"Well, Senator, I was about to address entitlements," Bernanke replied. "I think you can't tackle the problem in the medium term without doing something about getting entitlements under control and reducing the costs, particularly of health care."
Bernanke reminded Congress that it has the power to repeal Social Security and Medicare.
"It's only mandatory until Congress says it's not mandatory. And we have no option but to address those costs at some point or else we will have an unsustainable situation," said Bernanke.
"Willie Sutton robbed banks because that's where the money is, as he put it," Bernanke said. "The money in this case is in entitlements."
The deficit problem is not an entitlements problem. It’s not a Social Security problem. It’s a Medicare problem. It’s pretty foolish to call it an entitlements problem or a Social Security problem, unless you’re deliberately trying to mislead people. Furthermore, on the Ben Bernanke tour of “ARGGHHHH” (no wonder some think Senators have their “fingers in the wind” over reconfirmation):
"Only about 30 percent of the [stimulus] funds have been disbursed," Bernanke said. "It's a little bit early to make a strong judgment, a little bit early to decide whether or not to do additional fiscal actions."
But it’s not just Bernanke who seems to think the deficit constrains additional stimulus—despite the fact that interest rates simply aren’t that bad right now—it’s also Obama:
Mr. Obama said he would entertain “every demonstrably good idea” for creating jobs, but he cautioned that “our resources are limited.”
ARGGHHH (to be fair, however, there were some decent proposals in that article, including “cash for caulkers,” a weatherization program to save energy costs.)
Now, let’s say you wanted to deal with the deficit. Maybe by pinching the pennies on small stuff won’t solve your entire problem, but it’s certainly a good idea if possible, which is why this is so frustrating:
The U.S. House of Representatives passed a permanent extension of the federal estate tax on Thursday, but the measure, which taxes estates at rate of 45 percent after exempting the first $3.5 million, is likely to be changed in the Senate.
The current tax is due to expire on Dec. 31 but return in 2011, when it will exempt the first $1 million of an estate while taxing the remainder at a rate of 55 percent.
The 45 percent rate and $3.5 million exemption in the House bill would cost the government $234 billion of revenue over 10 years, according to a congressional tax committee.
The big deal, though, is health care spending, as I’ve said before. So how good are the health care spending controls on the bill? Well, check out this amendment:
Breaking a three-day stalemate, the Senate approved an amendment to its health care legislation that would require insurance companies to offer free mammograms and other preventive services to women.
The Democrats’ health care bill would generally require insurers to provide preventive treatment recommended by the expert panel, the United States Preventive Services Task Force. But lawmakers in both parties made clear that they wanted doctors to decide when a mammogram is medically necessary and that insurers should be required to cover the cost if the procedure is needed.
Well, who’s going to help doctors figure out whether a procedure is medically needed? In theory, it’s supposed to be expert bodies like the Preventive Services Task Force and the Medicare Commission, which as Ezra Klein explains:
The independent Medicare Commission is one of the most promising cost-control measures in the Senate bill. But as Joshua Gordon explains, it's been seriously weakened in recent weeks. The big problem is that the commission is now barred from submitting reform proposals when Medicare's five-year spending growth average is lower than the health-care system's more generally.
But Medicare's five-year average is almost always lower than the health-care system's. Medicare is better at containing costs. But better, in this case, is not good enough. Medicare will go bankrupt, and so too will the federal government -- and it will be no consolation that cost growth is even worse in the rest of the health-care system.
So, yeah. Government: they say that lawmaking is like sausagemaking, but the results of sausagemaking are far more delicious than the results of lawmaking.
Oh, also: Oregon State lost tonight, in a very good game. But here’s a remarkable fact about their team: “It is a measure of their eye for talent, and ability as teachers, that seven Beavers players were selected in last spring's NFL draft -- second most in the country behind USC, against whom Oregon State is .500 since '06. None of those players, remarkably, fielded a scholarship offer from another Pac-10 school.”
Stanford offensive breakdown, tomorrow.