Fiscal Policies Archives - Page 18 of 24 - Progressive Policy Institute

Wingnut Watch: Cut, Cap, Balance, Perry.

Posted on July 20, 2011September 18, 2024 by The Progressive Policy Institute

It’s a High Noon moment in Wingnut World, as conservatives do everything possible to sabotage a deal to increase the debt limit even as their congressional leaders negotiate behind the scenes to make a deal possible. Yesterday’s near-party-line vote in the House passing the “Cut, Cap, Balance Act” represented a particularly vivid demonstration of conservative inflexibility and its grip on the GOP. CCB would write directly into the U.S. Constitution the Right’s current contention that fiscal problems are always and invariably the result of excessive spending, and that a fixed, ideal ratio between spending and GDP can be deduced and legislated forever.

But extreme as the CCB exercise appeared in terms of all precedent, from the perspective of many conservative activists it was a bit of a wimpy compromise. CCB suggests, after all, there is a circumstance—an insanely remote circumstance, to be sure—under which a debt limit increase would be appropriate. That’s offensive to those who earlier staked out a “just say no” position Indeed, two of the nine votes cast by House Republicans against the CCB bill were from presidential candidates Michele Bachmann and Ron Paul. Bachmann had just, earlier this week, become the ninth candidate (everyone in the race other than heresiarch Jon Huntsman) to sign the Cut-Cap-Balance Pledge, after adding a proviso that she wouldn’t support a debt limit increase until such time as the Affordable Care Act of 2010 is repealed.

With CCB going nowhere in the Senate, Wingnuts now have at least a few days to fulminate against, and then to oppose, any actual debt limit deal. Their public rationales for obstructionism vary: Many conservatives are default denialists, who claim there are actually no significant economic consequences to a failed debt limit increase because the feds will figure out some way to pay creditors until something can be worked out. Others are what might be called bullies-and-bluffers, who are convinced (like some of their brethren on the Left) that the president and congressional Democrats will always and invariably surrender in any negotiations on any subject, making the maximum hard line the appropriate GOP starting point. And still others profess to believe that excessive federal spending—and/or the continued existence of entitlements like Social Security, Medicare and Medicaid—is the real threat to the economy and indeed to human liberty, making some short-term global economic collapse a small price to pay for a return to the lost Eden of the Coolidge Administration.

If, of course, a deal is struck and somehow can be maneuvered through Congress with just enough Republican votes to obtain a majority, we’ll see a whole new cycle of recriminations against this fresh “betrayal” by “RINOs”, complete with threats of primary challenges and maybe even third parties. That any such deal will almost certainly involve unprecedented Democratic concessions on spending, bipartisan “cover” for unpopular changes in entitlements, and abandonment of longstanding Democratic demands for higher taxes on the wealthy, won’t cut much ice on the Right.

As the countdown to default continues in Washington, two very different countdowns are underway on the presidential campaign trail: the countdown to the first real contest of the cycle, the August 13 Iowa GOP Straw Poll, and the countdown to Texas Gov. Rick Perry’s decision on whether to join the race.

Michele Bachmann continues to be the favorite to win the Straw Poll; she’s using her hard-line position on the debt limit to maximum advantage in Iowa, making it the subject of her first statewide TV ad (entitled “Courage”). But she’s now undergoing the first real rough patch of intense media scrutiny and personal questions, some undoubtedly inspired by her opponents. At present, the chattering classes are buzzing over anonymous claims that she is frequently incapacitated by migraine headaches and/or treatment for that condition.

Meanwhile, speculation mounts that Perry will soon jump in (though it’s no more definitive than earlier claims that Haley Barbour and Mitch Daniels were minutes away from candidacy). The implications of a Perry run depend on how you see his appeal. Some observers appear to think that the combination of his fundraising prowess, his Tea Party connections, and the “story” of Texas’ economic success, is simply unbeatable. The Hill’s Christian Heinze, for example, who is following the race full-time, appears to think Perry would almost immediately create a one-on-one battle for the nomination with Mitt Romney as Tea Partiers abandoned Bachmann and Cain for the pretty-boy Texan. But as Heinze himself notes, some New Hampshire Tea Folk, however, are raising questions about Perry’s chronic resistance to anti-immigration laws and rhetoric (a smart stance in Texas, but not necessarily elsewhere) and his staunch support for Rudy Giuliani in 2008. And Texans do not quite seem to share the national conservative belief they are living in an economic paradise engineered by Perry’s determination to give corporate executives absolutely everything they want.

If Perry does run—before or after his August 6 prayer-a-thon event in Houston that is certain to raise some questions about his relationship with the theocratic wing of conservative evangelicalism—he will face an immediate strategic decision about whether to plunge into the Iowa Caucus campaign full-bore (it’s already a bit late for a Straw Poll bid by Perry, though the Iowa GOP could put him on the ballot for the event), or instead lay a trap in South Carolina for whoever wins Iowa and New Hampshire (say, Bachmann and Romney). A complicating factor for a Dixiefied strategy by Perry is that wingnut kingmaker Sen. Jim DeMint has successfully convinced most Palmetto State pols and donors to hold off on any candidate endorsements or financial commitments until after Labor Day, apparently to increase his own leverage over the field. Leave it to virulently anti-union South Carolina Republicans to make Labor Day a signpost for keeping rightward ideological pressure on their party and its presidential field.

Photo credit: Bonzo McGrue

Balanced Budget Amendment: A Gimmicky Disaster-in-Waiting.

Posted on July 19, 2011September 18, 2024 by The Progressive Policy Institute

By refusing to budge on tax revenues, House Republicans have blown a rare chance to get Democrats to swallow trillions of dollars in federal budget cuts. As New York Times columnist David Brooks notes in a shrewd piece today, cuts of such magnitude would have provoked a rancorous split between President Obama and liberals.

Instead, Republicans have opted for ideological purity, including today’s purely symbolic vote on a balanced budget amendment that isn’t going anywhere.

The Balanced Budget Amendment (BBA) is an almost perfect embodiment of the contemporary GOP’s gimmicky approach to governing. It’s an uncomplicated way to convey toughness, and it allows conservatives to drape themselves in the mantle of fiscal responsibility without taking the heat for cutting specific programs. And like many of the faux solutions to which Republicans seem fatally attracted, it would damage our economy.

A balanced budget amendment would handcuff the federal government in times of emergency. Backers say the rule could be waived during recessions, but it’s never clear until after when recessions begin and end. Since most of the states have balanced budget mandates, only Washington can spend at the right time and on a scale sufficient to exert counter-cyclical pressure during downturns. The federal government’s superior resources and borrowing capacity make it in effect the nation’s fiscal reserve.

Republicans almost rammed through a BBA in 1997. In the years that followed, the Clinton administration produced balanced budgets the old-fashioned way, by cutting actual programs and making trade-offs among competing public priorities.

Nonetheless, House Republicans once again claim that only a Constitutional amendment can force Congress to do its fiscal duty. Their “Cut, Cap and Balance” plan not only would bar budget deficits, but would also limit federal spending to 18% of economic output, two points below the average of the past several decades.

In other words, it would force massively disruptive cuts in all federal spending, from Medicare and Social Security to the Pentagon and domestic programs. Not even Budget Committee Chairman Paul Ryan, the GOP’s uber fiscal hawk, goes this far.

At the same time, the proposed amendment would make it well-nigh impossible to raise taxes, which would require a two-thirds vote in the House and the Senate. It’s a formula for rigidity at best and fiscal paralysis at worst. It would invite judicial interference in a power the Constitution unambiguously delegates to Congress – the power of the purse – and narrow the scope of democratic decision-making.

So why are House Republicans pushing it now? Because they know that, in the end, at least some House Republicans will have to vote to raise the debt limit to avert an economic calamity. They want the political cover of having voted for a “permanent” solution to the debt crisis – the BBA – to shield them from the Tea Party’s wrath.

Senate Democrats of course aren’t about to let Republicans write their economic ideology into the nation’s fundamental law, and President Obama has threatened a veto. Still, it’d be a relief if Republicans could find ways to score political points with their base that don’t injure our economy — either by plunging the nation into default, or enshrining archaic notions of a feeble national government in the U.S. Constitution.

Photo Credit: Common Pixels

What Would Reagan Do?

Posted on July 18, 2011September 18, 2024 by The Progressive Policy Institute

Guess who said this:

“The full consequences of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar.”

President Obama? Treasury Secretary Tim Geithner? No, Ronald Reagan, in a 1983 letter to then-Senate Majority Leader Howard Baker. And yet GOP Sen. Jim DeMint called Geithner a “Chicken Little” for issuing an almost identical warning against undermining America’s global creditworthiness.

The Republicans have come a long way since Ronald Reagan occupied the Oval Office – and it’s mostly been downhill.

Winning no prizes for statesmanship is House Majority Leader Eric Cantor, who argues that it’s more important to prevent the government from raising a penny more in tax revenue than to prevent it from going bankrupt and defaulting on its debts. He says Republicans are making a major concession to Obama just by considering his request to raise the debt ceiling.

The Gipper must be rolling in his grave. Unlike Cantor, he didn’t worry that doing his public duty might be construed as a favor to his political opponents. Reagan was no fan of higher taxes either, but he manned up and raised them when that became necessary to corral federal deficits and restore fiscal responsibility.

What would Reagan do today? The best way to answer that is to look at what he actually did do as president.

First, Reagan pushed through the giant 1981 tax cut that marked America’s first misbegotten experiment with supply side economics. Whatever stimulative effect it may have had was soon overwhelmed by Fed Chairman Paul Volker’s decision to raise interest rates to wring inflation out of the economy. America suffered a harrowing recession in 1982, and federal deficits exploded.

Reagan urged the nation to “stay the course,” but on taxes he changed course. In 1982, when unemployment stood at 10.1 percent, he signed the Tax Equity and Fiscal Responsibility Act, which increased taxes by around one percent of GDP. Irate conservatives blamed the baleful influence of Senate Majority Leader Bob Dole. A young GOP backbencher and bombthrower, Newt Gingrich, famously called Dole “the tax collector of the welfare state.”

That was something of a bad rap, however, since Reagan ended up raising taxes a total of 11 times during his presidency. Unlike today’s Republicans, he believed fiscal discipline was more important than supply side theories and he understood that compromise is crucial to advancing national interests. In his second term, Reagan embraced a Democratic proposal to broaden the tax base by closing loopholes, and use the savings to bring rates down. The Tax Reform Act of 1986 simplified the tax code by drastically reducing the number of deductions and the number of tax brackets.

Reagan’s determination to not let deficits get too far out of hand continued under his successor. President George H.W. Bush even broke his “read my lips” pledge in 1990, pushing a deficit reduction package that cut spending by $324 billion and raised revenues by $159 billion over five years. Many conservatives were apoplectic, but Bush’s brave move helped put America on track toward the budget surpluses that President Bill Clinton achieved in the late 1990s.

Tea Party Republicans reject that legacy – even though it led to the balanced budget they are now loudly demanding. As conservative NYT columnist David Brooks wrote recently, that’s a radical departure from the party’s tradition of fiscal rectitude as well as the political give and take that makes democratic politics work.

It’s also repudiation of Reagan, the man conservatives love to venerate and name airports after but, as it turns out, honor in the breach when it comes to protecting the full faith and credit of the United States.

Photo Credit: Brett Tatman

Will Cantor Blow Up the Economy?

Posted on July 12, 2011September 18, 2024 by The Progressive Policy Institute

The stock market plunged over 150 points yesterday as Republicans hardened their stance in debt reduction talks with the White House. The sharp drop was a timely reminder that a political failure to raise the debt ceiling would be a body blow to America’s already weak economy.

The odds of that happening rose sharply this weekend, as House Speaker John Boehner broke off talks with President Obama because he couldn’t get Republicans to support a fiscal “grand bargain” that would include higher tax revenues. That puts Majority Leader Eric Cantor in charge of GOP negotiating strategy — and on the spot.

Unlike Boehner, who seems to have the quaint idea that voters sent him to Washington to solve problems, Cantor is a faithful medium for channeling the Tea Party’s anti-Washington wrath. Rather than prepare his troops for the compromises and shared sacrifices that reducing America’s debts inevitably will entail, he’s been a zealous enforcer of the GOP’s “zero tolerance” dogma on taxes.

Cantor says Republicans can live with closing tax loopholes, as long as every penny saved goes into lowering tax rates. Meanwhile, most House Republicans last week opposed even modest efforts to trim defense spending. So here in essence is Cantor’s generous offer to President Obama and the Democrats: You agree to cut domestic programs by about $2 trillion now and we’ll vote to raise the debt ceiling by that amount. Oh, and after that, we’ll start whacking entitlement programs.

What a deal! Since no self-respecting Democrat would ever bargain on such one-sided terms, it’s hard to avoid the conclusion that House Republicans actually want to plunge the nation into a new economic crisis. Do they really hate taxes – or Obama – that much? Or maybe in their revolutionary fervor the Tea Party patriots have unwittingly internalized the old Bolshevic slogan: “the worse, the better.”

In any case, the public seems to be in no mood for a politically manufactured crisis on top of the steady drumbeat of bad economic news — and Obama has deftly set up Republicans to take the political fall.

In contrast to the GOP’s truculence on taxes, the president has appeared reasonable, flexible and persistent in trying to get Republicans to “yes.” To the chagrin of many Democrats, he’s offered to cut $3 in federal spending for every $1 in new revenue. Obama is receptive to the idea of lowering tax rates, as long as some revenue is left over for cutting deficits, and last week even gave liberals chilblains by offering to put entitlement reform on the table.

In slapping away the President’s outstretched hand, the GOP seems to be in the grip of not one but two mass delusions.

The first is that Americans are groaning under crushing tax burdens that would make Pharaoh blush. But the federal tax take has sunk to just 15 percent of GDP, far below its usual average of 19 percent.

The second delusion is that failing to raise the debt ceiling might have no repercussions. On Fox News Sunday, Sen. Jim DeMint accused Treasury Secretary Tim Geithner of trying to scare Republicans into making a bad deal. “Secretary Geithner has been irresponsible. He’s playing Chicken Little here. The fact is that we will pay our debts if it’s the last dollar we have… We’re not going to default.”

DeMint’s logic apparently is this: Since tax revenues are sufficient to cover about 55-60 percent of what Washington spends, there will be plenty of money to pay our foreign creditors. There just won’t be nearly enough to finance federal programs but, who’ll miss them? One possible answer: Social Security recipients, whose checks are supposed to be mailed Aug. 3. Others include military personnel, federal employees, and all those families hoping to visit National Parks during their summer vacation.

When the public backlash comes, Republicans won’t be able to say they weren’t warned. Geithner broke it down clearly this weekend on NBC’s Meet the Press:

“Remember…we have to borrow now 40 cents for every dollar we spend…And every week starting the week of August 2, we have to go out and finance roughly $100 billion in maturing obligations of the government. We make 80 million checks a month to Americans, 55 million people on Social Security benefits, millions more Americans on veterans’ benefits, Medicare, Medicaid, people who supply our troops in combat. Eighty million checks a month.”

The imponderable here is the markets’ reaction to a failure to lift the debt ceiling. There’s a serious risk of higher interest rates, plunging confidence in the dollar and an even deeper freeze on job-creating investments in the U.S. economy.

Eric Cantor imagines the public is behind him on taxes. More likely, he’s saddling up to lead a fiscal reprisal of Picketts’ Charge.

Photo Credit: Republican Conference

Wingnut Watch: Cut, Cap, and Pledge

Posted on July 12, 2011September 18, 2024 by The Progressive Policy Institute

As negotiations in Washington over a prospective debt limit increase stall and sputter, the process is not exactly getting an assist from Republican presidential candidates. With the exception of Mitt Romney and Jon Huntsman, the field is joining conservative activists demanding that congressional GOPers hold the line against any revenue increases as part of a solution in favor of huge domestic spending cuts. Romney hedged his bets by signing onto the notorious “cut, cap and balance” pledge to oppose any debt limit increase not associated with big immediate spending cuts, a permanent limitation of federal spending to a fixed (and much lower) percentage of GDP, and a balanced budget constitutional amendment with a supermajority requirement for tax increases. Using his pledge signature as cover, the former governor is refusing to comment on the specifics of negotiations.

On the other hand Michele Bachmann, who is surging in Iowa and other states, and has earned some grief for (so far) failing to sign the CCB pledge, is settling into her own hard line of unconditionally opposing any debt limit increase (a demand for spending cuts large enough to obviate the need for an increase in the limit). As we get closer to the first real event of the 2012 presidential cycle, the August 13 Iowa State GOP Straw Poll, you can expect the candidates competing there — Bachmann, Pawlenty, Cain and Paul — to get more emphatically shrill about prospects for a “betrayal” of conservatives by their purported leaders in Congress.

While Bachmann has run some risks by declining to sign the CCB pledge (especially the displeasure of South Carolina Sen. Jim DeMint, one of its most prominent sponsors), she wasted no time signing onto a very different and more controversial “pledge”: the “Marriage Vow” released last week by the Iowa social conservative group known as The FAMiLY LEADER. The “Vow” contains a host of radical “pro-family” commitments, from standard right-wing fare like total opposition to same-sex unions to more exotic positions such as tougher divorce laws, opposition to women serving in combat, a national effort to wipe out porn, and natalist support for “robust” child-bearing. The pledge also includes a preamble with even more controversial propositions like the claim that African-Americans under slavery had a stronger family structure than they do today, and arguments that it’s “anti-scientific” to believe there is a genetic basis for homosexuality.

The language about slavery set off a firestorm, which made The FAMiLY LEADER scramble to make revisions, and gave candidates other than Bachmann and Rick Santorum (another early signatory) a good excuse to hold off on taking the “Wedding Vow.” What makes the situation difficult for candidates is that the promulgator of the pledge, FAMiLY LEADER President Bob Vander Plaats, is a big wheel in Iowa GOP politics (he was co-chair of Mike Huckabee’s 2008 Iowa campaign, and leader of the successful 2010 effort to recall three judges who supported the state Supreme Court’s 2009 decision legalizing same-sex marriages). Bachmann and Tim Pawlenty (who hasn’t taken a position on the pledge) particularly lust for Vander Plaats’ support, or at least his neutrality.

Meanwhile, in the broader context of the Iowa battle, a new poll of likely caucus-goers from The Iowa Republican site confirms Michele Bachmann’s surge in the state, showing her moving ahead of Mitt Romney (whom she narrowly trailed in a recent Des Moines Register poll) by a 25 to 21 percent margin. The poll also had some much-needed good news for T-Paw after his sixth-place showing in the Register survey: TIR has him inching past Herman Cain into third place with an anemic but still better-than-usual 9 percent. Moreover, the poll gave both Bachmann and Pawlenty significantly better favorable-unfavorable ratings than Romney, who has a barely visible Iowa campaign and is not competing in the August 13 Straw Poll. Interestingly enough, the survey showed Bachmann doing well with all ideological subgroups in the Iowa GOP (perhaps due to her mostly autobiographical ads and speeches so far)– a situation that greater scrutiny of her platform and background may not sustain. If T-Paw is able to parlay his strong organization into at least a second-place finish in Ames, he has some reason to hope he could catch Bachmann by the time of the Caucuses as voters learn more about her long association with extremist causes.

On a more immediate note, voters in southern California are going to the polls today in a special election to choose a successor to retired Congresswoman Jane Harman. In this solidly Democratic district, the favorite all along has been Los Angeles City Councilwoman Janice Hahn, who enjoys strong labor and party-establishment backing. But wealthy Tea Party Republican Craig Huey, who upset Democratic Secretary of State Deborah Bowen for a runoff spot in a May special election primary, has been running surprisingly well against Hahn in polls and in estimates of early voting. Hahn will probably still win. But in a very low-turnout scenario, an upset is possible, which would neutralize the Democratic optimism generated by a victory in a recent special congressional election in New York, and also perhaps indirectly validate a sexually and racially loaded web ad run by “independent” conservatives against Hahn widely viewed as the most offensive political ad since, well, forever.

Photo Credit: TalkMediaNews

Will Marshall Tackles Democrat Entitlement Anger in Politico’s Arena

Posted on July 8, 2011 by The Progressive Policy Institute

PPI President Will Marshall today discussed the “Hill Democrats Entitlement Mentality” in a post for Politico’s Arena today.

“House liberals, on the other hand, want to use “protecting Medicare” as a cudgel against GOP opponents in next year’s elections. That’s understandable, but can Democrats really afford to torpedo prospects for long-term debt reduction to win a few marginal House districts?”

Read the full post here.

New CBO Report Highlights Republican Intransigence

Posted on July 5, 2011September 18, 2024 by The Progressive Policy Institute

Last week, President Obama vented his frustration at Congressional Republicans for storming out of White House budget talks over raising the debt ceiling. Anyone who thinks the president overreacted should look to the Congressional Budget Office’s (CBO) latest budget forecast, which warns that the national debt is poised to spiral out of control.

Released on the same day GOP negotiators abandoned their post at the budget talks, CBO’s “Long-Term Budget Outlook” predicted that the debt will reach 100 percent of GDP in less than a decade, then zoom to twice the size of the U.S. economy by 2037. In other words, we are moving inexorably toward the unsustainable level of debt (about 150 percent of GDP) that has plunged Greece into crisis.

CBO’s grim forecast, said the fiscal hawks at the Committee for a Responsible Federal Budget, “should erase any thoughts of waiting until after the election – or worse, until markets force our hand – to make the needed changes to our budget.” Such warnings, however, have fallen on deaf ears among Republicans, who refuse to even talk about debt reduction if it includes tax hikes.

GOP intransigence boosts the odds that Congress will fail to raise the debt ceiling by the August 2 deadline set by U.S. Treasury Secretary Timothy Geithner. If that happens, the federal government would have to cut government programs drastically, or else risk defaulting debts to foreign creditors — “the first-ever failure by the United States to meet its commitments,” notes Geithner.

But even if the White House and House Republicans somehow strike a deal over the debt ceiling, the larger challenge of closing America’s enormous fiscal gap will remain. Before the Republicans quit the talks, the goal was to cut the debt by as much as $2 trillion over the next decade. The president’s Fiscal Commission, however, concluded that we need to close the gap by closer to $4 trillion. There’s no politically responsible or feasible way to get to that number by cutting government spending alone; that’s why tax revenues have to be on the table.

So do entitlements. The CBO report makes clear that we need a comprehensive deficit reduction plan that not only stabilizes and reduces the debt over the medium term, but also grapples with long-run spending on healthcare and Social Security. The CBO projects that by 2035, health care spending under both the baseline and alternative scenarios will grow 5.1 to 9.2 percent and 8.5 percent of GDP respectively. Similarly, the CBO expects Social Security to grow to from 4.8 to 6.1 percent of GDP under both scenarios.

President Obama is right: With the deadline for raising the debt limit only a month away, it’s time for an outbreak of fiscal sobriety in Washington. In truth, there is neither time nor political will to forge a comprehensive solution to America’s exploding debts before August 2. But lawmakers could put together a reasonable down payment that would include temperate cuts in domestic and defense spending; more tax revenues from closing backdoor spending through the tax code, such as oil and gas subsidies; and adoption of the “chained CPI” something I wrote about earlier, would lower spending growth on big entitlements like Social security, Medicare and Medicaid.

Either way, the debt ceiling must be raised, and a grand bargain on deficit reduction must be struck. So President Obama is right to reject the invitation from Senate Minority Leader Mitch McConnell to come hear Hill Republicans rehearse their undying opposition to raising taxes. We’re in the fiscal red zone now, and the time for posturing is behind us.

Photo Credit: Gage Skidmore

Danger Will Robinson! GOP Actually Not Serious on Defense Cuts.

Posted on June 27, 2011September 18, 2024 by The Progressive Policy Institute

In the GOP’s Establishment v. Tea Party battle, this round, at least, looks like it was won by the outsiders. And, so it seems, the Establishment looks to be fine with that.

After making a big political show last week of storming out of Vice President Joe Biden’s fiscal negotiations over taxes, Republican Majority Leader Rep. Eric Cantor (R-Va.) appears to have made a decision: cutting the Pentagon’s budget is less sacrosanct to conservatives than raising revenue. Cantor has positioned himself firmly against tax increases while using the Tea Party’s focus on spending cuts as political cover to give the appearance that he’s willing to give ground on Defense spending. “Everything is on the table,” Cantor said when referring to Defense cuts, implicitly endorsing the position of Tea Party-backed freshman Rep. Adam Kinzinger (R-Ill.) who says we “can’t afford” this Republican “sacred cow” anymore.

Not so fast, my friends. Cantor is trying to have his cake and eat it, too, stipulating that any reduction in Defense “belongs in the appropriations process.” This handful of words goes a long way when you parse them. In short, there are two major problems with this caveat:

First, and in English, that means Cantor is willing to give a nod towards reducing Defense spending on paper and in the press, but knows full-well that Republicans in charge of the House Armed Services and Appropriations Committees can fight to reinstate cut programs on a case-by-case basis at a later date.

Second, fixing the problem in the appropriations process focuses solely on weapons systems, which are, after all, the things that get appropriated. But weapons systems are hardly the lone driver of the Defense budget’s exorbitant rise over the last decade. As I’ve detailed in a PPI Policy Memo, personnel costs are the somewhat hidden story of Defense spending, even though Secretary Gates has stated that military health-care costs are “eating the Defense Department alive.”

A serious reduction in the Pentagon’s budget would agree to both reducing personnel costs and making any weapons systems reductions part of a legally-enforceable deal between the parties. Cantor doesn’t seems prepared to do either.

Worse, some Democrats are falling for Cantor’s slight-of-hand. Rep. Barney Frank (D-Mass.) seemed ready to embrace Cantor’s apparent willingness to talk defense cuts, saying, “If we can get $100 billion from reducing unneeded military spending, that’s better than $100 billion in taxation.” The risk is that in Frank’s haste to cut military spending, he is signing up for a deal that the Republicans have no intention of keeping.

We must scrutinize the Defense budget as part of a realistic national deficit reduction plan. But let’s do it the right way: reductions in Defense spending must come from personnel as well as weapons, and be enforceable over the long term. Eric Cantor is disingenuous about serious cuts, and Barney Frank seems too eager to reduce military spending to get a realistic deal from Republicans.

Photo Credit: drp

Fix CPI, Reap Big Savings

Posted on June 13, 2011September 18, 2024 by The Progressive Policy Institute

U.S. elected leaders are desperately searching for ways to reduce the nation’s colossal debt without casting career-damaging votes for hiking revenues and slashing spending. Policy-makers are now turning to a technical fix in how the government measures inflation not only to fight the deficit, but also to circumvent political backlash.

Currently, the Bureau of Labor Statistics accounts for changes in the cost of living through the Consumer Price Index (CPI). The traditional CPI measures the overall average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. But there’s a hitch: many economists say CPI overstates inflation, resulting in higher cost-of-living adjustments for people who receive public benefits, especially Medicare and Social Security, while simultaneously increasing federal deficits unnecessarily.

The problem with the traditional CPI is its dubious assumption that consumers continue to purchase the same basket of goods regardless of relative prices. That is where the so-called “Chained CPI” comes in. Many economists believe it more accurately measures inflation by taking into account something called “consumer substitution bias.” Simply, what this means is that when the price of food or some other good rises, people will look for a cheaper alternative.

According to a new paper by The Moment of Truth Project, a bipartisan effort focused on overcoming the nation’s debt problem, switching to the Chained CPI would save the government serious money — $12 billion in Social Security, $33 billion in other federal retirement plans and $23 billion in deficit reduction from other areas of the budget. Chained CPI will conserve another $87 billion in a ten-year period, because it slows the growth of tax bracket thresholds and other factors. All told, using Chained CPI to gauge inflation and index the federal budget would reduce the deficit by $300 billion total over the next decade.

No wonder the switch to the Chained CPI has been endorsed by both the National Commission on Fiscal Responsibility and Reform’s and the Domenici-Rivlin deficit reduction plans. The fiscal commission’s co-chairs, Erskine Bowles and Alan Simpson, set up Moment of Truth to advocate for the Bowles-Simpson commission’s plan.

According to the authors of the Moment of Truth report, Adam Rosenberg and Marc Goldwein, Chained CPI can fully account for the substitution bias that arises from consumer behavior by using market baskets from two successive months. The combination of baskets creates a chaining effect that links price changes to shifts in consumption.

Even though it is a technical fix, Congress still needs to approve adopting Chained CPI. In today’s hyper partisan times, fixing the CPI would be a less painful way politically to reap budget savings while providing a more accurate understanding of how inflation changes consumer behavior.

Photo Credit: Medill DC

Wingnut Watch: Debt-Ceiling Deniers, Hostage-Takers and the 2012 Field

Posted on May 24, 2011September 18, 2024 by The Progressive Policy Institute

It’s happened so quickly that its significance may have been obscured, but one of the biggest recent developments in Wingnut World has been the rapid devolution of conservative opinion on the pending debt limit crisis–from demands for hard-line negotiations to outright rejection of negotiations at all, often supplemented by claims that the government doesn’t need new debt authority anyway.

This last phenomenon, which Jonathan Chait and others have been calling “debt-ceiling denialism,” is spreading like kudzu since it was first notably articulated by Sen. Pat Toomey (R-PA) in a January column in the Wall Street Journal. There are different forms of the argument, but the common threads are the claim that the federal government can prioritize the use of revenues in a way that avoids debt default, and the complaint that the whole issue has been manufactured by Democrats to avoid big spending cuts. Toomey attracted 100 House members and 22 Senators to his “Full Faith and Credit Act” legislation that would supposedly avoid a default by forcing debt payments to the top of the spending priority list.

Short of explicit denial that a real breaching of the debt limit would be a bad thing, other conservatives (including presidential candidates Tim Pawlenty, Michele Bachmann and Herman Cain) take the parallel position of opposing any increase in the debt limit on grounds that spending (without, of course, any tax increases) should be cut enough to make the increase unnecessary.

The usual reaction in Washington to this sort of talk is to dismiss it as tactical positioning for the “deal” that will ultimately be cut—as “hostage-taking” aimed at maximizing the “ransom.” Perhaps that’s exactly what it was initially. But at some point, arguments that the hostage’s life is worth nothing, or worse yet, that the ransom limit increases are perpetually unpopular among the overwhelming percentage of Americans who have no real idea of the merits of either side of the can be earned precisely by killing the hostage, undermine the very idea of a deal, particularly when refusing to negotiate with Democrats is a posture that conservatives value as an end in itself anyway. Indeed, the trend in conservative rhetoric on this subject is to accuse Democrats of hostage-taking by their adamant refusal to accept vast spending reductions. It’s a dangerous gambit, made even more tempting to Republicans by the fact that debt dispute.

The key question is the extent to which the GOP’s business elites forcefully push back and demand a more reasonable attitude before things get out of hand. That’s particularly urgent since debt-limit deniers and hard-liners alike are getting into the habit of arguing that financial markets care more about spending reductions than any hypothetical default on the debt. Moreover, debt-limit ultras are also playing with fire by systematically eliminating any incentive for the Obama administration or congressional Democrats to make concessions to a credible negotiating partner. Why offer a ransom when the hostage-takers no longer seem to care what you offer? Better to just send in the SWAT team and take your chances.

Meanwhile, the last week offered more news in the shaping of the 2012 Republican presidential nomination field: Mitch Daniels disappointed his Beltway cheerleading squad by deciding against a run; Newt Gingrich imploded his long-shot campaign with a series of disastrous remarks and revelations; and Tim Pawlenty and Herman Cain formally announced candidacies.

Assessments of the impact of Daniels’ non-candidacy vary according to perspective. Some think it will lead Establishment Republicans to make a last-ditch effort to find another savior such as Gov. Chris Christie (R-NJ) or even Jeb Bush. And if that fails, to resign themselves to the existing field and get behind Romney, Pawlenty, or Huntsman (though the last option remains implausible because his path to the nomination remains extremely difficult). Others combine the Daniels and Huckabee withdrawals and suggest the weak field will produce a big opening for a southern Tea Party conservative with deep pockets like Rick Perry. Both Establishment types and fans of a late entry are beginning to burrow away to undermine the credibility of the Iowa Caucuses as the essential starting-point for the real campaign (for the latter camp, it’s in part because competing in Iowa requires competing in the state party Straw Poll that is held this August).

Though the Gingrich implosion has interested the conservative commentariat less than Daniels’ decision–for the good reason that very few observers considered the Newster viable in the first place–its long-term significance should not be underestimated: it proved once again that ideological purity is the preeminent demand of conservatives for GOP presidential candidates. If nothing else, the incident will make it very difficult for other candidates to distance themselves from Paul Ryan’s politically perilous Medicare proposals. But it should also serve as a dashboard idiot light to Mitt Romney warning him that his hopes of being forgiven for his health care heresy may not be terribly realistic.

The Fiscal Debate Is Missing Half the Picture – An Economic Perspective

Posted on May 20, 2011September 18, 2024 by The Progressive Policy Institute

The following is an anonymous piece by an economist at an international financial institution. The views expressed here are solely those of the author.

Despite what politicians across the political spectrum will scream at you, the United States’ screwed up finances haven’t yet reached the level of an existential debt crisis.

To be clear, America must get its fiscal house in order, and ongoing debates and collaboration across the legislative and executive branches are important to righting America’s budgetary ship over the next few years. But let us dispel the notion that unduly draconian debt-reduction measures–that only touch the discretionary budget no less–must be enacted yesterday. Big picture reform of entitlement spending, increasing federal revenue, and scrutinizing the Pentagon’s budget must, and will, happen. However, the shrill, mostly right-wing political calls to cast ideologically-motivated yet relatively tiny budget cuts as the solution to a spending emergency will not solve the debt crisis and could create a culture that chokes off needed investment in critical areas. As any CEO will tell you, a certain level of borrowing to fund strategic investment is a critical component to reaping higher future returns. The same is true of public borrowing to support America’s long-term economic growth.

Here are three unique reasons why the U.S. continues to be in a position to borrow:

(1) Liquid financial markets and the reserve characteristics of the U.S. dollar create a nearly inexhaustible supply of creditors for our public debt. In plain English, this means that U.S. dollar assets are the safest global investment and savings vehicle and are easily accessible, keeping the federal government’s cost of borrowing relatively low (i.e., the US can harness global, not just national savings).

(2) Confidence in our monetary system to keep a lid on inflation will preserve U.S. Treasuries as desirable assets. Fear of inflation stoked by printing money to finance deficits is a primary fear of investors and not concern for the U.S. due to an independent Federal Reserve. The Fed appears to be aware and prepared for potential inflationary risks, and its track record, through several business cycles, has been praiseworthy as inflation, measured by the consumer price index, averaged 3.1 percent between 1982 and 2011.

(3) We are saving more domestically and could replace external demand for US dollar assets. A surprisingly large percentage of U.S. Treasuries remained in the hands of U.S. residents as of December 2010, and with the household savings rate doubling since its trough in 2005, the capacity to fund our public liabilities domestically will improve.

Long-term economic growth constraints erode debt sustainability in the US

The resulting ongoing and outlandishly panicked fiscal debate ignores a critical measurement of the nation’s economic health: our long-term economic growth potential. Not only is it a source of wealth and power, it is a major component of assessing our level of sustainable debt. Nominal economic growth – a function of increases to our stock of labor and capital — reflects a nation’s capacity to repay debt. When it is faster than the growth of new net borrowing then there is no problem. In other words, if your family’s income is growing faster than the amount you are borrowing, then your indebtedness is declining – a good thing! This is the dual assessment employed by international investors and rating agencies.

Borrowing to fund investment is critical to fostering future economic growth. By ignoring crucial investments in the nation’s stock of capital and labor, our politicians are mortgaging our future. Investment in public infrastructure, education, and immigration reform foster more rapid growth as they increase our stock of capital and labor, expanding economic capacity and productivity. By failing to be cognizant of the basic investment needs to maintain and expand our growth potential, our political leaders are just making political hay.

Hence, the fiscal debate on the Hill, which ignores economic growth potential, could ironically contribute to long-term market insecurity by raising our interest costs, and possibly lead to a greater debt crisis. What’s needed is a balanced approach, one that puts our long-term fiscal policy on a sustainable path through a combination of controlled spending, entitlement reform, revenue increases and with a contribution from the Pentagon, while committing to invest in our future.

Here are three critical areas of investment where the United States is failing to maximize growth potential by under-investing in capital stock and labor:

Public infrastructure: The United States’ capital stock is suffering from decades of neglect, increasing the cost of doing business and decreasing our competitiveness. The 2009 American Society of Civil Engineers infrastructure report card gave us a grade of “D”. Compared to some of our competitors — who are investing in high-speed rail, clean energy production, and smart grids – we may appear to be standing still. For example, Europe invests 5 percent of GDP in infrastructure while the United States spends less than 2.4 percent.

Educating our future workforce: Sadly, our secondary education system compares poorly internationally and, while our universities are the envy of the world, we manifest an artificial brain-drain as we expel U.S.-educated, non-citizens to the benefit of our international competitors. Our education system is one of the most expensive but yields only average results. According to the OECD, the United States spent 7.6 percent of GDP on all levels of education in 2007, almost 2 percentage points above the OECD average, but secondary and tertiary completion rates remained below the average of other advanced countries.

Immigration: Immigration reform can and should be viewed through this economic lens – we must create a reliable system of immigration to expand our future labor pool, increase economic growth, and produce the resources we need to help finance unfunded public liabilities.

Our political class will continue to yell at one another on CNN and Fox, but keep in mind that all spending is not the same, and that there are sound economic arguments to support crucial investment in these discreet areas for the long-term economic health of the country.

Why Budget Line Items Don’t Die

Posted on April 21, 2011September 18, 2024 by The Progressive Policy Institute

In today’s Washington Post, David A. Fahrentold marvels at what he calls the “Line Items That Won’t Die” – federal programs that benefit narrow interests, but somehow manage to keep getting funded: “One spends federal money to store cotton bales. Another offers scholars a chance to study Asian-American relations. Two others pay to market U.S. oranges in Asia and clean up abandoned coal mines.”

Fahrenthold attributes their success to having Congressional champions. The study of Asian-American relations, for example, takes place at a Honolulu nonprofit called the East-West Center, and enjoys the support of Sen. Daniel Inouye (D-Hawaii), who also happens to be chairman of the Senate Appropriations Committee.

But there’s also a broader story: the simple fact that when a government program benefits a narrow constituency, it’s very easy for that constituency to organize and make demands on legislators about why this program is worth keeping. The larger public, meanwhile is rarely aware, and even if it were aware, is unlikely to do anything.

Take the Market Access Program discussed in the article, which helps promote U.S. agricultural products abroad. A coalition of agricultural interests benefit greatly from this, and they are organized to advocate fiercely for its continuance and threaten to punish any Senator or Congressman who would vote against the program by withdrawing votes and campaign contributions. Nobody in the general public, however, is likely to care about or vote based solely on this single issue.

This is the difference in what congressional scholar R. Douglas Arnold has called “attentive publics” and “inattentive publics.” Attentive publics are the small groups that care deeply about particular policies, and as a result, are likely to be more influential because they care so intensely about that one issue. Inattentive publics are everyone else. The public might be outraged after reading about the Market Access Program, but the likelihood of most people following up are small. Think of it this way: If 1,000 people want money from you, but only one bothers to keep calling you up telling you why he’s so deserving and threatens to punch you in the face if you don’t give him the money, you’re probably going to give that one person money, especially if it’s likely the other 999 will not even notice or if they do, won’t remember.

Another way to think about it (borrowing from James Q. Wilson) is in terms of distributed costs and concentrated benefits. The benefits of a program that pays peanut and cotton farmers to store their bales and bushels in warehouses are solidly concentrated among peanut and cotton farmers. The costs are distributed to everybody else. But the cost per taxpayer is so small that it’s hard to imagine any group getting organized to fight this particular program. Whereas the farmers – well, they’re damn certain to do fight any cuts to the program. What results is what Wilson calls “client politics” – where small narrow interests work with the relevant congressional committee and executive agency staff to build a usually impenetrable consensus around the importance of a single program.

The challenge for governing is that the federal budget and tax code and regulatory apparatus are filled with thousands upon thousands of these programs, each protected by a small consensus, and without any public coverage. One only need to scroll through the Federal Register to see all the small issues that could potentially benefit small attentive publics at the expense of everyone else. Or better yet, look through the tax code to find all the little credits and deductions for very narrow benefits. It’s enough to make your head spin round and round and round. Jonathan Rauch has pessimistically called this condition “Government’s End.”

I don’t really have a solution. In part, this is the nature of our current system of government and the size and complexity of our economy. But the point is, these programs are very difficult to kill, and Fahrenthold’s story is just the tip of the iceberg.

Obama Needs a Bipartisan Elder Statesman Road Show to Tackle the Deficit

Posted on April 19, 2011September 18, 2024 by The Progressive Policy Institute

As President Obama begins taking the budget deficit battle show on the road, he faces a number of obvious challenges. But perhaps the most pressing one is this: In the hyper-polarized political environment, how does a President whose approval ratings are stuck in the 40s successfully make the public case for a serious deficit reduction plan?

The answer is he’s going to have to try something different. If it’s just the usual campaign-style events like the GW speech from last week (“I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”), Republicans will respond predictably with wild demagoguery on tax hikes and entitlement cuts, and the battle lines will solidify into familiar gridlock patterns.

But here’s an alternative: Obama should to send a signal that this is serious, this is above party, this is for the good of the country, and if we don’t solve this problem soon, we’re going to pay a major price later. To do this, Obama should assemble a bipartisan team of elder statesmen to accompany him around the country as he talks about this. Imagine if he brought together Clinton and Bush Sr. on a hard-choices-to-tackle-the-deficit tour to give this some gravitas beyond the usual campaign-style events. At the very least he should be going around with Bowles and Simpson.

While the conventional wisdom is that the President can use the bully pulpit to move public opinion, the reality is that this is rarely the case. Public opinion is not easily moved, especially not by a highly divisive President on an issue that touches on issues of entitlements. (see, George W. Bush, privatization of Social Security).

And Obama seems smart enough to know that once a particular plan becomes the “Obama plan,” it’s going to be very hard to get any Republican co-sponsors, which is one reason he’s been slow to talk in specifics.

The political problem is that any serious deficit reduction plan has the dyspeptic taste of chalky medicine going down. This is not Ronald Reagan seeking public support for his tax cuts. A responsible deficit reduction proposal that requires tax increases and entitlement cuts (as a responsible plan must) exposes its advocates to attacks on the two most easily-demagogued issues in American politics. (He wants to raise your taxes! He wants to cut your Medicare and Social Security!) In other words, the politics of that responsible plan are very bad.

And yes, we know deficit reduction good for us, and increasingly, we know we really need to take that medicine (the federal deficit is rapidly shooting up among the ranks of Gallup’s most important problem). But we also keep thinking there must be a tastier medicine that can do just as good of a job, in good part because there’s always somebody out there promising a tastier medicine – magical elixirs based on heroic assumptions about tax cuts or mythical savings to be had from eliminating waste, fraud, and abuse or wooden-nickel promises about being able to preserve entitlements as they are.

If we’re going to get beyond this destructive dissembling, Obama’s going to need some Republicans out there speaking with him. Any plan needs to be sold as a bipartisan plan from the start.

While it’s unlikely any Republicans in the Senate would put themselves out on a limb and appear publicly with Obama, there should be some retired Republicans who might be willing to lend their name to a bipartisan effort to build a serious deficit reduction plan, especially given the stakes involved.

Had the President jumped out there earlier and defined the parameters of the debate on deficit reduction, he might be in a better place rhetorically. But Obama clearly believes in the rope-a-dope strategy – let the other guy (in this case Ryan) get out there first, and then punch back once he’s over-extended.

And yes, Obama can be the anti-Ryan if he wants, since the Ryan plan does not comport particularly well with the contours of public opinion. This might help in the short run. But it also runs the risk of defining the left flank of the debate, when that should really be reserved for the Progressive Caucus plan of 80 percent tax hikes.

This time, Obama should be more creative. Solving the federal deficit is a generational problem that needs to rise above party. Putting together a bipartisan road show of elder statesmen would signal that this is something grave and serious, not partisan politics as usual.

Obama Reframes the Fiscal Fight

Posted on April 14, 2011September 18, 2024 by The Progressive Policy Institute

Entering the lists at last, President Obama delivered a stout defense of progressive values yesterday and checked the rightward drift of the deficit debate. For all its strengths, though, his speech also left open the question of whether he and his party are ready to grapple effectively with surging health and entitlement costs.

Obama started with a history lesson. As the Tea Party harks back to 19^th century conceptions of limited government, he reminded Americans that the nation’s progress since then has been built upon a pragmatic synthesis of free enterprise and progressive governance. The extent of public activism required to create optimal conditions for shared prosperity is always a legitimate matter of debate, but the basic need for it shouldn’t be.

By insisting that deficit reduction leave room for strategic public investments in scientific research, modern infrastructure and education, Obama underscored a vital distinction that was being lost in the scramble to cut government spending: Reducing budget deficits is integral to reviving America’s economic dynamism. For most Americans, the priority is to get our economy moving again, not shrink government.

Obama also pushed back hard against Rep. Paul Ryan’s delusional budget, which asserts that the America’s path back to fiscal responsibility entails 100 percent spending cuts and 0 percent tax increases. In endorsing (finally!) his own fiscal commission’s plan, the president has set up a clear choice between the GOP’s fanatical devotion to shielding the rich from higher taxes and a bipartisan approach that exempts no one from sacrifice.

The president’s confident rejection of GOP tax dogma left House GOP Whip Eric Cantor sputtering. He was reduced to repeating the ridiculous Republican mantra that asking the wealthy to pay higher taxes is tantamount to killing America’s small businesses. Please Eric, bring it on: this is a debate progressives can win.

But Obama can’t just win debates. He needs to preside over passage of a comprehensive deficit-reduction package that, in a divided government, can only be achieved on a bipartisan basis. If he wants moderate Republicans to play on raising revenues – and a few intrepid souls like Sens. Tom Coburn and Saxby Chambliss have begun to do – he is going to have to convince Democrats to play on entitlement reform.

Here his speech fell short. Clearly mindful of President Clinton’s success in rallying the pubic behind his plans to protect Medicare and Medicaid during the 1995-96 budget battle, Obama categorically ruled out structural changes in how government finances those programs. That could prove to be a mistake.

It’s one thing for Democrats to reject the size of Ryan’s proposed cuts in the big public health care programs. But for both substantive and tactical reasons, they shouldn’t reject out of hand innovative devises to constrain entitlement costs.

It’s 2011, not 1996, and the baby boom retirement is underway, not over the horizon. This demographic surge, combined with health care costs that have been rising for decades faster than the economy has grown, are the real drivers of America’s debt crisis. To put a governor on the engine of federal health care spending, Ryan has proposed moving Medicare to a premium support model, and turning Medicaid into a federal block grant.

In his speech, Obama endorsed an alternative: strengthening provisions in his health reform bill to slow the unsustainable rate of health care cost growth. These provisions would encourage health providers to shift from fee-for-service to fixed fees for bundled services or capitated payments, which reward the value rather than volume of care delivered. These and other Obamacare provisions, including the independent commission set up to explore efficiencies in Medicare, are all good ideas. But even if they work, it will take a very long time for them to reach the scale necessary to break the back of medical inflation.

In the meantime, we need to protect public budgets from surging health care costs that threaten to soak up every dollar of revenue raised by 2040. If premium support and block grants are ruled out – even though some prominent liberals and Democrats have long supported one or the other — progressives need to come up with an alternative.

The political “grand bargain” Obama must strike couldn’t be clearer. It’s embedded in the fiscal commission plan: GOP support for raising revenues in return for Democratic support for constraining public health care and retirement costs. As the political action now shifts to the Senate, Obama needs to challenge his own party too.

Wingnut Watch: How the Budget Compromise Played Out on the Far Right

Posted on April 13, 2011September 18, 2024 by The Progressive Policy Institute

The consensus in Washington that last week’s appropriations deal represented a victory for conservatives was not shared very widely on the Right. Polls showed self-identified Republicans significantly less likely to approve of the deal than Democrats or indies. At the activist/elite level, the negative reaction was much stronger. Fits were pitched over the surrender of policy “riders,” notably by RedState’s Erick Erickson, who accused congressional GOPers of, quite literally, selling out “murdered children.” Rush Limbaugh even claimed that media assessments of the deal as a Republican win represented some sort of devious liberal trick.

Part of what’s going on here, of course, is that conservative activists want to maintain their leverage over Republican pols going forward. Many also don’t much appreciate all the bouquets being tossed at John Boehner for how well he “managed” them during the negotiations. Still others, especially on the Christian Right, really did care more about the policy riders than the overall level of budget cuts. A few, including probable presidential candidate Michele Bachmann, have adopted the Ahab Posture, making repeal of “ObamaCare” the condition for their vote on any budget or appropriations measure.

In any event, wingnut opinion is virtually unanimous in demanding a harder line in the FY 2012 budget debate and the associated debt limit vote, which many opinion-leaders (most famously Sen. Marco Rubio) are already promising to reject unless Democrats surrender definitively on every major issue, including “entitlement reform.” You can also expect a lot of conservative pressure to be applied to Republican senators this week to minimize support for the so-called Gang of Six, a bipartisan group that is working on a budget deal (loosely based on the Bowles-Simpson deficit commission report) that includes revenue measures, and may wind up working in tandem with the White House.

Over on the presidential campaign trail, things continue to heat up. Many conservatives took advantage of Mitt Romney’s announcement of a campaign exploratory committee to mock him for his stubborn continued support for the Massachusetts Health Plan, which, as it happens, was enacted five years ago this week. Puzzlement over the Mittster’s strategy for winning the nomination is spreading as well, particularly since it’s beginning to appear he may run away from serious campaigns in South Carolina as well as Iowa.

But the big news on the presidential front has been the startling evidence of significant support for possible candidate Donald Trump, the mythical tycoon and reality show host. A new CNN poll, in fact, shows The Donald running even with Mike Huckabee for the national lead among Republicans at 17 percent. The big question is whether such showings simply reflect name identification (Trump is, after all, nothing if not a celebrity), or perhaps a reaction to his recent high-profile expression of neo-Birther sentiments.

A PPP poll of New Hampshire, showing Trump running a relatively close second to Mitt Romney in that state, indicates the latter could be a factor: Trump actually leads among those denying Obama was born in the U.S. All these polls also show Trump having unusually high unfavorable numbers as well, so he’s hardly a threat to actually win the nomination. Still, his sudden emergence may indicate a craving in the GOP electorate for candidates with greater star quality, and perhaps more hard-core conservative views, though Michele Bachmann is certainly doing everything possible to supply both qualities. The possibility that Trump could actually run (and his bizarre interview with Christian Right journalist David Brody shows he’s trying to check off the interest-group boxes) should remain unsettling to other candidates; aside from his alleged wealth, he would be a nightmare in debates.

While Trump seems to be doing better than had been imagined among the conservative rank-and-file, the big winner during the last week in the Invisible Primary of insiders was Tim Pawlenty, with the announcement that former Republican Governors Association executive director Nick Ayers would run his campaign. Ayers, a Georgia-based wonder-boy (he’s only 28), was given a lot of credit for the GOP’s big gubernatorial gains in 2010. But a lot of the buzz about his T-Paw gig stems from the earlier assumption of many pols that he’d be involved in a different campaign: that of Haley Barbour, who was Ayers’ boss at RGA during the 2010 cycle. If nothing else, Pawlenty now has something important that he has lacked: a prominent backer from the South, where he will need to show strength if he winds up being the “consensus conservative” alternative to Romney to his left and perhaps an actual southerner to his right.