Newt Gingrich has done it again. With his new tax plan he has raised the bar from irresponsibility to recklessness.
Every dollar estimate I’m about to share with you comes from the independent, non-partisan Tax Policy Center – a group whose estimates are used by almost everyone in Washington regardless of political persuasion.
First off, Newt’s plan increases the federal budget deficit by about $850 billion – in a single year!
To put this in perspective, most forecasts of the budget deficit cover ten years. The elusive goal of the White House and many on both sides of the aisle in Congress is to reduce that ten-year deficit by 3 to 4 trillion dollars.
Newt goes in the other direction, with gusto. Increasing the deficit by $850 billion in a single year is beyond the wildest imaginings of the least responsible budget mavens within a radius of three thousand miles from Washington.
Imagine what Standard & Poor’s or Moody’s or Fitch would do if it became law. We’d go directly from a triple-A credit rating to triple X – the veritable porn star of fiscal mayhem. Interest on our debt would become larger than most of the rest of the budget.
Most of this explosion of debt in Newt’s plan occurs because he slashes taxes. But not just anyone’s taxes. The lion’s share of Newt’s tax cuts benefit the very, very rich.
That’s because he lowers their marginal income tax rate to 15 percent – down from the current 35 percent, which was Bush’s temporary tax cut; down from 39 percent under Bill Clinton; down from at least 70 percent in the first three decades after World War II. Newt also gets rid of taxes on unearned income – the kind of income that the super-rich thrive on – capital gains, dividends and interest.
Under Newt’s plan, each of the roughly 130,000 taxpayers in the top .1 percent – the richest one-tenth of one percent – reaps an average tax cut of $1.9 million per year. Add what they’d otherwise have to pay if the Bush tax cut expired on schedule, and each of them saves $2.3 million a year.
To put it another way, under Newt’s plan, the total tax bill of the top one-tenth of one percent drops from around 38 percent of their income to around 10 percent.
What about low-income households? They get an average tax cut of $63 per year.
Oh, I almost forgot: Newt also slashes corporate taxes.
I’m not making this up.
This might be amusing if Newt were just being old Newt – if this were another infamous hot-air bubble emerging from an always provocative, sometimes clever, often bizarre mind.
But it’s the tax plan of the leading candidate for president of one of the two major political parties of the United States.
And it comes at a time when America’s super rich are raking in a larger portion of total income and wealth than at any time over the last 80 years, and when their marginal taxes are lower than they’ve been in three decades; a time when the nation’s long-term budget deficit is causing cuts in education and infrastructure which will impair our future and that of our children, and when safety nets and social services are being slashed.
Can Newt get away with this?
Probably — because his plan also comes at a time when Americans are so cynical about the major institutions of our society that someone who offers huge, outrageous plans holds a special fascination: The whole system is so awful, people tell themselves, why not just jettison everything and start from scratch? Let’s throw caution to the winds and do something really big – even if it’s colossally stupid.
This is why the more outrageous Newt can be, the better his polls. The more irresponsible his bomb-throwing, the more attractive he becomes to a sizable portion of Americans so fed up they feel like throwing bombs.
History is full of strong men with dangerous ideas who gain power when large masses of people are so desperate and disillusioned they’ll follow anyone who offers big, seemingly easy solutions.
At times like this a nation must depend on its wise elders – people who have gained a reputation for good judgment and integrity, and who are broadly respected by all sides regardless of political affiliation or ideology – to call out the demagogues, speak the truth, and restore common sense.
The great tragedy of America today is the paucity of such individuals when we need them the most.
By: Robert Reich, Published in Salon, December 14, 2011. (This originally appeared on Robert Reich’s blog, December 13, 2011)
Ezra Klein has an excellent point to make about Republicans and policy this morning. He’s writing about how many policies Mitt Romney and Newt Gingrich once supported that turned out to be Kenyan socialism once Barack Obama adopted them. Jonathan Cohn has yet another excellent example: Newt was an enthusiastic backer (with John Kerry!) of comparative effectiveness research — that is, having the government collect data about which medical treatments actually work. That was way back in 2008, but as Cohn points out, after it became part of ACA a few months later it immediately became evil socialist rationing, something that Gingrich can now get in trouble for with conservatives on the campaign trail.
Klein concludes that the reason that Romney and Gingrich are stuck with having supported so many now-forbidden policy is because they are “wonks.” I think that’s too strong, however, or perhaps not strong enough, depending on your perspective. Klein provides a long list of Republicans who once supported an individual mandate on health insurance, but surely they weren’t all wonks? Nope. Most of them were just Republicans following the standard Republican line of the time, a line that was good enough until Barack Obama and the Democrats adopted a kitchen sink to health care reform and tossed in any decent idea that they could find (remember all that rhetoric back then about all the Republican-sponsored ideas included in ACA? It was true!).
No wonder that House Republicans are spending much of their energy repealing non-existent regulations about farm dust or affirming the US motto. Or why Romney’s entire foreign policy program appears to be a pledge not to go on an “apology tour” that never happened. It’s a lot easier to be certain that you always completely oppose the president’s program when you write your own fictional version of the president.
But Klein’s conclusion is right on the mark:
At the end of the day, the GOP will nominate somebody for president…The bigger problem will be if that individual wins. At that point, they’ll need actual solutions for the problems facing the nation. But the Republican Party has ruled out an individual mandate to help with health-care reform, a cap-and-trade program to mitigate global warming and speed the development of renewable energy options, tax increases to help reduce the deficit, and stimulus to help boost the economy. That leaves a potential GOP president with a lot of problems to solve, but few workable policies with which to solve them.
Well, they still have tax cuts for rich people.
By: Jonathan Bernstein, Washington Monthly, December 14, 2011
The conservative radio host Michael Savage this week presented an unusual offer to Newt Gingrich.
“Newt Gingrich is unelectable,” Savage said of the improbable new front-runner for the Republican presidential nomination. “Therefore, I am offering Newt Gingrich 1 million dollars to drop out of the presidential race for the sake of the nation.”
A million bucks? Come on, man.
Gingrich got $1.6 million being a lobbyi—, er, historian for Freddie Mac. He gets $60,000 a pop for speeches, by his own boastful account. He reportedly has generated $100 million in revenues by trading on his Washington connections.
Offering him $1 million to drop out of the presidential race is the political equivalent of Dr. Evil’s plan to hold the world hostage for — ONE MILLION DOLLARS!
But if Savage was a few zeros short on Gingrich’s price tag, his instincts were correct: Gingrich and his rivals are most definitely for sale. The Republican nominating contest resembles nothing so much as a Christie’s wine auction, as candidates accept, and toss about, dollar figures beyond the comprehension of the people they would serve.
“Tell ya what. Ten thousand bucks? Ten-thousand-dollar bet?” Mitt Romney proposed to Rick Perry in his now-infamous attempt at Saturday’s debate to resolve a dispute over health care.
Criticized for that high wager, Romney went on Fox News to say that Gingrich should return the $1.6 million from Freddie Mac. That led Gingrich, just days into his vow to stay “relentlessly positive,” to suggest that Romney should “give back all the money he’s earned on bankrupting companies and laying off employees.”
The positive front-runner also took a gratuitous pop at Perry, saying of the longtime public servant: “I couldn’t imagine he could cover a bet like that.”
To most Americans, lacking a spare $10,000 wouldn’t be considered a character flaw. But Gingrich is different: a member of Donald Trump’s Trump National Golf Club, he boasted on the campaign trail recently that he didn’t have to be a lobbyist because he was getting rich on the celebrity speaking circuit.
Romney can’t exploit Gingrich’s $100 million in revenues, nor his $500,000 line of credit at Tiffany’s, because his own net worth is $264 million and his own speeches bring in up to $68,000. If corporations are people, as Romney says, he is a man among boys — and his vast campaign stash is the main reason he still has a good chance to beat Gingrich.
President Obama (worth: as much as $11 million) would no doubt enjoy taking on either man, although the fun will be tempered by his own struggle to bring in $1 billion for his campaign, up from $750 million last time. For now, the task of taking on the plutocrats falls to GOP candidate Jon Huntsman, whose new Web site, www.10kbet.com, features a photo of Romney and his Bain Capital colleagues playing with cash.
For Huntsman to pursue this attack is a bit rich (his net worth: between $16 million and $71 million). But the problem is not the candidates’ net worth or their campaign cash. It’s the impression they are giving that corporate interests are receiving something in exchange for the worth they’re helping to build and the cash they’re providing.
Even the relative pauper Perry got in trouble earlier in the campaign for supporting mandatory HPV vaccination after the vaccine’s maker, Merck, gave money to his campaign. “If you’re saying that I can be bought for $5,000, I’m offended,” he said.
But could he be bought for the $28,000 he actually got from Merck? And could the billions now regularly generated in campaign contributions — nearly $4 billion in the 2010 elections alone — have something to do with all the goodies for pet corporations?
Though it’s difficult to trace specific government actions to contributions, there is no doubt in the aggregate that corporate interests can buy candidates for a modest investment.
Compared to $4 billion, Michael Savage’s $1 million won’t buy much: maybe a new, better-fitting suit for Ron Paul, a nice Christmas present for Herman Cain’s wife or enough cushion so that Sarah Palin doesn’t need to pitch another reality show.
In recent days, the gadfly Sen. Bernie Sanders, a Vermont independent, proposed a way out of this mess: a constitutional amendment that would outlaw corporate campaign contributions, overturning the Supreme Court’s Citizens United decision.
Ten thousand bucks says the idea goes nowhere.
By: Dana Milbamk, Opinion Writer, The Washington Post, December 13, 2011
For a man who likes to tout his expertise as a historian, Republican presidential candidate Newt Gingrich has a decidedly revisionist approach when it comes to his own history.
In 1997, Gingrich became the only speaker in history to be reprimanded by the House of Representatives. He agreed to pay $300,000 to settle the matter, which involved using charitable groups to promote his political views and submitting misleading documents to the House ethics committee.
The ethics charges sound like ancient history. They involve dreary matters of tax law. But the episode is worth revisiting because it offers insights into Gingrich’s bombastic, push-the-boundaries style. More troubling, in recent days, Gingrich has been blatantly dishonest in his self-interested rewriting of this history, dismissing the ethics sanction as the action of “a very partisan political committee.”
As Gingrich relates the story, “The Democrats filed 84 charges against me; 83 were dismissed. The only one which survived was the fact that my lawyers had written a letter inaccurately and I signed it.”
Referring to California Democrat Nancy Pelosi, who served on the panel, Gingrich said last week, “If she was in the middle of it, how nonpartisan and just do you think the process was?”
How partisan? The ethics panel, split evenly between Democrats and Republicans, voted 7 to 1 in favor of the reprimand. The dissenting Republican, Lamar Smith of Texas, said Gingrich had made “real mistakes” but called the penalty “way too severe.”
The House agreed to the reprimand by a similarly overwhelming margin, 395 to 28. “The penalty is tough and unprecedented,” the committee chairman, Connecticut Republican Nancy Johnson, said on the House floor. “It is also appropriate.”
Another Republican on the ethics panel, Porter Goss of Florida, said he found “the fact that the committee was given inaccurate, unreliable and incomplete information to be a very serious failure on [Gingrich’s] part.” Indeed, Gingrich’s own lawyer told the ethics committee that the speaker “recognizes the serious nature of the charges and the seriousness of his admission.”
The ethics investigation stemmed from a Gingrich-inspired enterprise during the early 1990s to spread his conservative message — and engineer a Republican takeover of Congress — through a satellite broadcast and a college course that would also be televised.
Both efforts were connected with GOPAC, a political action committee that Gingrich then headed, and were funded by tax-deductible contributions to various nonprofit groups.
For example, the Abraham Lincoln Opportunity Foundation, originally designed to help inner-city youth, served as the vehicle to fund the satellite broadcast. GOPAC lent money to the Lincoln foundation to take over the program, then steered its donors to the foundation and was ultimately repaid by the charitable group.
In Gingrich’s defense, the Internal Revenue Service concluded that the Progress and Freedom Foundation, which underwrote the college course, should not lose its charitable status. After initially revoking the tax-exempt status of the Lincoln foundation, the IRS agreed to reinstate it.
Yet the tax questions show Gingrich’s characteristic willingness to skirt close to the edge, if not beyond. Having been involved in a previous case about the permissible use of charitable groups, Gingrich “had ample warning that his intended course of action was fraught with legal peril,” the committee’s report found. The speaker’s own tax lawyer said he would have advised against the “explosive mix.”
The ethics committee ultimately concluded that Gingrich was, at the very least, reckless in not seeking tax advice.
Then there was the matter of repeated incorrect statements made to the committee as part of the effort to persuade it to dismiss the case. Gingrich twice assured the committee — incorrectly — that GOPAC played no role in developing or financing the college course.
Gingrich blamed the inaccurate statements on his lawyer and said he did not review the letters carefully enough. The four members of the investigative subcommittee found that there was “reason to believe” that Gingrich knew the information was wrong. But they settled for Gingrich’s admission that he “should have known” it was false.
“The violation does not represent only a single instance of reckless conduct,” the report found. “Rather, over a number of years and in a number of situations, Mr. Gingrich showed a disregard and lack of respect for the standards of conduct that applied to his activities.”
This is the bipartisan judgment of his peers. Is Gingrich really the man Republicans want to be their nominee?
By: Ruth Marcus, Opinion Writer, The Washington Post, December 13, 2011
Former Gov. Mitt Romney just can’t seem to get a break. And most recently, it’s not because of an endorsement he failed to get. It’s because of one he just received, from failed Delaware Senate candidate Christine O’Donnell, best known for her creepy TV ad reassuring voters that she is not a witch.
At a time when the GOP field is seeking to kick it up a scholarly notch, O’Donnell’s endorsement reminds voters of the intellectual lightweights in the party. Remarkably, O’Donnell—much like professional egotist Donald Trump—seems to think her blessing is desired.
“I’ve been warned by many not to endorse because no matter who I choose, no doubt some will be upset,” O’Donnell said in a statement. Really? Was the field of contenders trying to win her endorsement? Or is it only the campaign strategists of the endorsee who she believes will be upset?
More wisdom from the unsuccessful candidate:
“It is a difficult decision choosing between such great candidates, truly difficult. Yet, this race is too important to sit out.” It’s the presidential race, for heaven’s sake, and we’re struggling out of a stubbornly lingering recession and extricating ourselves from two costly wars. Of course it’s an important race.
Then there’s this political insight:
Additionally, we simply can’t afford to have the primary contest drag out the way it did in 2008. Unlike 2008 when the incumbent president was not a candidate, the longer the 2012 GOP Primary contest drags out, Pres. Obama continues to have a free pass and get away with campaigning from the Oval Office. The sooner we have a nominee, the sooner we as a movement can unite and get to the real task at hand; making sure Pres. Obama is a one-term president.
Baaaaammmmmp! Not really. The 2008 GOP primary didn’t really “drag on;” former Arkansas Gov. Mike Huckabee stayed in the race for awhile, but he stayed in longer than he genuinely was in the race. It was the Democratic primary that dragged on until June, and their guy won the election. That primary served to make President Obama a stronger candidate, and had Hillary Clinton won the nomination, she would have been a stronger candidate as well. The difference between the Democrats in 2008 and the GOP in the current cycle is that the Democrats’ last primary dragged on because they had two very strong candidates with very different appeals to voters. The Republicans, at the moment at least, are facing an extended selection process because segments of the party are unhappy with the offerings.
O’Donnell is right, then, in suggesting that a protracted civil war within the GOP could weaken the eventual nominee. But if her endorsement would make the difference, the party has much bigger problems.
By: Susan Milligan, U. S. News and World Report, December 14, 2011