How liberals will eventually throw Social Security and Medicare under the bus

Excerpted from Glenn Greenwald:

STEP ONE: Liberals will declare that cutting Social Security and Medicare benefits - including raising the eligibility age or introducing "means-testing" - are absolutely unacceptable, that they will never support any bill that does so no matter what other provisions it contains, that they will wage war on Democrats if they try.

STEP TWO: As the deal gets negotiated and takes shape, progressive pundits in Washington, with Obama officials persuasively whispering in their ear, will begin to argue that the proposed cuts are really not that bad, that they are modest and acceptable, that they are even necessary to save the programs from greater cuts or even dismantlement.

STEP THREE: Many progressives - ones who are not persuaded that these cuts are less than draconian or defensible on the merits - will nonetheless begin to view them with resignation and acquiescence on pragmatic grounds. Obama has no real choice, they will insist, because he must reach a deal with the crazy, evil GOP to save the economy from crippling harm, and the only way he can do so is by agreeing to entitlement cuts. It is a pragmatic necessity, they will insist, and anyone who refuses to support it is being a purist, unreasonably blind to political realities, recklessly willing to blow up Obama's second term before it even begins.

STEP FOUR: The few liberal holdouts, who continue to vehemently oppose any bill that cuts Social Security and Medicare, will be isolated and marginalized, excluded from the key meetings where these matters are being negotiated, confined to a few MSNBC appearances where they explain their inconsequential opposition.

STEP FIVE: Once a deal is announced, and everyone from Obama to Harry Reid and the DNC are behind it, any progressives still vocally angry about it and insisting on its defeat will be castigated as ideologues and purists, compared to the Tea Party for their refusal to compromise, and scorned (by compliant progressives) as fringe Far Left malcontents.

STEP SIX: Once the deal is enacted with bipartisan support and Obama signs it in a ceremony, standing in front of his new Treasury Secretary, the supreme corporatist Erskine Bowles, where he touts the virtues of bipartisanship and making "tough choices", any progressives still complaining will be told that it is time to move on. Any who do not will be constantly reminded that there is an Extremely Important Election coming - the 2014 midterm - where it will be Absolutely Vital that Democrats hold onto the Senate and that they take over the House. Any progressive, still infuriated by cuts to Social Security and Medicare, who still refuses to get meekly in line behind the Party will be told that they are jeopardizing the Party's chances for winning that Vital Election and - as a result of their opposition - are helping Mitch McConnell take over control of the Senate and John Boehner retain control of the House.

With last night's results, one can choose to see things two ways:

(1) emboldened by their success and the obvious movement of the electorate in their direction, liberals will resolve that this time things will be different, that their willingness to be Good Partisan Soldiers depends upon their core values not being ignored and stomped on, or

(2) inebriated with love and gratitude for Obama for having vanquished the evil Republican villains, they will follow their beloved superhero wherever he goes with even more loyalty than before. One does not need to be Nate Silver to be able to use the available historical data to see which of those two courses is the far more likely one. Read more >>

Dodd Financial Reform Bill: All Holes and No Cheese

Submitted by George Washington
In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd's proposed financial reform legislation wouldn't have prevented the current crisis ... and won't prevent the next crisis.

Dodd himself has admitted that his bill "will not stop the next crisis from coming".

In fact, the bill is wholly ineffective, failing to address the core things which need to be done to stabilize the economy. See this, this and this.

Moreover - as Simon Johnson points out - the bill intentionally doesn't have much in the way of specifics, but just pushes off on regulators the ability to crack down on Wall Street in the future. As Johnson notes, this is a recipe for continued failure to rein in Wall Street:

If legislation can only empower regulators then, given regulators are only as strong a newly elected president wants them to be, the approach in the Dodd bill simply will not work.

Moreover, as Democratic Congressman Brad Sherman - a senior member of the House Financial Services Committee and a certified public accountant - states:

The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for. The bill contains permanent, unlimited bailout authority.

And as Arthur Delaney notes, the bill is riddled with carve outs purchased by lobbyists:

"Obtaining a carve-out isn't rocket science," said a Republican financial services lobbyist. "Just give Chairman Dodd [D-Conn.] and Chuck Schumer [D-N.Y.] a shitload of money."

On MSNBC Tuesday morning, Sen. Bob Corker (R-Tenn.), a Banking Committee member who worked closely with Dodd, said there was "no question" that Dodd's draft contained loopholes. Corker mentioned a few hits from the carve-out list: "Private equity firms are left out," he said. "Hedge funds are left out."

The bill is all holes and no cheese.

→ Washington’s Blog

Dennis Kucinich Flips on Healthcare

Image by Getty Images via Daylife

Reuters
Obama wins first convert in healthcare push
President Barack Obama picked up his first convert in the push for healthcare reform on Wednesday as Democrats in the House of Representatives prepared for a close weekend vote on final passage.

Representative Dennis Kucinich, one of the most liberal members of Congress and an ardent supporter of nationalized healthcare, became the first House Democrat to switch from "no" to "yes" on the overhaul.

"This is a defining moment for whether or not we'll have any opportunity to move off square one on healthcare," Kucinich said in announcing his switch two days after Obama lobbied him on an Air Force One flight to Kucinich's home state of Ohio.

Kucinich, who voted against the reform bill for not being liberal enough when the House approved its version in November, said he realized the weekend vote on the Senate's version of the bill would be very close.

"Even though I don't like the bill, I've made a decision to support it in the hope that we can move to a more comprehensive approach once this legislation is done," he told reporters.

Kucinich is the first of 37 House Democrats who voted against the overhaul in November to flip to the "yes" column, but Obama and House leaders are frantically searching for more as they try to round up the 216 votes needed for passage.

"That's a good sign," Obama told reporters in the Oval Office. Asked what he had told Kucinich, Obama said, "I told him 'thank you.'"

Kucinich, a former presidential candidate known for his strong liberal views, is unlikely to bring a lot of followers along with him as most of the Democratic opposition came from moderates.

House Democrats are struggling to finish the legislative language on the final changes they seek to the Senate-passed bill and hope to publish them on Wednesday, along with cost estimates from the Congressional Budget Office.

Under the procedure planned for passing the reform overhaul, the House would vote this weekend on whether approve the Senate's version of the bill. The changes sought by Obama and House Democrats would move through a separate measure.

'HIDE WHAT THEY'RE DOING'

Republicans have criticized Democrats for considering using a process to avoid a direct vote on the Senate-passed bill, which is unpopular with House Democrats. Instead, they would declare the Senate bill passed once the House votes to approve changes it wants.

"They want to hide what they're doing from the American people -- who they seem to view as an obstacle," Republican Senate leader Mitch McConnell said.

The House changes would then be approved by the 100-member Senate under budget reconciliation rules that require only a simple majority, bypassing the need for 60 votes to overcome Republican procedural hurdles.

The overhaul would extend coverage to more than 30 million uninsured Americans and ban insurance practices like refusing coverage to those with pre-existing medical conditions.

Health insurer shares were down on Wednesday while the broader market rose slightly. The Morgan Stanley Healthcare Payor index .HMO was down 0.3 percent and the S&P Managed Health Care index .GSPHMO dropped 1.3 percent.

As many as two dozen undeclared Democrats could decide the overhaul's fate and end a political brawl that has consumed the U.S. Congress for months and put a dent in Obama's personal approval ratings.

Democratic leaders say they are confident they can find the 216 votes needed. The House passed its version of healthcare in November with only three votes to spare, and a dispute over abortion language could cost Democrats up to a dozen bill supporters this time.

"If I can vote for this bill, there are not many people who shouldn't be able to support it," Kucinich said.