Thursday, April 27, 2017

Making Sure The Trump Tax Plan Doesn't Explode The Deficit

If you are of a certain age, think of the Trump tax plan
as engaging the clutch in your car as you mash down
on the accelerator....but we also need some braking action
on spending.
You are going to be bombarded in coming days and weeks with shrieks and cries about how the Trump tax plan won't 'be paid for' and 'will explode the deficit'.

Which would be humorous if it wasn't coming from the same media outlets who were deaf and mute about the deficits and debt under President Obama.

Just for the record, the total national debt was $5.6 trillion when President Bill Clinton left office in 2001; $10 trillion when President George W. Bush left office in 2009; and just about $20 trillion when President Barack Obama left office in January, 2017.

The national debt was 34% of GDP in 2000 when Bill Clinton left office. It is now 77% of GDP.

Based on current CBO projections, another $10 trillion in debt is expected to be added by 2027 if nothing substantive is changed in the way we manage our national finances. Debt owed to the public is expected to be $25 trillion in 2027 whether Donald Trump was elected President or not.*

It is just baked in the cake already. Mostly due to entitlement spending and compound growth.


So no one gets any sort of star on the middle of their foreheads for holding down deficits since 2000. No one. In the White House or in Congress. Either Democrat or Republican.

There are several important parts of the Trump tax plan as outlined today. Until further details are presented, there is no way to be 100% sure about what the revenue changes will be.

However, here's what seems to be going on:

  1. The proposal seeks to reduce corporate and individual income tax rates a lot.
  2. Corporate tax rates would fall from 35 percent to 15 percent. “S corporations” would also enjoy the 15% rate.
  3. Individual income tax rates would go from 7 brackets down to just 3 and the rates would be 10%, 25% and 35%.
  4. Standard deductions would roughly double from $12,600 for married couples to $24,000.
  5. All tax deductions, credits and exemptions would be eliminated, save for the deductions for mortgage interest, retirement savings and charitable giving. 
To those who are suddenly 'worried' about the national debt after 8 years of not caring about it, they need to know that the net revenue loss due to all tax provisions NOW in the tax code amounts to roughly $1.5 trillion per year. Elimination of all of them, referred to as 'tax expenditures' in budget parlance, except for the 3 mentioned above, would yield at least $1 trillion in new tax revenue annually.

In order to not add to the debt, or the $10 trillion already expected to be incurred based on past policy-decisions, tax writers are going to have to find as many tax deductions to eliminate in order to make up for the lost revenue from the tax rate cuts.

Or they are going to have to find a commensurate amount of spending reductions from the baseline (which are not real absolute cuts but rather a slowing of spending in the out-years).

Which is where the 'Repeal and Replace Bill to Eliminate Obamacare' (RRBEO) comes in.

IF you don't want to see so many tax deductions eliminated, THE ONLY place left, if you care about reducing annual deficits, the national debt and generally the size of government, is to CUT FEDERAL SPENDING SOMEWHERE! ANYWHERE!

The first draft of the Republican health care bill to replace Obamacare had close to $1 trillion in spending savings in it. That is a good place to start.

The more 'debt-neutral' this tax bill can get, the better it will be for all of us in the long-run. Eliminating hundreds of special tax provisions for this industry or that business sector is a good thing, especially since cutting the tax rates is expected to contribute to a revving up of our economy.

Tax cuts have worked in the past when coupled with federal spending cuts that have exceeded the magnitude of the tax cuts in terms of impact on the economy. Just take a look at the entire presidency of Calvin Coolidge from 1923-1929; he led the effort to cut federal spending, federal debt AND federal taxes every single year and the US economy boomed during that time.

Silent Cal seemed to have understood the concept of getting the economy off to a roaring start as many hot-rodders of the 50's and 60's knew about their cars: popping the clutch and flooring the accelerator is the Trump Tax Plan right now.

We just need to make sure someone also knows how to use the brake on spending, again, much like Silent Cal knew how to use it.

The question really comes down to this: Do you think a national debt about the size of our US GDP is ok and manageable...or do you NOT think a national debt about the size of our US GDP is manageable or not.

Based on hundreds of hours of testimony we heard from hundreds of experts on the subject of national finance and the economy over 12 years working on Capitol Hill, we have come to the conclusion that, as former Federal Reserve Chairman Alan Greenspan used to dryly intone in one form or another:
'We know at some point in time, all nations in history that have over-spent their revenue base and built up unmanageable levels of national debt have suffered rampant inflation, severe depreciation of their currencies, sky-high interest rates and a collapse of their previously-working economic system.
The problem is....once a nation realizes it is past that point, it is too late to do anything about it. Cutting spending, increasing tax revenue, preferably through a growing economy and balancing the federal budget now is far preferable to rolling the dice later'
We heard that from Chairman Greenspan and 99 other experts starting in 1985. Republicans and Southern Democrats, (of which there were 91 at their high point) banded together in the House and the Senate to push through various budget spending control measures starting in 1990 and continuing in 1993-94 and 1997 to produce only the 4 balanced budgets from 1998-2001 that the US has seen, or is likely to see for the foreseeable future, since 1952.

'4 balanced budgets out of 65 years is no way to go through life, son!' as Dean Vernon Wormer might say if he were President.

It coulda happened you know.











*'Debt owed to the public' is just what it says it is....debt owed to people or sovereign governments. Overall Debt in 2027 should be around $30 trillion when you add in the intra-governmental debt that is issued such as when money is transferred from Social Security Trust Funds to other purposes




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Tuesday, April 11, 2017

Why Not Get Rid of the Senate Filibuster Altogether?

America's Debt Ship Is Coming Ashore
Now that we have your attention with all this red ink in the above chart put together by Jon Gabriel (it looks like the bow of a mighty aircraft carrier, or worse, the Titanic, heading for shore or an iceberg, doesn't it?), let's think aloud about how we might be able to use some of the seismic cracks in Washington to address our debt and economic growth problem now that the Senate has 'nuked' the filibuster when it comes to Supreme Court nominations....

First of all, a caveat: We think the US Senate should remain as different from the US House of Representatives and virtually every other legislative body in this nation and around the globe. It was set up to be 'The World's Greatest Deliberative Body' for a reason...namely because Founders far smarter than anyone who has come after them said it would be the best way to set up our democratic republic.

We are not adverse to going back to the whole 'unanimous consent' idea plucked from the Roman Senate long ago where every single Senator had to agree on the final legislative package, not just a majority or super-majority.

Think about the rough edges that would be filed off of any bill if every single Senator had to be mollified in some way to get a bill passed. Maybe that would neuter most legislation to mere gruel where nothing much of substance gets done.

Or maybe Senators start to realize that if they stand in the way of something YOU want to get done as a Senator, YOU will stand in the way of THEM getting something done as Senator

The filibuster, in some form or fashion, has basically worked so far. We hope they come to their senses in the Senate and restore coherent rules regarding the filibuster once everything settles down some.

Later.

In the meantime, we got to wondering with some folks:
'Hey! Since the Senate has already nuked the filibuster in judicial nominations, what if they 'nuked' the rules for other Senate bills, say, such as the budget reconciliation package everyone has said we might get in 2 parts this year: the first dealing with Obamacare repeal and the second, with tax reform.'
Stay with us here if you can. Paying any attention to a budget analyst as he/she explains the rules of the US Senate AND budget reconciliation (BR) procedure is like being kind to a stray dog or cat in the neighborhood.

They appreciate any and all the attention and love they can get.

It occurred to us that one of the huge blockades to getting Obamacare repealed was Speaker Ryan trying to craft the first phase of a 3-step process as a bill that would cut $1 trillion of spending by eliminating most of what was in the guts of the ACA. He said the reason was to use BR so Republicans would only need to a simple majority vote to win and avoid the Byrd Rule (too complicated but we have explained it before in other posts) and then move on to tax reform.

What if the US Senate suspended the role of the filibuster when it came to all budget-related matters? 

It would require a majority of the Senate to agree to amend the BR rules, which would look a lot like the recent vote to 'change the rules' before confirming Justice Gorsuch to the Supreme Court.

Once the filibuster was removed from any budget-related matter or process, there would not be any reason to have to concoct a less-than-optimal repeal of Obamacare which could then be replaced by whatever the Republican majority wants to replace the ACA with. All Senate business would be under regular order, with just a 50%+1 majority required to pass anything.

Then the Republican Majority in Congress could pass a bill that:
  1. Repeals Obamacare (to the tune of over $1 trillion in savings over 10 years)
  2. Repeals many to all of the Obamacare taxes which are close to $1 trillion in total.
  3. ADDS on the tax reform many Republicans have been dying to pass for decades now.
In the absence of the threat of a filibuster, and with new amendments to the BR process in the US Senate, this Congress and President could pass a simply GIGANTIC Omnibus Budget Reconciliation Act of 2017 (GOBRA) that: 
  1. Cuts taxes by $2 trillion over 10 years ($1 trillion repeal of ACA taxes; $1 trillion tax reform tax cuts) AND 
  2. Cuts spending on ACA by $1 trillion over the next decade AND
  3. Reduces tax breaks to the tune of close to the tax equivalent of $1 trillion over the same period of time.
Current tax law produces a sheltering of taxation through so-called tax expenditures of close to $2 trillion PER YEAR! The goal of any coherent tax reform plan has to be the severe flattening of the tax code across-the-board, first in the tax rates and second, in the number of tax exemptions available in many cases to only very special few taxpayers.

As humongous as it seems, the $2 trillion in tax cuts over 10 years represents roughly only 1% of GDP compared to the economy over that same time period. Pair $2 trillion in tax cuts with some combination of $1 trillion in ACA spending savings plus a mere shaving of many of the favored tax provisions of the US tax code today to come up with $1 trillion in elimination of tax breaks and you have a budget-neutral GOBRA to present to Congress in 1 phase, not 2 or 3.

Or, as the Debt Ship chart above suggests, come up with a package that throws off $200 billion in surplus per year to pay off the now-over $17 trillion in debt owed to the public.

That would 'only' take 85 years until the year 2102 to pay our national debt off to zero.

Think about that for a moment.




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Thursday, April 6, 2017

Want to Chart How Trump Is Doing On Job Front?

Here's everything you want to know about employment growth data over the past 100 years in America.

Whenever someone tries to manipulate the facts to his/her preferred candidate or political party, you can whip this report out and deal with the facts, not with their spin.

Always Remember This!:

'The unemployment RATE is not the same thing as finding out how many people are actually WORKING at any particular time in this country!'

The most important figure in any economic report is how many people are working full-time. Not how many are working part-time or sporadically. Not how low or how high the unemployment percentage rate is.

The absolute hard number of people working full-time. THAT should be our dipstick to measure how well an economy is doing under any elected President or Congress.

The unemployment rate can be manipulated and pitched one way or another depending on whether you are attacking or supporting a politician or position.


The hard absolute numbers of people actually working can not be as easily manipulated. They either go up in absolute numbers or down in absolute numbers. Pretty easy to see if you can understand elementary arithmetic.

Here's what the Bureau of Labor Statistics has to say about employment numbers since the Great Recession of 2008-2010:
'The depth and breadth of employment losses during the Great Recession contrast sharply with all other recessions since 1939. From its peak in January 2008 to its trough in February 2010, non-farm employment decreased by 8.7 million, a decline of 6.3 percent.
Only the job loss during WWII was greater—from November 1943 to September 1945, employment declined by 10.1 percent. Recovery was slow coming out of the Great Recession.
It took 25 months to lose the jobs, and twice as long (51 months) to recover them by May 2014. This was the longest employment recovery time following any recession since 1939. The next longest recovery, often referred to as the “jobless recovery,” followed the 1990–91 recession, in which employment took 23 months to recover'
If there was any main reason why millions of people in Michigan, Pennsylvania and Wisconsin voted for now-President Donald Trump contrary to past elections when they went for the Democrat candidate, that paragraph above from BLS pretty much encapsulates the angst and anger than millions of people felt from the lack of robust job creation coming out of the Great Recession under the final 6 years of President Obama's leadership.

The length of the recession and the lack of a profound sense of rapid job creation led many to believe that the economic policies, the tax hikes and the enormous load of new federal regulation-making under President Obama just were not working for the average American worker.

Had the recovery been anywhere near the rapid snap-back of previous recoveries and expansions under other Presidents, the economic ferment would not have been as deep as it was in 2016 when millions of people turned to businessman Donald Trump and basically said: 'He can't do any worse than that on the economy, can he?'

So the key number to focus on is the 143.261 million (or so) of people actively working in the American workforce today (see chart below).

If that number ratchets up to 155 million by the end of Trump's first term, which based on the first few months of economic data under his presidency might happen, he should be a walk-in for a second term if he wants to stay on the job regardless of what he does or says on Twitter or any other venue.

The confidence level of American business leaders right now is at a high of 93%, according to NAM President Jay Timmons (who, by the way, was communications director in former Congressman Alex McMillan's office, my boss for 10 years on Capitol Hill, so I can guess you can say we hired well)

Higher levels of confidence in the business community that, under President Trump, excessive regulations will be curtailed; taxes will be cut and government spending will be held in check will lead to more hiring in the job sector.

If there are 12 million more people working in 2020, many of whom have not been able to find a steady well-paying job for the past 8-10 years, who do you think they are going to vote for?

People vote with their pocketbook. And 401(k)s. And their children's education all in mind.

You can download the raw data from the BLS website (click here) if you want to play along at home each month.

You will wind up knowing more about the real economic growth data than many to most in the media and probably in government as well.



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Wednesday, March 29, 2017

What The Heck Just Happened Last Week With The Republican AHCA?

'Welcome to First Grade..of Budget Reconciliation!'
We had a good friend who called to get an explanation of what happened last week when the Republicans abruptly pulled their AHCA health care reform bill of Obamacare which was supposed to be a reform of our previously extant health care system and 'save every American household $2500!' and 'allow you to keep your doctor if you like your doctor!'

Remember those golden oldies?

After a few sentences trying to outline the rules of budget reconciliation and federal budget policy in general, he just stopped me and said:

"Just talk to me like I am a first-grader!"

That is easier said than done but here goes:
  1. 'Health care is very complicated, Junior. So pay close attention to me'
  2. 'You can't always get what you want. But if you try sometimes, well, you just might find, you get what you need'
  3. 'You need to learn to play with your friends. Or else they become your enemies'
  4. 'Getting 70% of a loaf of bread is better than getting none of a loaf of bread. Or anything'
  5. 'The US Senate is different from the US House of Representatives. Or anywhere else on earth'
  6. 'This bill had $1 trillion of tax savings in it. That would help me pay for your college education one day'
  7. 'Now run along and go play outside. That is all I can tell you right now' 
There is no earthly way explaining health care reform can get 'easy' or simple' as many people would like it. The US Senate was set up to protect the rights of the minority party at any time and the parliamentary rules and procedures of the Senate were established to allow full and free debate and an extended amendment process unlike any other legislative body in the world.

Finding ways around and through the parliamentary minefields of the Senate require men and women of extraordinary intelligence and ability. People such as Thomas Jefferson and James Madison crafted them to be as such from our Founding so they hoped there would be others like them who would follow in their stead.

You can determine whether that has happened or not.

Here's some more 'adult' information about the AHCA and why those who say that it was a 'crushing' blow to the Trump White House and Republicans in charge are wrong to assume that we have seen the last of health care reform in this, the 115th Congress;
  1. There was close to $1 trillion in tax savings that were embedded in the AHCA (over 10 years) (see bottom of post)***
  2. There is not just one but two budget resolutions in 2017, primarily due to the fact that no budget resolution was passed in 2016 for the FY 2017 fiscal year that we are about halfway through already here on March 29, 2017. (I know, I know...confusing but life is confusing)
  3. The 1st budget resolution passed the House and the Senate (no Presidential signature needed or veto allowed since it is a 'resolution' of both bodies of Congress, not a US law passed each year) in early January.
  4. This budget resolution was the vehicle by which Republican leadership sought to pass AHCA with simply majority vote +1.
  5. As long as the tax cuts fell below the level of spending cuts under the AHCA repeal of Obamacare, (stay with me here for a little while longer), the bill could be passed by simple majority under budget reconciliation rules and language. (Don't act like a 1st grader and ask: 'Why?' all the time unless you want to read the Budget Control and Impoundment Act of 1974 in its entirety which was one of the 'Watergate Babies' reforms intended to clean up the process post-Nixon Administration days)
  6. If the tax cuts in AHCA didn't fall below the spending cuts, it would increase budget deficits and add to our collective national debt, now at about $21 trillion, and therefore, would not be honored as a special provision of Senate rules and would be open to the 60-vote cloture requirements to get any debate going on any bill there.
  7. The hope was that once the bill got over to the Senate, there would be a surplus of spending savings that would later possibly be applied to the tax cuts that President Trump and the Republicans want to enact during their tax reform act to follow later this summer.
  8. That tax reform effort would be covered under another budget resolution to be passed perhaps by the end of May for FY2018 which would require perhaps ANOTHER $1 trillion of spending cuts in other parts of the federal budget and/or removal of tax exemptions and deductions currently in the tax code in order to 'pay for' the tax rate cuts in a budget-neutral manner so THAT tax reform bill could be passed with a 50%+1 vote instead of being subject to the 60-vote cloture requirement.
So, to boil this all down into some digestible gruel even a first-grader might understand (probably not):
The failure of the House to pass the AHCA and start the process to 'repeal' Obamacare not only puts the 'replace' effort of Obamacare in jeopardy but also makes it more difficult to pass and enact a more simple tax code for everyone later this year.
'Show them what they have won, Johnny!' 


(click through title link if you can't see video)

We don't believe for a minute that this is the last we have seen of the AHCA or efforts to repeal and ultimately replace Obamacare. It does delay it, though and the clock is ticking on the legislative calendar. 

Nothing big ever gets done in an election year. So by December 2017, President Trump and the Republicans in charge of the House and Senate better have some significant success stories to trumpet and run on or else they may feel the heat of the very people who elected them to 'drain the swamp!'; 'clean up this mess!' and 'do their jobs and go home!' (our addition based on our view we should have citizen-politicians who serve perhaps 3 terms in any elective office at any level...and then go back home and do what they were doing prior to elective service)

Stay tuned. Should be an interesting roller-coaster of a legislative year in Washington DC.

***Tax cuts in AHCA (per Americans for Tax Reform)***
-Abolishes the Obamacare Individual Mandate Tax which hits 8 million Americans each year.
This is part of a $270 billion tax cut.
-Abolishes the Obamacare Employer Mandate Tax. This is part of a $270 billion tax cut.
-Abolishes Obamacare’s Medicine Cabinet Tax which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts. This is a $6 billion tax cut.
-Abolishes Obamacare’s Flexible Spending Account tax on 30 million Americans. This is a $20 billion tax cut.
-Abolishes Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses. This is a $126 billion tax cut.
-Abolishes Obamacare’s HSA withdrawal tax. This is a $100 million tax cut.
-Abolishes Obamacare’s 10% excise tax on small businesses with indoor tanning services. This is a $600 million tax cut.
-Abolishes the Obamacare health insurance tax. This is a $145 billion tax cut.
-Abolishes the Obamacare 3.8% surtax on investment income. This is a $172 billion tax cut.
-Abolishes the Obamacare medical device tax. This is a $20 billion tax cut.
-Abolishes the Obamacare tax on prescription medicine. This is a $28 billion tax cut.
-Abolishes the Obamacare tax on retiree prescription drug coverage. This is a $2 billion tax cut.



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Sunday, March 26, 2017

The Trojan Horse's Nose Under The Tent--Opportunity Lost

'Are they aiming me at the Senate, or against themselves?'
The bottom line of this post is:

The Freedom Caucus better have 188 more votes up their sleeve to pass their version of Republican health care reform of President Obama's health care reform that is now the law of the land.

And will stay that way until something passes the House with 218 votes and 51 votes in the US Senate and President Trump signs it into law to supersede what President Obama and the Democrat Congress passed into law in 2010.

Those are the rules of the game whether anyone likes them or not. It is like the Rules of Golf; you move the ball in the rough while clearing some leaves or twigs around it and you incur a penalty whether you think it is fair or not.

Get used to it.

The best way we can describe what happened this week on the health care vote is to use two ancient examples in tandem:

The Republican strategy was to drag a Trojan Horse into the US Senate tent under the budget reconciliation and Byrd Rule hurdles where it could pass by simple majority vote of 51 and THEN be used as a vehicle for further reform and amendment.


If Republicans had 60 US Senators in the Senate, and they were all in agreement, the details of the Republican bill really would not have mattered very much. They could have put together a peanut butter-and-blackberry jelly sandwich and called it the 'American Health Care Reform' (AHCA) and it would have been accepted as a bill apart from the budget reconciliation and Byrd Rule restrictions and passed into law.

But they don't. Not yet anyway. With 24 Democrat Senators up for re-election in 2018, and 10-12 in states where President Trump won by double-digits, there conceivably is the chance Republicans could pick up the 8 US Senate seats to get to the magical number of 60.

The press is proclaiming this as a 'spectacular' defeat as if this was the final defeat at Waterloo for Napoleon.

This is the first major setback 2 months into a US Presidency that lasts 48 months at least. There are plenty of battles left to fight on tax reform, immigration reform, reducing the size of government bureaucracy just to name 3 that will happen after Judge Neil Gorsuch is confirmed as the next Justice on the US Supreme Court.

(Our advice to the Senate Majority Leader, Mitch McConnell, not that he needs our advice, is to tell Minority Leader Chuck Schumer: 'Go ahead; Make My Day!' and let him start a filibuster against the Gorsuch nomination on the floor of the US Senate. Based on the laws of human anatomy and physics, we anticipate the filibuster will last about as long as the youngest Democrat Senator with the largest bladder can stand up and yammer, which might be about 24 hours probably, 36 hours at best)

The reason why the Freedom Caucus needs to come up with another 188 votes is that they seemed to be the largest organized group in the Republican Caucus directing traffic at the end of last week. They secured some concessions according to news reports but with each concession, they lost more moderate members of the Republican Caucus such that no ground was gained to get to 50%+1. (216 in this case since 5 seats are now vacant in the US House)

Unless they are waiting for 2018 elections to come around and deliver 8 more Republican Senators to get to 60 in the US Senate, that is. Which will be problematic if Republican House Members and Senators have to go back home to face an angry primary and general election electorate who thought they were going to 'repeal and replace' Obamacare this year, not in 2019 or beyond.

President Trump has proven his willingness to negotiate and compromise and cut deals with anyone during his business career and now in his first 65 days as President. He has signaled his willingness to work with more moderate and/or conservative Members of the Democratic Party in the House of which there might be about 30 or so left in order to get some sort of health care reform passed this session of Congress. Not the next one.

It is a basic matter of arithmetic. Get to 218 votes and you can pass a bill in the House. With or without the Freedom Caucus or the Tuesday Group or any other subsection of the Republican Caucus.

There was over $1 trillion of tax cuts and over $1 trillion in reduced spending from the future baseline of federal budgets in the AHCA according to Americans for Tax Freedom. For most fiscal conservatives, that alone would have been enough to start the process of unraveling the ACA instead of stonewalling it.

Anyone who says that 'fixing' our health care system is easy and simple really doesn't not have much credibility in our book. It is one of the most vexing and complicated public policy issues of our time and for the past 40 years at least.

As long as the process helps produce a system where everyone can have access to catastrophic health care insurance coverage (in order to protect them and their families against the truly catastrophic costs of adverse health conditions such as cancer, stroke, accidents, etc); preventive health care; dental care and wellness training at a very minimum, we think that would take us back towards a rational and workable health care system in America.

But the process has to get started first. 218 votes in the House of Representatives is where it has to start.

Failure to get to 218 means failure to get anything done on health care reform any time soon.

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Wednesday, March 22, 2017

Will 24 Million People 'Lose' Their Health Care Coverage If The Republican Health Care Plan Passes?

It all depends on what you want to believe.

If you love the ACA and President Obama, you want to believe 30 million people 'will lose their health care coverage if the mean old Republicans pass their bill!'

If you hate the ACA and want the Republicans to overturn Obamacare in its entirety, you want to believe that 'hardly anyone is going to lose their health coverage if the Republicans pass their bill'

When it comes to political statistics, where you stand depends not only on where you sit on the political philosophy spectrum but how your amygdala gets triggered: either for the liberal side of things or things conservative. (The amygdala is where the animal response lies in the human brain).

Let's face it: we all get hard-wired one way or the other over time after listening to political debates and trained like Pavlov's dogs to respond viscerally and emotionally primarily with anger towards 'the other side'.

The first casualty is ALWAYS 'the facts'. If we can all learn to control our emotions and look at the facts first before opening our mouths and launching a fusillade of attack against 'the other side', we might all be better off in the long-run.

Doug Badger wrote a pretty good article explaining the wide range of estimates concerning the number of future enrollees in private plans and Medicaid in the Republican American Health Plan due to be voted on tomorrow if the legislative schedule, and the votes are there to pass it, hold.

Here's one conclusion he came to:

'For all the hoopla about the ACA exchanges, it appears that Medicaid accounts for the lion's share of coverage gains and that many new Medicaid enrollees would have been eligible for that program even if the ACA had never passed'

Here's another:

'Since the release of the HHS study, the government has published two additional surveys of health-insurance coverage - the Current Population Survey (CPS) and the American Community Survey (ACS). Both offer data through the end of 2015, allowing for comparison with the NHIS estimate.

The three surveys use different methodologies to produce estimates of the number of non-elderly adults who gained coverage. These estimates vary by 20 percent - ranging from the CPS estimate of 13.7 million to the NHIS estimate of 16.5 million.'

Here's another report in Real Clear Policy, 'CBO: You Can't "Lose" Medicaid You Don't Have' you need to read to get a bead on how the CBO estimates of '24 million people will lose coverage' if the Republican plan is passed in total by the end of this year after it wends its way through the gauntlet of legislative process.
'The Congressional Budget Office (CBO) had to deal with two separate worlds when it analyzed the American Health Care Act (AHCA), the version of “repeal and replace” put forward by two House committees. While the CBO exists to provide numbers that relate to spending, deficits, and the economy, a different number got the most attention: the assessment that by 2026, 24 million fewer people would have health insurance.
That is not the same thing as saying '24 million people will lose health insurance'. Rather, it is a statement that, compared to how many people CBO expects to have health insurance in 2026 under current law (the Affordable Care Act, also known as the ACA or Obamacare), 24 million fewer people will have health insurance. The largest contribution to that projection is 14 million fewer people enrolled in Medicaid, the federal-state program that pays for health care for low-income people.'
There is a very long way to go before any final version of any Republican plan to reform health care coverage in America is complete. It could be late October for all we know right now. Or it could be November or right before the Christmas holidays.

We remember several sessions lasting right up to about midnight on December 23.  No one liked it but it sure made people make decisions and compromises on passing a large piece of legislation so they could get home and enjoy the holidays with their families and friends.

Be prepared with the facts before you get too heated one way or another about this bill. Calm cooler heads need to prevail if we are ever going to find some long-term solutions to health care in America.

Living more healthy lifestyles would help. Raise your hand if you think Americans are ready to give up their cigarettes, soda, chips and Twinkies and exercise 30-60 minutes every day and curtail their beer, wine and alcohol consumption.

But that would require far more than any congressional legislation could ever achieve.


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Friday, March 10, 2017

The 3-Step Plan to Repealing and Replacing Obamacare

'Good thing a rocket launch doesn't need to
go through Budget Reconciliation and Byrd Rule!'
If you had never heard of the differences between the US House and the US Senate in Washington, you are about to learn a lot about them in a very short time frame.

Based on initial news reports, a 'normal' (as in 'I have better things to do than hang onto every word uttered on MSNBC, FOX News or from the National Review every second of every day!') person would conclude that the Republican alternative to repeal and replace the ACA, aka 'Obamacare' was a 'total disaster of biblical proportions!'

Mainstream news folks were apoplectic. Democrats were scathing. Even members of the Republican Party were pronouncing the bill 'dead on arrival' just after being introduced early this week.

What the heck is going on here?

As we just said, the US House and the US Senate are about as different of two legislative bodies as you could imagine. At least as they can be in two western democratic republican forms of government, that is.

There are 3 stages to this roll-out (outlined below) by Speaker Paul Ryan and backed up by HHS Secretary Tom Price, who most recently was Chairman of the House Budget Committee which was the same committee a younger congressman named Paul Ryan chaired before becoming the Vice-Presidential nominee in 2012 and then becoming Speaker of the House.

It is fair to say 'they speak the same language'. And an archaic and byzantine language it is. If it was simple and could be conveyed in first-grade English, they would do that. But they are dealing with the rules of the US Senate which is anything but first-grade elementary school.

We had the benefit of serving 4 years on the House Budget Committee from 1991-1994 where a lot of this same language was explained enough times to start making sense after hearing it a couple of thousand times.  We also had the benefit of serving in the US Senate as chief of staff to US Senator Elizabeth Dole where we learned the intricacies of parliamentary rules from former Senate parliamentarian Bob Dove who left us with this one axiom to always remember:

'In the US Senate, the only rule to remember is....there are no rules in the US Senate!'

Once you get that into your head, the proposed Republican health care alternative introduction and plan starts to make (some) sense.

Here's what that rollout plan appears to be based on public comments by Speaker Ryan and Secretary Price yesterday:
'Budget Reconciliation?' 'Byrd Rule?' Riiiiiight....
  1. Phase I was the core bill introduced this week designed primarily to repeal major provisions of Obamacare with an eye to getting through Senate rules to avoid an extended filibuster by using their budget reconciliation process and avoiding the 'Byrd Rule'. (eyes start to glaze over but pay attention cause it is important to understand)
  2. Phase II will be the bills that will be introduced once HHS Secretary Price has had a chance to review the over-1400 new federal regulations put in place by the Obama Administration for Obamacare to determine which will be kept (not many) and which will be jettisoned (most of them).

    Expect this bill later this spring.
  3. Phase III will be the broader, non-budget policies most Republicans want to see passed as part of this repeal and replacement effort such as selling health insurance across state lines; returning funds and flexibility in Medicaid to the states and enhanced medical legal reforms.

    Expect this bill perhaps during the summer.
Just for educational and edification purposes, here are somewhat pedestrian translations of what the budget reconciliation process and the 'Byrd Rule' are, taken from some very good reports from the Congressional Research Service (CRS) (click through links to read more for yourself):

I. Budget Reconciliation
'The budget reconciliation process is part of the fiscal framework established by the Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, 2 U.S.C. 601-688), as amended. The principal aim of this framework is to enhance Congress’s coordination of spending, revenue, and debt limit legislation through the adoption and enforcement of a concurrent resolution on the budget (commonly referred to as the budget resolution). The budget reconciliation process, in particular, is intended to facilitate the consideration and enactment of legislation that implements, in whole or in part, the budget policies reflected in the budget resolution. Perhaps most significantly, the process establishes special procedures that have allowed the Senate to get to a vote on passage on budget reconciliation legislation without first having to demonstrate super-majority support (i.e., without invoking cloture with a three-fifths vote).

Translation into English: 'This is a way to get around the painful filibuster rules of the Senate so the majority party (Republicans now) can pass spending and tax law by simple majority vote of 50+1, not having to get to 60 to close debate'

Note: Republicans have 52 US Senators. Democrats have 46 plus 2 Independents who caucus with them. You do the math.

II. The Byrd Rule
'Senator Robert C. Byrd (D-WVa) explained that the basic purposes of the amendment were to protect the effectiveness of the reconciliation process (by excluding extraneous matter that often provoked controversy without aiding deficit reduction efforts) and to preserve the deliberative character of the Senate (by excluding from consideration under expedited procedures legislative matters not central to deficit reduction that should be debated under regular procedures). He opened his remarks by stating:
'... we are in the process now of seeing ... the Pandora’s box which has been opened to the abuse of the reconciliation process. That process was never meant to be used as it is being used. There are 122 items in the reconciliation bill that are extraneous.
Henceforth, if the majority on a committee should wish to include in reconciliation recommendations to the Budget Committee any measure, no matter how controversial, it can be brought to the Senate under an ironclad built-in time agreement that limits debate, plus time on amendments and motions, to no more than 20 hours.
It was never foreseen that the Budget Reform Act would be used in that way. So if the budget reform process is going to be preserved, and more importantly if we are going to preserve the deliberative process in this U.S. Senate—which is the outstanding, unique element with respect to the U.S. Senate, action must be taken now to stop this abuse of the budget process.'
Translation into English: 'We just don't want to deal with a bunch of garbage every time we consider a tax and spending package! And, on top of that, anything that adds to the deficit without being paid for by offsetting spending cuts or tax increases elsewhere will be ruled out of order!'

So far, every US Senator, including even former Majority Leader Harry Reid (D-NV, now retired) has honored this unique Senate rule of procedure.

Our take on this after reading more detailed explanation of the House Republican strategy is that Speaker Ryan and Secretary Price know what they are doing. Both have been House Budget Committee chairs and know the process of budget reconciliation far better than the average Congressmen or Senator.

The knee-jerk reactions of Senators Rand Paul and other Freedom Caucus members flies right in the face of the fact that former fellow Freedom Caucus member, Mick Mulvaney of South Carolina, IS NOW BUDGET DIRECTOR UNDER PRESIDENT TRUMP!

If Mick Mulvaney is on-board with this strategy, perhaps his former colleagues should listen to him.

Here's some observations early in the process:

  1. Advocating HSAs (Health Savings Accounts) as a panacea for providing health insurance is not a practical solution for everyone. For one thing, 50% of all taxpayers in America don't have enough income to pay federal income tax to begin with, in which case receiving a tax credit or tax deduction to buy a HSA is virtually worthless unless converted into a direct payment along the lines of an Earned Income Tax Credit (EITC) where people who don't earn enough for that tax credit receive a direct check from Washington for the amount owed.

    In other words, that 'tax credit' becomes a 'direct subsidy' just like the ACA subsidies that now exist under Obamacare for non-Medicaid-eligible citizens.
  2. The end result of this effort should be a flattening of the tax code with regard to treatment of health care insurance between business and individuals. There should be a basic fundamental level of tax deductibility for a basic catastrophic health care insurance plan offered by whatever source with wellness care, preventive health care and dental care included.

    Beyond that, a company or individual could purchase any level of health insurance they want. They just wouldn't be able to deduct those costs as a cost of 'doing business'.

    Company-provided health care is a vestige of the wage-and-price controls instituted by FDR in World War II where companies started providing health care as a way to entice good workers to come work for them. It is time for that part of employment history to be repealed.
  3. Managed care has taken over virtually all of the Medicaid market across the country. Trained professionals are employed to help people learn how to take basic care of their own selves BEFORE they develop complications such as diabetes and heart disease that become so expensive in later years.

    If we really want to get at the cost-drivers of high health care insurance premiums, we need to encourage more managed care across all forms of health insurance programs in America.

    Close to 50% of all health care costs are related to heart disease, stroke, cancer and diabetes.

    Americans can eat less unhealthy food; stop smoking; stop excessive over-drinking of alcoholic products and exercise at least 30 minutes every day and experts will tell you this will significantly reduce the incidence of those four health conditions listed above.

    Want to see health care premiums drop precipitously? Get out of the chair, walk around the block a couple of times; eat kale, stop smoking and drink maybe just 1 glass of red wine at night with dinner instead of a bottle of Scotch or case of beer and get all of your family, neighbors and colleagues at work and church to join you on a daily crusade to restore America's health.

    We would never have to worry about 'Obamacare', 'Trumpcare' or health care reform ever again.

    And save trillions of dollars over coming decades in health care costs. At least $1.5 trillion this year alone.

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Tuesday, March 7, 2017

Repealing and Replacing Obamacare

'Keep your eye on the little white ball'




Below are direct links to the legislative language as introduced by House Republican leadership last night in the House Ways and Means and the Commerce Committees:
From Ways and Means:
CLICK HERE to read the legislative recommendations from the Ways and Means Committee.
CLICK HERE to read a two-page summary of the American Health Care Act.
CLICK HERE to read a section-by-section of the Ways and Means legislation.
From Energy and Commerce:

CLICK HERE to read the entire bill, which includes legislative recommendations from the Energy and Commerce and Ways and Means Committees.
CLICK HERE to read a section-by-section of the Energy and Commerce legislation.
Here's something you might want to consider doing and ask your friends and colleagues to do as well during consideration of this bill:

'Turn off cable news and radio talk shows UNTIL and UNLESS you have read the legislation for yourself!'

We don't say that to encourage you to be close-minded and tunnel-visioned and shut off debate or not hear from other sides of the issue.

We say that to encourage each of you to use your own common sense and brains to read the bills and the amendments as they come up and make your own evaluations and conclusions before you start to bank on the opinions of columnists or talk show hosts or the basic news media whom we have pretty damning evidence by now that they really are not interested in presenting news in a fair and balanced basis through whatever political lens they choose to use.

The main things to remember is that any health care legislation should seek to allow the following:

  • Universal access to health care insurance
  • Tax equity fairness and treatment for all consumers of health care insurance
  • Basic catastrophic health insurance coverage for everyone
  • Means and incentives for driving overall health care costs down, not up

Once we have had a chance to plow through this legislation and probably some analytical reports from unbiased sources, we will post some thoughts and insights in coming weeks.

It is the greatest and most complicated public policy issue of our time and has been for the past 30 years now. It is in our own collective best interest to find a compromise to replace the ACA which has failed to cover everyone with insurance and has caused premiums to skyrocket across-the-board in the meantime.



Tuesday, February 21, 2017

Is President Trump Being 'Unfair' To Our NATO Allies By Asking Them To Pay More For Their National Defense?

NATO Member Nation Defense Spending as Percentage of GDP (2016)
Much is being made of President Trump's public comments about asking our NATO allies to shoulder more of the collective NATO cost burden.

This is not a new thing. Republicans as far back as the 1980's were regularly talking about 'defense burden-sharing' as one way to start getting out from the enormous $300 billion+ budget deficits back then.

Think that is not a lot? That represented close to 30% of annual total federal budgets of just over $1 trillion.  Today's budget deficits, while enormous at $500 billion+, are 'only' 12% of annual federal budget totals of $4 trillion or so.

Still, the question of fairness and justice comes up when you consider that since World War II, the United States taxpayer has been asked to pay for a disproportionate share of the collective defense budget of the free world, namely the US, Canada and Western Europe before the Iron Curtain fell and Eastern Europe for the most part became part of NATO in the 1990's.

Is it 'fair' and 'just' to ask fellow free democracies such as France, Spain and Germany to pay more for their individual defense as part of the overall NATO treaty that commits the US and other nations to come to their defense in the event of an unprovoked attack?

As you can see from the chart above, only Greece, Poland, Estonia and the UK are paying more than 2% of their GDP in defense spending in addition to the US. 23 other member NATO nations fall below the suggested 2% of GDP threshold that every member nation knows is the preferred target for every nation.

The US is paying 3.62% of GDP in defense spending. Since the US economy is so enormous compared to the rest of the world, that translates into over $650 billion in FY 2016 or twice as much in real terms as the rest of the 27 NATO nations combined, even though their collective GDP is greater than the US.

Essentially, US taxpayers (and young people by virtue of the debt we have built up for them at stratospheric levels prior to the Trump Administration taking office) have paid for the vast amount of defense of freedom for our NATO allies since 1945.

Granted, the US has benefited from the institution of freedom and democratic government across the globe since World War II. Every time a dictatorship fell or communism collapsed in Eastern Europe, the US gained new friends and allies and trading partners just to name a few benefits of exporting freedom across the globe as the #1 American export since 1945.

However, 72 years is a very long time. The devastated nations of World War II, namely France and Germany, are among the top 6 economies in the world today. Surely they can be asked to shoulder more of their 'fair share' of the collective burden defending freedom and peace in their nations.

After all, they are closer to the hot spots of the world than the US is. It would seem they would understand the importance of paying for their freedom more fully than relying on a Big Brother such as the United States has asked its taxpayers.

Know what the 'excess' of the United States spending more than 2% of GDP on defense spending is annually?

It is close to $300 billion. Per year. Know how much lower our national debt would be today had the US spent only 2% of GDP for the past 17 years instead of the projected $21 trillion it will soon be?

Over $3 trillion. Our collective debt burden would have been close to $18 trillion instead of $21 trillion solely by limiting our defense spending to 2% of GDP as 'suggested' by our NATO alliance.

Or, to put it other ways, taxes could have been cut roughly on average $200 billion per year for the last 17 years. We could have paved and re-paved every US highway probably 2 or 3 times in advance of the Trump proposal to spend $1 trillion on our nation's infrastructure. $3 trillion in spending over the last 17 years could have done a lot in the fields of research to cure cancer, Alzheimer's or AIDS.

No wonder France and other European nations have the resources to offer 'free' health care or higher education or any of the other litany of supposed benefits of living in a socialized nation! Being relieved of paying fully their fair share for their national defense allows for such policies to be pursued by elected politicians in each country each seeking to get elected and stay elected.

9/11 changed a lot for the US. Much of our increased defense spending came as a result of the now 16-year War Against Terror with major expenditures on the battlefields of Iraq and Afghanistan.

Still, our NATO allies benefit whenever American troops and military strength push back against such oppression. Had the US not been attacked on 9/11, perhaps the targets of Al Qaeda then and now ISIS would have been France, England or Germany. They would have had to have increased their defense spending regardless.

There are historical reasons why no one in their right mind would want to ever see a Germany or a Japan for that matter fully re-arm their military completely outside of a very tight military and national security strategic alliance. For one thing, both nations have repeatedly shown over centuries a very dangerous disposition to fully arm and then wreak havoc, destruction and millions of deaths on the world stage.

No one ever wants to see a fully independent and warlike Germany or Japan operating again.


However, that does not preclude either nation from paying a higher proportionate share of their solid economic output on their national defense and security. They could very easily make regular payments into a collective pool for NATO members and basically 'purchase' their security and defense from other members as they deploy troops and assets in the defense of all members in the alliance.

'Defense burden-sharing' was not a bad idea in the 1980's. It should not be dismissed as 'out of hand!' and 'crazy!' and 'insane!' as many in the press are portraying President Trump's recent pronouncements to be.

He could be a bit more pragmatic and diplomatic, to be sure. Perhaps such conversations should take place in private first at some conference of the G-7 or something like that.

However, ask yourself this question:

'Are we going to be paying a disproportionate share of the defense of Turkey, Denmark and Italy in 2027? 2057? 2117?'

If the US is still paying for the bulk of the defense of NATO in 2117, that would be longer than the period of time from the end of the Civil War in America to today.

Think about that. It has to change. Today is as good as any.



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Saturday, February 11, 2017

Look at that Plate-Spinner!



(click through title link to see video)

One the most amazing acts in television history, if you are of a certain age, was 'The Plate-Spinner' on 'The Ed Sullivan Show' in the 1960s.

Ed Sullivan was a producer of many vaudeville acts and had really no discernible talent other than he could spot new acts and trends and put them on the air before anyone else knew who they were.

When he announced 'The Beatles!', America went wild. Elvis Presley graced his stage as did innumerable actors and bands.

But there was one act that seemed to be on at least 2 Sundays every month that captivated and mesmerized anyone who saw it: The Plate-Spinner.

Erich Brenn of Austria would come on-stage with a lot of fanfare music in the background and proceed to start spinning plates and bowls and whatever he could get his hands on it seemed on top of 5 or 10 or 15 long sticks on a table or stuck in the stage floor somehow.

All a person could do was to sit transfixed for the 2-3 minute performance watching the plates or bowls start to lose momentum and then somehow, Erich Brenn would spin the sticks and get them moving again properly instead of crashing to pieces below.

So far, in the first 3 weeks of President Donald Trump's presidency, we have been reminded of 'Erich Brenn, the Plate-Spinner from Austria!' mainly because the ultra-left in this country seemed to have gone bonkers over every single action, word and appearance of our new President.

And whether it is by design on the part of President Trump (he coulda been the second 'Ed Sullivan' you know) or happen-stance, all that attention on a tweet he sent out or a comment he made about his daughter's clothing line seems to have unhinged the Democrat opposition to the point where it is all they can do to find the next place to protest, riot or block and impede any conservative speaker or cabinet official from entering a building to speak on a matter.

Which leads us to remind everyone of the truly 'serious' and important work his administration and this Congress have got to do over the next 4 years. The more the left stays unhinged focusing on the trivialities of his plate-spinning, the more will get done to solve the truly big problems we face as a nation, beginning with this great summary below from The Committee for a Responsible Budget


  • 'Trump has taken office with higher levels of debt as a share of the economy than any president other than Harry Truman in 1945.
  • Unlike the debt under President Truman, which began to fall rapidly shortly after World War II ended, debt is projected to rise continuously during President Trump’s time in office and beyond.
  • Federal entitlement programs and interest currently represent a larger share of the budget than under any previous president, leaving relatively less room for defense and non-defense discretionary spending.
  • If in office for two terms, President Trump could face the insolvency of three major trust funds, and an additional one – the Social Security Old-Age and Survivors Insurance trust fund – soon after.


Debt is Higher Than at Any Time Since Truman

Over the past 50 years, the national debt held by the public has averaged about 40 percent of Gross Domestic Product (GDP), and was only 35 percent of GDP as recently as 2007. Since then, debt has grown dramatically, and is now higher than at any time since just after World War II.

Between 2007 and 2016, debt more than doubled as a share of GDP, from 35 percent to 77 percent.

This means that President Trump entered office with higher debt than any president since Truman in 1945, when debt was 103 percent of GDP.

At 77 percent of GDP, debt at the beginning of President Trump’s term is significantly higher than the 58 percent of GDP when President Eisenhower took office, the 46 percent when President Clinton entered, or the 44 percent at the beginning of President Obama’s tenure.



Trust Funds Are Headed Toward Insolvency

In addition to the overall debt and deficit situation, President Trump is confronted with a number of major trust funds out of long-term balance, with three that could be depleted by the end of a hypothetical second term in office.

CBO projects the Highway Trust Fund to become insolvent some time in Fiscal Year (FY) 2021. At that point, $70 billion of general revenue that was transferred into the trust fund in 2016 will have been spent in its entirety. As a result, the $40 billion of dedicated revenue will fall about one-third short of the projected $57 billion in spending in 2021. Through 2027, spending will exceed revenue and trust fund reserves by $139 billion, requiring significant adjustments to align them.

Two years later, in FY 2023, CBO projects the Social Security Disability Insurance (SSDI) trust fund will exhaust its reserves. When that happens, beneficiaries will face an immediate 16 percent benefit cut. To delay this cut, policymakers will need to close a $175 billion shortfall between 2023 and 2027. Over a 75-year period, the SSDI shortfall equals 0.65 percent of taxable payroll (the Social Security Trustees estimate a 75-year shortfall of 0.26 percent of payroll).

By FY 2025 – either near the end of a hypothetical second term or the beginning of the following president’s term – CBO projects the Medicare Hospital Insurance trust fund, which funds Medicare Part A, will also reach insolvency. When this trust fund is depleted, Medicare payments would be cut by 13 percent unless policymakers close the program’s $198 billion shortfall between 2025 and 2027 and the significantly larger long-run deficit (the Medicare Trustees project Medicare will be insolvent by 2028 and faces a shortfall of 0.73 percent of taxable payroll.)

Finally, CBO projects Social Security’s Old-Age and Survivors Insurance trust fund will deplete its reserves by calendar year (CY) 2030. At that point, under current law, all beneficiaries would face a 31 percent benefit cut. Though this date is still 13 years away, it is unlikely policymakers will be able to prevent insolvency (or prevent a large general revenue transfer) if they don’t act in the next few years. As we’ve explained before, delaying action on Social Security will ultimately require larger tax increases and spending cuts spread over fewer cohorts with fewer possible exemptions (such as current beneficiaries) and less time for workers to plan and adjust. Over 75 years, CBO projects Social Security’s retirement program faces a massive gap of 4 percent of payroll – the equivalent of one quarter of spending or one third of revenue (the Social Security Trustees estimate a 75-year shortfall of 2.39 percent of payroll and an insolvency date of 2035).'

As always, we encourage you to read the entirety of the report from CRFB and print it out and keep it handy if you have to; it is only 11 pages.

But while the left is getting all steamed up about 'Trump-The Plate Spinner From Queens!', you'll be able to soberly and calmly discuss with your friends and colleagues the importance of reducing federal spending so we can get our financial national fiscal house in order not unlike what has happened in the state of North Carolina over the past 4 years that has led to a $556 million annual surplus in the next budget.

(We couldn't resist: here's the Ed Sullivan Show announcing 'The Beatles!' to the world in 1964.

If you have never seen it, you just can't understand how much of an impact this performance had on America. 73 million people watched it that night when the population of the US was only 191 million folks. That would far exceed current Super Bowl ratings if adjusted for population growth)


The Ed Sullivan Show First Appearance of The Beatles in video on Jukebox[4] from Zip Code on Vimeo.

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Friday, February 3, 2017

Don't Like the 60-Vote Hurdle in US Senate? Here's A Way Around It Perhaps.....

'My '60' Was Easier To Get To Than
The US Senate's '60'!
The media is breathlessly obsessing over whether Democrats in the US Senate, led by New York Senator Chuck Schumer, can keep 8 Democrats from crossing over to vote with the 52 Republicans to get to the magic number '60' so that Supreme Court nominee Neil Gorsuch can be voted on to fill the seat left open when Justice Scalia died last year.

What is so 'magical' about the number '60' in the US Senate anyway?  When did '60' become so important so as to effectively be used to shut down operations of the Senate and therefore the entire federal government for much of the past 17 years essentially?

It is not like Roger Maris in 1961 trying to break Babe Ruth's home run record of 60*. There is nothing inherently 'magical' or even 'constitutional' about the number 60 in the US Senate, is there?

We think there is a very simple way to make the number '60' in the US Senate virtually worthless in short order. However, first a little history:

The 'terrible' thing that the US Senate wanted to prevent with the number '60' was the long 'filibuster' that would occur when or if a Senator would claim the floor and then proceed on a long sustained speech for 1, maybe 1.5 days at a time thereby stalling all Senate action for the duration.

Appropriately enough, the word 'filibuster' comes from the Dutch word for 'pirate' or 'freebooter':
'FILIBUSTERING'is a term lately imported from the Spanish, yet destined, it would seem, to occupy an important place in our vocabulary. In its etymological import it is nearly synonymous with piracy. It is commonly employed, however, to denote an idea peculiar to the modern progress, and which may be defined as the right and practice of private war, or the claim of individuals to engage in foreign hostilities aside from, and even in opposition to the government with which they are in political membership. ["Harper's New Monthly Magazine," January 1853]
'Piracy' of full and open free debate, that is. Filibusters do nothing other than delay free and open debate in the US Senate which should be anathema to anyone in the United States of America.

In 1917, the Senate adopted a rule that called for 67 votes to close off debate (called 'cloture'). Previously, since the beginning of the Republic, there was unlimited debate on an issue as long as the there was unanimous consent (100%) to continue debate before taking a vote.

The president pro tempore (or his designee) of the Senate could keep recognizing Senators who wanted to continue a filibuster as long as he wanted (and his party agreed to).


Remember: the rules of debate in the US Senate are just that: adopted rules by the Senate at the time. There is no constitutional requirement in the US Constitution regarding 'filibusters' or 'cloture' or anything like that.

As it is today, you would think the number '60' is ingrained in Article 1, Section 3 of the Constitution relating to the establishment of the Senate.

It is not. Anywhere.

Unlimited, open and free debate about everything was the hallmark of the US Senate, commonly referred to in the past as the 'World's Greatest Deliberative Body'.  No longer can it be claimed as such primarily due to the cloture rule of 60 today. Both sides engage in threats to 'do filibusters' simply to bottle up contentious issues and avoid making the tough votes and compromises on the big issues we send them to Washington to work out in the first place.

Cloture votes were designed to limit the obstructionist use of free debate of the opposition, especially obnoxious to the majority party in control of the Senate at any particular time.

'Filibusters' are great when you want to oppose an issue. They are 'awful' when you want something passed but your opponents engage in the dilatory tactics of the filibuster.

One the more famous (or infamous) individual filibusters in recent history was when South Carolina Senator Strom Thurmond took to the floor in a filibuster against allowing debate on the Civil Rights Act of 1957. He started speaking at 8:54 pm on August 27 and ceded the floor back to the Chair at 9:12 pm on August 28, 1957.  He spoke for 24 hours and 20 minutes on a wide range of issues from reading Shakespeare to his momma's recipe for 'pot-likker'.

Great theatre. Looked like Jimmy Stewart in 'Mr. Smith Goes To Washington'. 


What stopped Senator Thurmond?

Nature itself. Lack of sleep, physical fatigue will ultimately get every human being to submit to yielding the floor. 'Nature called' in the sense that Strom Thurmond eventually had to use the bathroom facilities and get some sleep, although Capitol Hill legend has it he used some sort of catheter device to postpone his inevitable visit to the bathroom.

After a 60-day Civil Rights filibuster in 1964 that was essentially broken when Republican Senator Everett Dirksen of Illinois brought 27 Republican Senators to invoke cloture at 67 votes, many observers sought to reduce the cloture vote even lower to frustrate future filibusters.  This finally was accomplished in 1975 when the rules to invoke cloture were changed in the US Senate to bring the threshold down to 3/5s or 60 votes from 67.

Today, all you hear about is how hard it will be to get 8 Democrats to switch over to join 52 Republican Senators to get to 60 in the Senate to invoke cloture (end any potential filibuster) and allow the nomination of Supreme Court nominee Neil Gorsuch to get to the floor of the Senate where he could be approved by simple majority or 51. (Republicans have 52 in the Senate today)

We think the effective number today to end cloture is 51 simply because former Majority and Minority Leader Harry Reid of Nevada quite honestly, and 'stupidly' as history will bear out, got a Senate rule lowering the vote for federal judges to simple majority rather than be subject to cloture rule votes. They were frustrated by their inability to get many of former President Obama's judicial nominees through the Senate because Republicans would not join the Democrats to get to 60 votes.

See? Obstructionism is bipartisan.

This is the so-called 'nuclear option' you keep hearing about. It is not 'nuclear' in the sense that the Senate will be radioactive for 250 years after using it. But it does take the US Senate far from the original intent of allowing minority party rights in the US Senate by our Founders that it might as well be considered a 'nuclear bomb' to our form of government and should be avoided at all costs.

'Resorting to the 'nuclear option' reduces the US Senate of the United States of America to merely being a second House of Representatives where majority rules and minority parties just get creamed and lose leverage in any compromise solution.

We don't need or want a second House of Representatives where popular emotion can often rule the roost in times of stress or crisis. The US Senate is supposed to be a place where cooler heads prevail and members of both parties are FORCED to make accommodations in compromises to pass laws and confirm nominees that reflect more of the center of the political spectrum than the extremes on either fringe.

So, what is the 'solution' alluded to earlier?

  • Let Senators go ahead and filibuster their brains out.
  • Let Nature take her course and her revenge against them. 
  • Nature always wins.

Think about it. Former Senator Harry Reid has effectively reduced the cloture vote to 51 anyway. It is like saying a women is 'half-pregnant'; she either is or isn't pregnant. The effective cloture vote now is 51 whether anyone likes it or not.

Senator Mitch McConnell can urge Senators to adhere to the 60-vote threshold now in the rules of the Senate but when push comes to shove, if only 7 Democrats join the 52 Republicans in the Senate to invoke cloture, Republicans in the Senate can just change the rules in the Senate and adopt simple majority rules to confirm Neil Gorsuch to the Supreme Court and be done with it.

So there. That is what is going to happen in the next month or so in a nutshell if you don't see 8 Democrats crossover to vote for cloture in somewhat of a dispirited effort to 'return to tradition and principle' in the Senate.

Allowing a Democratic Senator to start the debate by filibustering the Gorsuch nomination for a day or 2 at best would allow Majority Leader McConnell the opportunity to claim the floor when that Senator passes out from exhaustion and recognize a Republican Senator who could make the motion to proceed to debate the Gorsuch nomination on the floor of the Senate.

Debate will have started. The filibuster will have failed. The next speaker is recognized. And a motion to proceed to vote can follow some adult-level debate about the relative merits and demerits of Judge Gorsuch.

At that point, Mr. Gorsuch could be voted onto the Supreme Court with 51 votes, not 60 as it sounds like today.

What the Senate would lose is a day or so of listening to someone read Shakespeare or the New York City phone book (if such a thing still exists nowadays) into the Senate Record. It might be an affront to efficiency and common sense but the US Senate is not supposed to be 'super-efficient' when it comes to passing legislation in the first place.

Making Senators actually do a filibuster would be much more 'painful' to them personally, physically and emotionally than constantly falling prey to their 'threats' to filibuster. Make them do a couple of them, particularly the older and more frail Senators by age, and the allure of engaging in prolonged, dilatory tactics becomes much less interesting of an option to most sane people.

Including Senators.

In addition, people of their state might grow tired of their Senator constantly gumming up the works of the US Senate instead of doing the very hard work of working to find ways to get the bill in question amended in some way that would allow their affirmative vote.  Having a Senator spend 1 day per week screwing things up in the Senate might be fun for a couple of weeks or a month but after awhile, it will grow old and stale as last year's bread.

Order would be restored to the US Senate in terms of restoring it to the 'World's Greatest Deliberative Body' where substantive debate can and should be engaged and let the cards fall where they may based on reason, fact and persuasion.

As it should be.

(Restoring earmarks in appropriations bills so deals can be made and cut to get a Senator's vote once again would be helpful as well. Putting an earmark in for a state for a bridge to be built across a small river to a revered historic landmark in honor of the home state Senator's dearly beloved grandmother who hailed from the region would be a small price to pay to get things moving again on a bi-partisan basis...but that is a story for another time)

*(editorial side note: every major league player who hit more home runs in a season than Roger Maris is tainted by questions about their use of illegal or at least unethical PEDs or performance-enhancing drugs so 61 and 60 are still 'magical' numbers in Major League Baseball at least)

** (Caveat)- There may be some obscure parliamentary rule we are unaware of that experienced parliamentarians spend years in academia debating whether it was offered by a specific number of angels on the head of a pin. However, this discussion came out of a discussion from a veteran of Capitol Hill recently who went to Washington in the 1970s and has basically 'seen it all' so we are going with his observation.


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