My Beautiful and Talented Wife (The BTW) has declared that this is the weekend we will start to transition from winter to spring in our home. Cleaning is on the agenda starting Saturday morning, ao I thought I start with a few small items here.
I have only one thing to add to what Andrew and Pete, my two bloggers in crime here at Capital Gains and Games, have both posted on the Medicare trustees report: it was facinating to watch the Bush administration talk about the immediate need to deal with Medicare after having adamantly refused to deal with the problem since Inauguration Day 2001.
I have vivid memories of former Treasury Secretary John Snow continually being asked why the administration wasn't proposing a Medicare reform package even though its problems were projected to be much closer than Social Security's, which it was proposing to change. His often-repated answer was that the White House wanted to deal with Medicare as part of a comprehensive health care reform plan...which it then also never proposed.
To now hear the current secretaries of Treasury, Labor, and HHS say that immediate action is needed while still not submitting a plan or admitting that they've been sitting on the sidelines for the past seven-plus years is some combination of amusing, infuriating, and fascinating.
I'm a little late to the party on this one. On March 14, CNN talk show host Glenn Beck, who typically supports the Republican position on almost all issues, gave a budget- related commentary on the air that, without saying so, appeared to rip the Bush administration and the Republicans that controlled Congress the first six years it was in office a new one because of their failure to deal with the budget and leaving a situation that is much worse than when it began.
The most interesting quote was the following:"Im willing to do the right thing for our future, I'm willing to sacrifice..." He obviously doesn't say it exactly, but is this a Warren Buffett-like statement that Beck is willing to pay more in taxes? Beck probably wouldn't have said something like that without reserach that showed his fiscally and politically conservative audience would respond positively, so is this the start of a change in the conservative mindset?
Or, is Beck just starting to set up the issue for the next Congress, which as of now, at least, looks like it will be much more Democratic than this one.
Washington is usually a pretty sleepy place when, as has been the case the past two weeks, Congress is in recess. But although traffic has been better and reservations at restaurants easier to get, the financial services community has been anything but quiet.
The Bear Sterns situation has led to increased talk from people who don't typically speculate that a homeowner bailout and a Sarbanes-Oxley-like bill for financial services is on the way. There has also been a good deal of talk about how, if the economic environment got much worse, congressional Republicans would have a hard time voting against either bill or voting to sustain a veto.
Depending on when it was enacted, a homeowner bailout would likely add about $10 billion to $15 billion to the deficit in the current year and at least the same amount in 2009.
Speaking of the deficit...a homeowner bailout and further deterioration in the economy could push the budget deficit to close to $500 billion this year and next.