Ezra Klein

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Healthcare confusion

Let’s start with Jen Sorensen

Jen Sorenson

A lot of people are confused about what the Affordable Care Act does and don’t seem to realize that their insurance will actually come from a combination of Medicaid (or Medicare (for those who qualify) and a private insurer or just from a private insurer.  This is  the kind of insurance many got (I understand there are fewer offered these days) when they retired and got Medicare Advantage from a private insurer through their former employer as I do.  My retiree’s Medicare Advantage is partly subsidized by the City of Boston but I pay a monthly premium just as I pay a monthly premium for Medicare.  The ACA changes none of this for me.  And it changes nothing about employees who get qualified plans through their employers.  But to hear some of the Republicans carry on you would think that some staffer from the Department of Health and Human Services – or maybe Kathleen Sebelius herself will be performing medical exams.

As Gail Collins explained in her New York Times column today

The Democrats are depressed. The Republicans enjoy pointing out that the Obamacare rollout has been a mess. But they obviously can’t pretend to be upset that people are finding it hard to sign up for a program their party wanted to kill, eviscerate and stomp into tiny pieces, which would then be fed to a tank of ravenous eels.

Well, actually, they can.

“I haven’t heard one of you apologize to the American public,” Representative David McKinley of West Virginia sternly told government contractors who had worked on the HealthCare.gov Web site. McKinley’s party recently shut down everything from the national parks to preschool programs, while costing the economy an estimated $24 billion. Nobody apologized. Perhaps they’ll write a note this weekend.

“I’m damned angry that I and 700,000 Texans I represent have been misled, misled and misled,” said Representative Pete Olson. The only thing that could conceivably make Olson angrier would be if the Obamacare site was working so well that Texans could get health insurance as easily as they can order a chrome scarf holder from Amazon.com.

I thought these guys would be happy that people couldn’t get insurance and that the whole enterprise was a flop.  But maybe it is just the technical failures with the website that they don’t like.  I’m very confused.  As Andy Borowitz posted ” I guess once the Obamacare website is fixed the Republicans will be totally on board.”

But I don’t think the news will be good in the long run for the Republicans who want to repeal the ACA even if access to the sign-up website gets fixed.  This post from Sarah Kliff on Ezra Klein’s Wonkblog is likely just the start.

More than 330,000 people have managed to get deep enough into new government health insurance Web sites to learn how much financial assistance they will receive purchasing coverage, the Internal Revenue Service said Saturday.

That figure is arguably the most robust measure released to date by the Obama administration of how many Americans are successfully applying for financial help in purchasing a private insurance plan.

Calculations of financial assistance is a step that follows filing an application and tells applicants how much of a tax credit–if any–they can use to purchase a private health plan. This figure does not include shoppers who were found to likely qualify for Medicaid earlier in the shopping process.

…

The IRS said it has also received and responded to more than 1.3 million requests from the marketplace for personal data used to apply for Affordable Care Act programs, such as household income and family size.

The IRS said it is currently receiving about 80,000 such data requests each day. It is one of about a half-dozen agencies that send information to a federal data hub, along with the Department of Homeland Security and the Social Security Administration.

“Our IT systems are working well and providing both the historical tax data and the computation service accurately and quickly through the government’s data hub,” IRS spokesman Terry Lemons said. “The requests are being processed within seconds.”

This federal data hub determines eligibility for premium tax credits for the 36 states using the federal insurance marketplace and also for some, but not all, of the state-based exchanges. California, for example, opted to use its own technology to determine who qualifies for which programs.

The federal data hub was built by the contracting firm QSSI. The Obama administration announced Friday that QSSI would take on a new role as HealthCare.gov’s general contractor, overseeing efforts to fix the Web sites’ problems.

HealthCare.gov pings this federal data hub to verify a consumer’s identity and also when shoppers indicate in their applications that they would like to apply for financial assistance with coverage. Health and Human Services has said that, as of Thursday, 700,000 applications have been filed through the federal and state insurance exchanges.

People were slow to sign up when Massachusetts rolled out Romeycare and now there is close to universal coverage.  ACA sign-up, despite the problems is going even faster.

mass_enrollment_blue

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The real danger: The FISA Court

Congress and the President can say all they want to that everything about the surveillance is approved by the FISA Court.  OK.  But what do we know about this secret court?  Some revelations this past weekend by the Wall Street Journal and the New York Times tell us a great deal that I, for one, didn’t know.  For example, did you know that Chief Justice John Roberts was in charge?

The Ezra Klein/Evan Soltas Wonkblog had a great summary this morning.

The laws we live by aren’t just the bills Congress passes and the president signs. It’s what the courts decide those bills actually mean.

We’re used to that. The Affordable Care Act, for instance, says that states that don’t accept the Medicaid expansion lose all their Medicaid money. The Supreme Court decided that went too far. The law might still say that if you read the underlying bill, but it no longer means that. Now states can reject the Medicaid expansion without jeopardizing the rest of their Medicaid money — and many are.

But here’s the thing: When judges make the laws, Congress can always go back and remake the laws. The changes the court makes are public, and so is their reasoning. Both the voters and Congress know what the court has done, and can choose to revisit it.

Well, usually.

The Foreign Intelligence Surveillance Court (FISA court) that governs the national surveillance state is also remaking the law. But it’s remaking the law in secret. The public has no opportunity to weigh in, and Congress can’t really make changes, because few know what the court is deciding, and almost no one can discuss the decisions without endangering themselves.

So that’s a real Catch 22.

Surveillance types make a distinction between secrecy of laws, secrecy of procedures and secrecy of operations. The expectation is that the laws that empower or limit the government’s surveillance powers are always public. The programs built atop those laws are often secret. And the individual operations are almost always secret. As long as the public knows about and agreed to the law, the thinking goes, it’s okay for the government to build a secret surveillance architecture atop it.

But the FISA court is, in effect, breaking the first link in that chain. The public no longer knows about the law itself, and most of Congress may not know, either. The courts have remade the law, but they’ve done so secretly, without public comment or review.

…

These rules have been remade in a court where the government is the only witness, and there’s no possibility for appeal, and all 11 judges were chosen by Chief Justice John Roberts, and 10 of the 11 judges were Republican appointees to the federal bench. This is not a court like any other court in the United States save for the secrecy. It’s a court pretty much unlike any other in the United States.

When asked who watches over the National Security Agency’s surveillance efforts, the administration says that the FISA courts do. Trite as it may be, that leads to the age-old question: Well, then who watches over the watchers?

The answer would be to rewrite the law but how does one do that with a dysfunctional Congress and a law with impacts that no one can discuss without violating it?  As I said, a Catch-22.  But there is a proposal by Senator Jeff Merkley of Oregon and a bi-partisan group of other senators to end some of the secrecy.

We should be discussing ways to rein in the FISA Court and modify the Patriot Act.  Forget Edward Snowden.  He can stay at the Moscow airport or get smuggled to South American.  Fixing the law is what is important.

Let me end with Tom Tomorrow.

This Modern World

This Modern World

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Republican gerrymandering

With the Supreme Court saying that Section 4 of the voting rights act needs a do over thus making Section 5 void, many of us are not happy.  The odds of Congress coming up with a new formula are pretty slim.  But, all may not be lost.

We know that the Republican controlled state houses used the 2010 Census to draw districts that allowed them to hold on to the House last year.  This despite Section 4 in at least some of those states.  This morning, Politico.com published a story by Alex Isenstadt in which he points out that this gerrymandering may have unintended consequences for them.

No one disputes Republicans used the once-a-decade redistricting process to  lock in their House majority — almost certainly through 2014 and possibly until  the next round of line-drawing in 2020.

But the party could pay a steep price for that dominance.

Some top GOP strategists and candidates warn that the ruby red districts the  party drew itself into are pushing House Republicans further to the right —  narrowing the party’s appeal at a time when some GOP leaders say its future  rests on the opposite happening. If you’re looking for a root cause of the  recurring drama within the House Republican Conference — from the surprise  meltdown on the farm bill to the looming showdown over immigration reform — the  increasingly conservative makeup of those districts is a good place to start.

Opposition to immigration reform by the Tea Party.

Opposition to immigration reform by the Tea Party.

These gerrymandered districts are also less diverse.

Gerrymandering and partisanship, of course, aren’t new phenomena in the  House. But the post-2010 redistricting process driven by GOP-controlled state  legislatures — Republicans wielded line-drawing power in nearly five times as  many districts as Democrats — produced significantly more districts that are  overwhelmingly conservative.

Of the 234 House Republicans, just four now represent districts that favor  Democrats, according to data compiled by The Cook Political Report. That’s down  from the 22 Republicans who resided in Democratic-friendly seats following the  2010 midterms, prior to the line-drawing.

They’re also serving districts that are increasingly white. After  redistricting and the 2012 election, according to The Cook Political Report, the  average Republican congressional district went from 73 percent white to 75  percent white. And even as Hispanics have emerged as America’s fastest-growing  demographic group, only about one-tenth of Republicans represent districts where  the Latino population is 25 percent or higher.

My Ezra Klein Wonkbook email this morning pointed out

The conventional wisdom around Washington these days is that the Republican Party needs to pass immigration reform if it’s going to survive. But remember: House Republicans aren’t the same thing as “the Republican Party.” And they probably don’t need to pass immigration reform to keep their majority. In fact, passing  immigration reform — at least with a path to citizenship — might put them in more danger. Two figures from Janet Hook in the Wall Street Journal show why.

First, “only 38 of the House’s 234 Republicans, or 16%, represent districts in which Latinos account for 20% or more of the population.”

Second, “only 28 Republican-held districts are considered even remotely at risk of being contested by a Democratic challenger, according to the nonpartisan Cook  Political Report.”

So for about 200 of the House’s Republicans, a primary challenge by conservatives angry over “amnesty” is probably a more realistic threat than defeat at the hands of angry Hispanic voters, or even angry Democrats. “Our guys actually do primary over immigration,” a top House Republican aide who wants to get immigration done told me.

Of course, that leaves some 34 Republicans who have reason to fear a Democratic challenge. And  it leaves dozens who privately support immigration reform and don’t have much to fear from either Democratic or Republican challengers.

So the Republican House members mostly represent people like themselves and need to become more conservative, not less, to keep their seats.  We aren’t talking just about immigration reform here, but a whole range of issues.  It also explains why the House’s favorite vote is to repeal the Affordable Care Act.

What does all this mean for Democratic chances to take back the House in the next election?  Isenstadt writes

New York Rep. Steve Israel, chairman of the Democratic Congressional Campaign  Committee, argued that Republicans in moderate suburban and exurban areas will  find themselves under increasing pressure in the months leading up to the  midterms.

“The problem for many Republicans in these specific districts is that if  they’re less partisan, they face a primary from the right. If they protect  themselves from a primary by being more partisan, they’re in trouble in the  general election,” Israel said. “They’re getting squeezed. We’re going to make  sure that hole is very small.”

The question is:  Are there enough of those districts for the Democrats to take the House?

It would appear that much of what is holding up legislation in the House are internal Republican fights.

When House Republicans have rallied behind legislation, it’s often been for  something deeply conservative. Two weeks ago, Republicans passed a measure that  would ban abortions after the 20th week of pregnancy. Just six GOP members  opposed the bill, including two because it didn’t go far enough.

To the conservatives, softening the GOP’s positions isn’t what’s going to  save the party in the long run.

“Political success doesn’t come from moderation,” said Arizona Rep. David  Schweikert, a Republican who opposed the farm bill and supported the  anti-abortion measure. “It’s from having principles and articulating them in a  forthright fashion.”

Schweikert, who represents a conservative Scottsdale-area district that Mitt  Romney carried with nearly 60 percent of the vote, called the Senate immigration  bill a “nonstarter.” His district is 12 percent Hispanic.

The bottom line is that so-called national Republican leaders who currently do not hold elective office along with some governors and Senators who have to run statewide campaigns can call for the party to moderate positions all they want.  The House has hitched its horse to some very conservative ideals so Republican members can get re-elected.  In the long run, this is probably good for the Democrats.

Photograph:  AP

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What’s on your money?

Back in January I wrote about the new Treasury Secretary nominee’s signature.  Today, the Treasury unveiled Jack Lew’s new Hancock.

Here it is thanks to the Wonkblog on the Washington Post.

Lew sig on bill

Remember his original signature looked like this.

lew-sig old

He did promise President Obama that at least one letter would be legible and the “J” for Jacob is readable so he kept his promise.  I can’t wait until the money starts being issued.

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Don’t think Ted Cruz understands government

Senator Cruz has not exactly endeared himself to his fellow Senators in the short time he has been there.  Even those in his own party.  He has been entertaining in a scary kind of way.  It’s hard to believe that he was only elected last year.  I’ve thought for awhile that he didn’t understand governing – and that that is what Senators do after all – and now maybe I understand why:  He doesn’t understand the basics of government.  Here is Ezra Klein.

Texas Republican Sen. Ted Cruz knows how to deal with the Internal Revenue Service: Get rid of it!

We ought to abolish the IRS and instead move to a simple flat tax, where the average American can fill out our taxes on a postcard. Put down how much you earn. Put down a deduction for charitable contributions and home mortgage. And put down how much you owe.

OK.  But to whom should you mail the card?  And who will check the math?

That does sound simple! But what if some citizen somewhere declines to fill out the postcard? Well, I guess we need some bureaucrat that will send them a follow-up postcard making sure they got the first postcard. If they don’t fill out that postcard, we need someone who will give them a call to make sure they’re getting these postcards.

The bottom line is follow-up and enforcement.  That is one of the things that government agencies do.  Remember your civics, Senator?  The legislature (that’s the House and Senate) passes laws, the President signs them and then someone has to make sure it happens.  This is not a function of a legislative committee.  Their role is to go back and make sure that everything functions as the law intended.  If it doesn’t, you don’t then abolish the agency but you make sure it gets fixed.  But some seem to operated on the principle that is the bath water is dirty, but throw it AND the baby out together.

And Cruz’s flat tax is actually a bit more complicated than most. It includes deductions for mortgages and charitable contributions. What if everyone says they gave a million dollars to charity and own a huge home? Who’s going to check all that out? Well, some well-meaning flat-tax collection agents, I guess.

The people doing all this need to sit somewhere. The place they sit doesn’t need to be called “The Internal Revenue Service.” It can be called “The Agency of Tax Freedom.” But it is, in effect, the Internal Revenue Service.

Ted Cruz

Maybe we have finally found the bottom line for Senator Cruz and his friends.  They want the benefits that can accrue from government, but they don’t actually understand or like it.

His plan?  That a subject to a whole ‘nother post.

Photograph from Salon.com

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Taxes, taxes, taxes

Who was it that said, “Nothing is certain but death and taxes”?  They should have added tax loopholes and exemptions to that list.

Here in Massachusetts we have a Senate candidate who took at $281,000 tax credit for agreeing not to made changes to the facade of his home located in a historic district.  I don’t know how this works in other states but here local city and town councils can pass by-laws regulating historic districts.  Cohasset, the town where Gabriel Gomez lives, has a by-law on the books that says owners of homes in the historic district may not change the facades of their homes.  So Mr. Gomez basically took a tax credit for something he was prohibited from doing anyway.  Adrian Walker wrote this in the Globe this morning.

Challenged to explain, a testy Gomez set a new standard for chutzpah. He claimed that his tax break is really the fault of his opponent, Ed Markey — because in 1981, Markey voted for the law that established tax breaks for historical preservation.

OK.  So maybe taking the tax break was not illegal, but there is something about it that makes me – and it appears – other voters wonder if this is the guy we want representing us.  Plus there is the fact that most of us don’t make $281K over many years much less get to take that much off our taxes.

Walker continues

Andy Hiller of WHDH-TV cornered Gomez and asked a few questions about it, or tried to. What he got back from Gomez was this: “I don’t apologize for any success I’ve had. Absolutely not. I’m proud of everything I’ve done. I’ve worked for everything I’ve done. I’ve earned everything I’ve done.”

Gomez is an accomplished military veteran who has earned many things in his life, but he certainly didn’t earn this. Even the Internal Revenue Service has decried the historical-preservation deduction he took as a farce.

The questions about Gomez’s taxes probably haven’t ended, either.

On a financial disclosure form filed in March, Gomez said that under his separation agreement from the private equity firm Advent International, he received something called “carried interests.”

Carried interests are fees paid to equity firms and hedge funds to manage portfolios. They are taxed as capital gains, at a rate of 20 percent, rather than the top income rate of 39.5 percent.

Carried interests are fees paid to equity firms and hedge funds to manage portfolios. They are taxed as capital gains, at a rate of 20 percent, rather than the top income rate of 39.5 percent.

The carried interest rate — which costs taxpayers an estimated $1.3 billion a year — has long been the subject of dispute, with some critics arguing that this is one of the first tax loopholes lawmakers should close.

How much of Gomez’s income falls under the “carried interest” loophole is unclear from the disclosure form.

Gabriel Gomez is running as a reformer, as an outsider but as Walker points out, he already knows all the tricks.  Maybe we need someone like him to help reform the tax code – not!

Internal Revenue Service Building

Internal Revenue Service Building

Taxes are also at the heart of what the Republicans hope will be the scandal that brings down the Obama Administration if Benghazi doesn’t work out for them.  According to the New York Times this is what we know.

The Internal Revenue Service’s special scrutiny of small-government groups applying for tax-exempt status went beyond keyword hunts for organizations with “Tea Party” or “Patriot” in their names, to a more overtly ideological search for applicants seeking to “make America a better place to live” or “criticize how the country is being run,” according to part of a draft audit by the inspector general that has been given to Capitol Hill.

The head of the division on tax-exempt organizations, Lois Lerner, was briefed on the effort in June 2011, seemingly contradicting her assertion on Friday that she learned of the effort from news reports. But the audit shows that she seemed to work hard to rein in the focus on conservatives and change it to a look at any political advocacy group of any stripe.

…

Since last year’s elections, Republicans in Congress have struggled for traction on their legislative efforts, torn between conservatives who drove the agenda after their 2010 landslide and new voices counseling a shift in course to reflect President Obama’s re-election and the loss of Republican seats in the House and the Senate.

But the accusations of I.R.S. abuse are sure to fuel an effort that appears to be uniting dispirited Republicans and their conservative political base: investigating Mr. Obama and his administration. Republicans are pushing a portrayal of an administration overreaching its authority and punishing its enemies.

“The bottom line is they used keywords to go after conservatives,” Representative Darrell Issa of California, the chairman of the House Oversight and Government Reform Committee, said Sunday on the NBC News program “Meet the Press.” He requested the inspector general’s audit along with another Republican, Representative Jim Jordan of Ohio. As an audit, it will not find blame or refer anyone for criminal prosecution.

This all goes back to the Citizens United decision by the Supreme Count and the flood of organization, most it seems on the right to register as 501(c)4 social welfare groups.  This leaves me puzzled.  How can a group which supports political lobbying be tax exempt?  I give money to Planned Parenthood to support clinics.  I also give money for the political operations.  The first is tax exempt, the second is not.  So maybe the problem is, once again, with the tax code.  Ezra Klein explains.

Let’s try to keep two things in mind simultaneously: The IRS does need some kind of test that helps them weed out political organizations attempting to register as tax-exempt 501(c)4 social welfare groups. But that test has to be studiously, unquestionably neutral.

The story thus far seems both chilling and cheering. Employees at the agency’s Cincinnati branch did employ a test that, in effect, targeted tea party groups. Whether they meant it to be discriminatory or they simply created one that was discriminatory is in contention, but ultimately immaterial. The IRS, more so than almost any other agency, must act in ways above  reproach.

But when the Cincinnati group explained their test to IRS exempt organizations division chief Lois G. Lerner, she objected to it and it was changed. A few months later, the IRS would release new guidance that suggested scrutinizing “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement,” and after that, “organizations with indicators of significant amounts of political  campaign intervention (raising questions as to exempt purpose and/or excess private benefit.)”

The context for all this is that after Citizens United and some related decisions, the number of groups registering as 501(c)4s doubled. Because the timing of that doubling coincided with a rise in political activism on the right rather than the left, a lot of the politicized groups attempting to register as 501(c)4s were describing their purpose in tea party terms. A popular conceit, for  instance, was that they existed to educate on the Constitution — even if the particular pedagogical method meant participating in Republican Party primaries and pressuring incumbent politicians.

In looking for that kind of language in 2010, the Cincinnati employees were attempting to create a usable shortcut. Like Willie Sutton robbing banks, they were going where the action was. But they needed a clearer test that also identified the language of the left, even if left-leaning  groups weren’t exhibiting the same surge in activism. And, frankly, it shouldn’t have been left to career employees in Cincinnati. The IRS needed clearer rules coming from the top. But the top didn’t know what to do with these 501(c)4s, in part because it feared a situation precisely like this one.

It is worth remembering an important fact here: The IRS is supposed to reject groups that are primarily political from registering as 501(c)4s. If they’re going to do  that, then they need some kind of test that helps them flag problematic applicants. And that test will have to be a bit impressionistic. It will mean taking the political rhetoric of the moment and watching for it in applications. It will require digging into the finances and activities of groups on the left and the right that seem to be political even as they’re promising their activities are primarily non-political.

If we’re not comfortable with that, then we need to either  loosen the definition of 501(c)4s or create a new designation that gives explicitly political groups the benefits of the 501(c)4s (namely, they don’t have to pay taxes and they can keep their donors anonymous). But either way, as I wrote on Friday, the only way to make sure this doesn’t keep happening is for the IRS — or the Congress and White House that control it — to make some tough decisions about 501(c)4s.

To make things look even more suspicious, Ms. Lerner appears to have been confused about the order in which events unfolded.  But, is there a scandal here?   It does not appear that any group, on the right or left has been denied 501(c)4 status.  I believe that to get 501(c)3 status which most community development groups and organizations like the Girl Scouts and the Boys and Girls clubs have one must provide a lot of information including board membership and by-laws.  The problem here is that many these new groups appear to be political organizations regardless of whether or not they claim to be educational.  I question whether any of these groups, right or left, should be tax exempt.

“Tax-exempt social-welfare groups organized under section 501(c)(4) of the Internal Revenue Code are allowed to engage in some political activity, but the primary focus of their efforts must remain promoting social welfare. That social-welfare activity can include lobbying and advocating for issues and legislation, but not outright political-campaign activity. But some of the rules leave room for IRS officials to make judgment calls and probe individual groups for further information. Organizing as such a group is desirable, not just because such entities typically don’t have to pay taxes, but also because they generally don’t have to identify their donors.” John D. McKinnon and Siobhan Hughes in The Wall Street Journal.

The odds are against Mr. Gomez being elected to the Senate and they are likely to be against the Republicans making a credible argument about the IRS, but taxes and tax exemptions are clearly land mines for anyone in politics today.  But if the Republicans are right, that is a place where the Obama Administration and I will part company.  As my Congressman Mike Capuano said today, “There’s no way in the world, I’m going to defend that. [if the accounts are true] Hell, I spent my youth vilifying the Nixon administration for doing the same thing.”

Photograph:  Reuters

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Jack Lew, Secretary of the Treasury UPDATED

If Jack Lew is confirmed, we have a great thing to look forward to according to Ezra Klein.

The Treasurer signs our money.  This is Lew’s signature.

lew sig

I can’t wait to get my first bills signed by him.

But as Klein cautions

Obviously, that would turn American currency into the best money
ever. Unfortunately  there’s always the chance that Lew could ruin everything by
making his signature less, well, loopy. That’s what the fun destroyer Timothy
Geithner didwhen he became treasury secretary.

We can only hope that Mr. Lew is true to himself and we have great money for the next four years.  Don’t change your signature, Mr. Lew!

 

UPDATED:

President Obama had this today about his signature

“I had never noticed Jack’s signature” until media coverage of the looping letters on Wednesday, Obama said at the East Room ceremony where he announced his nomination of Lew. “I considered rescinding my offer to appoint him.”

Obama said he’s asked Lew to “make at least one letter legible in order to not debase our currency should he be confirmed as secretary of the Treasury.”

 

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Going over the cliff?!

The Senate is back in town with very unhappy members who would rather be kicking back at home and who can blame them.  Senator McConnell who really, really doesn’ t want to make a fool of  himself a la Boehner and Plan B, keeps asking for a proposal from the President.  I thought the President had made at least two proposals, but I guess Mitch doesn’t follow the new much.  Meanwhile the House is called back into session on Sunday night.  That is the night of December 30 a little more than 24 hours before the cliff.  So what is going on here?  Not being an economist, I can’t explain it all but I have found a couple of things this morning that have given me some things to think about as we play chicken with the deadline.

First is this handy chart from the New York Times from the Debt Reckoning blog.

It was posted last night with this explanation.

The deadline for resolving the pending fiscal crisis is less than a week away and, absent a breakthrough, spending cuts and tax increases on every income level will go into effect on Jan. 2. During their negotiations, President Obama and Speaker John A. Boehner have sought to keep tax rates at their current level for some taxpayers while letting them rise for high earners, but they have not agreed on where to set the income threshold. Mr. Obama has called for rates to go up on income above $250,000 (he later increased his offer to $400,000), Congressional Democrats have said they would agree to $500,000, and Mr. Boehner has called for a $1 million threshold.

So we aren’t talking about a lot of taxpayers here since the vast majority of us make under $250,000 in taxable income.  As I understand it, none of these proposals would impact investment income.  (Which as we have learned from Mitt Romney, is taxed differently.)  But we do pay a lot more taxes than just income tax and if we go over the cliff, these will go up.  Payroll taxes, business taxes, various tax credits like for child care, and unemployment insurance will all be affected.

The other thing I read this morning is from the Washington Post’s Wonkblog, They have put together a set of very helpful Frequently Asked Questions – with answers.

For example

What is the fiscal cliff in one sentence?

Much too much austerity, much too quickly.

And since this is Ezra Klein and company, there are a couple of helpful graphs.

On or around Jan. 1, about $500 billion in tax increases and $200 billion in spending cuts (see table 1) [ above] are scheduled to take effect. That’s equal to about four percent of GDP, which is according to the Congressional Budget Office, more than enough to throw us into a recession

Next question:  What matters most?

It’s important to recognize that the austerity crisis is a collision between deficit reduction and stimulus. The good news is that if you look at the various components of the fiscal cliff separately, you’ll see that the parts that do the most for deficit reduction do the least for the recovery, and vice versa. This suggests the possibility of “a la carte” approach to the fiscal cliff, in which we extend the most stimulative policies and wave goodbye to the most costly policies. And if you’re looking to go a la carte then here, via the Economic Policy Institute, is the menu.

I recommend that Senator McConnell take a look at this list and the chart showing the impact of various tax increase proposals, pull out his own calculator and make a proposal.  Of course given the House and Senate rules, we will probably go over the cliff before anything can be passed.

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Crazy state gun laws

Dylan Matthews posted this today on Ezra Klein’s Wonkblog.  He lists the 6 craziest.  I will talk about the craziest of the craziest, but the entire list is worth reading.

Concealed carry at 16 — with no permit: Most states that allow people to carry a concealed weapon on their person require gun owners to obtain a permit before doing so. But four states — Alaska, Arizona, Wyoming and Vermont — allow concealed carry without any permit. That means, the Brady Campaign’s Brian Malte tells me, that Jared Loughner was in full compliance with Arizona law up until the moment he used his concealed weapons to kill six people and severely injure Rep. Gabrielle Giffords.

Vermont, however, stands out from the pack because it allows people as young as 16 to conceal carry without parental permission, as well as buy handguns. So a Vermont teenager aged 16 can’t legally go to an R-rated movie alone or join the military, but he can buy a handgun and carry it in his jeans and be completely within the limits of the law.

I have family who have lived in Vermont for years.  My husband lived there for a while.  Who knew?

Property rights end where gun rights begin: According to the Law Centerto Prevent Gun Violence, 17 states, including Oklahomaand Florida, bar employers from preventing their employees from bringing
guns to work and keeping them locked in their vehicles, even if those vehiclesare on the property of the employer. Indiana and North Dakota allowemployees to sue their employers for damages if asked about gun possession. TheNorth Dakota statue specifically bars employers from asking if employees’
vehicles parked on company property have weapons in them. Georgia bars employersfrom making employment conditional on not bringing guns to work.

So when you have to discipline an employee they can go out to their car at lunch or break and come back and shoot you.  This is very rational – not!

Open carry without a permit: Most legal disputes around carrying gunsin public involved concealed carry. But open carry, which is arguably morethreatening to surrounding community members, is largely unregulated.
Thirty-five states allow open carry of handguns without a permit, while only three (plus the District of
Columbia) ban it outright. Forty-seven states plus the District allow open carryof long guns (that is, rifles or shotguns) in public, while only three ban it.

I guess it is better to know the guy next to you at the local bar is carrying so you can avoid arguments about the Red Sox and Yankees.

Members of the Virginia Citizens Defense League gather in July 2010 to celebrate
a new law permitting open carry of guns in bars. (Dayna Smith/For The Washington
Post)

Guns at schools: In 2010, Kansas passed a law allowing the concealed carry of guns in K-12 schools, in violation of the federal Gun-Free School Zones Act, which criminalizing the carrying of firearms in specified school zones. That act was ruled unconstitutional in U.S. v. Lopez as exceeding the federal government’s powers under the Commerce Clause, and a revised statute was passed that limits the ban to guns “involved in interstate commerce,” so it is possible that the Kansas statute does not run afoul of federal law in all cases.

This past week, Michigan followed suit, with state legislators passing a law allowing concealed carry in schools, bars, daycare centers and churches. Gov. Rick Snyder (R) has not signed the bill into law, and its ultimate passage is now in doubt due to the Newtown incident.

We all know that if the principal at Sandy Hook Elementary School had had a gun, she could have shot Adam Lanza.  Of course, no one has talked about where a teacher would keep the weapon so that the kids wouldn’t get access because they are curious.  We all know that kids are curious.

In addition to these gems, there are many states with Stand Your Ground laws and we know from the incidents in Florida how well that works out for the shooters.

If we can just figure out a way to get states to repeal some of these, I think we would be safer than we are today.

Brady Campaign

Brady Campaign (Photo credit: Wikipedia)

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About the Republican request for a balanced approach

Ezra Klein posted this today

This is a very sharp point by Josh Barro:

The Republicans’ main problem in this negotiation is that they know President Barack Obama will not agree to cut in the area they want to cut: aid to the poor. The signal Obama has sent is that he is willing to make a deal that cuts old-age entitlements, meaning Medicare and Social Security, and Republicans are internally conflicted over those programs.

He’s right. Think back to Mitt Romney’s proposed budget. Medicare and Social Security were held harmless for at least 10 years. Defense spending got a lift. PBS and the National Endowment for the Arts were on the table, but they cost so little it hardly mattered.

And there is the Ryan budget problem which remains the basic Republican budget outline.  It is what they ran on.

These are, however, classes of cuts the White House won’t even consider. A year ago, they were open to modest cuts in Medicaid, but after the Supreme Court’s health-care decision, even that door has shut. As for discretionary spending cuts, so many of those were made in 2011, there’s just not much left to do.

That leaves Medicare and Social Security. It’s possible that the negotiators will enact a backdoor, but significant, cut to Social Security by changing the government’s measure of inflation. But they’re not going to come at Social Security from the front. It’s too politically potent. Even Ryan’s budget left Social Security alone.

As for Medicare, as Barro says, if “Republicans ask for near-term Medicare cuts, that will mean reversing a position that is popular with a core constituency (old white people) and giving up a cudgel that they feel they have used effectively to beat up the president since 2009.” It’s a pickle.

In addition, as Steve Benen on the Rachel Maddow blog reminds us, the President has already offered spending cuts, of about 1.7 trillion over 10 years.

The White House keeps saying it wants a ‘balanced approach’ but this offer is completely unbalanced and unrealistic,” a Capitol Hill Republican said yesterday. “It calls for $1.6 trillion in tax hikes — all of that upfront — in exchange for only $400 billion in spending cuts that come later.”

Let’s put aside, for now, the irony of hearing Republicans talking about “balanced” debt-reduction plans. Instead, the importance of complaints like these is that they overlook everything that happened a year ago. Jonathan Cohn had a good piece on this.

…As part of the 2011 Budget Control Act, Obama agreed to spending  reductions of about $1.5 trillion over the next ten years. If you count  the interest, the savings is actually $1.7 trillion. Boehner should have  no problem remembering the details of that deal: As Greg Sargent points out, Boehner at the time actually gloated about the fact that the deal was “all spending cuts.”

And now, with this latest offer, Obama is proposing yet more spending  reductions, to the tune of several hundred billion dollars. Add it up  and it’s more than $2 trillion in spending cuts Obama has either signed  into law or is endorsing now. That’s obviously greater than the $1.6 trillion in new tax revenue he’s seeking. (And that doesn’t even take into account automatic cuts  from the 2011 budget sequester, which Obama has proposed to defer, or  savings from ending the wars in Afghanistan and Iraq.)

I can understand the temptation to block 2011 from memory, but what transpired is clearly relevant to the current debate. Obama wanted a “balanced” approach last year — some cuts, some new revenue — but didn’t get it. Instead, faced with the prospect of Republicans crashing the economy on purpose, the president accepted a deal with a whole lot of spending cuts.

How much new tax revenue came as the result of last year’s deal? Zero. The entire package came in the form of spending reductions and savings.

So with the new tax revenues and the already proposed budget cuts, President Obama is offering exactly what the Republicans keep asking for:  a balanced approach.  I’m not sure what they are waiting for.  Senator Harry Reid is mystified and so am I.

We need a comprehensive solution that lasts for a couple of years at a minimum because this non-economist doesn’t think the economy will improve as long as we seem to be in a continuous a budget or debt ceiling crisis.

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