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Post Politics: Budget Deficit, Health Care, More

Ed O'Keefe
Washington Post Staff Writer
Tuesday, August 25, 2009 11:00 AM

Federal Eye blogger Ed O'Keefe took your questions about the budget deficit, health care and all the latest news out of Washington.

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Ed O'Keefe: Welcome to the Tuesday edition of The Post Politics Hour, I'm your host, Ed O'Keefe, author of The Federal Eye blog and a federal government reporter with The Post.

I'll entertain your queries about all things political and governmental today, so let's go!

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Fort Worth, TX: Hey there Ed, I was 13 back in 1995, and while I was glad to not have to wear braces, the US Gov. spent roughly 1.5 trillion to run everything they needed to do for the entire nation. This year, a mere 14 years later, 1.5 trillion is the amount they're over budget. Since I was just coming of age during this explosive period (and since I'll probably be footing the bill for this), does anyone mind telling me what happened?

Ed O'Keefe: Here's a partial explanation from The Post's budget reporter Lori Montgomery:

White House projections of future deficits have increased sharply...as the administration has recalculated its economic forecast to take into account an unusually severe recession. The White House now projects that the economy will shrink by 2.8 percent this year, grow by a sluggish 2.0 percent next year and heat up to 3.8 percent growth in 2011. Unemployment, meanwhile, is likely to climb above 10 percent in the last quarter of this year and remain there into 2010, said Christina Romer, chairman of the White House Council of Economic Advisers, who predicted an average unemployment rate of 9.8 percent next year.

As a result, government spending on social programs will continue to soar while tax collections will lag behind expectations. Instead of $1.3 trillion, the deficit in the fiscal year that starts Oct. 1 is likely to exceed $1.5 trillion, the White House said. And deficits are likely to remain elevated even after the economy recovers, averaging more than $800 billion a year through 2019, when the White House forecasts the annual gap between spending and revenue will be $917 billion.

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St. Paul, Minn.: Hi Ed -- Thanks for taking questions today. Here we are again, another presidential vacation, though this time with someone new in office. I've always been curious -- how much vacationing do presidents really do? For instance, today Pres. Obama had to take time out to announce his renomination of Bernanke. Are there set times for relaxation, followed by set times for work, or do the two blend together?

Ed O'Keefe: Though the president can slip away to Martha's Vineyard or his Ranch (Bush II, LBJ), or his beach home (Bush I) or his family's Florida or Massachusetts compounds (JFK), it's always assumed that he's got at least half an Eye on his day job.

The motivation behind today's announcement -- the vacation from the vacation -- is that

the Office of Management and Budget announced this morning

that the $787 billion economic stimulus package is likely to cost "tens of billions of dollars" more than expected, helping to drive projections for next year's budget deficit to $1.5 trillion.

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Collingswood, N.J.: What do you think the chances of a medical coverage bill getting done this fall. And if it does not get done, what would the main reason be?

Ed O'Keefe: If it doesn't happen it's because Democrats couldn't unite around some kind of a plan -- whether partisan or bipartisan or nonpartisan.

It's likely something will be passed this Fall. What that "something" is remains very unclear.

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Dallas: Ed, four more US soldiers killed yesterday, now up to 192 for the year. Please, where are the anti-war protesters? Where is the media concern over this bottomless pit? Where are the WP editorials about presidential responsibility for this war? Does Obama versus Bush make this much difference, when our people are dying?

Ed O'Keefe: You'd have to ask various anti-war groups about their plans, I'm not aware of them.

As for editorials,

here's what The Post said most recently about the war in Afghanistan, back on Aug. 20

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"The violence, though serious, is the predictable result of a new effort by U.S. and NATO forces to wrest control of southern Afghanistan from the Taliban. It's too early to judge how the campaign is going, but the principles behind it -- protection of the population and the construction of a viable Afghan army, economy and political system -- are the right ones. Success will require considerable time and patience -- and, almost certainly, more troops and other resources than the Obama administration has yet committed to.

"In the shorter term, the administration will need to find ways to work productively with Mr. Karzai, should he win reelection. In recent months, senior U.S. officials and military commanders have often been publicly at odds with the Afghan leader, and both sides have some legitimate reasons for grievance. American policy should continue to aim at cultivating capable and uncorrupt local and regional leaders, and in encouraging Mr. Karzai to bring competent administrators into his cabinet. New policies to avoid civilian casualties could alleviate one of the largest irritants in the relationship. The Obama administration and the Afghan president will share a powerful common interest: demonstrating to Afghans that the government they vote for, in many cases at considerable personal risk, is capable of improving their lives."

A REMINDER: The views expressed by The Post's editorial board do not reflect the views of Washington Post reporters, editors, columnists or bloggers. The editorial and news operations are kept quite separate.

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Fairfax, Va.: To extend the Bush tax cuts that will expire in the next year or two, would the Senate need 60 votes or could it do it with just 51 as was needed when they were originally passed in 2001 since they used the reconciliation process.

Ed O'Keefe: From The Post's Congressional reporter -- and unrivaled Congressional historian/expert -- Paul Kane:

The tax cuts, by law, are sun-setting.

They are expiring. It takes an affirmative action by the Congress, and a presidential signature, to extend those tax cuts. Meaning, an actual piece of legislation to pass extending, so any member of the Senate could filibuster such action, meaning it would take 60 affirmative votes to EXTEND the tax cuts.

Note: Obama and Congress expect to deal with this next year, when the cuts are set to expire; the expectation is an extension of all the tax cuts except for the richest folks.

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Boston: Where do Obama and Democratic Congressional leaders go from here on health-care reform? Who will make these stategic decisions and when will they be made? Must they pass something no matter what?

Ed O'Keefe: It seems that at this point something will have to be passed. Just what exactly remains unclear. No matter what is passed, Democrats and the president will hail it as a victory, while most Republicans are likely to criticize it and argue it didn't go as far as originally intended.

Expect some coordination between the White House and Congressional leaders is already underway, and will continue into the Fall. Witness Obama's recent meeting with the bipartisan "gang of six" and his continued consultations with top leaders.

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Boston: Is the White House going to have to do a better communication job on who is to blame for the large deficits than they have done on healthcare reform? If they don't won't that tie their hands on almost any new spending programs they would like to pass?

Ed O'Keefe: It seems they've been pretty blunt about it so far, at least if you ready Lori Montgomery's report, which includes an interview with Peter Orszag.

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Princeton, NJ: I am a mathematician, and I do not understand why people put so much faith in economic projections. While the projections of the CBO and the SSA are mathematically sound, since they are projections, not predictions, they are based on assumptions that are just wild guesses. Because of this, they have been pretty consistently wrong in the past. In 1998, the CBO projected that we would have at least ten years of surpluses.

I think we would do better if we consulted a witch doctor with a goat and a sharp knife.

Ed O'Keefe: Now THAT is a great idea!

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Alexandria, Va.: With all the attention being paid to the fact that small state Senators are portrayed as essentially controlling health care reform, do you think that Congressional leadership will be more careful in doling out committee assignments in the future? And, do you think interest groups - either liberal or conservative - will start paying greater attention as well?

Ed O'Keefe: Congressional Committee Chairmanships are normally doled out due to seniority, time spent on the committee and how many favors you've done for top Congressional leadership. That's unlikely to change.

But -- you make an interesting point: Various interest groups would be wise to keep closer tabs on the people who will lead committees relevant to their work and try to apply pressure on leaders to sway their final decisions.

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Presidential eye on things: August 6, 2001, PDB read OSAMA BIN LADEN DETERMINED TO ATTACK IN US, but, hey, a vacation is a vacation, right?

Ed O'Keefe: Yes, yes, we know...

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Dallas, TX: Hi Mr. O'Keefe, Is there a chance AG Holder's torture investigation and the UK Iraq war inquiry might exchange information?

Ed O'Keefe: That's an interesting question that you should pose to my national security reporting colleagues at Noon ET. They're much more likely to know that I am.

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Reston, Va: Regarding the cost of health care, one aspect that hasn't been discussed is the fact that the AMA limits the number of medical student admissions every year. This practice was engineered to keep the value of medical professionals high.

Could one argue that if medical schools were free to increase enrollment, that in a few years, the consumer would benefit since competition for patients would result in lower prices for medical services?

Ed O'Keefe: Sure, you're free to argue whatever you want!

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Washington, DC: Is bipartisanship so important....didn't Pres. Johnson abandon efforts to get Southern Democrats to approve a local government with a Council and Mayor for DC residents and just re-organize the DC government by using his own federal power? Can Pres. Obama do this with healthcare?

Ed O'Keefe: Obama and Congressional Democrats could find ways to pass aspects of the health care reform legislation along party line votes and some have suggested that might happen.

The political risks and rewards are unclear however, so who knows if they'll do it.

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washingtonpost.com: Chat coming up at 12: CIA Releases Report on Torture Practices

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Pittsburgh: Do you think that Sarah Palin has revolutionized political campaigning by her use of FaceBook pronouncements? They cost nothing, yet reach her own readers -- and then there's the ripple effect, when they're reported in the MSM (print, broadcast and electronic) and on other blogs where millions more people read/hear of them? Is this a paradigm shift in campaigning, or a fluke?

Ed O'Keefe: It's not a paradigm shift, just a continuation of the political world's embrace of new media... started by Howard Dean and his big money fundraising in 2004, perfected by Barack Obama last yaer and also used quite effectively by other Republicans.

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competition for patients would result in lower prices for medical services? : Sounds good, but unfortunately health care does not obey the law of supply and demand. Many areas of the country with very high ratios of doctors to people (think Miami) have very high medical costs

Too bad.

Ed O'Keefe: Good point...

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Do We Have to Be So Stupid?: I was listening to NPR last night, and they were treating the "VA Death Book" accusation seriously. The people who throw this stuff up aren't serious about it, why do the journalists who cover it have to take them seriously?

Ed O'Keefe: (My colleague Steve Vogel wrote about this for today's print editions and I made mention of it in my blog's Eye Opener item today.)

It's an interesting issue that comes about amid all the health care reform conversations about end-of-life planning. It's also another example of how the Obama administration is forced to address or reconcile with a Bush-era policy decision. In this case, the book won an endorsement from a group back in 2007, and a revision began during the Bush years. Now the Obama folks have to hurry up and finish it.

Remember -- end-of-life planning is common, not just for veterans but for everyday folks.

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Paul Kane: I feel for all you other reporters on the WaPo. Paul Kane must be insufferable these days, what with the Phillies continuing their dominance in the NL East.

Ed O'Keefe: Haha -- my best friend predicts Yankees v. Phillies in the World Series. If that's the case, Kane and I won't be on speaking terms :)

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Kansas City, MO: I'm a little confused on the budget numbers. I knew the current year budget figures included the $800 billion or so in stimulus but without it next year are social program costs really going to make up that $800 billion to push the deficit to $1.5T?

Ed O'Keefe: Again referring to Lori Montgomery's reporting:

"Orszag said that the administration of Obama's Republican predecessor, George W. Bush, deserves much of the blame for the dark budget picture. More than half of the $9 trillion the nation is projected to have to borrow over the next decade is due to Bush's refusal to pay for new initiatives, such as sweeping tax cuts, the war in Iraq and a new prescription drug benefit for Medicare recipients, Orzag said."

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Re: Dallas: I'm actually kind of impressed by the level of coverage on a war that has been going on for seven years. I see a renewed interest in the media and that is a good thing. Your not going to get a lot of front pagers or TV footage, but that seems more because of the nature of the war in Afghanistan and media budgets than anything else.

Ed O'Keefe: Indeed. The Post had two reporters in Afghanistan to cover the recent elections, the broadcast and cable TV networks devoted considerable resources and I know NPR has done some fine reporting from there in recent weeks as well. There's renewed interest and a renewed understanding of the length of the war, its importance and potential risks. And there'll be a great debate this Fall in Washington as military commanders make requests for more troops, so that adds another great angle to cover and keep focus on the war.

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Washington DC: Population of Wyoming (2008): 532,668 Population of Washington DC (2008): 591,833

Why isn't there more outrage that DC doesn't have voting Congressional representatives?

Ed O'Keefe: As a D.C. resident, I pound my fist in disgust every morning (kidding...)

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Do We Have to Be So Stupid?: No! Obama and the Democrats in Congress could have avoided all of this by not including end of life planning as part of their cost-containment and savings strategy. They did not need to be stupid enough to give the opposition a club and then wonder why they are being hit.

Ed O'Keefe: One person's opinion...

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Chicago: How political was Obama's reappointment of Bernanke?

Ed O'Keefe: From my colleague Michael D. Shear's reporting from the Vineyard:

"By choosing to keep Bernanke at the helm of the country's central bank, Obama is also seeking to defend his administration's strategy for pumping huge amounts of money into the economy.

"In his remarks today, the president promised that he will 'not let up' on that strategy until the job market recovers and people are put back to work. To the critics of the government's actions, he said the decisions Bernanke helped shape have worked."

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(Audio Over: Crickets chirping): When it comes to the ACLU-forced release of the most recent torture documents yesterday, I'd just like to ask you: Where was the Washington Post in all this? Why does it take the (woefully over-stretched) ACLU to sniff out crucial information like this? Isn't that the media's role? Where are our vaunted investigative reporters, these days?

Ed O'Keefe: Again, a good question to ask at Noon ET. in the other chat.

My hard-working colleagues Joby Warrick and R. Jeffrey Smith first exposed some of the report's findings last week and I know they, along with the equally hard-working and hard-charging Julie Tate, Peter Finn, Karen De Young and others have been working this story for years.

I know this, because I sit by them and hear them on the phones all day long.

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Ed O'Keefe: Folks, that's it for today, enjoy perusing my answers and your questions and then check out my blog, The Federal Eye. You can also follow my regular Twitter updates at @edatpost.

Until next time,

- Ed

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