Health departments raise, or try to raise, tax rates to offset state cuts, higher benefit costs and Medicaid payment problems

Some county health departments are trying, and others may try, to increase property-tax rates to make up for Medicaid shortfalls, program cuts and the rising costs of employee benefits so they can continue providing essential public health services for their communities.

Anderson County Health Department Director Tim Wright has proposed a 33 percent rate increase from 3 cents per $100 of assessed property value to 4 cents per $100. The increase would add an estimated $150,000, which Wright says he would use to end employee furloughs and make up for $200,000 that has not been paid by the Kentucky Spirit managed-care company, reports Editor Ben Carlson of The Anderson News.

Many departments have already cut positions and implemented furloughs to compensate for Medicaid shortfalls, state program cuts and employee benefit costs, said Scott Lockard, past president of the Kentucky Public Health Association and director of the Clark County Health Department. Most departments have done everything possible to increase efficiency of the departments' resources, he said.

A recent tax increase in Boyle County will make property owners pay a little more to help fund the county health department. The fiscal court recently voted to raise the county's health tax from 2.4 cents per $100 to 2.5 cents.

As funding streams have changed, departments need additional revenue sources, said Brent Blevins, director of the Boyle County Health Department. Blevins said without the rate increase, the already short-staffed department would have to cut services.

Declining property values during the recession have decreased tax revenue, said Marcia Hodge, director of the Garrard County Health Department. It proposed a tax rate increase from 4 cents to 4.25 cents in September that was estimated to bring in about $21,000, but the fiscal court did not approve it, she said.

Another problem that health departments face, Hodge said, is that they are required to participate in the state's insurance and retirement system. Over the 12 years she has been at the department, retirement contributions have increased from 4 percent to 25 percent, while costs of fringe benefits have more than doubled while salaries have only increased 10 percent, she said.

The Floyd County Health Department increased its tax rate last September for the first time in 20 years, primarily because of increased costs of employee benefits and department funding cuts, said Thursa Sloan, director of the department.

Sloan said she anticipates a big change in the services that health departments provide over the next 10 years.  Primary care will take a much more preventive approach, she said, and health departments will have to pull back in such services and go back to the basics.

Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes

A national advisory panel says “drastic changes” in how Medicare reimburses doctors and other providers are needed to shore up Medicare's finances, improve patient outcomes and rein in health care costs, and there is no need to seek more taxpayer money.

Medicare needs $138 billion over the next decade to avoid steep cuts in physician pay, and avoiding those cuts has become an annual scramble in Congress known as "the doc fix."  A panel dominated by internal-medicine specialists, The National Commission on Physician Payment Reform, has concluded that reduction of wasteful medical services can help solve the problem and "our nation cannot control runaway medical spending without fundamentally changing how physicians are paid," it says in its report.

Source: Henry J. Kaiser Family Foundation and Congressional
Budget Office, Budget and Economic Outlook, January 2011

The U.S. spends nearly $3 trillion a year on health care, and that level of spending is unsustainable. The report says that as a proportion of the federal budget, the cost of Medicare has risen from 3.5 percent in 1975 to 15.1 percent in 2010 in 2010). In 2020, it is projected to consume 17 percent, or 4 percent of the U.S. gross domestic product.

Recognizing the way that physicians are paid contributes substantially to the high cost of health care, The Society of General Internal Medicine convened the commission in March 2012 to make recommendations for payment reform. According to the report, some of the factors that drive up health care expenditures are:

• Fee-for-service reimbursement
• Consolidation in the health-care industry
• Reliance on technology and expensive care
• Reliance on a high proportion of specialists
• Paying more for the same service or procedure when done in a hospital setting as opposed to an outpatient setting
• A disproportionate percentage of health care spending directed to a small number of people who are very sick and costly to treat
• High administrative costs
• Fear of malpractice lawsuits
• Fraud and abuse

The commission says increased taxes are not needed to fix the Medicare problem, and the Medicaid shortfall could be entirely found by reducing overuse of services within Medicare. See the chart to the right for a breakdown of those excess medical costs.

The commission developed 12 recommendations to reduce health costs, calling for drastic changes to the current fee-for-service payment system and a five-year transition to a physician payment system that rewards quality and value-based care and not the volume of care.

The 12 recommendations were based on the principles that payment reform should improve care quality and efficiency, encourage care for the medically disadvantaged, reduce marginal and ineffective services, increase transparency to the public and should reward patient-centered comprehensive care. (Click here to see those recommendations)

The world is getting fatter, but Kentucky's rate of obesity is two and a half times the world rate

Take no solace from The Economist, which proclaims in its yearly analysis-and-prognostication issue that this is the year world leaders will take on worldwide obesity because, writes Charlotte Howard, "they will realize something must be done."

So, no, it is not just you, Kentucky. In fact, Howard, the health-care correspondent for the magazine, writes that 30 percent of Mexico's adult population is obese. That is precisely the same percentage of Kentuckians that were considered obese by a Robert Wood Johnson Foundation and Trust for America's Health analysis released in August. (We ranked sixth fattest state nationwide.) It is also the same percentage of Chinese adults that are, as Howard put it, "too wide" -- a term that Howard uses here to include the overweight as well as the obese.

But there is no room to crow here. Kentucky is far ahead of the trend. Only 12 percent of the world counts as obese today. We beat that two and half times over. (The number of Kentuckians who were merely overweight was not calculated or included in the figures in the study.) A study released in September by the same group found that if trends continue, 60 percent of Kentuckians will be obese by 2030. The World Health Organization's estimate of the world's obesity was at 15 percent by 2020.

The Economist folks favors an approach that a democratic path to better health and fiscal sanity, given the health care cost ramifications of obesity. They like a tax on soda -- it's pure sugar, no real nutrition. They like subsidies to make fresh produce cheaper. And they like better school lunches and labeling, labeling, labeling so consumers will make better choices.

Biggest problem with health-care reform law is advocates' poor sales job to the American public, Rep. John Yarmuth tells C-J

By Tara Kaprowy
Kentucky Health News

The biggest problem with the federal health-care reform law is not the law itself, but the fact that "We've never done as good a job as we could have" in explaining what it is about, Democratic U.S. Rep. John Yarmuth of Louisville told the editorial board of The Courier-Journal Friday.

In his lengthy interview, Yarmuth said the problem started at the law's inception when President Obama outlined his parameters but  let Congress decide what the bill should be. "The challenge was explaining what the bill even was because we didn't know what it was going to be," he said.

The issue was compounded by the fact that, unlike energy legislation where its "impact is relatively uniform," with health care "everyone wants to know how it will affect you and your family ... and it's all different," Yarmuth said. "It's hard to market something individually to 300 million people."

Also contributing to the problem is the complexity of the subject itself, which Yarmuth likened to "the biggest Rubik's cube that ever existed," since "Every time you move one piece, 100 pieces move."

That has resulted in deeply-seated misconceptions about the law that are difficult to undo. The biggest, he said, is "that it is some form of government takeover." Those with that view note that the law's individual mandate in the law will force people to buy insurance or pay a fine, and the law will impose new rules on health-insurance companies and put many other controls on the system.

But Yarmuth argues the law uses "free enterprise and competition" to "provide more affordable care for individuals." Indeed, state insurance exchanges will feature different benefits packages from private companies from which people who qualify for the exchange can choose. People who qualify for the exchange — those who earn up to 400 percent of the federal poverty level — will be given subsidies in the form of tax breaks to help pay for their premiums. "The reason why the Republicans don't have an alternative is Obamacare was their alternative," Yarmuth said. "This was their plan: creating competition among insurers and letting them compete for individual business."

Another misconception is that people who don't have health insurance are "deadbeats," Yarmuth said. But he said 37 percent of Americans who are uninsured make over $50,000 a year and almost 20 percent make over $75,000 a year (those percentages are confirmed here). "No, these are solid citizens," he said. He pointed out that all families pay the cost of those who are uninsured, adding that an estimated $1,000 of every health insurance policy goes toward paying for uncompensated care.

Yarmuth said in Kentucky nearly $600 million is spent on uncompensated care each year. (A Kentucky Hospital Association report estimated it is far higher: $1.67 billion in 2010.) Regardless of the figure, Yarmuth said losses could be offset by expanding Medicaid, a claim supported by a report by the Urban Institute. Expansion would cover almost 300,000 Kentuckians and would cost the state $515 million through 2019, he said. "It will bring in $12 billion of federal money," he said. "Is that a good trade-off?"

Asked how provisions in the law would be paid for, Yarmuth acknowledged "If you're adding 30 million more people, it's going to add cost to the system." Ultimately, costs will continue to go up but "less than they otherwise would," he said. He referred to pre-law estimates by the Congressional Budget Office that the cost of employer-based insurance would double to $25,000 a year for a family of four, but the law seems to have slowed that trend. Yarmuth referred to an article published in the journal Health Affairs that indicated that between 2010 and 2011, overall national health-care expenditures increased by 3.9 percent. "That's the lowest rate of growth in the last 50 years," he said. "It is having an effect." The CBO estimated the law will reduce the deficit over the next 10 years by $130 billion, with an estimated $1.2 trillion saved in the second 10, Yarmuth noted. "We all knew we were on an unsustainable path."

But most still don't know that, and on Saturday, a day after the Yarmuth interview, the C-J editorial board criticized Democrats for not doing a better job getting their message out about the new law: "The problem is partially that the law is complex and 2,000 pages long. It's partially that the Republicans have successfully put the Democrats on the defensive, forcing them to defend the law to people who have already had the GOP message driving into their heads. But it's also that the Democrats don't trust that the American people will be willing or able to understand them when they defend the health-care law."

Does Obamacare tax the middle class?

U.S. Sen. Mitch McConnell speaks at
a Rotary Club meeting in Louisville.
(C-J photo by Michael Clevenger)

With Senate Republican Leader Mitch McConnell calling the federal health-care reform law a tax on the middle class, Courier-Journal Washington correspondent James R. Carroll collects the findings of independent fact-checking services to assess whether McConnell is accurate.

The Congressional Budget Office estimates that 4 million people would pay the tax or penalty for not being covered by insurance in 2016, which translates to about 1.2 percent of the population. But Glenn Kessler of The Fact Checker at The Washington Post, relying on CBO estimates, reported "that 16 million people will receive subsidies or tax credits to help pay for health coverage — about 5 percent of the population."

"It's worth noting that the health law involves more taxes than just a penalty on the uninsured," Kessler notes, including an excise tax on plans with very high premiums; fees for manufacturers and insurers; higher Medicare payroll taxes for people who make more than $200,000 a year; a tax on manufacturers of medical devices; and a tax on indoor tanning services. All told, "it's a stretch to say that any of these taxes will affect the middle class."

McConnell's assertion that President Obama is raising taxes with the individual mandate is also a double-edged sword: a similar penalty was passed with the health-care overhaul in Massachusetts while Republican presidential nominee Mitt Romney was governor. On that point, McConnell said "Romney will have to speak for himself." Last week, Romney said requiring all Americans to buy health insurance is equivalent to a tax, but that ran counter to how he viewed it earlier in the week.

McConnell told the Louisville Rotary Club last week that repealing the law would be his top priority if Republicans win the presidency in November, reports Chris Kenning for The Courier-Journal. (Read more)

Quotes Of The Day

“Taxes are the price we pay for a civilized society.” --  Justice Oliver Wendall Holmes

“We may have a democracy or we may have great wealth concentrated in the hands of a few, but we cannot have both.” -- Justice Louis Brandeis

"In fact, the 'Buffett Tax' hike touted by President Obama has been called everything from a 'sham' to a 'hoax' to 'total gimmickry.'"  -- House Speaker John Boehner

A Fair Economy Is Not Incompatible With Growth But Essential To It

By Robert Reich, cross-posted from his website

One of the most pernicious falsehoods you’ll hear during the next seven months of political campaigning is there’s a necessary tradeoff between fairness and economic growth. By this view, if we raise taxes on the wealthy the economy can’t grow as fast.

Wrong. Taxes were far higher on top incomes in the three decades after World War II than they’ve been since. And the distribution of income was far more equal. Yet the American economy grew faster in those years than it’s grown since tax rates on the top were slashed in 1981.

This wasn’t a post-war aberration. Bill Clinton raised taxes on the wealthy in the 1990s, and the economy produced faster job growth and higher wages than it did after George W. Bush slashed taxes on the rich in his first term.

If you need more evidence, consider modern Germany, where taxes on the wealthy are much higher than they are here and the distribution of income is far more equal. But Germany’s average annual growth has been faster than that in the United States.

You see, higher taxes on the wealthy can finance more investments in infrastructure, education, and health care – which are vital to a productive workforce and to the economic prospects of the middle class. 

Higher taxes on the wealthy also allow for lower taxes on the middle – potentially restoring enough middle-class purchasing power to keep the economy growing. As we’ve seen in recent years, when disposable income is concentrated at the top, the middle class doesn’t have enough money to boost the economy.

Finally, concentrated wealth can lead to speculative bubbles as the rich in the same limited class of assets – whether gold, dotcoms, or real estate. And when these bubbles pop the entire economy suffers.

What we should have learned over the last half century is that growth doesn’t trickle down from the top. It percolates upward from working people who are adequately educated, healthy, sufficiently rewarded, and who feel they have a fair chance to make it in America.

Fairness isn’t incompatible with growth. It’s necessary for it. 

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Quote Of The Day

“I wish they weren’t called the Bush tax cuts. If they’re called some other body’s tax cuts, they’re probably less likely to be raised.” 

George W. Bush,  Bush Institute Conference on Taxes and Economic Growth

"So there you have it," as Hunter at Daily Kos puts it:  "Bush finally expresses some remorse for something, but it turns out it's not over his stupid tax cuts wrecking the budget, ballooning the deficit, and generally prepping America for it's uncomfortable handbasket ride to the netherworld. No, it's because the Bush family name sucks so bad (for some unknown reason that he cannot possibly fathom) that things associated with it are less popular than they really ought to be."

The Buffett Rule Sets The Bar Too Low

By Robert Reich, cross-posted from his website

Next Monday most Americans will be filing their income taxes for tax year 2011. This year, though, tax day has special significance. If there’s one clear policy contrast between Democrats and Republicans in the 2012 election, it’s whether America’s richest citizens should be paying more.

Senate Democrats have scheduled a vote Monday on a minimum 30 percent overall federal tax rate for everyone earning more than $1 million a year. It’s nicknamed the “Buffett Rule” in honor of billionaire Warren Buffett who has publicly complained that he pays a lower tax rate than his secretary.

No one in Washington believes the Buffett Rule has any hope of passage this year. It’s largely symbolic. The vote will mark a sharp contrast with Republican Paul Ryan’s plan (enthusiastically endorsed by Mitt Romney) to cut the tax rate on the super rich from 35 percent to 25 percent – rewarding millionaires with a tax cut of at least $150,000 a year. The vote will also serve to highlight that Romney himself paid less than 14 percent on a 2010 income of $21.7 million because so much of his income was in capital gains, taxed at 15 percent. 

Hopefully in the weeks and months ahead the White House and the Democrats will emphasize three key realities:

1. The richest 1 percent of Americans are now taking in over 20 percent of total national income, and so far have raked in almost all the gains from this recovery. Thirty years ago, the richest 1 percent got 9 percent of total income. Income and wealth are now more concentrated at the top than they’ve been since the 1920s. 

2. The richest 1 percent are paying a lower tax rate than they’ve paid since 1980. For three decades after World War II, their tax rate never dropped below 70 percent. Even considering all deductions and tax credits, they paid close to 55 percent. Under Eisenhower, the top rate was 91 percent and the effective rate was 58 percent.

3. Right now the nation faces two yawning deficits – an investment deficit and a federal budget deficit. The investment deficit includes deferred maintenance on America’s infrastructure – roads, bridges, public transit, water and sewer systems that are all crumbling – and an educational system that’s being starved for resources (the federal government pays for 8 percent of K-12 education and about 5 percent of public higher education, but could do much more). The federal budget deficit is projected to mushroom to $6.4 trillion over the next ten years, mostly because of aging boomers and soaring healthcare costs.

Any serious person looking at these three realities would conclude that the rich should be paying far more. It’s not just a matter of fairness; it’s also a matter of patriotism. 

In fact, given these realities, the Buffett Rule sets the bar too low. For most Americans, wages and benefits are declining (adjusted for inflation), net worth has been plummeting (their only asset is their homes), and the public services they rely on have been disappearing. For the top, it’s just the opposite: Their incomes are rising, their stock-market portfolios have been growing, and a growing portion of their earnings has been subject to a capital-gains tax of just 15 percent. 

The Buffett Rule would generate only about $47 billion in extra revenues over the next decade, according to congressional estimates. Why not restore top rates to what they were before 1980, and match the capital-gains rate to the income-tax rate?

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Payola For The Most Profitable Corporations In History

And Why Taxpayer Shouldn't Stand For It Anymore

By Bill McKibben, cross-posted from Tom Dispatch

Along with “fivedollaragallongas,” the energy watchword for the next few months is: “subsidies.”  Last week, for instance, New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act.”  It was, in truth, nothing to write home about -- a curiously skimpy bill that only targeted oil companies, and just the five richest of them at that. Left out were coal and natural gas, and you won’t be surprised to learn that even then it didn’t pass.

Still, President Obama is now calling for an end to oil subsidies at every stop on his early presidential-campaign-plus-fundraising blitz -- even at those stops where he’s also promising to “drill everywhere.” And later this month Vermont Senator Bernie Sanders will introduce a much more comprehensive bill that tackles all fossil fuels and their purveyors (and has no chance whatsoever of passing this Congress).

Whether or not the bill passes, those subsidies are worth focusing on.  After all, we’re talking at least $10 billion in freebies and, depending on what you count, possibly as much as $40 billion annually in freebie cash for an energy industry already making historic profits.  If attacking them is a convenient way for the White House to deflect public anger over rising gas prices, it is also a perfect fit for the new worldview the Occupy movement has been teaching Americans. (Not to mention, if you think about it, the Tea Party focus on deficits.) So count on one thing: we’ll be hearing a lot more about them this year.

But there’s a problem: the very word “subsidies” makes American eyes glaze over. It sounds so boring, like something that has everything to do with finance and taxes and accounting, and nothing to do with you. Which is just the reaction that the energy giants are relying on: that it’s a subject profitable enough for them and dull enough for us that no one will really bother to challenge their perks, many of which date back decades.

By some estimates, getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. Many of those subsidies, however, take the form of cheap, subsidized gas in petro-states, often with impoverished populations -- as in Nigeria, where popular protests forced the government to back down on a decision to cut such subsidies earlier this year. In the U.S., though, they’re simply straightforward presents to rich companies, gifts from the 99% to the 1%.

If due attention is to be paid, we have to figure out a language in which to talk about them that will make it clear just how loony our policy is.

Start this way: you subsidize something you want to encourage, something that might not happen if you didn’t support it financially. Think of something we heavily subsidize -- education. We build schools, and give government loans and grants to college kids; for those of us who are parents, tuition will often be the last big subsidy we give the children we’ve raised. The theory is: young people don’t know enough yet. We need to give them a hand when it comes to further learning, so they’ll be a help to society in the future. From that analogy, here are five rules of the road that should be applied to the fossil-fuel industry.


1. Don’t subsidize those who already have plenty of cash on hand. No one would propose a government program of low-interest loans to send the richest kids in the country to college. (It’s true that schools may let them in more easily on the theory that their dads will build gymnasiums, but that’s a different story.) We assume that the wealthy will pay full freight.  Similarly, we should assume that the fossil-fuel business, the most profitable industry on Earth, should pay its way, too. What possible reason is there for giving Exxon the odd billion in extra breaks? Year after year the company sets record for money-making -- last year it managed to rake in a mere $41 billion in profit, just failing to break its own 2008 all-time mark of $45 billion.

2. Don’t subsidize people forever. If students need government loans to help them get bachelor’s degrees, that’s sound policy. But if they want loans to get their 11th BA, they should pay themselves. We learned how to burn coal 300 years ago.  A subsidized fossil-fuel industry is the equivalent of a 19-year-old repeating third grade yet again.

3. Sometimes you’ll subsidize something for a sensible reason and it won’t work out. The government gave some of our money to a solar power company called Solyndra.  Though it was small potatoes compared to what we hand over to the fossil-fuel industry, it still stung when they lost it. But since we’re in the process of figuring out how to perfect solar power and drive down its cost, it makes sense to subsidize it.  Think of it as the equivalent of giving a high-school senior a scholarship to go to college. Most of the time that works out. But since I live in a college town, I can tell you that 20% of kids spend four years drinking: they’re human Solyndras. It’s not exactly a satisfying thing to see happen, but we don’t shut down the college as a result.

4. Don’t subsidize something you want less of. At this point, the greatest human challenge is to get off of fossil fuels. If we don’t do it soon, the climatologists tell us, our prospects as a civilization are grim indeed.  So lending a significant helping hand to companies intent on driving us towards disaster is perverse. It’s like giving a fellowship to a graduate student who wants to pursue a thesis on “Strategies for Stimulating Donut Consumption Among Diabetics.”

5. Don’t give subsidies to people who have given you cash. Most of the men and women who vote in Congress each year to continue subsidies have taken campaign donations from big energy companies. In essence, they’ve been given small gifts by outfits to whom they then return large presents, using our money, not theirs. It’s a good strategy, if you’re an energy company -- or maybe even a congressional representative eager to fund a reelection campaign.  Oil Change International estimates that fossil-fuel companies get $59 back for every dollar they spend on donations and lobbying, a return on investment that makes Bernie Madoff look shabby. It’s no different from sending a college financial aid officer a hundred-dollar bill in the expectation that he’ll give your daughter a scholarship worth tens of thousands of dollars. Bribery is what it is.  And there’s no chance it will yield the best energy policy or the best student body.

These five rules seem simple and straightforward to me, even if they don’t get at the biggest subsidy we give the fossil-fuel business: the right -- alone among industries -- to pour their waste into the atmosphere for free. And then there’s the small matter of the money we sink into the military might we must employ to guard the various places they suck oil from.

Simply getting rid of these direct payoffs would, however, be a start, a blow struck for, if nothing else, the idea that we’re not just being played for suckers and saps. This is the richest industry on Earth, a planet they’re helping wreck, and we’re paying them a bonus to do it.
In most schools outside of K Street, that’s an answer that would get a failing grade and we’d start calling subsidies by another name. Handouts, maybe. Freebies. Baksheesh. Payola. Or to use the president's formulation, "all of the above."

Bill McKibben is Schumann Distinguished Scholar at Middlebury College, founder of the global climate campaign 350.org, a TomDispatch regular, and the author, most recently, of Eaarth: Making a Life on a Tough New Planet.

Road To Dystopia With The GOP

DonkeyHotey

Joan McCarter at Daily Kos wrote two pieces yesterday, one on the actions of the Republicans in the House and one on what they did in the Senate, that come pretty close to telling us all we need to know about what the GOP stands for.

First, the House Republicans passed Paul Ryan's budget resolution, the so-called "Path to Prosperity," which as McCarter explains, would among other things end Medicare as we know it:

The House Republicans made their ultimate dystopian statement today, in passing Rep. Paul Ryan's budget in a 228-191 vote. Ten Republicans voted against it, no Democrats voted for it and 13 members did not vote.

House Speaker John Boehner called this plan "a real vision of what we were to do if we get more control here in this town. It's still a Democrat-run town."

Just a few reminders about the Ryan budget, and what the House Republicans put down as their political marker for 2012, their vision for a Republican-ruled America: It would give the wealthy a humongous tax break, the lowest tax rate since the Hoover administration; it would gut nutritional assistance, cutting it by 17 percent over the next decade; it would cut Medicare benefits and begin the process of killing the program; it would kill millions of jobs; it turns Medicaid into a block grant and deeply cuts federal spending for it, and for SCHIP, the children's health program; and it breaks the already agreed upon Budget Control Act of 2011, threatening, once again, a government shutdown.

This is also the budget endorsed by Mitt Romney. Today the Republicans made their most definitive statement for the America they envision. This is their platform for 2012, from the top down.

Not to outdone, the Senate Republicans filibustered a bill to repeal subsidies and tax breaks to Big Oil that had majority support.

 Another day in the Senate, another filibuster by Republicans on behalf of corporate America. The Senate voted on advancing a bill to repeal subsidies and tax breaks to Big Oil, and while the majority supported the bill, the filibuster held in the final 51-47 vote (Republicans Mark Kirk and Orrin Hatch were not present to vote).

Maine Republicans Olympia Snowe and Susan Collins voted with Democrats, while Democrats Mark Begich (AK), Mary Landrieu (LA), Jim Webb (VA) and Ben Nelson (NE) switched sides. Landrieu and Begich, being from oil producing states, were needlessly voting for self protection, since there wasn't a chance the filibuster could be broken. Webb and Nelson, both retiring, are completely inexcusable.
But this is the status quo that the Republicans voted to protect:

Just this past January the typical household paid about $290.76 for gasoline, up by $25 over the same one-month time span in January 2011. It looks like households will face a similar increase in gasoline expenditures in February with gas prices on the rise even though demand is the lowest it’s been since 1997. This especially affects the 82 million households that spend 6 percent or more of their annual household budgets on gasoline. High oil and gasoline prices in 2011 enabled the big five companies to rake in $137 billion in profits last year. These enormous earnings contributed to the $1 trillion in profits they earned from 2001 through 2011. Despite a profit figure with 12 zeroes—count them: $1,000,000,000,000—these oil giants are major players in the lobbying efforts to retain $4 billion in annual tax breaks for oil and gas companies that they clearly do not need. In the scheme of all things Big Oil, these tax breaks are small, particularly in relation to their profits and in light of the fact that in 2011 these companies also had a combined $58 billion in cash reserves, nearly 30 times more than they received in special tax breaks.

The American taxpayer is subsidizing those billions Big Oil is raking in, while we pay more and more at the pump every week. At least we know now, definitively, which side the Republicans are on.

The Right Continues To Play To Stereotype

The Republicans are on a roll.

They continue to vilify Georgetown law student Sandra Fluke, displaying not just their mean-spiritedness, but their remarkable misunderstanding of how birth control works and how health care operates.

They continue to blame and smear Trayvon Martin, showing their cold-heartedness while avoiding serious debate about gun control, misguided stand-your-ground laws and racism.

They tout the new budget unveiled by Congressman Paul Ryan which will not only increase the deficit, cut taxes for the wealthy, gut the social safety net, and end Medicare as we know it but, as E.J. Dionne notes, would "produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent time."

I hate to perpetuate a stereotype but this sure seems ignorant, misogynistic, racist and greedy to me.

What Republicans Argue When They Have Nothing Left To Say

By Robert Reich, cross-posted from his website

DonkeyHotey

Republicans are desperate. They can’t attack Obama on jobs because the jobs picture is improving.

Their attack on the Administration’s rule requiring insurers to cover contraception has backfired, raising hackles even among many Republican women.

Their attack on Obama for raising gas prices has elicited scorn from economists of all persuasions who know oil prices are set in global markets and that demand in the United States has actually fallen.

Their presidential ambitions are being trampled in a furious fraternal war among Republican candidates.

Their Tea Party wing wants to reopen the budget deal forged with Democrats after Republicans got bloodied by threatening to block an increase in the debt limit.

So what are Republicans to do now? What they always do when they have nothing else to say.
Call for a tax cut, of course.

It doesn’t matter that their new “tax reform” plan (leaked to the Wall Street Journal late Monday, to be released Tuesday morning) has as much chance of being enacted as Herman Cain has of being elected president.

It doesn’t matter than the plan doesn’t detail how they plan to pay for the tax cuts. Or whether an even bigger whack would have to be taken out of Medicare than Paul Ryan’s original voucher plan – which would drowned many elderly under rising medical costs.

It doesn’t even matter that the plan would probably raise taxes on many lower-income Americans,
All that matters is the headlines.

“House Republican Budget to Propose Lower Income Tax Rates,” says Bloomberg Businessweek. “Republican Budget Plan Seeks to Play Up Tax Reform,” says Reuters. “GOP’s Budget Targets Taxes,” blares the Wall Street Journal.

Presto. Republicans have gotten what they wanted on the basis of saying absolutely nothing.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

The Widening Wealth Divide

And Why We Need A Surtax On The Super Wealthy

By Robert Reich, cross-posted from his website

$2500 Louboutin pumps

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth — not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets – including stocks and pension-fund holdings – are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes – whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class – lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap – already wider than the nation’s income gap – has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth – and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit – shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.



Yale Professor Bruce Ackerman and Anne Alstott have proposed a 2 percent surtax on the wealth of the richest one-half of 1 percent of Americans owning more than $7.2 million of assets. They figure it would generate $70 billion a year, or $750 billion over the decade. That’s half the savings Congress’s now defunct Supercommittee was aiming for.

Instead of standing empty-handed while Santorum and Romney dominate the airwaves with their regressive Social Darwinism, Democrats need to be reminding Americans of what’s happening in the real economy – and what needs to happen.

The wealth gap is widening into a chasm. A surtax on the super rich is fair — and it’s necessary.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Apes And Taxes

"It's a mad house.  A mad house"  -- Planet of the Apes

There are times when the Daily Show lays bare the complete and utter absurdity of right wing positions that no amount of reasoned analysis, much less the pathologically balanced approach of the mainstream media, can do.  Case in point is Samantha Bee's interview of anti-tax crusader, Grover Norquist, who has gotten most Republicans to sign the "Taxpayer Protection Pledge," a commitment to oppose all tax increases.

Norquist, who admitted to Bee that he came up with the no tax pledge when he was twelve years old (causing Bee to mutter, "the entire federal government is paralyzed because of a document, written by a twelve year old, in 1968), could not imagine any scenario in which it would be appropriate to raise taxes -- not war, not natural disasters, not beard flu.  He would not even approve of a tax increase to combat the rise of the apes.  I bet even Charlton Heston would have gone for that one.

Populism And Pain In Obama's Budget Proposal

By Karen Dolan, cross-posted from Other Words

Mitt Romney said it this way:

"I'm not concerned about the very poor. We have a safety net there. If it needs a repair, I'll fix it. I'm not concerned about the very rich, they are fine....I'm concerned about the very heart of America."

President Barack Obama said it this way:

"We can restore an economy where everybody gets a fair shot, everybody does their fair share, everybody plays by the same set of rules — from Washington to Wall Street to Main Street. That’s the America we believe in."

Both want to appeal to a hurting middle-class electorate. Only one has a populist message with appeal and effect. He most likely will win re-election in 2012.

Obama's $3.8 trillion 2013 budget proposal, with its 10-year outlook, is by design a populist campaign tool. Though not politically viable now, his newly released budget is critically important in this election year both for the values it reflects, the vision it promotes and the potential it promises.

Obama's budget has a populist tone, appeals to the middle class, and has some good proposals, both on investment and revenue-raising. But it also reflects the strict spending caps mandated this past summer by the Budget Control Act and hits some struggling families hard. It doesn't go nearly far enough in revenue-raising. For instance, it does't propose a tax on financial transactions that would curb Wall Street's worst speculation or propose significant corporate tax reform that would actually raise needed funds. And, by reducing non-security discretionary spending from its current 3.1 percent of GDP to a 50-year low of 1.7 percent over the next decade, a lot of pain will set in when the populism starts to wears off.


Let's start with the good. Among the good proposals on investment side:

• The extension of the payroll tax cut and unemployment benefits through the end of 2012.
• School modernization and plans to retain teachers and first responders.
• Project Rebuild which helps to match unemployed in distressed communities with those communities'  infrastructure needs.
• A small business tax credit that incentivizes new hiring.
• Increased child care funding.
• Improvements in Earned Income Tax Credit and Child Tax Credit.
• Tax incentives for manufacturers that keep and create jobs here in the United States.
• A National Infrastructure Bank that would fund projects that increase sustainable transportation and infrastructure investment.
• A total of $850 million in Race to the Top education proposals intended to improve the quality of education from early childhood through higher education.
• Efforts to make college more affordable through sustaining Pell grant funding, keeping interest on student loans from increasing, and reining in tuition hikes.
• A 7 percent increasing in new biomedical research grants.
• Support for a more sustainable economy through goals of increasing electric car production, doubling the share of "clean energy" electricity sources, and reducing the energy consumed by buildings by 20 percent by 2020.

And, among good proposals on the revenue side:

• Support sustainable energy and environment innovations by eliminating 12 tax breaks to the oil, gas, and coal industries by $41 billion over the next 10 years.
• Spend $487 billion less on the military over the coming decade.
• Make the "Buffet Rule" law, ensuring that millionaires pay a 30  percent tax rate on un-earned income.
• Let the Bush Era tax cuts for families making over $250,000 a year expire.

On to the bad. Here are some aspects of Obama's proposed budget that aren't as good as they might first seem:

• According to the Citizen's For Tax Justice, although the Obama plan proposes revenues from letting Bush era tax cuts expire for couples making over $250,000, it makes permanent 78 percent of the Bush tax cuts at a cost of $3.4 trillion over the next 10 years.
• Obama's proposal to replace the Alternative Minimum Tax with the "Buffet Rule" may not produce any new revenue at all.
• Details remain undisclosed about corporate tax reform proposals, but Obama has suggested they will be revenue-neutral. How is that a good thing?
• Even with this modest reduction in Pentagon spending, Obama's budget proposal still leaves an extreme imbalance between military and non-military spending.

Now, for the Ugly: Last year's Budget Control Act mandated $1 trillion in discretionary cuts. Much of that must come from programs that low-income people rely on for critical human needs. After a hard year of cuts in 2011, this budget proposal calls for a devastating 14 percent cut in social spending. Here are some examples where cuts occur:

• Health care services, career opportunities programs for low-income people.
• Children's mental health services.
• Housing for disabled people.
• Housing for people with HIV/AIDS.
• Rental Assistance benefits for low-income people.
• Home heating assistance for low-income people.
• Community Development Block Grants which help to fund critical human need services.
• Programs in the Environmental Protection Agency.
• Programs in the National Park Service.

This budget proposal will appeal to the middle class and puts Obama in a more popular position than Romney as the 2012 presidential election season heats up. But while this budget has the populist thrust of cutting long-term deficit and debt by attempting to balance spending cuts and revenue increases, it falls short. It bolsters some needed programs, but unnecessarily defunds others. By not calling for all of the Bush era tax cuts to expire, not calling on Wall Street to pay its fair share through enacting a small levy on speculative financial transactions, not cutting military base and war spending deeply enough and not calling for the kind of corporate tax reform that will produce revenue, Obama is letting the 1 percent off rather easy, while the rest of us, especially the poor, shoulder  the pain.

Why Is Obama Proposing A Tax Cut For Corporations?

One step forward, two steps back.  Just when you think Obama just might ride the wave of the 99%, provide a contrast with his Republican opponents, and push for a more populist agenda he undercuts it by once again spouting conservative talking points, this time about how the current tax code is unfair to corporations.  Instead of arguing that corporations need to pay more -- or at least their fair share -- he proposes to cut their taxes while closing loopholes, a plan intended to be "revenue neutral."  There is nothing neutral about it.  --- Lovechilde 

By Robert Reich, cross-posted from his website

The Obama administration is proposing to lower corporate taxes from the current 35 percent to 28 percent for most companies and to 25 percent for manufacturers.

The move is supposed to be “revenue neutral” – meaning the Administration is also proposing to close assorted corporate tax loopholes to offset the lost revenues. One such loophole allows corporations to park their earnings overseas where taxes are lower.

Why isn’t the White House just proposing to close the loopholes without reducing overall corporate tax rates? That would generate more tax revenue that could be used for, say, public schools.

It’s not as if corporations are hurting. Quite the contrary. American companies are booking higher profits than ever. They’re sitting on $2 trillion of cash they don’t know what to do with.

And it’s not as if corporate taxes are high. In fact, corporate tax receipts as a share of profits is now at its lowest level in at least 40 years. According to the Congressional Budget Office, corporate federal taxes paid last year dropped to 12.1 percent of profits earned from activities within the United States. That’s a gigantic drop from the 25.6 percent, on average, that corporations paid from 1987 to 2008.

And it’s not that corporations are paying an inordinate share of federal tax revenues. Here again, the reality is just the opposite. Corporate taxes have plummeted as a share of total federal revenues. In 1953, under President Dwight Eisenhower, a Republican, corporate taxes accounted for 32 percent of total federal tax revenues. Now they’re only 10 percent.

But now the federal budget deficit is ballooning, and in less than a year major cuts are scheduled to slice everything from prenatal care to Medicare. So this would seem to be the ideal time to raise corporate taxes – or at the very least close corporate tax loopholes without lowering corporate rates.
The average American is not exactly enamored with American corporations. Polls show most of the public doesn’t trust them. (A recent national poll by the University of Massachusetts at Lowell found 71 percent with an unfavorable impression of big business – about the same as those expressing an unfavorable view of Washington.)
 
The Administration’s initiative doesn’t even make sense as a bargaining maneuver.


Republicans will just accept the Administration’s lower corporate tax rate without closing any tax loopholes. House Republicans have already made it clear that, to them, closing a tax loophole is tantamount to raising taxes. And corporate lobbyists in Washington know better than anyone how to hold tight to loopholes they’ve already got.

Big business will fight to keep their foreign tax shelters. After all, it’s almost impossible to distinguish between their foreign and domestic earnings, which is why the U.S. Chamber of Commerce and other business lobbies have spent the past three years trying to make it even easier for companies to defer U.S. taxes on income they supposedly earn outside the country.

Representative David Camp, a Michigan Republican who heads the House Ways and Means Committee, has already proposed a 25 percent corporate top rate and changes that would let companies avoid paying U.S. taxes on even more of the income they say they earn outside America.
Nothing is going to be enacted this year, anyway, so it would have made more sense for the Administration to support a hike in corporate taxes – and use it to highlight the difference between the President and his likely Republican challenger.

Mitt Romney wants to reduce the corporate tax rate to 25 percent before eliminating any tax loopholes. Rick Santorum wants to cut the rate to 17.5 percent and eliminate corporate taxes for manufacturers. Newt Gingrich wants to cut the rate to 12.5 percent and let companies write off all capital investments immediately.

It’s discouraging. The President gives a rousing speech, as he did on December 6 in Kansas. Then he misses an opportunity to put his campaign where his mouth is.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

What The 2013 Budget Says About The Fight For Our Future

By Isaiah J. Poole, cross-posted from Campaign for America's Future

DonkeyHotey

One does not have to accept all of the specific choices in the administration's budget to appreciate the fact that the administration is trying to lay the groundwork for a broad and sustainable economic recovery, while the administration's opponents continue to be hell-bent on austerity policies that would stall that recovery.

President Obama explained his vision today in an address today at the Northern Virginia Community College. As reported by Politico:

“At a time when our economy is growing and creating jobs at a faster clip, we’ve got to do everything in our power to keep this recovery on track,” Obama said at Northern Virginia Community College. “We can settle for a country where a few people do really, really well, and everybody else struggles to get by, or we can restore an economy where everybody gets a fair shot, everybody does their fair share, everybody plays by the same set of rules, from Washington to Wall Street to Main Street.”

Meanwhile, The Washington Post reported today that Republican leaders on Capitol Hill, in addition to their usual complaints that Obama's policies would leave "America drowning in debt," reprised a version of their Medicare privatization plan. Yes, that same voucher plan that was roundly rejected by a majority of Americans when Rep. Paul Ryan, the chairman of the House Budget Committee, persuaded House Republicans to back it last year. That plan exemplifies the Republican economic agenda: A few people would do really, really well as congressional conservatives fight to maintain inequitable, record-low tax rates for the wealthiest Americans; everybody else would struggle to get by in a world where what were once shared commitments, such as Medicare to maintain the health of seniors, are turned into yet another opportunity for private gain and another source of economic insecurity for the vast majority of Americans.

This contrast will be exemplified vividly this week when the House of Representatives begins debate on funding for the nation's transportation network. The White House budget includes a $476 billion, six-year funding commitment for highways and public transportation, and administration officials were working with the Senate toward turning that commitment into legislation.

This is a huge spending commitment to make, but President Obama recognizes correctly that some investments can't be compromised, even at a time of large budget deficits. Even so, this is a fraction of what groups such as the American Society of Civil Engineers say America needs for a globally competitive economy. Nonetheless, this transportation spending will generate hundreds of thousands of jobs in the near term in areas ranging from construction to engineering to beautification, and in the long term this spending will establish a platform for a more efficient and greener economy.



Conservatives are girding to attack this. They argue that the funding source that has traditionally paid for road and transit improvements, the gasoline tax, won't yield enough money to pay for the president's spending plan. (At the same time, they object to increasing the gas tax so that it could.) House Speaker John Boehner has indicated that he wants to curtail federal support for public transportation, a direct slap at tens of millions of workers (and job-seekers) who depend on buses and trains to get to work. Other cuts would slap the face of commuters who use bike paths or parents whose children are protected by the federal Safe Routes to School program. And, to pay for what spending they are willing to sign off on, key conservatives in Congress are attaching to the bill oil drilling in environmentally sensitive areas, such as the Arctic National Wildlife Reserve, and forcing approval of the game-over-for-the-planet Keystone XL pipeline, risking environmental havoc at a time when we should be moving away from a fossil-fuel economy.

The contrast plays out throughout the budget. While the White House is embracing such policies as the "Buffett Rule," which would tax unearned income at the same level as wages and pushing for more fairness in the tax code, congressional conservatives accuse the administration of "class warfare"—even as they continue their own "class warfare" against government programs that provide millions of economically struggling Americans with a level of economic security and a means to climb the economic ladder.

The particulars of the Obama 2013 budget may not survive the Washington political grinder, but here's what should: the debate between a government that works for the benefit of ordinary people, operating on the principles that we should all work together to rise together and that those who benefit the most have the most obligation to support the opportunity of others, and a government that works the hardest for those with the most, and, to paraphrase the words of presidential candidate Mitt Romney, "doesn't worry" about those with the least.

In the coming days progressives in Congress will offer their own budget framework, which will draw the contrast in even more stark terms, and demonstrate that we as a nation do not have to accept the conservative austerity economics that are playing out to such disastrous effect in countries such as Greece. Whether it's the Obama administration budget or a progressive alternative, it is important to show that one set of budget decisions will point millions of Americans closer to their American dream of broadly shared prosperity, while conservative critics will drive us toward a dystopian economic future.

Why Mitt Romney Doesn't Know About The Downward Mobility Of The American Middle Class

Tom Tomorrow

By Robert Reich, cross-posted from his website

January’s increase in hiring is good news, but it masks a bigger and more disturbing story – the continuing downward mobility of the American middle class.

Most of the new jobs being created are in the lower-wage sectors of the economy – hospital orderlies and nursing aides, secretaries and temporary workers, retail and restaurant. Meanwhile, millions of Americans remain working only because they’ve agreed to cuts in wages and benefits. Others are settling for jobs that pay less than the jobs they’ve lost. Entry-level manufacturing jobs are paying half what entry-level manufacturing jobs paid six years ago.

Other people are falling out of the middle class because they’ve lost their jobs, and many have also lost their homes. Almost one in three families with a mortgage is now underwater, holding their breath against imminent foreclosure.

The percent of Americans in poverty is its highest in two decades, and more of us are impoverished than at any time in the last fifty years. A recent analysis of federal data by the New York Times showed the number of children receiving subsidized lunches rose to 21 million in the last school year, up from 18 million in 2006-2007. Nearly a dozen states experienced increases of 25 percent or more. Under federal rules, children from families with incomes up to 130 percent of the poverty line, $29,055 for a family of four, are eligible.

Experts say the bad economy is the main factor driving the increase. According to an analysis of census data by the Center for Labor Market Studies at Northeastern University, 37 percent of young families with children were in poverty in 2010. It’s likely that rate has worsened.

Mitt Romney says he’s not concerned about the very poor because they have safety nets to protect them. He says he’s concerned about the middle class. Romney doesn’t seem to realize how much of the middle class is becoming poor.

But Romney doesn’t like safety nets to begin with. He’s been accusing President Obama of inviting a culture of dependency. “Over the past three years Barack Obama has been replacing our merit-based society with an entitlement society,” he says over and over, arguing that our economic problems stem from a sharp rise in dependency. Get rid of these benefits and people will work harder.

He and other Republicans point to government data showing that direct payments to individuals have shot up by almost $600 billion since 2009,  a 32 percent increase. And 49 percent of Americans now live in homes where at least one person is collecting a federal benefit such as food stamps or unemployment insurance, up from 44 percent in 2008.

But Romney and other Republicans have cause and effect backwards. The reason for the rise in benefits is Americans got clobbered in 2008 and many are still sinking. They and their families need whatever help they can get.

The real scandal, as I’ve said before, is America’s safety nets are too small and shot through with holes. Only 40 percent of the unemployed qualify for unemployment benefits, for example, because they weren’t working full time or long enough on a single job before they were let go. The unemployment system doesn’t recognize how many Americans work part time on several jobs, and move from job to job.

And even those who are lucky enough to be collecting employment benefits are about to lose them. A record and growing percent of the unemployed have been jobless for six months or more, and Republicans in Congress are unwilling to extend their benefits.

Romney’s budget proposals would shred safety nets even more. According to an analysis by the Center on Budget and Policy Priorities, his plan would throw 10 million low-income people off the benefit rolls for food stamps or cut benefits by thousands of dollars a year, or some combination. “These cuts would primarily affect very low-income families with children, seniors and people with disabilities,” the Center concludes.

At the same time, Romney’s tax plan would boost the incomes of America’s most wealthy citizens, who are already taking home an almost unprecedented share of that nation’s total income. Romney wants to permanently extend George W. Bush’s tax cuts, reduce corporate income tax rates, and eliminate the estate tax. These tax cuts would increase the incomes of people earning more than a million dollars a year by an average of $295,874 annually, according to the nonpartisan Tax Policy Center.

By reducing government revenues, Romney’s tax cuts would squeeze programs for the poor even further. Extending the Bush tax cuts will add $1.2 trillion to the nation’s budget deficit in just two years. That’s the same as the amount that’s supposed to be saved by automatic spending cuts scheduled to start next year – which, by the way, will hit the poor especially hard.

Oh, I almost forgot. Romney and other Republicans also want to repeal of Obama’s health care law, thereby leaving 30 million Americans without health insurance.

The downward mobility of America’s middle class is the big news, but the GOP apparently hasn’t heard about it. Maybe it’s too hard to hear about from that far away – and Mitt Romney is certainly far away. His unearned income last year was more than $20 million. That’s about as much as the combined earnings of a thousand American families at or just above the poverty line.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Ronald Reagan's True Legacy: Republicans Continue To Create Their Own Reality

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."  -- Ron Suskind, quoting unnamed Bush aide in 2004 NYT Magazine article.

Robbie Conal

On "60 Minutes," after House Majority Leader Eric Cantor signaled a reluctance to compromise with Democrats, interviewer Leslie Stahl noted that Cantor's idol, Ronald Reagan, compromised by raising taxes.  At which point, Cantor’s press secretary, off camera, bizarrely began yelling that Stahl was lying.  As Stahl told “60 Minutes” viewers, “There seemed to be some difficulty accepting the fact that even though Ronald Reagan cut taxes, he also pushed through several tax increases, including one in 1982 during a recession.”

Paul Krugman, Steve Benen, Ezra Klein and others weighed in and demonstrated that President Reagan unequivocally raised taxes during his time in office.  Indeed, ThinkProgress documented that Reagan did not “compromise” just this once, but actually increased taxes “in seven of his eight years in office, including one stretch of four tax increases in just two years.”

Eric Alterman makes the critical point about this incident: "The real story here is the vehemence of the conservative movement’s commitment to ignoring all forms of evidence that it finds inconsistent with its ideological preconceptions, regardless of circumstances or even consequences."

Alterman goes on to say that Reagan's "true legacy" is the tendency among conservatives to "ignore inconvenient facts and unwelcome evidence."

The president tended to “build these little worlds and live in them,” noted a senior advisor. “He makes things up and believes them,” explained one of his kids. President Reagan thought he'd liberated concentration camps. He invented what he called "a verbal message" from the pope in support of his Central America policies, news to everyone in Vatican City. In 1985 President Reagan one day announced that the vicious South African apartheid regime of P.W. Botha had already "eliminated the segregation that we once had in our own country." And note that I have not even mentioned the words “Iran Contra,” a scandal that was filled with more presidential lies than one can comfortably recount here.

Ronald Reagan's "preference for fantasy over fact" proved to be such a successful strategy that, as Alterman says, "it became a template for the modern conservative movement, and hence underlies its leaders' statements on virtually every topic from economics to the environment to the beliefs of this country’s founders."

Alterman aptly concludes that it is a "is a shame for Americans, liberals, and conservatives both" that the right wing insists on maintaining falsehoods in the face of reality, and "it is our media’s shame that such lies are rarely, if ever, identified as such."