Kausfiles

Will Krugman Thank the Centrists?

Mickey Kaus — Thu, 12 Feb 2009 06:11:00 GMT

Wednesday, February 11, 2009

Steven Pearlstein argues that the ideal stimulus spending "is that which creates jobs and economic activity now, has big payoffs later and disappears from future budgets." The last criterion doesn't get much attention in many pro-stimulus arguments (including Pearlstein's), but it's important if you care about deficits . It's also important if you think the claim of government on the national GDP is limited, and you want there to be room for universal health insurance down the road . And, Paul Krugman even claims (for somewhat tricky technical reasons), it's important if you care about maximum stimulus, because "temporary government spending has a bigger effect"-- i.e. it's better at creating new demand than spending that won't disappear from future budgets.

So if the big dispute in the stimulus conference committee was over school construction spending , where

House Democrats are pushing to have school-repair funding listed as a recurring expense; Senate Republicans want such an allocation to be a one-time-only deal.

And if as a result of the moderate GOP Senate crossovers like Susan Collins holding firm, the school construction spending will be a one-time only deal ...

Then haven't the much-criticized Senate centrists , at least on this one issue, helped produce a better stimulus bill --not just a lower-deficit stimulus bill, or a stimulus bill that leaves a bit of room for health care, but, according to Krugman, a more stimulating stimulus bill? ... Am I missing something? ... 11:06 P.M.

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Special Fratricidal Edition

Mickey Kaus — Thu, 12 Feb 2009 02:24:00 GMT

I apologize for the dropped posts (now back ). Slate 's new blogging system is cr ... undergoing continuous improvement! Lucky I'm not the type to let that sort of thing drive me crazy ... If anyone notices any other missing posts, please let me know. ... Meanwhile, Andrew Sullivan's bellicose and bullying "New Orwell" era archives magically reappear at the very moment they come in handy for him. Funny how that happens! ... 6:46 P.M.

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You mean "dollar cost averaging" is a bad idea ? Experts (not just Suze Orman) have been telling me to do that for decades. Still seems smarter than trying to time the market. ... [ via Gawker ] 6:35 P.M.

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Turning Over the Rock

Mickey Kaus — Wed, 11 Feb 2009 20:31:00 GMT

Robert Rector and Katherine Bradley note that the anti-welfare-reform provisions in the stimulus bill aren't as bad as I'd feared. They're worse . They attempt replicate the fiscal mechanics of the old welfare (AFDC) "entitlement," but with a bigger incentive to welfare expansion:

For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads. Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

12:58 P.M.

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If the election were held today, would Republicans retake the House? Michael Barone finds the Dem generic ballot plunge "astonishing," though he acknowledges it might be ephemeral. ... P.S.: Ramesh Ponnuru argues

Republicans would probably be better off if they spent less time pointing out the Democratic plan's flaws and more time talking up their favored economic fixes.

I dunno. If Barone is right, they're doing OK pointing out the flaws. (It's their fixes that are unappealing.) If the GOP's leaders had pointed out the Welfare Restoration provisions a little earlier, for example, they might have had a much bigger impact. ... P.P.S.: Remember when, during the Bush Social Security debate, responsible types urged Pelosi to present a Democratic alternative? She refused, and stuck to attacking the Bush plan. It worked. ... 12:52 P.M.

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Slouching toward 1994: The Corner reports that the Senate has dropped a requirement that employers who get stimulus money use the E-verify hiring system to screen out illegal workers. ... Update: But it's in the House bill, and could still be included in conference. Krikorian has more :

If Reid and Pelosi do strip the E-Verify provisions from the bill, they'd give Republicans an easy-to-explain reason to vote no: "The Democratic leadership rejected bipartisan measures to ensure that the jobs created would go only to Americans and legal immigrants, and we're not going to mortgage our great-grandchildren's future to create jobs for 300,000 illegal aliens ."

Stimulus jobs for illegals! Restore welfare as we knew it! Maybe I'm wrong about where the electorate's anti-Dem hot buttons are located, but it sure seems as if Reid and Pelosi are determined to unearth them and push them. ... You almost think they're not bringing up gays in the military because it won't turn the voters sufficiently against them. ... By the time they get to "card check" in the summer they'll have rubbed the public raw, no? .. 12:39 P.M.

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It's not nice to piss off Heather Mac Donald . ... 12:36 P.M.

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The Money Liberal Conspiracy At Work

Mickey Kaus — Tue, 10 Feb 2009 22:14:00 GMT

Tuesday, February 10, 2009

As promised, here are the gory mechanics of the liberal conspiracy to expand welfare rolls through an insufficiently publicized provision in the stimulus bill:

Under the welfare reform regime established in 1996, states were basically required to engage 50% of their caseload--mainly single mothers--in some kind of "work activity" (workfare, job search, training, etc.). But there was a problem with this half-the-caseload requirement: What about would-be recipients who got off the rolls entirely when the states found jobs for them--or who were diverted into jobs before they ever signed up for welfare? Shouldn't states be able to count these "successes" toward the 50% requirement? You wouldn't want to give states an incentive to somehow keep these people on welfare in order to count them. Thus was born the "caseload reduction credit," which let states count the net decline in their caseloads against the 50% work requirement.

Fair enough. But because caseloads declined dramatically after 1996--they've gone down by two-thirds--the "caseload reduction credit" effectively absolved many states of the requirement to get half of their caseloads working. When Congress reauthorized welfare reform it updated the baseline to 2005. States could still take the credit for any reductions after that date. Many did so, as caseloads continued to fall.

Now, though, Congressional Democrats want to encourage states to expand their caseloads, offering billions of federal dollars in the "stimulus" package as an incentive to do so. But wait, if states expand their welfare caseloads as the Dems want, they'd lose the "caseload reduction credit," since their caseloads would not, in fact, have been reduced. They might then have to start enforcing the "work activity" requirements on those caseloads. Can't have that! That might discourage states from expanding welfare, for one thing, since enforcing work requirements costs money, and states have no money. And Congressional Money Liberals** never liked work requirements much in the first place. The last thing they want to do is increase them. (Their whole theory is that the many single-mom recipients are "hard-to-employ" types with "multiple problems" who basically need to be supported on the dole.) What's a good Money Liberal to do?

Answer : Rewrite the law, in the stimulus package, to let states expand their caseloads but pretend, for "caseload reduction credit" purposes, that the caseloads have declined . Specifically, the revision would allow states take the credit they would have gotten based on their caseloads in 2007 or 2008 even if their caseloads soar (as the Dems would like) in 2009 and 2010.

In other words, they can expand their caseloads but still use the now-fictitious "reduction credit" to avoid the law's work requirements.

Lots of new people on welfare . Lower work obligations. The best of both worlds for welfare-unreforming Dems.

The major difference between the House and Senate versions of this deeply troubling provision, apparently, is that the Senate allocates only $3 billion to induce states to expand their caseloads, while the House bill might spend more than twice as much.

P.S.: On bloggingheads my colleague Bob Wright routinely ridiculed me as paranoid for worrying that if Democrats got back in power they would unravel welfare reform. Even I thought I was paranoid. If only for political purposes, I figured, Dems would have to wait a few months or years before sabotaging Bill Clinton's major domestic achievement. It took them two weeks. ...

**--By "Money Liberals" I mean liberals who define the equality they seek entirely in economistic terms . Confronted with the indignity of poverty, Money Liberals seek to end it by the simple expedient of sending cash to the poor. Money Liberalism, in this definition, ignores non-material distinctions, like those between those who work and those who don't, that (in an alternative, more Clintonian view) are fundamentally bound up in our ideas of dignity and civic respect (i.e. social equality). Specifically, an able-bodied person who fails to work and relies instead on the dole can't have full respect in our society, and shouldn't. The attempt to confer equal respect by spreading around cash--as opposed to guaranteeing work, and making work pay--is doomed. (More here , esp. the exciting footnote 2 on page 192). 3:05 P.M.

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It's OK to have opinions!

Mickey Kaus — Tue, 10 Feb 2009 20:07:00 GMT

Marc Ambinder tells us what he really thinks about TARP II:

Banks that need money will be given a "capital bugger" to make sure they can keep lending.

12:17 P.M.

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Boehner Squawks

Mickey Kaus — Mon, 09 Feb 2009 21:23:00 GMT

Monday, February 9, 2009

GOP House leader John Boehner has issued an "alert" saying the stiumulus bill "undermines the 1996 welfare reforms by promoting bigger welfare rolls and expecting less work and less training on the part of government welfare recipients." Boehner cites not only the bill's fiscal reward for state caseload expansion, but also some "complicated" funny business involving "'caseload reduction credits." (I will try to figure that out.**) ... [ Tks. to R.N. ]

**--Michael Tanner offers a semi-explanation . ("It also shifts the base for states caseload reduction bonuses in a way that will discourage states from holding down the growth in welfare ...") 1:41 P.M.

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kf Goes In the Tank

Mickey Kaus — Mon, 09 Feb 2009 09:04:00 GMT

I saw my friend and Slate contributor Tom Geoghegan speak in L.A. at a fundraiser for his Congressional run.** He wasn't as good as I expected. He was much better. The joy of Geoghegan is that he usually has a big interesting new theory, often a (dare I say it) contrarian one. He can be earnest, but that's soon subverted by a fleeting isn't-this-all-absurd smile. What I didn't expect is that he'd be tightly focused--paring his pitch down to three points. You can hear them here . At least two of them aren't things you'll find in the official Ambitious Dem Playbook.. ... Plus he's able to disagree with his audience in an agreeable way, a non-trivial gift ... Plus he only mentioned "card check" once. ... P.S.: Katha Pollitt got it right, I think, when she said that Geoghegan could be the next Paul Wellstone--meaning a left-liberal who's liked and respected by those to his right (i.e.,everyone). ... Reminder: Geoghegan is pro-union but he's well aware of the deficiencies of "interest group liberalism." ...
**-- I gave $250. ... 1:59 A.M.
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That welfare-expanding provision remains in the Senate stimulus compromise, alas, the language of which has now been released. (You can read it here .) I can't help but think that if even a few Republicans squawked the potentially damaging publicity might force the Dems to drop it or at least rewrite it (to fund hard hit states, for example, whether or not they expand their welfare caseloads). ... Update: The New York Times gives the game away by explicitly calling for "rolling back work requirements" in an editorial endorsing the stimulus welfare provision. These are people who never liked welfare reform's work requirements in the first place. ... 1:16 A.M.

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Versa Mystery Solved

Mickey Kaus — Sun, 08 Feb 2009 04:38:00 GMT

Saturday, February 7, 2009

Ghosn's Revenge: According to Consumer Reports , the "Nissan Versa sedan's reliability is much below average." That always seemed shockingly bad for a small car from a major Japanese manufacturer. But the mystery is solved in the latest CR issue, which notes that the Versa is "based on a design from French carmaker Renault." Aha. Renault. Say no more. National stereotypes intact! ... 9:03 P.M.

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Hello? GOPs? Your favorite wedge issue is coming back.

Mickey Kaus — Sat, 07 Feb 2009 21:32:00 GMT

Shouldn't Republicans be making more of a fuss about the provision in the stimulus bill-- both House and Senate versions, apparently --that spends $2-3 billion to the states for "temporary welfare payments"? I initially thought Charles Hurt of the N.Y. Post was being alarmist when he suggested the provision would "drastically undo two decades of welfare reforms." The essence of the 1996 reform was ending the individual legal entitlement to AFDC (cash aid to single mothers, basically) and replacing it with state-run programs that, in theory, require recipients to enter the work force. The stimulus bill doesn't rip up that basic deal, as I understand it. But it is part of a larger liberal campaign ** to use the recession to weaken work requirements and let millions of non-working single mothers back on the welfare rolls . Specifically, it would apparently reward states that expand their welfare caseloads --even if the increase is only the product of loosened work requirements rather than a worsening local economy.

Nothing wrong with helping states avoid anti-stimulating cuts in a recession. Nothing wrong with targeting money to the poorest, who are most likely to spend it quickly. But why use the aid specifically to encourage expansion of welfare ? This isn't "welfare" as only conservative Republicans would define it --i.e. any means-tested assistance. This is welfare as everyone would define it--cash assistance to able-bodied single mothers (or fathers) who may or may not be working, as in the old, despised AFDC program. Better to use the money (and more) to create public jobs*** for these would-be recipients if private sector jobs have dried up , even if that upsets municipal employee unions (which don't want welfare recipients doing jobs their members might do). Don't revive the old AFDC principle that if you have a child, you can count on the government to take care of you with cash aid even if you don't work.

At the very least the extra aid to the states shouldn't be triggered by caseload expansion . (You could, for example, give states aid in proportion to their local unemployment rate.)

You would think this would be a potential killer issue for the GOPs--"See, the Democrats already want to undo welfare reform"--and Obama, being sensitive to the charge, might quickly back down. It's easiest to whack the camel when only its nose is in the tent, no?

More tk, as I find out more. ...

**--See, for example, Peter Edelman's comments here .

***--These could either be "workfare" jobs (required once you are receiving welfare) or last-resort WPA-style jobs (which pay people for their work without ever signing them up for welfare). ...

Update: Thanks to Rob Neppell, here is the relevant provision in the House bill , and in the pre-compromise Senate bill. The Nelson/Collins compromise language does not seem to be available yet. ... Note that the extra federal money seems clearly tied to increased welfare caseloads , not increased unemployment or poverty or other measure of need:.

A State meets the requirement of this clause for a quarter if the average monthly assistance caseload of the State for the quarter exceeds the average monthly assistance caseload of the State for the corresponding quarter in the emergency fund base year of the State.

If a state somehow succeeds at placing would-be recipients in jobs, it's out of luck under this provision. To get the extra federal money, it has to get more people on welfare (though presumably it could count "workfare" participants if it happens to have a workfare program). .... 2:52 P.M.

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Tomorrow's CW Today

Mickey Kaus — Thu, 05 Feb 2009 07:38:00 GMT

Thursday, February 5, 2009

Is anybody scared of Obama? If you're going to be an effective president, don't people have to be at least a little scared of you? At least with Bill Clinton you'd worry that you'd be audited. ... 12:02 A.M.

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Wednesday, February 4, 2009

Forget Anna Wintour: kf' s temporary Paris bureau chief suggests Caroline Kennedy for Ambassador to France. A good prix de consolation . Plus she speaks French fluently. And they would love her--at least initially. ... Assuming Secretary of State Holbrooke approves. ... 11:46 P.M.

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