The Debt Impasse - A Modest Proposal

I want to apologize, gentle reader, for using the clichéd title originally (and brilliantly) coined by Jonathan Swift for his rational solution to an Irish famine. If only the Republican Party could read it without missing the irony, and lauding it as a damned sensible idea. One which they would no doubt think fine to impose on the millions of Americans unemployed by their laissez-faire approach to Wall Street regulation.

No, I am not making an ironic proposal. I am perfectly serious, and only wish that the current Administration had the political skills to recognize that this concept (1) would, merely by being introduced in Congress, substantially increase the President’s prospects for re-election; (2) would also make it likely that we Democrats would increase our Senate majority and take back the House in 2012, and (3) when and if enacted - even if only by a Democratic Congress in 2013 - go a long way toward ending the carnage inflicted on American families by the Bush II Administration, and by the current President’s asthenia in dealing with Republican opposition.

The current annual deficit is somewhere around $1.6 trillion, which is about 11% of GDP. Unlike Republicans who parrot absolutes, we Democrats know that, in the long run, those numbers need to come down. The question is, how to get there? The GOP’s balanced budget amendment proposals would be so disastrous, that any person seriously proposing it obviously lacks the wrenches in his or her intellectual toolbox to pursue a learned profession.

The win-win solution, for America and for Democrats, is a fairly unsophisticated tweak of the basic individual income tax rates. In Tax Year 2008, the most recent year for which final statistics are currently available, taxpayers in the so-called 35% bracket paid an actual tax rate of only 28.9%. This is because 35% is the “marginal” tax rate - these top taxpayers still pay the same rates as you and I on their income at the same level. In other words, Mr. Billionaire pays the same rate on his first $50,000 of income as the worker who only makes that much in total.

More important for our purposes is how un-progressive (“regressive,” to use the term used by economists and tax lawyers) the Bush II tax cuts have made the system. Those tax cuts were, of course, heavily weighted toward the very wealthiest taxpayers. In 2000, under Clinton, a married couple filing jointly paid at least 36% on everything over $161,450 and 39.6% on everything over $288,350. In 2008, the same couple paid only 33% above $200,000 and 35% on everything over $377,500.

What I propose we do is this - and the numbers aren’t carved in granite; some fine tuning would not ruin the concept - tax the top 6.4% of taxpayers at their marginal rate on all their income, and boost that marginal rate by a mere 3%. Keep in mind, in 2008, that would have been married joint filers with an income of over $200,000 a year. If a couple were making $199,000 a year, I wouldn’t raise their taxes a penny. How big a bite would that take out of your big, ugly, trillion-dollar deficit? Fasten your seat belts.

About $520,000,000,000 - over half a trillion a year. And the current crop of leaders is haggling over a package (I refer to the Obama-GOP “compromise” reported as of 7:00 p.m. CDT on July 31) that reduces the deficit by just $2 trillion - over a decade.

(You could do the same thing with corporate income tax rates, giving some smaller, mom and pop corporations a break, but the individual rates are where the real economic, and political, effects are to be seen. Also, by reducing the huge breaks fat cats get on corporate dividends and capital gains, which are almost exclusively enjoyed by these top tier earners, you could get even more.)

But wait, my modest proposal gets better. In the same bill, I would add a proposal to divert, say, $200 billion of this annual tax equity improvement, not to the deficit - but to a tax cut going exclusively to the 93.6% of Americans making under $200,000 per couple. Of course, I would weight it more heavily toward the lower tax brackets in that group. This would be, in effect, a $200 billion-a-year economic stimulus package. And it would be much more effective than the bank handouts of Bush II and Obama I. When that money is in the hands of people making $500,000 a year or more, they park it in a hedge fund or mutual fund, many of which do not create jobs in the United States. People living from paycheck to paycheck are always deferring necessary purchases, and when they get more cash, they run out and make them. That creates jobs in the United States. The resulting tax equity improvement would still reduce the deficit by more than the current leading prospect, and without cutting any benefit programs, and even without cutting defense spending! To get this done, I would not be averse to some very careful trimming of spending, just so the talking heads on “Meet the Press” didn’t cluck too loudly about no spending cuts - but I bloody sure wouldn’t have made my proposal the Republican fantasy that Democratic “leaders” are currently embracing.

Now for the politics. (I do enjoy writing about politics more than economics, but the economics was a necessary foundation for what follows.) Imagine this: beginning in the spring of 2012, Democratic TV spots, Democratic canvassers working door to door, and Democratic spokespersons in local news stories, all start reminding that 93.6% of voters that the Democrats were responsible for their tax cut - or, since the GOP in this Congress would have probably killed it, who was responsible for them not getting their tax cut. “MO BROOKS KEPT YOU FROM GETTING A TAX CUT!” “MARTHA ROBY BLOCKED YOUR TAX DECREASE!” Just imagine the possibilities. It’s even possible to correlate Census income data with the Alabama Democratic Party’s new VoteBuilder program (I have seen the future of that, and I like it) to target the vast majority of the households in that 93.6% with individual, specific, concrete persuasion: “YOU, AND EVERYONE ON YOUR BLOCK, WOULD BE PAYING LOWER TAXES IF ROBERT ADERHOLT AND THE REPUBLICANS HADN’T VOTED ‘NO’.” If the Republicans tried to sell this as a “tax hike” (which they would), “WHEN JEFF SESSIONS SAYS THE DEMOCRATIC BILL WOULD HAVE RAISED YOUR TAXES, HE’S LYING. YOU, AND EVERYONE ON YOUR BLOCK, WOULD BE PAYING LESS, NOT MORE!” It has to be carefully explained, but it would work. Imagine the chromatic effect on the current Speaker.

Sadly, most of what I have been writing is a sand table exercise. The opportunity to paint the GOP into a corner with Grover Norquist and the Teabaggers was lost weeks, if not months, ago. For that, I blame the myopic lack of political skills, and political leadership, of the Obama Administration. As Maureen Dowd put it so well in The New York Times today:

Democratic lawmakers worry that the Tea Party freshmen have already “neutered” the president, as one told me. They fret that Obama is an inept negotiator. They worry that he should have been out in the country selling a concrete plan, rather than once more kowtowing to Republicans and, as with the stimulus plan, health care and Libya, leading from behind.

Of course, any single Democratic member of the House could have introduced a bill embodying my proposal, and any Senator could have introduced a substitute doing so. They have to share a little of the blame. It’s hard to do the kind of groundwork we need to win the 2012 and 2014 elections when our leaders aren’t giving us the right talking points. Or worse, letting the GOP define the talking points. Sometimes, the right thing is also the politically smartest thing. These are things worth remembering when voting in primaries in the future.

Meanwhile, as a quasi-Republican debt ceiling bill slouches toward Washington to be born, at least as far as the top of the Party is concerned,

The best lack all conviction, while the worst
Are full of passionate intensity.

Maybe we’re eating our children after all.

What’s in a Name?

One of the favorite games of political pundits is playing with the names of candidates. Candidates are perceived to have a greater, or lesser, appeal because their name sounds sufficiently stentorian when rolling off the tongue. Oddly enough, this is a hobbyhorse that has survived the election of one Barack Hussein Obama to some minor federal offices.

Some serious academic attention has been given to the so-called “ballot order effect,” which supposedly gives some marginal advantage to candidates whose alphabetical priority places them at the top of the ballot (usually in the primary; general election ballots are usually ordered by party). The results are far from certain, but there seems to be some small advantage to being the son of Mr. Aaron or Mr. Adams. The more imprecise efforts of the chattering classes to fathom the depths of a name’s “sound” are sometimes thinly-veiled efforts to favor those of us whose names are more Anglo-Saxon. Or, depending on the locale, more or less Jewish, Irish, or German. One “oops” moment in the 2004 Kerry campaign came when it was learned that presumed Boston Irishman John Forbes Kerry was in fact Jewish. His denials of knowledge that his grandfather had been born as Friedrich Kohn in Moravia gave Bush boosters a twofer: they could flag Kerry to the anti-Semitic vote, while pretending only to question his veracity.

The “American” ring of a (usually) Anglo-Saxon name (or the “un-American” sound of an opponent’s) has had apparent consequences. In one noted instance, the 1988 election for Democratic Party Chairman in Harris County (Houston) Texas, incumbent chairman Larry Veselka, a little known lawyer and activist, lost out to the more melodiously-named Claude Jones in a low profile race. Problem was, Jones was a groupie-supporter of perennial candidate and eternal fruitcake Lyndon LaRouche. (The local Party committee promptly amended the bylaws to strip the chair of all power and authority.) Local Democratic leaders uniformly blamed the name factor for Jones’s otherwise inexplicable win.

All of this contemplation, however, is not what gave birth to this post. What got me thinking about names was this week’s fundraising missive from the Obama for America Committee. Something about that name sounded slightly off-key, and it took a few minutes for me to realize what it was. Where is the Vice President’s name??

In 1984, the official effort to inflict four more years of Bonzo government was named the “Reagan-Bush ‘84 Committee.” In 2004, Americans (may have) voted for a narrow margin in favor of the campaign mounted by “Bush-Cheney ‘04 Inc.” The recognition of a sitting Vice President in the re-election letterhead is a bipartisan tradition. In 1996, we got behind the “Clinton/Gore ‘96 General Committee.” As far back as the halcyon “what’s a computer?” campaign days of 1980, we Democrats rallied around the “Carter/Mondale Presidential Committee, Inc.” (One of my first paid employers.)

So, where is the name, “Biden” in next year’s committee name?

Little happens at the level of a Presidential campaign without thought and planning; the malapropisms, errata, and gaffes of Bachmann and Palin notwithstanding. While I will certainly keep an eye on this post’s comments for other explanations, I can see three possible reasons for the absence of the Vice President’s name. (1) This could be just another manifestation of the narcissistic and borderline messianic tendencies of this President, and of his coterie of Chicago hacks, who have yet to realize he was elected President for the same reason he won the Nobel Peace Prize; his name isn’t “Bush.”

(2) There may be some measured consideration that Vice President Biden, whose open-mike flaps and other memorable moments are Leno-Letterman fodder, may be something of a drag on the ticket, or at least doesn’t give it a boost. This explanation could well coincide with (1). I would argue against it. Biden is a solid Washington presence, knows his way around the Hill, and brings a lot to the table that is lacking in the Oval Office. Voters want to know that the man or woman “a heartbeat away” is up to the promotion if, God forbid ... Remember the Palin drag as her lack of depth became apparent late in the 2008 campaign. Without it, we might have been challenging President McCain next year.

(3) - and I can’t believe this is the case and no one’s leaked it, the omission of Biden’s name might be a signal that has been missed by the entire punditocracy, blogosphere, and even the phone-tapping minions of Rupert Murdoch. Of course, if (2) reflects the perception in the Obama high command, then (3) becomes a more plausible scenario. The Vice President was not yet 30 on the day he was first elected to the Senate in 1972; he attained the Constitutionally-required age before Congress convened in January. Of course, that means he will be 70 at the beginning of the next Presidential term. That is not too old by recent historical precedent. However, the Chicago hacks place an excessive premium on the President’s “youth appeal,” and 70 may be a number that troubles them.

It is possible that I am reading too much into these facts. Trying to interpret signals that may not even be there is as dicey as my (late) Cold War work parsing the photographs atop Lenin’s Tomb in Правда to determine who was in or out in the Kremlin. Whatever the explanation, this is an item that bears close scrutiny in the coming months. Obama need not make a move to replace Biden for some time, but any story of that magnitude will be hard to keep under wraps. If the Vice President is going to remain on the ticket, someone needs to take a crayon to the letterhead, pronto, not only to express the President’s confidence in his running mate, but to prevent the rumor mill from going to work. As I said, I am happy with the Vice President, and think it would be a mistake to replace him on the ticket. That said, speculation about potential replacements at least makes an interesting parlor game.

In a totally unrelated note, emptying my pockets earlier this evening, I discovered that someone, apparently mistaking it for a quarter, had given me a Susan B. Anthony dollar in change. Of course, I am not at all into omens or other irrational forms of superstition. Not at all.

Hail to the Chief ... Justice

After treating myself to taking June off, I found my email filled last week with inquiries about the sudden, and unexpected, retirement announcement by Chief Justice Sue Bell Cobb. Judge Cobb, one of two Democrats currently holding statewide office, and the only one on the appellate courts, will be missed. She has brought leadership to the Supreme Court, not only as a tireless and forward-looking administrator of the state judicial system, but as a courageous voice of moderation and justice on a court dominated by Fortune 500 rubber stamps. Before her tenure on the highest court, she served for 12 years on the Alabama Court of Criminal Appeals, where she frequently took the position that - imagine this - the law had to be upheld, even if that meant a conviction was reversed.

Perhaps nothing calls to mind her judicial courage more than her opinion in the case of Wilson v. State, 830 So.2d 765 (Ala.Crim.App. 2001). Theresa Wilson was the poster child for what can go wrong in the war on drugs. A 28-year-old mother of two small children, Wilson became addicted to narcotic painkillers prescribed to her by her physician for her fibromyalgia. Unable to work, she sold a portion of her painkillers to an undercover officer for money to pay her utility bills. The officer then goaded her into procuring more drugs, which turned out to be prescription morphine a similarly-strapped neighbor provided her to sell, for a share of the cut. That diluted morphine mix turned out to be 41.8 grams - 1.47 ounces - over the threshold for Alabama’s drug trafficking law. Her naïveté in drug sales was manifest; she let the narc leave with the drugs, without full payment. Wilson had no prior criminal record. Because Wilson’s second, police-encouraged sale was 1.47 ounces over the limit, she was sentenced to a mandatory term of life imprisonment without any possibility of parole or early release.

Noting that the trafficking law under which Wilson was charged is legally titled the “Drug Baron’s Enforcement Act of 1986,” and that “Wilson does not fit into that category,” Judge Cobb wrote a detailed opinion, explaining how the precedent of the United States Supreme Court required constitutional review of such sentences, and held that while Wilson’s crime was serious, leaving prison in a pine box was cruel and unusual punishment. (Republican Judge Kelli Wise, now a Supreme Court Justice, agreed with Judge Cobb and wrote a concurring opinion. Republican Judge James Shaw, who defeated Judge Deborah Bell Paseur to join the Supreme Court in 2006, dissented, saying that “the majority’s decision is impermissibly based on a concept of natural justice.”) Contrary to Judge Shaw’s opinion, no convicted trafficker has been released since the Wilson case on a similar basis, but our prisons - as Chief Justice Cobb has recently pointed out - are still overflowing with nonviolent minor drug offenders.

One of the recurring themes of emails and calls I have gotten since Judge Cobb’s announcement has been its impact on the prospects of the Alabama Democratic Party. Does this yet further signal the Party’s demise? Is there any hope for the Judicial System? When will we again be a competitive party? Will Judge Cobb ever return to politics?

All are good questions. As to the first, many will overstate its significance to the Party’s prospects. I understand that the condition of Judge Cobb’s mother - to whom she is especially close - is indeed serious. This retirement may mark one of those rare occasions in politics when a statement regarding “more time with my family” is indeed the truth. Her retirement may also have intended political consequences with respect to her successor. Governor Bentley is likely to appoint someone from his faction of the GOP to the vacancy, rather than someone from the Business Council-Riley wing. This would give such an appointee the advantage of campaigning in 2012 as an incumbent, and Judge Cobb may have intended to thus lessen the Business Council’s voice on the Court.

The history of appointed Supreme Court justices in Alabama is a mixed one. It features one unlikely hero, at least in the mind of the progressive Democrat: Fob James. James shattered the racial barrier on the modern Supreme Court with his 1980 appointment of Oscar W. Adams. When Adams retired, Jim Folsom Jr. appointed Justice Ralph Cook, who is also black, to the vacancy. Don Siegelman appointed a second black Justice, Judge John England, to the Supreme Court during his administration. Both seats were eventually lost to white Republicans in 2000, although Judge Cook did narrowly win one full term in the 1994 elections. Racial animus, however, is not the only reason appointed judges fail to win election after appointment, and the partisan sword is two-edged. Judge Cobb won her seat as Chief Justice in 2006 by defeating Riley appointee, and serious corporate ho, Drayton Nabers. Expect a heated GOP primary for the job in 2012, with current Justice Lyn Stuart the likely Business Council candidate. (Having written elsewhere about the all-white Alabama appellate judiciary, I won’t urge Governor Bentley to show Fob’s courage and appoint someone doomed to lose the Republican primary - but it would be a tremendous gesture.)

As to the personal future of Judge Cobb, I wouldn’t be surprised to see her back someday. Her retirement remarks didn’t foreclose the possibility. The 2014 gubernatorial race is a long way off. It’s a good two years before a 2014 nominee will have to seriously hit the fundraising and rubber chicken circuit. This should provide her with plenty of time to spend with her family and catch her breath after 30 years of nonstop public service. Should she run, there is a good chance she would not have serious primary opposition. The Democratic bench isn’t as deep as it was in the early 90’s; if Lucy Baxley retires from the PSC, we may well have no incumbent statewide Democratic officeholders going into 2014. One or two legislators whose names have come up in recent years as gubernatorial possibilities either lost their seats in 2010, or had close shaves that might reflect on their electability. Ron Sparks would be a strong candidate for another try, but his acceptance of a position in the Bentley administration indicates he’s not looking in that direction. Finally, if Bentley loses the Republican primary to a Business Council ally, Judge Cobb could count on substantial financial support from AEA in the general election.

Whatever the future holds for her, Judge Cobb deserves a “thank you” from each of us in the Democratic Party - and in Alabama.