By PETER FENN

USNews & World Report, Thomas Jefferson Street Blog

Roughly half of the defense budget goes to salaries and benefits.

Here we go again. Congress is rejecting the advice of the Department of Defense, the Joint Chiefs of Staff and the military establishment to pare back benefits.

For years, military leaders have made it clear that readiness is being eaten alive by wasteful giveaways. Now, we are in the unenviable situation of roughly half of the defense budget going to salaries and benefits.

Not only does Congress refuse to tackle this problem, it now wants to reverse the modest change the Murray-Ryan budget deal recently made in the retirement pay of future military retirees. As the Washington Post points out, “for someone who enlisted at 18 and retired at 38, lifetime retirement pay would decline from $1.734 million to $1.626 million.”

Members of Congress knows full well the situation we have ourselves in with the personnel costs of our military. They have seen the financial projections; they know the sweet deal that many get; and they understand the unfairness for many who fight on the front lines. The system is broken and members of Congress know it is broken.

[See a collection of political cartoons on Congress.]

But very few stand up and accept the military’s own recommendations to help fix the problem. Why? Easy answer – military retirement pay, health care and benefits are the third rail of American politics. Touch it and you die. It used to be that Social Security was the third rail; now it is military benefits.

Let’s take a good hard look at the facts. First, there are roughly 9.6 million active duty, retired or military dependents. About 17 percent of them serve 20 years and retire. These cost us about $100 billion a year, and that figure is supposed to double by 2034.

The cost of military health care alone has risen from $17.4 billion in 2000 to more than $50 billion today. It is projected to be $64 billion in 2015. The TRICARE benefit, as its called, is extraordinary. For the past 15 years, it had been frozen at $460 a year for a family. Practically all military retirees have chosen to leave private insurance plans at their private firms in favor of TRICARE. Who wouldn’t, when you get a deal like that?

Former Defense Secretaries Robert Gates and Leon Panetta pressed hard to control these costs simply by having the military pay modest payments and co-pays, but they were stifled by Congress. If families paid $1,100 a year, less than $100 a month, we would save $28 billion over the next 10 years.

[See a collection of political cartoons on defense spending.]

Let’s look at military compensation. Since 2000, active duty compensation has gone up 28 percent – from $64,406 to $80,292 in 2012. In addition to pay and other allowances, there are serious benefits like housing, food, health care, PX privileges, tax breaks, education, etc. And those who stay in the military for 20 years get generous pensions, many for more than 40 years, twice as long as they served.

The sad part of all this is that if you don’t hit the 20 years, but serve overseas in combat in places like Iraq and Afghanistan and then leave, you aren’t entitled to those pensions. It is all or nothing, no vesting prior to the 20 years.

[Check out 2013: The Year in Cartoons.]

The other sad part is that Congress refuses to address this problem while American men and women are fighting overseas, as they fear of incurring the wrath of voters and veterans groups for “not standing by our military.” How ironic that it’s the military service chiefs, the leadership in the Pentagon, those who battle every day for a strong defense, who are crying out for reform.

It is precisely those who know and understand the problem who are getting stonewalled by Congress in their efforts to seriously reform a broken system. To quote from the conservative American Enterprise Institute: “These pay and benefits increases were created with the best of intentions in the midst of two brutal wars, but they reached the point when they are simply unsustainable.”

It is long past time for Congress to exhibit some courage, do the right thing and lead on this important issue.

PETER FENN

By PETER FENN

USNews & World Report, Thomas Jefferson Street Blog

As we move into 2014 there is a great deal on the plate of President Obama and members of the 113th Congress. There’s a stalled immigration bill, tax and entitlement reform, climate change, the farm bill, not to mention 1.3 million Americans who just got their unemployment benefits cut off and a defense budget where half the cost is benefits and salaries.

Many argue that the deficit is still the number one issue and that government must be cut while taxes or revenues are “off the table.” But after the shutdown disaster and the end-of-the-year agreement on a two-year budget the radical tea party faction has lost clout and most Republicans seem reluctant to engage in brinkmanship over a February extension of the debt limit.

The elephant in the room is the shrinking middle class and the rapidly growing inequality in America. This has not just critical economic implications but it impacts so much else about what America is, has been and will be. It affects how we educate our people, it affects how we live in cities, suburbs and rural areas, it affects how we deal with issues of race and ethnicity, it affects the very essence of how we define the American Dream. Are we really the “land of opportunity” any more?

If we fail to focus on, and tackle, the problems of inequality it will impact who we are as a country in more devastating ways than we can imagine. Who gets educated properly, who has the chance to advance, who lives in a stable, nurturing home, who has financial stability or even a hope for a better future, who holds the power? Never before have so many had the deck stacked against them.

[See a collection of political cartoons on the economy.]

Let’s look at the trends and the facts: The share of income of the top 1 percent peaked in 1928 at 25 percent, just before the crash. It dropped and leveled off to between 10-15 percent for nearly 60 years, from the 1930s to the late 1990s. During that time the middle class grew and opportunity flourished.

But things have changed. Over the past decade the share of income has risen to 1928 levels.

The top 1 percent have seen their income rise, according to the Congressional Budget Office, by 275 percent in the last 30 years. Those in the middle 60 percent during the same period have only seen a 40 percent increase. And in the last decade wages of middle class Americans have actually decreased. The average family income for the middle class is just over $51,000 the same as it was in 1999 and, of course, it costs more to live.

Let’s look at minimum wage workers. My first full paying job as a 15-year old kid was working on the Capitol grounds. I made $1.25 an hour in 1963, the minimum wage. I was lucky, actually, and the equivalent today would be $8.37 an hour, even higher than the current minimum wage of $7.25. In 1968, the equivalent for today hit $9.44 an hour and the unemployment rate was at 3.5 percent. Jobs weren’t lost, companies kept hiring workers and there were no harmful effects on businesses.

[See a collection of political cartoons on the budget and deficit.]

So why have we refused to raise the minimum wage to keep workers up to date with the times?

Part of the reason may be the declining influence of the union movement in America – a clear and consistent driver of creating a growing, thriving middle class from the 1930s on. Back in 1955 a third of workers were union members, by 1983 that number had dropped to 20 percent and in 2012, only a little over 11 percent of workers were union, and close to half of those were public employees. In 2012, only 6.6 percent of private sector employees were unionized.

Clearly, that trend is not turning around and clearly we need to seriously rethink what we need to do to rebuild the middle class and to provide the opportunity that is absent today.

[Read the U.S. News Debate: Should the Federal Reserve Keep Interest Rates Low?]

Several important steps might be:

1. Raise the minimum wage to keep up with historic trends, now.
2. A college education is critical in today’s internationally competitive environment. We need to double the number of college graduates in a generation and we need to provide the scholarship funds to do it, not unlike the G.I. Bill.
3. Make work places pro-family. Provide day care help, wellness centers, time off for family emergencies.
4. Continue to promote equal pay for equal work, reducing the disparity between male and female workers.
5. Rework our tax system so that it is fair and provides more opportunity for the middle class.
6. Increase the opportunity for job training and learning new skills.
7. Provide incentives for companies to give employees a stake in the company.
8. Strengthen health and safety regulations in the workplace, to prevent injuries and enhance productivity.
9. Encourage increased investment in plant and equipment and research and development through targeted tax incentives.
10. Increase research on social mobility, where the acute problems are and how to move people out of the cycles of poverty and hopelessness.

This deserves a combined effort by government and the private sector. A national conversation should be started as a 2014 New Year’s resolution, spearheaded by the White House and a coalition of the major business and labor organizations. A national commission, similar to Simpson-Bowles, should be formed soon to provide recommendations for action. This may be one way to break the Washington gridlock – working toward a common goal that we all share. (Even if my list of prescriptions is not everyone’s list!)

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January 03, 2014, 02:42 pm

‘Duck Dynasty’ vs. ‘Guess Who’s Coming to Dinner’ and ’12 Years a Slave’

By PETER FENN

USNEWS AND WORLD REPORT, THOMAS JEFFERSON STREET BLOG

House Budget Chairman Paul Ryan, R-Wis., and Senate Budget Chairman Patty Murray, D-Wash.

It is not often that those of us political animals inside the proverbial beltway open up our Washington Post and have a smile on our faces. Scowls have been the order of the day for quite some time now.

This morning, though, two stories caught my eye and lifted my spirits.

The first was the passage of the budget deal by the House of Representatives. When has the House passed anything like this by a margin of 332-94? Maybe when Barack Obama and John Boehner were in knee-pants. There were only 32 Democratic “no” votes and 62 Republican “no” votes – mostly from the more conservative and more liberal members.

Make no mistake, Democrats and Republicans are surely not holding hands and singing kumbaya. But the endless showdowns and shutdowns have taken a toll. Members are tired and the public is furious. For two days, Speaker Boehner has made it crystal clear that outside groups and some members have been “misleading”; he even said some have “lost all credibility.” In short, he has had enough and he has taken on the likes of Heritage Action, the Club for Growth, Freedom Works and Americans for Prosperity.

[See a collection of political cartoons on the Republican Party.]

Seven conservative Senators are now being challenged in their primaries by extreme right-wing candidates backed by many of these groups. The Chamber of Commerce, the business community and Republican leaders on the Hill have recognized that the backfire potential is serious and severe, not just in terms of their politics but policy, as well.

The fact that we have a two-year agreement is critical for the business community. Heck, if two months is an eternity in politics, two years seems like beyond forever. So the fact that this compromise is not really anyone’s cup of tea, Republican or Democrat, doesn’t stop them from drinking it. They believe it is likely to work.

So that agreement between Sen. Patty Murray and Rep. Paul Ryan brought a pretty nice smile to my face.

The second article was on page two, written by Melinda Henneberger, and was entitled, “Bob Dole Honored for Work in Helping to Feed the Poor.” It was all about the late George McGoven and the now 90-year-old Bob Dole working together to feed the hungry here at home and around the world. It was all about shared interests and shared respect. It was a tribute to a program named in their honor that has resulted in more than 22 million children in 41 countries getting fed.

[See a collection of political cartoons on the Democratic Party.]

Yesterday, Dole defended McGovern’s heroics in World War II as a fighter pilot, and he knows a little something about heroics. Yesterday, Dole recounted how McGovern took him on a tour across America that opened his eyes to the problem of malnutrition in the nation. And yesterday, all who were there learned a little something about men of different parties and persuasions delivering for people.

The Washington Post article closes with a wonderful paragraph:

The long partnership and friendship that grew between the liberal and the conservative is “one of the most beautiful political stories in history,” said David Lambert, a longtime food security advocate who worked with McGovern and advises Dole on the issue. “This was from the heart.”

It is hard, even for anyone who has been discouraged of late, not to break into a smile when reading that over a morning cup of coffee.

By PETER FENN

USNews & World Report

Thomas Jefferson Street Blog

It is truly amazing to me to read through the blogs, the press releases from the Republican anti-Obamacare war room, the phalanx of Koch-brothers’ sponsored think tanks and web sites – one message: FAILURE.

Let’s leave aside that their cagey rhetoric has shifted from “repeal” to “a fix,” but that their policy position remains the same: kill it. Republicans will continue their onslaught against the Affordable Care Act because they believe it is a political attack that will work for them and unite their party, at least in the short run.

They complain about the problems with the website, yet they love that it didn’t work well. They are euphoric when it fails. Do they want it to succeed? Heck no.

[See a collection of political cartoons on Obamacare.]

They offer up people who have had problems switching their health care plans, with big smiles on their faces. Another Congressional hearing is called for to condemn the ACA, according to the Republicans.

Peter Roff, one of my esteemed colleagues on this blog, publishes a list from the Heritage Foundation on why the ACA will fail (never mind that much of what Heritage called for is in the law, like the individual mandate).

But forget all that. I would cite much of this list as precisely why Obamacare will work (see Roff’s Heritage list here):

1. The new plans available under the law will provide better coverage for a better price. This is not a broken promise by the president but the end result. Think about the benefits: no pre existing conditions; no canceling of your plan when you get sick; no caps on coverage; no huge costs for women over what men pay; keeping children on the plan until they are 26.
2. There will be more options for consumers to choose from, not less. They won’t be forced into inferior plans.
3. The new approach to Medicaid will allow people to shop for and purchase their plans, not arrive in emergency rooms often too late for help and with exorbitant costs. This will be a vast improvement on where we are now. Sadly, many Republican governors want to keep these people from getting insurance by rejecting federal funds to help with the Medicaid expansion.
4. The ACA will lead to more stable families with better health care, not penalize people for success or getting married, as Heritage asserts.
5. There will be better care for women, more coverage, and it won’t destroy our religious liberties. Pardon the sexism, but that is a “straw man.”
6. Probably the most absurd claim from Heritage is that the ACA is a job killer. If we are providing health care to an additional 30-40 million Americans, it will create jobs in the health care field, not kill them. More doctors, more nurses, more ways to care for patients. Businesses will have more productive workers, fewer who are sick and out of work, and costs will decrease as more people are covered.

[See a collection of political cartoons on the Republican Party.]

I do have one prediction for my friend Peter Roff and those Republicans who are staking the political future of their party on killing the ACA: When this succeeds, voters will not forget, and they will remember the horror stories of the old system.  The more the focus is on patient care, better treatment through R&D, keeping people healthy, access for millions, the more that Democrats will benefit from the contrast. Republicans should be very careful not to argue too strongly for failure, it will come back to haunt them.