a budget neutral economic stimulus for Oregon

I've been meaning to write this post for a couple of days now since the State of Oregon Economist Tom Potiowsky issued his report on the state of the Oregon economy on Thursday indicating that recovery may be particularly slow in Oregon.  Collins, Snowe, Specter, and Nelson put States in a real bind by negotiating a lot of the aid to States out of the stimulus bill back in February.  This put States in the position of having to cut spending or increase taxes in order to balance their books, creating what Krugman termed, "the problem of the 50 Herbert Hoovers."  The road to full recovery is likely to be slow to begin with, and if Oregon lags behind the rest of the nation, it could be an awfully tough road back.  It seems that while a second stimulus would be very useful from the federal level, a State-level stimulus package in Oregon would be particularly useful, but there's no way it can happen given Oregon's budgetary situation.  That's why I was taken with an idea I originally bumped into in the the Washington Monthly about a month ago of taxing College Endowments as an economic stimulus (I for the life of me can't seem to find this post).  The point being that because College Endowments have become a status symbol, they're holding on to them instead of spending them.  Last time I checked the endowment was supposed to be sort of a "rainy day fund," and if now is not a rainy day I don't know what is.  In defense of Universities, there has been a sizable dropoff in the size of endowments recently due to the fact that donors are tightening their belts.  A policy that could force Universities to spend their endowments rather than holding on to them would be very beneficial to those communities.  As a result, college endowments being currently tax free nonprofits, I propose setting a temporary tax on college endowments in the State of Oregon to force them to put some of that money into the economy, there are a number of beneficial uses that this money could be put towards.

Students-Have been hit with an enormous tuition increase this year, if Universities dedicated some of their endowment to not increasing tuition then students would both not be forced to drop out due to affordability, which is a long term positive and increases the likelihood that Universities will be able to rebuild their endowments in the future, as well as allowing those students who do stay in college to engage in more discretionary spending locally, this helps local businesses.

Infrastructure-Invest in new buildings and/or more maintenance on campus, this allows plumbers, carpenters, drywallers... to stay in business, keeping unemployment down and leading to more local spending.

General Operations-Kill all spending freezes and layoffs, keeps people employed and allows departments to operate as they did two years ago, once again (are we noticing a theme here?) this means more spending in the local economy by not forcing academic departments to do things like not using any more paper, and keeping people employed.

The circumstances surrounding the money reserved in college endowments is a tricky issue, and some of that money can't be spent.  Without a thorough study of the status of endowments in Oregon I can't speculate on how much they can actually start spending in the near future, but any policy that forces them to spend more seems to me like it would be a good idea.  The following are the total amount of the endowments for Oregon Colleges and Universities, so we can imagine what 1/2 or 1/4 of that put into the local economy would do for Portland, Corvallis, Eugene, or Salem.  And the best part is, its not only budget neutral, but budget enhancing, as the State gets a chunk of whatever doesn't get spent.

University of Oregon-$498 million
Oregon State University-$476 million
Willamette University-$283 million
Lewis and Clark College-$231 million
University of Portland-$95 million
Linfield College-$71 million
Portland State University-$47 million
Southern Oregon University-$20 million
Western Oregon University-$10 million
Eastern Oregon University-$3 million
*list not based on who has the biggest endowments, but who I thought about

That's a lot of money out there that could be boosting the economy and is instead sitting in a bank account somewhere, there are very good ways it could be spent to help students, faculty, and the university itself.  Any policy that gets them to spend a chunk of that is a net good, tax them for this year (and this year only) and see what they decide to use rather than give back to the State, and what they do give back to the State helps prevent cuts to education, infrastructure, or the Oregon Health Plan.

Robert Reich's incrementalist parable

Robert Reich has a good piece on the need to fight the desire to be incrementalists on health care reform.  This is great parable that I thought was worth repeating in as many places as possible.

Years ago, as the story goes, Britain's Parliament faced a difficult choice. On the European continent drivers use the right lanes, while the English remained on the left. But tunnels and fast ferries were bringing cars and drivers back and forth ever more frequently. Liberals in Parliament thought it time to change lanes. Conservatives resisted; after all, Brits had been driving on the left since William the Conquerer's charriot. Parliament's compromise was to move from the left to right lanes -- but incrementally, on a voluntary basis. Truckers first.

My attitude has long been that in terms of health care policy, incrementalism is public policy's version of Zeno's Paradox.  If we forever resist universal coverage in favor of measures to insure part of the uninsured population, we never reach the point at which everyone has access to quality health insurance.  In environmental policy by contrast there's no particular desired end point, so we can always hope to achieve better environmental outcomes, and can pursue those by increments, a small positive step here, a small positive step there and we always make progress.  In health care on the other hand all progress towards universal coverage that falls short leaves some other group still lacking in coverage, and as we cover progressively more people in reforms, those left out become ever more vulnerable to moralistic claims about the lazy poor that the United States is so prone to.

RIP Senator Kennedy

Senator Edward M. Kennedy died today after his long battle with brain cancer. It is a sad day for all Americans as Senator Kennedy was a great figure in the United States Senate. While he was initially dismissed as a pick of nepotism he proved to be one of the most influential figures in the history of the United States Senate. He was a true liberal lion and cared for the poor and working class in this country very deeply. He was responsible for leading the fight against Judge Robert Bork for Bork’s confirmation to the Supreme Court and was responsible for much landmark legislation. This included:
Immigration and Nationality Act of 1965
National Cancer Act of 1971
Federal Election Campaign Act Amendments of 1974
COBRA Act of 1985
Comprehensive Anti-Apartheid Act of 1986
Americans with Disabilities Act of 1990
Ryan White AIDS Care Act of 1991
Health Insurance Portability and Accountability Act of 1996
Mental Health Parity Act of 1996
State Children’s Health Insurance Program of 1997
No Child Left Behind of 2002
Edward M. Kennedy Serve America Act of 2009
Senator Kennedy served his country well and will be greatly missed.

There's got to be an ad in this somewhere

The conservative strategy in opposing health care reform is clearly to scare the living crap out of the elderly.  The irony in all this being that it is Republicans who are the longstanding enemies of Medicare and social security.  As recently as the past election the Republican Nominee for President advocated cuts in Medicare to slash the federal budget deficit.  So it is really strange to see the Republicans turning seniors into their base as they oppose a centrist plan to reform health care.  So why hasn't Moveon or someone run an ad based on this quote:

"The reality of it is, this single-payer program known as Medicare is a very good example of what we should not have happen with all of our health care," said Steele. "The reality of it is, how many times have we been at the trough of bankruptcy and no money for the Medicare program, where Congress is running around like chickens with their head cut off, trying to figure out how to fix a program that they've already mismanaged? So now you want to do that, Congressman, on a larger scale? You want to include all of us. You're talking about taking our senior population, and expanding it to all of the population? Government cannot run a health care system. they've already shown that. Trust the private markets to do it the right way."

or this one.

We've had Medicare since 1965, and Medicare has never done anything to make people more healthy. If there's any opportunity for more healthy activity, it's going to be, again, a private, competitive...

There's got to be a way to counter the fear mongering, seems to me that while the Republicans are pretending that the Democrats are trying to kill Medicare we should be reminding them who passed and still supports Medicare and who opposed and still hates it.  Where are the moveon ads on this?

Wyden's game on the Public Option

Most accounts I've seen have Oregon Senior Senator Ron Wyden playing coy on the public option, suggesting that he might or might not support it.  I've had a difficult time figuring out what exactly Wyden's position is on the matter, but he did seem to take a small step towards, "standing in the way [of the public option]," as he said he wouldn't when he signed a letter along with major health care reform roadblocks such as Ben Nelson, Mary Landrieu, Susan Collins, and Olympia Snowe urging a delay in the reform effort.  That letter allowed for the push to slow to a halt leading into the August recesses, that allowed the anti-reform brigades time to organize and present their fake populist outcry against health care reform.

I'm not sure what Wyden's position is precisely here, beyond that he understandably likes his own bill.  When it was first drafted a couple of years ago Wyden's bill was an excellent roadmap for what passable health care reform might look like given the slim Democratic majority of 2006, with of all people Robert Bennett of Utah as its cosponsor.  The thing that's odd about this whole thing, however, is that Wyden won the argument before it began, his Healthy Americans Act was the first coherent presentation that I'm aware of, of the "health care exchange" model that forms the basis of the Senate HELP Committee bill, the House Education and Labor Committee bill, and the Obama outline plan.  There are only two major differences that I'm aware of:

1) to Wyden's credit, his bill seems to advance insurance portability a little bit more effectively than the health care exchanges presented in the House and;
2) Wyden's bill contains no public option

Clearly the second is the more contentious issue, oddly given that a public option advances the goal of health care portability more effectively than anything else in the insurance exchanges that are presented in the bills that have been passed out of committee.  This is very strange, given that its the first difference that Wyden's bill is more effective on, there may also be some very specific cost-containment measures in Wyden's bill that don't exist in other bills, but many of those could easily be added in by amendment.  That the public option has become the point of contention with Wyden is very strange, since a well organized public option that assumes Medicare providers will participate in the public plan, ties reimbursement rates to Medicare rates, and allows for drug price bargaining by Medicare and the Public Option would provide tremendous downward pressure on private health care costs.

Back when he introduced it, Wyden's plan was a good outline for bipartison, effective health care reform that promoted universal coverage.  Since that time however, it has become obvious that the goal of the Republican Party on many issues is to block the Democratic majority from any accomplishments, this was apparent from the stimulus debate and from Republican repositioning on the once bipartison Employee Free Choice Act, as well as to block any health care reform.  This is part of why the debate has had nothing to do with the actual proposals, with half the debate being about Canada and Britain (solutions that are not being proposed by anyone with power) and the other half being about blatant lies and distortions.  While Wyden's proposal could pick up Republican support in 2007 I seriously doubt that it could today.  Nonetheless I'm not opposed to having a vote on Wyden's plan, but his waffling on a public option is just plain bizzarre, as Jacob Hacker (linked in previous paragraph) argues compellingly, Wyden's plan too would benefit from a public option.  Its time for Wyden to stop playing whatever game he's playing here and get on board with the public option, its hard enough to pass health care reform over the objections of conservative Republicans, they don't need help from progressive Democrats.

Cwech Blug is Back!

From June 2005 up to January 2007 I tried to regularly post here, and while there were lull months when something got in my way I was able over that period on most months to post 20 or so times.  After the 2006 election I faded, with class it became difficult to keep posting consistently, and my brain was too fried to come up with interesting things to post.  Even after graduating and getting through the 2008 election cycle I couldn't bring myself to bring the Cwech Blug back online. What I realized during that time was that the Cwech Blug was an important outlet for me to continue to keep my writing sharp and to maintain an outlet for my thoughts. As the health care debate has heated up this August I finally concluded that in spite of being on the verge of starting graduate school (which will undoubtedly put more pressure on me from class than I had as an undergrad), I needed to bring this blog back.  This time I resolved to protect myself from creative lulls and class pressures by adding two good friends with good minds for politics to help me out, with three of us posting it should be a lot easier to consistently keep material coming and to avoid the pressure of having to constantly be posting something just for the sake of posting. This should keep the material here more interesting and fresh, while bringing some different perspectives to the table and allow for consistency of posts.

I hope that I can regain readers and find new ones from the last run at this blog, and keep interesting material coming.

The (Mythic) ‘Sister Souljah Moment’

America’s ‘first black president’ confronted America’s ‘black community’ when he took the stage in front of the Rainbow Coalition and denounced the remarks of one of the ostensibly monolithic community’s leaders spokespersons, Ms. Sister Souljah. In so doing, he distanced himself from an ‘extreme element’ of the Democratic Party, offending some of its members but establishing himself as a moderate. Thus, Bill Clinton won the Democratic nomination, and eventually, the general election.

This year, though there has been much ‘Sister Souljah’ calling, there will be no such moments. Why? Because there never was such a moment. To borrow heavily from a generic meta-narrative of the blog community, the media proffered the previously articulated narrative in order to explain why a white candidate would disagree with a rapper who argued for a ‘week to kill white people’ following the 1992 LA riots. Although I wasn’t there and haven’t yet been able to contact an official representative of the ‘black community’, I can imagine that there weren’t too many in the Rainbow Alliance audience who stood up to defend Sister Souljah’s right to kill white people. I think I know why; because while the ‘black community’ is an extremely intellectually and politically (and ethnically/racially) diverse imagined ‘community’, there isn’t much of a movement within the ‘community’ for racially motivated killings. As I said, I wasn’t there, but the primary reason for objecting to Clinton’s statement was probably was more along the lines of questioning why an alleged ally of the community needed to inform a pacific group of advocates for justice that killing people was wrong. So while the media generated a historic precedent, attendees of the rally wondered what Clinton had said that distanced himself from their political beliefs. They hadn’t endorsed Sister Souljah, or even contemplated picking up arms. There was a response against Clinton; not because he denounced killing, but primarily because Clinton did not warn organisers that he would be speaking out against Sister Souljah.

Despite the dubious nature of the moniker, its memory and precedent(ial) quality hovers over the current batch of Democratic presidential candidates. Incredulously, the biggest bout of ‘Sister Souljah!’ calling that I have witnessed has been over remarks by Barack Obama to that same ‘black community’, albeit twelve years later. Apparently, a candidate telling people that parent’s should be more involved in their children’s educations distances the candidate from the listeners. As if black parents are the sole guilty ones of excessively leaning on the TV to parent children. Or that Obama, a father of two daughters, only mentions the importance of parents to people whose skin colour doesn’t look like most of the rich and powerful of the world. Perhaps it was simpler for the media (including, I might add, many left leaning bloggers) to continue the flawed narrative by making the connection over racial lines. Ostensibly, this is because the ‘community’ is monolithically out of sync with mainstream American politics, holds incredible influence, and other voters may not support a candidate too close to such a dangerous monolith. (The second is rather interesting claim against a group that has only been allowed to vote for about 40 years.)

Of course, much of this commentary may stem from caffeine enhanced paranoia about the state of our nation and the media of convenience, but don’t dismiss it. Instead, look for ways that candidates substantively distance themselves from groups (or not), rather than citing actions that seem like distancing according to racially focused narratives. For example, Obama and Edwards distancing themselves from lobbyists, especially in contrast with Clinton not creating the same distance; or Obama’s speech to automakers in Detroit. These are easy examples by a rather uninvolved observer, I’m sure that you can find more.

Just don’t reference Sister Souljah when you do.

Bush Threatens to Derail 9/11 Security Bill over Empowerment of Workers

The bill enacting many of the 9/11 Commission proposed reforms faces a possible veto from the White House because (gasp!) it would allow airport screeners to unionize!

The Senate's leaders moved closer today toward a head-on collision over using the 9/11 bill to give collective bargaining rights to Transportation Security Administration (TSA) screeners, a provision that already has sparked a White House veto threat. The bill is now on the floor.

Senate Republicans have followed the lead of their House counterparts, who are countering a House Democratic plan to call up another pro-union measure later today. Republicans have blasted Democrats, arguing that the bill is a giveaway to the labor interests that have given crucial political support to the new majority. Senate Minority Leader Mitch McConnell (R-Ky.) told his party's faithful at today's Conservative Political Action Conference that Republicans would stay united to sustain any presidential veto of the 9/11 bill.

While it would be a shame to see a good bill get derailed over the right's perverse fear of all things union, I kind of hope they do back Bush if he vetos this, beause I dont see any way Smith or Collins, or Coleman will be able to explain their way out of this one. What are they going to say? "Preventing workers from forming unions is more important than the Nation's security"? Let Bush veto this, and let him veto the Employee Free Choice Act, which passed the House today. 20% of the American public would join a union if they were given the opportunity, yet union membership is at an all time low 12% today and the Bush Administration and Republican Congress want to limit the right to unionize as much as possible.

Uninspired Blogging

Since the start of the new year I've felt very uninspired as I write this blog. My posts have recently been written most often because I feel like I should post something rather than any sense that I want to talk about a given issue. That all culminated almost two weeks (12 days to be exact) ago when following a post on Lt Watada I proceeded to go on a long hiatus without a single post. What all this tells me is that it is clear that this blog must change its course (much like the US in Iraq only without the bloodshed). It has been my observation that far too little attention is payed by the mainstream press and by major blogs to labor/union issues. I now hope to stake myself out against that trend dedicating the bulk of this blog to precisely those issues. I have set up google and yahoo news alerts for labor and union relevent articles and will try to extensively cover everything union to the best of my ability. If I feel compelled to write about another issue I will, but the bulk of this blog will henceforth be dedicated to labor and unions. Expect this to start sometime today.

The Watada Trial and Personal Responsibility

I was struck by this collumn in the Seattle Post Intelligencer today regarding the actions of Lt. Ehren Watada. The author Robert Jamieson explores the difference between Lt. Watada and Sgt. Mickel David Garrigus who recently died in Iraq, asking which one should be treated as a hero. Before I get deeper into this I believe that Mr. Jamieson forces a false choice upon his readers, playing on every emotional connection that one can to portray Sgt. Garrigus well and Lt. Watada poorly. Undoubtedly we should mourn for Sgt. Garrigus just as we should morn for every one of the more than 3,000 American soldiers and countless Iraqis who have died in this terrible war. Jamieson acts as though one cant think highly of both at the same time, as though respecting the fight that Mr. Watada is putting up somehow diminishes the life of Sgt. Garrigus, it doesnt. The crux of Jamieson's argument however lies below.

They've talked about values they hold dear: patriotism and honor and duty.

Both have anguished over the implosion of Iraq.

But as soldiers they've long known -- or damn well should have known -- that an imperfect military machine works because men and women sign up to follow orders. They are contracted to abide by the rules. You break these rules -- even if you question, as I do, those at the top who are now enforcing them -- and you face the consequences. Period.

This is a deeply flawed moral philosophy that Jamieson presents his readers with, and one that needs to be examined. Jamieson even quotes the right source but fails to engage with the weight of its words, I refer to Martin Luther King's "Letter from a Birmingham City Jail."

"One who breaks an unjust law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for law."

This is not about whether Lt. Watada will face consequences (though I was sure he would until today) this is about the responsibility that an individual holds to others. Watata feels that the war is unjust and has made the determination that if one feels the war is unjust one should not participate in it. Jamieson's argument is precisely the one that was rightly rejected at Nuremburg, that individual's following orders bears no responsibility for what he has done. The Nazi bureaucrat Adolf Eichmann merely decided to do his job rather than to stop and question the fact that he was playing an active part in the slaughter of millions of innocent people. Watada has broken the law and should be confined to prison, but that misses the point, the point is that Watada has acted in good faith with his conscious, he has made the determination that he cannot bear to live knowing that he played a part in this war. Those who say that soldiers should not question the conflicts for which they fight merely return to the nuremburg defense. Watada is as King put it "showing the highest respect for law" but refusing to participate in this war and willingly accepting the penalty for it. But recent events undermine this.

The Army court-martial of 1st Lt. Ehren Watada, which ended in a mistrial Wednesday, may have stranger turns ahead: Prohibitions against double jeopardy may keep prosecutors from having a second trial, his lawyer and another legal expert say.

The opposition of Watada and his defense team to the mistrial, declared by the military judge and eventually endorsed by prosecutors after their case fell apart, opens the door for a double-jeopardy defense, said John Junker, a University of Washington law professor.
...
The dramatic turn of events hinged on a stipulation of fact that Watada signed in a plea agreement more than a week ago. Under the plea deal, prosecutors dropped two charges of conduct unbecoming an officer against Watada. He was being tried this week on two other charges of conduct unbecoming an officer and one count of missing movement when his Stryker Brigade deployed to Iraq in June.

Head questioned Watada while the jury was out of the courtroom, which Seitz objected to but allowed, and legal experts such as Junker said they would consider that questioning "very unusual" in a civilian trial.

Head concluded that he could not accept Watada's statement. Although Watada had admitted to failing to deploy with his unit, it was not the same as admitting guilt, which prosecutors considered it to be, Head said.

Watada should in fact have admitted guilt, he should have said "yes! I refused to get on that plane, if that is a crime than I guess I'm guilty!" But he didnt, If Watada truly wants to take the moral high ground he should not be pleading his innocence but rather admitting his guilt. I have a deep respect for Watada's refusal to participate in more killing, he can not participate in this war if he truly believes that it is wrong. However, he should plead guilty and accept the consequences of doing so. The moral high ground rarely comes without consequences, and it seems as though Lt. Watada is trying to have it both ways, which is a shame.

Coolest Picture Ever

Literally.

That looks like it should be painful but he doesnt look like he's in pain. Thank you CNN.com

Diplomatic Operations

Josh Marshall asks:

Can we assume the number of billions of dollars for "diplomatic operations" is a pretty small part of the pie? And what "diplomatic operations" are they talking about exactly?

My guess is aggressive negotiations.

Anakin: When I got to them we got into aggressive negotiations.
Padme: Aggressive negotiations? What's that?
Anakin: Ah, well, it's negotiations with a lightsaber.

I've got to work Star Wars into this blog every once in a while.

My Thoughts on the New Tax Proposal

I'm not a big fan of the bipartison tax reform bill that the Oregonian discussed this morning.

A bipartisan plan to remake Oregon's tax system -- add a 5 cent sales tax, cut income taxes by one-third, add tax credits for the poor, slash the tax on capital gains -- was formally put before the Legislature on Wednesday.

If enacted, it would represent the biggest change in state tax policy since 1929, when Oregon began a state income tax.

But the odds are steep: The plan would have to be approved by two-thirds of the House and Senate, and it would have to overcome the deep aversion of Oregon voters and politicians to a sales tax.

I guess I'm one of those with a deep aversion to a sales tax. Sales taxes are regressive, and the sponsors of the bill realized that. They were wise to attempt to balance it out for poor Oregonians by making income taxes for those very people lower.

Taxpayers in every income range could expect to pay less in taxes, except some taxpayers who earn too little to owe income taxes. For most Oregonians, sales tax payments would be more than offset by reductions in income and property taxes, Westlund says.

But Westlund acknowledges that some people will slip through the cracks in this bill paying more in sales taxes but not having enough income to get an income tax cut to balance it out. So the poorest Oregonians end up paying a disproportionate high percentage of their income to the sales tax. Aside from that practical argument, I think sales taxes are also a pain, in Oregon now when you see a price on something you know thats the price, something reassuring, when there's a sales tax you dont really know what you're paying in the end unless you're a math wizz. There is something that can be done to this bill that I believe would make it acceptable. Washington probably has the right model here, Washington has a sales tax but it exempts food, so that the basic necessities that everyone must have and cause the sales tax to burn the poor are not taxed. If the legislature wants to enact a sales tax they should exempt food so that the poorest Oregonians dont get burned as they would without such an exemption.

The Problem with National Popular Vote

The electoral college is broken, States like Wyoming that have a tiny population still get three electoral votes giving them far more electoral power than they deserve based on their population. Blue Oregon pointed out that we nearly had two consecutive elections in which the winner of the popular vote lost the electoral vote. In response a group called National Popular Vote has begun a campaign to convince States to agree to send their electors to the winner of the popular vote, bypassing the Constitutional Amendment process that would be needed to get rid of the electoral college. They seem to have convinced an Oregon legislator to introduce a bill sending Oregon's electoral votes to the nationwide winner.

This is a bad idea, because it means that Oregonians get less of a voice than anyone else in the Presidential election. By agreeing to send our electors to vote for whoever won the National popular vote, Oregon's concerns will be tossed aside for the concerns of voters in all the other States. If a candidate wants to win Oregon's electoral votes, that candidate needs to be able to convince Oregonians that he's the best candidate, and that he shares Oregon's values and concerns. His policies need to reflect the policies that Oregonians want enacted. By doing this, Oregon would in essence be agreeing to throw away the votes that are cast be Oregonians.

I don't believe that the electoral college is a good idea, but in order to chance it we can't go looking for the easy way out as this does, it undermines the voting rights of the resident's of the State who get nothing in return. If its going to be changed it must be done by Constitutional Amendment. Personally I favor removing Senators from the equation to calculate electoral votes, which would mean that while some States might still be overrepresented, their overrepresentation would be minimized. If only Representatives comprised the electoral votes then Gore would have recieved 227 electoral votes (assuming I counted right) and Bush would have won 213 electoral votes. Al Gore would be the President if Senators (which every State has two of) were not included in the formula for determining electoral votes. Bush gained 19 electoral votes over Gore by winning smaller States than Gore did. This is the hard way, because it requires a Constitutional Amendment, but it is also the right way because unlike the plan being offered for Oregon it doesnt take away one State's voting rights. There are other plans that would be reasonable as well, but any of those plans would also require a Constitutional amendment.

Smith Filibusters Minimum Wage

After griping for the last three years about Democrats occassionally filibustering things, the Senate Republicans have already excersized their right to filibuster, demanding that any increase in wages for the lowest paid workers must be coupled with tax cuts for those higher up on the income ladder.

WASHINGTON, Jan. 24 (Bloomberg) — Senate Republicans rejected an effort by Democrats to pass minimum-wage legislation without breaks for small businesses on Wednesday, setting the stage for a potential impasse with the House, where lawmakers are demanding a “clean” bill.

The Senate vote of 54 to 43 was six votes short of the 60 needed to move ahead with a wage measure that does not include tax benefits for employers. Earlier this month, the Senate Finance Committee voted to add $8.3 billion in tax breaks to the bill.

And who joined this cynical Republican filibuster? None other "moderate" Republican Gordon Smith. That's your "moderate" Republican from Oregon, working hard in the Senate to stick it to workers every day. And if it takes a filibuster to make sure he can stick it workers, Gordon Smith will filibuster.

Cwechblug State of the Union Response

First, excellent Democratic rebuttal by Sen. Webb. There were a few things in the State of the Union that struck me as interesting, bad ideas, or idiotic. First, I was surprised at how little substance there was in this State of the Union. Very few coherent policy objectives, and a lot of fluffy nice sounding rhetoric. The few things that he did propose left me perplexed however. Why did Bush propose the National Guard?

A second task we can take on together is to design and establish a volunteer Civilian Reserve Corps. Such a corps would function much like our military reserve. It would ease the burden on the Armed Forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them. And it would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time.

If anyone can tell the difference between what he proposes in this section of the speech and the National Guard, please tell me, because I am still perplexed about why Bush proposed the National Guard tonight.

Moving on to Health Care. This is quite possibly one of the worst ideas I've ever heard. The following is what Bush proposed tonight in regards to health care.

For Americans who now purchase health insurance on their own, my proposal would mean a substantial tax savings — $4,500 for a family of four making $60,000 a year. And for the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach. Changing the tax code is a vital and necessary step to making health care affordable for more Americans.

My second proposal is to help the States that are coming up with innovative ways to cover the uninsured. States that make basic private health insurance available to all their citizens should receive Federal funds to help them provide this coverage to the poor and the sick. I have asked the Secretary of Health and Human Services to work with Congress to take existing Federal funds and use them to create “Affordable Choices” grants. These grants would give our Nation’s Governors more money and more flexibility to get private health insurance to those most in need.

There's been much debate about the problems with Wyden's plan, namely that it doesnt do enough to contain costs. But this is truly rediculous. If you make health care costs tax deductable and do nothing else, you merely give insurance companies the ability to charge any amount of money at public expense. Rather than contain costs as we need to do, insurance premiums would drive straight through the roof. Because once everyone has the ability to deduct health care costs from their taxes, insurance companies will have a huge market available to them for which there is no demand curve. There is nothing to contain costs of insurance. People by health care at price 1, deducting their entire premium from their income taxes, insurance companies raise prices because they can make more money, cost 2 is now far higher than cost one. Consumer purchases health care at cost 2 and deducts it from their taxes. It is a giant Federal gift to insurance companies that seems limitless. I'm also wondering about people who have so little income that they dont pay anything in taxes. Are they going to recieve money back from the government to cover their health care costs. This may be universal, but its a monumentally bad idea.

The proposal to give a Federal grant to encourage States to "find innovative ways to provide private health insurance to their citizens." This is really a way to prevent States from going single-payer on their own and stop the movement at the State level where it is beginning to take shape. This is not encouraging States to come up with innovative new policies, it is limiting them to a narrow set of policy options that are more likely to fail than single-payer. The specification of private insurance here is important.

Finally, Bush once more proposed health savings accounts, which have the fundamental flaw of assuming that health care is a normal consumer item. If I want a banana, I know that a banana is what I need and I can shop at a place in which I can get a good price for a banana. Health care isnt like this at all. If I need an MRI, the only way I know that I need an MRI is that the doctor who is going to make money through the process told me I need an MRI. I cant make the rational consumer choice that I dont really need an MRI, if I choose not to get one I run considerable personal health risks. The money in a health savings account would be limited, so if I develope a major health problem I might run out of money in the account and end up paying out of pocket. Not to mention the question of what one does if they dont have any money to put in the health savings account to begin with. So that's three bad ideas in health care by my count.

Bush also engaged in a little bit of Ron Saxton style rhetoric, claiming that we're going to keep medicare healthy, expand the war in Iraq, cut taxes, create a new National Guard (huh?), and balance the budget. A friend of mine commented "We're raiding Canada," and as near as I can tell that's the only way to do it. We're not going to cut programs, we're going to cut taxes, and balance the budget. It all sounds nice but cant be taken seriously, I guess Saxton's magic "inefficiences" have returned.

Oregon Takes a Lead on Health Care

While California gets most of the press for Health Care reform, Oregon seems to be moving forward with plans to dramatically restructure the State's health care system. And unlike in California it has a chance of passing in Oregon (California has some screwed up laws on budgetary matters allowing a minority to easily block the legislation). The debate is beginning in Oregon, and not just on the topic of whether universal health care is the best policy (it is), but rather about exactly what plan is best to do that, good serious proposals are being made and sent into committee in the Oregon Legislature, there seems to be a growing consensus that something needs to be done and that the health care system as it is today is unsustainable. Former Governor John Kitzhaber is leading this charge with the Archimedes movement.

Former Gov. John Kitzhaber rolled out a bold legislative plan for overhauling Oregon's health care system Wednesday, hoping to leverage a national debate on health care reform that will spread to the 2008 presidential race.

"The health care system today is unsustainable," he said. "It is remarkable we are utterly unable to change our direction."

The plan would pool roughly $7 billion from employer tax deductions for health care and from state and federal tax money spent on Medicare and Medicaid in Oregon. The pool then would be spent in a more efficient and rational system that would provide a "core benefit" of essential health services to every Oregonian, including the 609,000 who now have no health insurance, said Kitzhaber, a former emergency-room doctor, during a news conference in downtown Portland.
...
Kitzhaber's bill will go to the Senate Special Committee on Health Reform, said the Democratic co-chairs, Sen. Alan Bates of Ashland, and Sen. Ben Westlund of Bend. The committee will consider Kitzhaber's plan along with at least three other health reform plans: one developed by a Senate commission led by Bates and Westlund and others from the Oregon Business Council and the Oregon Health Policy Commission.

"What is most significant and shows the true depth of this (health care) crisis is the number of groups that have come together to propose solutions," Westlund said.
...
No plan will work if it does not contain costs, Kitzhaber said.

Like other plans before the Legislature, his would seek administrative efficiencies, include incentives to keep costs low and the quality of service high, and would guarantee Oregonians health care no matter where they work.

Its a shame Kitzhaber appears to have no plans to challenge Gordon Smith for the Senate seat in 2 years, but it does little good to dwell on that. What Kitzhaber recognizes that Ron Wyden doesnt is the section I put in bold from the Oregonian article. Wyden seems to think that we cant effectively control the costs but we can ensure access to health care for all. This concedes ground in the debate that doesnt need to be conceded, one of the most compelling reasons for health care reform is the runaway cost of care in the current system. Massachussetts, Vermont, and Hawaii have all drastically reformed their health care systems, if California and Oregon do it too then perhaps the US Congress will begin to really take this issue seriously and do something about a broken system. The Oregonian piece also mentioned that Kulongoski is backing a bill to guarantee coverage for all children, and if we're going to take baby steps toward this thing that's certainly admirable, but it fails to deal with the larger health care crisis in the State and the country choosing instead of focus on select social groups while ignoring the larger problems. If a universal plan cannot get through the legislature than Kulongoski's plan to cover all children would be nice, but if we can make health care in this State more efficient and change its fundamental structure we should.

Weather Griping

Ok, this is directed at everyone in western Oregon and Washington. You're all wimps. Linfield College was cancelled yesterday and the local news out of Portland acted as if all hell had broken loose when the roads were what I would describe as "clear" in both cases. Even so, lets entertain for a moment the possibility that the roads actually were dangerous. Linfield College delayed its opening today, my question is this: how can it take more than 24 hours to get the roads clear? If the roads arent clear by now someone isnt doing their job. Now back to our regularly scheduled blogging (also known as complaining about more relevent things than the weather).

The Effects of Higher Minimum Wages

The New York Times ran a good story today on the way minimum wage law acts on the Idaho-Washington border where the highest minimum wage in the country meets the lowest. They pointed to the relationship between Post Falls and Liberty Lake. But the story was the same where I grew up in Moscow Idaho/Pullman Washington.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.

Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.

With a lowball minimum wage, Idaho businesses who pay minimum wage sacrifice more committed workers who cross the State line to Washington and is stuck with the bottom of the barrel labor at least in town near the border. One of my good friends in High School who commuted to Pullman to work every day made the comment once to me "why would anyone in this town want to work in Moscow, yes you pay a little more for gas to commute but its more than made up for by the difference in wage." Idaho businesses near the border, this article pointed out excellently are at a huge disadvantage if they fail to pay close to Washington's minimum wage to their employees.

Bush Ignores Democrats

It seems that Bush is still excluding Democrats from the decision making process in spite of the fact that the Democrats now hold both Houses of Congress.

President Bush yesterday began promoting his plan to send more troops to Iraq, bringing more than 30 Republican senators to the White House as part of a major campaign to rally the American people behind another effort to stabilize the country.

So the Democrats won an election recently, largely because of anger over the Iraq war, yet the President still wont talk to Democrats? Interesting.