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Public Opposition to the Health Reform Bill — and Liberal Pundits Who Ignore It

Posted on by The Progressive Policy Institute

There will be a mountain of analysis regarding the Brown victory in Massachusetts last night and what it means for health care reform. But what is striking to me this morning, skimming my RSS feeds, is the same thing I have found striking throughout the past year — how willfully ignorant liberal advocates of health care reform continue to be about public opinion on the Senate- and House-passed versions of health care reform.

There’s no need for extended analysis of the polling to make my point. Start with the basic favor/oppose trend for health care reform:

You can argue that people are uninformed. You can argue that Republicans have misled them. You can argue that people support something called “health care reform” as a general concept. But the numbers are what they are — only a minority supports the bills under consideration.

Faced with such numbers, reform advocates have defensively pointed out that much of the opposition to health care reform comes from the left, as if that somehow rendered the bills’ unpopularity irrelevant. What is devastating to their case, however, is a look at the intensity of views toward reform.

When assessing polling results, I have found it is crucial to employ what I call the Kessler Rule, after Third Way’s Jim Kessler. Jim argues that anytime someone tells a pollster that they are “somewhat” supportive or opposed to something, it basically means they don’t have strong feelings one way or another or that they have so little interest in the issue that they haven’t even formed an opinion. Rasmussen has been asking its respondents whether they “strongly” or “somewhat” support or oppose health care reform for months. The first time they asked was in August, during the congressional recess, when they found that 43 percent of respondents were strongly opposed, compared with 23 percent who were strongly supportive. Keep in mind, this was when the public option was still included in all major proposals, so liberal backlash was unlikely to have been much of a factor in this contrast.

The most recent poll Rasmussen conducted was over the weekend. Results: 44 percent strongly opposed, 18 percent strongly supportive.

You would think that such numbers would dent the confidence of reform advocates that the public overwhelmingly supported their own preferences. You would be wrong. Instead, incredibly, health care reform was cited throughout the fall and winter as Exhibit A for why we need to get rid of the filibuster in the Senate! If something as popular as health care reform faced such difficulty winning passage, it was argued, then the Senate can no longer govern!

Now with Scott Brown’s defeat of Martha Coakley, advocates have bent over backwards making the case that the election of a conservative in one of the most liberal states in the country — to fill a seat vacated by the patron saint of health care reform, at a time when the result would determine the fate of reform — had nothing to do with public opposition to reform.

Rasmussen’s election night survey says everything you need to know about how much these advocates are kidding themselves: 78 percent of Brown voters strongly oppose the health care bills before Congress.

What’s my point? It’s not that the case for health care reform is bunk or that policymakers should make their decisions based on polls. Like many progressives, I think the House should pass the Senate bill and that they should fix it later. (Unlike most progressives, my “fixes” would involve moving in the direction of Wyden-Bennett or even a more generous version of the House Republican bill rather than in the direction of House Democrats.) It’s not that liberal advocates should not spin issues in ways that promote their policy preferences. It’s that they should not believe their own spin — the country remains moderate. But don’t take it from me — take it from the 2010 electorate in November.

The views expressed in this piece do not necessarily reflect those of the Progressive Policy Institute.

Massachusetts Election Postmortem

Posted on by The Progressive Policy Institute

Brutal ironies abound in Scott Brown’s Senate victory in Massachusetts. First and most obvious, Brown won Ted Kennedy’s seat, despite promising to kill what Kennedy called the cause of his life – a federal push to expand health care coverage to millions of uninsured Americans.

Apparently, Bay State voters – or at least the independents who put Brown over the top — aren’t sentimentalists where the Kennedys are concerned.

Another incongruity: Scott comes from the first state to achieve a nearly universal health care system – and whose system is the model for what President Obama and Democrats are trying to achieve nationally. The reforms before Congress share the same basic architecture as the Massachusetts plan: health exchanges where people can choose among competing private insurance plans, subsidies for those who can’t afford to buy coverage, and an individual mandate to prevent people from “free riding” on the system by getting coverage only when they get sick.

Yet Brown says he won’t work to undo his state’s system. Apparently, what seems to be working in Massachusetts becomes something hideous, a hydra-headed example of “big government” and “socialism,” when the federal government tries to apply the same principles on a national scale.

It’s tempting to dismiss Brown’s improbable upset as purely a reflection of a bad economy. Economic distress, compounded by public anger over the perceived injustice of bank bailouts and bonuses, has surely contributed to the voters’ cranky and volatile mood. But there’s more going on here.

It’s not an ideological shift to the right so much as an upsurge of anti-establishment, even anti-politics, sentiment. Brown ran not only against health reform, but also against Obama’s stimulus package, the administration’s plans to cut U.S. carbon emissions through a cap-and-trade system, and its decisions to ban “enhanced interrogation techniques” and to try terrorist suspects in civilian courts.

It’s not hard to discern in all this an angry rejection of elite certitudes, and hostility toward the way politics is played in Washington. Although the media predictably casts the Massachusetts result as a repudiation of President Obama, he remains personally popular and will rebound from this setback. But Congress is another matter. Public attitudes toward the legislative branch seem particularly sulfurous. This suggests that Obama needs to be more forceful in shaping his major initiatives, lest parochial and special interests run rampant as they have often seemed to do during the endless negotiations over health care.

For now, though, Democrats should make this clear: Scott Brown won the right to represent Massachusetts in the U.S. Senate. He did not win the right to thwart the will of a president and party that won solid majorities over the last two national elections. As the governing party, Democrats have not only a right but a responsibility to advance health care reform, for which they won an unambiguous mandate in 2008. If Republicans want to stop them, they will need to win a lot more than one Senate seat.

America Acts in Haiti

Posted on by The Progressive Policy Institute

With a hat tip to Spencer Ackerman for flagging the video (and accompanying sentiment), scenes like this symbolize what America stands for:

Watch as LA County rescue workers pull a victim from the rubble; the crowd erupts with spontaneous applause and chants of U.S.A.! U.S.A.!

I worry that there’s a strain within progressive America that doubts our country’s place in the world. I worry that America’s actions over the last decade have irreparably damaged progressives’ image of America as a great nation that was conceived to do great things.

To be sure, the Iraq war has triggered worthy reflection on that point. But my uber-fear is that with President Obama’s decision to adopt a new strategy in Afghanistan, progressives’ degraded concept of America has been legitimized now that one of their own has allegedly–if falsely in my opinion–“followed in Bush’s footsteps.”

Not to trivialize the point by being colloquial, but with issues like Iraq, it is unfortunately and tragically true that America screws up sometimes, and royally so (and Massachusetts, don’t think I’m just looking at that ranch in Crawford). Let’s remember that though even gross misjudgments in policy may raise questions about what America is, the worst errors are ultimately set right. America will remain a great place that does wonderful and selfless acts of kindness. It does so for two reasons–because it can and because that what it was meant to do.

Rebuilding Haiti

Posted on by The Progressive Policy Institute

Scott and readers at TPM have suggested that the United States must assume nation-building efforts on the scale of Iraq or Afghanistan in Haiti. Scott makes an excellent point that the silver lining of all this is that America’s humanitarian mission in Haiti is an opportunity to provide reconstruction assistance in a country where it’s welcomed by all. However, let’s keep in mind that American assistance will likely flow under the auspices of the U.N., so the rebuilding effort won’t provide the unfettered learning tool that Scott envisages.

That said, I’m nervous about the comparison drawn between Haiti and Iraq/Afghanistan. If the evocation of America’s other nation-building efforts is meant merely as a general comparison to signify the size of the U.S.’s contribution to Haitian reconstruction, stabilization, and eventual growth, then it’s right on. But the cynic in me worries that comparisons to Iraq and Afghanistan are designed to elicit a direct contrast between very different missions. It’s as if some are almost daring the Obama administration to prove that America actually cares about a country that doesn’t immediately impact America’s national security (though if reports of mass refugee influxes prove accurate, then there is a decided self-interest as well).

Haiti is neither Afghanistan nor Iraq. The circumstances of America’s involvement couldn’t be more different. Haiti is closer and smaller. It had a more stable government that could control its territory. Haiti’s geography and history of foreign occupation are less violent. Its social structures and norms couldn’t be more opposite… and on and on.

So let’s dispense with those comparisons as quickly as possible. The bottom line is that America’s contribution is, and should be, of historically large proportions. The reason for our involvement will be for no better or worse reason that what President Obama wrote:

[F]or a very simple reason: in times of tragedy, the United States of America steps forward and helps. That is who we are. That is what we do. For decades, America’s leadership has been founded in part on the fact that we do not use our power to subjugate others, we use it to lift them up—whether it was rebuilding our former adversaries after World War II, dropping food and water to the people of Berlin, or helping the people of Bosnia and Kosovo rebuild their lives and their nations.

And that’s all that matters.

Vision of a State: Ultra-Federalism in Afghanistan

Posted on by The Progressive Policy Institute

President Obama’s provocative, considered decision to send another 30,000 troops to Afghanistan was a major moment in his presidency. By the president’s own description, the deployment is a means to an end. However, since his speech, there has been too little discussion about what we hope to achieve after security is delivered in Afghanistan.

The fact of the matter is that, assuming we achieve broad-based security in the region and “degrade” the Taliban, any successful democratic system in Afghanistan will need to be sui generis—in a class unto itself. This new goal should recognize the critical difference between a written constitution (a document) and a culture of constitutionalism (a way of life). As Thomas Jefferson once wrote of America, “Where is our republicanism to be found? Not in the constitution, but merely in the spirit of the people.” Afghanistan today possesses a perfectly serviceable written constitution, with a bicameral legislature, provincial government, an independent judiciary, and a strong executive branch. The question is whether it also possesses constitutionalism.

America’s non-military assets—including our aid budget and the Pentagon’s “civilian surge”—should make constitutionalism our ultimate goal in Afghanistan. To achieve constitutionalism in Afghanistan, we should aim at what might be called “ultra-federalism,” following the model of the United States Constitution. In designing America’s Constitution, the Framers built from our inheritance prior to 1787: thirteen states with existent, different constitutions; dramatic cultural, economic, and demographic contrasts; and legal and cultural misgivings about a strong central government. Over the decades, as America evolved—as slavery was prohibited and the Civil War was fought, and as the New Deal swept through the country—our constitutional values, like a vine, wrapped around the knottiest ethnic and historical features of our landscape.

The governing principle? We should avoid the naïve goal of perfecting a political system from scratch on the basis of abstract concepts; instead, only a pragmatic, syncretic approach—sampling from different systems for what works best—will achieve a resilient, native design that will be endorsed by the citizens it will govern.

“Ultra-federalism” in Afghanistan should mirror and embrace the country’s unique and disparate elements. The new system should include established practices and political values that accept and incorporate the ethnic divisions between the country’s major and minor ethnic groups: the Pashtuns and Tajiks (both historically Iranian), Hazaras, Uzbeks, Aimak, Turkmen, Baluch, Nuristani and other small groups. Constitutional law should embrace not only Pashto and Persian, the two official languages of the country, but Uzbek and Turkmen, which are spoken in the north, and, to the extent possible, the 70 other dialects throughout the country. As far as tribes go, the Pashtuns alone have at least seven tribes, the Durrani, Ghilzai, Jaji, Mangal, Safi, Mamund, and Mohmand, which generally distribute authority to elders through patrimony. Those power structures ought to be recognized and brought into the ultra-federalist system, just as the pre-existing American states were incorporated into the 1787 Constitution.

Afghanistan is 99 percent Muslim, and Afghanistan’s constitution already embraces Shari’a law; however, an ultra-federalist culture would constantly seek to discover and bridge gaps between local systems for administering justice and the official machinery of the state courts. Finally, the ultra-federalist system ought to recognize and incorporate discrete issues certain tribes present for the federal government. For instance, the Ghilzai generally use a flat political structure that pointedly avoids a paramount chief. Such local decision-making processes should be welcomed into the ultra-federalist system.

Finally, as far as the familiar democratic goals of rule of law, recognition of human rights, and free and fair elections go, it is essential that we be practical in our attempts and circumspect about our goals. To trumpet absolutist aspirations for a “democratic” Afghanistan by implanting new institutions (such as nationwide elections) will result in charades like the flawed and corrupt election in August and the bankrupt run-off in November. Instead, we should establish reasonable benchmarks that aim for democratic participation (a process that can grow) instead of only participatory democracy (a binary outcome that sets us up to fail).

But ultra-federalism won’t only be about accepting the givens; it should also be about pushing initiatives that will help constitutionalism take hold culturally. These include reducing Afghanistan’s shameful illiteracy rate of 70 percent, so people can understand laws and participate politically; launching an all-out war on corruption, in part by nurturing an independent bar of trained, competent lawyers; and making militias and warlordism both unacceptable and illegal.

All of these efforts should be considered and adopted by Afghanis through a series of new local and national loya jirgas—the traditional elder-driven, tribal-based, deliberative structure that approved Afghanistan’s 2003 constitution.

The security earned through President Obama’s new strategy needs a larger end: a stable Afghanistan that will, in turn, help make the world safer for America and our allies. The broader aim of ultra-federalism will help build a robust Afghan state that will withstand the Taliban and grow, eventually and on its own path, into a democracy Afghans can truly call their own.

Where’s Mitt?

Posted on by The Progressive Policy Institute

As the entire political world looks to Massachusetts today to see what its voters (or at least those willing to vote in a special election) do about an open Senate seat, Republicans, of course, are excited by the possibility that they can kill health care reform by denying Democrats the 60th vote they need for final passage of the reform plan in the upper chamber. But it kinda makes you wonder why in all the obsessive coverage of the MA race, we aren’t seeing the last Republican to win a major statewide office in the Bay State: you know, Mitt Romney, supposedly the front-runner for the 2012 GOP presidential nomination.

Politico‘s Alex Isenstadt raises that question today, and the bottom line is that, well, Romney’s just not that popular in Massachusetts:

Romney’s White House run, said Jeffrey Berry, a Tufts University political scientist, left a sour taste in the mouths of state voters.“Mitt Romney is an unpopular former governor. He left the state to run for president and people feel he was insincere when he ran for governor in the first place,” said Berry. “He hasn’t really been a part of Massachusetts political culture since he left office. I think people thought he ran for office merely to run for president.”

Andrew Smith, director of the University of New Hampshire Survey Center, explained that voters in Massachusetts had recoiled after Romney took a sharp right turn on social issues during the presidential campaign — and the former Massachusetts governor went so far as to criticize his home state over its legalization of gay marriage.

“He sort of lost credibility among voters in the state,” said Smith.

This certainly helps explain why Republican candidate Scott Brown hasn’t been anxious to recruit Romney to run around the state with him, but there may be something else going on that is keeping Romney out of the picture: Brown’s support for the Massachusetts health system, which is by all accounts a major albatross for Mitt in his future presidential aspirations.

After all, Brown’s number one talking point in recent days has been that his state doesn’t need federal health care reform because it’s already enacted a strikingly similar set of reforms on its own. National action, he argues, will just mean Massachusetts taxpayers will have to help other states get up to speed in covering the uninsured.

This may be an effective argument in Massachusetts, but it’s not terribly appealing to Republicans elsewhere, who typically view the kind of reforms enacted under Romney’s leadership in the Bay State as rampant socialism. The last thing Romney needs is to put himself in the middle of that particular debate.

And so, irony of ironies, the most famous Massachusetts Republican is out of public sight on the day when Massachusetts could give the GOP a very famous victory. That doesn’t bode well for Mitt’s 2012 prospects, and for that matter, for Republican claims that a Brown victory can be exported elswewhere–say, to the 49 states who haven’t enacted a health care reform initiative much like the one they are trying to kill in Congress.

This item is cross-posted at The Democratic Strategist.

Health Reform Endgame

Posted on by The Progressive Policy Institute

Whatever happens today in Massachusetts, congressional Democrats must pass a health care reform bill. There is a lot more at stake here than curbing medical costs and expanding coverage, though both are crucial. The fundamental challenge is proving that progressives can govern the country.

A win on health care would show that Obama and his party are serious about fixing our broken political system. A loss would make Democrats look feckless and deepen public anger and cynicism toward government.

It’s gut check time for Democrats. If Republican Scott Brown wins the Massachusetts Senate race, some nervous centrists may be tempted to overread the result as a “populist” revolt against health reform or “big government” solutions in general. Some liberals will claim that voters are punishing Democrats because Obama and his party haven’t been radical enough. If only the Democrats had included a public option, or embraced a straight-up single payer architecture, then voters would at last see change they can believe in.

Well, Massachusetts voters seem to have other things on their minds besides health care, like the economy and one-party dominance of state politics. But there’s no doubt that public support for health reform has steadily eroded over the past year. During the 2008 campaign, voters routinely listed health care as their top concern; now only 39 percent favor the President’s reform blueprint.

Although conservative disinformation has taken a toll, the main reason is that Americans are more worried about the economy than health care. And as ordinary families struggle with depleted retirement savings, home foreclosures and double-digit unemployment, they also stew over the billions Washington has spent to bail out overcompensated bankers and inept auto executives. Such “populism,” however, doesn’t fit neatly within any ideological template. People are mad at Wall Street greedheads, but they’re also increasingly anxious about government regulation and deficits, which makes them wary of liberal demands for bolder, costlier initiatives.

Another reason for growing disenchantment with health reform is the process itself. The health care debate has shown Washington at its polarized and parochial worst. It has taken too long and involved endless haggling by an ever-changing cast of negotiators. Too many interests have been accommodated, at the expense of both taxpayers and policy coherence. Win or lose, the coming after-action reports on health reform will surely focus on the wisdom of President Obama’s decision to articulate broad principles and let Congress sweat the details.

Still, in the end, all of us need relief from escalating health care costs, and millions of our fellow citizens need access to insurance. And more than anything else, Americans need to know that our democracy still works. That’s why progressives ought to fall in behind President Obama’s dogged efforts to pass a bill.

“The worst thing to do is nothing,” former President Bill Clinton advised Democrats at their recent retreat. He’s right. Should Democrats lose the Massachusetts seat, they will basically face three choices. One is to speed up efforts to reconcile House and Senate bills and push for floor votes before Scott is seated in the Senate. The second is for the House to pass the Senate bill intact and send it to the President’s desk for signature. The third is to give up. Option 2 is the quickest, simplest and most procedurally defensible course. It’s one pragmatic progressives should support on policy grounds as well, since the Senate bill, though far from perfect, is more fiscally responsible and contains stronger cost control measures than the House version.

Republicans will cry foul in any case, but their credibility is shot. The post-mortems also will show that, by taking an obstructionist stance from the beginning, Republicans foreclosed any possibility of a bipartisan bill. Worse, as health care analysts Bryan Dowd and Roger Feldman argued last week on Progressive Fix, they violated their their own beliefs (for example, by piously denouncing cuts to Medicare providers) and utterly failed to offer a principled alternative.

For House Democrats, especially liberals, having to approve the Senate bill unchanged would be a bitter pill. The bill’s subsidies for low-income workers aren’t as generous, its regulations on the insurance industry are less severe and, of course, it doesn’t include their cherished public option. But they should recognize that their party’s reputation for governing competently is on the line and take one for the team.

For the governing party, winning ugly beats losing ugly. Passing a bill, moreover, is the beginning, not the end, of improving health care quality and delivery in the United States. The government will have to issue new regulations to put the bill’s often vague provisions into force, and like any piece of landmark legislation, it will be tweaked and revised as we go along.

So on health care reform, progressives ought to hang together or – you know the rest.

Haiti, Nation-Building, and Soft Power

Posted on by The Progressive Policy Institute

I am minimally qualified to comment on the crisis in Haiti, but one of Talking Points Memo‘s readers has what sounds to me like an important perspective on American involvement in reconstructing the country over the coming years (not months). Since Haiti is in our backyard, the reader says, we will have to assume nation-building efforts on the scale of Iraq or Afghanistan if Haiti is not to devolve into chaos.

I’m sure Jim will have much sharper thoughts on all of this, but I’ll just throw out there the suggestion that the great tragedy before us presents at least one silver lining — it gives us an opportunity to gain valuable experience in nation-building, and to do so in a context where our help is viewed gratefully rather than resentfully.

If soft power and nation-building are to become increasingly important in foreign policy to avoid the prospect of failed states (or to address actually existing failed states), then the United States must not only repair its image as a hegemonic bull in a china shop, but it must show that we can actually produce an unambiguously good reconstruction. Simply, we need to be trusted and seen as effective. I don’t think it’s too controversial to say that we’re not exactly effusing these qualities today when it comes to our nation-building efforts.

Of course, our efforts could go badly in Haiti, which would be another setback for us. But what alternative do we have than to hope for the best?

Public Transit Fans, Rejoice

Posted on by The Progressive Policy Institute

The Obama administration this week announced that it would be changing the rules governing funding of transit projects. The shift would loosen the criteria for using federal funds to finance light rail, bus routes, and other public transit projects.

Under the Bush administration, federal rules called for evaluating new transit projects largely by how much they cut down on commuting times and how expensive they were. The Transportation Department is essentially reversing that guideline, broadening the assessment criteria for projects by evaluating whether they promote “livability” — their effect not just on commuting times but also on the environment, community, and the local and regional economy.

The Federal Transit Administration hands out about $2 billion a year in federal money to cities and states for transit construction. That might not seem like a lot, but small, barely covered rule changes like these can actually have tremendous, on-the-ground impact. As a Wall Street Journal story on the DOT’s announcement noted, more than 80 cities will now see their prospects for federal funds to shore up and expand their transit systems brighten, and manufacturers and infrastructure firms focused on urban transit will also get a boost. No less important, this could lead to the revitalization of urban areas that receive a jolt from a shiny new transit tram or Metro system.

The announcement, made by Transportation Secretary Ray LaHood at the convention of the Transportation Research Board, a division of the National Research Council, is in keeping with the administration’s broader push to get agencies to collaborate more closely on projects and policies that would promote walking, biking, and public transit.

In the coming days, there’ll be a lot of stock-taking going on as pundits assess Obama’s first full year in office. While everyone will be eyeing high-profile and contentious accomplishments, changes like this will be overlooked. It’s a shame because this is exactly the kind of smart-growth, post-carbon policy that got progressives excited about an Obama administration.

More on the Tea Party/GOP Dance

Posted on by The Progressive Policy Institute

Yesterday I posted some thoughts on the relationship between the Tea Party Movement and the Republican Party, suggesting the latter was probably in the process of swallowing the former.

At about the same time, the ever-excellent David Weigel of the Washington Independent provided another, and very detailed, perspective on the Tea Party/GOP relationship in the context of the controversy over next month’s National Tea Party Convention in Nashvillle.

Weigel reports that while some of the grumbling over the convention among Tea Party activists has been published in the context of an alleged “takeover” or “hijacking” of the Movement by Republican pols. But at the same time, there’s not much interest in any other political direction:

Nine months ago, [American Liberty Alliance chairman Eric] Odom got national headlines for pre-emptively denying RNC Chairman Michael Steele a speaking slot at the Chicago Tea Party. “We prefer to limit stage time to those who are not elected officials, both in government as well as political parties,” he said at the time. Today, Steele is winning a Tea Party Nation web poll on whether he should speak the convention, and Odom is gearing up for a trip to Massachusetts to help the Republican candidate, Scott Brown, take the state’s open Senate seat. The Tea Party Express, an operation of the GOP-supporting Our Country Deserves Better PAC which has been utterly rejected by some Tea Party activists, is rolling into the convention and catching hardly any flack for it. The presence of Palin, Rep. Michele Bachmann (R-Minn.) and Rep. Marsha Blackburn (R-Tenn.) at the convention is seen, universally, as a coup with import that will outlive the controversy over the event itself.

So for all the protests by Tea Party activists about their hostility to the Republican “establishment” and their independence from both parties, it appears their short-term political objectives, and their heroes, are so closely aligned with the GOP’s dominant conservative wing that you can barely tell them apart.

Update: Two other new pieces of note have appeared on this subject: a New York Times report by Kate Zernike on the growing determination of Tea Party activists to take over the GOP at the grassroots level and move it sharply to the Right; and a piece by Michelle Goldberg at TAP about Christian Right involvement in the Tea Party Movement, which calls into question its supposed libertarian character.

This item is cross-posted at The Democratic Strategist.

In Massachusetts, Race to the Top Spurs Reform

Posted on by The Progressive Policy Institute

The Massachusetts state House and Senate yesterday passed a major education overhaul bill, considered to be the most sweeping school legislation in the state in more than 15 years.

The bill calls for doubling the number of charter schools in districts that are in the lowest 10 percent of state assessment scores and grants new powers to superintendents, making it easier for them to dismiss teachers and lengthen school days (a policy that PPI supports).

The story might seem like a state matter, but it actually has broader relevance. Here’s the telling passage from the Boston Globe:

The bill represents a cornerstone of Patrick’s education agenda, which slightly more than a year ago appeared to be all but on hold as the state confronted ever-worsening budget woes.

But the effort was reignited last year at the prospect of receiving $250 million from President Obama’s Race to the Top competition, reserved for states aggressively pursuing overhauls of failing schools and expansions of charter schools.

Now state education officials are racing to meet a Tuesday deadline to submit their funding proposal, including a copy of the approved bill. They will send the hundreds of pages by express carrier, while a state official who will be in Washington Tuesday has agreed to drop off a backup copy.

Massachusetts students are typically among the top-performing students in the country. But when broken down along socio-economic lines, the results actually vary greatly, with black, Latino, and low-income students all lagging behind. By lifting the cap on charter schools, the bill allows charter schools with proven track records to replicate their methods and try to revitalize long moribund school districts.

With Race to the Top, the Obama administration made a bet that dangling financial incentives for states would prompt them to enact reforms that for years have been stuck in sclerotic legislatures. By combining money with reformist guidelines — for instance, Race to the Top’s insistence on a favorable policy toward charters — the administration is getting states and districts to consider and pass bold education policies without imposing onerous top-down orders. The Massachusetts education bill is a victory for the reform in the state, but it also augurs well for the national education reform landscape.

Why Republicans Deserve to Lose the Health Care Reform Debate

Posted on by The Progressive Policy Institute

As Congress makes sausage out of health care reform, Republicans have complained bitterly that they have been excluded from the process. As health economists whose work generally reflects a market-based perspective, it might be surprising to hear us say that exclusion is just what the Republicans deserve. There are three reasons why.

Private health insurance works best for Americans who get it in groups through their employers. But virtually all such Americans know they are only one layoff away from losing their health insurance. If they have a pre-existing medical condition, they will have to pay astronomical premiums for an individual insurance policy, if they are lucky enough to get coverage at all. Those who are turned down can face financial ruin from the cost of illness. Any rational person would want to insure against the risk of losing his or her health insurance, but that is virtually impossible to do in the current health insurance marketplace.

This is a clear case of market failure and it has persisted for decades, yet Republicans simply don’t recognize this as a problem that needs to be solved. The individual insurance market is the source of most of the horror stories that plague and sully the health insurance industry, yet Republicans, who say they want to preserve private insurance, have proposed nothing that would address the problem.

The obvious solution is to impose some type of structure (i.e. “insurance exchanges”) on the individual insurance market, including a guarantee that affordable coverage would be available to anyone who shops in the individual market. State governments would be the natural entities to manage this market, but government involvement, even in the face of clear market failure, is anathema to Republicans. In addition, the Democrats’ mandate requiring individuals to purchase insurance is too much for many libertarian-oriented conservatives to bear, especially if costly subsidies are tied to the mandate. But at least they’re attempting to solve a complex problem, something Republicans can’t seem to do.

The second Republican failure is their criticism of the Democrats’ proposed cuts to Medicare. Part A of Medicare (which pays for hospital care) is scheduled to run out of money in 2017, or sooner if the recession continues to depress federal tax revenues. Young Americans have not mismanaged the Medicare program and don’t deserve to pay the bill for that policy failure. Drastic cuts in the cost of Medicare (coupled with higher premiums and a dramatic increase in price competition at all levels) will be necessary to solve this problem, and the sooner the better. The cuts proposed by congressional Democrats – mainly in payments to hospitals, other providers, and private Medicare Advantage plans – are a tepid attempt to deal with this problem. Like many Democratic proposals, they go hand in hand with a misplaced distaste for private health insurance plans. But vilifying the Democrats on that score, without offering alternatives to shore up the program, is fiscally irresponsible.

The third Republican failure is their knee-jerk criticism of “comparative effectiveness” research. This research aims to discover which medical treatments work better than others. It’s perfectly acceptable to worry that comparative effectiveness research in the wrong hands (like the government’s) could lead to rationing. But blanket condemnation of comparative effectiveness research leaves the impression that the current level of ignorance regarding the effectiveness of medical treatments is an inconsequential feature of the health care system. This is an embarrassment to the party that claims to be a prudent steward of the public’s money.

Republicans need to start listening to their constituents and propose innovative, conservative remedies to the numerous problems that plague the U.S. health care system. People who truly are market-oriented should be able to see market failure when it exists and propose corrections, even when those corrections include a role for government. Since the insurance industry has failed to fix itself, Republicans should have proposed a new set of products that protect people from losing insurance coverage. They should have proposed remedies including regulatory constraints that would lead to more stable and affordable health insurance coverage without the need for government subsidies. Finally, Republicans should have promoted their own proposals to fix Medicare, instead of demagoguing the issue. The Republicans’ silence on these fronts has been deafening – and explains why they deserve to lose the health care debate.

Bryan Dowd and Roger Feldman are professors at the University of Minnesota. They split their votes between Barack Obama and John McCain in the 2008 presidential election.

Taking It to the Banks

Posted on by The Progressive Policy Institute

Following a week of trial balloons about a tax on banks and bankers, President Obama today unveiled a “financial crisis responsibility fee,” to be levied against 50 of our nation’s largest banks. While the tax will not be able to seriously address the deficits that the government faces – it’s expected to raise only $90 billion over 10 years – any tax on the financial system can affect the course of our economy. The details of the proposed tax have yet to be outlined. Compared to the alternatives, this tax is a good start – but it doesn’t go far enough.

In the discussion of taxing banks and bankers, a couple of possibilities have been floated, some of which can reap short-term political points, others of which have the potential to promote progressive policies:

Bonus tax – One of the easiest – and politically most satisfying – would be a tax on excess bonuses. The British exercised this option on London bankers this past year. Bonuses in the City above a certain amount were taxed at a 50 percent rate. Banks responded by threatening to move offshore and – when that threat rang hollow – doubled the bonus pool they paid out to bankers. The end result was that the bankers whose decisions led in part to the crisis were financially unharmed, the British government raised a relative pittance in taxes, shareholders in City banks took a hit (as the bonus pools were increased at their expense), and the underlying fault lines in the British banking system remain unaddressed.

Transaction tax – The worst of the options would be a tax on transactions. As discussed before, this would merely pour sand in our financial system, breaking it and slowing economic recovery.

Excess profits tax – A more appealing option would be a tax on excess profits. A defining aspect of the financial bubble of the last decade was the fact that financial profits were 40 percent of overall corporate profits – more than double the slice financials made up of profits in the 1980s. A tax on these excess profits would rein that in. But while this could be useful, as Simon Johnson points out, it would be fairly easy to game, and end up being ineffective.

Tax on assets – A tax on bank assets above a certain amount addresses not just political sentiment that banks have made it through the crisis unscathed, but also the fact that banks are too big to fail. Encouraging banks to “right-size” themselves would make our economy safer from the systemic risk imposed by banks like Citigroup or Bank of America – which are debilitated but whose failure would be economically catastrophic.

Excess leverage tax – Taxing the leverage that financial institutions use to increase returns would allow us to avoid situations like that faced a year and a half ago when Lehman Brothers – leveraged over 30:1 – collapsed over the course of a weekend. It would make banks “safer” but would leave them still too big. In the event a bank were to fail, it would still be a systemic threat to our economy. This would be a more targeted version than an assets tax, but it would be harder to implement — definitions of leverage differ – and if not properly defined would leave hedge funds, insurance companies and other “non-bank financial institutions” untouched, leading to a crisis like that perpetuated by Long-Term Capital Management in 1998 or AIG last fall.

The taxes unveiled today are a very tentative step down the path towards an effective tax on assets. But the administration’s proposal is too broad – affected institutions could be as small as $50 billion — and too light to be effective.

If the Obama administration were strictly looking to tax the problem of an outsized and dangerous financial industry out of existence, a combination of the last two taxes — properly implemented to cover the whole financial sector when looking at leverage and focused on banks that are bigger than, say, $300 billion when looking at assets — would be the most effective. But hastily implemented, they could have unintended consequences, crippling our economy while merely pushing the problem offshore. Coordination with the EU and other G-20 countries will be vital to help with the de-leveraging of our economy.

A Push For Regional Primaries

Posted on by The Progressive Policy Institute

A recent report from a “Democratic Change Commission” authorized by the last national convention to look at the presidential nominating system mainly got attention for its predictable recommendation that “superdelegates” lose their independent voting power. The “supers” will still get convention seats and votes, but said votes will be allocated according to primary or caucus results in their home states (which could make the DC primary of greater-than-usual interest).

A second Change Commission recommendation got a bit of attention: another in a long series of efforts to reduce “front-loading” of the nominating process by pushing the “windows” for allowable primaries and caucuses forward a month (the Commission did not, however, tamper with the two-tiered process by which four states—IA, NV, NH and SC—get their own early “window”).

But virtually no one was aware of a third recommendation, until yesterday, when 538.com’s Tom Schaller interviewed Change Commission member (and 2008 “delegate guru” for the Obama campaign) Jeff Berman. According to Berman, the commission is encouraging the party to award bonus convention delegates to states that agree to cooperate in regional primary/caucus “clusters.” Regional primaries, long a favorite idea of critics of the current system, are relatively efficient ways of enabling candidates to compete for significant delegate counts, particularly when contrasted with the high costs and sheer madness of big, scattered national “clusters” like Super Tuesday, or the inefficiency of dozens of individual contests.

The big questions, of course, are (1) whether the party chooses to make the “bonuses” large enough to actually encourage states to participate in regional primaries, and (2) whether there’s a parallel movement by Republicans, since many states require both parties to hold nominating events on the same day. On this latter point, it’s probably an ideal time for Democrats to make changes in the nominating system, as nobody much expects a challenge to President Obama in 2012. But with Republicans anticipating a wide-open nomination contest, any changes in the system will be scrutinized minutely for their possible impact on particular candidates.

I would argue that a direct assault on the “right” of states to control the presidential nominating process is the only way to ensure major reforms. But barring that, the carrots-and-sticks approach of the Change Commission is perhaps the best available avenue for reform. And there’s no time like the present to undertake it.

More on Wages and the Middle Class: A Response to Rortybomb

Posted on by The Progressive Policy Institute

I will be posting soon on the living standards of the poor, but I first wanted to take some time to respond to Mike Konczal of Rortybomb. Mike argues that incomes have stagnated since 1999, which coincides with a dramatic rise in consumer borrowing. Kevin Drum picks up his post and runs with it. Let me start out by saying that I wasn’t so much objecting to Mike’s (or more specifically, Raghuram Rajan’s) hypothesis as I was objecting to general claims that wages have stagnated.

But Mike’s analysis has some problems. First, while he wants to argue that 1999 represented the start of a period of stagnation, a quick look at his chart will reveal that the significance of that year is that it is a cyclical peak year. The trend line hits local peaks at the height of the business cycle going all the way back through the late 1960s. The decline in real income from 1999 through the early 2000s isn’t any steeper than in previous downturns (it’s the recovery from the mid-2000s forward that’s weak). So it’s unclear to me why consumers became overleveraged this time but not in previous recessions.

Beyond that, Mike’s chart on household credit market debt is misleading. He’s comparing income levels in his first chart to debt changes in the second one. Conveniently, they sort of support his hypothesis. But he should be comparing levels to levels. Here’s the chart showing levels of household credit market debt:

Put the two charts together and you get this one:

If you can find a relationship there, you are more creative than I am. One more thing: “credit market debt” includes mortgages, car loans, and credit card debt. But the first two of those are secured by assets, so charting the change in debt without accounting for changes in assets is also misleading.

OK, Mike’s next objection is that the increase in income that I documented is due to households working more hours—in particular, wives. But here’s the thing—part of the reason that male compensation has “stagnated” (in quotes because I don’t believe that’s true) is due to the increase in work among women (increased supply of labor leads to lower wages). We don’t know what the counterfactual would have been had women not increased their hours.

As for “middle class woes,” foreclosures have risen dramatically, but they are a tiny percentage of mortgages (and a sizable chunk of homeowners don’t have mortgages because they’ve paid them off). The Calculated Risk post that Mike links to shows that other than Florida and Nevada (where many foreclosures are properties owned by speculators), between one and six percent of mortgages were in foreclosure as of mid-2009.

Oh, and about that “stagnation” since 1999—if you compare 1999 to 2007 (both peak income years), median household income using a comprehensive measure (that nevertheless does NOT include the value of health insurance) rose from $44,205 to $46,201 (in 2007 dollars, using the CPI-U-RS). [See Alternative Measures of Income and Poverty, Definition 14a.] Using my preferred PCE deflator, the increase is from $42,786 to $46,201—an 8 percent increase.

As for Kevin’s contrasting of per capita income growth and household income growth, see Steve Rose’s explanation of why these comparisons are apples-to-oranges.

The views expressed in this piece do not necessarily reflect those of the Progressive Policy Institute.

An Interesting Idea for Senate Reform

Posted on by The Progressive Policy Institute

The possibility of Democrats losing their 60th Senate seat in Massachusetts next week, slim as it is, should concentrate minds once again on the travesty of the 60-vote threshold for enacting legislation in the Senate. The Senate being what it is, of course, prospects for a major change in rules governing filibusters are not that good, unless some new dynamic is introduced.

At the American Prospect, Mark Schmitt may have identified an avenue for Senate reform: link rules restricting filibusters to rules tightening up the use of the budget reconciliation process.

He predicts, quite plausibly, that if Republicans continue to gum up the works in the Senate by voting en bloc against cloture motions, needing just one Democrat (at present) to hold up action, Democrats will increasingly resort to the reconciliation process, which fast-tracks legislation and prevents filibusters. But that’s hardly an ideal scenario:

[B]ecause budget reconciliation was designed for a completely different purpose it makes an awkward fit for big policy initiatives. It’s like entering a house through the pet door instead of the front door — you might fit, if you twist just the right way, but it will be painful. Provisions that don’t directly affect the budget can’t be included, so, for example, much of the fine detail of health-insurance regulation in the current bill would likely have been lost if pushed through reconciliation. If Congress chose reconciliation as the means to pass a jobs bill, it could include tax credits for job creation but probably not many of the infrastructure-spending initiatives that would directly create jobs.

Still, what choice does any majority party in the Senate have if the minority party chooses to block all major legislation? The experience with health reform is all but certain to create momentum among Democrats for using reconciliation whenever possible. And thus the dilemma, says Schmitt:

So what we have in the Senate are two extremes: the rigid, partisan system of near-total stasis created by the filibuster, on the one hand, and the merciless, closed-door, majority-controlled arcane process of budget reconciliation on the other. A solution might be found in reforming both: Loosen the stranglehold of the filibuster…. And in return, offer the minority party a reform of the power of budget reconciliation that currently cuts them out entirely. Start by permanently limiting reconciliation to measures that actually reduce the deficit (a rule the Democrats adopted in this Congress) and then look at reforms that open up the process to longer debate and a wider range of amendments.

Schmitt cites a number of feasible filibuster reforms, including Sen. Tom Harkin’s proposal to gradually lower the votes needed for cloture after repeated efforts to move legislation are thwarted, along with the very popular idea of requiring actual stemwinding filibusters instead of paper threats. But what’s important is Schmitt’s notion of packaging together reforms attractive to both majority and minority parties. The big question is whether Republicans are interested in any reforms, if only because they hope someday to return to majority status in the Senate. Maybe a bill or two whipped through the Senate via reconciliation would bring them around.

This item is cross-posted at The Democratic Strategist.