Other Stuff

So because I have some kind of obsessive-compulsive disorder and am posting less right now as I await the ramp-up to a dedicated site on FDL, here are some quick hits on stories I didn't get to on that site today:

• Congress will hold hearings on those forged letters from astroturf groups sent to swing-state Dems urging them to vote against the House climate bill. This needs to be more than investigated by Congress; the Justice Department should get involved.

• Another day, another GOP front group headed by neocons. This one's called "Keep America Safe." It's a Bill Kristol/Liz Cheney special. Nothing but good can come of that.

• NOAA steps up and warns against indefinite offshore drilling without limits. This is one of those small benefits of the Obama Administration, that relatively sane regulatory agencies are starting to assert themselves.

• A nice piece from Peter Orszag on the delivery system reforms in the bill.

• Jon Corzine has a couple new attack ads out, slamming Chris Christie for his ties to corporate interests and the Bush Administration. Corzine has been relentless.

• Publius calls it Rick Perry's Saturday Night Massacre, and I agree. He's now fired ANOTHER member of the commission looking into whether Texas killed an innocent man. This is a huge story going completely unnoticed by the national media.

• Charlie Rangel's getting a primary challenge. Charlie Rangel NEEDS a primary challenge. Corruption is not a partisan issue.

• North Korea may be launching missiles, but they're also agreeing to talks. Guess the missile launches aren't going well. Meanwhile, Russia is splitting from the US over the issue of sanctions for Iran, with the Foreign Minister calling them "counterproductive."

• Tim DeChristopher, the activist who bid up oil and gas leases without the ability to pay in an effort to deep-six the potential drilling, is charged with two felony counts for his activism. For bidding on something? Really?

Budget Hell Pretty Much Over, Reality Hell Begins

So the Assembly is wrapping up their budget session, and it turns out that the Assembly came up $1.1 billion dollars short of the Senate's solutions. Oil drilling failed, and the local government raid on HUTA (gas taxes) failed as well.

So where does that leave us? These bills will go to the governor, and since there isn't concurrence, it will be roughly a $23 billion solution rather than $24 billion. But, the Governor has a line-item veto. He can make various cuts with his blue pencil. But $1.1 billion? Who knows. That seems like a tall order.

Considering what Schwarzenegger did the last time a partial solution was handed to him, I guess there's an outside shot that he'll just say no and open a new extraordinary session. But he'll probably just line-item some, and maybe make up the difference by eating into what is now a $900 million dollar budget reserve.

Is everybody ready to be back here in October?

...Let me clarify. The Governor can make line-item cuts but he doesn't necessarily have to, because this is a budget revision. He can also shift around the size of the reserve. In the end, he doesn't actually have to be in balance for a revision; that's a Constitutional need at the beginning of the process, as I understand it, not now. Clearly from the Governor's remarks, he's not going to veto the whole thing, so this is the "solution," for now. There also may be Constitutional problems with some of the stuff passed.

Still Not Over - Assembly Stalemated

The Assembly has gone into a deep cocoon, only occasionally popping up to finish a vote that has been placed on hold. The most recent one was SB12, which set cuts for general government. That's not necessarily in the land of controversial votes - the local government raids, the offshore drilling proposal and the return payment of Prop. 98 maintenance of effort funds in future years are the major stumbling blocks. But SB12 couldn't get the 54 votes needed for passage, stalling out at 51. Now, it's possible that this was just a delay tactic while negotiations and arm-twisting continue over the other issues. But the longer this plays out, the more opportunity for a collapse.

The Senate is in adjournment. They are gone until August. They jammed the Assembly and now the Assembly has to find a way out of the mess. If you've resigned yourself to the fact that this is over, well, I think we might have a long way to go. Remember that the Assembly has one less person in it now than it did in February - Curren Price moved up to the Senate. That means additional votes are needed, most likely from Republicans, for these measures.

I would be slightly surprised if these remaining measures didn't pass. But the going is very slow, and there's still time to weigh in and whip your Assemblymembers, particularly on the contentious issues.

Budget By Sunrise

Maybe you've been following along at Calitics, but if you haven't, the Senate essentially passed all of their budget bills, albeit with difficulty, and adjourned a session that started last night around 7:30pm at 6:16 this morning. The Assembly is still working through some of the final trailer bills, including the local government raids and the offshore drilling proposal at Tranquillon Ridge. Here's an incomplete roundup from the LA Times.

The worst elements of the bill were passed while everyone was asleep. They must be very proud of their work.

And of course, this is a rolling, perpetual crisis. Dan Walters is correct today when he says that the state now operates on 5-month budget cycles.

There have been some discussions about shifting to a two-year budget cycle to ease the one-year cycle's tight – and usually unmet – timetable. In reality, though, the state has shifted to a five-month cycle, with the latest version of the budget, which was undergoing the dreary drill of adoption Thursday night, being the latest example [...]

If the five-month cycle holds true, the deal's deficiencies will be acknowledged in October, when the state must redeem the IOUs it's sending to creditors. And then legislators will return to Sacramento to be entertained by lobbyists, plug the new holes and collect about $1,200 a week in tax-free per diem checks.

In January, the governor will propose a 2010-11 budget and the game will begin again.

It's as much that they cannot fathom the extremity of the real budget problems as that the cumulative effect of kicking the can becomes greater with every kick. Of course, there's a way out - you could reduce useless tax breaks to corporations and increase revenue. But that's deeply unserious and verboten.

If ever the need for a Constitutional convention to fix the broken system in Sacramento has become clear, it's now, when 40 years of progress has been reversed in the dead of night.

Setting The Scene

Well, it's going to be a late night. The Legislature is set to convene at 2pm to consider the budget deal. Here's the Assembly floor report. I could write another "25 Things" just off of this document, some of the bits buried in there are amazing. Here's just one example:

Eliminates automatic cost of living adjustments (COLA) for CalWORKs and SSI/SSP grants. Also eliminates COLA's for the budgets of UC, CSU, and other state departments.

Also, IHSS workers, who make $12 bucks an hour, may have to pay for their own criminal background checks and fingerprinting. Just for bureaucratic-speak, I also like the absurdity of this: "Consolidates the Bureau of Electronic Appliance Repair and the Bureau of Home Furnishings and Thermal Insulation into the Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation." Done!

This will not be an easy vote. Democratic lawmakers in the rank and file are unlikely to rubber stamp this. In addition to Sen. DeSaulnier, I'm hearing that many other lawmakers are uncomfortable on a variety of measures, to the extent that the Assembly Speaker is not whipping votes on the offshore drilling proposal or the dissolution of the Integrated Waste Management Board (which costs $0.00 for the state). The City of Industry lobbyist-backed deal to securitize redevelopment project money and tangle 10% of property tax revenue for up to 30 years isn't a done deal, either.

A provision of the budget agreement, which faces a vote in the Legislature as early as today, would extend the life of the state's redevelopment areas, a proposal that Industry officials have pushed for more than two years. Critics say the move would be a gift of public funds to benefit the proposed stadium and other private development at the expense of cities and counties that need the money for healthcare, welfare and police services.

A similar measure backed by Industry died in the Legislature last year after complaints from local government officials. But late in the budget negotiations, the city and its allies helped revive the proposal.

"They were able to find a mechanism to provide the infrastructure for an NFL stadium, but they aren't able to find the mechanism to fund nutrition for a hungry child," Los Angeles County Supervisor Zev Yaroslavsky said Wednesday. "It's galling. It's really galling."

AFSCME is running ads against the whole budget deal, and most advocacy groups have been quite critical. I would guess that most people in the Assembly have the perspective of indie Juan Arambula, that he'll vote for most of the budget "with a heavy heart and a clothespin on my nose." But I think some provisions could easily get struck down today, so it's worth letting lawmakers know what you think.

Exclusive: Mark DeSaulnier Voting No on "Most" Of The Budget

I interviewed Sen. Mark DeSaulnier just a few minutes ago for a series on CA-10 candidates. But I took the opportunity to ask him about the budget deal. Un unusually blunt and what I would characterize as irate language, DeSaulnier blasted the budget and the process that created it. "It's all awful," he said. "On a majority-vote level, with votes that require a majority vote, California still leads the nation. But on a fiscal level, we're living in the Dark Ages. The system is completely dysfunctional and maybe the only good thing is that people will finally see the kind of change we need. Sadly, too many people are still in denial about that change. But we can't go on like this. It's just a mess."

DeSaulnier thinks that the economy is unlikely to change dramatically to bail out this budget, and it will take a long time for General Fund revenues to get to a point to pay off the money borrowed from education. And so we'll remain in this dark place for some time.

The Senator is carrying a bill in the legislature to put together a Constitutional convention, and he is "more convinced than ever" about the need for it. He believes that, after the budget is put the bed, there is an urgent need, recognized by the leadership, to turn completely to reform. Sen. Steinberg has said to him that the message will be nothing but change, change, change. And the caucus wants to work, whether through a revision commission or reforms that could be put together with majority support, to do a "Constitutional convention in the building." Unfortunately, DeSaulnier said, everyone on both sides of the aisle immediately goes to the worst-case scenario of a convention, thinking that their gains and protections will be lost. But that's no excuse. DeSaulnier hoped he could get with Republican leaders like Sam Blakeslee to find common ground on a few reform issues, but he's not sanguine about those choices. "They're individually good people, but put them together and they're a cult, not a party. Milton Friedman's dead, move on."

When I asked what he would vote for on Thursday, he said "I will probably vote against most of it." DeSaulnier singled out two pieces that could not get his support: the offshore drilling in Tranquillon Ridge, and the raid on local governments. On the drilling, he doesn't understand why Democrats would approve such a proposal for a paltry $100 million dollars in this budget year. "I don't know why the Governor would do that. Whatever environmental record he claims to have will go down the tubes. I never thought he was particularly green to begin with, he tried to slow-walk AB32 and all sorts of environmental initiatives. He's the worst Governor in state history, just like George W. Bush was the worst President in history.

On the local government raid, DeSaulnier said that as someone who came from local government, he could not see clear to essentially bankrupt them. Those takings don't take place until December, according to him, so he would rather get the LAO involved, score the kinds of tax credits at the local level, things like enterprise zones that don't work and other giveaways to corporate interests, and suspend them to make local government whole. I think it's an interesting strategy, though I don't know if it could succeed. Tying it to local government needs is smart.

And by the way, the crazy redevelopment money scheme, to borrow against those future funds and securitize 10% of property taxes for 10-20 years? DeSaulnier called that "insane" and "illegal," and just a shadow play by Republicans "so they can go back to San Diego and Riverside and say they tried to save their local money and failed."

DeSaulnier has an election coming up, and thus an incentive to take a bold stand. But this is pretty darn bold. And if there are enough Democrats to go along with him, Republicans may indeed be forced to own this budget.

Burton Demands "No" Vote On Offshore Drilling In The Budget

This is a big deal. John Burton just sent out an action alert to CDP delegates and supporters urging them to vote AGAINST an element of the budget negotiated by the Democratic leadership. Specifically, he wants the offshore drilling at Tranquillon Ridge voted down.

As you may have heard, legislative leaders and the governor have reached a tentative budget deal that the Senate and Assembly could vote on as soon as tomorrow.

One part of the package is a Republican-written bill that would allow offshore drilling in state-controlled waters off California’s coast for the first time since the devastating 1969 oil spill off the Santa Barbara coast. This proposal is an affront to all Californians and we must urge lawmakers to vote it down.
This sweetheart deal for one oil company was negotiated behind closed doors, without any legislative hearings to allow public comment.

It strips the State Lands Commission – which has approved or rejected oil leases for the past 150 years – of this power and gives it to a commission controlled by the governor’s administration. This commission would have unlimited authority to rewrite the lease to benefit the oil company.

The offshore drilling plan does not solve either this year’s budget problems or systemic problems. That’s because its promises of future revenue are not actually written into law.

This Republican offshore drilling scheme endangers California’s environment. It would further pad the pockets of oil executives. And it does virtually nothing to solve the state’s current or future budget problems.

Ironically, the same Republican legislators who support this sweetheart deal are the ones who refused to vote for our Democratic leaders’ proposal for an oil-severance tax like the one levied in every other oil-producing state.

Please call your local lawmaker and urge him or her to say NO to new offshore drilling. Say NO to jeopardizing our coastline for minimal budget help this year or in the future.

At the end of the email, Burton reminds readers that these kind of backroom deals are part of why "it’s so important to have a majority-vote budget in California so Republicans cannot hijack the budget process to make bad policy changes that are extraneous to the state budget." A-men to that, but tell it to the Democratic leaders who helped negotiate this.

Karen Bass was asked today by reporters why the offshore drilling bill was included in the budget agreement, and she replied, "It comes down to $100 million dollars." Apparently you can put a price on despoiling the coastline and destroying the environment. Turns out it's 1/880th of total budgetary spending.

It's good to see the Chairman of the CDP picking up on a campaign by the Courage Campaign and amplifying it. The offshore drilling plan will be considered in a separate trailer bill. It can be defeated.

The Reductio Ad Absurdum Of Armchair Warblogging

In general, I have a wide degree of latitude for US bloggers or commentators reporting on the events in other countries. We're allowed to have an opinion. Occasionally, however, it does fall into this kind of self-regarding feedback loop, where clicking on a petition or changing your background color on your blog to green becomes a revolutionary act. And the worst example of that actually comes from US Rep. Pete Hoekstra:

Iranian twitter activity similar to what we did in House last year when Republicans were shut down in the House.

He's relating millions of people in the streets in Iran, risking death, to the GOP playing model Congress during the #dontgo movement to drill offshore for oil. You know, because the House turned off the microphones when it was out of session, and Iranian protesters were beaten to death.

Twitterers are killing Hoekstra in replies. More from Greg Sargent and Spencer Ackerman.

Arnold Still Wants To Drill Baby Drill

As Brian noted, in the full list of the Governor's slash and burn budget, the offshore drilling proposal in Tranquillon Ridge off the Santa Barbara coast remains. After a key environmental group backed away from the plan, which originally was structured as a compromise proposal to allow an additional rig in exchange for ending all drilling in the channel by 2022 (which the Lands Commission determined was unenforceable), many expected the plan to be scrapped. But it remains, despite the fact that the California Lands Commission spoke out yesterday, calling on the legislature to put a stop to this power grab.

The State Lands Commission on Monday lashed out at an attempt by Gov. Arnold Schwarzenegger to allow the first new oil drilling in California waters since 1969.

Lt. Gov. John Garamendi, chairman of the three-member panel, called the governor's effort "a naked power grab." At a contentious hearing in Santa Monica, the commission passed a resolution urging legislators not to go along with the plan, which would revive a drilling proposal off the Santa Barbara County coast that the commission killed in January.

The Commission doesn't out-and-out call this illegal. But they hold jurisdiction over oil drilling, and the Governor is simply trying to go over their heads. You can basically shut down the California Lands Commission if this goes through, because they will be rendered impotent.

And of course, while the Administration foregrounds the $2 billion dollars to be gained from allowing the leases in Tranquillon, he does not make a peep about charging an oil severance tax, to actually make the oil companies pay to take California's natural resources out of the ground.

Put The Governor's Bill To A Vote

At Calitics, Robert makes quick work of the new and not improved Gov. Schwarzenegger prescriptions for disaster, trying to fill an entire $21 billion dollar deficit (which is now more like $24 billion according to the Legislative Analyst) with cuts. I cannot completely argue with the decision to cancel the RAW (revenue anticipation warrants), because bad borrow and spend policies, as Noreen Evans explained, part of the problem in Sacramento, not the solution ("Like paying your bills with your credit card when you don't have the money to afford it.")

But to replace that entirely with cuts to things like CalWorks, Cal Grants and Healthy Families would place a massive hole in the social safety net. This would, for example, roll back children's health coverage at the moment that the federal government would expand it. And nobody ought to look forward to being the only state without emergency poison control services.

This is going to get worse, by the way. The offshore drilling plan Arnold proposed lost a key environmental supporter this week, threatening that $1.8 billion solution. And Tim Geithner's apparent suggestion that loan guarantees require an act of Congress, while immaterial to the budget at this point, really hinders the ability to solve the short-term cash crunch. Basically the entire budget would have to get passed before one dime of borrowing could take place, otherwise the borrowing is unlikely to even happen, and even when it does it will be prohibitively expensive.

So, what to do? I think Greg Lucas is on to something. It's time to embarrass Governor Hoover. Put his bill on the floor and watch it get a half-dozen votes.

Bringing the GOP governor’s plan to a vote accomplishes several things.

It establishes how many initial votes exist for the plan. Not many, presumably. Will Republicans vote for it or are the cuts too deep even for them? Or should they choose to dismiss the action as a “drill” and not participate, an opportunity is presented for Democrats to score some coup on their political opponents.

A somewhat simplistic example: “All we hear from Republicans is that they want to cut state spending. Well, here’s a chance to do so and yet they sit on their hands.”

Bringing the proposal to a vote also attracts the media spotlight. Parents might be interested to know about the $6.3 billion in payments to public schools the governor would defer for one year, a figure that doesn’t include the $8 billion the state already owes schools.

What the plan does to immigrants, the developmentally disabled, the elderly who receive in-home care also might be of interest to the public which so recently decided to make the fiscal problem worse.

The public might also like to know that $12 billion of the governor’s $21 billion worth of actions are one-time and that embracing them makes it harder to solve future budget messes.

Essentially, it's time to build a set of facts and put people on the record. There has to be some long-term thinking here, and some public explanation of the implications of a Hoover-like budget. Like there was no reason for Democrats to play nice with George Bush when he was at 28% in the polls, there similarly is no reason to play nice with Arnold Schwarzenegger. He is basically despised.

Time to kick sand in the face of the bully.

Inside Governor Hoover's Budget Revise

When you go beyond the headlines, there are several interesting elements of the Governor's May Revise - which by the way, was illegally delivered, under the February budget agreement, but hey, what's the law, right?

We know some of the major portions of the Governor's plan - cutting education, thousands of state employee layoffs, lots of borrowing (something like 40% of the gap through revenue anticipation warrants), selling public landmarks, etc. First of all, with respect to selling off public property, easier said than done.

Case in point: the governor's plan a while back to sell EdFund, the state's student loan guarantee fund. It was projected to bring in $1 billion, but still hasn't been sold (and was last valued at 50% of its original estimate). I mention that because in this proposal, the governor suggests $1 billion for selling off part of the State Compensation Insurance Fund. Maybe it's an easier deal than EdFund (and others in the past), but...

Some other interesting pieces:

• Despite the fact that Schwarzenegger adamantly insisted there will be not tax or fee increases as part of any solution, there in fact are new fee increases included. The Governor seeks higher fees, but significantly, those fees would hit some of the most vulnerable citizens in the state. For example, he raises fees for residents living in veterans homes throughout the state, adding $2.8 million dollars. What's important here is that he betrays his own rhetoric by raising some fees inside his own revised plan.

• While the budget deficit exists because of an historic drop in revenue during this Great Recession, instead of temporarily cutting various services, the Governor's revised budget would cut them permanently, particularly in programs like Medi-Cal, In-Home Supportive Services, SSI/SSP, regional centers, Cash Assistance Program for Immigrants. This despite, once again, the Governor reconciled his raid of local governments by saying that "hopefully the economy comes back." But even if it did, the permanent cuts to programs serving the most vulnerable elements of society would remain. The vast majority of those cuts would be implemented regardless of the outcome of the May 19 ballot measures.

• Never one to let an opportunity in crisis to slip by, the Governor would also allow the first new offshore drilling off the California coastline in 40 years, putting a major dent in any possible depiction of Schwarzenegger as some kind of environmentalist. Despite not being able to tax the severance of oil from California land, the Governor would lease new offshore drilling sites to bring in $100 million from the state. And this would nullify a ruling by the State Lands Commission that denied further oil leases. As recently as last summer, Schwarzenegger vowed not to allow new drilling off the California shore.

You won't read much of this fine print in the discussion of the budget, or the glorifying media profiles of the "Governator." But it's important, because every aspect of this reveals him as a cheap fraud.

VA-Gov: Terry McAuliffe's Money To The Rescue

The NYT Mag has a profile of Terry McAuliffe, who to me represents the worst of the Clinton-era corporate Democrats, but who is re-inventing himself as a candidate for Governor of Virginia. He's simply swamping the state with money, much of it out-of-state (82%) and corporate money, and using his peripatetic style to attract votes. Apparently he's campaigning on a message of jobs - a keen political insight considering the country has lost 5.7 million of them in the last year-plus:

His campaign is tailored for these times. “Jobs is the issue — the issue, the issue, the issue,” Cranwell, the Virginia Democratic chairman, told me. And wherever McAuliffe goes, he is surrounded by campaign placards reading, “New Energy for New Jobs.” He talks everywhere, albeit often vaguely, about using economic incentives to attract out-of-state industry and to promote clean-energy technology. When Terry McAuliffe pitches Terry McAuliffe, it is not as the former head of the Democratic National Committee but as the businessman who started his first enterprise, tarring driveways for Syracuse neighbors, when he was 14. “If the biggest problem facing Virginia today were crime, Terry would not be a plausible candidate,” says Paul Begala, who first worked with McAuliffe on Richard Gephardt’s presidential campaign in 1988 [...]

As he campaigns, McAuliffe’s economic plan is “probably the most aggressive economic plan that has ever been put out in the country,” if McAuliffe does say so himself. By the time he is done as governor, he will “create more jobs than all the other 49 governors,” Virginia will supplant California as the film-production capital of the world and Old Dominion University in Norfolk will become the nation’s leading research university.

His business acumen, however, mainly involves shilling for candidates and taking money off the top of deals, not creating thousands of middle class jobs for Virginians. I mean, this is ridiculous:

In December, in response to Moran's claim to be the only candidate who had run a business and raised a family in Virginia, McAuliffe boasted of launching five businesses in Virginia.

It turned out that all five are investment partnerships, with no employees, registered to his home address in McLean.

McAuliffe may or may not have some liabilities - the $100,000 investment in the ultimately failed company Global Crossing, which netted him $18 million while employees lost their pensions - on the business and jobs front. He's always been a salesman, and that sales pitch might get him through an election. But I worry more about his policy menu:

There are a few policy differences among the Democrats, in particular Moran and McAuliffe. Moran opposes offshore oil and natural-gas drilling and the construction of a coal-burning plant in Surry, and he has pledged to fight to repeal a 2006 state constitutional amendment banning gay marriages and civil unions. McAuliffe has said he is open to coal-burning plants and offshore drilling for natural gas, though only under stringent circumstances. While McAuliffe says he also opposed the gay-marriage amendment, he has argued that it is politically unrealistic to think the state’s two Legislatures would ever vote to repeal it.

Terry McAuliffe strikes me as a huckster, not a leader. He'll compromise and not advocate. He'll listen to donors while talking to voters. And he's apparently winning the primary. I hope Brian Moran can come back.

New And Improved, With Numbers!

Tired of all the mockery, Congressional Republicans today released a budget - OK, made a plan to release a budget.

House Minority Leader John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell joined their colleagues, entering from the side, and addressed the gathered reporters.

After ripping the Democratic budget as too expensive, Boehner said that "Republicans in the House will offer a better solution that'll be less on spending, less on taxes and a lot less on debt for our kids and grandkids."

But there was no budget. "Do you guys have a formal budget yet?" asked a reporter.

"Mr. Ryan will outline the Republican budget at 10:30 this morning. And yes we do have it," replied Boehner, referring to Rep. Paul Ryan (R-Wisc.).

A silence followed, with reporters apparently unsure what to ask next.

I'm beginning to think the Republican Party is a giant episode of "Punk'd."

What amounts to the alternative budget, as described by Paul Ryan in the Wall Street Journal, consists mainly of those innovative and fresh ideas like cutting taxes on corporations and the wealthy, freezing spending in the middle of a recession, and drilling for oil.

* Deficits/Debt. The Republican budget achieves lower deficits than the Democratic plan in every year, and by 2019 yields half the deficit proposed by the president. By doing so, we control government debt: Under our plan, debt held by the public is $3.6 trillion less during the budget period.

* Spending. Our budget gives priority to national defense and veterans' health care. We freeze all other discretionary spending for five years, allowing it to grow modestly after that. We also place all spending under a statutory spending cap backed up by tough budget enforcement.

* Energy. Our budget lays a firm foundation to position the U.S. to meet three important strategic energy goals: reducing U.S. dependence on foreign oil, deploying more clean and renewable energy sources free of greenhouse gas, and supporting economic growth. We do these things by rejecting the president's cap-and-trade scheme, by opening exploration on our nation's oil and gas fields, and by investing the proceeds in a new clean energy trust fund, infrastructure and further deficit reduction.

* Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. The proposal includes generous standard and personal exemptions such that a family of four earning $39,000 would not pay tax on that amount. In an effort to revive peoples' lost savings, and to create an incentive for risk-taking and investment, the budget repeals the capital gains tax through 2010 for all taxpayers.

On the business side, the budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%. This puts American companies in a better position to lead in the global economy, promotes jobs here at home, and strengthens worker paychecks.

In case you missed it, Ryan wants to drill offshore in order to fund clean energy. My head hurts now.

They also helpfully scored the competing budgets over a 70-year time-frame, and while I think they're off a bit in 2072, you can plainly see that government under Robot Obama, who will be governing until he is 117, will explode in size.

Ryan also came up with a new health care plan while simultaneously cutting entitlements, a neat trick. (This shows that Republicans are deathly afraid of being left behind on health care reform, actually. It's quite interesting.)... aha, I see how they pull this off, they actually phase out Medicare over time. Brilliant!

Ryan calls on the Administration not to sow fear over their alternative budget at the same time that Judd Gregg takes to the Washington Post to sow fear about the President's budget. But it's not working. Americans don't mind investments in their future; in fact, they voted for them. And the Obama budget would actually reduce federal deficits by $900 billion dollars compared to current policies. The cuts are simply in programs and areas that conservatives don't like, such as ending privatization in various forms, stopping cost overruns in defense, incorporating tax fairness, and pulling back on subsidies for rich corporations.

Party Of No Clue

I briefly alluded to Mark Sanford rejecting stimulus funds that will result in up to 7,500 teachers being laid off. South Carolina legislators are trying to outflank him on that. But he's not the only one. Governor Goodhair of Texas is denying his citizens stimulus funds, too:

Gov. Rick Perry will announce today that he is blocking the state from accepting $550 million for expanded unemployment benefits as part of the federal stimulus package.

With an upscale Houston hardware store as his backdrop, he will paint the expansion as a burden on small business.

The Legislature still could move to change state law to draw down the money, but those changes would be subject to a Perry veto.

To be eligible for all the money, Texas must enact legislation that would change how the state’s calculates a worker’s eligibility and extend benefits to more workers, including those looking for part-time work.

Arnold Schwarznegger is trying the same thing in California, with the same argument that the changes in eligibility would impose an "unnecessary burden" on state businesses. Actually, what would impose a burden on them is them having to file for bankruptcy because nobody's buying goods because their unemployment ran out.

There's no real argument for this obstinacy from a policy perspective, just shopworn and outdated ideology. Sanford compared the stimulus to the policies of Zimbabwe, saying all this federal spending will lead to hyper-inflation. I wish! Right now we're in a deflationary spiral, and the only thing the Fed has the monetary tools to combat is inflation at this point. If we were experiencing any inflation at all, it would mean that the economy is at least sort of working again.

Then there's the argument that all this fiscal policy is like what FDR did during the Depression. Yes, they use that as a negative. The Bible for this revisionist history is a book by Amity Shlaes, and Jon Chait fairly well demolishes it.

Now here is the extremely strange thing about The Forgotten Man: it does not really argue that the New Deal failed. In fact, Shlaes does not make any actual argument at all, though she does venture some bold claims, which she both fails to substantiate and contradicts elsewhere. Reviewing her book in The New York Times, David Leonhardt noted that Shlaes makes her arguments "mostly by implication." This is putting it kindly. Shlaes introduces the book by asserting her thesis, but she barely even tries to demonstrate it. Instead she chooses to fill nearly four hundred pages with stories that mostly go nowhere. The experience of reading The Forgotten Man is more like talking to an old person who lived through the Depression than it is like reading an actual history of the Depression. Major events get cursory treatment while minor characters, such as an idiosyncratic black preacher or the founder of Alcoholics Anonymous, receive lengthy portraits. Having been prepared for a revisionist argument against the New Deal, I kept wondering if I had picked up the wrong book [...]

Shlaes begins every chapter with a date (say, December 1936), an unemployment percentage (15.3) and a Dow Jones Industrial Average. The tick-tick-tick of statistics is meant to show that conditions did not improve throughout the course of Roosevelt's presidency. Yet her statistics are highly selective. As those of us who get our economic information from sources other than the CNBC ticker know, the stock market is not a broad representative of living standards. Meanwhile, as the historian Eric Rauchway has pointed out, her unemployment figures exclude those employed by the Works Progress Administration and other workrelief agencies. Shlaes has explained in an op-ed piece that she did this because "to count a short-term, make-work project as a real job was to mask the anxiety of one who really didn't have regular work with long-term prospects." So, if you worked twelve hours per day in a coal mine hoping not to contract black lung or suffer an injury that would render you useless, you were employed. But if you constructed the Lincoln Tunnel, you had an anxiety-inducing make-work job.

In response to this criticism, Shlaes has retreated to the defense that unemployment was still high anyway. "Even if you add in all the work relief jobs, as some economists do," she has contended, "Roosevelt-era unemployment averages well above 10 percent. That's a level Obama has referred to once or twice--as a nightmare." But Roosevelt inherited unemployment that was over 20 percent! Sure, the level to which it fell was high by absolute standards, but it is certainly pertinent that he cut that level by more than half. By Shlaes's method of reckoning, Thomas Jefferson rates poorly on the scale of territorial acquisition, because on his watch the United States had less than half the square mileage it has today.

This is the intellectual heft on the right. And it manifests itself into policy with things like the "no-cost stimulus" - really - which would create two million jobs by, um, drill baby drilling, I guess. Never mind that oil prices are down, auto mileage is down and it takes ten years to get a drop of oil out of a new platform. That's going to be the "timely, targeted" stimulus to save our souls.

I'm beginning to think that, by trying to talk himself out of the RNC Chairmanship, Michael Steele is the SMART one.

News Of The Good

I've been slamming the President enough the past couple days, here are a few things that he's recently gotten right.

• Continuing his full restoration as an environmentalist, Interior Secretary Ken Salazar has put a stop to a Bush-era draft plan to allow offshore drilling on the Atlantic and Pacific coasts.

"To establish an orderly process that allows us to make wise decisions based on sound information, we need to set aside" the plan "and create our own timeline," Interior Secretary Ken Salazar announced in a statement.

Alleging that the Bush administration "had torpedoed" offshore renewable energy in favor of oil and natural gas, Salazar said he was extending the public comment period by 6 months.

"The additional time we are providing will give states, stakeholders, and affected communities the opportunity to provide input on the future of our offshore areas," he said.

Salazar also ordered Interior Department experts to compile a report on the Outer Continental Shelf's energy potential — not just oil and gas, but also renewables like wind and wave energy.

I mean, it's just stunning to see sound policy coming out of the federal government again, so we'd do our best to acknowledge it.

• Obama is also looking to keep Patrick Fitzgerald on as the US Attorney for Northern Illinois. This is a merit-based appointment as well as one with an eye to continuity, as Fitzgerald is currently readying his case against Rod Blagojevich. But Fitz has done an excellent job, not only on the Plame case but on cleaning up corruption in the Land of Lincoln. Good move.

• This could be the most striking - a progressive policy choice for the US drug czar.

According to both local and White House sources, President Barack Obama will nominate Seattle Police Chief Gil Kerlikowske as director of the Office of National Drug Control Policy—a cabinet-level position commonly referred to as the Drug Czar—an appointment that could signal a substantive departure from our nation’s current marijuana-focused, interdiction-heavy drug policy, and a more realistic and progressive approach toward the issue of drug abuse in general.

Within the context of career law enforcement professionals, I think it safe to label Kerlikowske a “progressive.” During his ten-years at the helm of the Seattle Police Department and his current term as president of the Major Chiefs Association, Kerlikowske has been a vocal advocate for gun control and community policing, while serving as a prominent critic of the use of intrusive data mining techniques as a tool for combating domestic terrorism. But while he hasn’t been particularly outspoken on drug control policy, Kerlikowske’s relative silence is encouraging in itself, considering the progressive mores and statutes of the city whose laws he has enforced for the past decade.

While Kerlikowske opposed a 2003 citizens initiative making marijuana in Seattle a “low priority crime,” calling the measure vague and confusing (and… well… most initiatives are), he emphasized to local reporters at the time that marijuana possession and use already was a low priority, and in fact, Seattle’s already low marijuana prosecution rate has dropped even further since the measure’s passage, indicating a responsiveness to the will of the voters.

A saner drug policy is one of those third rails of American politics that is much easier to perform through shifts of emphasis than legislation, and perhaps Kerlikowske will signal that shift.

Drill Now, Stop Later Proposal Torched

The State Lands Commission scuttled a proposed compromise that would have brought new oil drilling to the Santa Barbara coast for the first time in California since 1969, in what is seemingly a victory for environmental and coastal protection advocates. However, some are arguing that the proposal, which would have mandated closure of 4 additional oil platforms off the coast within 13 years, should have gone through.

But a parade of local officials, residents and environmental activists insisted the plan would have advanced efforts to protect the coast by eventually closing four of the region's 20 platforms.

"For the first time in history, the public and the state will be able to shut down existing oil production," argued Linda Krop, an attorney for the Environmental Defense Center and one of the people behind the proposal. "Without this project, they'll continue indefinitely -- perhaps another 40 years." [...]

Nineteen of the 20 platforms that dot the ocean off Santa Barbara and Ventura counties are in federal waters. Shuttering four of them, says Krop of the Environmental Defense Center, would make it difficult for the federal government to lease underwater tracts accessible from those platforms.

And with closure of the two processing plants, the prospect would have been more unlikely, she said.

Read the whole article. There was a significant green alliance in favor of this drilling-for-closure exchange. I tend to agree with the Lands Commission that the proposal for closure wasn't completely enforceable, but then, that's their job to write the law with some enforcement, isn't it? (I guess their concern is that these are federal waters and the state would be limited to enforce end-dates.) I also understand John Garamendi's stated rationale, that approving one lease would set off a parade of oil companies coming to sully the coast, but off course those are approved on a case-by-case basis as well.

If we're going to talk seriously about drilling off the coast in the future, there should be at least a couple bright lines - closure deals like this, and the implementation of an oil severance tax so that we're not the only state in the country that doesn't charge a fee to industry for taking our natural resources out of the ground.

It's an interesting debate - legislators are split, with coastal Assemblymembers opposing but the locals in Santa Barbara in favor, and even Lois Capps thinks it's a worthwhile deal. Endless oil and gas concerns off the coast ought to be dealt with, it's a good question to ask whether this is the right way.

Drilled Baby Drilled

You know, the people who said that President Obama said what he had to say during the campaign, feinting to the center and then moving left once in power, is massing a good amount of evidence.

U.S. President Barack Obama may order a hold on a proposal issued in the final days of the Bush administration to expand offshore drilling in previously banned areas, an Interior Department official told Reuters on Wednesday.

Shortly after being sworn in on Tuesday, Obama ordered all federal agencies and departments to halt pending regulations until they can be reviewed by incoming staff.

An Interior official said the department is waiting for clarification from the White House on whether a proposed draft of a five-year plan to lease areas in the Atlantic and Pacific waters for oil and natural gas drilling can go forward.

I think Interior Department Secretary Ken Salazar has argued against oil shale exploration in the interior West in the past.

Now, Obama may not be able politically to reinstate the ban, but he could functionally reinstate it through denying expansion proposals. And considering that miniscule amount of oil available in the US, this won't affect supply and is not worth destroying environmental balance in the process.

Sigh... Comity

I guess it was too nasty and partisan to suggest that coal makes people sick, so Dr. Steven Chu had to tone it down in the hearing room.

President-elect Barrack Obama's nominee for Energy secretary, Steven Chu, walked a fine line today between his strong views on the need to combat climate change and the concern of some senators about Chu's past criticism of coal use, endorsement of gasoline taxes and tepid embrace of a cap-and-trade system for limiting greenhouse gas emissions.

Chu, who appeared before the Senate Energy and Natural Resources Committee, was asked about a comment he once made that "coal is my worst nightmare." Chu told the committee that "if the world continues to use coal the way it is using it today, not only in the United States but in Russia, India and China, it is a pretty bad dream." But he added that he does not favor a moratorium on coal and said he would seek and fund research on technologies so that the United States could continue to tap its abundant coal reserves.

Although Chu, a Nobel Prize-winning physicist who heads the Lawrence Berkeley National Laboratory, once called for sharply raising gasoline taxes, today he echoed Obama's comments that given the troubled economy, higher gasoline taxes are for now "off the table." But he also said that higher taxes could lead to lower prices for crude oil by creating incentives for more efficient vehicles and reducing demand for petroleum products [...]

Chu also responded to questions on a variety of topics from members of the Senate committee:

Nuclear power: Chu said that he favored tapping loan guarantees to restart the U.S. nuclear industry, which he said had to be "part of our mix." But he deflected a question from Sen. Jeff Sessions (R-Ala.) about whether he favored a far-reaching expansion of nuclear power, saying he hoped to get "a few" new plants started while continuing to search for safe ways to store nuclear waste.

He said that current methods of reprocessing nuclear waste, a solution favored by the Bush administration, were "not ideal" and that the issue need not be resolved for a decade. "We don't need a solution today or even ten years from today," he said.

Offshore oil exploration: Chu repeated Obama's view that exploration onshore and offshore had to be part of "a comprehensive energy policy," but he added that U.S. reserves were a tiny fraction of world reserves. "The more efficient use of energy in the United States is the biggest factor that can reduce our dependence on foreign oil," he said.

Clean coal, nuclear, no carbon pricing, offshore drilling - what a conservative bonanza! Boy, was this guy emasculated.

In his opening remarks Chu promised to reduce emissions, but given the fact that his wings are so clipped and the progress will be so incremental, I'm not sure it'll matter. Very disappointing stuff from what was thought to be one of Obama's best nominees. Heck, even the CEO of EXXON is advocating a carbon tax (though probably because he knows the politics are treacherous; John Dingell tried this same kind of sabotage last year).

The Dead-End Kids

Eve Fairbanks has an important piece about the deepening conservatism in the Congressional Republican caucus. They have been emboldened by their little model Congress stunt on offshore drilling in August, which led to a predictable capitulation from Democrats and the prospect of oil rigs on the California coast within a couple years. Despite the will of the voters at the polls, Republicans learned the lesson of 2008 is that if they stamp their feet and scream loud enough, there is no limit to what they can achieve.

The episode was the happiest moment of the House Republicans' two years in the minority. But, for House conservatives, the energy insurgency provided far more than mere satisfaction: It became a blueprint for the future. Forget the self-flagellating remedies proposed by white-flag Republicans like David Frum or the Sam's Club crowd. The House right-wingers concluded from the drilling victory that conservatism needn't compromise ideologically in order to win--just the opposite. It's a lesson they're eager to apply to Barack Obama's economic schemes, like health care reform and the huge infrastructure stimulus package. Rather than accepting the implications of John McCain's recession-driven loss--that Americans, perhaps, might be growing weary of Republican economics--the conservatives intend to trigger a popular revolt, like the one they provoked over drilling, against Democrat-led socialism itself.

Conservatives may have dwindling ranks, increasing illegitimacy and the headwind of a very well-liked incoming President eager to implement a popular agenda to deal with. But that is simply not what they gained from the election season. Their take was that McCain was insufficiently conservative (!) and that, besieged on all sides, they must stand up for the people and put the brakes on this whole "change" fad. They have nothing left but ideology, and the Drudge/Fox/talk radio megaphone that it still able to mainline that ideology into the public opinion stream. The years of groupthink have proved to BOTH sides in Washington that only conservative populists are the holders of the popular will, regardless of, you know, election returns.

By the time Pence and his pro-drilling confederates stormed the House floor on August 1, Republicans were primed to accept the ensuing battle's lessons: One, dramatic gestures pay; two, conservatives don't have to compromise to capture the people's imagination. "When [Pelosi] and other Democratic leaders felt the force of America against them ... Americans let their voices be heard, and they were enraged, and it affected the way the [energy] bill was put before the House," explains Representative Louie Gohmert, a bald, cheerful judge from Texas who got swept up in the August excitement.

Soon, as Lehman Brothers melted down and Treasury Secretary Henry Paulson rushed around the Hill begging representatives to do something, a new menace ripe for attack emerged: government intervention in the free market. Psychologically rejuvenated by the energy fight, conservatives turned their newfound taste for melodrama against government bailouts. Hensarling derided the September $700 billion plan to rescue the financial industry as a "slippery slope to socialism," and Thaddeus McCotter, a conservative from the Detroit suburbs, exclaimed that "it was no mistake that, during the 1917 Bolshevik revolution, the slogan was 'Peace, land, and bread.' Today, you are being asked to choose between bread and freedom. I suggest that the people on Main Street have said they prefer their freedom!"

All 17 House Republican freshmen rejected Boehner's tearful pro-bailout appeals and signed up with Hensarling's mutiny against the first bailout vote. And the enthusiastic response from constituents confirmed the conservatives' view that, while America (perplexingly) might not be planning to vote for them, it stood with them. As Culberson posted proudly on Twitter: "Texans core belief =leave me alone: gov't stay away from my home, my family, my church, my school, my bank account & my guns." Even Boehner became a believer. After the GOP's loss on Election Day, its second in a row, he promoted Pence, his old rival, to the leadership team and mailed a letter to House Republicans praising the conservatives and vowing to use the energy episode as his battle plan.

The bailout bill was ideologically muddled by the fact that it was designed to funnel money to giant investment banks at least partially responsible for the financial meltdown, and as such is not the best example. But what's significant is the language used, the simplistic shibboleths of "freedom" and "socialism". These didn't work during the Presidential campaign, but when they are channeled into populist proposals that Democrats haven't successfully pushed back on, the result could be dangerous.

Gohmert, the conservative Texas judge, had the brainstorm for his own contribution to the coming wave as he emerged from anesthesia a few days before Thanksgiving. He'd just undergone surgery to repair his anterior cruciate ligament, torn in the annual House softball game, and, as he lay recovering, he was possessed with the germ of an idea. He dropped an e-mail to Newt Gingrich. "He wrote, 'Do you realize that the amount of money they want [in the remaining, as-yet-unused $350 billion of the Wall Street bailout fund] is so great that you could actually give every American a tax holiday for two months?'" Gingrich remembers: "I looked at it and I thought, wow, what a great way to quantify it." Newt shot back a message predicting that a two-month holiday on both income and Social Security taxes--proposed by Gohmert as a conservatively populist, don't-let-Big-Brother-take-your-money alternative to the bailouts--would be "brilliant." "I don't get a lot of e-mails from anybody, especially somebody as smart as Newt, saying 'This is brilliant,'" Gohmert modestly admits.

I don't think anyone has invalidated that "let the people have their own money" approach. Obama's transition team is talking about reducing withholding taxes to give tax cuts to working Americans (which is a behavioral economics scheme based on the idea that people will spend an extra $20-$50 they get every two weeks instead of a lump sum of $500 or $1,000, which would just go to paying down debt). Traditional media still foregrounds ideas like "sales tax holidays" forwarded by lobbying groups like the National Retail Federation. And conservative economists can still credibly view the stimulus choice as one between tax cuts and public spending, and call on 40 years of demonization of government to trot out tax cuts yet again as the solution. After all, Obama's proposed it, so it's just a matter of more of them and less of that nasty big-spending liberalism.

The goal will be to end or moderate the recession. According to the textbooks, government spending raises the demand for goods and services. Tax cuts also spur demand by putting more income in the hands of consumers or more after-tax profits in the hands of businesses.

Is a fiscal stimulus good policy? The answer is no if the stimulus consists of increased spending. The stimulus may be good policy, though, if it consists of lower taxes.

See? They're just the same, only lower taxes lets YOU keep YOUR money, and big gubmint spending steals your money for pork. Pork!

There really is nothing left for conservatives to argue beyond "that way lies socialism." As Fairbanks explains, this is the same strategy they used in the 1930s to try and slow down the New Deal. They argued to themselves that Roosevelt was just a charismatic leader and his policies were abhorrent to the majority of the public. They tried to corner the 1930s version of Blue Dog Democrats to get them to flip their votes. They believed the country was center-right and that by holding to their convictions, they could not fail. What else could they do, other than disband? The strategy wasn't very successful then. Nowadays, there is the constant hum of the noise machine and a right-wing movement well-practiced in the art of obstruction. Not to mention a Democratic majority that fetishizes bipartisanship and timid in the face of these cries from the other side.

(I'm wondering about the connection between dead-ender conservative populists and the "Lost-Cause" mythmakers of the South. Michael Lind calls for a "Third Reconstruction" of the South to save the US economy, while Ed Kilgore has a contrarian view, while acknowledging that "first-wave" economic strategies of low wages, deregulation and the absence of unions have taken hold in the South in the Bush era.)

A lot of commenters and writers in the blogosphere thinks that we should just dismiss the conservative populists and let them play their little games, that the elections have rendered them irrelevant. I don't subscribe to this point of view. We still have a media inclined to promote conflict, and a steady stream of right-wing operatives ready to get their position into the discourse. Further, the imbalance between extreme partisan warfare on one side and the desire to play nice on the other persists. Past history of Congressional capitulation is not promising here. Not to mention that so many of the initiatives the incoming Administration wants to implement need to happen fast to maximize their effectiveness, giving the dead-end kids a piece of leverage that they are sure to use.

Cranks like this are present in virtually every new Administration, but in our current media/political age I think they are uniquely equipped to succeed. And I don't see a real strategy to counteract them yet.

Keeping Up With The Jones

Let's continue my look at various cabinet and White House staff appointments by taking a look at the new national security advisor, James Jones. By all accounts Jones, a former Marine general, is fairly apolitical, although he supported John McCain in the election and has been tapped to head at least a couple studies by the Bush Administration. He has commanded NATO forces in the past and has a keen understanding of both military and diplomatic issues. By all accounts, he's a smart, committed public servant, and his views on some major issues have been decent, particularly on Afghanistan, where he is an advocate for improving both reconstruction and diplomatic efforts.

Many are justifiably concerned about Jones' most recent job at the US Chamber of Commerce, advising on energy issues. Energy is absolutely a national security concern, so his new position will be at least tangential to that issue. And the Chamber's energy policy, in a word, sucks.

Jones sits on the board of Chevron Corp., and since March 2007 has been president and chief executive of the U.S. Chamber of Commerce's Institute for 21st Century Energy, which has been criticized by environmental groups.

"They have a reprehensible record," said Frank O'Donnell, the outspoken leader of Clean Air Watch, of the institute led by Jones.

The institute calls for the immediate expansion of domestic oil and gas production, nuclear energy and clean-coal technology, in addition to investment in renewable and alternative energy sources.

O'Donnell criticized institute reports under Jones that challenged the use of the Clean Air Act to combat global warming and the right of states, such as California, to impose environmental standards that go beyond those set by the federal government.

"Since global warming is a security threat, this selection raises a real eyebrow," O'Donnell said in an e-mail. "Will Jones be predisposed to compromise the new administration's environmental agenda, both at home and in the international arena? . . . Stay tuned."

We cannot think in the mindset of the past, where we use the military to provide safe passage for oil and fight resource wars. The future of energy has nothing to do with "Drill baby drill" or clean coal, which doesn't exist. Hopefully Jones' views on this subject will be taken with massive amounts of grains of salt. At this point, the jobs of Energy Secretary and EPA Administrator had better be far to the left of Jones to balance this out.