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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (264632)	5/22/2008 8:56:08 PM
From: Ruffian	Respond to of 281500

Dems Doing What They Do Best; Congress enacts $290B farm bill over Bush veto By MARY CLARE JALONICK, Associated Press Writer 2 hours, 7 minutes ago WASHINGTON - Congress enacted a massive farm bill Thursday with new and bigger subsidies for farmers, plus more food stamps for the poor. ADVERTISEMENT But first Democrats had to eat a little crow that dimmed the election-year victory of overriding President Bush's veto for only the second time during his seven years in office. Omitted from the $290 billion, five-year law because of a printing mistake was a small amount of money to address a growing global hunger crisis. Democrats only realized the mistake on Wednesday, just before the House voted 316-108 to override Bush's veto. The Senate joined the override Thursday with a 82-13 vote. Eager to begin a Memorial Day vacation, the issue of helping starving countries was left for another day. "I take responsibility for what happened here," said a chagrined House Speaker Nancy Pelosi, D-Calif. She said her reaction was "uncustomarily crude" upon learning that the 34 pages dealing with international food aid and trade were omitted from the bill sent to Bush. Republicans and the White House accused the Democrats of incompetence. "It seems that the congressional debate on the pork-laden farm bill is coming to an inglorious conclusion," White House spokesman Scott Stanzel said. Bush claimed the legislation was too expensive and too generous with subsidies for farmers who are enjoying record high prices and incomes. He had opposed the legislation from the start, threatening his first veto last July. A bipartisan group of negotiators on the bill made small cuts to subsidies to appease the White House, but Bush said it wasn't enough. Still, congressional Republicans overwhelmingly abandoned Bush in voting to override the legislation, overlooking its cost amid public concern about the weak economy and high gasoline and grocery prices. GOP lawmakers are anxious about their own prospects less than six months before Election Day. Despite the bipartisan nature of the bill, the printing error turned a triumphant political victory into a vexing embarrassment for Democrats. The party's leaders in the House decided to pass the bill again, including the missing section in the version that Bush received. That vote was 306-110, again enough to override another veto from Bush should the need arise. Democratic leadership aides said the Senate will deal with the problem when Congress returns in June from a one-week vacation. House Republicans berated Democrats for the error and raised questions that the law would be unconstitutional because it was not the full bill passed by the House and Senate. Senate Majority Leader Harry Reid, D-Nev., said the process was entirely legal. "We have, under good legal precedent, going back to a case I understand in 1892 where something like this happened before, it is totally constitutional," he said. Likewise, Pelosi's office released a statement from the House parliamentarian saying the incomplete bill could legally become law because Bush had vetoed that version. About two-thirds of the law would pay for nutrition programs such as food stamps, which would see increases of around $1 billion a year. About $40 billion is for farm subsidies and almost $30 billion would go to farmers to idle their land and for other environmental programs. The farm bill also would: _Increase subsidies for some crops and for the first time subsidize growers of fresh fruits and vegetables. _Extend and expand dairy programs. _Increase loan rates for sugar producers. _Expand a program to provide fresh fruits and vegetables to schoolchildren. _Cut a per-gallon ethanol tax credit for refiners from 51 cents to 45 cents. The credit supports the blending of fuel with the corn-based additive. More money would go to cellulosic ethanol, made from plant matter. _Require that meats and other fresh foods carry labels with their country of origin. ___

To: Sun Tzu who wrote (264632)	5/23/2008 3:27:04 PM
From: TimF	Respond to of 281500

The issue is to complex for either side to reasonably be called "just plain wrong", but to the extent that anyone has a mistake to correct it is you. The CPI can reasonable be attacked for using rent equivalence rather than the prices of houses, but its not a "just plain wrong" type of thing, as there is some reasonable justification for it. If you disagree with that justification, and want to adjust based on house prices, that only decreases the current inflation rate, because house prices are going down, while rents are generally going up at the moment. In addition, food and energy prices are eliminated from the so-called core CPI, which many economists tend to focus more closely on because they claim food and gas prices are volatile. The CPI includes food and gas prices. There is also an additional stat that exclude them, but most offical adjustments are made off the CPI, or off entirely different stats such as the GDP deflater, or the Personal consumption expenditures price index, not off of the CPI - food and gas prices. In addition while food and gas prices are going up faster than the general rate of inflation, for a long time they did not do so, and in fact typically increased at a lower rate. Another problem with the CPI figures, according to skeptics, is that it doesn't accurately reflect what's going on in the housing market. That's a legitimate concern, but again one which probably causes a higher official inflation rate at the moment, even if it caused a lower official rate at some points in the past. Also most of this is to do counting rent equivalents rather than house prices, which while questionable, has some justification because when you buy a house you are getting both a consumer good and an investment. You could have instead rented and put money in to the stock market. Higher prices for shares would not represent inflation. OTOH I did agree the adjustment is questionable, is is questionable because investment or not, people mainly buy homes to live in, and when the cost of houses goes up, the cost of living for new home buyers goes up (and typically by more than rents go up). If anyone wants to eliminate this particular adjustment, I would not oppose the change. Just remember that at the moment if you make the change you will cause the headline official inflation rate to go down by quite a bit. Also note I'm not defending the CPI as ideal, or perfect, or the best measure possible, or even the best measure available. I'm also not saying that the specific adjustments for changes in the basket of goods people buy, and for changes in quality over time, are necessarily the correct adjustments. What I am defending is the idea that such adjustments should be made, and that if you don't make them at all you will constantly get inflation wrong. If you don't make the quality adjustments you will get an official rate that is too high. If you don't adjust for changes in goods people buy over time, than in some cases you will falsely push the official rate up, and in other times you will pull it to far down. "Did your new model computer come with a 25% discount from last year's price?" Typical computer prices have gone down. Also you are getting more for the money. The exact amount that should be adjusted for this extra quality is not only complex, but to an extent subjective. The idea that some other stat say "shadow stats" gets it right just by making the adjustment equal to zero is silly. Even if the adjustment currently made is too high (and some economists think in general the adjustments are conservative), some adjustment is called for. If your adjustment for additional quality is zero, you will always overstate inflation.