washington political establishment."

I'm shocked, shocked! find that a society governed by neoliberal capitalists,
with communications primarily owned by neoliberal capitalists,
with "democracy" farcically represented by the "choice" between neoliberal Wall-Street-approved candidates,
would have as its primary purposes the expropriation of wealth from those who produce it (labor) to those who in this system primarily benefit from it (Big Capital), and the maintenance of their (capital's) position of power, privilege and wealth regardless of the costs -- in blood, treasure, freedom, etc -- to the vast majority.

Is that you, (0.00 / 0)
Big Bill Haywood? :-) (You're not wrong; but damned if I haven't heard it before. Eternal verities, and all that.)

[ Parent ]
It was true in Haywood's time (4.00 / 1)
...and before his time, and since his time through today.

"....labor is prior to, and independent of, capital; that, in fact, capital is the fruit of labor, and could never have existed if labor had not first existed; that labor can exist without capital, but that capital could never have existed without labor. Hence they hold that labor is the superior - greatly the superior - of capital. They do not deny that there is, and probably always will be, a relation between labor and capital. The error, as they hold, is in assuming that the whole labor of the world exists within that relation. A few men own capital; and that few avoid labor themselves, and with their capital hire or buy another few to labor for them..."

Abraham Lincoln, September 30, 1859.

[ Parent ]
if this were about the deficit (4.00 / 3)
Obama and everyone else would insist on HR 676, Medicare for All, which would save at least $350 Billion a year.

$350b/yr is only part of the savings -- (4.00 / 2)
-- administrative cost reductions -- with single-payer. That figure doesn't include the inevitable reductions in the cost of pharmaceuticals, equipment, etc.

[ Parent ]
Deficit (4.00 / 3)
It is easy to solve the deficit.  Just restore tax rates to pre-1980 levels (not just Bush but Reagan tax cuts have got to go) and cut military spending to below $200 billion dollars. There, problem solved

I prefer pre-1960 tax rates (4.00 / 4)
with the loopholes closed.

For REAL progressive taxation, I say tax wealth, NOT work.

[ Parent ]
The Health care bill has to be revenue neutral because of reconciliation (4.00 / 3)
The health care bill can only be passed through reconciliation, and the only way that a permanent bill can be passed through reconciliation is that it not add to the deficit.  I understand most of what you're saying is really about rhetoric and not the on the ground political realtiy, but this seems to be an important point to me.

Why? (0.00 / 0)
If I recall correctly, the Bush Tax Cuts were passed in reconciliation. Were those also deficit neutral?

"It sounds wrong...
     ...but its right."

[ Parent ]
No, they weren't permanent (4.00 / 1)
that's why they had to be renewed once, and why we're debating about renewing them again.

[ Parent ]
Yes and no (4.00 / 2)
The stimulus bill was deficit spending.  Every time they extend unemployment benefits and food stamps it is deficit spending.  So it isn't quite as straight forward as you claim.

You are absolutely right about military spending, though.  You can't let economics get in the way of a good war.

But even with war and the bailouts, there is a real difference between short term spending and one-shot spending.  It is fundamentally more important that scheduled spending be paid for in the budget than supplemental spending for short term gain.  Well, ok, after 8 years the wars don't really count as one-shot, do they?  But they can pretend, I guess.

The tax cuts were stupid on multiple levels, but the first pass at least was when we were running a surplus.  The Bush Medicare drug plan was also deficit spending, also at the time of the surplus.  The drug plan at least helps people at the same time it gives money away to the pharmaceutical industry.

So overall I agree with you.  It is abundantly clear Washington is far more moved to help Big Money then the needy.  But it isn't quite as simple as you put it, either.

If the bill adds to a deficit (0.00 / 0)
it needs 60 votes to pass whether it's filibustered or not.  

Why? (0.00 / 0)
This is the same reconciliation issue raised up-thread. Were the Bush Tax cuts deficit neutral?

"It sounds wrong...
     ...but its right."

[ Parent ]
Bush Tax Cuts (0.00 / 0)
Some of the Bush tax cuts expire after 5 years due to the fact they are not deficit neutral and passed via reconciliation.  We don't want the same thing to happen to health care.

[ Parent ]
That was a negotiated sunset, no? (0.00 / 0)
Maybe the debate was an illusion created by the M$M? I'm no expert on the arcane rules of the US congress. Of that I assure you. If reconciliation is the root reason for this deficit neutral BS, then its not the way to go.  

"It sounds wrong...
     ...but its right."

[ Parent ]
It was confusing (0.00 / 0)
but I remember the explanation being that if they sunset in 5 years, the cost will be made up in 10, so basically they were deficit neutral, and any extention of them would have to be deficit neutral, but I have to look it up again.

In 2001 it didn't matter because we had a surplus, but in 2003, they passed in a really confusing manner. I think at one point they ignored the rules of the pariliamentarian and just did whatever they wanted.  

[ Parent ]
ah (0.00 / 0)
That is different than my understanding, but perhaps I got it wrong.  I only learned this recently by reading other people's blog comments, so either I misread or what I read was wrong.  (I read it on the Internet, so it must be true!)

[ Parent ]
Confusing is not strong enough a word (0.00 / 0)
Still that whole argument sounds like negotiation to me. If reconciliation rules are not set in stone and can be ignored at will, then they are not a roadblock.

"It sounds wrong...
     ...but its right."

[ Parent ]
conflicts of interest (4.00 / 1)
What's genuinely confusing is the media's complicity in this.

not really

Deficits (0.00 / 0)
Thanks people I stand corrected.  It should be 1960 rates.  

re: msm ignorance (0.00 / 0)
It is interesting, and perhaps worth noting, that while political opposition seems to be hardening against the $1 trillion, ten-year cost of the early versions of health reform, barely a peep of concern has been raised about the $3 trillion price tag for President Obama's plan to extend most of the Bush-era tax cuts.

have someone do a poll asking which thing they'll prefer to sacrifice in order to deal with the deficit? health-care for all or tax-cuts for the millionaires

then push this poll


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