Posts Tagged ‘Cap and trade’

Nancy Pelosi’s Essential Leadership

Monday, November 9th, 2009

At this point, whatever you think of Nancy Pelosi’s policies – or her personality – you have to admit this: she’s ruthlessly pragmatic, knows how to wield her power effectively, has excellent political instincts, and is one of the more effective Speakers of the House in recent memory. In an interview with Ezra Klein, Pelosi described her legislative philosophy:

“You get the votes,” she said, balling one hand into a fist, “and you take the vote,” and she punched her other hand. “Because you never know what can happen.”

Pelosi’s 11th hour compromise Saturday night – accepting the Stupak amendment – proved she was willing to do what it took to get the health care “bill that no one loved but almost everyone still believed in” passed. The Stupak amendment brought two key constituencies on board: the Catholic bishops and pro-life Democrats. As Minority Leader Boehner prepared to use legislative maneuvers to scuttle the bill on the grounds it would make everyone in the health insurance exchange pay “an abortion premium” – Pelosi’s acceptance of the Stupak amendment lead Cardinal Francis George, the president of the U.S. Conference of Catholic Bishops, to call Boehner to make sure “the GOP didn’t play any games,” blocking health care reform on the pretense of a pro-life position. At the same time, the Stupak amendment also allowed the bill’s sole Republican supporter to sign on, Congressman Anh Cao. The fallout among the pro-choice Democrats has been severe – but Pelosi must assume it’s manageable. Given the fact that this provision will likely be stripped from the final version of the bill, it seems a small price to pay to pass this historic legislation.

At the same time, Klein points out that Pelosi’s decision to push cap and trade legislation through months ago looks prescient today:

I’m not saying that cap and trade has great odds this year, but whatever chance it does have is a function of Pelosi passing it back in June. She got the votes, and she took the vote.

The House has now passed two bills tackling two major issues that have been growing worse for the past two decades but Washington has been unable to address due to partisan gridlock. Obama deserves much of the credit. But Nancy Pelosi has proven to be a formidable pol – and it is her leadership most of all that has gotten this legislation as far as it has.

Now, all eyes turn to the Senate – for both health care and cap and trade. In the coming months we will find out whether or not Washington is able to deal with either of these issues, or to once again put them off, drawing closer to the moment that is too late. But in the meantime, Nancy Pelosi has done her job.

[Image by Public Citizen licensed under Creative Commons.]

Limbaugh claims Obama is a radical leftist because he supports programs Republicans proposed a generation ago.

Thursday, November 5th, 2009

Rush Limbaugh, Dick Cheney, Glenn Beck, Sarah Palin, Charles Krauthammer, and other right wingers have begun to converge on a unified theory of Obama – a systematic critique of who he is, what he stands for, and what he is trying to do. Part of this theory – one of the core themes being developed – is that Obama is the most far left American leader ever. Rush Limbaugh expresses this as well as anyone – and I’ve spliced together two clips from his interview this past Sunday with Fox News. (Full interview here.)

Let’s take two of these quotes out for a moment:

We’ve never seen such radical leadership at such a high level of power…

I don’t know of any Republican who would try to take over one sixth of the U.S. economy. I don’t know one Republican who would put forth this…this…irresponsible cap and trade bill. I don’t know one Republican who would actually do that.

To understand why this is such a bizarre thing to say you need to look at some history.  It illustrates what I mean when I call the Republican Party and the right wing – and much of our public debate as it attempts to find the middle ground between the right and left – unhinged. Take a minute to look at the history of the policy proposals regarding the two examples Limbaugh cites – health care and cap and trade.

Health Care

The plans moving through Congress now have an historical precedent in most of their aspects in the two serious Republican attempts to reform health care after LBJ’s introduction of Medicare and Medicaid – Richard Nixon’s health care proposal in 1974 and the Dole-Chafee bill in 1993. Between the two bills, they contained a technocratic institution to reign in health care spending by looking at medical practices – similar to the IMAC that Sarah Palin called a death panel (Richard Nixon’s proposal); an individual mandate, an extension of Medicaid eligibility (the Dole-Chafee plan); an end to insurance industry abuses – for example, banning people with preexisting conditions, subsidies or vouchers for individuals who couldn’t afford health insurance to purchase it, and the creation of a standard minimum level of benefits for health insurance plans (both plans.)

Those who developed the base model that of health care reform now – used these models as the base onto which they grafted a health insurance exchange and a public option. They combined market forces with decentralized decision-making – the exchange on which private companies would offer health insurance – with a more top-down centralized approach – the public option which would compete with the private companies. Clearly, though the plan is distinctly liberal, it was developed by people who have a deep appreciation for some of the central conservative critiques of government planning and New Deal/Great Society-style liberalism. The plan is also clever politically – as a great majority of the American people, in their wisdom, see great value in having a choice between public option and a private one. Michael F. Cannon of the libertarian Cato Institute accidentally justified the rationale behind this popular sentiment:

Any payment system creates perverse incentives…which is why we need competition between different payment systems to temper the excesses of each.

Unlike the Dole-Chafee bill which sought to undermine the current system with the hope that something else would develop, the plans working through Congress now are more conservative as they seek to preserve the status quo while introducing an alternative model that people could opt into if it works.

You wonder how far to the right the Republican Party Rush imagines is if he claims he doesn’t know any Republican who would propose anything like this.

How about Mitt Romney, Bob Dole (who incidentally endorsed a version of the bill currently moving forward), Richard Nixon?

The one thing that makes this plan distinctly liberal is the public option. Yet, if anyone believes that after dropping it, the Republicans would support a health care bill, they haven’t been paying attention.

(For more on the similarities on health care, see this post from yesterday.)

Cap and Trade

On climate change, the story is even more dramatic.

Cap and trade started out as a hair-brained scheme to solve the problem of acid rain thought up by a Reagan administration lawyer, C. Boyden Gray. Environmentalists and liberals hated the idea. They saw it as a license to pollute, a “morally bankrupt” “license to kill,” or more reasonably as a “scheme for polluters to buy their way our of fixing the problem.” They preferred the more “command-and-control” approach of top-down regulation. Regulators resisted the idea – as it forced them to surrender “regulatory power to the marketplace.” Industry opposed it, claiming it “was going to shut the economy down.”

But George H. W. Bush thought that free market principles could realign the incentives to fix this problem – and he wanted to placate the Canadians who were bearing the brunt of the acid rain.

So he pushed through a cap and trade scheme to eliminate acid rain over these strong objections. It beat all expectations. Eventually environmentalists came around and industry continued to thrive. This Republican success on solving a major environmental issue without top-down regulation made cap and trade a popular, bipartisan idea. Eventually, Bill Clinton saw it as a way to tackle global warming. But as a significant minority of Republicans continued to question whether or not global warming was real and whether or not it was man-made (along with every other scientifically moot question that industries raised) any possible deal was postponed. Still, as late as 2008, the Senate had strong bipartisan support for a cap and trade program – with Joe Lieberman and John McCain taking the lead. Now McCain is a major opponent of the cap and trade legislation, complaining about the lack of support for nuclear reactors in the bill as a reason to oppose it. This when as late as a year ago, he reiterated his statements of the past eight years in saying that global warming demanded “urgent attention” – that we must “act quickly” to “dramatically reduce our carbon emissions” with a “cap-and-trade” program.

As I said regarding health care, if anyone thinks that McCain will come around to support this legislation that is so similar to what he supported as essential a year ago if the Democrats just tossed some more money into nuclear energy, then you haven’t been paying attention. McCain will likely start calling it a “power grab” and a “government takeover” of the world, echoing Cheney and Krauthammer by the time the bill is up for a vote.

Conclusion

In both cases, Republicans proposed ideas based on core conservative principles – on a respect for the free market, on avoiding rapid change, on avoiding top-down regulation. And now Democrats led by Barack Obama have taken up these proposals – amending them somewhat to take into account liberal ideas such as a distrust of large corporations and a concern for community goods – hoping to pass bipartisan legislation.

What they are met with instead is screams of “Socialism!” and “Government takeover!” and “Unprecedented!” “Attacks on liberty!” and “Why do you hate America?”

The Federal Reserve, Henry Gates, Popular Policies, Health Care, Krugman on Cap and Trade, and High Times

Friday, July 24th, 2009

1. Down with the Fed! William Greider suggests we “dismantle the temple” that is the Federal Reserve in a piece this week. Greider is not only one of my favorite authors and one of the best writers on economics, he is also one of the foremost experts on the Federal Reserve. They key problem for Greider is that the Federal Reserve is an essentially anti-democratic institution:

The Federal Reserve is the black hole of our democracy – the crucial contradiction that keeps the people and their representatives from having any voice in these most important public policies.

Ezra Klein gives the piece a symapthetic audience, but then explains his reservations:

[F]or a period of time, Ben Bernanke ran our economy under a monetarist’s version of martial law. And the really problematic thing is that it probably worked. It may be all that saved us. You could argue that in the absence of the Federal Reserve, Congress would have been a whole lot more aggressive and responsible because Bernanke wouldn’t have been there to backstop them. But would you really want to bet the U.S. economy on it?

2. Sanity on the Henry Gates Controversy. Jacob Sullum in Reason‘s Hit ‘n’ Run blog gives what I think to be the essential take-away from the Gates fiasco:

[E]ven if we accept the facts as presented by Crowley, it’s clear he abused his authority, whether or not the color of Gates’ skin had anything to do with it.

Let’s say Gates did initially refuse to show his ID (an unsurprising response from an innocent man confronted by police in his own home). Let’s say he immediately accused Crowley of racism, raised his voice, and behaved in a “tumultuous” fashion. Let’s say he overreacted. So what? By Crowley’s own account, he arrested Gates for dissing him.

3. The Appearance of Bipartisanship Creates Popularity. Matt Yglesias has an interesting piece exploring the difference between how the media treats the relationship between public opinon, Congress, and policy issues and how that relationship actually works.

4. Imitation is the Sincerest Form of Flattery. Ezra Klein points out that one passage from Obama’s speech Wednesday night seemed to be taking arguments directly from articles by Steven Pearlstein and David Leonhardt this week that got a lot of traction in the blogosphere. Both columns are worth reading even independent of their apparent influence on the Obama administration’s tactics.

5. Krugman on Cap and Trade Speculation. Paul Krugman takes on doubters encouraged by Matt Taibbi’s piece describing cap-and-trade as a giant scheme:

The solution to climate change must rely to an important extent on market mechanisms — it’s too complex an issue to deal with using command-and-control. That means accepting that some people will make money out of trading — and that yes, sometimes trading will go bad. So? We’ve got a planet at stake; it’s crazy to cut off our future to spite Goldman Sachs’s face.

6. A Laid-back Beat. Lastly, I came across this song in an episode of the British series Skins this week:

[Photo by me.]

Lies About Obama’s Tax Plans

Friday, September 5th, 2008

I just received another one of those mass emails being used to spread lies about Obama. I’ve interspersed the text of it with data contradicting the claims:

INTERESTING DATA JUST RECEIVED ON TAXES

Spread the word…..

This is something you should be
aware of so you don’t get blind-sided.
This is really going to catch a lot
of families off guard. It should
make you worry.

Proposed changes in taxes after 2008 General election:

CAPITAL GAINS TAX

MCCAIN
0% on home sales up to $500,000
per home (couples) McCain does not
propose any change in existing
home sales income tax.

OBAMA
28% on profit from ALL home sales

How does this affect you?
If you sell your home and make a profit, you  will pay 28% of your gain on taxes.
If you are heading toward retirement
and would like to down-size your
home or move into a retirement
community, 28% of the money you
make from your home will go to taxes. This  proposal will adversely affect the elderly who are counting on the income  from their homes as part of their retirement income.

This claim about Obama taxing profits on home sales comes from nowhere. Any gains on the sale of one’s principal residence is not taxed under section 121 of the Internal Revenue Code. Neither McCain nor Obama has proposed to amend this section.

DIVIDEND TAX

MCCAIN 15% (no change)

OBAMA 39.6%

How will this affect you?
If you have any money invested in stock
market, IRA, mutual funds,
college funds, life insurance, retirement  accounts, or anything that pays or reinvests dividends, you will now  be paying nearly 40% of the money earned on taxes if Obama become president.
The experts predict that ‘higher
tax rates on dividends and capital gains would crash the stock market yet  do absolutely nothing to cut the deficit.

As for Capital Gains taxes in general, Obama is proposing to raise the capital gains tax rate from 15 percent to 20 percent for those American families making more than $250,000.00 per year or singles making over $200,000.00 per year. Those families or singles making less than these respective amounts will not have a tax increase. Further, IRAs and college funds are exempt from taxation entirely – and neither candidate is proposing to change this.

INCOME TAX

MCCAIN (no changes)

Single making 30K – tax $4,500
Single making 50K – tax $12,500
Single making 75K – tax $18,750
Married making 60K- tax $9,000
Married making 75K – tax $18,750
Married making 125K – tax $31,250

OBAMA
(reversion to pre-Bush tax cuts)
Single making 30K – tax $8,400
Single making 50K – tax $14,000
Single making 75K – tax $23,250
Married making 60K – tax $16,800
Married making 75K – tax $21,000
Married making 125K – tax $38,750

Under Obama your taxes will
more than double!
How does this affect you? No explanation needed. This is pretty  straight forward.

This claim is worse than all those above – because Obama is actually proposing to lower taxes for all of these groups listed. Here’s a site which provides an Obama tax cut calculator. I can’t vouch for its accuracy, but it seems to be based on the Tax Policy Institute’s analysis of both candidates’ plans. The email also inaccurates states that Obama plans to revert to “pre-Bush tax cuts” which is only true for those making over $250,000.00. As Obama said in his speech on Thursday night:

I will cut taxes for 95 percent of all working families. Because in an economy like this, the last thing we should do is raise taxes on the middle class.

Sarah Palin in her speech this past Wednesday made the same claim the Republicans keep making:

Taxes are too high, and he wants to raise them. His tax increases are the fine print in his economic plan. And let me be specific: The Democratic nominee for president supports plans to raise income taxes, and raise payroll taxes, and raise investment income taxes, and raise the death tax, and raise business taxes, and increase the tax burden on the American people by hundreds of billions of dollars.

As Politifact.com writes – Palin’s claims are deliberately misleading. This email is worse than misleading – it is entirely fase.

This little list conveniently does not include those making over $125,000.00. It is this group of people – especially those making over $250,000.00, and even more, those making over a million dollars a year – to whom the profits of the past eight years has gone. The economy has been growing for eight years while the income of those in the middle class has decreased by approximately $2,000.00 when accounting for inflation since Bush took office.

INHERITANCE TAX

MCCAIN 0% (No change, Bush repealed this tax)

OBAMA Restore the inheritance tax

How does this affect you? Many families have lost businesses,  farms and ranches, and homes that have been in their families  for generations because they could not afford the inheritance tax.
Those willing their assets to loved
ones will not only lose them to
these taxes.

As for this section – again, falsehoods galore. According to FactCheck.org:

The claim that Obama proposes to “restore the inheritance tax” is also false, as are the claims that McCain would impose zero tax and that Bush “repealed” it. McCain and Obama both would retain a reduced version of the estate tax, as it is correctly called, though McCain would reduce it by more.

The tax now falls only on estates valued at more than $2 million (effectively $4 million for couples able to set up the required legal and financial arrangements). It reaches a maximum rate of 45 percent on amounts more than that. It was not repealed, but it is set to expire temporarily in 2010, then return in 2011, when it would apply to estates valued at more than $1 million ($2 million for couples), with the maximum rate rising to 55 percent.

Obama has proposed to apply the tax only to estates valued at more than $3.5 million ($7 million for couples), holding the maximum rate at 45 percent. McCain would apply it to estates worth more than $5 million ($10 million for couples), with a maximum rate of 15 percent.

Again – this email is counting on people accepting its’ allegations without checking them and hoping that stereotypes about liberals are strong enough that people will accept these charges.

NEW TAXES BEING PROPOSED BY OBAMA

* New government taxes proposed on
homes that are more than
2400 square feet

* New gasoline taxes (as if
gas weren’t high enough already)

* New taxes on natural resources
consumption (heating
gas, water, electricity)

* New taxes on retirement accounts
and last but not least….

This section is even more fanciful than the rest. Obama has never proposed taxes on water. He isn’t proposing to increase gasoline taxes. He isn’t proposing to increase taxes on retirement accounts. The taxes on homes with more than 2400 square feet – neither the number nor general idea can be found anywhere aside from in references to this email.

The one thing that is partially true is that Obama – and McCain – are proposing to create a “cap-and-trade system” which would impose a cost on businesses’ carbon emissions. Although neither McCain nor Obama call these costs “taxes” they can reasonably be called that. Further, Obama, though not McCain, plans to offset any potential increase in costs for consumers with a refund from a windfall profits tax.

* New taxes to pay for socialized medicine so we can receive the same  level of medical care as other third-world countries!!!

This final claim is way over-the-top. Obama’s plan calls for every American who wants to preserve their health insurance plan to be able to keep it. His plan even includes incentives that reward employers that do provide health insurance and penalizes employers that do not (with exceptions for small businesses.) In addition to this, Obama’s plan will open up the government health care plan used by members of Congress to allow consumers – in a free market – to opt into it. Obama’s plan is designed to create incentives within our current system to gradually close the huge holes in insurance coverage and over time bring down costs. It’s a conservative plan, in the best sense of that word.

John McCain’s health care plan is radical. McCain says he wants to:

Reform The Tax Code To Offer More Choices Beyond Employer-Based Health Insurance Coverage

In other words, McCain wants employers to stop providing health insurance coverage. He proposes to include the cost of health care in each employee’s taxable income – and to offset this by offering a $2,500.00 tax rebate for individuals and $5,000.00 for families. This isn’t enough to purchase health insurance coverage in many states, so in addition, McCain proposes to effectively deregulate the insurance market and allow insurance to be sold across state lines – eliminating the consumer protections states provide, including protections for those with pre-existing conditions.

The theory behind the McCain plan is that we already have too much health insurance coverage and are going to the doctor too often because we don’t have to pay every time we do. So he proposes that every individual – or family – purchase individual or family health insurance – a radical change, and one that places much greater power in the hands of the insurance industry. As a matter of fact, it would be accurate to say it is exactly what the health insurance industry is asking for.

Conclusion

So, there we have it. An email full of lies deliberately designed to mislead those Obama’s plans are designed to help. Obama’s plans – which are the fruit of a kind of Democratic consensus that has emerged in the past ten years on how to deal with the destabilization that has come from globalization. Obama is asking that those individuals who have gained the most from our society and economy should give a bit more in this time of need. All McCain and Palin and the Republicans offer is more tax cuts for the richest indivudals and the biggest corporations (tax cuts that go further than Bush’s tax cuts in favoring the wealthy) – for which their only defense is to make the false claim that Obama is planning on raising everyone’s taxes.

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