Has the CBO missed something?

Probably not, but I’ll ask the question and see if greater minds than mine will weigh in.

The CBO’s Budget and Economic Outlook for 2014 to 2024 says that some workers, mostly very low wage workers, will reduce their hours by an amount approximating 2 million jobs. So what is going to happen with all of those lost hours?

Imagine if a guy who worked at McDonald’s and Walmart quit the McDonald’s job thanks to the provisions of the Affordable Care Act. What is McD’s going to do? One of four things, would be my guess:

1) Limp along, and perhaps close a store because they can’t find anyone to work there.
2) Replace the position with technology.
3) Hire someone who is currently out of work.
4) Increase pay or benefits to attract job hunters, who are no longer as desperate as they were, to unpleasant jobs.

The third possibility seems most likely to me. As long as there are unemployed people looking for some extra cash, McDonald’s is going to have a ready supply of desperate people to humiliate in exchange for low pay and no benefits. Some of those people will be people who wouldn’t have taken a minimum wage job before, because that would mean working for less money than they need to support their families while wasting 30 hours a week that could otherwise be used for job hunting or self improvement. Now, with medical expenses covered, they might be more willing to take what they can get.

I just don’t see all of those hours disappearing. I can see some cases where someone may quit a low wage job and the business might limp along for a while without someone to fill that position, but the CBO’s estimate of 1 to 2 percent of hours worked seems high to me. And I think they missed the reserve of unemployed people who will be hired to fill those lost hours.

Stylized image of CBO Report cover

Notes from Suffolk’s Public Hearing on the Budget

I attended the City of Suffolk’s public hearing on the budget last night but had to leave before council members spoke at the conclusion. An overwhelming amount of citizens spoke in support of fully funding the school board’s budget request. Most of those suppoters were connected with the school system and spoke proudly of the acccomplishments of Suffolk public schools and about how difficult it is for teachers, administrators and staff to work with relatively low funding levels provided to the schoolboard by the city. Wendell Foster of the Education Association of Suffolk said other regional cities provide more school funding as a percentage of their budget than Suffolk does, with another speaker saying “Dead Last” while another acknowledge that Suffolk did “beat Newport News”.

Few who came to defend the schoolboard’s funding directly addressed Mayor Linda Johnson’s assertion that we must either cut services or raise taxes. In fact, only a few citizens did respond to the mayor’s options, and most chose a third: cut abuse and mismanagement. Elliot Joyner had a list of eight suggestions, aimed at cutting “out of control spending”. This included cutting the amount of vehicles and driving, both of which he said was excessive. He also suggested cutting Parks and Recreation and Public Works in half. Other speakers also spoke to abuses and attacked the mayor and city manager over their high salaries. Chris Dove said the council is “reaping what [they] sowed” by breaking zoning laws, allowing an increase in population accompanying a decrease in property values, resulting in the shortfall which was the primary concern for the meeting.

A few speakers did express a willingness to endure tax increases in support of the schoolboard and other spending, including a businessman who said he has been successful and the city already has “plenty of” his money. At least two speakers defended the city manager and mayor and praised them for the city’s growth and for keeping Lipton Tea in Suffolk.

Even those who attacked the city council over spending cited other areas, not the schoolboard, to cut funding.

A few speakers spoke to specific issues. Marion Flood, who defended the schoolboard, decried the loss of Robertson Elementary and, in general, the lack of spending in Whaleyville. “What does Whaleyville get?”, she asked, and called for a computer lab in the Whaleyville recreation center to assist in after-school education. Two speakers complained about excessive development and loss of services in Pughsville, one saying the streets are so blocked by cars that an ambulance would have difficulty gaining access to the area. Linda Bunch of Suffolk Art Leage said investment in arts is an investment which provides a return of at least three times over. Karen Joyner of the Foodbank Of Southeastern Virginia defended spending on human services.

The Suffolk News Herald quickly posted a summary of the hearing. As Tracy Agnew reports, the mayor and councilmembers spoke at the end of the meeting and addressed the overwhelming amount of requests to fully support the schoolboard and other spending, but the very small amount of concrete suggestions on how to do so.

Councilman Charles Parr said he had not heard the specific suggestions he had hoped to hear, with a few exceptions.

“It’s ringing in my ears — education, no tax raise, education, no tax raise,” he said, adding later: “I’ve heard, I want this, I want that, I want this, but don’t raise taxes.”

I received an email from Arthur Singleton, who was at the meeting with me and stayed until the end, saying, “You missed the best part of the meeting”. According to Mr. Singleton, council members pointed out how the financial status of the city has improved under the leadership of our city manager, and that her pay hike was a promise made to her when she was hired at a low salary, with the challenge to improve the moody rating of the city. Council also pointed out that the emergency response bus was a federal grant, and that it was not paid for with city tax dollars.

Updates, Mar 20th: I added Art Singleton’s comments.

The Asymetrical Sequester

The sequester gives Republicans cuts in government spending while protecting the wealthiest Americans from paying higher taxes. It’s a fallacy that it provides equal satisfaction to Democrats in the form of military cuts. Although many Democrats rightfully support elimination of pork barrel military contracts for equipment that doesn’t work and that the pentagon doesn’t want, for political reasons Democrats can’t boast about cutting military spending as triumphantly as Republicans can about cutting off medical care and education for poor children. Democrats really don’t want to gut the military. Republicans really do want to gut services that help the poor and middle class. The imbalance is exacerbated by the bizarre fact that Republicans never pay a political price for voting against the military, and also by the freedom the media seems to feel to blame Obama, rather than congressional Republicans, for everything the Republicans do to the economy.

The cuts to programs like head-start and meals on wheels are part of the sequester because that’s what Republicans were demanding. The military cuts are part of the sequester because they were, in theory, so unpalatable to Republicans that they would be forced to negotiate. Apparently, closing the wealth gap is more unpalatable.

Both Republicans and Democrats have the option of caving to the other’s demands in order to protect the military. But if Republicans cave, it will mean higher taxes on the wealthy. If Democrats cave, it will mean gutting programs that Americans depend upon, and allowing Republicans to get what they want by threatening to destroy our economy. It is due to that threat that the sequester deal was suggested in the first place.

In the Washington Post, Thomas Mann notes something else that the Republicans get:

The insistence on deep discretionary-spending reductions while calling for even deeper tax cuts shows that the sequester is not about money but about taking a meat ax to government as we know it … Planning, recruiting personnel and drafting long-term contracts have become impossible in areas from cybersecurity to embassy security to medical research to homeland security, damaging not industries rife with waste, fraud and abuse but critical services.

The very rich have always faired well through tough economic times, which might explain the willingness of the Republican party to sacrifice the economy to get what they want. And they never cared about the troops the way they claim to. But their willingness to sacrifice our safety to prevent the wealth of the wealthy from being used for food, health, and education is surprising.

Depression era photo of poeple on food line in front of billboard about America's high standard of living.

Randy Forbes the Visionary

All this rancor about sequestration is all for naught because Randy Forbes has a solution: “Hey guys, how about Republicans take whatever they want and let Democrats eat shit?”

Wow, Randy. Nobody ever thought of that. Sure glad we have you and your win-win attitude.

I have an idea, too. Why don’t Republicans stop giving lip service about how important they think the military is and prove that they’re willing to sacrifice for it. As far as I can tell, Republicans will do nothing to stop the sequestration because they get political points for blaming it on Democrats. But the sequestration had plenty of Republican support. In fact, it had better support among Republicans than among Democrats. Even Paul Ryan pushed for it.

The reason sequestration is looming is it gives Republicans what they want. Not that Republicans want to gut the military, they just want to gut social programs to prevent the wealthy from paying higher taxes. And they can accept the devastation that sequestration will bring as long as they can blame it on Democrats.

Democrats, on the other hand, aren’t nearly as hostile to the military as Republicans claim they are. Democrats shrink from accusations of not supporting the military while Republicans boast about cutting social programs. Democrats do want to cut wasteful spending on pork-barrel programs that don’t actually strengthen the military, but they support the military with far greater force than Republicans support economic safety nets, infrastructure, or public education.

The asymmetry of sequestration is that social programs are on the chopping block because Republicans want them to be cut, but military spending is on the chopping block because they were supposed to be so unpalatable that they would force Republicans to negotiate.

But it turns out that taxes on the wealthy are more unpalatable for Republicans than cuts to the military. Republicans aren’t willing to honestly negotiate for what they claim is so important to them. The best they can do is Randy Forbes’s visionary proposal to let Democrats make all of the sacrifices.

The next time a Republican politician talks about supporting the troops, remember how Republicans would rather leave the military on the chopping block than negotiate to save it.

From a recent Forbes email:

Working to Prevent Sequestration and Protect Our Military

With sequestration just days away, Congressman Forbes continued in his efforts strongly opposing these arbitrary cuts and protecting our nation’s armed forces. Congressman Forbes voted against the Budget Control Act, which set up the process of sequestration, and has been warning against the devastating nature of these cuts ever since.

Introduced a bill to protect defense from sequestration. Congressman Forbes introduced a bill, H.R.773, to remove the Department of Defense from sequestration. Under sequestration, defense spending will be disproportionately cut, absorbing 50% of the cuts. Spending cuts of this magnitude will not only cripple the economy, but will decimate the military. This bill would reduce the amount of the sequester to $600 billion.

Joined bipartisan, bicameral letter on impact of sequestration in Virginia. Congressman Forbes joined Senators Warner and Kaine and Congressmen Wittman, Rigell, Wolf, Scott, Moran and Connolly in writing a letter to President Obama and congressional leaders to express concern about the disproportionate damage sequestration will have on Virginia. Members of the Virginia delegation urged both parties to work cooperatively to end the threat of sequestration. Due to Virginia’s contribution to national defense, the letter notes that over 207,000 Virginia jobs may be lost as a result of sequestration should Congress and the President fail to act.

Urged protection of vital defense programs. Congressman Forbes and Congressman Rob Wittman sent a letter to the House Appropriations Committee urging that vital defense programs remain fully funded in the face of looming defense cuts. Among the programs cited as essential to national security were the continued modernization and maintenance of the Navy’s Fleet; completion of refueling and overhauls for the aircraft carriers Theodore Roosevelt and Abraham Lincoln; construction of a new aircraft carrier, USS John F. Kennedy; and ensuring the procurement of additional Virginia-class submarines and Arleigh Burke-class destroyers. Congressman Forbes is determined to prevent possible defense budget cuts from degrading critical U.S. military capabilities and inflicting unnecessary economic damage on our struggling economy.

Met with senior leaders of the Department of Defense. Congressman Forbes met with senior military officers and Pentagon civilian officials to discuss the potential consequences of sequestration and another Continuing Resolution (CR) on U.S. national security. Among those whom the Congressman has met in recent weeks are Assistant Secretary of the Navy Sean Stackley, the Navy’s senior shipbuilding official; Lt. Gen. Charles Davis, the Air Force’s senior uniformed acquisition official; Lt. Gen. Richard Mills, the Deputy Commandant of the Marine Corps; and Lt. Gen. Burton Field, Air Force Deputy Chief of Staff. The Congressman will continue his consultations with the Pentagon’s senior leadership in the coming weeks as he works to prevent and mitigate the damage of sequestration to our national security.

Questioned the Joint Chiefs of Staff on DoD’s failure to plan for sequestration: During a House Armed Services Committee hearing, Congressman Forbes questioned the Joint Chiefs of Staff and senior civilian officials as to why the Defense Department has waited until recently to publicly explain the impact of sequestration. Congressman Forbes expressed his concern that the DoD has not adequately informed Congress and the public about sequestration’s potential damage to our economy and security. The Congressman will continue to use his leadership position on the House Armed Services Committee to demand accountability from our senior military leadership on issues affecting the national security of the United States.

Delayed implementation of health care law to prevent sequestration. Congressman Forbes cosponsored a bill, H.R.607, to delay all provisions of the health care law that are set to take effect in 2014 and 2015 until January 1, 2016, and then use those savings to replace sequestration for the remainder of Fiscal Year 2013. Not only does this measure stop the destructive effects of these cuts, it gives the Administration time to prepare for the many new provisions of the health care law.

Sequester Blame

This graphic that’s been going around lately had me scratching my head, having said many times that the sequester deal was a bi-partisan agreement and that Republicans are full of shit trying to blame this mess on Obama or Democrats.

Crying Boehner with text: Who voted for the sequester?  Democratic votes -0 Republican votes - 218

The bill which is about to kick in was passed in the house 269 to 161, with strong Republican support and half of the House Democrats voting for it. The figure in the graphic comes from an earlier version, which was killed in the Senate.

It’s dishonest to suggest that no Democrats supported the sequester when some Democrats eventually did, but it’s not nearly as outrageous as blaming it on Democrats who never supported it as strongly as Republicans. It’s also outrageous to blame it on Obama, who’s team only came up with the idea to keep Republicans from pushing the country into default.

Romney’s 25 Years Means Nothing to Me

Am I being too simple if I point out that Romney’s ability to balance the budget of a financial firm which made huge profits buy buying, destroying, and selling pieces of other companies has nothing to do with balancing the budget of a government which, in theory, is not actually supposed to sell any product or make any profit from its customers?

Bain capital had a large pot of money and was able to decide how to spend it in order to make more money. Romney did a good job with that. If you gave me a big pot of money and told me to buy companies, fire employees, and sell the remains, I wouldn’t be able to do so with such efficiency and effectiveness.

But the U.S. Government doesn’t have the option of only putting its money into profitable ventures. We can’t just say, “You know, the Coast Guard (or the FBI or FAA, etc) isn’t really returning much of a profit, so let’s just fire all the personnel and sell off the assets.” Running a government is about providing the most important services with the available resources so your customers can flourish. It’s not about making the most money from your customers so that you can flourish.

There are no actual facts to support Romney’s economic plan. Romney’s proposal doesn’t add up when analyzed by experts, he makes the rather bizarre promise that he’ll cut taxes but also cut loopholes to make his plan revenue neutral, he falsely claims that six studies support his plan, and he refuses to answer questions about which loopholes he’ll close.

We only have Romney’s assurance that he knows how to balance a budget because he’s been balancing budgets for 25 years. Millions of Americans have also been balancing budgets year after year, with more pressure and tighter margins than Romney ever had to juggle. Mitt Romney’s 25 years of balancing budgets means nothing to me. I want him to stop dodging questions about his plan and explain why the Tax Policy Center and the Joint Committee on Taxation say his plan doesn’t add up.

Keynesian Hypocrisy

I don’t believe Grover Norquist has given up on his lie that government can’t create jobs, but I’ve been getting fliers and phonecalls from his organization, Americans for Tax Reform, blaming Tim Kaine for letting the Joint Forces Command close and putting 10,000 jobs at stake. Nowhere in the phone calls or the fliers is there mention of any military necessity for keeping the command open.

Flayer including: Tim Kaine [...] forgot to look out for Virginia [...] 10,000 jobs at stake [...] Who could have stopped the Joint Forces Command closure [...] ?

In fact, it was time for JFCOM to close. “We no longer require a separate four-star command to oversee joint warfighting”, said JFCOM’s last commanding officer, quoted here from PilotOnline.com, “We have progressed far enough and inculcated jointness deeply enough to realize efficiencies while simultaneously refining our efforts.”

But, according to ATR, Kaine should have fought harder to keep tax dollars flowing through an unnecessary military command because doing so would mean jobs in Virginia.

Conservatives, including Norquist, know that government spending can create jobs, and that’s a scary fact. It’s scary because no matter who gets elected in November, the economy will go up and down, and there will be times when the President has to take action keep Americans in their jobs. But Romney won’t be able promote spending on any kind of stimulus or jobs bill unless he completely reverses himself again and becomes a Keynesian. While that’s very possible, he’s still more likely to promote spending in the only way Republicans find it easy to do so: by citing a threat and increasing military operations.

Republicans know that government spending can and does create jobs. Ronald Reagan doubled the national dept mostly through military spending, and Rick Perry boasted jobs in Texas when much of those jobs came from the government and stimulus spending.

The Keynesian model, contrary to popular rhetoric, isn’t an upward spiral of taxing and spending. But it includes the idea that when the economy slows, the government should take steps to help. Taxes should be cut during a stalled economy, and, also contrary popular rhetoric, the Obama administration has done so.

Tim Kaine supports plans that create jobs. Tim Kaine and George Allen are both former Virginia Governors, but under Kaine, the tax burden for Virginians was lower than it was under Allen, and Forbes Magazine rated Virginia best for business and careers.

Government can help create jobs by investing in education to make American workers more productive than less expensive competition overseas, finding new sources of energy, and building a superior infrastructure that makes doing business in American more efficient than anywhere else.

But today, conservatives want to keep saying that government doesn’t create jobs while falsely accusing Tim Kaine of not trying hard enough to protect government created jobs in Virginia.

Republicans for Obama

When I first saw a link to Republicans for Obama, I thought it was a joke. But the organization was featured in a Washington Times article and the website makes some very good points about why Republicans should support President Obama’s reelection. Of course they point out the fact that Obama’s landmark health care legislation is actually a Republican idea, and

the Heritage Foundation, Newt Gingrich, Bob Dole, Chuck Grassley, Orrin Hatch and a whole slew of other Republicans and conservatives over the past 20 years have backed healthcare reform with an individual mandate as its centerpiece.

The hypocrisy of Republicans not only opposing their own party’s idea just to score political points when it became associated with Democrats, but challenging it as unconstitutional, losing that challenge and still claiming that it’s treasonous, is an example of how the low the Republican party has sunk.

But while it’s good that some Republicans have recognized how dishonest and destructive their party has become, current right wing extremism is different from old GOP philosophy only in magnitude. The Republican party has long promoted “Voodoo Economics” while hiding Keynesian policies behind military spending. And while the Republicans initially championed the idea of freedom for all Americans, they have since resisted legislation that protects citizens from discrimination. Romney’s policies will be perfectly in line with GOP principles of allowing the already-rich to take ever increasing portions our nation’s wealth while blocking policies which allow upward mobility for the rest of us.

Republicans for Obama should become Democrats for Obama and promote policies which provide a safety net for the poor, protect the environment, prevent discrimination, and invest in education, research, and infrastructure. All this while incorporating some of the best conservative ideas for economic growth.