Wednesday, January 30, 2013

How the RNC plans to rig the 2016 elections

The GOP's post election hand wringing has two faces: One is to soul search why they lost the Latino, women, and youth votes. The other is more sinister and under the radar: a move supported by the Republican National Committee to rig the mechanics of our elections to make it easier for the GOP to win in 2016.

If you are one of those Americans frustrated by Congress‘ inability to compromise and angered by a minority in the House that just says “no”, then fasten your seat belts. The strategy cooked up by the RNC is an attempt to thwart public will at the presidential election level. They plan to do it by changing long standing Electoral College rules that allocate electoral votes at the state level. The repercussions would be many, from diminishing the importance of swing states in elections, to increasing the likelihood that presidents would be elected who did not get the majority of the popular vote, and institutionalizing gridlock on the national level for years,

Republicans have succeeded in the past four years in seizing control of more state legislatures and governorships even in states that often vote Democratic in presidential elections. This has, allowed them to gerrymander districts in 2011, drawing lines to make them homogeneous and safe for more Republicans. Now about 158 of the 234 Republicans in the House of Representatives come from “safe” districts, thanks to recent redistricting and gerrymandering. It worked. Democrats failed to regain control of the U.S. House of Representatives in 2012, even though Democratic candidates for Congress won 1 million more votes than Republicans.

Building on their safe district strategy, the RNC has launched a coordinated effort, to change the winner take all Electoral College votes in six states where the GOP controls state houses, but that voted for Pres. Obama in 2012. The plan is to have Electoral College votes be allocated by Congressional district. For example, in Virginia, in 2012, Pres. Obama won the popular vote and took all 13 electoral college votes. If the electoral college votes were allocated by the winner in each separate congressional district, Mitt Romney would have won 9 of Virginia's 13 electoral votes in spite of his losing the popular vote.

Only two states have ever opted for proportional votes. Most have not because a large block of votes garners more power and attention for state interests in Washington than splitting themselves into smaller bits and it is a leading reason why the electoral college system has not been changed. It also may explain why attempts in the Virginia legislature to pass such a scheme were killed last week when the Governor and major GOP legislators withdrew their support.

One complaint about the Electoral College is that the winner is not always the same as the winner of the national popular vote. It has happened four times in 44 presidential elections, but in using the Virginia example ,it is easy to see how the distortion could actually be much worse.

Another up side of requiring a Presidential candidate to win the popular vote statewide in order to win all of the Electoral College votes requires them to appeal to a wider range of interests and it forces moderation and compromise. For example, a candidate that only needs to win an urban district could ignore rural needs so there is less reason to compromise. Worse, if they do compromise, they could inspire a more purist primary opponent. When they get to Washington, the pressure is not to compromise so gridlock is set in concrete.

Swing state Colorado will escape the controversy since Democrats control both Houses and the governorship and commissions and courts thwarted gerrymandering in 2011. However, keep your eyes on RNC targeted Michigan, Wisconsin, Ohio, Pennsylvania, and Florida state legislatures.

(My column in the Sky Hi Daily News today)

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Wednesday, January 23, 2013

The GOP's attempt to skewer Hillary Clinton backfired today

Listening to both the Senate and House Committee hearings in which Secretary of State Hillary Clinton appeared today was probably the best boost to a political future she could have gotten. She delivered 7 hours of a widely media covered buffo performance. .If the GOP had hoped to skewer her potential candidacy, it backfired.

  The hearings showcased her good health, her steely resolve, her knowledge, her intelligence, her self control, and her humanity.  They gave her an opportunity to give a memorable farewell address in her last days as Secretary of State.

Those who had hoped they could pin a Watergate type scandal on her asked every hostile question dreamed up by right wing talk show hosts they could remember and they still  failed to make a connection with some supposed cover up. . Some even tried to bully her with questioning that attempted to drown out her answers. She aced them; she kept control of them by matching their anger with corresponding firmness  and giving herself the dominance of the floor  to present her views. She gave them back better  than what they  tried to give her.

 Those GOP Senators and especially House members  obviously were not making an honest attempt  to fact find in order to provide advice and resources to  avoid similar Ben Ghazi  incidents in the future.  They hardly were not subtle in their attempt to damage her as much they could before she ever threw her hat in the ring for President.  In their line of questioning, they only showed their partisan  hostility and   limited knowledge..  Time and again, she answered the questions by referring them to the recently completed independent review ,both the classified and public versions,  which obviously so many of the GOP  representatives and Senators had not appeared to have read.

That the GOP hopes to turn the Ben Ghazi incident into the next Watergate scandal, they have a steep hill to climb. They tried to pin the Ben Ghazi tragedy on the President during the presidential campaign, and it hardly made a ripple. Foreign affairs rarely bump up to the head of the concern of voters, and to compare  Ben Ghazi to 9/11, as one over the top Representative did, is only GOP wishful thinking that Ben Ghazi would assume that importance in 2016. If Clinton is the candidate, they are in for even stronger headwinds.

The lack of funding for the State Department missions and security was one of the most concrete revelations to come out of the hearings.  Clinton time and again made that point.  The most ironic realizations  were that State Department funding was on the sequester cutting board and that an attempt to include funding was attached to the Hurricane Sandy funding approved by Congress in December, but was removed.  Guess it was one of those pork barrel amendments so despised by the GOP fiscal hardliners. It will be one of those details to watch in the upcoming March madness of fiscal cliff 2.  We will then see who puts their vote for money where their mouths are.

The real Sword of Damocles hanging over our fiscal heads

There is a difference between the real sword of Damocles and a fake one in the fiscal issues before Congress.

The looming fiscal cliff part 2 is as good as plastic, a flexible set of deadlines concocted in the halls of Congress. The sword hanging over our heads is the one wrought in steel that will fall on our necks in the long run: real life, harmful consequences if we do not reduce the deficit. But the swordplay has degenerated to one delay of game trick after another.

The GOP was realizing that their bargaining chip, threatening to vote no on raising the debt ceiling, was about to blow up in their faces because of the dire blowback on the economy if they carried out the threat. The GOP congressional caucus came out of their huddle last week and punted the debt ceiling downfield until the end of March. As an incentive to force a final deal for long term deficit reduction, they made failure subject to a penalty: Congress not getting paid.

Now sequester, government shutdown and debt ceiling will all meet in March madness. The GOP must be hoping that by April Fools' Day, the joke will be on the Democrats because Republicans will have succeeded in making their strategy of calling for spending cuts without being the first to name which ones. Credit the GOP caucus with being clever.

On the left of the spectrum, liberal economists such a Paul Krugman claim that the deficit is not so big a problem, so just ignore it. Economists may ignore it, but the rating agencies did not do so in last year's debt ceiling debacle, and the economy took a dip. Last week, Fitch's rating agency warned that if the debt ceiling is not raised, they would indeed downgrade the country's credit rating.

Most pencil pushers estimate that about 40 percent of the deficit is due to the Great Recession and the resulting decrease in government revenue. Growth will help, but it will not be enough.

The plan on the table that would get the job most thoroughly accomplished is the Simpson- Bowles plan. Both Democrats and Republicans piously invoke their proposal, but they ought to read it. Simpson-Bowles proposed $1.4 trillion cut in defense spending in addition to withdrawal from Iraq and Afghanistan. Other politically hard to swallow recommendations: capping deductions on charities and home mortgages, taxing capital gains and dividends as normal income, and raising Medicare and Social Security retirement ages to 69 by 2075.

Both Simpson-Bowles and President Obama proposed ending Bush tax cuts for earners over $250,000, but to avoid the December fiscal cliff, the President compromised at $400,000. However, he was closer to Simpson-Bowles when he said we must still raise more revenue. Just ending the Bush tax cuts to the wealthy and cutting spending was not enough to reduce the deficit.

The president in his inauguration speech Monday addressed the need to reduce the deficit and revamp our tax code, but still we must “care for the vulnerable.” He used the term “reduce,” which sets a goal of degree, not a matter of complete elimination.

Since Simpson-Bowles, a degree of progress has been made. Richard Kagan at the Center of Budget and Policy Priorities explains, “Congress passed $1.5 trillion of spending cuts in August 2011.” If you take out the recommended cuts that are already enacted, getting to the “how much” is not as difficult as the GOP claims.

The political hang-ups are the “what” cuts and “who” will take the blame for cutting defense spending and for tinkering with Medicare, Medicaid, and Social Security. While both houses of Congress delayed the game in 2012, this time the GOP has delayed the penalty while deserving the penalty flag.
This is my column in the Sky Hi Daily News today

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Saturday, January 19, 2013

The deficit is a real problem and Simpson Bowles is still the key to the solution

A week or so ago, I set about to write more about the fiscal cliff, the real one, not the one manufactured by Congress and I posed  questions to Ted Muftic,  financial consultant and chief investment officer  for private equity firms and our family’s resident Harvard MBA with over 15 years experience on Wall Street.  He is a contributor to the Muftic Forum Blog

This bit of using debt ceiling and continuing resolution as a bluff or irresponsible threat to force the admin to bend to their will on the sequester is still really mostly a bluff, I think.  The results would be too horrible for the economy if the GOP carries through. What I would like to do is to talk about other Sword of Damocles ...that have more meaning to solving the  deficit problem. Down grade of credit rating, resulting  in higher interest rates suppressing economic growth?  More quantitative easement (treasury just printing more money) would result in inflation later?  Unlike Greece, we can just print more money; they couldn't.  I recall that in the 1980's, we did pay for the Viet Nam War and the Great Society, so afterwards, the interest rate soared to 15% plus, resulting in the election of Ronald Reagan.  Is my memory right?  I was head of the foreclosure process in Denver and I recall the foreclosure rate quadrupled every year in lock step with the increase of interest rates.  There are two perspectives: short and long term and are we already at the backfire of the long term?

The debt problem is deadly serious.  It is difficult to grow our way out of it.  We need to do more and Simpson Bowles is  the key.

The path that we are on should be enough to want to cause politicians to act on debt and deficits if they were doing their job.  However,  it is much easier for them to promise everything instead of doling out pain that would cost votes.  The analogy I like is that if we were really concerned about our health, wouldn't we rather want to have regular annoying visits to the doctor instead of  the inevitable  pain of chemo to fight a cancer that could have been diagnosed earlier? Without taking regular small steps now, we could be heading to Greece-like pain later.

The U.S has a debt problem and it is not just a federal issue. Consumer, mortgage, corporate, local and state debt combined dwarfs federal debt, and our growing medical costs are causing are federal debt to explode! Total U.S indebtedness is 3 or 4 times bigger than our annual economy.  That is like making 50k a year and having 200k of debt.  If rates are low enough, maybe you can meet monthly payments. But what if lenders got too concerned about the economy and your job stability , refused to roll over  your debt ,and the only lender said” yes I'll lend you money, but your rate is going to double or triple”? How would your lifestyle change? What would you have to sacrifice? Your house, your children, your health? What if all the lenders to the US (China, Japan, oil-rich countries, pension and saving plans) said enough is enough?)That is the danger. That would be a real fiscal cliff that would have profound impacts on the veritable peace and stability of our society. It is like the fall of the Roman Empire - and I am dead serious.

Can we grow our way out of the debt problem? Excluding growth caused by inflation.( real growth),  it is possible so long as we pay down debt and not expand our lifestyle or make other investments.
Furthermore, given the current anemic level of growth, it would take years to make any kind of dent in the debt and we would have to effectively freeze ALL government spending and curtail entitlements a lot too.

What other countries have done is to inflate their way out of a debt problem. Debasing our currency would greatly minimize the cost of our fixed-rate debt a lot. Indeed, the Fed has been trying to stimulate growth and inflation through just about every means possible, most drastically through quantitative easing. A little bit of inflation is fine. But massive inflation like we had in the late seventies would not be good. And frankly, there is only so much they can do when there is no corresponding fiscal policies to help. Yes...that means stimulus,  which is a dirty word in DC these days. Sadly there is no fiscal flexibility left, there is no political flexibility. There is very little monetary flexibility  to grow the economy and control debt and deficits at the same time. The policies of the Bush years leading up to the Great Recession and the ire of the Tea Party afterwards have severely limited political courage and policy innovation. n

Simpson Bowles would represent a sensible way to unleash the economy and reduce debt and deficits. In particular, radically altering the tax code, getting rid of loopholes and arcane tax policies in favor of lower, simpler and fairer taxes would, in my view, breathe new life into business activity, investments, and to consumer confidence. In addition, modifying or making sensible changes to entitlements such as extending the ages of eligibility and more means testing, applied to people say under 50 now, would be good ideas. Policies geared to just changing more tax rates on the rich will eventually become unpopular. The benefits are just not large enough to really make any meaningful difference.  

Without bold thinking and big ideas on both sides of the aisle, I fear that we will lurch from manufactured crisis to manufactured crisis with the predictable effects of diminished American relevance in the global economy, frustratingly slow growth, consistently high unemployment, and debt levels that at any moment could create a real crisis that is  not of our politicians' makings.

Wednesday, January 16, 2013

Colorado's approach to keeping guns out of the hands of the mentally ill

While the nation, the White House, and Congress are coming to grips with proposals to curb the carnage of mass shootings, there is one sub issue with a meeting of minds: mental health and how to keep guns out of the hands of the mentally ill.

There are two thrusts: One, to improve the reporting to data banks of those deemed by the courts to be a danger to themselves and those around them, and the other is to give greater access to mental health services. None of these alone is a silver bullet, but together they will help save lives and reduce the frequency of such gun violence.

Thanks to the horrors of Columbine and the Aurora Movie Theater tragedies, Colorado has become an icon for mass shootings. Our state is also leading the way in seeking solutions. Gov. John Hickenlooper made some key proposals in December and in his State of the State address. Obamacare, which will be fully implemented in 2014, will also make access for all to some affordable mental health services a reality.

We thought we were safer than we are. We thought courts that ruled someone a mental health danger reported the names to a data bank, but we learned that Colorado only updated information twice a year. We thought closing the gun show loophole in Colorado, requiring background checks before purchase, had resolved that problem. Now we learn 40 percent of the sales conducted in private are not subject to such checks.

We thought that when laws required employer-provided insurance and Medicaid to cover some mental health services, we had solved the access issue. However, we learned through the Colorado Health Institute that over 640,000 adults in Colorado were uninsured by anyone (24 percent of Grand County). And then we wondered why those who were mass shooters appearing to be mentally disturbed still committed their crimes with ever increasing frequency and death tolls.

Obamacare will help make access to mental health services affordable to all in Colorado. Those who do not have health insurance now will be able to buy insurance at rates according to their income levels in 2014. Colorado has just agreed to add 160,000 of the currently uninsured to Medicaid beginning in 2014. This means an individual earning $14,856 or a family of four earning up to $30,657 may qualify for Medicaid, which includes mental health services.

The expansion of Medicaid under Obamacare includes a series of measures designed to bring down the cost of Medicaid while improving health outcomes, according to the National Mental Health Association - Colorado. Over the next 10 years, according to the governor and the state's director of Healthcare Policy and Financing, Sue Birch, the expansion and other reforms will save Colorado taxpayers up to $280 million.

Gov. Hickenlooper has also proposed the state spend $18.5 million in the 2013 state budget to provide a crisis response hotline and walk-in crisis centers around the state, to expand jail-located mental health beds, and to provide housing and short-term residential facilities for those transitioning to the community. The proposal would align various laws for civil commitments for treatment, clarifying options for providers of mental health and substance abuse services.

In addition, reporting of mental health records sent to the Colorado Bureau of Investigation would be made in real time instead of twice a year to provide up to date background checks. In his State of the State address, the governor urged “universal background checks” for all purchases of firearms.

The question is will the legislature and the public, including 2nd Amendment advocates, put their money where their mouth is or will Hickenlooper's proposal end up in the budget cutting heap in these times of tough public finances. We should hope not.

This is my column today in the

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Wednesday, January 9, 2013

Warning to the GOP: don't overplay your hand in the March fiscal cliff

In the winter of 1995-1996 there was a death with repercussions lasting a decade. The deceased was the Newt Gingrich Republican Revolution.

It was a self-inflicted wound. The weapon used to commit suicide was the shutting down of government for days, used as a GOP bludgeon in arguments over the budget. So angered were the voters that in the next election cycle, Bill Clinton was re-elected easily.

In 2011, the GOP used the debt ceiling as a bargaining chip again and the economy took a measurable dip. In 2013, the debt ceiling, continuation of the resolution to fund government, sequestered spending cuts, and raising the debt limit unite in a perfect storm of entangled issues in March. The GOP should know from past experience if they overplay their hand, they risk a public backfire and a dent in economic growth.

The compromise avoiding the fiscal cliff on Jan. 2, also delayed debate on sequestered spending cuts for 60 days. The GOP is threatening to use disapproval of raising the debt limit and shutting down government as bargaining chips to get their way. They think they have a hot one, too. Hot, indeed.

What they may have done is set up the possibility of some of the most important Supreme Court decisions of the past 125 years, addressing the fundamental question of the separation of powers. Just how far does the GOP want to take their “leverage?” Are we now headed for a constitutional crisis, too? Do they really want to default on our loans if we do not raise the debt ceiling and imperil the economy to get their way over the debt ceiling? A wiser Newt Gingrich called this strategy a “dead loser” last week. Or is this just more brinkmanship bluffing?

While not precluding reduction in spending or more revenue enhancement, the president made it clear in remarks Jan. 2 he would not allow the GOP to use the debt ceiling to get their way on future spending cuts. The president staked his legal claim that Congress voted for the expenditures and he had the obligation to pay bills as they came due. That is indeed a major constitutional issue the Supreme Court could decide: Can Congress keep him from his duty as the executive branch to pay bills Congress had already authorized?

The president could also choose to tap the 14th Amendment, daring the GOP sue him and throw the issue to the Supreme Court. The president could continue to make good on payments on bonds (treasury notes) even if Congress forbids him from doing it. At issue is the 14th Amendment to the Constitution regarding the executive's power to pay bonds as they came due. Legal experts are divided so the outcome could be risky for both parties.

The question is not whether the debt problem should be tackled: Both the GOP and the Democrats know it must happen to avoid a credit rating downgrade or future economic problems. The issue is how. That “entitlements” need trimming is also acknowledged by both sides of the aisle and the Pentagon budget also needs close scrutiny. It is a matter of coming up with ways acceptable to a bipartisan coalition large enough to get it through Congress.

The GOP is laboring under a questionable belief they have the public mandate because they were re-elected to be the majority in the House. Some 2011 gerrymandering resulting in more safe districts for conservatives may have been greater factors. Public opinion polls in November 2012 showed more than 60 percent supporting balanced taxing and cuts. Public opinion also counted in the mid-90s when the GOP shut down government and the Republicans paid the price in the next election.

This is my column that appeared in the today

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Wednesday, January 2, 2013

Is there an emerging pragmatic middle, a coalition of the willing to compromise?

The painful Congressional machinations to avoid the fiscal cliff and defaulting on our loans up to now had been an irresistible force meeting an unmovable object. What we have needed is the emergence of a strong, pragmatic middle, a coalition of the willing to compromise. Whatever middle is born this week will be on life support through March. Debates on tax policies, budget cuts, defense spending, Medicare, Medicaid, and Social Security, and debt reduction will take place in a series of votes on the fiscal cliff, dire budget cuts, debt ceiling, and in “the continuing resolution” to avoid a government shutdown. Just what we need: a government shutdown, the final evidence of a dysfunctional democracy.

These votes will signal whether a pragmatic middle has grown strong enough in Congress to control the political process and to marginalize those unmovable objects, straight jacketed by ideology, pledges, campaign promises, and lobbyists.

Recently I heard liberals tagging Tea Party members of Congress as “extremists”. I reached for my dictionaries. General consensus is that someone is extreme if they are out of the mainstream of thought. Common wisdom is that we are so polarized, there is no mainstream. We are all extremists: Anti tax on one side and pro unaltered social programs on the other and nothing in between.

However, exit polls in November showed over 60 percent of all voters, more than voted for Pre. Obama, supported increasing taxes on the rich and a balanced approach of some cuts, some tax increases. This may be an emerging new mainstream that is somewhere in the middle of the political spectrum. The question is will the new mainstream be reflected in Congress to be sufficiently powerful in the next couple of months to overcome filibusters and parliamentary tricks.

The fundamental problem is that compromise has become a dirty word, yet It is the heart of our political system. Our founding fathers hammered out many compromises in formulating our Constitution and the amendments. They constructed a government they had hoped would balance power, protecting the minority from absolute rule of the majority, while allowing the majority to rule. They gave us a Congress with a platform to work out differences. Since then, Congress has established rules that have allowed a minority to be the tail wagging the majority dog by abusing the filibuster, certain party caucus practices, and denying votes on issues. Those rules are compromise killers and stonewall enablers.

To make the process even more dysfunctional, the Tea Party caucus and fellow travelers are not only anti-tax, they are anti-compromise. They have been throwing a monkey wrench into the gears of our Constitutional government dependent on compromise. They seem to be willing to kill economic recovery in the name of tax protesting ideological purity, opposing a 4 percent tax increase on 2 or 3 percent of the rich, no matter what ratio of cost cutting to tax increases the Administration offers them. The Congressional Budget Office estimated that raising such taxes on the top would not hurt the economy, in spite of Tea Party claims.

To their credit, the left has been a bit more pragmatic. While grousing about any tinkering with “entitlements,” they so far seem unwilling to vote against compromises the President makes. If the cliff and debt ceiling debates result in deadlock, and our economy crashes, the Tea Party is more likely to get the blame. They can hide in gerrymandered safe districts. However, those from more diverse districts who join them should fear voters' wrath in the next election cycle.

The laurel leaf of voter approval in the future will be awarded to members of a new moderate coalition formed from both parties to solve our problems in a balanced, fair way. Democracy based on compromise will then function again.

This is a column that appeared in the today

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