If you need a good chuckle today, or just a defense mechanism against the high-pitched chattering whine of conservative spin against health care reform, check out Joe Conason’s reality check about the accuracy in recent years of Dick Morris’ political predictions:

During the 2008 election cycle, Morris offered many forecasts, none of which were right. Early on he picked Hillary Clinton and Rudolph Giuliani as almost certain nominees of their respective parties and trashed John McCain as a sure loser. In January 2007, he told an audience of conservative journalists: “I think what’s going to happen in the world is that Hillary’s going to be the next president.” Not too long after that, he and wife Eileen McGann wrote a column for the New York Post headlined “It’s Now a Rudy Romp.” A year later, he was predicting that Clinton would crash and burn in the New Hampshire primary, right up to the evening before that election. Her tears had proved to voters that she was unfit to serve as president, he explained. When she won the following night, he overreacted again by predicting that she would surely go on to secure the nomination. (Back when Clinton was running for the U.S. Senate from New York in the 2000 cycle, Morris similarly made one delusional prediction after another, claiming that she would never run, withdraw, falter, lose, and so on. She ran and won, of course.)
Among Dick’s wackiest blunders in recent years was his confident assertion — on the eve of the 2006 midterm election — that North Korea would become the overriding issue in that campaign, eclipsing taxes, the war in Iraq, and Republican corruption

Since Morris is now probably the shrillest prophet of perpetual doom for Democrats if health reform passes (after, as Conason points out, predicting in the wake of Scott Brown’s election that Obama would never have another significant legislative victory), it’s worth knowing that the man rarely knows what he’s talking about–or if he does, he’s supressing that knowledge in the interest of spin.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
This past Friday, without much fanfare, CBO submitted its analysis of President Obama’s proposed FY 2011 budget. The bottom line is worse than we thought. Despite sustained economic recovery, the budget deficit under the president’s proposal never falls below 4 percent of GDP over the next decade and rises to 5.6 percent by 2020. The aggregate deficit during that period is $9.761 trillion—close to $1 trillion each year on average. Not surprisingly, debt held by the public rises steadily and reaches 90 percent of GDP by 2020. If the historical study of financial crises conducted by Kenneth Rogoff and Carmen Reinhart is correct, that level of debt is enough to reduce our long-tem growth prospects by about a percentage point each year.
Unfortunately, the much-ballyhooed alternative to Obama’s budget—Representative Paul Ryan’s “Roadmap for America’s Future”—is equally flawed. Despite drastic reductions in both discretionary domestic spending and entitlement programs whose wisdom and political viability is questionable at best, the roadmap contemplates budget deficits of 5 percent as late as 2037 and produces its first balanced budget in 2063. Not surprisingly, it runs the debt up to 100 percent of GDP before the curve turns down. And these mediocre results rest on a leap of faith—namely, that Ryan’s proposed tax reforms would actually produce revenues equal to 19 percent of GDP, in line with CBO’s assessment of current policy. (The CBO analysis notes dryly that while the proposal “would make significant changes to the tax system … as specified by your staff, for this analysis total tax revenues are assumed to equal those under CBO’s alternative fiscal scenario.”)
Ryan’s roadmap does have one incontestable virtue: It demonstrates that even with draconian spending cuts, there’s no way of achieving fiscal sustainability during the next three decades without additional revenues. And the president’s budget has the mirror-image virtue: Even with health reform and tax increases for upper-income Americans, spending shoots ahead much faster than politically feasible and economically prudent revenues possibly could.
In her testimony before the Senate Budget Committee last month, former CBO director Alice Rivlin stated that “the widening gap between projected spending and projected revenues is too large to be closed by either spending cuts or revenue increases alone.” As we can see, that’s not just her opinion; it’s a political fact. How long will it take for our reality-denying political system to catch up to it?

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
“With the passage of time,” former Bush administration official Pete Wehner writes today, “President Bush’s decision to champion a new counterinsurgency strategy, including sending 30,000 additional troops to Iraq when most Americans were bone-weary of the war, will be seen as one of the most impressive and important acts of political courage in our lifetime.” Wehner may turn out to be right. And his argument has broader implications that deserve our attention.
Wehner tacitly defines political courage as the willingness to go against public opinion in pursuit of what a leader believes to be the public interest. Fair enough. And unless one believes—against all evidence—that democracies can do without courage, so defined, it follows that there’s nothing necessarily undemocratic about defying public opinion when the stakes are high. After all, the people will soon have the opportunity to pass judgment on the leader’s decision. And they will be able to judge that decision, not by the claims of its supporters or detractors, but by its results.
Note that to accept this argument, as I do, is to deny that President Obama and the Democrats are acting high-handedly—let alone anti-democratically—in moving forward with comprehensive health insurance reform. They genuinely believe that the public interest demands it­—and that the people themselves will eventually agree. And they know that the people will have the last word.
This approach has the firmest possible roots in our constitutional traditions. The Framers deliberately established a republican form of government that is representative rather than plebiscitary. And Alexander Hamilton explained why in Federalist #71: “[T]he people commonly intend the PUBLIC GOOD. … But their good sense would despise the adulator who should pretend that they always reason right about the means of promoting it.” In a republic, the people are always the ultimate source of legitimacy. They are not always the proximate source of wisdom.
Many conservatives don’t seem to understand this distinction. In response to the health care proposal President Obama released prior to the bipartisan summit, Senate Minority Leader Mitch McConnell said, “It’s disappointing that the Democrats in Washington aren’t listening, or are completely ignoring, what Americans across the country have been saying.” House Minority Leader John Boehner responded in the same vein: “The president has crippled the credibility of this week’s summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected. And today’s lead Wall Street Journal editorial accused the Democrats of scheming to pass health reform “merely because they think it’s good for the rest of us”—as though pursuing the public interest were a suspect motive for legislating.
So today’s conservatives have a choice: They can contest health reform and the rest of the Democratic agenda on its merits, or they can go down the populist road that Sarah Palin and her followers represent. But let’s call that populism by its rightful name—namely, shameless flattery of the people and the manipulation of public fears and prejudices for short-term political advantage. Honorable conservatives such as Wehner know better. We’re about to find out how many of them there are.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
In a superb speech at the Brookings Institution on Monday, House Majority Leader Steny Hoyer called on the United States—elected representatives and average citizens alike—to “rededicate ourselves to the painful, unglamorous, and indispensible work of fiscal discipline.” Drawing on the studies of leading economists and historians, he warned that failing to do so would be committing ourselves to national decline. What is happening in Greece, he declared, can happen here: “If we don’t change course, it will happen here.”
While rejecting the ideologically-driven belief that “our budget deficit snapped into existence at noon on January 20, 2009,” he was ecumenical in his criticism:

When it comes to budgeting, what is politically easy is often fiscally deadly. It is easier to pay for tax cuts with borrowed money than with lower spending; easier to hide the true costs of war than to lay those costs before the people; easier to promise special cost-of-living adjustments than explain why an increase is not justified under the formula in law; easier to promise 95% of Americans that we won’t consider raising their taxes than to ask all Americans to contribute for the common good.

These words will evoke heartburn among the leaders of both political parties, and at both ends of Pennsylvania Avenue. They happen to be true.
As the earliest leader of either party to endorse a bipartisan fiscal commission, Hoyer had no difficulty endorsing the commission President Obama created by executive order after the effort to create one through legislation collapsed (regrettably, in Hoyer’s view). But he went on to do something much more difficult than calling for bipartisanship—namely, putting some concrete options on the table:

On the side of entitlement spending, an agreement might recognize that Americans are living longer lives and raise the retirement age over a period of years, or even peg the retirement age to lifespan. Another option is to make Social Security and Medicare benefits more progressive, while strengthening the safety net for low-income Americans. That could preserve those programs as a central part of our social compact, while protecting their ability to help those of us in the greatest need.
On the side of revenues, President Obama was correct in refusing to take any options off of the commission’s table. No one likes raising revenue, and understandably so. But if you’re going to buy, you need to pay. In 1993, President Clinton proposed an economic plan aimed at accomplishing fiscal balance, and he paved the way for the greatest American prosperity in a generation. The bipartisan tax compromise in 1986 also showed the importance of a simplified, more efficient tax code. If need be, and I hopeful that both parties will agree to look at revenues as part of the solution—not as a gateway to higher spending, but as part of a compromise that cuts spending and balances the budget.

Hoyer praised Republican Paul Ryan’s program as an honest effort to tell the public exactly what he’d cut to restore fiscal discipline without raising taxes. Indeed, Hoyer commented, “As much as his party’s leadership tries to distance itself from his plan, Paul Ryan’s program, or something very much like it, is the logical outcome of the Republican rhetoric of cutting taxes and deficits at the same time.” Indeed it is, unless Republicans are serious about cutting taxes but unserious about cutting deficits—a proposition for which it is easy to mobilize three decades of evidence, unfortunately.
In the end, Hoyer argued, Congress and the American people will prefer a balanced approach to one that either tries to stabilize taxes while gutting Medicare or that tries to preserve the Medicare status quo at the cost of huge tax increases. I think he’s right about that. Still, as he conceded, there’s no guarantee that our badly polarized system can reach a reasonable result. The only certainty is that our failure to do so will be a self-inflicted disaster.
This is, Hoyer concluded, much more than a policy issue. It is a measure, and test, of our character: “If we are unable to raise our heads even for a moment above the daily partisan fight, if the collapse comes—we will deserve it.” Amen.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
On Tuesday, Intel CEO Paul Otellini delivered a speech at Brookings on long-term economic competitiveness. While there were some points with which I disagreed—specifically, his critique of the stimulus plan and his advocacy of wide-ranging corporate tax cuts—I agreed with his core thesis: We’re not investing adequately or strategically in our nation’s future, and we’ll pay a huge price if we don’t change course.
To support his argument, Otellini cited some startling statistics: Although we rank sixth among the top 40 nation’s in innovation-driven competitiveness, we rank dead last—40th out of 40—in the effort we’ve made over the past decade to improve future competitiveness. That sounded too bad to be true, so I hunted down Otellini’s source, “The Atlantic Century,” a 2009 study conducted by the Information Technology and Innovation Foundation.
The ITIF constructs an index based on 16 indicators in six different categories—human capital, innovation capacity, entrepreneurship, information technology infrastructure, economic policy, and economic performance. A few examples will make the point. We rank fourth in science and technology researchers as a share of our workforce, but only 20th in our rate of change over the past decade; fifth in corporate R&D investment, but 17th in the rate of change; fourth in government R&D investment, but 15th in the rate of change; seventh in broadband, but 22nd in rate of change; first in GDP per working-age adult, but 16th in rate of change; and so on.
While statisticians can always quibble with the report’s selection of indicators and the methodology used to weigh and assess them, it’s harder to argue with its overall thrust. Because we’re under-investing in the areas that will determine our future dynamism and standard of living, we’ll continue to lose ground relative to our competitors and may eventually lose ground in absolute terms as well. (In seven of the 16 ITIF indicators, we’ve actually gone backwards since 1999.)
To be sure, 1999 represented a cyclical peak. Still, it’s hard not to conclude that the past ten years were a lost decade. We can’t afford to lose the next one. Our challenge now is to adopt policies that build a stronger future while reining in our unsustainable budget deficits and protecting working families from the harshest consequences of disruptive economic change.
The way forward is neither obvious nor easy. But one thing is clear: Our margin for error is a lot smaller than it was a generation ago. We can no longer afford to waste resources, public or private, on expenditures that do not create economic or social value. The federal budget and tax code are honeycombed with unproductive payoffs to special interests; it’s time to purge them. And the private economy has been dominated by a financial sector that’s more interested in transferring wealth (to itself) than in creating wealth through sensible investments. Perhaps the 2008-2009 financial crash will force bright young people to stop producing complex derivatives and start working on innovations that improve our lives.

This item by TDS Co-Editor William Galston is cross-posted from The New Republic.
Because Congress failed to adopt a bipartisan deficit commission on its own, President Obama created one through executive order on Thursday. This comes as a disappointment to members of both parties who had endorsed the Conrad-Gregg bill: that proposal would have forced the Congress to vote on the commission’s recommendations, while the administration’s initiative does not.
The failure of Conrad-Gregg was surprising as well as troubling. By last December, the bill had garnered almost three dozen cosponsors across party lines and seemed to be gaining momentum. Although Senate minority leader Mitch McConnell had not formally signed on, he had made a number of favorable public statements. (Last May, for example, he proclaimed on the Senate floor that the Conrad-Gregg proposal was “the best way to address the crisis” and that it “would provide an expedited pathway for fixing these profound long-term challenges.”) And just days before the vote, President Obama endorsed the bill.
But it wasn’t enough. On January 26, the bill went down to defeat: 53 senators voted in favor, but it needed 60 to pass. Democrats assembled a solid majority of 37 votes, while Republicans could muster only 16. As has been widely reported, seven of the bill’s Republican cosponsors ended up voting against it; had they remained resolute, it would have passed. Reversing his earlier position, the minority leader also voted against the bill.
So what happened between December and January? Put simply, the forces within the conservative movement who oppose any and all tax increases mobilized against legislation that might have produced the long-sought grand bargain—significant entitlement reform coupled with additional revenues.
On December 9, Grover Norquist of Americans for Tax Reform sent a letter to Conrad and Gregg expressing his opposition to their proposal. “Despite the appearance of protection for taxpayers,” he wrote, “this commission would guarantee a net tax increase. … In order to make this commission acceptable from a taxpayer perspective, language must be included that explicitly removes tax increases and/or new taxes from commission consideration.” The substantial anti-tax coalition Norquist leads then swung into action with a steady drumbeat of op-eds and open letters to elected officials.
Even more significant was a lead editorial in The Wall Street Journal on December 29. After issuing a thinly veiled warning to Republicans who might go along with the plan and denouncing past bipartisan efforts–including the 1983 Greenspan Social Security commission and the 1990 Andrews Air Force Base summit–the Journal launched a preemptive strike against the kind of deal it feared a Conrad-Gregg commission would reach: “Democrats would agree to means-test entitlements, which means that middle and upper-middle class (i.e., GOP) voters would get less than they were promised in return for a lifetime of payroll taxes. … In return, Republicans would agree to an increase in the top income tax rate to as high as 49% and in addition to a new energy tax, a stock transaction tax, or value added tax. The Indians got a better deal for selling Manhattan.”
In short, the Journal opposed not only new taxes, but also progressivity in spending cuts. The only remaining alternatives to national bankruptcy (although the editorial writer wasn’t candid enough to say so) are draconian cuts imposed on those Americans who can least endure them.
In the few weeks following the editorial, the intensifying pressure proved too much for many Republicans. The seven Conrad-Gregg deserters included Robert Bennett, Kay Bailey Hutchison, and John McCain, all of whom are embroiled in tough primary campaigns, along with Sam Brownback, who’s running for governor of Kansas, and John Ensign, who’s already in more than enough trouble.
Also of interest is the roster of 16 Republicans who stood up to the pressure and held their ground. In addition to four senators who are retiring and have little to lose, the honor roll includes a dozen who will have to answer to the forces that Norquist and the Journal represent: Lamar Alexander, Saxby Chambliss, Susan Collins, Bob Corker, John Cornyn, Mike Enzi, Lindsey Graham, Johnny Isakson, Mike Johanns, Dick Lugar, David Vitter, and Roger Wicker. (Olympia Snowe is conspicuous by her absence, yet another in a lengthening list of disappointing performances.) Whatever their substantive views on fiscal policy, these are public servants who at least take the responsibility of governance seriously and understand that no single party—whether today’s Democratic majority or a possible future Republican majority—can discharge this responsibility on its own.
And that’s the issue: Will the Republican party remain beholden to the forces that Grover Norquist and The Wall Street Journal represent? Does the party just want to mobilize popular grievances in the effort to regain power, or is it willing to help govern our country and address its mounting problems? Beyond undermining campaign finance legislation, Mitch McConnell is interested in only one thing—winning elections—an outlook apparently shared by two-thirds of his colleagues. The question is whether the minority of the minority party can ever get together with the majority of the majority to find real solutions—and then level with the people about what these solutions will mean. The alternative to a new governing coalition is the intensification both of our problems and of public contempt for its elected representatives.

The problems faced by Democrats in Senate elections this fall just got bigger, as Sen. Evan Bayh shocked the political world by announcing he isn’t running for re-election. He claims to be sick of partisanship in the Senate, though if Republicans win his seat in November, partisanship will simply get worse.
The challenge this poses for Democrats in Indiana and nationally isn’t simply that a popular incumbent in a marginal and traditionally conservative state who was sitting on $13 million in campaign cash is hanging it up. It’s timing: Bayh chose to take this step just four days before qualifying ends for 2010 candidates. (Two Republicans who are former members of Congress are already in the race). Since he appears to have kept his equivocation on running for re-election entirely to himself, there’s no Democratic successor waiting eagerly in the wings.
Early speculation revolves around U.S. Reps. Brad Ellsworth and Baron Hill as potential Democratic candidates. But with so little time to make up their minds, nobody knows if a top-tier Democratic candidate will become available.
Expect Republican hyping of their chances (objectively still limited) of taking over the Senate this year to get amped up to a feral roar.

This item by TDS Co-Editor William Galston is crossposted from The New Republic.
One of the few benefits of being snowed in is the chance to read long documents more carefully than the normal pace of work allows. The 462-page economic report that the Council of Economic Advisers (CEA) released today is worth the time it takes.
On one level, it paints a clear and cogent picture of the path that economic recovery and growth over the next decade will have to take. The principal drivers of growth in the decade prior to 2007—construction and personal consumption—will both lag between now and 2020. Savings and investment will rise, as will net exports. This is more than national accounting arithmetic: Savings had fallen to unsustainably low levels in response to misleading economic cues (more on this a bit later), and investment sagged below trendline for much of the past decade. For their part, exports tend to decline more rapidly than GDP during recessions and to grow more rapidly during recoveries. So the story makes sense, at least qualitatively.
The CEA report offers an illuminating account of the savings rate. It turns out that three factors—the wealth/income ratio, credit availability, and the unemployment rate—explain most of the variation. Much of the decline in the savings rate since the early 1980s is attributable to the proliferation of credit; the near-collapse of saving during 2005 and 2006 is correlated with what turned out to be illusory increases in household wealth. Looking forward, it seems likely that the wealth/income ratio will stabilize below its peak, that credit will remain tight for quite some time, and that unemployment will decline only slowly.
Indeed, the labor market outlook over the next decade is not especially bright. The CEA is projecting above-trendline growth in GDP over the next eight years. Nonetheless, the unemployment rate will decline only slowly. It is projected to average 10.0 percent this year, 9.2 percent in 2011, 8.2 percent in the year President Obama will run for reelection, and 6.5 percent during the midterm election year of 2014. This is not the formula for a contented electorate.
The underlying math shows why it will take the job market so long to climb out of its hole. Recent estimates revealed that the economy has lost a staggering 8.4 million jobs since the Great Recession started in December 2007. In addition, the economy needs to generate about 100,000 jobs per month just to stay even with the natural growth of the labor force. In short, we are nearly 11 million jobs short of where we need to be. But the CEA estimates job growth for 2010 at 95,000 per month—just about enough to keep the hole from getting even deeper, but not enough to begin digging out. My calculations based on the CEA projections show that we will not recover the missing 8.4 million jobs until the spring of 2013, more than five years after the recession began. And we won’t reach full employment (defined as 5 percent unemployment) until nearly the end of the decade.
Suppose you have only five minutes to spend on this report. What are the five most illuminating pages? Here are my nominees, back to front:

•Figure 8-7, p. 225, which dramatically illustrates how we have lost our leadership in post-secondary education attainment. We still have the greatest research universities in the world, but our workforce is treading water while the rest of the developed world is moving ahead. We won’t be the world’s economic leader in 30 years if we don’t do something to end our stagnation.
•Figure 8-4, p. 219, which charts the unbelievable rise, over the past four decades, in the share of pretax income going to the wealthiest 10 percent of all families. Bottom line: Welcome to the 1920s.
•Figure 7-4, p. 192: From 2000 until 2008, the percentage of non-elderly adults with private insurance coverage fell from 75.5 percent to 69.5 percent. What are the chances that this trend will halt if the Democrats let health reform die.
•Figure 7-2, p. 184: During the past decade, health insurance has consumed all the growth in total compensation … and then some. If we do nothing over the next 30 years, health care will constitute fully half of total compensation, and workers’ income net of health care costs—i.e., the amount remaining for everything else—will barely budge.
•Figure 5-3, p. 141: The previous administration’s refusal to pay for two tax cuts, two wars, and prescription drug coverage has increased the budget deficit by more than 4 percent of GDP. How long will it take the Republicans to acknowledge that they bear some responsibility for the fiscal mess we’re in?

The late lamented Daniel Patrick Moynihan once remarked to the effect that, while every man is entitled to his own opinions, he’s not entitled to his own facts. How quaint that sounds today. But we can’t have a serious discussion of our problems—especially across party lines—if we don’t jointly acknowledge a common base of evidence. I’m not holding my breath.

Like it or not, and I certainly don’t like it, the Supreme Court’s Citizens United decision has revolutionized the landscape of campaign financing. Corporate political spending, at least on efforts that are separate from specific campaign operations, is now going to be legal. You can rage against the decision, and you can conclude, as I have, that some form of public financing of campaigns is the only way out of this mess. But given the current high levels of hostility to government, this isn’t exactly the best time to ask Americans to support use of taxpayer dollars for political campaigns.
That’s why it’s important that Sen. Chuck Schumer and Rep. Chris Van Hollen have come up with a more practical response to the new reality in campaign finance rules: a bill that would limit the damage wrought by Citizens United without uselessly attacking its core holdings.
As Mike Lillis of the Washington Independent explains, this legislation would fence in the consequences of the Supremes’ dirty work by banning campaign spending by foreign interests or domestic federal contractors; enhancing discloure requirements; tightening restrictions on coordination of corporate political efforts and actual campaigns; and requiring affordable access to media for responses to corporate-backed political ads.
Given the configuration of forces in the U.S. Senate, it’s unlikely this legislation can become law. But it does usefully offer Democrats and campaign finance reformers from every background a line of attack that doesn’t simply rely on calls for public financing.

As Washington gets buried by consecutive major snow storms, Republicans are reviving one of their oldest and dumbest tricks: using snow to mock the idea of global warming. Just before the first storm hit, the Virginia Republican Party ran a web ad attacking Democratic Reps. Rick Boucher and Tom Periello for supporting climate change legislation, and then said:

Call Boucher and Perriello and tell them how much global warming you get this weekend. Maybe they’ll come help you shovel.

In the same ludicrous spirit, the daughter, son-and-law and grandchildren of Sen. James Inhofe (R-Oil) built an igloo on the National Mall and called it “Al Gore’s new home.”
Yuck yuck.
The problem is that more severe winter weather tends to confirm rather than contradict climate change theory. Warmer overall temperatures produce moisture, which in winter tends to produce snow. Climate scientists have long predicted more turbulent winter weather as a result of climate change. And by the way, last month was the world’s warmest January on record.
This won’t keep conservatives from taking cheap shots at anyone who wants to deal with climate change, but it’s worth knowing that this particular attack line is particularly cynical and wrong-minded.