Wag of the Finger

Peter Peterson, hedge fund CEO and former Nixon Commerce Secretary, is also co-founder and President of the Concord Coalition, a group that specializes in talking about fiscal policy and Social Security in roughly the same fair and balanced manner as GW Bush did about Iraqi WMD's (before invading Iraq) and currently does about terrorism.

In a nice piece in the NY Times Business section, reporter Landon Thomas asks the right question about Peterson:

Can a man who has scored riches from an industry that has benefited from a generous, controversial tax break emerge as a credible voice in favor of broad fiscal constraint in Washington?

The special interest tax Peterson has benefited from is the hedge fund tax break, a tax preference that transfers roughly $6 billion a year from the Treasury to the extremely well-off. Peterson doesn't only benefit from the tax break, he lobbied against efforts to fix it, and, as Landon notes:

... remains firm in his defense of the special provision for private equity partnerships despite the view of many on Wall Street, including the billionaire investor Warren E. Buffett, that the rate is too low.

The Concord Coalition takes its name from first battle of the American Revolution, fought at Lexington and Concord, and their website compares Peterson and Co. with the Minutemen:

Although many years of tough fighting and terrible sacrifice lay ahead, these brave Americans kept at it against overwhelming odds because they had a vision of the grand nation they wanted for their future and for generations to come.

But as Peterson's opposition to ending a special tax preference that benefits him shows, he's not so crazy about sacrifice.

PS: The article opens with former Bill Clinton spokesperson Mike McCurry challenging Peterson, but later on, Wall Street Dem Robert Rubin comes to Peterson's defense by comparing him with, and I'm not making this up, Paul Revere.

... at this great new website from our friends at American Rights at Work.

Last October, I noted that the Pew Charitable Trusts was looking for an executive director for a project they were planning on Economic Mobility. The project was officially announced today. The Wall Street Journal, which must have been given an exclusive by Pew's press people, had this description in today's edition:

The Pew Charitable Trusts is expected to announce today that it is giving $2.2 million over two years to four local think tanks—two liberal, two conservative—in an unusual effort to forge a consensus across the political spectrum about the extent to which Americans can move up the economic ladder in their lifetimes and from one generation to the next.

...

The funding will go to scholars at the American Enterprise Institute and Heritage Foundation, which have a conservative bent, and the Brookings Institution and Urban Institute, which are more liberal. "The design of the project is not by accident," Ms. Rimel [CEO of Pew] said. "So much of public policy is people leading with their passions and partisanship rather than the facts. If we can get them to work together productively on a topic like this...it'll model the kind of behavior we think would be good: Coming together to solve problems rather than carving them up."

I think somebody at Pew needs to read War of Ideas: Why Mainstream and Liberal Foundations and the Think Tanks they Support Are Losing in the War of Ideas, a brilliant article published in 2005 by the Stanford Social Innovation Reivew. The author, Andrew Rich, is a political scientist who has spent his career—and lots of time here in DC—studying think tanks.

The think tanks that Pew calls liberal—Brookings and Urban—Rich more accurately categorizes as "think tanks of no identifiable ideology." The list of "project principals" that Pew provides—two people from Brookings, Heritage, and Urban, and one from AEI—offers additional support for Rich's categorization. Two of the four project principles who work for the "liberal" think tanks previously held positions in Republican Administrations. Eugene Steuerle of Urban worked for Reagan—and also at the conservative AEI. Ron Haskins of Brookings worked for Bush II and for the House Republicans.

I know what your thinking—well, at least fewer principles from the "liberal" think tanks worked for Republican presidents than did principles from the conservative ones, right? Actually, no. The representatives from AEI and Heritage are all proud conservatives, but only one of them worked for a Republican president—Marvin Kosters of AEI, who held positions in the Nixon and Ford Administrations.

Brookings and Urban aren't "liberal" at the institutional level even if they have some liberals working for them. I wouldn't be surprised if a majority of staff at Brookings even self-identify as "centrist" or "moderate" rather than liberal or progressive. By contrast, Heritage and AEI see themselves and self-identify as organizations dedicated to promoting conservative principles and ideas. To get a sense of this, compare the Heritage mission statement:

... to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

With this statement from Strobe Talbott, the president of Brookings:

Underlying all Brookings activities is a belief in the necessity of framing issues accurately and impartially, of presenting ideas without ideology.

As I've noted previously, Brookings actually does have plenty of individuals—liberal, moderate, and conservative, and Republican and Democrat—who present ideas with ideology, but, as an institution, its ideology is, as Rich notes, unidentifiable.

I don't have any particular problem with Pew providing funding to conservative institutions like Heritage and AEI, or to institutions of unidentifiable ideology like Brookings and Urban. But I do believe in Truth in Advertising. If Pew wants to say it's funding liberals to try to reach consensus with conservatives, then it should actually fund liberals as part of the deal.

A comment by mlewis on my earlier "the Bush budget is bad, but it's a not a Behemoth" post:

How about this for framing from CBPP:

"Some of the proposed changes in mandatory programs, including some of the Medicare savings proposals and the proposed reforms in student financial aid that include an increase in Pell Grants, merit consideration."

Exactly which medicare cuts merit consideration? Being so vague and supporting these cuts even with such weak language just gives Bush cover for pretty much any cut.

I think this is a valid point. Although my former boss Bob Greenstein uses a qualifying "some", it would have been much better to more narrowly characterize what particular Medicare cuts deserve consideration.

I feel obligated, however, to give my CBPP friends a tip of the hat in addition to this mild finger wag. To CBPP's credit, I think the overall framing of their statement is pretty good and relatively focused. Here are the initial framing paragraphs:

The President says he wants to promote fiscal responsibility and address growing inequality, but his budget fails on both counts. In fact, it would make both problems worse.

In a sign of the President’s misguided priorities, his budget puts extremely large tax cuts for the most affluent Americans ahead of the needs of low- and middle-income families as well as future generations. Low- and middle-income Americans would be hit by budget cuts in areas from education to protection of the environment and assistance to the poor. Future generations would foot the bill for the much larger long-term deficits that the President’s extravagant tax cuts would produce. The tax cuts in the budget far exceed proposed reductions in domestic programs.

The folks at CAP diminish an otherwise good set of talking points on the Bush 2008 budget by starting off with this very bad framing sentence:

President Bush yesterday sent Congress his 2008 budget, a $2.9 trillion behemoth that sets spending records.

The sentence links to a Bloomberg.com article that starts as follows: "President George W. Bush sent Congress a record $2.9 trillion spending blueprint for the coming year ...."

Yes, $2.9 trillion is a record in the extremely narrow sense that it's bigger than previous year's numbers—but that like saying that when I turn 40, I've set a new age record for myself. In general, the size of the budget increases every year because the economy, population, and prices generally increase every year. Even if one looks at the size of the budget in constant (inflation-adjusted) dollars, it generally increases, which is to be expected given economic and population growth. So, it's not saying much at all to call this year's budget a record—in fact, it's basically misleading. Moreover, it's quite counterproductive for an organization like CAP to use that terminology unless they are prepared to support a "non-record" budget, ie, one that reduces spending in either current or constant dollar terms.

So, I've been half-listening to the Ways and Means hearing on Poverty and Economic Growth, and as I'm getting out of the shower, I hear Harry Holzer say, in response to a question from Rep. Levin, the following:

"I think the issue of wage levels is very important and has not been mentioned in this hearing until you raised it."

EXSQUEEZE ME?? We're an hour and fifteen minutes into a two-hour hearing on poverty and the economy, a hearing in which all of the witnesses have already testified and only one of whom is conservative, and the issue of wage levels have yet to be mentioned? Ron Haskins and other conservatives have already mentioned marriage like 20 times, and "the issue of wage levels" is just being raised?

I'm now waging my finger.

(Ok, maybe unfairly, since I wasn't listening particularly carefully to the first hour and fifteen minutes, but somebody can correct me if my waging is unjust.)

I'll be waging it again if nobody raises the need to move from the 40-year old, never improved, lame and arbitrary official definition of poverty to a definition that is tied to having income significantly below (like 60 percent of) median income.

PS: Now they're getting to the good stuff, but it should have been the initial frame, not a follow-up.

As if having Max Baucus head a committee in the Senate wasn't bad enough, check out this new report from Newsweek:

Sen. Joe Lieberman, the only Democrat to endorse President Bush’s new plan for Iraq, has quietly backed away from his pre-election demands that the White House turn over potentially embarrassing documents relating to its handling of the Hurricane Katrina disaster in New Orleans.

....

But the decision by Lieberman, the new chairman of the Senate Homeland Security and Governmental Affairs Committee, to back away from the committee's Katrina probe is already dismaying public-interest groups and others who hoped the Democratic victory in November would lead to more aggressive investigations of one of the White House’s most spectacular foul-ups.

Last year, when he was running for re-election in Connecticut, Lieberman was a vocal critic of the administration’s handling of Katrina. He was especially dismayed by its failure to turn over key records that could have shed light on internal White House deliberations about the hurricane, including those involving President Bush.

It's official—315 "yeas" to 116 "nays" in the House for increasing the minimum wage; 82 Republicans voted for the clean increase.

Things will get messier from here on out, but some celebration is in order.

For wag of the finger purposes, here's the roll call of the nay-sayers:

Akin
Bachmann
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bilbray
Bishop (UT)
Blackburn
Blunt

Boehner
Boustany
Brady (TX)
Brown (SC)
Burgess
Burton (IN)
Calvert
Camp (MI)
Campbell (CA)
Cannon

Cantor
Carter
Chabot
Coble
Cole (OK)
Conaway
Cubin
Culberson
Davis, David
Davis, Tom

Deal (GA)
Doolittle
Drake
Dreier
Fallin
Feeney
Flake
Fortenberry
Foxx
Franks (AZ)

Gallegly
Garrett (NJ)
Gingrey
Gohmert
Granger
Graves
Hall (TX)
Hastert
Hastings (WA)
Heller

Hensarling
Herger
Hobson
Hoekstra
Hunter
Inglis (SC)
Issa
Johnson, Sam
Jordan
King (IA)

Kingston
Kline (MN)
Lamborn
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo

I would have liked to see EPI stick to their guns on this, but Ross deserves credit for being open about the push-back they got from Dem leadership—here's the story in the NYT:

Trying to push the populist case, the Economic Policy Institute, a labor-oriented research center, posted a statement in late November calling for an increase in the minimum to $8 an hour in 2009 instead of the $7.25 proposed by the party leaders. That recommendation was quickly withdrawn, however, under pressure from the leadership.

“Our friends on Capitol Hill said our statement would be heard as criticizing the Democrats,” said Ross Eisenbrey, the institute’s policy director. “It would not be perceived as encouragement to do more; it would be perceived as raining on the parade.”

In a second statement, issued this month, the Economic Policy Institute finally endorsed the increase to $7.25, stipulating that once Congress approved this amount, a second bill should be introduced to raise it to a higher $8 in 2009.

For an excellent review of the problems with the new bankruptcy law, I recommend reading the testimony of Robert Lawless (an excellent name I must say for somebody who teaches law at the University of Illinois College of Law), from an oversight hearing yesterday the Senate Judiciary Committee held yesterday:

Although the new law was called the Bankruptcy Abuse Prevention and Consumer Protection Act or BAPCPA, it addressed abuses that did not exist and protected the credit industry instead of consumers. Nevertheless, we were told the law was necessary because bankruptcy had lost its power to shame. The decision to file bankruptcy was made to sound as if it were a lifestyle choice. Just before the bill passed, Professor Zywicki, one of today’s witnesses, told the full Judiciary Committee that the bankruptcy system was a tax on our society. Changes in the bankruptcy law could lower interest rates and lower prices.

A recent Wall Street Journal piece on Wade Horn's marriage-promotion crusade notes his rather inexplicable opposition to domestic-violence protections in the marriage-promotion spending program that he sheparded through Congress:

To help negotiate the welfare legislation, Sen. Baucus in 2004 hired Kate Kahan, now 32, a single mother and former welfare-rights organizer. Pregnant at 18, Ms. Kahan had married the father, then left him after a year and a half because she says he was violent. She and Sen. Baucus knew that the welfare bill inevitably was going to include a marriage program, but she fought for explicit protections: a promise that the domestic-violence experts hired would be experienced and qualified, and guarantees the programs would be voluntary. Dr. Horn, insulted that anyone would question his commitment to protecting women, pushed back.

The tension came to a head at a meeting during negotiations aimed at writing a bipartisan bill. Ms. Kahan was surprised to find Dr. Horn there. By her account, he began by asking what Sen. Baucus had against marriage. Ms. Kahan shot back that the senator is not against marriage but had more questions than answers about government promoting it. In any case, she said, poverty is complex and isn't going to be solved with marriage classes. Frustrated by her repeated insistence on that point, Dr. Horn threatened to walk out of the room, according to two people in the meeting.

From yesterday's show (thanks to Gwen for pointing this out to me):

... time for COUNTDOWN‘s latest list of nominees for “Worst Person in the World.”.

....

Our runner-up, Wade Horn, assistant secretary for Children and Families at the federal department of Health and Human Services. He‘s the one explaining to newspapers why the department is extending its arguments on behalf of sexual abstinence to, not just teens anymore, but people between the ages of 20 an 29, even though the National Center of Health statistics reports that more than 90 percent of people in their 20‘s have already had sex. Kind of an uphill battle you picked there, Wade.

Who beat out Wade for Olbermann's honor? A drunk driver who turned the wheel over to a designated driver ... his seven-year old son.

The Heritage Foundation and Robert Rector continue to push their Frank Luntz-devised, more subtle than Pat Buchanan, neo-nativist line that immigrants are bad because ... they'll raise your taxes! Thankfully, Lou Dobbs seems to be the only one listening any more:

Robert Rector appeared on Lou Dobbs Tonight to discuss his latest research on U.S. immigration policy and poverty. .... Any immigration reform should take into account the effects that the policy will have on poverty in the U.S., according to Rector. “U.S. immigration policy should encourage high-skill immigration and strictly limit low-skill immigration,” he writes.  “In general, government policy should limit immigration to those who will be net fiscal contributors, avoiding those who will increase poverty and impose new costs on overburdened U.S. taxpayers.”

Hmm ... if "net contributions" is the standard, then Rector should prefer the Senate-passed immigration bill that created new pathways for legal immigration to the fence approach that Congress ended up opting for. As I explained in a paper for the National Immigration Law Center, the Senate bill would boost economic growth and improve the solvency of the Social Security Trust Fund. A reasonable middle-ground estimate is that GDP would increase by about $36 billion a year on average over the next five years, and by $134 billion a year on average over the next ten. In addition, the net fiscal benefit of the Senate provisions would be about $60 billion over the next ten years.

Dean Baker on David Broder's most recent "The Sky (Social Security) is Falling" column:

Projections show that the combined cost of Medicare, Medcaid, and maintaining the roads and sidewalks in front of the Washington Post will increase by more than 8 percentage points of GDP by 2050. Clearly we cannot afford to maintain the roads and sidewalks. When will politicians have the courage to cut the budget for maintaining the roads and sidewalks in front of the Washington Post?

Yes, David Broder did the old Medicare and Social Security trick again. (Projections show that Medicare's costs will explode over the next 40 years, the projected increase in Social Security spending is about the same as over the last forty years.) By the way, one of the "prominent non-aligned" economists who provided the background wisdom for Mr. Broder's article was David Lereah, the chief economist

The National Labor Relations Board ruled yesterday to exclude millions of Americans from labor law protections by broading the definition of "supervisor." (Under the National Labor Relations Act, "supervisors" are not able to collectively bargain or join a union.)

At TPM Cafe, Nathan Newman explains how the decision is the latest blow to workers' right to organizize.