-- Brad Plumer investigates the Tea Party's obsession with rewriting the Constitution.

-- Tim Noah's series on income inequality for Slate.

-- Ezra Klein asks, "Why did Obama do health care first?"

Also, I will be out tomorrow for Rosh Hashanah, but my TNR colleagues will keep you company in the meantime.

Matt Bai writes:

That was a moment, perhaps, when Mr. Obama might have given one of his trademark orations to an anxious public, an opportunity to lay out the different dimensions of the economic crisis in a way that had eluded his predecessors. You could have imagined Mr. Obama explaining then that the country had to respond in two related but distinct ways — first by spending hundreds of billions of dollars in the short term to avoid a depression, and then by making a series of large-scale investments over time that would modernize the foundation of the economy.

What happened, instead, was this: The administration turned control of the roughly $800 billion stimulus package over to Congress. Congress decided that the most expedient thing to do was to throw every kind of expenditure one could think of, short-term and long-term, into a single bill, because the public was willing to spend the money right then and the legislative politics required addressing the demands of disparate constituencies.

Before taking office, here's Obama's speech outlining his stimulus plan on January 8th, 2009:

That is why we need to act boldly and act now to reverse these cycles.  That's why we need to put money in the pockets of the American people, create new jobs, and invest in our future.  That's why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years.  It is not just another public works program.  It's a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done.   That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That's why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services…

[four paragraphs later]

To build an economy that can lead this future, we will begin to rebuild America. Yes, we'll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects.  But we'll also do more to retrofit America for a global economy.  That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation.  It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.  And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

And in his inaugural speech:

For everywhere we look, there is work to be done.  The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.  All this we can do.  All this we will do.

His remarks at the signing of the stimulus bill:

I don't want to pretend that today marks the end of our economic problems.  Nor does it constitute all of what we're going to have to do to turn our economy around.  But today does mark the beginning of the end -- the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; the beginning of what we need to do to provide relief for families worried they won't be able to pay next month's bills; the beginning of the first steps to set our economy on a firmer foundation, paving the way to long-term growth and prosperity.

Finally, Obama's first State of the Union, earlier this year:

From the day I took office, I've been told that addressing our larger challenges is too ambitious; such an effort would be too contentious.  I've been told that our political system is too gridlocked, and that we should just put things on hold for a while.

For those who make these claims, I have one simple question: How long should we wait?  How long should America put its future on hold? 

You see, Washington has been telling us to wait for decades, even as the problems have grown worse.  Meanwhile, China is not waiting to revamp its economy.  Germany is not waiting.  India is not waiting.  These nations -- they're not standing still.  These nations aren't playing for second place.  They're putting more emphasis on math and science.  They're rebuilding their infrastructure.  They're making serious investments in clean energy because they want those jobs.  Well, I do not accept second place for the United States of America.

As hard as it may be, as uncomfortable and contentious as the debates may become, it's time to get serious about fixing the problems that are hampering our growth.

(Click here to see TNR's take on Rahm Emanuel's possible replacements.)

[Guest post by Noam Scheiber:]

With Tuesday’s surprise announcement that Richard Daley won’t seek a seventh term as mayor of Chicago, the early consensus is that Rahm Emanuel will almost certainly cut short his White House career and enter the race. If I were betting, I’d lean that way, too. Rahm has long coveted the job, he hungers to return to the life of the principal (even if he’s currently the most powerful staffer in the world), and it’s not clear what options he’ll have besides mayor. It’s certainly hard to imagine him returning to the House.

Having said that, I’m not at all convinced Rahm’s candidacy is a done deal. Here’s my thinking based on what I knew at the time of the Daley announcement:

First, yes, it was definitely a surprise. As of a few weeks ago, Rahm was actively brainstorming his next move under the premise that Daley was running again. The second (only slightly hazier) premise was that he’d serve as chief of staff until sometime in the middle of next year, as  other outlets have reported. 

So what are the implications of the surprise? I tend to depart from the conventional wisdom here. The instant reaction seems to be that it’s a disadvantage for Rahm, because other potential candidates are already on the ground in Chicago; many of them represent powerful local constituencies. The thinking seems to be that they can gear up more quickly in response to the news.

There’s clearly something to this. But I think the element of surprise could actually help him in the mayor’s race. If everyone is caught flatfooted, as they appear to have been here, then the guy with the best organization holds a big advantage. Most observers believe Rahm will have Daley’s blessing if he runs. (Or put it this way: It’s hard to believe Rahm would run without Daley’s backing.) I assume that means a lot in terms of organizational strength city-wide.

The real problem with the unexpectedness has less to do with Chicago than with Washington. Had Rahm known a few months ago that Daley was retiring, he could have gradually laid the groundwork for a smooth departure. It’s much harder to do that in the narrow window between now and the midterm elections. No matter how strong the rest of the White House team—and there are some hugely talented people there—you don’t just replace the chief of staff without breaking stride. It takes weeks if not months to plan and execute these transitions seamlessly.

A related point: The conventional wisdom is that Rahm has to make a decision in the next two weeks to give himself a fighting chance in Chicago. That may be right. But, again, I think that misses a more important point: He has to make a decision quickly because the White House simply can’t have a distraction of this size hanging over it for weeks with a potential midterm rout looming. That’s the one way to ensure the midterms turn out disastrously.

Finally, several stories have pointed out that the Daley announcement may be manna for Rahm—“an artful way out of Washington” before the inevitable midterm recriminations, as one Chicago strategist told the Post. Again, I disagree. If Democrats take a beating this fall, one of the most high-profile and polarizing chiefs of staff in recent memory is hardly going to escape blame. (And I say that as someone who thinks Rahm’s been right about a lot of things.)

This is yet another reason I’m not so sure he’s running. The thing you have to understand about Rahm is that he’s a bit of a control freak. The last thing he wants is to be held responsible for something (the Democratic showing in November) that he can't influence, which will happen if he leaves prematurely.

Actually, that may be the second-to-last thing Rahm wants. Probably the last thing is to miss the chance to run for a job he’s dreamed of for years—especially after bagging on another dream-job (speaker of the House) to help get Obama’s presidency off the ground. It was noble of him to do that, and so the president and White House will almost certainly support whatever decision he makes. And it’s why I think the odds are still better-than-even that he leaves. Still, with all the aforementioned considerations, that same noble streak probably makes Rahm susceptible to another hard-sell from the president, should he choose to make it.

My guess (and, again, I haven’t talked to anyone close to Rahm since the Daley announcement) is that he’ll spend the next few days feeling out people in Chicago, particularly Daley himself. If Daley is less than unstinting in his support, he’ll probably stay put. (Although Rahm and Daley are known to be close, you do wonder what to make of the fact that Daley didn’t warn him, thereby massively complicating Rahm’s life.) If he gets Daley’s enthusiastic backing, there’s a very good chance he’ll do it. But, even then, I don’t think it’s a sure thing.

Update: The Tribune reports that Daley won't endorse anyone. I'm not entirely sure what that means as a practical matter--perhaps he can stay officially neutral but throw his organizational support behind Rahm. Or perhaps he'd stay out of the first round of voting and support Rahm in the likely runoff (assuming he makes it that far). But, whatever it means, it makes me even more skeptical that Rahm will run.

Indiana governor, former Bush budget director and rumored dark-horse Republican presidential candidate Mitch Daniels lays out his economic recovery plan in today's Wall Street Journal op-ed page. Here's the basic problem. The gulf between the foundational beliefs of the conservative movement and basic fiscal reality is so deep that it is impossible for a Republican in good standing to promote a budget proposal that remotely makes sense. Yet analysts don't want to appear so partisan that we simply dismiss every Republican plan. So the standards for such proposals are extravagantly lowered. A proposal that seems remotely close to reality will be widely praised, as if we were watching a person with severe disabilities manage to finish a race. Wow, look at that! You have a plan! With numbers! Hooray for you!

Thus, very smart guy Ezra Klein writes of Daniels:

I'm impressed by Indiana Gov. Mitch Daniels's op-ed laying out his proposal for "a time-limited, emergency growth program." It's a real plan, with concrete policy ideas that might actually make a difference. It's mercifully free from vague hand-waving about business uncertainty and government spending.

Okay, let's look at Daniels' plan. He says we should suspend or reduce the Social Security tax for a year. In order to compensate for the lost revenue, Daniels proposes to make it up "twice over."

The Social Security tax is projected to bring in $934 billion next year. If we "suspend" the tax, that means we need $1.8 trillion in savings to meet his target. If we merely reduce it, we need less. Keep that in mind while we go through Daniels' proposed savings, which are these:

• Impoundment power. Presidents once had the authority to spend less than Congress made available through appropriation. On reflection, nothing else makes sense. Plowing ahead with spending when revenues plummet is something only government would do. In Indiana, we are still solvent, with no new taxes, money in reserve, and a AAA credit rating only because our legislature gave me the power to adjust spending to new realities. I promise you that a president who wanted to could put the kibosh on enormous amounts of spending that a Congress might never vote to eliminate, but the average citizen would never miss.

• Recall federal funds. Rescind unspent Troubled Asset Relief Program (TARP) funds and any unspent funds from last year's $862 billion "stimulus" package, as well as large amounts of the hundreds of billions of "unobligated funds" unspent from previous appropriations bills.

• Federal hiring and pay freeze. Better yet cut federal pay, which now vastly outstrips private-sector wages, by 10% during the emergency term, and freeze it after that.

• A "freedom window." Might we try some sort of regulatory forbearance period in which the job-killing practice of agonizingly slow environmental permitting is suspended, perhaps in favor of a self-certification safe harbor process? Businesses could proceed with new job creation immediately based on plans that meet current pollution or safety standards, or use best current technology, subject only to fines and remediation if a subsequent look-back shows that the promised standards were not met.

Okay. First we have this business about "impoundment power," which entails magically re-writing the relationship between the White House and Congress. (All efforts to date to give the president line-item veto power have run aground in the courts.) Even if this process could magically occur overnight -- and Daniels is talking about a short-term plan -- it does not specify which spending programs he would impound.

Next, he wants to recall unspent TARP or stimulus funds. There's $78 billion in unspent TARP funds. The stimulus has $144 billion of spending still in process -- which means we can save the money only if we want to leave a lot of half-built bridges lying around -- and $69 billion in money left to be spent. So that leaves us with around $144 billion in savings, or about 8% of the way to the full goal he lays out.

Third, Daniels proposes to cut federal pay, "which now vastly outstrips private-sector wages," according to Daniels. In fact, this is a total myth. A study has shown that the pay gap is entirely due to differences in the kind of job and the skill level:

“Jobs in the public sector typically require more education than private sector positions. Thus, state and local employees are twice as likely to hold a college degree or higher as compared to private sector employees. Only 23% of private sector employees have completed college as compared to about 48% in the public sector."

Anyway, the 10% federal pay freeze would save a grand total of $26 billion, inching us up to 9% of Daniels' savings goal. Then the fourth item, a regulatory pause, is not even a plan for saving revenue at all. I mean, he clearly writes, "Offset the revenue loss twice over through a combination of the following four policies," but the fourth is not a revenue offset.

Oh, and this passage from Daniels' op-ed looks an awful lot like the "vague hand-waving about business uncertainty and government spending" that Klein says is not in there:

Moreover, the administration's big-government policies—most notably health-care reform—are holding back job creation. Drowning in new or pending regulations and taxes, businesses, banks and investors are understandably sitting on dollars that could be putting Americans to work.

But it's OK, Mitch. You put out a real plan. Sure, you rely on magical constitutional thinking and empirically false analysis of federal pay. And your savings only make it 9% of the way to your stated goal. And the four revenue offsets you promised are really only three offsets plus one unrelated ideological hobbyhorse. But it was a good try. Look at Sarah Palin and Newt Gingrich over there -- they fell down after only a few yards! You should really think about running for president.

[Guest Post by Isaac Chotiner]

Considering the ever-increasing amount of anti-Muslim paranoia and bigotry, it is essential that opponents of such sinister nonsense focus on actual examples of discrimination and violence. Alas, the brouhaha over the Koran burning seems to have obscured existing problems in American society. Of course burning Korans is damaging and hateful, and of course it is worth condemning the idiots who are threatening to do so. Then there is this, from Associate professor Muqtedar Khan, in The Washington Post:

The act will scorch Muslim hearts everywhere. The searing pain will never be forgotten.

Really? The pain of Koran burnings will never be forgotten? If this self-pity weren't silly enough, Khan goes on to say:

I would rather burn in fire myself, than watch a Quran burn. I am amazed at how millions of Americans who are decent and honorable can watch this happen.

The reactionary note gets louder when Khan adds:

No matter how ugly the act the Constitution permits this, is not an acceptable excuse. The Constitution does not permit this. The Constitution forbids cruel and unusual punishment. For Muslims this is worse than torture.

Khan should speak for himself and not pretend to know what other Muslims (including other Muslims who have, over the past decade, actually been tortured) are feeling. Burning Korans is insanely dumb and offensive, but being offended is part of living in a free society. If thirty dolts can really inflame people enough that American soldiers will be put at risk, then the blame still lies with the people actually committing acts of violence. The reaction of Khan and others to this potential incident only exacerbates  a disconcerting and depressing moment in American life.

Health care reform repeal activist Michael Tanner complains that none of the Democrats who voted against the Affordable Care Act have signed on to repeal. Meanwhile, Republicans are decidedly lukewarm:

Among the six Republicans who have not signed either discharge petition are senatorial candidates Mark Kirk in Illinois and Mike Castle in Delaware. This is particularly surprising in the case of Kirk, who once vowed to “lead the effort” to repeal the health-care law.

Meanwhile, over in the Senate, a bill by Jim DeMint (R., S.C.) to repeal Obamacare has attracted only 21 cosponsors, meaning that 19 Republican senators have not yet committed to repeal. Among the scofflaws are Senate minority leader Mitch McConnell and Republican conference chairman Lamar Alexander.

Nor has repeal of Obamacare been a national Republican theme. Individual candidates have, of course, made it an issue. But national Republican spokesmen have not invested the issue with a sense of urgency.

Right. It's not going to happen. People may have been put off by the legislative process, but they believed and believe health care needs to be reformed. Going back to the status quo is political poison. That's why Republicans are keeping their distance before the elections.

The basic wonk take on President Obama's new package of tax cuts is "low cost, low benefit." Here's Mark Zandi, and here's Howard Gleckman.

Obviously the substance is beside the point right now. Republicans aren't going to hand Democrats a substantive achievement leading up to the election. The point is to be able to say you have some kind of plan, and have a plan that's moderate and wonk-approved. It checks all the boxes in that regard but it doesn't really, you know, matter.

Republicans have been promoting a payroll tax holiday for a while now. Ezra Klein did some reporting on whether they'd make a deal on that issue now:

From my reporting, the problem wouldn't be in the White House. It would be in Congress. I've asked a number of Republican offices whether they'd be willing to work with the Democrats on a payroll-tax holiday. Without fail, they've told me no, that they no longer support a payroll-tax holiday given the size of the deficit.

You have to keep in mind that the main role of most Republican alternative proposals has merely been to stave off the accusation that Republicans have no plan of their own. And it's certainly true that Republicans do have some ideas, it's just that those ideas -- like the Ryan Roadmap -- are radical and unpopular and Republicans don't want to run on them. When you see Republicans put forward something more concrete, it's an offer likely to be withdrawn if taken up.

I don't see how the question of whether the Obama administration should extend the Bush tax cuts only on income over $250,000 a year is even a question. This seems totally obvious. Let's walk through this.

1. Voters in general are in favor of pretty much any measure that takes money from the rich. And they specifically support, by wide margins, repealing the Bush tax cuts for the rich

2. George W. Bush's policies remain highly unpopular, but the Democrats' problem is that Americans don't believe that Republicans would continue those policies:

Do you think if Republicans win control of Congress in November they will return to the economic policies of George W. Bush or do you think they will have different ideas for how to deal with the economy?

Policies of George W. Bush 35

Different ideas 58

So isn't a high profile fight forcing Republicans to defend Bush's signature economic policy a good idea?

3. Democrats are caught in the dilemma of having promised to extend all the tax cuts that have any benefit for taxpayers earning less than $250,000, despite the near-imposibility of reconciling that pledge with sustainable fiscal policy. So why not let the Republicans do their work for them? Put up a popular bill to extend tax cuts on income below $250,000. Let Republicans block it. Then you get to attack them as so loyal to George W. Bush's economic agenda of aiding the rich at all costs that they're blocking a middle class tax cut. And then either they give in, or the deficit picture starts looking better. In the meantime you keep running on a middle-class tax cut, over and over, make that the theme of the elections and 2011.

I mean, really -- what is the hang-up here?

-- John Judis emphasizes the difference between "recession" and "depression."

-- Ezra Klein on the pro-business White House.

-- Andy Rotherham on the impossibility of education reform without controversy.

-- Nate Silver asks, "What are the Democrats running on?"

I sometimes feel that I spend too much time pointing out all the ways in which various people are wrong, and even then, the vast quantity of wrongness in the public discourse overwhelms my capacity to process it. In that spirit, I'm launching an occasional feature called "Today In Wrong." In it, I'm sweeping up some of the wrongnesses that don't quite merit an individual post. I'm starting with two of the most consistent and reliable sources of wrongness.

1. Today's Wall Street Journal editorial page purports to rebut liberal arguments about the stimulus. Liberals argue that the stimulus was too small and that Republicans blocked more aggressive action. The Journal offers two rebuttals:

Even Paul Krugman, who now denies intellectual paternity for this economy, wrote on November 14, 2008 that "My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion." The White House raised him by 33% two months later, but now we're told that wasn't enough.

In fact, as Krugman points out, he was calling for $600 billion per year, not total, which would be much larger than the $787 billion over two years (much of which consisted of non-stimulative spending at the behest of Senate moderates.) Also, the economic outlook darkened dramatically between November and the time the stimulus passed.

The Journal also pooh-poohs the idea that GOP obstruction limited the size of the stimulus:

As for blaming the Republicans, with only 40 and then 41 Senators they couldn't stop so much as a swinging door.

Of course, at the time of its passage, Democrats had just 58 Senate votes and needed two Republicans to do anything. It's simply a fact that Republican moderates forced the stimulus to be lower than the Democrats wanted.

2. Former Bush Minister of Propaganda Pete Wehner purports to rebut my argument about health care and the Democrats' popularity. My argument, in a nutshell, is that it's debatable whether declining to reform health care would have helped Democrats, since the public wanted reform, and failing to carry out a clear campaign commitment would have entailed major costs of its own. The further notion, popular among Republicans, that Democrats should have abandoned heath care reform after spending a year on it and passing similar bills through both chambers is absurd. One element of my argument is that health care is just about the only issue where Republicans don't have an advantage over Democrats, which helps undergird the point that the public still doesn't support the do-nothing position, and that the do-nothing option thus would have also carried significant political costs for Obama.

Wehner replies by pointing out that Democrats once had a huge lead on health care and saw their large lead dwindle:

There is no other issue, in fact, over which Democrats have lost as much ground as quickly as over health care. What was once the strongest issue in the Democratic arsenal — an issue on which Democrats enjoyed public support for generations — has now turned politically neutral with respect to the support each party enjoys on it.

I don't see what his point has to do with anything. My whole point is that you have to gauge it against the counter-factual. Wouldn't Democrats also have lost their health care advantage if, after winning a solid majority running on a platform promising health care reform and universal coverage, they decided not to reform health care? Wehner notes that Democrats are running away from the Affordable Care Act. That is generally true, though the Affordable Care Act is the most prominent Obama administration initiative, and it's unsurprising that vulnerable members would run away from the administration during an economic collapse. Moreover, Republicans are still running away from the right-wing plan to repeal the ACA, full stop. Even the GOP leadership won't come out and endorse that idea.

In sum, the idea that there was some cost-free alternative way for Obama to handle health care seems pretty fanciful. What's even more fanciful is the method of arguing for an alternative entirely by pointing out flaws with the status quo, declining to consider the potential flaws of the alternative course of action. But of course this line of thinking, or lack thereof, is entirely consistent with the Wehner Fallacy.

Recently departed budget director Peter Orszag says that Democrats should make a deal with Republicans to extend all the Bush tax cuts for two years in return for canceling them all out after two years:

Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.

I don't understand the logic of this argument. The portion of the Bush tax cuts that only benefit people making more than $250,000 a year has some stimulative benefit -- anything that increases the short-term deficit has some stimulative benefit. But the bang for the buck is extremely low.

Republicans in Congress aren't that interested in buying an extra couple years of upper-income tax hikes -- and they certainly don't want to give Democrats political cover to wiggle out of their promise to preserve the Bush tax cuts for everybody earning less than $250,000. The Republican game is all about making the Bush tax cuts for the rich permanent. So Republicans are only going to agree to a deal like this if it increases the likelihood that, after the two-year extension, the tax cuts for the rich will simply be extended again.

And maybe it would. By 2013, there's a decent chance that Republicans will control the White House. Their top priority is obviously going to be an upper-income tax cut. But it will be politically easier for them if they're merely keeping the status quo in place.

It seems to me that Democrats need to take advantage of their shrinking window in which they control the legislative process and can control the terms of debate. They should bring up an extension of the middle class tax cuts. If Republicans block it, then Democrats can attack them for raising taxes on the middle class, while enjoying the benefits of the higher revenues brought about by that tax hike. They can keep bringing up middle class tax cuts and keep daring Republicans to block it on the grounds that the rich don't get a big enough share:

But basically I don't see the overlapping priorities that create the groundwork for a potential deal on taxes. Democrats want higher revenues and the most progressive possible tax code. Republicans want lower revenues and the least progressive possible tax code. The only way a deal could happen is if one side fools the other about what is being agreed to.