February 20, 2009

2/20: Deconstructing Orszag

Ben Smith's interview with OMB dir. Peter Orszag -- who will help lead Obama's upcoming "fiscal responsibility summit" -- received a mixed reaction in the liberal blogosphere. Some lefty bloggers were cheered by Orszag's argument that the best way to address Social Security's projected "actuarial deficit" is to reform the health care system, not dramatically cut benefits. However, other liberal bloggers were disturbed by the fact that benefit cuts are even being discussed (according to Smith, Orszag believes that "Social Security requires only modest tax hikes and benefit cuts" -- our emphasis). Jane Hamsher complains: "There's nothing 'liberal' about accepting the frame that Social Security needs addressing in any way that cuts benefits, no matter how 'slight.'"

Meanwhile, the conservative blogosphere is buzzing about a recent rant by CNBC's Rick Santelli (which was heavily promoted by Matt Drudge) in which he characterized Obama's mortgage plan as "rewarding the losers." Righty bloggers are describing Santelli's remarks as "dead-on" and are suggesting that Obama's mortage plan will incite a middle-class "revolt". One conservative blogger is even speculating about a "Palin-Santelli 2012" presidential ticket. Liberal bloggers, naturally, had a different take on Santelli's remarks; one described his speech as "right-wing backlash stuff at its absolute best."

ORSZAG: Making The Right Noises?

Smith's interview with Orszag generated a divided response from lefty bloggers. Here are some of the key grafs from Smith's article:

"Orszag's long-running project -- something that has made him the left's favorite Cabinet member -- has been replacing talk of an 'entitlement crisis' with his argument that Social Security requires only modest tax hikes and benefit cuts, while Medicare and Medicaid have much more dramatic fiscal woes.

'Social Security faces an actuarial deficit over the next 75-100 years. In the past I've resisted the term "crisis" to describe that kind of situation,' he said. 'This is not quantitatively as important as getting healthcare done.'"

Some liberal bloggers were comforted by Orszag's remarks, which they saw as evidence that the Obama admin. wants to reform the health care system rather than cut Social Security and Medicare benefits:

• Ezra Klein: "You'll notice that Orszag says 'health care,' not 'Medicaid and Medicare.' The Obama administration believes that the entitlement problem is a health care entitlement problem, and the health care entitlement problem is a health care system problem. And so the focus now is on health care reform: The fiscal responsibility summit will be used, in part, to make this argument. In Obama's Washington, a plan to cut Social Security is no longer enough to qualify you as 'fiscally responsible.' You need an answer to the Medicare and Medicaid questions, which means you need an answer to the health care system. We will see the beginnings of the White House's answer -- an answer that has required a series of decisions by President Obama himself -- when the budget emerges next Thursday. That, and not Monday's summit, is where the nature of the administration's commitment to fiscal responsibility will come clear."
• The Washington Monthly's Steve Benen: "Whenever President Obama or anyone associated with his administration utters the phrase 'entitlement reform,' it generates an audible gasp. The fear, of course, is that the White House might buy into conservative rhetoric about weakening Social Security. Those concerns are especially acute now, on the eve of next week's 'fiscal responsibility summit,' which may include some high-profile figures who see entitlement 'crises' where none exist. For what it's worth, I'm not worried. Obama has always been entirely consistent on the issue -- Social Security isn't a crisis; Medicare needs to be addressed in the context of the healthcare system's larger problems. Those close to the president keep saying the same thing. OMB Director Peter Orszag, who'll help lead the 'fiscal responsibility summit,' said all the right things to Ben Smith yesterday. [...] If anything, the 'fiscal responsibility summit' appears to be a vehicle for advancing the Obama healthcare agenda. Works for me."
• Think Progress' Matthew Yglesias: "I'm not sure Orszag really is 'the left's favorite cabinet member' -- he's a pretty moderate dude. Ask about [Energy Sec.] Steven Chu or [Labor Sec.] Hilda Solis. But the left certainly agrees with Orszag about this issue. [...] Only structural reform of health care can avoid long-term budgetary apocalypse."

ORSZAG II: "Modest" Benefit Cuts Are Still Benefit Cuts

Other liberal bloggers had a different reaction to Smith's interview with Orszag. These bloggers were alarmed by Smith's claim that Orszag believes "that Social Security requires only modest tax hikes and benefit cuts" (our emphasis):

• Firedoglake's Jane Hamsher: "This seems to be the frame du jour, that 'modest benefit cuts' is a liberal 'solution' to the Social Security 'problem.' [...] There's nothing 'liberal' about accepting the frame that Social Security needs addressing in any way that cuts benefits, no matter how 'slight.' The Orszag plan calls for raising the retirement age and cutting benefits for people under 55. The 'liberal' position, per Jamie Galbraith, is that Social Security benefits actually need to be increased, not decreased."
• digby: "I agree with Jane on this. When did the 'liberal' position become 'modest tax hikes and benefit cuts on social security' are necessary? That's just not true. In fact, according to most progressive economists, social security benefits need to be raised. (And after watching this rather huge loss of retirement wealth in the past year, I would think that it's politically unthinkable to even whisper about lowering benefits at this point.)"
• Open Left's Chris Bowers: "[W]hile those in the policy wonk business may think that modest Social Security benefit cuts represent some sort of liberal consensus, the fact is that such a plan is heavily opposed by liberals at large, and indeed opposed by the nation at large, too. It is very good that the Obama administration is looking to reframe the entitlement debate toward health care and away from Social Security, and that Social Security is not on the administration's radar. However, as long as someone who, only four years ago, published a plan favoring Social Security benefit cuts is apparently drafting the federal budget, I reserve the right to remain unnerved about potential Social Security cuts during the Obama administration. Those fears will be greatly reduced if no such cuts appear in the budget outline that will be revelaed next Thursday."

Klein thinks Hamsher's reaction to Orszag's remarks is too alarmist: "There are two things going on in Jane Hamsher's post on the 'fiscal summit.' The first is a show of thundering opposition to benefit cuts in Social Security. That's a good thing. Progressives should draw bright lines. The second, though, is an effort to read the tea leaves to suggest that the Obama administration has a secret plan to cut Social Security benefits. That makes rather less sense. [...] The point of Orszag's argument is not how you fix Social Security. It's to stop talking about an entitlement crisis. [...] Orszag is one of the good guys here."

Hamsher pushes back: "Orszag's not running for prom king here so whether he's 'one of the good guys' is not really relevant. He has been presenting his plan to cut Social Security benefits as part of the White House's efforts on 'fiscal responsibility,' according to people who have directly participated in those presentations. [...] If Ezra's got great sources in the administration, why is he venturing guesses about what Orszag intends? Why doesn't he go and ask them, point blank -- is cutting Social Security benefits off the table? [...] It may be that in the wake of the horrified response Orszag got from Congressional leadership that any ideas about 'fixing' Social Security have been abandoned -- these things seem to be changing by the minute. But if Ezra has valuable sources within the administration willing to speak to him about what the White House intends, there are a lot of people right now who would like to know. He should be using them to find out solid information on that front rather than float anonymous spin and then speculate about the meaning."

SANTELLI: This Trader's As Mad As Hell And He's Not Gonna Take It Anymore!

Conservative bloggers are buzzing about a recent rant by CNBC's Santelli in which he blasted the Obama admin.'s mortgage bailout plan:

"'The government is promoting bad behavior,' Santelli said of President Obama's $75 billion initiative to refinance mortgages.

'I have an idea,' he said on the Chicago Mercantile Exchange floor. 'How about this, new President and new administration, why don't you put up a Web site to have people vote on the Internet ... to see if we really want to subsidize the losers' mortgages? Or would we like to at least buy cars and buy houses in foreclosure and give them to people who might have a chance to actually prosper down the road... reward people who could carry the water instead of drink the water.'"

Conservative bloggers were delighted by Santelli's remarks:

• RedState's Erick Erickson: "So the [RedState] contact email address is getting inundated by people sending links to Drudge's top story -- the CNBC call for a modern Boston Tea Party over Captain Bull Crap's crap mortgage plan. People respond viscerally to this. They might not had Porkulus not overreached. But it did. And now there is this. Most people bought their homes responsibly. They bought what they could afford. Some people tried to take advantage of the system or did not think ahead. They've gotten burned. No one wants to bail out irresponsibility, which is exactly what Captain Bull Crap's plan would do. The result of Obama pushing forward with this could be transformative societal change against him with the middle class in revolt."
• NRO's Kathryn Jean Lopez: "The reaction to Rick Santelli's Chicago-trading-floor incident this morning echoes the emotional reaction my inbox had to Sarah Palin's convention speech this summer. [...] I think people are hungry for someone who is fed up with the way things are and who seem to believe in something enough to know there in an alternative worth fighting for. Some of the voices may be far from perfect, but Americans are looking for signs of the life of an alternative. And so if a representative pops up -- someone who appears to have roots and energy, folks will cheer them on in the hopes there's a candidate here. Maybe not a presidential candidate, but a leader of some sort. Someone who can offer a vision of something other than a culture of bailout. Today, Rick Santelli was that sign of life."
• The Heritage Foundation's Conn Carroll: "Santelli's criticism of the mortgage bailout plan is dead on: The plan treats borrowers who sacrificed to pay their mortgages on time the same as those who used their equity for a boat and stopped paying their loans. This moral hazard sends a clear message to our children that they can avoid the consequences of their actions."

Meanwhile, NRO's Stephen Spruiell interviewed Santelli after the video of his rant became an Internet sensation.

SANTELLI II: Way To Stick Up For The Rich Guy, Rick!

Liberal bloggers, naturally, had a different reaction to Santelli's remarks:

• CJR's Ryan Chittum: "This is an example of what's wrong with a certain kind of financial journalism, the kind where people of like backgrounds spend all day staring at tickers and interviewing each other. The segment couldn't more clearly illustrate the disconnect between the financial-services sector, certain financial journalists, and, you know, 'reality.' [...] What sent Santelli, CNBC's hot-air, oops, 'On-Air Editor,' over the edge? The homeowner bailout. Of course, he didn't get himself into nearly this much of a lather over the trillions of dollars we've given to Wall Street welfare cases and the busted banks. Oh no. He's mad that non-financial-service-professionals, otherwise known as homeowners, or, according to Santelli 'losers,' are up now for help—to the tune of $275 billion, much of which would go to the banks anyway."
• Firedoglake's Scarecrow: "CNBC's on-air editor, Rick Santelli, calls ordinary Americans who face losing their homes to foreclosure 'losers' who don't deserve government help. [...] America's homeowners have just lost about $6 trillion in home value in the last year, largely because the people who are supposed to oversee and finance the economy didn't do their jobs, but Santelli thinks we should let Americans facing foreclosure just fail. That way, more patriotic Americans like the traders surrounding him -- the guys who made a bundle riding the housing bubble economy -- can scarf up the properties for pennies on the dollar and get rich. Thanks, Rick and CNBC, for making the case for a surcharge on transactions, greater securities regulations, and an increase in the top marginal tax rates."
• dday: "[This is] right-wing backlash stuff at its absolute best. Lost from this complaint is the plain fact of predatory lending, that lenders got cash rebates to put people in crappy, high-interest mortgages, that they hid terms of the agreement and denied disclosure, and that all of those hardworking folks are seeing their property values plummet as a result of millions of foreclosed homes glutting the market. To the tune of $6 trillion dollars in home value. [...] The revolution has begun. These workaday stock traders are going to take back this country for the laissez-faire capitalists who are entitled to it."
• Open Left's David Sirota: "[This is] what Thomas Frank has called 'Market Populism' -- the portrayal of Wall Street's agenda as an impassioned mass-based populist movement. [...W]ith the economy in meltdown, I'm convinced that part of why the public is so angry is because what they see on television and in their newspapers is so fundamentally at odds with how they are feeling and what they are dealing with. As Santelli shows, large swaths of the media and political Establishment actively and publicly denigrate the people who are most hard hit by the downturn."
• MyDD's Charles Lemos: "[R]eferring to suffering Americans as 'losers' is just so classy and morally uplifting. And his proposal there at end reminds yet again of Andrew Mellon's candid assessment that 'in a depression, assets return to their rightful owners.' Mr. Santelli is bemoaning the fact he is being deprived of the chance to make a killing by profiting on the misery of others. Let us not be deceived, this is his real complaint -- he's being denied 'the right' to buy foreclosed properties for pennies on the dollar. Rick Santelli is today's Andrew Mellon."

THOUGHT OF THE DAY: Hip-Hop Republicans

The Atlantic's Ross Douthat offers his thoughts about RNC Chair Michael Steele's plan to appeal to younger voters by applying GOP principles to "urban-surburban hip-hop settings":

"Michael Steele sounds clownish, and merits some mockery, but he isn't entirely wrong: Symbolism matters in politics, and there are almost certainly some votes to be gained for the GOP simply by easing the party's optics and rhetoric in a more youth-oriented, multicultural, self-aware direction. (As Mike Huckabee has demonstrated, just being less crabby and more self-deprecating can make a difference in how the media covers you.) But the basic dynamic that Daniel Larison identifies is still the most important one: Policy choices matter most, and for a losing political party whose current raft of policy proposals are deeply unpopular, better communication strategies and candidate recruitment only make sense as a supplement to a message adjustment, not as a substitute for it."

LEST WE FORGET: Thanks A Lot, Folks; I'll Be Here All Week

From Overheard in the Office:

Assistant to boss: I need to leave early today for a dentist's appointment. Would that be okay?
Boss: Sure, is at 2:30?
Assistant: 2:30? No, it's at 3.
Boss: Well, it should be at 2:30.
Assistant: Why?
Boss (chuckling): Because your tooth hurty. Get it? Two thirty, tooth hurty.
Assistant: Are you kidding me?

Posted by Ian Faerstein at February 20, 2009 01:00 PM