True, George W. Bush is resolved. But to what end?
By Harold Meyerson Web Exclusive: 09.02.04
There is apparently not much to George W. Bush's presidency except his resolve.
Judging by the speeches of Sen. John McCain and former New York mayor Rudy Giuliani on the Republican convention's opening night, the president has no record whatever on matters economic, nor -- remarkably for a wartime president -- much of one when it comes to conducting the war in Iraq since the fall of Saddam Hussein.
What the president does have is leadership -- pure, undiluted determination, a virtue that transcends such considerations as where exactly he is leading us. At other periods in our history, issues might matter, Giuliani noted, but "in times of danger, as we are now in, Americans should put leadership at the core of their decision."
Of course, the Bush campaign is fully aware that on a range of issues, Americans aren't wildly enthusiastic about where the president's resolve has taken us. By a narrow plurality, Americans would now prefer that he not have led us into Iraq. And nowhere has the president been more unwavering than in his disastrous commitment to tax cuts, which has held firm through surplus and deficits, peace and war, a weak economy and -- well, a weak economy.
Consistency may be the hobgoblin of small minds, but George Bush got it and John Kerry don't -- or so Giuliani and a host of other Republican speakers would have us believe. Kerry, said hizzoner, lacks the "clear, precise, and consistent vision" that the president has already demonstrated.
In the happiest of sheer coincidences, the convention's coordinated attacks on Kerry's alleged lack of grit follows hard on the Swift boat veterans' assault -- both base and baseless -- on Kerry's record in Vietnam. Though Kerry's crews still swear by his leadership, the Swifties contended that John Kerry was unfit for command then and remains so.
One test of Bush's putative leadership skills, you'd think, would be his ability to rally his countrymen around a shared national purpose. Both McCain and Giuliani strove manfully to recall the moment when the nation did indeed come together, in the wake of the Sept. 11 mass murders. "We were not two countries," McCain said, "we were Americans."
But this spirit of national unity didn't mysteriously slip away, nor was it sundered by the plots of fractious Democrats. Though most Democrats and liberals backed the war in Afghanistan, Bush decided to lead in a divisive manner for narrowly partisan ends. The president made no move to bring Democrats into his Cabinet to fight what some supporters have termed a new world war. On the contrary, in a spirit of downwardly shared sacrifice, Bush pushed for further tax cuts for large-scale investors; his war in Iraq would be fought by the working class and funded by its children. By forcing Congress to vote to give him a blank check to make war in Iraq before the November elections, Bush sought to use his war as a weapon against the Democrats. This was leadership all right, to exquisitely sectarian ends. And for Giuliani to have waxed nostalgic about the post-Sept. 11 period of national unity in a speech extolling George W. Bush's leadership was industrial-strength chutzpah.
The mayor's speech was plainly crafted to appeal to a number of swing voter groups, among them blue-collar white males who have borne the brunt of Bushonomics but who just might stick with the president out of some pathetic sense of tough-guy kinship. Giuliani lovingly recalled the bond between Bush and New York construction workers at Ground Zero three days after the Sept. 11 attacks, and earlier in the evening, in a film broadcast at the convention, the leader of a dissident Wisconsin firefighters local told the president, "We are willing to walk into a burning building with you." Of course, nothing in Bush's service record, or his cosseted careers in business and politics, suggests that he'd be willing to walk into a burning building with them, but that merely testifies to how effective the marketing of the president's macho-mindedness may prove to be.
The Wisconsin firefighters are precisely the demographic that the Bush campaign is wooing with its emphasis on the president's "leadership" and its avoidance of any discussion of his record. For Bush to win, he needs downscale, white, Midwestern males to bond with him nearly as strongly as downscale, white Southern males. There's a lot these guys will have to overlook to vote for Bush -- the exporting of their jobs, and the loss of their health coverage, to name just two -- but the decimation of industrial unions in the Midwest has Bush strategists hoping that white guys in Ohio will vote increasingly like their Mississippi counterparts.
It's not that Bush is resolved to help them better their lives; it's just that he's resolved.
Harold Meyerson is editor-at-large of The American Prospect. This column originally appeared in the Washington Post.
Citing Higher Costs, U.S. Plans Record Rise in Medicare Premium
By GARDINER HARRIS
Published: September 4, 2004
WASHINGTON, Sept. 3 - A day after President Bush heralded his efforts to help the elderly cope with increased medical expenses, federal officials announced the largest premium increase in dollars in the Medicare program's history, raising the monthly expense by $11.60 to $78.20.
The increase, which amounts to 17 percent, results largely from increased payments to doctors and reflects rising medical expenses generally, officials said. The rise has nothing to do with a program that will start in 2006 to offer prescription drugs, for which beneficiaries must pay a separate premium.
The increase immediately became grist for an increasingly contentious presidential campaign. Phil Singer, a spokesman for the Kerry campaign, released a statement saying, "After doing nothing about the record increases in the cost of health care over the last four years, George Bush is presiding over a Medicare system that is socking seniors with the largest premium hike in the program's 40-year history."
Scott Stanzel, a spokesman for the Bush campaign, said that "President Bush has worked to increase health care access and affordability, including guaranteeing Medicare recipients prescription drugs."
Dr. Mark McClellan, administrator of the Medicare program, said in an interview that the elderly were receiving improved benefits now and would l have lower out-of-pocket expenses when the new drug benefit began in 2006. Dr. McClellan pointed out that Medicare recently instituted a "Welcome to Medicare" physical and screening program, giving the elderly more for their money.
When Dr. McClellan's predecessor, Thomas A. Scully, announced last year's 14-percent premium increase, he said the increase demonstrated that Congress should give private health plans a larger role in Medicare. Through such private plans, Mr. Scully said, beneficiaries "would have access to lower premiums and lower costs."
Dr. McClellan acknowledged that about $1.75 of this year's $11.60 premium increase results from the billions of dollars Medicare is paying insurers to encourage them to offer private plans. Many in Congress refused last year to support the new Medicare drug benefit legislation unless the program did more to lure patients into such private plans.
As Medicare cut costs in recent years, many private health insurers bowed out of the program, leading the number of beneficiaries in private plans to drop to 4.6 million last year, or 11 percent of the beneficiaries, from 6.3 million, or 16 percent of beneficiaries, in 1999. With higher administrative costs, private plans are generally more costly than regular Medicare and thus need subsidies to provide services.
Dr. McClellan pointed out that private plans often offer additional benefits, including prescription drugs, more preventive care and even dental and vision care. Copayments in the private plans are often lower, he said.
By law, the federal Medicare program picks up the cost of about 75 percent of the Part B Medicare program, which pays for physician services, hospital outpatient care and medical equipment. Premiums pay for the remaining 25 percent. A significant part of the increased premium announced on Friday will also go to bolster the Medicare trust fund, a short-term reserve used to pay benefits, Dr. McClellan said.
Most beneficiaries pay their Medicare premiums through deductions from their Social Security checks. In years past, the premium increases have been announced in October at the same time that cost-of-living increases to Social Security checks are announced. The twin announcements allow the elderly to calculate how much they will be receiving the following year.
Dr. McClellan said politics played no role in the decision to announce the increase late Friday afternoon, just as much of official Washington was heading out for a three-day weekend and the Republican convention and a hurricane moving toward Florida were dominating the news. He said he simply wanted to make the announcement as soon as he had the information.
Representative Pete Stark, Democrat of California, scoffed at Dr. McClellan's explanation for the announcement's timing and said, "This is a cynical attempt to bury bad news by leaking it out when you hope no one is watching."
Robert Hayes, the president of the Medicare Rights Center, an advocacy group, said the premium increase would be a "body blow" to the elderly and resulted from "profligate management of Medicare."
Medical costs have been rising faster than inflation for more than a decade, reflecting innovations and better care for patients. Medicare is not immune to such increases, although program administrators have long tried to slow such increases with measures that often amount to price controls. These controls have so enraged many health care providers that they appeal directly to Congress, where doctor groups and others have sought more money for treatments. Such appeals led Congress last year to roll back expected cuts in many payments to doctors and instead to order that such payments increase 1.5 percent, an important reason for this year's premium increase.
The latest group to make such an appeal is cancer doctors, who say Medicare will soon sharply reduce payments to them under a new system that changes the way Medicare pays for cancer drugs. Some oncologists have threatened to reduce services to patients or give them older, more toxic therapies unless Congress increases payments to them.
Far From Great, Bush's 'Ownership Society' Could Cost Americans in Unseen Ways
By Allan Sloan
Tuesday, September 7, 2004; Page E03
By now, if the Republicans did their job right, the term "ownership society" is still rattling around inside your head. It sure sounded great when President George W. introduced it at the Republican convention last week. Instead of depending on government or an employer, you'd own your own future.
"Ownership," Bush said, "brings security and dignity and independence."
What's not to like? You could own an individual Social Security account, new high-powered retirement and savings accounts, your own health care account.
If the government trims Social Security and Medicare benefits -- that's inevitable, given the looming retirement of the baby-boom generation -- you'd own accounts that no one could take away.
But the president didn't exactly burden us with details about paying for all this.
It's great marketing: Show your audience the goodies but not the price tag. It's like going to the supermarket, picking out your stuff and taking it home without stopping at the checkout line to pay.
The bill? That will come later -- or maybe get sent to your kids. Sound laughable?
Consider the recently enacted Medicare prescription-drug program. Cost: hundreds of billions of dollars. How we're covering the cost: government borrowing, to be paid for by taxpayers yet unborn.
Who can argue against ownership?
Ownership's great. Take housing. More than two-thirds of us own our homes. Not only is homeownership socially desirable, but rising housing prices have multiplied the wealth of tens of millions of ordinary Americans. I love it. But the individual Social Security accounts that are the centerpiece of Bush's "ownership society" aren't an unalloyed good, as homeownership is.
There are huge personal and social costs to these accounts: giving up a guaranteed benefit and cutting holes in our nation's most important safety net. You can't decide if private accounts are better than what we've got until you see the price. The devil is in the details we haven't yet seen.
How do we pay today's beneficiaries if workers put some of their Social Security taxes into individual accounts? The gap -- we're talking at least a trillion dollars -- has to be filled somehow. The budget surpluses that Bush inherited are long gone, so where's the money going to come from?
Huge government borrowings, massive cuts in other programs or raising taxes.
And private accounts don't address Social Security's long-term shortfall: Projected revenues are about 30 percent below projected costs. Bringing Social Security into balance while letting people put some Social Security tax into private accounts implies a cut of at least 50 percent in the government's payment to future retirees.
Sure, even if we don't adopt private accounts, future Social Security recipients are going to get far less from the government than the current benefit formula calls for. But private accounts won't miraculously make the need for cuts go away. So Bush is being less than candid when he talks about such accounts protecting Social Security and doesn't even address the concept of trade-offs and risks. True ownership is about taking risks to control your own destiny. It's not about getting something for nothing, which is all the "ownership society" has offered thus far. Bush is peddling gain without pain -- and anyone who truly believes in markets and self-reliance knows perfectly well that there's no such thing.
The Bush response? "Unless we take on and modernize the entitlement programs [Social Security, Medicare and Medicaid], they will devour the rest of the government," says White House spokesman Trent Duffy. Totally true. Duffy says that if Bush's economic policies are adopted, a stronger economy will help generate tax revenues to cover the tab. Can we be a tad specific, I ask. Sorry, no numbers.
Bush's speech had no mention of the controversial "retirement savings accounts" and "lifetime savings accounts" that are a keystone of the "ownership society." These large, high-powered accounts would make income from investments tax-free. They would be great for people who already have plenty to invest, but not helpful for people who don't already own plenty of capital. It's all part of a long-term plan to turn the income tax into a wage tax, make inheritances and income from investments tax-free and fill the budget gap with a national sales tax or value-added tax.
Ironically, the Clinton administration -- remember them? -- also proposed reducing people's dependence on employers and government programs. "There were discussions about ways to help people save and invest more," recalls former labor secretary Robert B. Reich. But Clinton's marketers never came up with anything as snappy as "ownership society."
The bottom line: Whenever the government offers to help you grow wealthier and more self-reliant, ask what it costs and who pays. Administrations change, but economic fundamentals don't. No matter which party's in power, there's no such thing as a free lunch.
Sloan is Newsweek's Wall Street editor. His e-mail is sloan@panix.com.
(COMTEX) B: Bush Economic Adviser Leaving White House ( AP Online )
WASHINGTON, Nov 23, 2004 (AP Online via COMTEX) -- Stephen Friedman, one of the President Bush's top economic advisers, is leaving the White House to return to the private sector in New York, a senior administration official said Tuesday.
Friedman, who served as the behind-the-scenes coordinator for the administration's economic policies, is to leave by the end of the year. There is no imminent announcement on his replacement, said the official, speaking on condition of anonymity.
Friedman replaced Larry Lindsey, who resigned with former Treasury Secretary Paul O'Neill two years ago in a shake-up of Bush's economic team.
The senior administration official said that while there has been wide speculation that Friedman might become treasury secretary in Bush's second term, Friedman had never been considered for the job because he had expressed no desire for the post. Friedman had expressed his intention to return to New York after the presidential campaign, the official said.
Bush named Friedman assistant to the president for economic policy and director of the National Economic Council in December 2002. Friedman had spent 28 years with Wall Street investment giant Goldman Sachs & Company, where he served as co-chair from 1990 to 1994, sharing the job at first with Robert Rubin, who left in 1992 to join the Clinton administration.
One person mentioned as Friedman's replacement as head of the National Economic Council is Tim Adams, who served as policy director for Bush's re-election campaign and before that was chief of staff at the Treasury Department under both O'Neill and current Treasury Secretary John Snow.
The NEC was created in the Clinton administration to coordinate economic policy for the White House in much the same way that the National Security Council coordinates foreign policy.
Friedman's selection by Bush initially sparked a revolt among conservative "supply siders," who questioned his commitment to further tax cuts because of his membership in the Concord Coalition, an anti-deficit group.
Friedman, however, allayed the concerns of conservatives and became an enthusiastic booster of the third round of tax cuts which passed Congress in the summer of 2003.
During his time in the administration, Friedman mostly worked behind the scenes, coordinating economic initiatives and serving as the administration's liaison to Wall Street.
At the beginning of the Iraq war in 2003, Friedman chaired daily meetings of a "watch group" of top economic policy-makers including Federal Reserve Chairman Alan Greenspan, who met at the White House to monitor the war's impact on global financial markets and oil markets.
By DEB RIECHMANN Associated Press Writer
Copyright 2004 Associated Press, All rights reserved
I have just one question about President Bush's trip to Europe: Did he and Laura go shopping?
If they did, I would love to have been a fly on the wall when Laura must have said to George: "George, do you remember how much these Belgian chocolates cost when we were here four years ago? This box of mints was $10. Now it's $15? What happened to the dollar, George? Why is the euro worth so much more now, honey? Didn't Rummy say Europe was old? If we didn't have Air Force One, we never could have afforded this trip on your salary!"
The dollar is falling! The dollar is falling! But the Bush team has basically told the world that unless the markets make the falling dollar into a full-blown New York Stock Exchange crisis and trade war, it is not going to raise taxes, cut spending or reduce oil consumption in ways that could really shrink our budget and trade deficits and reverse the dollar's slide.
This administration is content to let the dollar fall and bet that the global markets will glide the greenback lower in an "orderly" manner.
Right. Ever talk to someone who trades currencies? "Orderly" is not always in the playbook. I make no predictions, but this could start to get very "disorderly." As a former Clinton Commerce Department official, David Rothkopf, notes, despite all the talk about Social Security, many Americans are not really depending on it alone for their retirement. What many Americans are counting on is having their homes retain and increase their value. And what's been fueling the home-building boom and bubble has been low interest rates for a long time. If you see a continuing slide of the dollar - some analysts believe it needs to fall another 20 percent before it stabilizes - you could see a substantial, and painful, rise in interest rates.
"Given the number of people who have refinanced their homes with floating-rate mortgages, the falling dollar is a kind of sword of Damocles, getting closer and closer to their heads," Mr. Rothkopf said. "And with any kind of sudden market disruption - caused by anything from a terror attack to signs that a big country has gotten queasy about buying dollars - the bubble could burst in a very unpleasant way."
Why is that sword getting closer? Because global markets are realizing that we have two major vulnerabilities that this administration doesn't want to address: We are importing too much oil, so the dollar's strength is being sapped as oil prices continue to rise. And we are importing too much capital, because we are saving too little and spending too much, as both a society and a government.
"When people ask what we are doing about these twin vulnerabilities, they have a hard time coming up with an answer," noted Robert Hormats, the vice chairman of Goldman Sachs International. "There is no energy policy and no real effort to reduce our voracious demand of foreign capital. The U.S. pulled in 80 percent of total world savings last year [largely to finance our consumption]." That's a big reason why some "43 percent of all U.S. Treasury bills, notes and bonds are now held by foreigners," Mr. Hormats said.
And the foreign holders of all those bonds are listening to our debate. They are listening to a country that is refusing to raise taxes, and an administration talking about borrowing an additional $2 trillion so Americans can invest some of their Social Security money in stocks. If that happened, it would almost certainly weaken the dollar, further depreciating the U.S. Treasury bonds held by all those foreigners.
On Monday, the Bank of Korea said it planned to diversify more of its reserves into nondollar assets, after years of holding too many low-yielding and depreciating U.S. government securities. The fear that this could become a trend sparked a major sell-off in U.S. equity markets on Tuesday. To calm the markets, the Koreans said the next day that they had no intention of selling their dollars.
Oh, good. Now I'm relieved.
"These countries don't have to dump dollars - they just have to reduce their purchases of them for the dollar to be severely affected," Mr. Hormats noted. "Korea is the fourth-largest holder of dollar reserves. ... You don't want others to see them diversifying and say, 'We'd better do that, too, so that we're not the last ones out.' Remember, the October 1987 stock market crash began with a currency crisis."
When a country lives on borrowed time, borrowed money and borrowed energy, it is just begging the markets to discipline it in their own way at their own time. As I said, usually the markets do it in an orderly way - except when they don't.
(COMTEX) B: Education Chief Criticizes Connecticut ( AP Online )
ATLANTA, Aug 24, 2005 (AP Online via COMTEX) -- Education Secretary Margaret Spellings on Wednesday called claims that the No Child Left Behind Act isn't fully funded "a red herring," and suggested states that are balking may simply fear seeing the test results.
Connecticut filed a lawsuit Monday that claims the federal government has not provided enough money to pay for the testing and programs associated with the 2001 law.
Spellings, speaking to the Atlanta Press Club, said the lawsuit "does trouble me a little bit" and, afterward, suggested states that oppose the law simply fear the results of its accountability measures.
"I just see that as a red herring," she said of Connecticut's claim that this year's federal funds will fall $41.6 million short of paying for staffing, training and tests for No Child Left Behind.
"What are they afraid of knowing, I guess, is one of the things I'd like to know."
Connecticut was the first state to sue, but lawmakers in other states have complained about its funding and experts expect that other states could join Connecticut's lawsuit or sue their own.
The National Education Association, a national teacher's union, filed a lawsuit last spring on behalf of local districts and 10 state union chapters, including Connecticut.
Spellings said annual testing is a cornerstone of the federal program and needed to assess student achievement and help struggling students catch up with their peers.
"Parents want to know where their children stand," she said. "That's a reasonable expectation for Connecticut and Georgia and Texas and every other state in the land."
Spellings plans to visit several cities promoting national test results she said have improved since the inception of No Child Left Behind.
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