Sunday, September 29, 2013

Shutdown Showdown, also known as Politics as Usual

As I write this America is 31 hours away from the first government shutdown since 1995-96.  On Friday the Senate voted to amend the continuing resolution by removing the House riders that would prevent any funding to implement the provisions of the Affordable Care Act (ACA), which is set to begin individual enrollment on Tuesday October 1st.  Whether that's a good thing or a bad thing I'll leave it to the reader to decide.  My concern is how we got to this point and what do we do about it now?

First, how we got here seems to be a matter of partisan preference.  Either the Republicans are acting like intransigent elephants by insisting on a bill that undoes a duly passed law or the Democrats are acting like stubborn jackasses by refusing to negotiate with House Republicans on the contents of the resolution to continue funding the government until a budget deal can be reached.  Again, where you stand probably depends upon which side of the aisle you sit. 

One thing, however, is particularly clear.  Most of what is passing for political discussion in Washington is simply a very loud public relations campaign.  Republican Ted Cruz (R-TX) took to the airwaves insisting that everything happening or about to happen lies solely at the feet of Senate Majority Leader Harry Reid for taking an 'absolutist' position that will force a government shutdown.  In his view, Reid should acquiesce to the GOP demand for defunding or delaying the ACA.  Reid, for his part, says the Senate will not consider any further resolutions pushed through the House on party line votes by the GOP.  Neither party is talking to the other in a serious effort to negotiate, though it is difficult to negotiate with those who refuse to do so, which aptly describes the leadership in both parties. 

A broader question remains to be addressed: how did we get to the point where one party believes it can make demands that must be met in order for orderly continuation of government?  The answer to that, I believe lies squarely in the Oval Office.  Governing from party created crisis to party created crisis began shortly after Republicans took control of the House in early 2011.  First, they wasted their breath passing repeal after repeal of the ACA that would never be considered by the Democratically controlled Senate.  The same with Paul Ryan's 'roadmap' budgets that contained dramatic cuts in discretionary spending, including the same $750 billion (over ten years) cut to Medicare that President Obama utilized to fund the ACA.  This was followed by the near breach of the debt ceiling in August of 2011 that resulted in a lowering of the nation's credit rating.  Days before the U.S. would default on its debts, the president made some concessions to the GOP in exchange for an increase in the debt ceiling and a budget agreement through FY 2012.  A few months later came negotiations over the expiration of the 2001 and 2003 tax cuts, followed by the collapse of the so-called 'Supercommittee' to reach a budget deal (resulting in the across the board cuts that took effect in March).  In late August and early September Obama announced his intention to launch punitive strikes against Syria for using chemical weapons in the sectarian civil war going on there but then backpedaled when Congress refused to back him (though claiming authority to act anyway).  In short, the president has encouraged the kind of nonsense politics playing out in Washington by repeatedly drawing a line in the sand and then scribbling it out to draw a new one.  Yesterday, the president vowed to veto any spending resolution that goes after the ACA in any way.  The question is, will he stand his ground this time or back down in the face of more GOP threats? 

How long will the brinksmanship continue?  Only until someone realizes there are winnable battles and unwinnable battles.  Only a fool wages a battle he cannot win.  But given recent history the GOP may think history will repeat itself yet again, making this battle seem all the more winnable. 

Friday, September 27, 2013

Should Congress Listen to the American People?: The Myth of American Democracy

America is not a democracy.  Nor was it ever intended to be.  Let's get that notion out of our heads right now.  The founding fathers viewed democracy with great trepidation and fear, perhaps more so than they did 'big' government.  True, the American Revolution was fought to throw off the shackles of a distant government that ostensibly oppressed its citizens by taxing them to support the military campaigns waged on their behalf but without providing them with a voice about the level of that taxation.  But no one should be deceived by the notion that the revolution was about implementing the will of the people.  No, the revolution was begun and sustained by a small group of wealthy colonists who were fed up with British rule.  Once the colonies secured their independence the hard work of designing a new government began.  The first effort ended in miserable failure when Daniel Shays led a populist uprising that the new government was unable to put down, leading to the call for a constitutional convention to address the deficiencies in the Articles of Confederation and Perpetual Union.  The result is what we call the United States Constitution, which does anything but establish a democratic system of government.  Let us take a brief look at two of the branches of government created by the Constitution in light of this argument.

The Presidency

For convenience sake I will begin with the presidency, though the authors of the constitution dealt with this institution in article II rather than article I of the document.  The framers clearly feared the rise of a demagogue as leader of the new nation so they instituted safeguards to limit popular influence upon presidential action.  In fact, the president was not to be the representative of all the people but the representative of all the states.  He would be selected by a majority of votes cast by electors, not citizens, in the states.  The selection of electors is left to the state governments.  Further, the president was to act as a check on unwise legislation originating from the Congress.  His job was to act in the best interests of the union, which is not necessarily the same thing as the best interests of individual citizens or even groups of them.  Modern presidents have developed constituencies comprised of the population and perpetuated the myth that they 'represent all the people.'  They do not and never were intended to do so.  The modern presidency is a bastardized version of what was created in Philadelphia in 1787. 

The Congress

First, let us consider the House of Representatives, which is probably the closest the U.S. Constitution gets to embracing democracy.  Yet, even here the only requirement is that every state shall receive a number of representatives proportional to its share of the national population but no fewer than one.  Exactly how the representatives were distributed within each state was a matter left for the states to decide.  As such it was not uncommon to have legislative districts that varied widely in terms of population and geographic coverage until the Supreme Court ruled in the 1960's that legislative districts must be as equal as possible, a concept found nowhere in the constitution.  This allowed states to structure their legislative districts to in such ways as to preclude majority rule and promote the agenda of the ruling coalition.  Most states continue to do this today by gerrymandering their districts so that a party that wins a minority of the popular vote can nevertheless control the House of Representatives.  For example, in the 2012 U.S. Congressional Elections, Republicans received 46.9% of the popular vote while Democrats received 48.3% of the popular vote.  Yet, Republicans hold 53.8% of the seats in the House while Democrats hold 46.2% of the seats.  If the House were truly a democracy, Democrats would control the chamber today. 

Turning to the U.S. Senate we can see the framers fear of democracy even clearer.  The constitution established a Senate whose members would be appointed by the state legislatures to represent the state for a six year term.  In the ultimate wisdom of some the constitution was amended in 1916 to establish the direct election of Senators, contributing to the system we have now where Senators are not dependent upon the state legislatures but upon the wealthy organizations and individuals who have the means to fund their very expensive campaigns.  Further, the Senate is granted the power to approve treaties, confirm presidential appointees, and hold trials for impeachment.  The framers did not place these powers in the hands of the 'people's chamber' but in the hands of the chamber that would resist the populist passions of the people.  Today, however, like the presidency, the U.S. Senate is merely a shadow of the Senate envisioned by the framers. 


Why does any of this matter?  Given citizens penchant to believe what they want to believe regardless of the facts, probably not much.  Yet, on the floor of the House and the Senate this week we have heard members of the Republican Party allege that the Congress is not listening to the will of the American people.  That's exactly right and that's exactly what the framers intended.  Yet, the politicians making these statements were lamenting the fact that Congress was not listening to the vast majority of Americans who are ignorant of public policy and its implications.  Consider this...would these politicians make the same argument if a majority of Americans thought it would be a good idea to bomb Canada?  Would Congress be right or wrong to ignore the will of the 'unwashed masses' in this case?  This is a key reason why the framers created a set of undemocratic institutions that would utilize their own wisdom to make decisions in the best interest of their states/districts and a president to do so on behalf of the nation as a whole.  Even if one were to concede that elected officials ought to be responsive to the wishes of their constituency, which I do not, none of these elected officials has a national constituency, popular perception notwithstanding. So Republicans are right about Congress not listening to the American people as a whole...but they're wrong when arguing that it should, especially when they themselves are not listening to the American people.

Monday, September 23, 2013

The Irrationality of Rationality

As I write this the government is 7 days away from a shutdown that neither party will admit to wanting.  Yet, the irrationality of rational action may well produce this undesirable outcome.  At the heart of it lies the fact that some in the GOP, mostly freshman and sophomore Tea Party Republicans, hate the president and his healthcare law so much that they are willing to shut down the government and forfeit their own paychecks, prevent Social Security payments from being made, and cause IOU's to be delivered to hundreds of thousands of government workers.  Add to that the economic chaos as people dependent upon these checks stop going out to eat or to ballgames or shopping and it is a recipe for disaster.  All because of some misguided belief that the Affordable Healthcare Act is some kind of socialist medical bogeyman that must be killed no matter the cost to representative democracy. 

Yet, even though the Tea Party cannot win this fight it is one they want to and, indeed, must wage.  First, they cannot win because the parliamentary rules of the Senate preclude it.  Sometime in the next few days Majority Leader Harry Reid will make a motion to proceed on the continuing resolution (CR) stripping funding from Obamacare that passed the House on Friday.  This motion can be filibustered, which will put Republicans in the awkward position of opposing a resolution their colleagues in the House were urged to pass.  So either they don't filibuster the resolution or Reid moves for cloture on the resolution, which will take 60 votes (55 Democrats plus 5 from the GOP).  He will likely get many more than 60.  Once cloture has been invoked Reid can offer an amendment to the resolution that strips the defund language out, which can pass with only 51 votes.  Republicans can then filibuster the new resolution or allow it to pass, in which case it goes back to the House.  Speaker John Boehner will then have the clean continuing resolution he originally wanted to pass that maintains the sequester level of spending through mid-December.  However, this clean CR will still need to garner majority support in the House to pass and be sent to the president.  Here's where things get sticky for Speaker Boehner.

As of the start of the 113th Congress in January of this year the Tea Party Caucus had 49 members, all Republicans.  The GOP currently holds 233 seats in the House and needs 218 votes to pass the clean CR.  If the Tea Party Caucus remains firm in its resolve to defund Obamacare and vote against any CR that does not do so it leaves the Speaker in a bind.  Assuming Boehner, like all other members of Congress, is a self-interested, rational actor whose primary goal is winning re-election and maintaining his position (as Mayhew claims), he will not bring the clean CR to the floor for a vote.  Why not?  Because doing so will mean he must rely on Democratic support to pass the CR, thus violating the unwritten 'Hastert Rule', which states that a measure may only be brought to the floor when it can pass with 218 votes from the majority party (the minority is free to join in but cannot provide the votes that put the bill over the top).  Boehner has violated this rule on at least three occasions this year already but if he does it again he may well see a movement to replace him as speaker.  So the rational thing to do is stand his ground even if it results in the irrational action of a government shutdown.

Likewise for Tea Party members it is entirely rational for their self-preservation to oppose any CR that does not defund Obamacare.  Nationally, polls show that a majority of Americans, and even a majority of Republicans, oppose a government shutdown, the Tea Party Caucus members do not have a national constituency.  Only the president has that.  Tea Party members have a dual constituency of a different nature.  First, they must answer to the voters in their congressional districts that elected them to represent their interests in Washington, D.C.  In many of these districts the voters are as conservative, if not more so, than the members themselves.  The boundary lines in many of these districts have been drawn to elect Republicans to the House and have been made as safe as possible for the incumbent.  Further, most of these members represent districts that are between 10 and 15 percentage points more conservative than the nation as a whole, according to the non-partisan Cook Political Report's Partisan Voting Index of the 113th Congress.  A vote that defies the wishes of their constituents may well lead to a primary challenge from the right.  Thus, a self-interested Tea Party member must oppose the clean CR if he/she hopes to be reelected.

The second constituency for Tea Party Caucus members to answer to are the funders who paid for their campaigns.  Contrary to popular perception most Tea Party members did not arrive in Washington based on a groundswell of grass roots activism.  True, they may have won the district primary based on grass roots support but that alone does not win congressional elections.  It takes money, and lots of it to win a seat in the House.  Much of the fundraising comes from special interest groups like the Club for Growth or the U.S. Chamber of Commerce.  These organizations have vowed to make sure that the voting constituents know if a Tea Party member backs down on the defunding movement.  Thus, it becomes rational for Tea Party members to take a stance that may well result in the irrational act of shutting down the government and causing great harm to the national economy, the GOP, and many Americans. 

Friday, September 20, 2013

Is Obamacare Really Turning Our 'Full Time Economy into a Part Time Economy'?

It must really be nice not to have to support anything you say as a member of Congress.  I sure wish I had that kind of immunity when I speak or write something.  Take, for example, Eric Cantor's (R-VA) statement about the effect of Obamacare on the U.S. economy.  In justifying his vote for the continuing resolution to keep federal spending at current levels while defunding Obamacare he said,
“Each week, we hear stories about how both major employers and small businesses are cutting back benefits and cutting back hours. The president’s health care law is turning our full time economy into a part time economy.”
 As a political scientist a good part of my job involves being skeptical about truth claims made by politicians, especially when they involve cause and effect.  So let's dissect Cantor's truth claim in the above statement. 

First, Cantor levels a generic claim about how 'major employers and small businesses' are 'cutting back benefits and cutting back hours.'  Notice that he does not provide any source for this claim other than '...we hear stories.'  Are these 'stories' representative of all major employers and small businesses?  We have no way of knowing because Representative Cantor does not give us any idea where these 'stories' are coming from.  That means we'll have to do some searching on our own.  According to Fox Business News, which cites two surveys but doesn't provide links to the data, approximately 20% of the 603 small business owners surveyed by the Society for Human Resource Management have reduced workers hours because of the employer mandate requiring health insurance coverage by employers with 50 or more employees.  If my math is correct, that means 80% of the small businesses surveyed have not reduced workers hours.  Yet, we still do not have any idea if these 603 businesses are part of a random, representative sample or a convenience sample.  Unfortunately, one has to pay a membership fee to get access to the data and methodology utilized in this survey.  All we can tell from the results released is that a small percentage of small businesses have decided it is economically advantageous to reduce the number of hours part timers work to less than 30.  The problem with the first part of Cantor's statement is that he doesn't make it clear that this is happening among a small number of employers.  Further, as the Fox article indicates, some employers are actually increasing the number of hours full time (over 32 hours per week) are working to compensate for reduced hours by part timers.  Thus, the net economic effect is unclear.

The second part of Cantor's statement is more problematic as he makes the claim that Obamacare ' turning our full time economy into a part time economy.'  Neither of the two surveys the Fox News story referenced indicated that any such thing is happening.  There is also no data to support the connection between increasing hiring of part time workers and the health care law.  Note that the surveys found that employers were reducing the hours of part time employees, not full time employees.  What Cantor is probably talking about is the fact that part time employment has been growing at a faster pace than full time employment in the U.S. economy.  But that trend began long before the Affordable Health Care Act ever saw the light of day.  The chart below shows the growth of part time jobs versus full time jobs since the start of the Great Recession in late 2007.  The full source of the data is here.

Once again, Cantor makes the fatal error of equating correlation with causation, as politicians and amateur statisticians are frequently apt to do.  That's not to say Cantor is's just that there isn't enough evidence to support the contention he makes.  Further, according to the Bureau of Labor Statistics, there are approximately 144 million jobs in America today.  Roughly 81% of those are full time jobs.  It is unknown what percentage of people working full time jobs also have second part time jobs.  Even so, with 81% of American jobs being full time jobs with an average hourly wage of $23.98 it seems safe to say that we are in no current danger of entering into a 'part time economy.'  In fact, as more and more baby boomers retire from their full time jobs, they may welcome the creation of more part time opportunities. 

Yet another reason for the growth in part time employment is where the job growth is occurring.  Most job growth since 2009 has been in the hospitality and retail industries, which typically pay lower wages and provide fewer benefits than industries such as healthcare and manufacturing.  But this is part of a much longer term trend that began in the 1980's as American manufacturers found it easier and cheaper to outsource production.  As the country has moved from an economy that makes things to one that provides services employers have found more need for part time workers to give them the flexibility to adjust to lulls in the business cycle.  For example, in the restaurant industry, which has exploded in size over the past 30 years, it is not always necessary to have a full crew so there are many more part time jobs in food service.  That makes good economic sense.  The same is true in retail services.  It would be more troubling if industries that traditionally employed full time personnel were shifting to part time personnel to avoid providing health insurance.  Fortunately for the country (and unfortunately for Mr. Cantor), there is no evidence that such a shift has been or will occur because of the Affordable Care Act.  The truth is that most Americans who work full time already have health benefits provided by their employers and that is very likely to remain the case as the ACA enters full implementation in 2015. 

Wednesday, September 18, 2013

Let's Just Mothball the Whole Dang Thing....

Of course, I am referring to the impending government shutdown if lawmakers in Washington cannot come up with a compromise continuing resolution (hereafter, CR) to maintain government operations beyond the end of the 2013 Fiscal Year (September 30, 2013).  Seems like we have been here before both in the recent past and nearly 20 years ago when Bill Clinton was president.  It did not go well for the majority party in Congress after the two shutdowns in 1995 and there is little indication it will go well for them this time, if it happens.  But, as Ezra Klein points out, the GOP has a collective action problem.  On the one hand it may be disastrous for the GOP if the government actually shuts down for any length of time.  On the other hand, most Republicans represent safe conservative districts (for a variety of reasons I won't go into here) so taking a staunch, fiscally conservative stance will win them brownie points with their core constituents back home and, perhaps, stave off the all too frequent 'tea-party' primary challenges emerging from the hard right these days.

The question before the House is a simple one:  What level of funding should the government operate at for fiscal 2014?  Had Congress done its job and actually worked out a budget deal over the past year, we wouldn't be having this discussion.  Yet, here we are on the verge of another needless crisis created by those who want to score political points on both the right and the left.  In reality, the issue is not whether to fund the government.  A clean CR that maintains the current level of funding, including the sequester cuts implemented in March, could probably pass with about 150 Republican votes and the rest coming from Democrats.  Of course, that would be deadly for Speaker John Boehner so he has to offer a CR that does all of that and includes the tea party pipe dream of defunding Obamacare.  So...that CR likely passes the House on a strict party line vote and goes to the Senate, which will strip the defunding of Obamacare from the CR, leaving us no closer to averting a government shutdown.

In yet another effort to repeal Obamacare, the Republican Study Committee released a new proposal that will completely repeal the Affordable Care Act and replace it with the American Health Care Reform Act.  The proposal includes the following main points:

  • Fully repeals President Obama's health care law, eliminating billions in taxes and thousands of pages of unworkable regulations and mandates that are driving up health care costs. 

  • Spurs competition to lower health care costs by allowing Americans to purchase health insurance across state lines and enabling small businesses to pool together and get the same buying power as large corporations.

  • Reforms medical malpractice laws in a commonsense way that limits trial lawyer fees and non-economic damages while maintaining strong protections for patients.

  • Provides tax reform that allows families and individuals to deduct health care costs, just like companies, leveling the playing field and providing all Americans with a standard deduction for health insurance.

  • Expands access to Health Savings Accounts (HSAs), increasing the amount of pre-tax dollars individuals can deposit into portable savings accounts to be used for health care expenses.

  • Safeguards individuals with pre-existing conditions from being discriminated against purchasing health insurance by bolstering state-based high risk pools and extending HIPAA guaranteed availability protections.

  • Protects the unborn by ensuring no federal funding of abortions.
While many of these proposals are laudable and worthy of implementation they still will not address the biggest problem...the affordability of health insurance by lower middle income Americans who do not receive it from their employers yet are above the Federal Poverty Line (FPL) of $11,490 for a single individual and $23,550 for a family of four.  A single individual working for minimum wage would earn $15,080 per year, thus not qualifying for Medicaid if he/she worked for a company that did not provide health insurance coverage.  That is $1256.67 per month before taxes.  For 2013, the standard deduction and exemption for a single totals $10,000.  Add to that the $7500 in this proposal and our hypothetical individual would pay NO federal income tax.  They would, however, pay the FICA tax of 7.8% on $7580 of income.  That amounts to $49.27 per month for the feds.  In MS, such an individual would receive an $8400 deduction and pay tax on $6680.  The rate is 3% on the first $5000 ($150) and 4% on the additional $1680 ($67.20) for a total MS tax liability of $217.20, or $18.10 a month.  That leaves a net income of $1256.67-$67.37 or about $1189 a month to pay for shelter, food, clothing, transportation, and health insurance.  I doubt one could do that in low cost MS let alone more expensive places such as NY or CA.

So, while the Republican Study Committee proposal has some good aspects until it finds a way to deal with the affordability issue for the working poor it probably will go about as far as the CR that defunds Obamacare.  Which is likely a place filled with mothballs.