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America in 2030: A Fiscal Portrait

Posted on by The Progressive Policy Institute

The Congressional Budget Office’s long-term budget forecasts on the national fiscal health are highly educated guesswork, but guesswork just the same. The 2030s are pretty far off, and the degree of forecasting uncertainty is higher than it once was. As CBO explains “the current degree of economic dislocation exceeds that of any previous period in the past half-century, so the uncertainty inherent in current forecasts probably exceeds the historical average.” But let’s imagine that the 2030s have arrived, and that CBO’s budget projections have come true. What would America look like?

For starters, Social Security would be flat broke. All U.S. Treasury’s IOUs to Social Security will have been cashed in. Since the Social Security trust funds will be completely depleted and, because Social Security is barred by law from borrowing from the federal government, the program will be unable to meet its obligations. Thus, by the end of the 2030s, payable benefits would have to be cut by 20 percent. Is it possible to imagine that the government will suddenly cut 20 percent of the benefits it hands out? That seems unlikely — the law would be changed and borrowing would resume.

In fact, Social Security’s problems would start much earlier. In 2016, according to CBO, its outlays would begin to regularly exceed its revenues, and consequently Social Security would first start to regularly call in its IOUs. Thus, the Treasury Department would need to borrow billions of dollars each year to pay back what it borrowed from Social Security’s trust funds.

If Social Security is expected to be in bad shape by the 2030s, the big public health care programs, Medicare and Medicaid, would be doing even worse. The culprits being an aging population and expanding health care costs, which are scheduled to grow faster than the U.S. economy. By the 2030s the number of people over the age of 65 — the beneficiaries – will have increased by 90 percent while those between 20 and 65 — the contributors — will have grown by a meager 10 percent.

In the 2030s, federal spending on mandatory health care programs accounts for 11 percent of GDP, about twice the level in 2010. Add in Social Security, and the big three entitlements cost about 16 percent of GDP. Keep in mind that primary spending for the 40 year period before 2010 averaged 18.5 percent of GDP. This means that in 2030, the U.S. government will either be unable to direct resources to other priorities (like education,) or will have to increase a tax rate by roughly double that of 2010.

Finally, America in the 2030s will groan under mind-boggling public debt, assuming the country’s fiscal fortunes are calculated by the CBO under what’s called a “current policy” scenario. In this case, the CBO assumes that no major public policy innovations will occur throughout the lifetime of its projection. This scenario reflects the political reality we face today. For example, congress is currently debating whether to extend the Bush tax cuts and “patch” the Alternative Minimum Tax. If political inaction prevails, debt-to-GDP ratio would exceed 200 percent by the 2030s, even with an economic recovery.

It is true that the U.S. holds a privileged position by virtue of the dollar’s role as the world’s reserve currency. But we have no idea how a debt of this magnitude would affect our ability to invest in future growth, and to keep borrowing from abroad. Moreover, in the 2030s, interest payments on the national debt are nine percent of GDP, from just one percent of GDP in 2010. If we continue borrowing at the projected rates beyond 2030, interest spending would exceed total federal revenues 15 years thereafter.

Finally, this grim fiscal portrait of America in the 2030s rests on optimistic assumptions. CBO projections assume that revenue will average around 19 percent of GDP and that long-term interest rates remain low. They also assume away the strong likelihood that America will face another economic crisis or armed conflict between 2010 and 2030.

The key for policy-makers, of course, is to envision a different fiscal future for America – and to act on it just as soon as the economy recovers.

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Rocky Week for Colorado Republicans

Posted on by The Progressive Policy Institute

Colorado is without question a key target for the GOP this year. It’s a traditionally “purple” state where Democrats captured the governorship and legislature in 2006, and then carried the state for Barack Obama in 2008. With incumbent Gov. Bill Ritter stepping down voluntarily, and with a competitive Democratic primary for the U.S. Senate between appointed Sen. Michael Bennet and former House speaker Andrew Romanoff, GOPers have definitely been seeing an opening. Polls have been showing close general election races for both the governorship and the Senate.

But somebody up there must not like Colorado Republicans, because they are in the midst of a plague-of-frogs series of misfortunes. As I noted here recently, the campaign of the front-running GOP gubernatorial candidate, Scott McInnis, imploded upon allegations that he plagiarized big chunks of a report he supposedly wrote to justify a very lucrative think-tank contract just a few years back.

As Colorado GOPers tried to figure out what to do, the wingiest nut of them all, former Rep. Tom Tancredo (last seen calling for the President’s impeachment on grounds that he is a “dedicated Marxist”) publicly demanded that the two Republicans officially in the race advance to drop out after the August 10 primary (enabling the party to name someone else), or he’d run for governor himself on the Constitution Party ticket. Presumably the answer didn’t come fast enough, and Tancredo duly announced his third-party candidacy, following that up with a public shouting match with the state Republican chairman.

But the weirdness has not been confined to the gubernatorial race. In the Senate primary, district attorney Ken Buck, a big Tea Party favorite who’s recently moved ahead of “establishment” candidate Jane Norton in the polls, got caught saying this into a live microphone:

[W]ill you tell those dumbasses at the Tea Party to stop asking questions about birth certificates while I’m on the camera?

Boy, what a quandry for Buck: he now has to eat a big plate of crow to avoid offending his own base, but in doing so he will appear intimidated by a Birther contingent that he obviously considers stupid. And he’s already in some hot water for earlier blurting out that he was a better candidate than Norton because “I don’t wear high heels.”

All in all, it would have been a good week for Colorado Republican officials–and their various candidates–to have taken a vacation.

Photo Credit: QualityFrog’s Photostream

This item is cross-posted at The Democratic Strategist.

Sen. Webb Tackles Preferences

Posted on by The Progressive Policy Institute

Democrats like to think of themselves as champions of economic fairness for working families. But for decades now, working class voters – especially white ones – haven’t been feeling the love. Even as their economic condition has deteriorated, they persist in voting against their “class interest” by voting Republican.

Few U.S. political leaders have studied this phenomenon more intently than Virginia Senator James Webb. In a thought-provoking Wall Street Journal article last week, Webb took aim at government policies intended to promote “diversity,” which he says have marginalized many white workers.

Webb acknowledged Washington’s responsibility to redress the wrongs endured by black Americans. But he maintained that affirmative action policies have been expanded to include many people, including recent immigrants, who cannot by any stretch of the imagination claim to be victims of discrimination. Such policies give a leg up to minorities in competition for government jobs and contracts, broadcast licenses, college admissions and even private sector hiring.

“Those who came to this country in recent decades from Asia, Latin America and Africa did not suffer discrimination from our government, and in fact have frequently been the beneficiaries of special government programs. The same cannot be said of many hard-working white Americans, including those whose roots in America go back more than 200 years,” Webb wrote.

Excepting programs intended to benefit black Americans, “government-directed diversity programs should end,” he added.

Webb’s criticism of group preferences is reminiscent of President Bill Clinton’s “mend it, don’t end it” approach to reforming affirmative action. Perhaps because of their own humble origins, both men feel viscerally that policies that treat all whites as privileged, regardless of wide variations in their socio-economic background and circumstances, make a mockery of the liberal ideal of equal justice.

That glaring contradiction at the heart of contemporary liberalism offers a more-than-plausible explanation for why non-college white voters spurn Democrats. Liberals generally have preferred other explanations: endemic racism, or the supposed power of cultural issues to trump economic ones. Webb is challenging Democrats to come to grips with the obvious: white working class voters have good reasons for believing the party doesn’t stand for economic fairness for them.

All this is highly relevant to Democrats’ electoral prospects, in the midterm election and beyond. In last year’s big elections in New York, Virginia and even solidly Democratic Massachusetts, only a third of working class whites picked the Democratic candidate. According to a recent Allstate/National Journal Heartland Monitor Poll, a mere 34  percent of non-college white men and 37 percent of non-college women approve of the job President Obama is doing.

Even among college white men, Obama’s approval stands at 42 percent, and 50 percent for women. In fact, the sharp drop in Obama’s public esteem Gallup seems to be largely due to the defection of white voters, and women in particular, since nearly two-thirds of minority voters approve of his performance.

Obama and the Democrats don’t need to win a majority of white voters, but they can’t afford to lose them by enormous margins, either. To close the gap, progressives must do a better job of addressing the real economic interests of white working class, which after all are not much different than those of working class blacks, Latinos or Asians.

What’s needed is a new agenda for modernizing public infrastructure, expanding access to education and retooling the American economy to win in global competition. The details of that agenda are a subject for another day. But Sen. Webb is right: Progressives should start by tailoring affirmative action policies narrowly to those they were originally intended to help, and let everyone else compete for economic opportunities without government’s thumb on the scales.

The New Leak from Wikileaks

Posted on by The Progressive Policy Institute

The story leading the day in the New York Times and Washington Post details the release of some 90,000 U.S. military documents by Wikileaks. Many of which detail the level of coordination between elements within Pakistan’s intelligence service, the ISI, and the Taliban operating in Afghanistan.  In fact, the Taliban and ranking officers within the ISI have worked together is not “news.”  Pick up a copy of Steve Coll’s brilliant Ghost Wars, which ably details the relationship.  Here’s an excerpt from a PBS Frontline interview with Coll on the topic:

Frontline: You describe [the Taliban] as a client of the ISI.

Coll: They received guns; they received money; they received fuel; they received infrastructure support. They also, we know, had direct on-the-ground support from undercover Pakistani officers in civilian clothes who would participate in particular military battles.

Frontline: Is it a fair characterization to say that the Taliban were an asset of the ISI?

Coll: They were an asset of the ISI. I think it’s impossible to understand the Taliban’s military triumph in Afghanistan, culminating in their takeover of Kabul in 1996, without understanding that they were a proxy force, a client of the Pakistan army, and benefited from all of the materiel support that the Pakistan army could provide them, given its own constrained resources.

The Taliban were important to the ISI in the late 1990s for another reason. The ISI also promoted a rebellion against what it regarded as Indian occupation in Kashmir. The Taliban in Afghanistan provided logistical support, training and other bases that the ISI could use to train and develop its Kashmir rebellion as well.

To sum it up:  The ISI has used the Taliban for more than 15 years as a proxy force in Afghanistan.  First, they served as a bulwark against the spread of Soviet communism.  Old habits die hard, so when the Americans arrived, the ISI viewed collaboration with the Taliban as a natural point of influence that could be used to suit its interest — namely, keeping Afghanistan weak and unstable and impossible to dominate its neighbor.

Some in the blogosphere have treated Wikileaks’ revelation with a yawn.  Check out Andrew Exum’s dripping-with-sarcasm post comparing the shock-value of the story to news that Liberace likes dudes.  So sure, if you’re in the expert community, it’s easy to brush off as a non-story.

However, getting these stories out to major news outlets has relevance.  Spencer Ackerman points out that the Wikileaks information provides a “new depth of detail” about the long-held ties.

More importantly, it raises the issue to a level that people controlling the purse strings can’t ignore.  I’ll bet you a crisp dollar bill that John Kerry has read Ghost Wars.  I’ll double down on the fact that Kerry, chairman of the Senate Foreign Relations Committee, soon moves lickity-split to convene an oversight hearing that reexamines the $500 million that Secretary of State Hillary Clinton just promised to the Pakistanis last week for two hydroelectric projects, a pledge that comes on the heels of a massive $7.5 billion Pakistan aid package.  Keep in mind that this assistance was essentially conditioned on strengthening the Pakistani civilian government at the expense of its military and intelligence services and was accepted by the Pakistanis after some rather significant heartburn in Islamabad.

The bottom line is that widespread public disclosure of the depth of the Taliban-ISI contacts ultimately creates leverage for the Americans, and that’s a good thing.

UPDATE:  It occurred to me last night that by saying leverage created by the release of classified information was “a good thing” may have tacitly endorsed the idea that I favor future leaks of classified information.  Nothing could be farther from the truth.  As a veteran of five years inside the intelligence committee, I deplore leaks of all kinds — they harm sources and methods, which in turn jeopardizes the IC and military’s abilities to collect information germane to America’s national security.  That leverage was created by the release of information is a fortunate byproduct of the leak.  My preference would been to have none at all.

Photo Credit: DVIDSHUB’s Photostream

Senate Punts Carbon Price

Posted on by The Progressive Policy Institute

After much self-congratulation over passing a massive financial regulatory bill, the U.S. Senate has punted on pricing carbon. That decision is likely to have a bigger long-term impact on the U.S. economy, and not in a good way.

Senate leaders yesterday conceded they don’t have the votes to put a price on carbon. Instead, they’ll try to pass a pallid energy bill that raises liability caps on oil companies and makes modest gestures toward energy efficiency. Even the catastrophic BP oil spill, it seems, was not enough to overcome lawmakers’ fear of being accused of raising taxes on energy as the economy struggles, even though a carbon price wouldn’t have gone into effect for several years.

Well, there’s always next year — except that the midterm election will likely bring in more Republicans wedded to climate denial and cheap fossil fuels. So the Senate’s failure to act is a costly setback from an economic, security and environmental perspective. It will prolong America’s dependence on oil and fossil fuels, worsen our trade deficit, retard investment in clean technology and low-carbon fuels, and forfeit leadership in energy innovation to other countries. And it means the United States won’t do its part to lower carbon emissions and thereby stop overheating the planet.

All this suggests progressives will have to rethink their approach to achieving a low-carbon economy. Not only is “cap and trade” dead, Majority Leader Sen. Harry Reid (D-NV) said those words are no longer in his vocabulary.

PPI has long considered pricing carbon the sine qua non of progressive energy policy, although we have been agnostic as to how. We helped to design the cap and trade architecture in several pathbreaking legislative proposals (the Lieberman-McCain and Lieberman-Warner bills, as well as Senator Tom Carper’s “4P” bill), and proposed a “tailpipe trading” system to cover auto emissions. We continue to believe that cap and trade offers the twin advantages of environmental certainty — a quantifiable limit on the amount of carbon Americans emit – and strong incentives for companies to invest in energy efficiency and innovation.

At the same time, however, we’ve endorsed a straight up carbon tax, as well as setting a “floor” under oil prices to prevent their volatility from inhibiting investments in clean fuels. The key is to price carbon realistically, by taking into account the “externalities” not included in the price of gas at the pump (or coal for that matter): the hundreds of billions we spend each year to assure access to fossil fuels, as well as the environmental damage done by concentrating greenhouse gases in the atmosphere.

To free market fundamentalists, ending such implicit subsidies to fossil fuels is tantamount to raising taxes on energy. So be it. We need to raise the cost of burning fossil fuels and lower the cost of low-carbon alternative fuels. This is a matter of urgent national interest, and President Obama will need to propose a new clean energy strategy to the next Congress.

Photo Credit: Americaspower’s Photostream

From Georgia to Oklahoma

Posted on by The Progressive Policy Institute

I won’t go through the all the results for Tuesday’s Georgia primary, since an earlier P-Fix post covered the basics.  But I will mention a few details that I omitted in the quick piece I did on Wednesday.

In the gubernatorial contest, while Democrat Roy Barnes looks highly competitive for the general election (particularly if the Republican runoff gets as nasty as it looks like it may), it’s worth noting that turnout for the GOP primary was just under 700,000, while turnout for the Democratic side was just under 400,000. While turnout in both parties was terrible, and some of the disparity was attributable to the more competitive nature of the GOP battle (and the attendant television ads), it’s a reminder that this state which didn’t have a Republican governor from the early days of Reconstruction until 2002 now has a decided red tint. To win, Barnes will need to run a very good campaign (he’s certainly reconfirmed his reputation as an outstanding fundraiser), while taking advantage of the opportunities the GOP has created in eight years of lackluster governance of the state, and in the extremism of the primary messages of its candidates this year. If Barnes does win, he would interrupt what would otherwise certainly be a blatant Republican gerrymandering effort, made all the worse by Georgia’s acquisition of an additional congressional district.

A second observation is that this is one GOP primary where geography seemed to matter more than ideology or the association of this or that candidate with the Tea Party or some national conservative figure. I’ve posted a fairly elaborate analysis of this topic at FiveThirtyEight, but suffice it to say that Karen Handel finished first more because she is from vote-rich metro Atlanta than because she was endorsed by Jan Brewer and Sarah Palin. The endorsements definitely helped her overcome a financial deficit by generating free media, but in the end half the primary vote was cast in her base region, and that was the most important difference. And that’s also why she has to be considered a heavy favorite in the runoff, since her opponent, Nathan Deal, did well only in his north Georgia base, which provides a much smaller segment of the GOP vote. It’s a measure of the importance of geography that Handel trounced Deal in the Atlanta suburb of Cobb County, home of Deal’s padrone, Newt Gingrich.

Perhaps because of this disadvantage, Deal looks likely to spend the three-week runoff attacking Handel for insufficient conservatism, which won’t be easy given her Palin association and her own harsh record on issues ranging from taxes (she wants to abolish the state income taxes and rely instead on regressive consumption taxes to finance state government) to immigration (as Secretary of State, she initiated a harsh voter ID system that ensnared a good many native citizen voters on primary day). So far Deal has mainly pounded Handel for supporting a rape-and-incest exception to an abortion ban, which used to be an acceptable conservative position, and for making a small contribution to the Log Cabin Republicans back when she was running for office in culturally tolerant Fulton County (Atlanta). Since Handel’s main attack line on Deal has involved ethics allegations, this could be a truly nasty culture-war dominated runoff that could drive up both candidates’ negatives.

In terms of the congressional races, there will be four Republican runoffs on August 10, two in safe Republican districts, one in a safe Democratic district, and one to choose an opponent for theoretically vulnerable Democrat John Barrow (D-GA) (though he is likely to have a big financial advantage and Barack Obama carried his district).

Down-ballot, there will be a highly contentious Republican runoff for Attorney General that could boost statewide turnout.  And though it’s not directly connected to the primaries, the general election will be complicated by the fact that outgoing GOP Gov. Sonny Perdue is backing an independent candidate for State School Superintendent because the Republican nominee opposes accepting Race to the Top dollars.

The next primary is in Oklahoma on July 27, where there are competitive gubernatorial contests in both parties.

In polling news, PPP has had some interesting assessments of the Florida governor’s race.  The late but free-spending entry of controversial former hospital executive and health reform opponent Rick Scott in the GOP contest has upset a lot of apple carts. A primary survey shows Scott beating long-time front-runner and party warhorse Bill McCollum 43-29, mainly by driving McCollum’s approval ratio among Florida Republicans to a dismal 26-40. But a general election poll shows Democrat Alex Sink beating either Republican (along with independent candidate Bud Chiles). And in the general electorate, Scott’s approval ratio is 23-41 and McCollum’s a truly disastrous 16-51. Like Georgia, this is a state where a Democratic gubernatorial victory could have major implications for redistricting.

In non-candidate polling news, Mark Blumenthal of pollster.com has a solid and very thorough critique of the new Politico “Power and the People” surveys by Mark Penn comparing the views of Americans generally with those of “D.C. Elites.”

Ed Kilgore’s PPI Political Memo runs every Tuesday and Friday.

Photo credit: Chuck “Caveman” Coker’s Photostream

The Changing Political Discussion Around Defense Spending

Posted on by The Progressive Policy Institute

With today’s New York Times’ article, we may be on the verge of a sea change in political attitudes on defense spending. To be sure, the political dialogue has not fully accepted the necessity of fiscal restraint at the Pentagon, but we’re getting there.

When you hear the likes of Republican Sen. Judd Gregg (R-NH) say, “defense should be looked at” as a part of deficit reduction and Democratic Sen. Daniel Inouye (D-HI) toe a harder-line, something’s up.  Okay, Inouye has a long, hard-earned reputation as a defense porker, but the contrast with the conservative Gregg (even if he is from New Hampshire) is notable.

Defense spending has been a counter-intuitive third-rail of its own in domestic politics. Conservatives, allergic to every government program they’ve ever come across, drip with hypocrisy when they can’t seem to get enough pork at the barbecue of weapons systems. And progressives are often skittish about restraining defense spending in order to preserve home-district jobs and out of fear of “weak on defense liberals” charges.

But Erskine Bowles, Bill Clinton’s chief of staff and co-chair of the Deficit Commission, insists, “We’re going to have to take a hard look at defense if we are going to be serious about deficit reduction.”

It’s something your friends here at PPI have been pushing. Will Marshall, PPI’s president, testified in front of Bowles’ commission in late-June and was adamant that “defense has a contribution to make” in deficit reduction.

The hard part, however, is making sure it’s the right contribution. Secretary of Defense Bob Gates has said that he’s looking at a whole-sale restructuring of Pentagon spending:

What I’m asking for is not a simple budget cut; [what] I’m talking about is changing the way we do business. It’s taking the savings from that and applying it to long-term investments… This is a lot harder than cutting the budget for one year.”

In doing so, it’s critical to strike a balance between fiscal restraint and maintaining national security. This calls for a nuanced approach that doesn’t just ax a few weapons programs one year and starts all over the next. To keep America safe, strong, and solvent, we need creative ideas for restructuring defense spending.

Continue to check in at ProgressiveFix.com, as PPI plans to issue our own plan in the coming weeks.

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For the Record

Posted on by The Progressive Policy Institute

Recent blog posts by Americans for Tax Reform and Free Press inaccurately portray policy recommendations in the recently released PPI Policy Memo, “The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy.”

Written by Michael Mandel, the memo examines recent employment data that suggests the communications and Internet sectors may be emerging as “job leaders” as the overall economy struggles to recover. It also proposes that regulatory policy, like fiscal or monetary policy, should be sensitive to business cycles.

The memo calls for a “countercyclical regulatory policy,” focusing on the timing, rather than the merits of regulation. It recommends the Federal Communications Commission pause for a two-year period before imposing regulations on the growing communications sector in order to not impair job creation. The memo states: “After that period, the agency should systematically and proactively track down areas of excess and exploitive behavior and target them for selected intense regulation.”

The Progressive Policy Institute’s aim is to modernize regulatory policy for the 21st century by making it more flexible, more responsive to “boom and bust” cycles, and more attentive to growth and innovation.

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Clinton to Vietnam, Human Rights Raised. Does She Really Care?

Posted on by The Progressive Policy Institute

Secretary of State Hillary Clinton raised concern over human rights during her trip to Vietnam, a country she last visited in the waning days of her husband’s presidency.  Per the NYT:

Noting Vietnam’s recent jailing of democracy activists, attacks on religious groups and curbing of Internet social-networking sites, Mrs. Clinton said she raised the status of human rights in a meeting with a deputy prime minister, Pham Gia Khiem. … She said the United States would press Vietnam to do more to protect individual freedom. …

Mrs. Clinton’s comments were notable, given that she has played down human rights concerns in visits to Vietnam’s neighbor, China. But her timing, at the outset of the visit, suggested that she wanted to make her point, and move on.

The last line is particularly intriguing, and offers potential fodder to critics from across the political spectrum: from conservatives wed to George Bush’s “Freedom Agenda” to liberal critics to issue-focused NGOs, like Human Rights Watch and Freedom House. Is the Secretary of State just making her point and moving on? Have human rights become simply a talking point, as Secretary Clinton unfortunately suggested before her first trip to China in early 2009?

Despite her regrettable gaffes about China, she’s said that her more nuanced approach is “designed to make a difference, not prove a point.” So what is Secretary Clinton’s approach, exactly?

In Russia, a country desperate for some international respect, a stern human rights stare-down could prove counter-productive. The balance between economics, bilateral security, multi-lateral security, climate change and personal freedoms demands measured engagement. Would, for example, Russia have cooperated on New START or Iran sanctions if the Obama administration issued one human rights tongue-lashing on top of another? Anything’s possible, but such agreements would have undoubtedly been more difficult to come by.

That’s why, in big countries as Will Marshall wrote on this site the other day, Secretary Clinton is focused on building civil societies:

In an important speech that got little attention back home, she unveiled what she called a 21st century approach to promoting democracy by defending civil society. Clinton described an independent civic sector as a nursery for democratic citizenship, no less critical to a free society than representative government and a market economy. And she warned of a spreading global backlash against civil society…. This marks a significant departure from the Bush administration’s approach to democracy, which centered on demands for elections and accountable political institutions. …

Clinton aimed more modestly, but shrewdly, at bolstering a particular aspect of liberty – freedom of association. In authoritarian countries, civil society or “third sector” organizations play an especially vital role in building the infrastructure of liberal democracy. … [Clinton’s approach is] deeply subversive, in that it enables indigenous reformers to carve out space for civic action that is independent of state control. By defending the right of CSOs to organize and operate, and receive international support, the United States and other free countries can promote democracy from the ground up.

It’s in this vein that Secretary Clinton addressed an audience on cyber freedom at the Newseum earlier this year.

Some countries have erected electronic barriers that prevent their people from accessing portions of the world’s networks. …  They’ve expunged words, names, and phrases from search engine results. They have violated the privacy of citizens who engage in non-violent political speech. These actions contravene the Universal Declaration on Human Rights.

Expect the direct challenging on human rights to continue behind closed doors, but expect the Obama administration to take a more indirect, but ultimately more effective path in public.

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Newt and the Religious “Double Standard”

Posted on by The Progressive Policy Institute

As you may have noticed, the latest right-wing “scandal” (at least for those who are not mesmerized by the “exposure” of liberal opinion in the leaked archives of the JournoList) is the planned construction of a mosque and Islamic cultural center near Ground Zero in New York. This is essentially a local land use issue of the sort that New York authorities deal with every day, but the “threat” of this mosque has already become a cause celebre around the country, particularly with the Tea Party folk.

But the most radical reaction so far has been not from any Tea Party spokesman or talk radio jock, but from the former Speaker of the U.S. House of Representatives and a putative presidential candidate in 2012, Newt Gingrich. Check this statement out:

There should be no mosque near Ground Zero in New York so long as there are no churches or synagogues in Saudi Arabia. The time for double standards that allow Islamists to behave aggressively toward us while they demand our weakness and submission is over.

Yes, Gingrich is arguing that religious liberty for Muslims in the United States should be made contingent on religious liberty for non-Muslims in Saudi Arabia. Anything less is a “double standard.”

I suppose this sounds reasonable to people who think all or most Muslims are “Islamists,” or buy Newt’s dubious assertion that the name of the proposed facility, Cordoba House, is a deliberate Islamist provocation aimed at heralding some future armed conquest of the United States. But put aside the particulars here and think about the idea that a unilateral commitment to religious liberty by the United States represents a “double standard” inviting our destruction.

This isn’t a particularly new idea. For a very long time some American Protestants resisted full civil rights for Catholics on grounds that Catholic countries did not extend similar rights to Protestants. You’d think Newt Gingrich, as a very avid recent convert to Catholicism, would be aware of that history and its relevance to his “double standard” argument.

Newt’s line, of course, is an analog to the argument beloved of some conservatives that in the civilizational struggle with Islamism, American principles of decency–say, a reluctance to torture prisoners–are just signs of contemptible weakness that make our enemies laugh at us. It’s richly ironic that the kind of people who deeply believe in “American exceptionalism”–the notion that much of what is good on this planet would disappear if America began to resemble countries like Canada or England or France–are sometimes among the first to argue that America should abandon its distinctive beliefs whenever it is convenient. But Gingrich carries the freedom-is-weakness argument to a brand new extreme. Wonder how his fans would react if he suggested that the right to bear arms should be suspended for the duration of the War On Terror to keep guns out of the hands of Islamists? The mind reels.

This item is cross-posted at The Democratic Strategist.

Photo Credit: Gage Skidmore

New Report Suggests Innovation In the Communications Sector Will Spur Growth and Lead American Job Recovery

Posted on by The Progressive Policy Institute

NEWS RELEASE
FOR IMMEDIATE RELEASE
July 21, 2010

PRESS CONTACT:
Steven Chlapecka—schlapecka@ppionline.org, T: 202.525.3931

Economist Michael Mandel Unveils a New Analysis Citing Countercyclical Regulatory Policy As a Pathway for Job Creation

WASHINGTON, D.C. – July 21, 2010 – The Progressive Policy Institute (PPI) released a new report by economist Michael Mandel titled “The Coming Communications Boom? Jobs, Innovation, and Countercyclical Regulatory Policy.” Unveiled at a July 20 event on Capitol Hill featuring Mandel and Rep. Ron Kind (D-Wis.), co-chair of the New Democrat Coalition Task force on Innovation and Competitiveness, the paper proposes a countercyclical regulatory policy for high-tech and innovation-centric industries to promote job creation and generate a new wave of innovation-led growth.

“This policy memo raises an intriguing question: should regulatory policy be any less sensitive to business cycles than fiscal and monetary policy?” said Will Marshall, president of PPI.

The report finds that the “broad” communications sector – Internet companies, wireless telecom carriers and computer systems design – is creating jobs even as the rest of the economy experiences double-digit unemployment. Mandel cites these sectors as “job leaders” that could spearhead a broader expansion of employment as the U.S. economy fully recovers from a fierce financial meltdown and recession.

Mandel’s research shows that the communications sector is poised to lead job creation in the short term, and is where most of the “energy” and innovation are happening that are needed to avoid a jobless recovery. He cautions that now is not the time for regulators to step in to this sector and derail what is expected to be a strong and steady trajectory to job creation.  

In his paper, Mandel addresses current proposed regulation over the communications sector, stating that “in the early stages of an innovation-driven boom, permissive regulatory policy is important to let new products and services take root.”

The paper proposes the government hold off on imposing regulations over growth sectors for a two-year period. This would “allow the incipient communications boom to get started. After that period, the [FCC] should systematically and proactively track down areas of excess and exploitive behavior, and target them for selective intense regulation.”

To access the full memo, visit: https://bit.ly/98crsS

For additional information, please contact PPI’s press office at 202.525.3931.

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TopSecretAmerica Comes Up Short

Posted on by The Progressive Policy Institute

After digesting three days’ worth of the Washington Post’s TopSecretAmerica series, consider me unimpressed.

As I said in my initial post, I do generally support the series’ aim — to demonstrate that we’ve had a massive intelligence community bureaucracy sprout up since 9/11, and that oversight and public accountability seem to be lacking. That point is well-taken, and one that I support.

My critiques are simple: TopSecretAmerica is neither even-handed nor nuanced. It paints the intelligence community in a broad-brush negative light while ignoring many of its achievements in the last decade.

The series’ point of departure seems to be that the intelligence community is a secretive monster. The articles lean too heavily on the notion that big, expensive and secretive mean scary and, by implication, counter-productive: Companies put the bottom line before country, no one knows what happens at Ft. Meade, and the super-nerds of the NSA are too affluent … and … what? The country is weaker for it?  We don’t know for sure, but that’s the impression I get.

Rarely do the authors acknowledge that much of the money spent in the IC actually, you know, helped keep Americans safe. KSM’s capture? Al-Zarqawi’s death?  Catching the Times Square bomber in 53 hours? The Russian spy ring? The recent slate of high-level Taliban takedowns in Afghanistan and Pakistan? All these, and more, were left conspicuously off the final draft. Of course, this is the IC’s inherent PR nightmare: its shortcomings are publicly scrutinized; its successes often remain hidden.

Instead of striking a proper balance that tells a measured story of waste, overlap and needless spending mixed with strategic intelligence successes, “TopSecretAmerica” is too quick to throw the baby out with the bath water.

The lack of nuance is equally disappointing. As intelligence analysts, the contractors I worked with couldn’t have been more conscientious, patriotic employees. They were crucial components of our analytic team. Should they have been replaced by civilian employees on a purely cost basis (for purely economic reasons)? Probably, and the government is working to facilitate that transition (a point mentioned in the text). But that’s only part of the charge the Post levels against them — did my colleagues value their shareholders more than their country? No way.

And should my colleagues be lumped in with the protective service contractors who did irreparable harm to America’s mission by murdering Iraqi citizens? No, but to the intelligence novice, it’s easy to lump all contractors under one umbrella. A distinction should have been made.

Take the issue of overlap. In instances the Post highlights, yes, analytic overlap, most egregiously in the form of the “soccer ball syndrome“, creates inefficiencies that should be sussed out in better oversight.

However, overlap can provide necessary perspective to individual customers. In my old job, I was once the U.S. government’s foremost expert on maritime terrorism in the Strait of Gibraltar. That’s quite a niche, huh? I focused on all the major terrorist groups in Spain, Morocco, and Gibraltar (amongst other responsibilities) just like every other CIA or DIA analyst charged with those countries. But I did so with an eye towards my Department of the Navy customer as a maritime and regional specialist. If a group’s activity suddenly indicated a maritime inclination in that area, I took over as the lead because I was the subject expert.

Overlap makes contributions elsewhere, too. In another personal example, I worked with my agency’s team in Spain to determine, based solely on random, personal connections between my colleagues and their Spanish intelligence contacts, that Islamic extremists, not ETA as the Spanish first decreed, were responsible for the Madrid bombings of March 2004. Once we — the Navy — issued our initial report stating this possibility, other more appropriate agencies took over.

The lack of oversight in intelligence spending must be addressed, but let’s not forget the IC’s valuable successes, either.

Photo Credit: Marcin Wichary’s Photostream

Low Turnout, High Consequences

Posted on by The Progressive Policy Institute

I’ve found this year’s primaries in my home state of Georgia to be very interesting. Clearly, Georgians do not agree. Despite a host of competitive contests in both parties, total turnout in yesterday’s primaries was about 22 percent, which is pretty pathetic.

In any event, the consequences wrought by those few voters were pretty interesting. On the Democratic side, former governor Roy Barnes took the next step in his attempted redemption from a huge stumble in 2002, when his grossly overconfident re-election campaign was upset by a party-switching good ol’ boy named Sonny Perdue. This time around Barnes impressively defeated an African-American statewide elected official by a three-to-one margin, doing especially well in heavily African-American urban areas. Two Democratic congressmen, Hank Johnson and John Barrow, survived primary challenges.

Republicans set themselves up for some potentially wild-and-crazy runoffs. Sarah Palin’s candidate, Karen Handel, will face Newt Gingrich’s candidate, Nathan Deal, on August 10. All kinds of nastiness between these two candidate broke out late in the primary contest; Handel has basically called Deal a crook and Deal has basically called Handel a godless liberal. It’s not likely to get more civil in the runoff.

The Republican congressional primaries produced some odd results, too. You have to have some sympathy for 9th district congressman Tom Graves. He won his gig after a special election in May and then a runoff in June, all because Nathan Deal resigned the seat to (take your pick) devote more time to his gubernatorial campaign or short-circuit an ethics investigation. Then he had to run for a full term in yesterday’s primary, and once again, he’s in a runoff against the same candidate, Lee Hawkins. So Graves and Hawkins will be facing each other for the fourth time in three months.

Then you’ve got state Rep. Clay Cox (R-GA), who was endorsed by a who’s-who of Georgia Republican politics in his bid to succeed the venerable right-winger John Linder in a safe GOP district. Cox dutifully endorsed Linder’s hobby-horse, the “Fair Tax” proposal, and did everything else expected of him. But he finished a poor third, losing not only to Linder’s former chief of staff, Rob Woodall, but also to talk radio host Jody Hice.

In general, the August 10 runoffs will be mostly a Republican affair, and in that rarefied company, we can expect a lot of more-conservative-than-thou one-upsmanship. Looking forward to the general election, Democrats are in reasonably good shape to do relatively well in this red state, in this bad year.

This item is cross-posted at The Democratic Strategist.

Photo credit: 55thstreet’s Photostream

Primary Watch 2010

Posted on by The Progressive Policy Institute

Today’s major primary is in Georgia, and I covered the Peach State contests pretty thoroughly last week (for more detail, see this preview at FiveThirtyEight). An update, though: one late poll of the Republican gubernatorial race, by Magellan Strategies, shows Karen Handel blowing out to a big lead and long-time front-runner John Oxendine fading fast, with Nathan Deal and Eric Johnson battling for a runoff spot.

The primary calendar going forward includes Oklahoma on July 27; Kansas, Michigan and Missouri on August 3; Tennessee on August 5; and Colorado, Connecticut, Georgia (runoffs) and Minnesota on August 10. The general election calendar for November picked up an additional contest, with West Virginia formally scheduling a special election for the late Sen. Bob Byrd’s seat. The candidates are expected to be West Virginia Governor Joe Manchin, a Democrat, and Republican Rep. Shelley Moore Capito (R-WV), with the special election statute enabling the latter to run concurrently for re-election and for the Senate.

Second-quarter fundraising figures for federal contests have been trickling out during the last week, and the number that drew the most attention was probably the 4.5 million haul brought in by Florida Republican Senate candidate Marco Rubio, more than doubling the funds raised by apostate Gov. Charlie Crist. On the other hand, a new PPP survey of the Florida Senate contest shows Crist maintaining a 35-29 lead over Rubio in a three-way race with Democrat Kendrick Meek (who has 17 percent); 52 percent of Crist’s support is from Democrats. In Nevada, controversial Republican nominee Sharron Angle outraised Sen. Harry Reid (D-NV) by $400,000 ($2.6 million to $2.2 million), though again, the latest poll, from Mason-Dixon, showed Reid now up by 44-37. And in CA, incumbent Democratic Sen. Barbara Boxer (D-CA) had a very good second quarter, raising $4.6 million. Her Republican challenger, Carly Fiorina, raised $3 million, but $1.1 million of that total was a loan from her own personal wealth. The latest poll there, from Rasmussen, shows Boxer up by seven points, 49-42. The largest disconnect between money and public opinion is in Arkansas, where incumbent Sen. Blanche Lincoln (D-AR) outraised Republican John Boozman by a four-to-one margin (though a lot of that was to finance her primary and runoff battles with Bill Halter); even Lincoln’s own polling, from Benenson, shows her trailing Boozman 45-36, while other polls have her down 2-1.

Poll Watch

In other polling news, Rasmussen has Democrat Richard Blumenthal maintaining a 53-40 lead over Republican Linda McMahon in the Connecticut Senate race; and shows Republican Paul LePage holding a 39-31 lead over Democrat Libby Mitchell (with independent Eliot Cutler at 15 percent) in the Maine gubernatorial contest. A Glengariff Group poll for the Detroit News of the Michigan Republican gubernatorial primary shows a close three-way race among congressman Peter Hoekstra, Attorney General Mike Cox, and businessman Rick Snyder. The little-known “outsider” Snyder seems to have a lot of momentum.  And in non-election polling news, an ABC/Washington Post survey on Elena Kagan’s Supreme Court nomination shows support for her confirmation continuing to lead opposition by a 53-25 margin.

Ed Kilgore’s PPI Political Memo runs every Tuesday and Friday

The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy

Posted on by The Progressive Policy Institute

 

This policy memo brings together three important strands of current policy debate: jobs, innovation, and regulatory policy. Everyone these days is concerned about the slow pace of job creation coming out of the Great Meltdown. Over the past six months, the economy has generated less than 600,000 net new private sector jobs—hardly enough to make a dent in the 14.6 million unemployed.

A bigger issue, though, is that the job drought actually started well before the meltdown. In the last business cycle—running from 2000 to 2007—the private sector created 4.4 million net new jobs. But out of those, fully 74 percent were in the health/education sector. That is, most of the private-sector jobs were being created in places like hospitals, nursing homes, and universities that are heavily government-funded. In effect, the public sector has been keeping the job market afloat since the beginning of the decade.

Most distressingly, America’s great strength—its innovative sector—actually lost jobs during the 2000-2007 business cycle. This sector includes everything from aerospace to pharmaceuticals to telecommunications to software (see Table 1). Some individual industries added employees, but collectively the innovative sector lost almost
700,000 jobs from 2000 to 2007, before the bust hit.

That performance was far worse than anyone expected: In 2001, the Bureau of Labor Statistics published projections implying that the innovative sector would create 1.7 million net new jobs by 2007. In other words, the innovative sector had a shortfall of 2.4 million jobs relative to expectations, even before the bust.

There are promising signs, however, of a rebound in one part of the innovation sector: communications. Internet companies, along with firms engaged in wireless telecom and computer systems design, seem to be emerging as “job leaders” in the next economic expansion. Unfortunately, these companies are also embroiled in struggles with federal agencies – and among themselves – over whether more regulation is required to police competition in communications.

Download the entire memo.

For Intelligence, Big Doesn’t Always Mean Bad

Posted on by The Progressive Policy Institute

The Washington Post’s new series Top Secret America is well intentioned:

When it comes to national security, all too often no expense is spared and few questions are asked – resulting in an enterprise so massive that nobody in government has a full understanding of it.

That’s right. As an intelligence community analyst for some five years, I’ve seen plenty of the bureaucratic inefficiencies, excess and unchecked spending, and unwieldy sprawl that have mushroomed since 9/11. From this perspective, it’s important that questions get asked, money be justified, and overlap — where necessary and possible — be reduced.

My beef with the article — the first in a three-part series — is that it is framed as “big = bad.” Its thesis seems to be that more construction, more analysts, more information, more publications are all fleecing America. The series’ lede lays out this premise:

The investigation’s other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

* Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

If you’re writing a piece of investigative journalism that is an implicit call for more oversight, pointing out physical size is an obvious organizing frame that seems to illustrate the problem. If there are a bunch of big buildings and no one knows what happens in them, are they necessary?

The problem, however, is delving into why physical size is symptomatic of the problem. Here, the article falls short — lost is that some of these mysterious, large building have contributed to our national security. Raw size isn’t the intelligence community’s problem.

For example, former Director of National Intelligence Dennis Blair released the IC’s budget for the first time. At $75 billion, it’s almost twice the State Department’s, but only ten percent of DoD’s (however, though the Pentagon’s intel spending is counted in Defense’s budget). If increased oversight improves efficiency by — oh, pick a number — 15 percent, the IC’s budget is still $64 billion and the vast majority of those new buildings out in suburban Maryland are still being built.

Or take the National Security Agency’s budget, the agency that controls our satellite spies that listen in to bad people (when not embroiled in Bush-era domestic eavesdropping cases). It’s budget has doubled.   Based on the “big = bad” frame, you might think this is inherently negative. I’d argue that there’s more to the story, and that the increase in signals intelligence collection has kept the country safer by forcing Al Qaeda to use arcane and slow means of communicating.

Buried are two important reasons why size matters, a link that should be made more explicitly. First:

The overload of hourly, daily, weekly, monthly and annual reports is actually counterproductive, say people who receive them. Some policymakers and senior officials don’t dare delve into the backup clogging their computers.

IC bean-counters value quantity over quality, the latter being more difficult to judge. I can’t tell you how many times we were told to “produce more,” irrespective of whether that production had any mission impact. A lot of dog shit is more valuable that one diamond. That’s because budgets are justified by numbers.

And second:

[S]ecrecy can undermine the normal chain of command when senior officials use it to cut out rivals or when subordinates are ordered to keep secrets from their commanders.  One military officer involved in one such program said he was ordered to sign a document prohibiting him from disclosing it to his four-star commander, with whom he worked closely every day, because the commander was not authorized to know about it.

Almost four years ago, I was in a meeting with the new intelligence chief for a certain country I was working on. He was briefed by my boss’s boss on a variety of secret operations my organization had going in the area. When the chief asked for further information about a specific operation, my boss’s boss continued on for several minutes about all the amazing intelligence we’re getting from it.

It was highly inconvenient that I knew better: in truth, that operation had been shut down for over a year, and continued to exist on paper only. My boss’s boss was giving the new chief a complete snow job, only to give the appearance of competence and justify more money. I decided to quit that afternoon.

In sum, there’s been no question that the intelligence community was ill-equipped to deal with the new security threats facing the country that grew in complexity and immediacy between the end of the Cold War and 9/11. An overhaul was necessary, and the community continues to face growing pains in the aftermath of that reorganization and the increased budgets that come along with it.

The central tension in intelligence spending is striking a balance between dollars and security. Much of the post-9/11 intel money has effectively contributed to the country’s security, an inconvenient truism that’s glossed over in the Post’s new series. In the remaining articles, I hope the focus is on the marginal rate of increased security for every dollar spent. And in cases where we’re not getting enough bang for our buck, I hope there’s a better explanation of what drives those inefficiencies. Raw size is an occasional indicator of a deeper problem, not the problem itself.

Photo Credit: Orin Zebest