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Income gap as a political weapon in 2012

Income gap as a political weapon in 2012

the new york times

The smoke from the smoldering failure known as the deficit “supercommittee” spread heavily across Capitol Hill on Monday, allowing Republicans to obscure the simple truth about the failure to reach an agreement.
The only reason the committee failed was because Republicans refused to raise taxes on the rich, and, in fact, wanted to cut them even below their current bargain-basement level.
Republicans in Washington claimed Democrats refused to budge on entitlements. John Boehner, the House speaker, and Mitt Romney, a Republican presidential candidate, as if by rote, issued statements saying it was all President Barack Obama’s fault.
But, had a single Republican on the panel endorsed even a modest increase in upper-income tax rates,
Republicans could have won trillions in cuts from entitlements and discretionary spending. (Certainly far beyond anything we would endorse.)
None would take that courageous step, and now it seems foolish to expect that they would have. In July, they rejected a “grand bargain” from Obama that would have cut $1 trillion in domestic and defense spending, and $650 billion from Medicare, Medicaid and Social Security, all because it would have raised tax revenue by $1.2 trillion.
They dismissed Obama’s second offer in September, which would have cut $3.6 trillion from the deficit, 60 percent from spending cuts.
And, naturally, they rejected the proposal from supercommittee Democrats to cut at least $3 trillion from the deficit, because a third of it would have come from higher taxes on the rich.
When you hear Republicans claim that Democrats refused to touch their sacred cows of spending, remember that the Democratic offer would have cut $475 billion from Medicare and Medicaid over 10 years, nearly half of which would have come directly from beneficiaries.
That’s more than the Bowles-Simpson deficit plan proposed, and eight times the level of Medicare cuts offered by Obama in September.
These plans actually tipped too far in the direction of spending cuts. By comparison, the Republican offers were risible. One pretended to raise revenue by $300 billion, while actually calling for the Bush tax cuts to be permanent and even reducing the top bracket to 28 percent from 35 percent. The consequences of this failure are serious.
The most immediate result will be an automatic cut in federal spending of $1.2 trillion, which will disproportionately affect defense programs.
That cut, though, doesn’t take effect until 2013, which means that Congress will spend the next year trying to reconfigure it or come up with a real deficit plan.
Expect to hear a huge wailing from the good friends of military contractors in Congress, mostly Republicans, who will try to use every budgetary choke point to undo the defense sequester, possibly starting as soon as next month, when the current continuing resolution financing the government runs out.
Cutting one-tenth of the military budget is hardly a real threat to national security, and it is fitting that the sequester hits defense particularly hard because the first $900 billion in cuts in the law creating the supercommittee came out of nondefense domestic spending. An across-the-board cut of $55 billion a year is a terrible way to achieve cuts in the Pentagon’s budget. But the president and Democrats in Congress should hold firm to their pledge not to undo this sequester until Republicans give in on their pledge never to raise taxes on the rich.

Any lawmaker who fears devastating cuts to the armed forces should explain why they consider it more important to keep upper-bracket taxes historically low.

THE RISK TO RECOVERY – The supercommittee drew the focus away from the more important task of creating jobs. But that need is coming right up with the renewal of the payroll tax cut and unemployment insurance, both of which expire at the end of the year. Without them, the economy could lose up to 2 percentage points of its potential growth in 2012. A deal by the panel probably could have included both measures, but now Republicans are talking about trying to extort a deal, possibly involving the Bush tax cuts, which expire at the end of 2012.

The formation of the deficit panel was an acknowledgment that the regular budget process had also failed, largely because of the 60-vote rule in the Senate, which Republicans have made routine. With the panel’s collapse, the process now returns to the usual open-air infighting, which is an alarming thought, but at least will make it clear which side is refusing to cut the payroll tax and extend jobless benefits.

It will also illuminate the Republican fixation on preserving the Bush tax cuts. By refusing the Democrats’ proposals on the panel, Republicans clearly figured that they might win the next election and keep the cuts. But even if they win the White House, getting to the necessary 60 votes in the Senate would still be a long shot.

Until then, Democrats should press their advantage. No matter what happens next November, by the time of the next postelection lame-duck session, Republicans may be so fearful of the military sequester and the expiring cuts that they might agree to a deal that preserves the cuts for the middle class while ending them for the rich.

Americans should know that that was a deal that could have been reached last summer.


The Food and Drug Administration’s withdrawal of its approval for Avastin to treat advanced breast cancer is causing understandable anguish and anger among women who believe the drug has saved or prolonged their lives. But the agency followed the scientific evidence, which showed that the drug was not as effective as it first seemed and that its severe side effects outweighed its benefits for a vast majority of patients.

Avastin, produced by Genentech, had full-fledged approval as a treatment for certain advanced cancers affecting the colon, lung, kidney and brain, based on thorough clinical trials. It got provisional approval for Avastin to treat metastatic breast cancer in 2008, based largely on a single trial. The trial found that when Avastin was added to a standard chemotherapy agent, it delayed the median time before cancers grew worse by 5 1/2 months compared with the standard drug alone. It also found that Avastin did not prolong women’s lives and that a small percentage of women suffered serious or potentially life-threatening side effects.

The FDA has been trying to bring promising drugs for life-threatening diseases to market quickly while thorough studies are conducted to be sure they are safe and effective. In Avastin’s case, the answer was disappointing.

When Avastin was combined with two different chemotherapy drugs, it delayed progression of tumor growth by only one to three months and did not prolong lives or improve quality of life. It also caused a greater risk of serious adverse events than in the original trial. The FDA and its advisory committees of experts have now concluded quite reasonably that such meager benefits did not justify the severe risks to some women.

The decision has been denounced by some conservatives as regulatory overkill that will impede progress and innovation in the fight against cancers. But, if the FDA is going to allow innovative drugs on the market based on promising early studies, it must be able to revoke those approvals based on more definitive evidence.

Avastin will remain on the market to treat other cancers, and any doctor is allowed to use it “off label” to treat breast cancer. Medicare will continue to pay for its use against breast cancer, but some private insurers have already stopped paying and others may follow. Genentech is looking for tests to identify women who respond well to the drug. Meanwhile, insurers ought to keep paying for women who are already in that category.


The self-inflicted wounds from Alabama’s most-abusive-in-the-nation immigration law just keep on coming. Last week, a manager for Mercedes-Benz, visiting from Germany, was pulled over in his rental car by a police officer in Tuscaloosa, near where a Mercedes plant builds sport-utility vehicles. The manager didn’t have his driver’s license, and, just a few months ago, he would have just been given a ticket. But Alabama’s new law now in effect demands tougher action against suspected illegal immigrants. The manager was arrested and taken to police headquarters.

Germany is Alabama’s largest international trading partner, and Mercedes, a unit of Daimler, recently announced more than $2 billion in new investment there through 2014. Is this any way to treat a visitor, especially one representing a company that could just as easily invest in some other low-wage state? Is this any way to treat anybody at all?

Of course, all sorts of unexpected and nasty things happen when you empower the police to demand papers of suspected illegal immigrants and nullify contracts they enter and impose a host of other vile and unnecessary penalties, like forcing schools to check the immigration status of children and their parents (one of several provisions blocked for now in federal court).

According to The Associated Press, this not-so-trivial traffic stop came to the attention of Gov. Robert Bentley, who called his homeland security director, Spencer Collier, who called the Tuscaloosa police chief, Steven Anderson. “It sounds like the officer followed the statute correctly,” Collier told the AP. Unfortunately, that is the truth.

Somebody in Alabama has to wake up. Even before the Mercedes debacle, some legislators were having second thoughts. Not the law’s sponsor, a Sen. Scott Beason, who was recently dumped by his Republican leadership as chairman of the rules committee, possibly because he used the word “aborigines” in a reference to black Alabamans. But Sen. Slade Blackwell told The Times, “All of us realize we need to change it.” And Bentley has made vague comments about simplifying the law.

Our advice to Bentley and the Legislature: Forget simplifying. Call a special session, repeal the law and begin repairing your state’s crashing reputation.