Weak Economy May Hurt GOP Worse Than Dems

June 3rd, 2011 at 2:35 pm | 83 Comments |

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Recent signs of an economic slowdown — stock market declines, so-so job numbers, sluggish growth — aren’t a good reason for Republicans to crack open the champagne. In fact, they could well end up being used to hurt Republicans in Congress. All other things being equal, of course, President Obama would be best off politically with a strong recovery but a weakening but still active one (that coincides with Republican House control) may be the next best thing for him.

It’s pretty simple: a strong recovery would help all incumbents and strengthen parties in places where they are naturally strong. In this kind of environment, Republicans would easily retain control of the House and almost certainly take the Senate even if Obama wins reelection. (There are currently eight Democratic seats Republicans can plausibly compete for and only two Republican-held seats where Democrats have a chance.)

A weakening economy, on the other hand, is likely to hurt anyone in power. With the President’s respectable approval numbers, a weak Republican field, and the near certainty that he’ll be able to put more resources behind a reelection bid than anyone on the Right, a Republican will have a hard time. Yes, a bad economy weakens Obama, but it isn’t necessarily fatal.

Democrats seeking seats in Congress, on the other hand, will have much more to run against in a failing economy particularly if no Republican at the top of the ticket can deliver charisma and resources equal to Obama’s. As the debt ceiling issue seems to be contributing to the slowdown, Democrats may have a plausible case to ask for a return of the House.  With redistricting likely to benefit Democrats in at least a few key states, holding a rather narrow House majority is going to be a challenge anyway.  Bottom line: a slowing economy hurts the President for sure but it could well hurt Republicans in Congress even more.

Recent Posts by Eli Lehrer



83 Comments so far ↓

  • Smargalicious

    Eli, you keep trying to pin the blame on the current stagflation and massive debt on the GOP, but it ain’t happenin’. Your agenda is clear.

    Word.

  • medinnus

    Smargy,

    You keep trying to pin the blame for everything on Obama. Your insane prejudice is clear. The GOP are sabotaging the economy to hurt Obama’s re-election campaign. Learn to read, and try to be quiet when the adults talk.

    *snickers* You’re so easy.

    • Smargalicious

      meddy, u so funny.

      Everyone who shills for Odumbo now looks like a fool and a clown, given the recent economic news.

      Hello, shill.

    • jakester

      Well, the trouble is that the president is usually the fall guy for the economy

  • WillyP

    you gotta wonder when FF became the official spin machine for the communist wing of the democrat party.

    • TerryF98

      WillyP(rick)

      Can you confirm that you believe Palin will beat Obama by 40 states in 2012 as you declared yesterday. I need another laugh.

      • Watusie

        It isn’t the first time he posted that bit of bravado in order to cheer himself up a bit.

        I figure the 10 states that Obama would take would be CA, HI, IL and then a handful on the east coast: CT,DE, MA, ME, MD, NY, VT.

        Let’s embrace the fantasy and say Tub of Guts delivers NJ for Palin.

        That means God himself has to intervene to deliver MI, MN, OR, PA, RI, WA and WI – all states that went for Gore and Kerry and Obama.

        God also has to come thru with CO, FL, IN, NV, NC, OH, VA, NH, IA and NM. However, his task will be a little bit easier, as these states all voted for Bush at least once.

        The remainder are the ones that went for McCain and so are presumably already prepping their electors for vote for Palin in 2012.

        Simples!

        • WillyP

          At this rate, we’ll be at 9.5% unemployment in 2012 – a number that sums up his presidency better than any other. You think Obama will win re-election? This isn’t France.

        • Watusie

          Yes, Willy, I think Obama will win re-election. Furthermore, I think there is no chance that Sarah Palin will become president. Furthermore, I think anyone claiming she’ll not just win but carry 40 states has lost touch with reality.

          And I’ll throw in that I think there is at least a 50:50 chance that the Democrats will retake the House.

        • politicalfan

          WillyP- Where are the Jobs, Jobs, Jobs!!! Your Bush tax cuts were given. How many jobs have you created? We need to see the math.

          Yes, we should give businesses tax cuts if they produce the jobs. Who has the stats?

      • WillyP

        Who’s the prick here?

        The awad who launches his political career in the apartment of a man who bombed the Pentagon?

        Or the productive, hardworking civilian who opposes this man for what he is doing to the American people?

        • Watusie

          Don’t you mean public-sector cubicle dweller, seething with resentment?

          Barack Obama took out Osama Bin Laden. What have you ever done for this country?

        • Smargalicious

          What did you say?? Obama took out WHO??

          Yer outta yer freakin’ mind, whackjob. Trying to cash in on Bush’s interrogation order’s results is prima facie absurd.

          Also, the weak economy is absolutely on the shoulders of your Messiah.

          It’s a sign of grim times indeed when Odumbo is touting a potential $14 billion loss to the taxpayers WRT the government motors bailout as a great economic success.

          The White House is running on its auto bailouts as courageous acts that saved the industrial Midwest. To critics of government intervention, the administration holds up the revival of General Motors and Chrysler as proof of the efficacy – nay, the necessity – of bailout economics.

          It’s a telling point of pride. In bragging about the bailouts, the administration is boasting of a process shot through with lawlessness and political favoritism, not to mention reckless disregard for taxpayer dollars.

        • jakester

          productive, hardworking civilian

          Who is that? Isn’t Obama a civilian too, or is he just some lazy, cotton picking commie who doesn’t count, unlike someone who makes easy money off of media sinecures.

  • TerryF98

    It was supposed to be Jobs,Jobs,Jobs. Instead we have had a litany of looking into a womans Vagina legislation. The only emergency bill was to defund NPR.

    Then they produced a joke jobs plan that was 10 pages long 4 of which were pretty pictures and the rest was 24 point type.

    The public is not fooled by this, you only have to look at the GOP polling collapse and the fact that the Democrats now lead the generic ballot to see the effect of this idiocy.

    As the turtle in chief said. “Our no1 priority is to defeat Obama in 2012″ not jobs, not the economy.

    The GOP is 100% fail when governing.

  • Jim_M

    Eli,

    Monkeys could fly out of yer arse too.

  • Jim_M

    TerryF98,

    Had a look at what the Republicans AND Democrats just did to our pathetic, floundering POTUS in Congress? This unraveling…it’s just hard to watch.

  • sdspringy

    The Republicans in the House first had to pass a budget for 2011, which the Democrats who had control of the House, Senate, Presidency failed to do the previous year.

    Then the Rupblicans had to prepare a budget blueprint for the 2012 budget year. Knowing that the Senate Democrats have failed to produce any budget plan since 2010 and have yet produced nothing for the current budget cycle or any plan for the debt ceiling.

    Now we have the idiots here and the fools who write for Frum crying about Republicans. The only political group to actually have a budget plan.
    Eli and TeaBag Terry offer nothing, support a political party which has failed to provide any leadership other than continue spending and complain about the only solution provide since 2010.

    Difficult though it may be to understand Lib/Lefties actually think this is the best solution, no solution, no plan, and believe this is the best way to win the next election.

    • Watusie

      “Now we have the idiots here and the fools who write for Frum crying about Republicans. The only political group to actually have a budget plan.”

      But it isn’t a plan. It is a work of fiction on par with “Atlas Shrugged”, somehow managing to be even more badly written and implausible.

      I will be happy to spell out for the the major illogical, inconsistent or just down right impossible elements of the Ryan “Plan” for you, if you like.

      • sdspringy

        How about explaining the Senate Democrats plan. Start there, if you can find one. Explain Obama’s plan for more shovel ready stimulus and why 5 Trillion in government spenting has provided zip.

        Those you should tackle first.

  • Graychin

    Sdspringy, you haven’t got a clue what “Lib/Leftys” think.

    Based on the actions of the Republican congressional leadership, it appears that they would sabotage the economy in hopes of weakening Obama.

    • sdspringy

      Gray, no matter what you say the Republicans at least have a plan. You may not like it, may not agree with it but it exists, it has form and you can review it.

      You can not say the same for the Senate Democrats or Obama. Democrats have failed miserably for over 750 days in producing any form of budget plan.

      You think that is responsible?
      You want to defend that?

      • armstp

        sds,

        The GOP have a plan? Really. A plan for what?

        GOP deficit plan? – Ryan did not present a plan, he presented a fantasy…. a fantasy built on lies: 2.8% unemployment, a housing market that will magically have a huge bounce back, etc. etc. The Ryan plan will actually increase the deficit over the next 10 years… etc. that is no plan. that is a joke

        GOP jobs plan? – still waiting for it…. anything they have come up with is even more of a joke?

        the GOP have no “plans”.

        The Dems have a plan:

        Dem deficit plan – first the HCR bills were a good start; CBO says it will cut $1 trillion from deficit; it will also put in place real mechanisms that will help to tackle healthcare and medicare costs.; Obama also put together the deficit commission, with no help from the GOP, which came up with the Simpson-Bowles plan; the House Democrats came up with their own plan as well:

        “The House Democratic plan calls for more gradual deficit reduction of about $1.2 trillion over 10 years. It says it would bring spending in line with revenues by 2018 if interest payments on the $14.3 trillion national debt is excluded.”

        etc. etc. etc.

        All of these Democratic proposals are not built on the lies and sand that the Ryan fantasy “plan”.

        Dem plan for jobs and economy: well the plan is what Obama has been doing for the last 2 1/2 years, trying to dig the country out of the hole the GOP put us in; we have had many plans; stimulus bill, auto sector rescue, numerous plans from the Fed, etc. etc.

        • sdspringy

          Pathetic talking points Arm. None, absolutely none have worked or provided any job creation.
          ObamaCare thats your plan, even Unions are getting exemptions to avoid compliance. Thats a great job creation plan when Unions beg not to be involved.

          And yes everyone noticed that you provided no Senate Demcrat plan and the House Democrats 1.2 Trillion cut over 10 years is as pathetic as you using it as an example of fiscal leadership

        • armstp

          sds,

          explain to me why you think we have a deficit problem? and why we need to do anything about it….

        • armstp

          sds,

          up to this point Obama has done much more to help reduce the GOP deficit than anything the GOP has done: Simpson-Bowles was an Obama initiative, HCR reform bills according the the objective and credible CBO is a very good start at conquering healthcare costs…

          jobs…. well lets see we went from losing 700,000 jobs a month to gaining on average about 200,000 to 250,000 jobs a month over the last several months… that is almost a 1.0 million job net improvement a month under Obama that is pretty impressive; 1.5 million private sector jobs have been added in the last 6 months… not bad either… we are getting there, but it is a long road back from where the GOP left us with their 8 million job losing recession.

      • Graychin

        The Republican plan is to sabotage the economy. To follow in the footsteps of Hoover. And hope that’s enough to defeat Obama.

        The joke is that the Ryan plan leaves us with worse deficits than doing nothing. The biggest driver of the deficit is the Bush tax cuts. The Ryan plan is to double down on the tax cuts for the wealthy. Medicare? The Ryan plan kills it off but does nothing to control costs in the most expensive and economically inefficient health care system in the world. (Obamacare does, but you guys want to even repeal that.)

        The Republicans do NOT have a plan, if you are referring to the Ryan debacle.x

  • valkayec

    I agree to the extent that no one in the GOP presidential run at this point is likely to beat Obama. However, regarding the rest of the GOP electoral chances, I’m not so sure.

    Americans are simply unaware of – or refuse to believe (as do many in the freshman GOP House who continue to think of the vote for a debt ceiling increase as some sort of political one-upsmanship game) – that a debt default will destroy the economy, cost millions of jobs, raise interest rates, and increase the deficit. There’s an attitude that if a default occurs, it will be good for the country, and if the market drops no real harm will come of it. Some even believe that Treasury can continue paying the interest on the bonds and will still have enough money for just about everything else if only some programs/projects are not paid for. And of course the Tea Party advocate slashing everything government does, believing that raising the debt ceiling is totally unnecessary.

    The lack of knowledge is more than overwhelming. It’s astounding. As a result, I’m not so sure the GOP will be held responsible. If a default occurs, it’s possible the results will produce such a shock to the American psyche that everyone in DC will be blamed and another “throw out the bums” election mood will ensue.

    What may harm the GOP more than a default will be the exact cuts they demand in order to approve a debt ceiling increase. If voters view those cuts as too drastic or harming them personally, they’ll turn on the GOP. That’s why the GOP is demanding that the President and Senate produce a budget showing what they’re willing to cut. They’re hoping to demagogue whatever the President and Democratic held Senate produce in order to win the next election cycle while at the same time refusing to produce what they want to cut in order to get their demand of $2 to 6 trillion (depending upon who’s talking) in deficit reduction.

    Since most people get their news via TV, I’m amazed the media fails to educate the public on the reality of what will occur if the nation defaults. People don’t hear about it, don’t get, don’t understand it, and therefore aren’t concerned about it. They’re more concerned about getting a job, keeping their job, and paying their bills. They simply don’t understand the risk.

    • Watusie

      I think people are beginning to clue in:

      • COProgressive

        I think people are beginning to clue in:

        It’s the same ol’ story, year after year, after year.

        PJ O’Rourke said it best…..

        “Republicans are the party that says government doesn’t work and then they get elected and prove it.” – P.J. O’Rourke

  • gmckee1985

    Romney and the Congressional Republicans are going to demolish the abysmal economic record of Barack Obama and the Democrats in Congress.

    The Democrats are an embarassment. They don’t even pass budgets, Obama has absolutely no plan to tackle spending, deficits, debt or the looming entitlement crisis. Any halfway competent Republican candidate should be able to expose these lightweights.

    • Watusie

      Two questions. First, where are you going to find a halfway competent Republican candidate. Second, what are they going to propose that isn’t a return to the disastrous Republican policies of 200-2008 that caused the deficits and blew-up the economy in the first place?

      • sdspringy

        What specific policy was that Watusie? What specific piece of legislation or govenment policy blew up the economy?

        • Watusie

          If I’m only allowed to name one, I’ll go with refusing to regulate subprime mortgage lenders. If I’m allowed more, I will also throw in encouraging the housing bubble in the first place to distract attention from the weakness of the general economy, along with the fiasco of Iraq, in which trillions of taxpayer dollars were set on fire for no purpose. And, of course, cutting taxes on the rich.

          I can do more if you like.

        • sdspringy

          Like CountryWide, the big donors to Dodd, and Obama. Or Raines who was Clinton’s man at Fannie then Obama’s advisor. Did Bush prevent increased regulation on the mortgage market in 2005, in fact no, that would be Senate Dems. Remember the intrepid Barney Frank and those statements concerning Fannie/Freddie and mortgage market. No train wreck here people keep moving. You have absolute no leg to stand on when the Democrat record is examined.

        • TerryF98

          Medicare part D. A wholly planned and executed plan by Bush and the GOP. Totally unfunded.

          Bush tax cuts have cost trillions will cost another 750 billion in the short term. Totally un funded.

          Iraq and Afghan wars totally unfunded and kept off the budget by Bush to avoid scrutiny.

          There are three please defend them.

          The effect on the deficit.

    • valkayec

      How do you know Obama has no plan? In a negotiation, of which I’ve had millions, you don’t give away your bargaining position up front, especially if you know it’s going to be demagogued. Moreover, if the GOP has a specific plan, why aren’t they releasing it? BTW, the Ryan plan can’t be used as a real plan because it is far too general, and contains no specifics on cuts other than Medicare and Medicaid and reducing taxes on the very wealthy and corporations. I’d like to see their specifics.

      Meanwhile the Gang of Six (minus one) in the Senate continues working on a long term plan while VP Biden & company works on a short term plan. Unfortunately, it seems every time I turn around, the GOP House members keep adding one more thing to their list of demands.

  • Thucydides73

    This jobs number hurts the President far worse that any republican congressman. Anyone who thinks otherwise should read the legions of political science journal articles that use unemployment to predict the reelection probability for a president.
    Now, this is only one month and but should June’s and other following months be as bleak then the president will have a serious problem on this hands. I think he can win election with unemployment about 8 but that will only happen if the trend shows an improving labor market. Besides weak jobs numbers, the BLS numbers also show flat wage growth. The economy is losing is dynamic ability to create jobs, and the credit crunch only magnifies this since small businesses and entrepreneurs are facing much more restrictive credit criteria.
    The President had a democratic congress to work for during his first two years in office. He got a huge stimulus and a healthcare reform passed. The Republicans only have had control of the House since January and still have to contend with a Democratic Senate and the President. Assigning them blame for this poor job’s bill either shows a tremendous amount of partisan hackering or absolute incompetence. I leave the author of the article to determine which applies.

  • gmckee1985

    Watusie, an incredibly simplistic response. We all know the housing market and inflated consumer debt started long before the year 2000, and were the primary drivers of the economy crashing. Certainly lowering taxes for all income groups as President Bush did had very little to do with it.

    Personally, I believe Mitt Romney will be the nominee, and he can definitely be a competent president. Wouldn’t take much to be an improvement over the current guy.

    • Watusie

      We know no such thing. We do know that the Bush Administration sat by and did nothing while the subprime fiasco blew up on their watch and damn near took the entire economy out.

      • armstp

        Wat,

        and the GOP even went further with their men Bush and Greenspan actively encouraging the inflating of the bubble by suggesting there was no problem and home ownership should be for everyone….. the market participants took their cues from the top… deregulation by Ayn Rand protege and GOP favorite Greenspan actually created all the risk in the market….

    • think4yourself

      @ gmckee “We all know the housing market and inflated consumer debt started long before the year 2000, and were the primary drivers of the economy crashing. Certainly lowering taxes for all income groups as President Bush did had very little to do with it.”

      I disagree. While housing and consumer debt were the primary driver’s behind the economy crashing, the issues became significant after 2000 (I’m not blaming Bush for that other than a laissez faire attitude toward corporate oversight that benefitted the financial institutions driving the increase in debt). First, while housing and debt was increasing, the pace grew rapidly in the Bush years. Between Jan 1994 and Jan 2000, average US housing increased by 30%. From Jan. 2000 – Jan. 2007 housing increased by 56% http://www.census.gov/const/uspricemon.pdf (I did the math myself). Consumer credit, especially fueled by low rates and easy refinancing on mortgages was even worse.

      As for lowering taxes, I don’t think they caused the economy to crash. But I don’t think they helped the economy and they were a significant part of causing the current Gov’t deficit (along with wars that were not paid for, Medicare Part D that was not paid for and lastly this recession that both lowered tax reciepts and had several rounds of stimulus that occurred under Bush and Obama).

      In my view if we hadn’t lowered taxes, we would have continued with budget surplus, paying down our debt. If we had enacted a “war tax” to pay for the costs and if Medicare Part D required a funding mechanism. The gov’t balance sheet would have been in much better shape and the stimulus costs would not have been so bad.

      • COProgressive

        “In my view if we hadn’t lowered taxes, we would have continued with budget surplus, paying down our debt.”

        Exactly! It was the Bush gift to his base which caused the trajectory of OUR economy to tip over and start the nosedive we’re in today. Without the gifts we wouldn’t be in 14 Trillion dollars of debt. But then, if things had gone differently in Florida in 2000, and Gore had won, oh wait…..

        It ‘s nice to have Daddy’s friends in high places and your brother running the swing state……..

        “It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.”
        Joseph Stalin 1879-1953, Katherine Harris (R-FL) 2000, Kenneth Blackwell (R-OH) 2004

  • kuri3460

    Considering that Barack Obama still enjoys approval ratings around 50% despite the slow economic numbers and the typical mid-term lull that sets in during most presidential administrations, it would seem that the odds currently favor him winning re-election. If things are truly as bad as conservatives like to say they are, but Obama is still this popular, what does that say about the electorate’s appetite for the bill of goods that the GOP is trying to sell them?

    The outcome that is still up in the air is whether the Republicans are competitive, or get utterly decimated, at the polls in 2012, and I think that the longer Eric Cantor suggests things like the government’s ability to assist tornado victims in Joplin, MO is tied to making budget cuts elsewhere, the longer that the House GOP introduces more pieces of anti-abortion legislation than jobs legislation, the longer that Republicans use defaulting on the debt as a legitimate political tactic, the longer that the GOP insists that a $15,000 voucher is a suitable replacement for Medicare coverage, and the longer that asinine, sophomoric pretenders like Donald Trump and Sarah Palin steal the headlines away from actual qualified candidates, the more likely the GOP is to not only lose the House, but to lose the Presidential race by a popular vote margin that hasn’t been seen since Reagan won re-election.

  • Nanotek

    “We all know the housing market and inflated consumer debt started long before the year 2000″

    yeah, Reagan led the Republican way to exploding deficits and the bottom line is Republicans walked into an economic surplus and booming economy under Clinton and … controlling all three branches of government (Congress, Presidency and the Supreme Court (hence the selection of Bush by it) … in 8 years, Republicans doubled the deficit, de-regulated Wall Street, launched two unpaid-for wars, dreamed up the $400 billion give away to the pharmaceuticals (forbidding the government to use its massive buying power to get cheaper prices for tax payers), cut taxes for the super rich and devastated the economy … handing President Obama a collapsed economy that was losing 750,000 jobs a month! Now that Obama is fixing the economy as best as possible, you Republicans want to drive the bus again? Don’t think so. You’re still in timeout.

  • WillyP

    “Don’t you mean public-sector cubicle dweller, seething with resentment?”

    Are you implying I’m a public-sector cubicle dweller? That’s news to me.

    And if I were, why would I oppose the greatest friend of big government this country has ever seen (with the possible exception of FDR)?

    • Watusie

      Yes, Willy, I’m implying you are a public-sector cubicle dweller. As for the answer to your second question, see the “seething with resentment” thing.

      • WillyP

        Again, that’s news to me.

        Assuming that you stalk me, just so you know, FYI, I’m on a private payroll.

        Unlike Obama.

        • Watusie

          Another fiction you tell yourself (like Palin’s inevitable 40-state victory). In your mind you are John Gault. So how is it that you ended up in a cubicle, dependent upon the taxpayers for your livelihood?

  • sdspringy

    Armstp loves the CBO but the CBO doesn’t love the ObamaCare:

    http://online.wsj.com/article/SB10001424052748703858404576214622084940078.html?mod=rss_opinion_main

    ObamaCare numbers have been a fraud from the start. You are either a fool or a hack to keep quoting them.

    • armstp

      sds,

      I would love to read the article that you reference from the WSJ, but I can’t because you have to pay for it….. but, what I can read I am not sure what your point is… I have read that CBO report. of course the numbers are high from this very preliminary starting point for Obama’s proposed budget, as talked about in the WSJ article you reference, but that is just an opening bid. the budget will look very different by the time it is done….

      as for the healthcare costs in the article, I am not sure what the point is there, particularly as I cannot read the article, but given that the commentary is from the WSJ it is predictably that whatever they are saying is only half the story, given the constant bias of the WSJ. In fact, if you read the actual CBO report the WSJ is talking about, sure the costs estimates are slightly higher than first estimated, as the WSJ points-out, but the CBO is also saying the savings from the plan are also higher, so the CBO continues to say the HCR bills will have a significant positive impact to helping reduce the deficit. So the WSJ, as usual, is only telling you half the story.

      Now lets see what the latest March 30th 2011 CBO report says on the HCR bills:

      Estimated Effects on Health Insurance Coverage

      CBO and JCT estimate that PPACA and the Reconciliation Act will increase the
      number of nonelderly Americans with health insurance by about 32 million in 2016
      and about 34 million in 2021.1 About 95 percent of legal nonelderly residents will
      have insurance coverage in 2021, compared with a projected share of about 82 percent
      in the absence of that legislation (and an estimated 83 percent currently). In
      2021, approximately 24 million people will purchase their own coverage through
      insurance exchanges, and Medicaid and the Children’s Health Insurance Program
      (CHIP) will have roughly 17 million additional enrollees, CBO and JCT estimate.

      [b]Estimated Budgetary Effects from 2012 to 2021: Direct Spending and
      Revenues[/b]

      The legislation will have a number of effects on the federal budget—including added
      spending to subsidize the purchase of health insurance and increased outlays for Medicaid,
      as well as reductions in outlays for Medicare and added revenues from taxes,
      fees, and penalties. On net, CBO and JCT’s latest comprehensive estimate is that the
      effects of the two laws on direct spending and revenues related to health care will
      reduce federal deficits by $210 billion over the 2012–2021 period (see Table 1).

      The Most Recent Comprehensive Estimate.

      CBO and JCT’s most recent comprehensive
      estimate of the budgetary impact of PPACA and the Reconciliation Act was in
      relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care
      Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2
      would repeal the health care provisions of those laws. CBO and JCT estimated that
      repealing PPACA and the health-related provisions of the Reconciliation Act would
      produce a net increase in federal deficits of $210 billion over the 2012–2021 period as
      a result of changes in direct spending and revenues.2 Reversing the sign of the estimate
      released in February provides an approximate estimate of the impact over that period
      of enacting those provisions. Therefore, CBO and JCT effectively estimated in February
      that PPACA and the health-related provisions of the Reconciliation Act will produce
      a net decrease in federal deficits of $210 billion over the 2012–2021 period as a
      result of changes in direct spending and revenues. The projected net reduction in
      deficits is the difference between $813 billion in projected additional revenues and
      $604 billion in projected additional outlays.

      The provisions related to health insurance coverage—which affect both outlays and
      revenues—were projected to have a net cost of $1,042 billion over the 2012–2021
      period; that amount represents a gross cost to the federal government of $1,390 billion,
      offset in part by $349 billion in receipts and savings (primarily revenues from
      penalties and other sources). [b]The other provisions related to health care and revenues
      will reduce budget deficits by an estimated $1,252 billion over that 10-year period—
      including $520 billion in revenues, mostly from new taxes and fees, and $732 billion
      in outlay savings for Medicare and other federal health care programs [/b] (see Figure 1).
      Those outlay savings reflect the net effect of some provisions that will reduce direct
      spending—such as lower payment rates in Medicare—and others that will increase
      direct spending, such as the expansion of Part D benefits and mandatory funding for
      a number of grant, research, and other programs.

      http://www.cbo.gov/ftpdocs/121xx/doc12119/03-30-HealthCareLegislation.pdf

      Those are great outcomes for a very good and important piece of legislation that will bring a lot of good to the American people. Anybody that does not think those are good outcomes are morons. You get to put 34 million more people into healthcare coverage and actually reduce healthcare expenditures at the same time. Amazing..

  • Thucydides73

    Armstp,
    How for the love of god can you give Obama credit for a comission when he refuses to enact any of it’s recommendations? I will give him credit when he fights for what the commission recommended, but I have no faith in him doing that. Obama refuses to reform Social Security nor Medicare. Why not take Speaker Boehner up on his offer to means test Medicare ? That could reduce spending and fits in with the idea of shared sacrifice for the wealthy, but you and I both know that a democart will NEVER agree to that.

    • armstp

      Thu,

      not sure what you are talking about…. still very early in the game. complicated issues that require long term solutions. if you listen to any of the commentators who have any credibility they all are saying that anything that Obama comes up with will be much closer to Simpson-Bowles, if not the same in many areas.

      The reality is that Obama invited the GOP to participate in putting together the Simpson Bowles commission almost two years ago. he wanted them to help pick the people on the commission and help to outline its mandate. The truth is the GOP refused to participate. Now we know why. They were working on their on sic Ryan “plan”. Simpson-Bowles is all Obama and is the only credible set of ideas we have to reduce the deficit and deal with the longer term issues.

      Obama refuses to reform SS and Medicare? Really? You are really going to say that? have you even been listening to Obama speeches and what he says on these issues?

      He constantly says everything is on the table… here is Obama from his famous April deficit speech:

      “So here’s the truth. Around two-thirds of our budget — two-thirds — is spent on Medicare, Medicaid, Social Security, and national security. Two-thirds. Programs like unemployment
      insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20 percent. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our national priorities — education, clean energy, medical research, transportation, our national parks, food safety, keeping our air and water clean — you name it — all of that accounts for 12 percent of our budget.

      Now, up till now, the debate here in Washington, the cuts proposed by a lot of folks in Washington, have focused exclusively on that 12 percent. But cuts to that 12 percent alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget.

      http://www.npr.org/2011/04/13/135383045/president-obamas-speech-on-deficit-cutting

      That sounds very clear to me that Obama is willing to look at SS and Medicare…

      by the way Medicare is already means tested… and there are also negatives for taking out all the wealthy from Medicare…. it will then given conservatives the excuse to get rid of Medicare all together, as it will only be for the “poor” etc.

    • Watusie

      Thucydides73, Obama has ALREADY started the introduction of means-testing for Medicare. As of this year higher income people have to pay a surcharge for Part D premiums. So much for your ill-informed snide sniping.

    • think4yourself

      Thu, I don’t believe Boehner when he offered to means test Medicare. And of course that is different from Ryan who wants to voucher Medicare. I also think Obama would be willing to means test Medicare and SS – IF the GOP is willing to consider tax increases.

      I believe Obama would have supported the Deficit Reduction Commission’s proposal if they had gotten their required super majority. They didn’t and a politically astute President is waiting while negotiating on debt ceiling, etc. I personally believe that this President is a (semi) closet deficit hawk and wants his legacy to be that the country was on a sustainable path economically. I believe he will accept cuts that Liberals would consider draconian, but the GOP must be willing to bargain which means agree to increased tax revenues. So long as Grover Norquist speaks for the GOP, I don’t see a deal happening, no matter how much spending cuts there are.

  • talkradiosucks.com

    “Another fiction you tell yourself (like Palin’s inevitable 40-state victory). ”

    Did he really say that?

    Could be the stupidest thing any regular has ever uttered here (excepting the trolls, of course, who do it on purpose.)

    • Watusie

      Read it and guffaw:
      http://www.frumforum.com/whats-to-blame-for-the-weak-recovery/comment-page-1#comment-301459

      I’ve tried to wrap my mind around the scenario – you can see my list of the lonely ten states to go for Obama in 2012 further up this thread. And you know what? As ridiculous as the claim is on its face, it gets even MORE ridiculous if you start trying to map it.

      • TerryF98

        WillyP(rick) said.

        Quote in all it’s glory, for ever to be imortalised in the annals of the most stupid comments ever uttered on FF.

        “A true disgrace, and why he’ll lose 40+ states. When you’re saluting President Palin, you can blame yourself.”

  • rubbernecker

    It’s a sign of grim times indeed when Odumbo is touting a potential $14 billion loss to the taxpayers WRT the government motors bailout as a great economic success.

    Smarg, you forgot a decimal point. We all make mistakes.

  • JimBob

    You’re a crank Eli.

  • ChallengingFrum

    This article is a joke. Two weeks ago FF was telling us how obama saved the economy. Now its the republicans fault that it crashed.

    • TerryF98

      You must have been in prison from 2000-2008.

      Or you are a time traveler and spent the whole of the Bush Maladministration in the year 1978

  • ottovbvs

    Lehrer is a Republican spear carrier. All the usual suspects here need to ask themselves what possible reason would he have for underselling Republican chances next year? In fact his RESPONSIBILITY scenario is obviously realistic given the bind Republicans in the house find themselves in. They have the worst of all worlds. Control of one third of the govt but little real power. Well they have the power to commit suicide but apart from that? If the economy goes off the rails over the next couple of months Republican intransigence over the debt ceiling gives Obama the perfect alibi. Republicans are creating,,,what’s the word?….oh yes….UNCERTAINTY.
    How well Obama and the Democrats do next year is purely a matter of math. If the turnout is around 130 million as it was in 2008 then Obama is home free and the Democrats will a)hold onto the senate b) have a shot at taking back the house. If it’s substantially less then things become more problematic for the Democrats. That’s it.

  • talkradiosucks.com

    “I’ve tried to wrap my mind around the scenario – you can see my list of the lonely ten states to go for Obama in 2012 further up this thread. And you know what? As ridiculous as the claim is on its face, it gets even MORE ridiculous if you start trying to map it.”

    A woman with the WORST favorability ratings of a potential presidential candidate probably ever recorded? LOL.

    WillyP, your remaining credibility (such as it ever was) just took a big flush.

    And speaking of no credibility…

    “You’re a crank Eli.”

    You’re a total fucking idiot, “JimBob”.

  • Frumplestiltskin

    Good article by Eli, all told I would rather have a Democrat President and a Republican majority in the Senate with the House reverting more to its mean (meaning a few less Republicans as they won seats they will not hold on) and a surging economy, but if we do double dip or stumble along and it is Romney as the nominee, I think he would benefit and likely win. Of course if it is any one of the nutty Republicans, we can have 25% unemployment before a Bachmann would be elected President.

    And please, ignore WillyP, he is obviously a sad, lonely little man looking for attention.

  • think4yourself

    During the end of the Clinton years, the budget balanced due to a variety of factors including the following:

    1. Surging economy created unusually large tax reciepts.
    2. Reform of welfare (lowered the amount of welfare costs, plus more people working = more tax reciepts).
    3. GOP blamed for shutting down gov’t, lost politically and then bargained with Clinton.
    4. Clinton was really a moderate who was a deficit hawk (for a Democrat).

    Who gets blamed this go around? To early to say. I think it’s unfortunate that the GOP especially (but both parties) are much more interested in blaming than compromising. This President will accept big spending cuts if the GOP will do tax increases. It’s crazy that they have staked their claim on no tax increases when taxes as a share of GDP are at 60 year lows. As I recall Bowles/Simpson was about 1/3rd tax increases – 2/3rds spending cuts. That’s a pretty good deal for the GOP, but they won’t do any tax increases. Because of that, I’m guessing they get the blame.

    However, even if they lose the House, nothing changes. The GOP figured out that if they make every bill require 60 votes in the Senate, nothing get’s done and they can blame the Dems for that. It’s really the American people who lose.

  • politicalfan

    It’s really the American people who lose.

    Good point!

  • valkayec

    Here’s a bit of recession analysis from Annie Lowrey in yesterday’s Slate:

    “So what’s the good news? Could foreign demand save us, with Asian and European consumers taking advantage of the cheap dollar and their more-buoyant economies pulling ours up? Not likely. The trends are bad over there and over here: Demand is slack around the world. China’s economic growth is slowing. And Europe continues its tremendous struggle to keep weak economies, like Greece’s, simply afloat.

    All this bad news has Wall Street spooked. On Wednesday, stocks took the steepest nosedive since August last year. Forecasters now expect continued gloominess in the stock market, which had until recently seen a strong rally, throughout the summer. CNN, for instance, reports that “shareholders in major U.S. companies are rushing to sell their own stakes, trying to cash out ahead of what many experts say will be a summer of declining stock prices.”

    There is, finally, one bit of cold comfort: At the very least, the news is not really news. Most analyses of the kind of recession we are having—the kind that follows a massive financial crisis and an asset-price bubble that led to too much leverage throughout the economy—indicate that things should be pretty bad right now. They’re correct. The IMF, for instance, warned as far back as 2009 that the “combination of financial crisis and a globally synchronized downturn is likely to result in an unusually severe and long-lasting recession.” Economists Carmen Reinhart and Ken Rogoff, who have studied 800 years of recessions and panics, concur. “I would say we’re right on track,” Reinhart says. “Yes, the recovery looks long, but that’s because we haven’t had a financial crisis this severe since World War II.”

    That is not to say that there is nothing to be done, of course, or that the current state of affairs is inevitable. More stimulus or more aggressive monetary policy could help the economy, boosting employment and keeping the self-sustaining recovery going. But such measures are unlikely, given Congress’ concern with the debt ceiling and cutting spending.”

    http://www.slate.com/id/2296042?wpisrc=nl_wonk

    Good analysis and good advise. Of course, everyone realizes that during the ’30s depression, FDR’s policies caused employment to rise and the economy was well on it’s way back to normal when members of Congress convinced him to go on an austerity plan. As a result, the economy fell back into recession (depression).

    • ottovbvs

      Forecasters now expect continued gloominess in the stock market, which had until recently seen a strong rally, throughout the summer.

      In fact it’s not at all unusual for the stock market to go through a soft spell in the summer. Hence the origin of the expression “Sell in May and go away.” The market has softened because of weak data but it’s on very low volumes. It takes very little to shift the market when volumes are low.

  • Chris Balsz

    Where does this additional necessary $2 T over the next 2 years come from?

  • valkayec

    One of the best economics blogs around, particularly relating to the financial sector, is Yves Smith’s Naked Capitalism. Today, there’s a long post about Greece, the EU, ECB and IMF. It’s really quite fascinating because there’s so much in the story of what is going on with Greece and how its being pressured by neoliberal policies (a la Friedman) that practically mirrors events here in the US.

    http://www.nakedcapitalism.com/2011/06/michael-hudson-replacing-economic-democracy-with-financial-oligarchy.html

    She’s also got a good critique on why Eliz Warren is so hated…as well as some analysis of the Chinese economy and how it will affect both global employment and the recession. See it’s all China’s fault. :-)

  • pnumi2

    [img]=http:/cid:0BAEB576-2B98-4849-8485-1650C46FBB09/[/img]

    Well, otto, It serves me right for trying to show you volume on the NYSE since March 2009 when the the Dow marched from 6500 to where it was last week, knowing that you knew all about it.

    • ottovbvs

      It’s very hard to follow market gyrations these days because about 60% of trading is automated using elaborate math developed by quants at financial institutions. This is why the entire day trading philosophy which was popular a few days back and still has adherents is a bit of a joke. I’m way too stupid to participate.

      • pnumi2

        The last time someone told me he was ‘way too stupid’ to do something, I lost quite of bit of money playing poker with him. You’re ‘too stupid’ like Sarah Palin is the reincarnation of Clara Barton.

        Except for 50,000 shares of Global Crossing @.18 cents a share (I didn’t even get to sell into a short covering bounce when they announced bankruptcy), I have been out of the market since September 10, 2001. (This is one of the reasons I believe so strongly in God.) I was in for the summer rally and sold half my position on the 7th and the other half on the 10th. When the markets finally reopened, the $57k I took out dissolved into $23k. You could water board me and I wouldn’t get back in.

        I have an account in a top 10 bank and the manager offers me the rates on a 48 or 60 month CDs, but allows me to bust out at any time without a penalty. If she has this discretion, managers at all big banks probably do.

        I’m still pessimistic about things , but hanging with you guys is a tonic for that.

        Your attitude, intelligence and eloquence are worth the trip here.

        • ottovbvs

          Thanks for the testimonial. I wasn’t entirely kidding about day trading, it does require intense focus and quite a lot of intelligence to do successfully and even then you can lose your shirt. It’s hard to compete against computers that trade in nanoseconds. For amateurs it’s buy good companies on the dips and don’t do anything stupid. In reality the climb from the bottom when the Dow was around 6300 was a great moneymaking opportunity. This is a good blog apart from the kapok brained usual suspects.

        • pnumi2

          I lost money in the market consistently from 1965 (when if you wanted to buy a put or call, your broker had to phone somebody to arrange it) to 1997, when I began buying only junk and rumor stocks and then my fortunes changed. A broker at a small stock brokerage put me in one company when the tech bubble was inflating that went from a buck and a half to over $50. Totally worthless.

          The most intelligent thing I did in 35 years in the market was deciding that the crooks were going to get out at Nasdaq 5000 in March 2000. So I got out and they did too. I went back in 2001. Got out in 2002 and never looked back.

          A couple of months after the market turned in 2009, I figured it was TARP what done it. But I was sleeping too well to get back in.

          I’m a little nervous about Obama in 2012 if the economy doesn’t improve faster, but that’s why I enjoy reading you and other more optimistic commentors here.

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