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A short biography of Wisconsin Congressman and Romney's vice presidential pick, Paul Ryan.

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Buffett's view that higher capital gains taxes will not result in less business investment. He favors a $500,000 figure instead of the $250,000 proposed by president Obama for Bush tax cuts for incomes below that level.

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Senator Mitch McConnell, the Republican Majority leader in the U.S. Senate has come up with a new health care bill that is aimed at winning over reluctant Republican Senators. Two taxes on high income people on 3.8% investment income and a payroll tax of 0.9% on incomes over $200,000 for individuals and $250,000 for couples are retained in this version of the bill, which adds $231 billion over a decade. Some of this is used to offset rising premiums in the new bill, and provide additional funds. The deep cuts to Medicaid are retained and Senator Collins of Maine says she is opposed to the new bill because this will hurt people in rural areas of Maine, and does nothing to change this. Senator Rand Paul of Kentucky is also opposed to the bill. Opposition comes from moderate Senators opposed to deep cuts to Medicaid in Republican health care alternatives to president Obama's Affordable Care Act, and from conservative Senators opposed for other reasons.  Senator Graham of South Carolina and Bill Cassidy of Louisiana introduced their own version just minutes before Mitch McConnell brought up his revised bill. All Democratic Senators are opposed to the Republican bill and call the deep cuts to Medicaid disastrous for lower income people.  ...

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Samuelson points out that the golden age of bipartisan harmony never existed. Yet it is true to say that with the constant chatter on cable television and stridently expressed views, the activism of the more extreme wings of both American parties, and the role of money in politics, the partisan nature of politics in America has increased. And this is happening even when the Gallup polls from 1992 and 2010 show similiar numbers for the people who describe themselves as Conservative, Liberal or Moderate, showing that the people themselves haven't changed (42-43% Conservative, 35-36% Moderate, 17-20% Liberal), but activism at the edges of both parties has. In this condition, only 7% of americans have a "very positive view" of the Republican party, only 11% of Americans have a "very positive view" of the Democratic party and only 12% of Americans have a "very positive view" of the Tea party (even though the Tea party is at the height of its mometum). The net impact says Samuelson is that the nation's important problems get neglected. There is little discussion about the expenditure of blood and treasure in Afghanistan, says Tom Brokaw, see his article. There is little discussion of the need to rebuild America's deteriorating infrastructure. Or a serious discussion on deficits or energy. All this is lost in the dysfunctional politics of the moment. This is a significant observation....

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Lack of any effort by Democrats and Republicans to come up with a negotiated agreement to end the $85 billion in sequester automatic spending cuts in the U.S. for 2013. For the Republicans the risk is that president Obama gains ground in preparation for the 2014 midterm elections. For president Obama the risk is that his will become a distraction for his second term legislative agenda including immigration reform, and other legislation.

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Ezra Klein writes that he disagrees with Bob Woodward's assessment that the Obama administration moved the goalposts by trying to secure an increase in taxes to pay for the deficit. Klein says voters voted in favor of an increase in taxes as part of the effort to reduce the deficit when they elected Obama to a second term.

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Brooks is critical of Republican intransigence over reducing tax expenditures in the negotiations with the Obama administration in early July 2011.The Bowles-Simpson commission on the U.S. budget deficit specifically targeted a number of tax expenditures for savings to reduce the budget deficit. This resistance comes from a ideological fervour for no tax increases that does not grapple with the realities of spending cuts and the need for an approach that looks for savings wherever they can be found. That approach also leaves room for maintaining spending and not making deep cuts where such spending adds to future growth prospects for the U.S.

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Krugman questions the Paul Ryan U.S. budget proposal on several grounds. He says the Ryan proposal depends on projections by the Heritage Foundation for its assumption that the tax cuts would generate higher revenues by creating a booming economy. The Heritage Foundation projection is for revenue increasing by $600 billon over the next 10 years as a result of tax cuts. Krugman cites a different view from the Congressional Budget Office estimate for the Ryan proposal, which shows assumed savings from spending cuts will go not to reduce the deficit but to pay for tax cuts, with bigger deficits in the next decade. He says the spending cuts excluding Social Security, Medicare and Medicaid- but including defense- go down from 12% of GDP in 2011 to 6% of GDP in 2022- meaning that cuts in public services will need to cut to the bone. The Medicare part of Ryan's proposal does not say how spending on medical care will be reduced. The voucher or premium support Ryan envisages is estimated by the Congressional Budget Office to cover only one third of the cost of insurance premiums for Medicare equivalent care by 2030. Krugman cites the Center on Budget and Policy Priorities, which says the Ryan proposal achieves two thirds of its $4 trillion in spending cuts over the next decade by cutting programs that primarily serve low-income Americans. ...

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The Ryan-Murray budget deal of Dec. 2013 is seen as a ceasefire between Republicans and Democrats with modest changes to the sequester defense and domestic spending cuts and increase in retirement payments by federal employees.

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Ezra Klein says about the contrasting choices offered by Romney-Ryan vs Obama-Biden, that everyone wanted to see a clear choice between different approaches to the issues, and now they have got one. Its almost a repeat of Reagan-Bush vs. Carter-Mondale during a period of high unemployment with Democrats risking underestimating the importance of the careful choice made by Romney today.

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Rep. Paul Ryan got his start in politics in 1983 when he was hired to work for a think tank Empower America. This think tank was formed by Weber, Kirkpatrick, Bennett and Kemp, to preserve Reagan era ideas of focussing on economic growth generated by private investment. This was followed by working as an aide to Senator Brownback of Kansas and Rep. Jack Kemp till his election to Congress in 1996. Kemp was the big idea guy and it was Paul Ryan who delved into the budget details at the time to support Kemp's ideas. Kemp was Republican vice presidential candidate, the same position that Ryan is in today. Ryan represented the area around Janesville, Wisconsin, in the U.S. Congress. He graduated from the University of Miami, Ohio.

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Allan Blinder gives a spirited account of what he sees in the Paul Ryan Republican deficit reduction plan. He says that with the voucher plan retirees would fall further and further behind the increasing cost of health insurance. With no explicit cost containment proposals it assumes that some kind of miracle will occur for costs to be kept in check- especially as Republicans want to repeal the cost containment proposals in the President's healthcare plan. He asks whether someone is saying, that we have to destroy Medicare so it can be saved. Ryan woulld also turn Medicaid into a block grant, then underfund it and let the states figure it out when they are in a budget squeeze. Blinder points to the estimates of the Center on Budget and Policy Priorities, that show about two-thirds of Ryan's budget cuts would come from programs that serve low and moderate income Americans. And to make matters worse the steep spending cuts go to finance tax cuts that largely benefit the wealthy. He calls this Robin Hood operating in reverse, and coming on top of 30 plus years of rising inequality. David Stockman makes a similiar point on the editorial pages of the New York Times, April 24, 2011; also adding the point that the middle class will have to pay higher taxes for the deficit to be addressed, something President Obama's plan fails to do. Blinder says that the Bowles-Simpson and Rivlin -Domenici proposals attack the deficit reduction problem in a better way, that asks something from all classes and interests. ...

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Einer Elhauge, professsor of law and founding director of the Petrie-Flom Center in Health Law Policy at Harvard University, says there are limits to Congressional powers under the Commerce clause such as enacting a law requiring Americans to eat broccoli. If the health care law required all Americans to subject themselves to health care this would be the case. But the law only requires all to buy insurance so that insurance can cover the costs of healthcare for all. He points to the "necessary and proper clause" as also authorizing the health care mandate. That clause gives Congress the power to pass laws that are "rationally related" to execution of constitutional powers, such as criminalizing the interference with mail, on the basis of the constitutional power to setup post offices. In this case the health care law mandate is related to the constitutional power to regulate premiums and prohibit rejecting the sick, says Elhauge.

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Demonstrations by public workers in Madison, Wisconsin. Public workers are protesting cuts in benefits by Republican governor, Scott Walker. Governor Walker is proposing legislation that will require public workers to pay more for health insurance and pensions, resulting in a reduction in take home pay of about 7%. He is also proposing changes that limit bargaining to basic wages, excluding benefits from bargaining. Wisconsin faces a deficit gap of $3.6 billion for the next 2 years.