As in December 2010, trading tax cuts

The pending debt ceiling deal is shaping up as quite a Rorschach test. On the left, Michael Cohen crows that the GOP caved, while Noam Scheiber is convinced that Obama has finally and definitively destroyed his negotiating cred.  Reception on the left was shaped this morning, as the deal came gradually into focus, by an uncharacteristic freakout from Jonathan Chait. Just returned from vacation, Chait seemed to be reacting more to Obama's offer several weeks ago to start income tax hikes at the $400k level than to overnight developments (though the overnight news did move that higher threshold to the realm of the more limited deal).  Me, I wavered between "poles of hope and fear... Dec 2010 tax deal vs.crappy Jul 2011 deal Boehner did O favor of pulling out of. ' My hope:  "Perhaps cliff deal postmortem will look like 12/2010 - jaw-dropping headline concession offset by lower profile plusses."

My sense at this point is that the pending deal does look something like the 2010 agreement: a steep headline price paid to preserve core Obama priorities, with judgment yet again to be deferred until another round of deficit reduction is negotiated in 2013. On that second point, Obama laid down a key marker in his press statement this afternoon: that all subsequent spending cuts would have to be offset by tax hikes of equal value.  It's unclear how he would enforce that: his ability to do so depends both on how the sequester is handled and how he plans to make good his proclaimed refusal to negotiate under threat of a debt ceiling default. If he can make his own ground rules stick, then this is indeed a good deal.

The deal resembles the December 2010 agreement insofar as in both cases, the two sides found it easier to trade favored tax cuts than to either cut spending or raise revenue (surprise...).  In exchange for holding households earning $250k--$450k nearly harmless (though they are subject to some deduction limitations), the Democrats will have secured (if the deal goes through) 5-year extensions of Obama's tax credits for low- and middle-income Americans (expansions of the Earned Income Tax Credit, the Child Tax Credit, and the credit for college tuition), alternative energy, and business investment, along with a one year unemployment benefit extension. Thus Obama continues to forego hardball to maximize future revenue in favor of easing financial pressure on the needy and nonwealthy, stimulating the economy, and advancing his energy policy.  Long-term, I suspect he thinks that revenue can be squeezed out of the GOP in stages, but that the economy and Americans with stagnant incomes need help now.  Those who insist that our chief challenge is to stimulate the economy rather than reduce the deficit ought to be pleased.

If Dems scotch a deal, cont.

Reports that Biden, taking up the fiscal cliff baton, is on the point of giving away the store have sparked deep depression in the left-side twittersphere this morning, leading me to this acid flashback:

@xpostfactoid1 another past pattern possible: Dems balk as crappy deal takes shape; O makes a last-minute ask to pacify them; Repubs reject & go home 7:53 AM - 31 Dec 12 · Details

And on cue, we have this from Senator Tom Harkin this morning:

December 31st, 2012 11:13 AM ET Washington (CNN) - Sen. Tom Harkin, a veteran Democrat and a leading liberal voice, told CNN Monday that he and other Democrats may try to block the fiscal cliff deal that's being furiously negotiated ahead of the year-end deadline.

At cliff's edge, Obama lays down his conciliator chips

President Obama invested a large sum of political capital in his interview with David Gregory on Meet the Press this morning.

All published accounts (1, 2) highlight -- because no one could miss -- the forcefulness with which he rejected false equivalence regarding the causes of his standoff with the GOP and blamed them for taking us to the brink.  What I would stress is that to the extent that you can genuinely credit Obama with playing a long game, this is its locus: convincing the public that he is the reasonable one, the one willing to compromise, the one putting forth centrist, mainstream, "balanced" proposals for deficit reduction.  That self-portrait is now backed by several rounds of negotiations in which he appeared (to supporters at least) to yield too much, always stressing that he was doing the best he could in the face of implacable opposition by ideological fanatics.  Now, when the leverage is on his side, he has a long history backing his claim that he is not the intransigent party.

Political scientists are at pains to demonstrate to us that presidential rhetoric per se does not sway public opinion. But a president's track record does register, I think, and long-term repetition of certain themes in word and deed do sink in. Perhaps more to the point, public opinion is a potent weapon when the public is already on your side, as they essentially always have been for Obama regarding the high-end Bush tax cuts. Polls showed broad public support for the broad outlines Obama's "balanced approach" to deficit reduction in the summer of 2011, and it registered that Republicans would not budge on that front, and that Obama essentially caved in the face of the debt ceiling threat. Likewise, in the fall of 2010, Obama claimed public support for letting the Bush income tax expire for the top two brackets. Compare his language in the December 2010 press conference in which he announced the budget agreement that extended both the Bush cuts and his own middle class tax cuts, along with unemployment insurance (adding the payroll tax cut).  Below, in 2010, he is challenged as to why he could not raise taxes on the top 2% (my emphasis throughout):

The dangers of last-minute dealing

Greg Sargent is salivating at the prospect of Obama daring the Senate GOP to veto a stripped-down fiscal cliff bill that would raise marginal rates on the top two brackets and extend unemployment benefits, the Earned Income Tax Credit and the child tax credit.  Jonathan Cohn, while acknowledging the dangers of going over the cliff, is cautiously optimistic that if we do so Obama will be able to a) impose a better deal, and b) blame Republicans for the deadlock:

And then there are the polls, which suggest that the public overwhelmingly blames Republicans, rather than Obama, for inaction. Polls don’t always predict how people will react to actual political developments in real time. But chances are good that, the longer it takes for a deal, the more pressure Republicans will feel from the voters—not to mention their supporters in the business community—to abandon their opposition to tax increases and determination to cut entitlements.

Does Andrew Dream of Electrified Woodchucks?

Serving our Jersey suburb is a pest control company (maybe many) that will catch unwanted rodents (woodchucks, raccoons) in have-a-heart traps and allegedly transport them to public land at least ten miles away (sounds suspiciously like giving Rex to a farm family, but bear with me).  Contemplating an invisible fence for a prospective new dog (alas, only blind Merlin of blessed memory could be contained by our 15-inch stone wall at the back), my sons started speculating about a have-a-heart exterminator that would catch unwanted rodents, tranquilize them and collar them.*  That raised the problem of the collared pests' offspring and led us to the inevitable conclusion that responsiveness to the invisible fence would would have to be infused by genetic modification.

Ergo, the answer to this post's title is yes.  And getting there (here, sort of) is the whole purpose of this post. 


*We also speculated that widespread adoption would lead to pest infestation of lower-income neighborhoods abutting the served towns or neighborhoods, but that does not get us where we're going here.

Undone by the gun lobby

I rarely react to news stories with unfiltered rage. Maybe it's a lack of moral imagination or empathy on my part, since outrages are reported daily.  But today's front-page New York Times account of how the gun lobby, working through a corrupt Congress, has hampered the Bureau of Alcohol, Firearms and Tobacco's ability to track guns to their owners and crack down on corrupt dealers left me choking over my leftover Christmas rum cake.

The gun lobby's hobbling of rational gun control is perhaps the perfect instance of government corruption through lobbying, in that the lobby works not simply by buying Congressional reps but by whipping up a substantial, vociferous constituency that gives the corrupted reps political cover; they can cast themselves as defenders of liberty and rights guaranteed by the Constitution. The effect is to weaken the kinds of safeguards that even a large majority of gun owners say they support, such as criminal background checks for all gun buyers. The only credible motivation for legislation recounted by the Times' Erica Goode and Sheryl Gay Stolberg is to boost gun sales:

law enforcement officials and criminal justice experts who would like the A.T.F. to have greater latitude in fighting crime say its effectiveness in reducing gun violence is still hampered by a thicket of laws that limit the information it can obtain and constrain its day-to-day functioning.

The Firearm Owners Protection Act of 1986, for example, prohibits A.T.F. agents from making more than one unannounced inspection per year of licensed gun dealers. The law also reduced the falsification of records by dealers to a misdemeanor and put in place vague language defining what it meant to “engage in business” without a dealer’s license. 

Tyler Cowen's modest proposal for an imaginary GOP

Tyler Cowen would have Republicans shake up the tax debate by proposing a tiny across-the-board income tax hike in addition to the moderate tax hike for the wealthy proposed by President Obama. Further tax hikes would then kick in automatically as (or if) spending rises. He regards this direction for tax reform as fairer and more sustainable than current proposals, as everyone would feel the effects of "paying" for whatever level of social services and other spending we collectively undertake. Here's the meat of it:

To see how this could work, consider this script: Let’s say the Republicans decide to largely give in to what the President Obama is proposing. There is, however, a catch: the president has to agree to raise marginal tax rates on all income classes, not just on the rich. The tax increase would be one-quarter of a percentage point, or some other arbitrary small amount, with larger increases possible for higher incomes, as has been discussed. The deal also stipulates that both the president and Congress must publicly acknowledge that current plans for government spending can’t be financed unless taxes on most or all income groups climb further yet, and by some hefty amount. 

Epistemic closure: the prequel

Thanks to the Lincoln movie and Ta-Nehisi Coates, I've been reading This Mighty Scourge: Perspectives on the Civil War by James M. MacPherson just as our current tax/spending battles reach their Little Round Top.  One essay, "Long-Legged Yankee Lies: The Lost Cause Textbook Crusade" recounts how self-appointed guardians of historical truth in the postwar South inculcated the mythology of the Lost Cause -- a noble, benevolent, freedom-loving southern society crushed by the aggression and fanaticism of Lincoln's north. That news from 1919 gave a deja-vu quality to my absorption of  statements by GOP leaders this week:

"It’s not a gun problem; it’s a people problem."

Washington doesn't have a revenue problem—it has a spending problem!  

"I've become convinced the president is unwilling to stand up to his own party on the big issues that face our country."

Dark matter in John Boehner's pool

John Boehner used some revealing language in his press conference today to defend the Plan B that his caucus refused to support yesterday. In Republicanspeak, Boehner is champion of the 99%:

Listen, there was a perception created that that vote last night was going to increase taxes. Now, I disagree with that characterization of the bill. but that impression was out there. and we had a number of our members who just really didn't want to be perceived as having to raise taxes. That was the real issue. now, one of my colleagues the other night had an analogy of 100 people drowning in a pool, and then he was the lifeguard. and because he couldn't save any of them, does that mean he shouldn't have done anything? His point to them is, if I can go in there and save 99 people that are drowning, that's what I should do as a lifeguard. but the perception was out there, and a lot of our members did not want to have to deal with it.

It's no secret that in addition to cutting taxes for the wealthiest Americans by leaving most of the goodies in the Bush tax cuts intact, Plan B would  raise taxes on most Americans, and raise them substantially for low-income Americans, by letting the Obama tax cuts enacted in 2009 expire. The Center for Budget and Policy Priorities summarizes:

Chaining ourselves to (slightly) higher tax rates

I was going to suggest a couple of potentially good things about chained-CPI, a slower and allegedly more accurate measure of inflation than the one currently in use, as a means of boosting tax revenue. Josh Barro slowed me up. Having criticized chained-CPI as a means of reducing Social Security benefits, which Barro believes should be indexed to income growth rather than inflation, he moves on to taxes:

Inflation indexing of the income tax code also makes little sense. Every year, income tax brackets are adjusted upward in line with CPI. So, while the 25 percent federal income tax bracket started at $34,500 of taxable income in 2011, it doesn't start until $35,350 for 2012. But, except in recessions, incomes tend to rise faster than price inflation. That means that, absent changes in tax law, a taxpayer at any given place in the income distribution will face a higher effective tax rate over time.

This effect is called "real bracket creep," and it’s undesirable if we want a tax code that produces stable collections and a stable distribution of the tax burden over time. Indexing tax brackets to national income would cause the bracket thresholds to rise faster, eliminating real bracket creep.

At least chained-CPI is chained to reality

The good folks at WonkBlog have been castigating the proposed move to a "chained-CPI" to slow the rate of Social Security benefit growth as "obscurantist,"  as Dylan Matthews called it this morning.  Three hours later, Ezra Klein elaborated the complaint:

Chained-CPI, in [Bowles-Simpson's] telling, is simply an effort to correct a measurement error in the way we calculate inflation. It’s a tweak, a fix, a policy designed to achieve a higher level of technical precision. And who could be against that?

There’s something to this line of argument. The way we measure inflation right now really does mismeasure inflation. Chained-CPI really is a bit more accurate. But that’s not why we’re considering moving to chained-CPI. If all we wanted to do was correct the technical problem, we could make the correction and then compensate the losers.

But no one ever considers that. The only reason we’re considering moving to chained-CPI because it saves money, and it saves money by cutting Social Security benefits and raising taxes, and it’s a much more regressive approach to cutting Social Security benefits and raising taxes than some of the other options on the table.

The question worth asking, then, is if we want to cut Social Security benefits, why are we talking about chained-CPI, rather than some other approach to cutting benefits that’s perhaps more equitable? The answer is that chained-CPI’s role in correcting inflation measurement error is helpful in distracting people from its role in cutting Social Security benefits.

Klein may well be right that there are better ways to cut Social Security than moving to chained-CPI and leaving benefits otherwise unaltered (or that we're better off not cutting Social Security benefits at all).  But there's something fundamentally wrong with his critique, too. If he's right on policy, he's wrong on semantics. And frankly, I'm still trying to figure out whether the semantic error may also imply a policy error.

When SSI is the only route to health insurance

Re that Nicholas Kristof column alleging skewed incentives in the children's Supplemental Security Income (SSI) program: in a prior post, I looked at a study Kristof cited that does not clearly demonstrate what Kristof implies it does --that an undue proportion of children on SSI transition directly to adult SSI when their eligibility for the children's benefit ends at age 18.

The 2009 study, by Jeffrey Hemmeter, Jacqueline Kauff, and David Wittenberg, does indicate a variety of incentives, some of them potentially perverse, for staying on children's SSI while eligible and for transitioning to adult SSI if possible.  One set of incentives is indeed skewed, thanks to a dearth of resources outside the program.  It's this: SSI, for children and adults alike, can be the only source for health insurance and specific health services:

Obama bridges a chasm

Waiting for Obama to speak tonight, I thought, as I'm sure many did, that he could not simply give another tender and eloquent consolation speech, as he did when Gabby Giffords was shot.  He can be so eloquent about love, and family, and the nation as family -- you could even say that's why he was elected, as that theme catapulted him to prominence in 2004.   But that would not be enough tonight. The policy void is too gaping, the collective guilt about all these mass murders too raw, his own silence on the gun front too deafening.

And yet, he could not very well talk to an auditorium full of grieving parents and a grieving community about legislation he would send up to Congress.   How would he square that circle?

He did so in the simplest terms. He boiled down all human endeavor, our whole duty, from the personal to the professional to the political, to taking care of children, to creating a community that takes care of its children.  And after five years of uplifting flattery, he said that we all have to do it better. He drew a straight line from the love we all feel for our children to our collective failure to keep them, and all of us (not just children literally understood, as he invoked all the recent massacres), safe from mayhem - and more broadly, to foster their welfare and potential. The speech text is not up yet; here is a NYT quote-and-paraphrase:

When Nick Kristof stretches a study

They say that three times is a trend, so I will have to make do with two thirds of a trend regarding Nicholas Kristof's use of social science research. Or more precisely, regarding Kristof's use of research to back what he presents as inconvenient truths regarding the behavior of poor people or the efficacy of attempts to help them.

Instance 1: Kristof is currently taking a lot of heat from liberal social policy experts for using anecdotal evidence to suggest that significant numbers of parents of children receiving Supplemental Security Income (SSI) deliberately keep their children illiterate to avoid losing the child's disability check.  More precisely, Kristof uses anecdotal evidence supported by statistical sleight-of-hand.

Harold Polllack rather gently points to the questionable deployment of data. I'd like to elaborate a bit. Pollack's case first:

The Hobbit, or “Gone Forever”

Introducing xpostfactoid's first guest post! -- by son Jonah.
----

The first book I grew to love was A.A. Milne’s The World of Pooh, as read to me by my father. In his eyes, it was a pinnacle of English literature, and he cursed the copyright laws that allowed Disney to turn it into popular pablum. You don’t really know the violence of the Free Market, he’d say, until it breaks something you love.*

    Eventually, J.R.R. Tolkien's The Hobbit came to replace Pooh as our long-car-ride staple. As for many boys it was one of the first “chapter books” I made it through on my own, and I felt notably older upon finishing. The book pretty much defined adventure for me; I can remember looking out middle school windows at our suburban NJ hills (which, though full of buildings, manage to look tree-covered from certain angles) and thinking: how sweet it would be to just start walking, with nothing but a stick and a small pack!

In which I jump to a conclusion

Jonathan Bernstein jumped in early yesterday with a characteristic caution regarding Susan Rice's withdrawal of herself from consideration for Secretary of State:

I’d caution everyone to wait a bit before drawing any firm conclusions about what happened here. We don’t know she was Barack Obama’s first choice. We don’t know, if she was the top choice, why she didn’t wind up the pick. If outside objections mattered — say, from John McCain — we don’t know which ones mattered, and it’s not necessarily the loudest ones.

It's certainly true that we don't know everything Bernstein says we don't know. Nonetheless, when I saw the news, my own mind jumped to a conclusion simultaneous with processing it: shit, Obama caved. I consider that a significant data point, not because I'm particularly knowledgeable about this process or about Rice, but because I'm not. I think anyone who followed the course of this prospective nomination even casually would have leaped to the same conclusion. And those optics suggest a major White House failure, whatever the merits of Rice as Secretary of State.

Free to be, day by day

A burst of attention in its 40th anniversary year to Free to Be You and Me, Marlo Thomas' children's record devoted to shaking up sex role stereotypes in song and story, has put me in mind of an equally consequential work from the same era. That is Non-Sexist Education for Young Children by my mother, Barbara Sprung, first director of the Non-Sexist Child Development Project at the Women's Action Alliance, founded by Gloria Steinem and Letty Cottin Pogrebin in 1971.  Published in 1975, the book was the fruit of a then-three year old field project devoted to combating sex role stereotyping in nursery schools and day care centers.

When my mother undertook this project in 1972, she was an experienced nursery school teacher who had just completed a Masters at Bank Street College of Education. She got the job at the WAA from a posting on a Bank Street bulletin board. She did not know she was a feminist until Letty Pogrebin, interviewing her for the job, asked her. (It may be a false memory, but as I recall, I asked the same question after she took the job, and my mother answered, after a brief pause, "Yes, I am.")  The project began effectively as a listening tour at twenty-five daycare centers, and it reflects the common-sense, hands-on experience of nursery school teachers awakening to gross inequities they partly struggled against and partly promulgated day-by-day.  Four of the childcare centers became pilot sites for a revamped curriculum.

The book reads well today. Its goals and methods, laid out in the Chapter 1 excerpt below, are moderate, common-sense and concrete, its archaisms relatively few.  See for yourself.

     In 1972, at the very beginning of its existence, the Women's Action Alliance began receiving mail from women all over the country who were concerned that their children were being forced into rigidly stereotyped roles, even in pre-school. The Alliance did some research into the problem and came to the conclusion that although people were working to reduce stereotyping at every other strata of education, virtually nothing was being done at the pre-school level. The Alliance felt strongly that non-sexist education should start at the beginning of a child's educational life rather than somewhere further up the line when much that had already been learned in a sexist way would have to be "relearned."
     The Women's Action Alliance decided to undertake the development of a non-sexist early childhood program. It would free girls and boys of sex-role stereotyping and allow them to develop to their fullest potential, unhampered by societally imposed restrictions regarding appropriate behavior for each sex. The goals of the program were:

• To present men and women in a nurturing role so that children understand that people are free to choose their work from an enormous variety of options unhampered by sex typing. In many cases, we have presented men and women in counterpart jobs to underscore the fact that most jobs can be performed equally well by men and women.
• To encourage girls as well as boys to engage in active play and to encourage boys as well as girls to enjoy quiet play. In all media, girls are overwhelmingly presented as passive creatures watching boys at play, while boys are presented as always active, unflaggingly energetic dynamos.

If loophole closures are benefit cuts, are benefit cuts tax hikes?

Eduardo Porter suggests that raising new tax revenue by cutting loopholes opens up a semantic loophole:

Though the offer to raise money by closing loopholes has a bipartisan pedigree — based on a plan proposed last year by the Democrat Erskine Bowles and the Republican Alan Simpson, the chairmen of President Obama’s deficit commission — it relies on rhetorical sleight of hand. If tax breaks are equivalent to government spending, eliminating them is equivalent to spending cuts. Mr. Boehner’s offer to do away with tax breaks in exchange for cutting entitlements raises no new revenue. It amounts to cutting spending twice.

Porter goes on to point out that a) Democrats have opened many "loopholes" for the poor and middle class because it's often the only form of social spending that Republicans will allow, but b) on balance, tax deductions disproportionately benefit the wealthy. His main point: we should consider each break on its merits, not make a shibboleth out of closing out as many as possible.

I would add a couple of wrinkles. First, Republicans are conflicted about whether to regard tax breaks for the nonwealthy as spending or tax cuts.  On the one hand, they've not only acceded to Democrat-initiated lower-income tax breaks, but sweetened their own wealthy-tilted tax cut goodies by cutting taxes and expanding loopholes for the nonwealthy as well.  On the other hand, they've come to regret the low-end largess, as all that bitching about the 47%, the lucky duckies who pay no income taxes, demonstrates.

Second, if Republicans are pulling the wool over by treating loophole closures as tax hikes, they've got themselves fooled as well.  When such tax "increases" were being bruited in the debt ceiling negotiations of 2011, Tom Coburn and others struggling to wriggle out of Grover Norquist's embrace experimented with casting  loophole closures (e.g., the ethanol subsidy) as "spending cuts."  It didn't fly; Norquist screamed that any phased out tax break would have to be offset by another tax break, and the GOP fell in line.

In which Henry Aaron talks himself into supporting a raised Medicare eligibility age

Henry Aaron of Brookings, one of the nation's top healthcare economists, has a rather odd perspective on the current brewing battle over so-called "entitlement reform." On the one hand, he focuses his concern on the older elderly, with their ever-dwindling purchasing power, which leaves him less hostile to raising the Medicare eligibility age than other left-of-center economists who acknowledge a need to trim benefits. He is more distressed by proposals to trim cost-of-living increases, e.g. the so-called chained CPU, which seem to strike most observers as a milder, more gradual mode of trimming benefits. Indeed, in the fullness of time, when the ACA is fully up and running and providing affordable care to the uninsured, Aaron favors raising the Medicare eligibility age to expand the ratio of working to retired adults.

On another front, Aaron at once provides historical and comparative data to demonstrate that U.S. senior health and pension benefits are unduly skimpy, and effectively concedes that given our political culture, we need to plan how best to make them skimpier still. He suggests that only by agreeing to benefit cuts can Democrats forestall more radical proposals to shred the safety net, e.g. via private accounts for social security or voucherization of Medicare. At the same time, he argues for benefits that increase with age, with offsets for lower-income younger elderly for whom raised retirement ages are a burden, and for a variety of formulas to shift costs onto the wealthier elderly (his Medicare reforms look something like those proposed by Senators Lieberman and Coburn: providing catastrophic insurance but ending Medigap as we know it, and making the wealthy elderly pay a much higher percentage of the actuarial value of their coverage).

I find it odd that Aaron argues, in effect, for preemptive concessions -- proposing policy choices he regards as less than optimal as a means of forestalling more radical, Paul Ryanesque attacks on safety net programs: 

White man: "whaddaya mean, we?"

"Epistemic closure" is by now a tired, not say clunky, phrase. But how else do describe this dead-end thinking, relayed in today's Playbook?

‘Political consultants in Washington are panicking about Hispanics, and their solution is to grant amnesty,’ said a conservative GOP lawmaker … ‘They’re afraid Hispanics hate Republicans, so they want more of them? It doesn’t pass the laugh test. … [M]embers are right to be worried about getting primaried.’ …

The unlaughable strategy, then, is to keep Hispanics out -- and by extension, to work overtime to keep the voting population as white as possible.

Obama, intrextrovert

For a year or two, we've been awash in stories casting Obama as a singularity among politicians: a successful introvert.  He doesn't schmooze congress-folk, we read ad infinitum; he doesn't butter up billionaires, or at least doesn't keep them well buttered.

It's true he's no Bill Clinton, sniffing out crowds to soothe a recurring jones for mass adulation.  But he's no classic introvert, either, as this remembrance from Maraniss's Obama reminds me:

There were certain aspects of organizing at which he excelled. 280 While Loretta Augustine-Herron and Yvonne Lloyd were wary of some streets, even in familiar neighborhoods, and warned Obama away, he had no qualms about walking down any block or entering any house, no matter how threatening or odd. His life’s history was at work here. When you spend several formative years starting at age six immersed in an unfamiliar culture on the other side of the world, walking the exotic alleyways and pathways of the Menteng Dalam neighborhood of Jakarta, and figure out how to survive and thrive there, learning the language, seeming so at home that Indonesians come to think of you as one of them, nothing after that can seem too intimidating. But Lloyd was shocked one day when Obama reported that he had eaten at the house of a woman who was known for being a packrat, with old newspapers and detritus stacked high everywhere. “I said, ‘Did you go over and eat in that house? It’s not exactly the safest place in the world.’… He’d say, ‘Yeah, it was interesting.’ We’d say, ‘You need to stay away. Don’t walk through there.’ He’d laugh. It didn’t bother him. He was on that level with all of those people. I don’t know how he managed it because they were leery [of anyone walking up to their doors]. It was the way he approached them. That has a lot to do with why they would let him in. It’s like he belonged. Now he didn’t, and we know he didn’t, but he gave them kind of that feeling.”

The price of dealing with an extremist opposition?

There is a meme gathering steam on the left -- whether triggered by Ezra Klein or by multiple people in the know or making the same deduction -- that Obama will accede to raising the Medicare eligibility age as the price for pretty much getting his way on taxes (and stimulus)?  Here's how Don Taylor compressed the logic in a tweet: 

it is only thing Rs have on health. Inevitable & some D political advantages per ACA even tho bad policy

My first thought in response was, "since Republicans always toss in "means-testing" when they talk up entitlement "reform," why not "means-test" the eligibility age? As Paul Krugman has pointed out repeatedly, "Gains in life expectancy have been very strongly correlated with income and class; those with lower incomes and lower status...have seen very small gains in life expectancy." So perhaps eligibility could be tied to income or assets. That might create some marginally perverse incentives, but that only underscores what a dumb idea raising the eligibility age is in any case (it will raise total healthcare spending, as Sarah Kliff has demonstrated).

Obama on the power of words

One moment in the formation of Obama's habit of mind that David Maraniss spotlights in his magisterial biography occured in high school:

Barry was not the most talkative student in her class, [English teacher Barbara Czurles-Nelson] recalled. He would sit near the back of the room, relaxed, waiting for his opening in the conversation. One day they were dealing with a philosophical question about what people should most fear. The answers included loneliness, death, hell, and war. Then Barry straightened up. That was the sign that he was ready to participate, Nelson thought, when he was sure to sharpen the class discussion.  “Words,” he said. “Words are the power to be feared most.… Whether directed personally or internationally, words can be weapons of destruction” (pp. 299-300, Kindle Edition).

Though the emphasis is on danger, the resemblance is still striking to the moment that first fully impressed on me Obama's potential to be the transformative president he said he wanted to be, when he again spoke of the power of words. It was in a debate with Hillary, between  the Iowa and New Hampshire primaries, Jan. 5, 2008:

De-deducting your way to $800 billion in new revenue

Available information about Obama's fiscal proposal is surprisingly sketchy, unless I'm missing something.  Forgive me, then, if I get something fundamentally wrong here. But the proposal is said to closely track Obama's 2013 budget, and it seems to me that if you moderately expand a key revenue raising proposal in that budget, it would be possible to raise $800 billion in revenue over ten years by reducing deductions for the wealthy. Maybe not desirable as an opening gambit, but hardly mathematically impossible.

The provision in question, on page 39 of the budget, would reduce the value of itemized deductions and other tax preferences to 28 percent for families with incomes over $250,000 and individuals with incomes over $200,000 (at 2009 levels, to be adjusted for inflation).  That is, suppose you're taxed at a 33% rate and you make $3600 in charitable contributions. At present, deducting that amount would lower your tax bill by $1200.  At a 28 percent deduction level, your bill would be lowered by $1008; you would pay $192 more.  That change, across all deductions, is projected to reduce the deficit by $584 billion over ten years.

An incentive that works less well than I thought

A recent study indicating that tax incentives for retirement savings are not very effective is changing my thinking about that incentive, specifically about how it's worked in my life.

My wife and I are savers. Arguably, we've had to be, as our income was pretty low until our late thirties, and neither of us is building a fixed pension.  Plus, we've had maybe 40-60% of our money in stock funds since we started saving in the late nineties, and what with two market crashes I reckon our return has been less than 5% per year.

Since the late '90s I've had the kind of solo retirement accounts allowed to the self-employed. Early on, I was allowed to save 20% of my income, and I was comfortable with that, and my wife has done the same through her employer.  Since the individual 401k was created in 2004 or 2005, however, I've been allowed to tack on an ever-increasing contribution on top of the 20% -- this year, an extra $22.5k, since I'm over 50.  That is a tall order.  I am always acutely conscious that a large chunk of every allowable dollar that I fail to contribute goes to taxes -- avoidably. So I come as close to maxing out as I can.  I've always assumed that this a good thing -- that this incentive is working as it should.

You want real deficit reduction? Try this...

Like most progressives, I've been pleased to witness Obama thus far refusing to negotiate with himself in the fiscal cliff battle. With his tax proposals and modest proposed spending cuts on the table -- a package derived from his 2013 budget -- it would seem to make sense to let Republicans detail the deeper entitlement cuts they say they want. As Paul Krugman highlights today, the Republican leadership seems unwilling to go on record proposing deep, substantive cuts to Medicare, Medicaid, and Social Security. So the progressive consensus is clear: let them put up or shut up.

Nonetheless, there remain calls among some Obama supporters -- e.g., natch, Andrew Sullivan -- for Obama to "seize the center" and propose more thoroughgoing plans to restrain long-term spending.  And there may in fact be political opportunity for him in doing so -- on his own terms.

In Spielberg's Lincoln, don't underestimate Thaddeus Stevens

There is a legitimate criticism to be made that Steven Spielberg's Lincoln underplays the role of African Americans in their own liberation. The charge holds, notwithstanding that the opening battle sequence prominently spotlights black soldiers in a battle tableau of intense horror, immediately followed by a powerful scene in which a young black soldier, present at that battle, challenges Lincoln with the nation's failure to live up to the lofty sentiments expressed in the Gettysburg address. Kate Masur makes a convincing case  that  "it’s disappointing that in a movie devoted to explaining the abolition of slavery in the United States, African-American characters do almost nothing but passively wait for white men to liberate them." Masur's complaint that the film renders passive two African American White House servants who were in fact effective activists seems to me inarguable.

Less legitimate, it seems to me, are complaints that the film glorifies political compromise (as opposed to inviting us to assent to ethically compromised political machinations, which it does do) - or that in valorizing Lincoln's pragmatic maneuvering, it correspondingly devalues the unalloyed abolitionism and racial egalitarianism of the radical Republicans, led by Thaddeus Stevens. So argues Ta-Nehisi Coates: