Some GOP lawmakers distance themselves from tax pledge By Gregory Korte, USA TODAY

WASHINGTON – At least two Republican congressmen say they don't remember signing it. One signed it, but has since disavowed it. A half dozen have bucked pressure from within their own party and never signed it.

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  Eric Francis, for USA TODAY
  Rep. Jeff Fortenberry has informed Norquist's Americans for Tax Reform that he no longer wishes to be associated with the pledge.

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Eric Francis, for USA TODAY

Rep. Jeff Fortenberry has informed Norquist's Americans for Tax Reform that he no longer wishes to be associated with the pledge.

And a few others say they support the Taxpayer Protection Pledge in principle but would sooner violate the pledge than turn their back on a deal to reduce federal spending.

For more than two decades, the pledge written by activistGrover Norquist has been essential job application paperwork for any conservative Republican seeking a seat in Congress.

But a small number of GOP House members are joining Senate colleagues in distancing themselves from the pledge, as Congress works on a compromise to reduce the deficit.

That distance has taken a number of forms, from amnesia to outright disavowal:

•Not constrained: Rep. Jeff Fortenberry, R-Neb., has informed Norquist's Americans for Tax Reform that he no longer wishes to be associated with the pledge, though his name still appears on the group's website. "When you look at something like ending the ethanol subsidy, if that's considered a tax increase, I can't be constrained by that," he told USA TODAY. "Things have to be on the table."

•Agree in principle, if not in practice? Rep. Dennis Ross, R-Fla., stands behind the "spirit" of the pledge, but "does not believe that the pledge prevents him from supporting tax reform that includes tax increases in some instances or closing loopholes," said his chief of staff Fredrick Piccolo Jr. If raising some taxes to solve the debt crisis means angering Norquist, Piccolo said, "he'll anger Grover Norquist."

A spokesman for Rep. Sean Duffy, R-Wis., said Wisconsinites are interested in revenues in general, not the specifics of the Norquist pledge. "That's why Congressman Duffy has voted to get rid of loopholes and deductions in an effort to make the corporate tax code fairer and flatter and more competitive," said his chief of staff, Brandon Moody. Does that mean Duffy could support a deal that ends tax breaks for some people? "He'll take each vote as they come and make an informed decision based on the specifics of the proposal or bill," Moody said.

•Don't remember: At a town-hall-style forum last month, a constituent challenged Rep.Lee Terry, R-Neb., about his signing of the pledge. "I did?" Terry responded. "The list I've seen doesn't have my name on it."

In an interview afterward, Terry said he may have signed the pledge as a candidate in 1998, but wouldn't do so today. "I am so anti-pledges," he said. "At some point, I have to be able to say, 'Look at my record.' And my record shows I have never voted for a tax increase."

Rep. Elton Gallegly, R-Calif., also "doesn't sign pledges," said spokesman Tom Pfeifer. But after retrieving a signed copy of the pledge from Norquist's office, Pfeifer said: "Whether or not he remembered signing something 19 years ago. … after reading the pledge it's clear he has stuck to it."

Thirteen members of Congress — including six in the House of Representatives— have never signed the pledge. One is Rep. Frank Wolf, R-Va.

With increasing amounts of Treasury debt being bought by China, the deficit is a national security and human rights issue so important that "everything has to be on the table," Wolf said — especially tax breaks favoring special interests. "Tax earmarks ought to be eliminated."

Rep. Rob Woodall, R-Ga., also never signed the pledge, saying it "simply reinforces our existing, broken tax code—the same tax code that's laden with 60,000 pages of deductions, exemptions and exclusions designed to curry favor from special interests," he said in a statement. He supports abolishing the income tax and replacing it with a national sales tax.

Norquist's group says 236 congressmen have signed the pledge, agreeing to oppose tax increases for as long as they hold their current office. That's up from 173 congressmen just a year ago, before Republicans took control of the House.

If tax increases are to be part of a deal to decrease the deficit by the end of this year, 19 will have to find a way out of the pledge.

The pledge takes several forms depending on the office. In its simplest version, politicians oppose "any and all efforts to increase taxes."

The pledge for members of Congress is more specific. Congressmen pledge to: "One, oppose any and all efforts to increase the marginal tax rate for individuals and businesses; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates."

Despite questions about the definition of a tax increase, Norquist has little patience for any equivocation. "Everybody knows what the pledge means. It's very simple. If it raises taxes, it's a tax increase," he said.

Politicians trying to wiggle out of their promise don't have to answer to him, Norquist said. "The commitment is not to Americans for Tax Reform. It's to their constituents."

That's good enough for Sen. Tom Coburn, R-Okla., who has been feuding with Norquist since leading a group of 34 GOP senators — including 31 pledge-signers — to eliminate ethanol subsidies in June.

"Most of us agree with Grover on most of the stuff," Coburn said. "But he's not the one who gets to determine what a tax increase is. We are, and the American people are.

"The more media he gets, the more false power he has, which is more intimidating to people," Coburn said.

If more House members are showing their independence from Norquist in going after tax "earmarks," that could bode well for future deficit reduction efforts, he said.

Think the US ain't in t-r-o-u-b-l-e? Take a look ..

See, I don't agree w/Mish's analysis sometimes - I am an institutionalIST not a pro market investor.

But he is very good drags out some pretty impressive stats and tables while building his arguments.   I do not agree w/his anti-government worker, right to work bs.  He simply does not care of REAL income goes down for the bulk of people.  He's never truly studied how to decrease fossil fuel dependence either, amongst other things.  You may wish to read his whole article.  Me, I stick w/Michael Hudson and the gang8 crowd.

But here is one of his charts and below his "solutions":
http://globaleconomicanalysis.blogspot.com/2011/09/bernankes-waterloo-midst-of.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29










*snip*

"Twelve Specific Recommendations

1. Banks and bondholders should take a hit. Banks are not going to lend anyway so bailing them out at the expense of taxpayers is both morally and economically stupid. End the bailouts, all of them, and prosecute fraud, the higher up the better.
2. Implement serious bank reform now, not 9 years from now. Banks should be banks, not hedge funds. This proposal will necessitate breaking up banks. So be it.
3. Scrap Davis-Bacon and all prevailing wage laws. Such laws drive up costs and have wreaked havoc on many cities and municipalities, now bankrupt or on the verge of bankruptcy.
4. Pass national right-to-work laws. Once again, we need to reduce costs on businesses and local governments to spur more hiring and reduce costs.
5. End collective bargaining rights of all public unions. The goal of unions is to provide the least service for the most money. The goal of government should be to provide the most services for the least money.
6. Scrap ethanol policy and end all tariffs.
7. Legalize hemp and tax it. Prison costs will go down, tax revenue will grow, and biofuel and fiber research will expand as hemp produces very soft fibers.
8. Corporate income tax rates should be lower in the US than abroad. Current policy encourages capital flight and jobs flight via lower tax rates on profits overseas than in the united states. This penalizes businesses that work only in the US, especially small businesses that do not have an army of lawyers and lobbyists.
9. Stop the wars and set a plan to bring home all US troops from Iraq, Afghanistan, and 140 or so other countries.The US can no longer afford to be the world's policeman.
10. Implement Paul Ryan's Medicare voucher proposal. It is the only way so far that anyone has proposed that puts much needed consumer "skin-in-the-game" that will reduce medical costs.
11. Legalize drug imports from Canada
12. End the Fed and fractional reserve lending. Both have led to boom-bust cycles of ever-increasing amplitude.

Those are the kinds of things we need to do, not throw more money at problems. The latter does nothing but drive up national debt and interest on the national debt for short-term gratification."

THE DEBT CEILING 'DEAL' : ‘class economic warfare by legislation’

“The $1 Trillion Debt Ceiling Deal of July 31”

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By Jack Rasmus

Monday, August 01, 2011

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Sunday evening, July 31, President Obama and Senate Majority and Minority leaders, Harry Reid and Mitch McConnell, announced they had reached an agreement on cutting $1 trillion in spending in exchange for raising the debt ceiling. House Speaker, Boehner, indicated he was also in agreement, subject to voting to take place in the House on Monday.

This latest ‘deal’ is essentially the same that was reached by Harry Reid in the Senate on July 29 and Boehner in the House on July 27, with two major changes—one favored by the Republicans and another by Obama. These two changes were then ‘traded off’ this weekend, bringing the parties to a deal.

Boehner and Reid essentially came to an agreement last Friday, July 29. Their respective July 29 (Reid) and July 27 (Boehner) positions called for $917 to $927 in spending cuts, only $10 billion apart. Both proposals contained no reference to tax loophole closings. The tax hikes idea was given up by Obama and the Democrats early last week, bringing the Democrats to essentially the Republican position on spending vs. tax hikes. The only substantive difference as of July 29 between the two was that Reid also proposed $1.044 trillion in additional cuts in Defense spending, as well as a measure that prohibited a re-opening of the debt ceiling issue before the 2012 November elections.

Today’s Boehner-Reid final agreement effectively drops explicit cuts in Defense, another Republican position all along. Reid’s defense cuts are now replaced with ‘triggers’ in defense spending reduction. The ‘triggers’ concept has been a maneuver used by Congress on occasion in the past. It is designed to let one party save face, allowing it to appear that their provision is retained in the bill, when in reality it will never be implemented. In fact, ‘triggers’ have never been implemented in any instance since 1980 in which they were included in a spending bill.

With Defense spending cuts taken effectively ‘off the table’ this weekend, the only remaining substantive issue was whether the debt ceiling would be allowed to come up as an issue before the 2012 elections. Republicans now agree it will not.

This Republican shift means Reid’s previously proposed $1 trillion additional cuts in Defense appears, in retrospect, to have been a ‘trading item’ and tactical maneuver all along to get the Republicans to agree not to revisit the debt ceiling issue again before the coming 2012 elections.

But the Republican leaders in the House and Senate don’t need a debt ceiling issue again to get further cuts. The 2012 budget deadline of October 1 will do just as well for a threat to shut down the government.

So, in summary, it appears the deal just negotiated means both parties agree on cutting $1 trillion in spending only, with no tax hikes. The Republicans will shift to the 2012 budget deadline for a new hammer to extract extra spending cuts. Defense will remain effectively untouched. And, in exchange for $1 trillion in cuts and no tax hikes and leaving defense spending untouched Obama gets an agreement not to raise the debt ceiling issue again before his next election. But don’t think that’s the end of the story. It’s just the beginning.

The bigger attack on social security, Medicare, Medicaid is still to come. The next round in what amounts to ‘class economic warfare by legislation’ is the 2012 budget negotiations that are supposed to conclude by September 23. Republicans will get another ‘bite of the apple’ in spending only cuts at that time. And Obama and Democrats will likely cave in to those demands yet again, as they have repeatedly the past year.

But the even bigger bite will come as a result of another provision in today’s agreement: the creation of a so-called ‘Bipartisan Commission’ to reduce the debt and deficits by even greater magnitudes. That Commission will make still further major proposals for cuts by November of this year, to be voted on by Congress before year-end.

Following Senators Reid and McConnell, President Obama spoke on national TV tonight to endorse the tentative Boehner-Reid agreement and to announce the ‘Bi-Partisan Debt Reduction Commission’. In his brief comments this evening he employed an important phrase that TV commentators mostly overlooked. He said,  “The Commission’s proposals will be submitted for an up or down vote only” by members of Congress. That means some small group—no doubt appointed by him or Congressional leaders—will now decide solely between themselves the composition and magnitude of cuts in Medicare, Social Security, Medicaid, how much tax loopholes will be closed, and how much Defense spending will be cut. The rest of Congress will then be limited to voting ‘yea’ or ‘nay’ and that’s it.

The conservative composition of such appointed commissions in the recent past are well known. There was the Simpson-Bowles deficit commission appointed by Obama in 2009 that was lopsidedly conservative. And Obama’s commission to recommend Health Care legislation that was composed of mostly conservative Republican and Democrats. The forthcoming ‘Bipartisan Commission’ will almost certainly assume the same conservative-leaning composition. We can expect $2 in cuts in Medicare and Social Security for every $1 in tax loophole closing and Defense spending reductions…if we’re lucky.

This deal of the past weekend to raise the debt ceiling in exchange for $1 trillion in spending cuts—with no tax hikes or defense cuts—shows clearly that politicians in Washington are concerned first and foremost with their re-elections. Democrats don’t want to be confronted with another debt ceiling debacle during their re-election campaign. Both Republicans and Democrats are, furthermore, intent on protecting their Defense industry friends, and on ensuring their corporate campaign contributors don’t have to pay their fair share in taxes. The rest of America gets to pay the bills and pay the price.

Jack Rasmus is the author of ‘Epic Recession: Prelude to Global Depression’, Palgrave-Macmillan and Pluto Press, 2010; and the forthcoming ‘Obama’s Economy: Recovery for the Few’, same publishers, 2011. His blog is jackrasmus.com and website: www.kyklosproductions.com.

CLERGY MEMBERS ARRESTED AT CAPITOL PROTESTING BUDGET CUTS

CLERGY MEMBERS ARRESTED AT CAPITOL PROTESTING BUDGET CUTS |About a dozen religious leaders were arrested in the Capitol rotunda today after they refused to end their public prayers calling for “an equitable resolution to the debt ceiling debate,” according to the Presbyterian Church (U.S.A.), which organized the protest. The leaders noted that default would be catastrophic, but current plans to raise the debt limit would still include “severe spending cuts to the programs and services that support the poorest and most vulnerable people living in the U.S. and around the world.” A photo of the leaders captured by theNew York Times:

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• 'What Would Jesus Cut?': Christian Leaders Urge Obama To Protect The Poor In Debt Talks

Gang of Six Takes from Poor, Gives to Rich

Published on Friday, July 22, 2011 by Facing South

Gang of Six Takes from Poor, Gives to Rich

A look at the numbers

by Sue Sturgis

Under the Senate's so-called "Gang of Six"* debt plan unveiled this week, percent of deficit reduction that comes through spending cuts to social programs including health care, education and environmental protection: 100The Gang of Six includes Republican Senators Saxby Chambliss of Georgia, Tom Coburn of Oklahoma and Mike Crapo of Idaho (in top row of photo, left to right), and Democratic Senators Kent Conrad of North Dakota, Dick Durbin of Illinois and Mark Warner of Virginia (in bottom row of photo, left to right).

Amount by which the plan cuts Medicare, the health care program for seniors, over a decade: at least $298 billion

Amount by which it would cut military benefit programs, such as health plans for soldiers and veterans: $80 billion

Portion of the immediate deficit reduction savings outlined in the proposal that would come from reducing Social Security benefits: 1/5

Under the plan, amount less per year the average Social Security recipient would receive at age 75: $560

At age 85: $1,000

Current top marginal income tax rate for the wealthiest Americans and most profitable corporations: 35%

Lowest rate to which that would be reduced by the Gang of Six proposal: 23%

Estimated amount in profits being held offshore by U.S. companies, which under the plan would see an end to taxation of most of their overseas profits: $1 trillion

Amount by which the Gang of Six plan claims to reduce deficits over the next decade: almost $4 trillion

Amount by which the plan would actually reduce revenue by 2021, compared to the Congressional Budget Office's current law baseline: $1.5 trillion

Number of weeks left to reach a deal before the U.S. could begin to default on its debt obligations: less than 2

© 2011 Facing South

Sue Sturgis is the Director and regular contributor to the Institute for Southern Study's online magazine, Facing South, with a focus on energy and environmental issues. Sue is the author or co-author of five Institute reports, including Faith in the Gulf (Aug/Sept 2008), Hurricane Katrina and the Guiding Principles on Internal Displacement (January 2008) andBlueprint for Gulf Renewal (Aug/Sept 2007). Sue holds a Masters in Journalism from New York University.

Thirty years of the debt ceiling in one graph

By Ezra Klein

Nice graphic by the visual whizzes at The Post:

(THE WASHINGTON POST)

The one caveat to this graph is that the colors on the bar showing control of the House of Representatives look to be reversed. But that doesn’t distract from its main point: “Since 1980, the debt ceiling has been raised 39 times. It was raised 17 times under Ronald Reagan, four times under Bill Clinton and seven times under George W. Bush.”

At any given time, the minority party likes to pretend that the debt is all the majority party’s fault. That’s the whole theory behind the McConnell plan. But every president and congress is paying for the decisions of every previous president and congress. This is, and always has been, a bipartisan affair.

By Ezra Klein  |  11:39 AM ET, 07/15/2011 

USA Today's Deficit Hysteria

by Greg Anrig

The USA Today’s hyper-alarmist front pager about the federal debt conveys the misleading impression that projected government shortfalls have suddenly become much worse and have reached overwhelmingly high levels that we will never be able to repay. Reporter Dennis Cauchon, whose past reporting has perpetuated discredited right-wing bromides, makes three basic errors that are common among those who have an ideological hostility toward government:

Combining federal debt held by the public with intra-governmental debt. The trillions of dollars worth of U.S. Treasury securities held by the Social Security, Medicare, and other federal trust funds are assets as well as liabilities to the government as a whole. As former Congressional Budget Office and Office of Management and Budget Director Peter Orszag explains, “when I tell my daughter and son that I owe them each $10 for their allowances, I am poorer and they are richer—as a family, though, there is no change in our overall finances. That’s why the Congressional Budget Office, the Office of Management and Budget, and the Government Accountability Office all agree that gross debt is not a meaningful metric for assessing the government’s current fiscal position.” Yet, the USA Today repeatedly refers to federal trust fund assets as if they were only liabilities to the government.

Using infinite time horizons to calculate cumulative debt obligations. By assuming debts will compound not only over decades into the future, but forever, the USA Today concocts enormous “unfunded liability” numbers. To understand why that approach is misleading, think of how much a baby born today might spend over the course of a lifetime – and then compound that unfunded liability indefinitely after his or her life ends. Would that figure reasonably convey anything about how “affordable” that individual is? The amount Social Security has already paid to all of its beneficiaries since it was created in 1935 is also a huge number, but the program always been fully financed through taxes and has greatly reduced the poverty rate among the elderly. Indeed, the American Academy of Actuaries issued a statement to Social Security’s Trustees strongly objecting to the use of infinite time horizons, and most mainstream media outlets join the Trustees in adhering to specified time frames.

Failing to provide perspective. Dollar amounts in the trillions sound too big to even comprehend and therefore are inherently disturbing. But the overall U.S. economy, which creates the output from which government programs are financed through taxes, also is calculated in trillions of dollars. As a share of the economy, current debt levels are still substantially below what they were in the aftermath of World War II. If all of the Bush era tax cuts were to be rescinded, the projected escalation in future debt would flatten out at a manageable level for an extended period as a share of the economy. As for Social Security, it will grow very gradually from about 5 percent of the economy now to 6 percent by 2030 and then remain at that level indefinitely – an entirely affordable prospect.

The prospect of high and rising federal debt in the next decade, which is primarily driven by the expectation that health care costs will continue to rise rapidly as the population ages, is a legitimate cause for concern – though less of one than the ongoing joblessness crisis. Media outlets reporting about such important and complicated issues poorly serve their readers when they rely on wildly misleading and discredited ways of presenting information.

Posted by Greg Anrig on June 7, 2011

The Real Impact Of Cutting Medicaid -- Just When We Need It Most

by Harold Pollack

(This first appeared at Kaiser Health News)

An excellent Chicago Tribune story by Rex Huppke details the impact of cuts to home and community-based services in Illinois. Huppke recounts the story of 81-year-old Lorraine Phifer, who cares for her son William, who has cerebral palsy. Phifer has a wheelchair van, but she can't maneuver him into it by herself anymore. He has also required help with a wheelchair lift to get into and out of bed. Staff from the University of Illinois at Chicago Assistive Technology Unit have come out to the Phifer home and provided valuable help. That unit now faces a 70 percent budget cut.

UIC's intellectual disabilities family clinics, which offer a range of services that are hard to access elsewhere, also face deep cuts. My intellectually disabled brother-in-law occasionally uses these facilities, too. I'm not a disinterested observer.

Few of my fellow policy wonks have occasion to write these last words. Most policy debate occurs at great personal distance from the world of safety-net care. To be sure, every policy debate has its quantitative dimension. Congressional Budget Office projections and actuarial reports matter, because there are real human consequences when the numbers don't add up. When the numbers are all we talk about, though, policy debate bears discomfiting similarity to arguments among armchair warriors maneuvering toy soldiers on a plexiglass board.

Debates about health care for seniors generally acknowledge these elemental realities. Nearly everyone involved has a parent or other relative who receives Medicare. And most expect to rely on Medicare, too, when they grow old. Seniors are a powerful constituency. If they find a proposed policy too unsettling, it probably won't happen.

The tone and the politics change when things turn to Medicaid and related safety-net services. Dozens of states are making painful cuts right now. The disadvantaged people most directly affected are playing conspicuously small parts in the accompanying political process. In Washington and in state capitals, too, few influential stakeholders have any strong personal stake in such matters. Few have sat on either side of the counter in some welfare office, county hospital or public health clinic.

Thus, the New York Times Lizette Alvarez reports that Florida's Republican-dominated legislature is set to scrap traditional Medicaid services and shift Medicaid recipients into state-authorized for-profit HMOs or provider sponsored networks. Florida also seeks permission to deny recipients some benefits now being offered. These changes could occur as quickly as next year. For those immediately affected, this program represents a more radical experiment than any provisions of last year's health reform. Florida legislators are quite explicit that their purpose is to save money: "The Medicaid system is irretrievably broken," State Sen. Joe Negron (R) says.

Florida indeed faces growing Medicaid burdens. These arise because of surging enrollment in a state hammered by recession and the foreclosure crisis, and which has one of the nation's highest rates of uninsurance. Concerns that the state's predicament is driven by lavish benefits and inefficiencies can be put to rest. Florida ranks 43^rd in per-recipient Medicaid costs.

Florida's proposed Medicaid changes are based on a dubious pilot project that has disrupted life for thousands of Medicaid recipients. Part of the problem was that for-profit HMOs proved unable or unwilling to serve many disabled or medically complicated recipients. WellCare, one of the largest participating HMOs, exemplified these problems. WellCare encountered legal difficulties over alleged Medicaid fraud and charges of "cherry-picking" the healthiest recipients, as the Miami Herald reported.

Ultimately, low Medicaid reimbursements led WellCare and other HMOs to precipitously exit much of the market, forcing tens of thousands of families to change health plans. A Georgetown research team released a very critical analysis of these operational problems, concluding:

The five-year pilot program has yielded little in the way of concrete evidence of either efficiencies or cost reductions. In fact, the pilot has raised significant questions about the ability of its managed care model to effectively meet the needs of beneficiaries….

Despite this track record, Florida lawmakers seek to expand this program statewide. Whether Medicaid recipients would actual benefit seems beside the point.

Politicians in Washington are following a similarly unpromising path. The CBO estimates that Republicans' proposed plan to block-grant Medicaid would reduce federal program expenditures by 35 percent by 2022 and by 49 percent in 2030 relative to current law. In return, states would have greater flexibility to restructure Medicaid benefits.

How governors would actually use this flexibility is another matter. Medicaid is flexible right now. The Center on Budget and Policy Priorities reports that about 60 percent of state Medicaid spending consists of expenditures to cover people or to reimburse services that are not required under federal law. Given Medicaid's low per-person cost and its relatively restrained projected cost growth, there's little room to comfortably cut. Safety-net services are already shoestring operations. Under-funded and stressed, they have many shortcomings. There is no way to meet the above spending reduction targets without shifting costs and risks onto the states, covering markedly fewer people and services, or further underpaying Medicaid providers.

No one can firmly say how states would respond to the reduced federal support. I fear that's precisely the point. Block grants provide both states and the federal government with useful political cover to cut important benefits. If a particular state eliminates Medicaid home care services or by dropping the working poor from coverage, Congressional Republicans can say: "Don't blame us. That's what this state chose to do." Meanwhile governors can say, with equal justification: "Don't blame us. We're doing the best we can, given limited federal resources."

I wish that Rep. Paul Ryan, R-Wis., architect of the House Republican budget plan, could accompany my wife and her brother to waste hours sitting in a gritty welfare office. I wish he had the responsibility of helping an intellectually disabled person with a nasty toothache, when the state Medicaid program no longer covers dental care.

Ryan's proposals won't become law anytime soon. Still, they exemplify this political moment's misguided mood and priorities. During the worst recession in decades, we are cutting needed services precisely when the need for them has grown.

Despite heated rhetoric about federal debt, this proposed budget does surprisingly little to reduce the deficit. Even if this plan did more, Americans would be wise to reject it. Our policy debate seems predicated on the philosophy that we must sharply shrink government despite the accompanying human costs. That vision is mighty appealing, especially to those who feel comfortable and safe without public help.

President Barack Obama helpfully identified what Republicans left out: our collective obligation to protect one another against misfortunes that could crush any one of us left to face them alone. When I consider the 81-year-old women gutting it out to care for her disabled son, or the aged and disabled people in South Carolina losing their adult day care, hospice or meals on wheels services due to current Medicaid cuts, I can only tell Rep. Ryan: "There are more things in heaven and earth than are dreamt of in your philosophy."

Fed Laugh Track: ‘Can We Borrow from the Greeks?’

Federal Open Market Committee meetings entail central bankers going around a table discussing their views about the economy. They also include numerous jokes and attempted jokes, many from economists who have a unique sense of humor. Transcripts of the meetings mark such moments with a simple tag: [Laughter].

Here’s a sampling of jokes from the 2005 transcripts, released today with the customary five-year lag with updates to come:

Alan Greenspan, March 22, 2005, in an exchange with Dino Kos, then head of the New York Fed’s markets desk.

Bloomberg News

Former Fed Chairman Alan Greenspan yukking it up.

MR. KOS. As some of you know, Greece issued a 30-year bond recently at 26 basis points above the rate on Bunds, or about ½ point below the U.S. 10-year rate and about 100 basis points below the 30-year rate.
CHAIRMAN GREENSPAN. Can we borrow from the Greeks? [Laughter]
MR. KOS. It’s interesting, since they are at about double the 3 percent (borrowing) limit. So the markets are not punishing anybody for not complying.
Fed officials joking about Bear Stearns and Lehman Brothers long before the crisis, November 1, 2005
CHAIRMAN GREENSPAN. On the bottom of page 3, are these brokerage sector CDS? Is this the mix of their individual portfolios or their estimates of the total market?
MR. KOS. No, no. This is if you want to buy protection on, say, Lehman Brothers or Bear Stearns. This is the price of protection on these firms.
CHAIRMAN GREENSPAN. Oh, this is the actual credit default swap on Lehman Brothers or on—
MR. KOS. Yes, all eight of them.
CHAIRMAN GREENSPAN. This tells you a good deal about the individual firms. That’s interesting.
VICE CHAIRMAN GEITHNER. There’s a moral hazard in there, too, if you look at it. [Laughter]
CHAIRMAN GREENSPAN. I’m going back in the private sector. I’ve got to know who’s risky! [Laughter] That was off the record. [Laughter]
Edward Gramlich, lamenting fiscal laxity, March 22, 2005
In recent meetings, I have held out one factor that could get me to be less hawkish—the prospect of real fiscal tightening. This has become less likely, too. There has been a dispute between those who want to cut spending and extend the tax cuts and those who want to maintain spending. When not dealing with steroids in baseball and feeding tubes in Florida, the Congress seems to be working toward one of their unique compromises: Let’s extend the tax cuts and maintain spending. [Laughter] There just doesn’t seem to be much voice for and hope for real fiscal tightening.
David Stockton, March 22, 2005, Sept. 20, 2005 and Dec. 13, 2005, economist and Fed funnyman
–I offer one more piece of evidence that I think almost surely suggests that the end is near in this sector. While channel surfing the other night, to the annoyance of my otherwise very patient wife, I came across a new television series on the Discovery Channel entitled “Flip That House.” [Laughter] As far as I could tell, the gist of the show was that with some spackling, a few strategically placed azaleas, and access to a bank, you too could tap into the great real estate wealth machine. It was enough to put even the most ardent believer in market efficiency into existential crisis. [Laughter]
–So what should we worrying about? While my colleagues who attend our lengthy forecast meetings were not exactly thrilled by it, the removal of my arm from its sling in the past few weeks has allowed me, once again, to bring my principal value added to the forecasting process, and that is copious amounts of hand-wringing. [Laughter]
–With the retail price of gasoline having risen above $3.00 per gallon in much of the country, there is certainly cause to be concerned. As a macro guy, I hope that those of you involved in supervision haven’t been too hard on home equity lending, because pretty soon people are going to need a loan to fill up their SUVs. [Laughter]
–Our calibrated vintage capital models failed us, and clearly finger-crossing has not proven a terribly robust forecasting technique. We even tried an approach gently suggested to us by Governor Olson at the time of our last forecast—you know, had we thought about trying common sense? [Laughter] We tried, but even that didn’t seem to work.
Kansas City Fed President Thomas Hoenig and Fed Vice Chairman Roger Ferguson with words of wisdom for central bankers, September 20, 2005:
MR. HOENIG. Mr. Chairman, I support your recommendation. And having listened to your comments, I would like to invoke the central banker’s prayer from Jackson Hole this year. It says, “Lord, if there be shocks, let them be varied and preferably moderate ones so that we can stress test our systems.” [Laughter]
…
Mr. FERGUSON. I’ll close with one other thing, the central banker’s anxiety, which is: “Good times are bad because they could turn out to be bad. Bad times are bad for obvious reasons.” [Laughter] I think you’ve given us a lesson in why these extremely good times are unlikely to be good for us in the long run.
David Stockton again and Dallas Fed President Richard Fisher with separate informational anecdotes, September 20, 2005:
MR. STOCKTON. In adjusting our forecast of the U.S. economy to incorporate the consequences of Hurricane Katrina, we were forced to rely more on economic judgment and assumption than our models. Perhaps that is just as well, given what I heard last month in Jackson Hole. At various turns, the staff was criticized for building models that bear no resemblance to economic reality and praised—or at least I think it was praised—for then having the good sense to essentially ignore those models through the wise use of add factors.
That mixed message reminded me of a story told by Nobel laureate Ken Arrow. During World War II, Arrow was assigned to a team of statisticians to produce long-range weather forecasts. After a time, Arrow and his team determined that their forecasts were not much better than pulling predictions out of a hat. They wrote their superiors, asking to be relieved of the duty. They received the following reply, and I quote “The Commanding General is well aware that the forecasts are no good. However, he needs them for planning purposes.” [Laughter]
…
MR. FISHER. I’m reminded of a story that George Shultz told me about his time working under President Reagan, who was very frustrated about spending. George picked up the phone and called I think it was Sam Cohen and said, “Tell me, Sam, is there really any difference between Republicans and Democrats when it comes to spending?” And Cohen said, “I want to think about it, do some research, and give you a serious answer.” He called back the next morning and said, “Yes, George, there is. Democrats enjoy it more.” [Laughter] “But otherwise there doesn’t appear to be any difference.”
Vincent Reinhart, Feb. 1-2, 2005, Director of Monetary Affairs
Over the intermeeting period, I surveyed you about whether the summary of your economic projections should be expedited—that is, released next week rather than three weeks later when the Chairman delivers the Monetary Policy Report in testimony to the Congress. My experience in surveying you has been that if I ask the 19 of you “What is the color of an orange?” I couldn’t be sure of getting a majority on a single answer. [Laughter] This most recent survey was no exception. Almost as many of you strongly endorsed an expedited release of your projections as strongly opposed it. An equal number of you endorsed it as opposed it, and there were two lonely people who were indifferent. [Laughter]
Alan Greenspan teasing Tim Geithner, then New York Fed President, March 22, 2005
VICE CHAIRMAN GEITHNER. I have no humor in my statement and nothing that differs from the consensus.
CHAIRMAN GREENSPAN. Your straightforward remarks are very humorous. [Laughter]
VICE CHAIRMAN GEITHNER. Careful. [Laughter]
Fed Chairman Greenspan, the Henny Youngman of the FOMC, June 29-30, 2005 and Nov. 1, 2005:
MS. JOHNSON. Absent a dollar depreciation that’s now probably on the order of 8, 9, or 10 percent, the deficit is going to steadily worsen. If the dollar were to start depreciating, that would slow the rate of deterioration. If the dollar depreciation that we put into the forecast were to get as high as 8 or 9 percent, that might plateau the deficit.
CHAIRMAN GREENSPAN. One thing we can be sure of is that the value of the dollar will be worth 100 cents. [Laughter]
…
MR. FERGUSON: Someone quoted Yogi Berra. I’m going to quote that equally famous poet, Archilochus, whom some of you may recall from the 7th century B.C. [Laughter]
CHAIRMAN GREENSPAN. I knew him well. [Laughter]
Richard Fisher again, June 29-30, 2005 and Nov. 1, 2005:

The largest paper product company, Kimberly-Clark, is in our District. Interestingly, its CEO reported only one product line where they feel the ability to pass on costs based on energy prices, which again was the diaper market. That has been the subject of quite a lot of discussion in our District! [Laughter]

…

Everyone I’ve talked to continues to try to figure out ways to exploit globalization. Each of them, from the IT [information technology] guys to the big box retailers to the specialty chemical firms to the service firms, wants to have offshore supply. One of the CEOs said, “We have a long way to go in exploiting China.” We’ve heard that forever. And one of my favorites was the comment, “China, India, and Indonesia can make Italian ceramics better than Italians can now or could 200 years ago.” [Laughter]

Federal Reserve Board economist David Wilcox, August 9, 2005:

I can’t think of any reason off the top of my head for the confidence band to have changed. We certainly perceived no asymmetry in the risks. We’ve gone to enormous effort this time, as always, to present to you a forecast with balanced risks. I don’t see any reason why the width of our confidence band should have narrowed or widened. I suppose I’m going to fall into a common conceptual error here, but I guess I would say that the uncertainty around the oil price projection might be even greater now than average. But I hear echoes in my brain saying, “You know, now is a particularly uncertain time,” and I never hear anybody ever saying, “Now is a particularly certain time.” [Laughter] Nevertheless, if I were going to point to something that would widen the confidence intervals, it may be the oil situation, but I don’t find that a very compelling piece of evidence.