What happens when the preferences of the economic base meet the preferences of the ideological base?
Mitt Romney was in Colorado yesterday, where some people aren’t too pleased with him. This week he came out in opposition to an extension of the wind-power production tax credit (PTC), which is set to expire at the end of the year. The tax credit helps make wind power competitive and is credited with enabling the creation of thousands of jobs in manufacturing and construction. This is almost certainly not going to be a huge issue in the campaign, but it does reveal some interesting things about where Romney is vis-a-vis the Republican Party. On one side, you have the parochial economic interests of many Republican members of Congress and some very well-heeled Republican economic constituency. On the other, you have the purely knee-jerk reaction of Tea Party types to anything hippies might like. Guess where Mitt comes down?
Yesterday, the Senate Finance Committee passed an extension of the credit with bipartisan support. The PTC has support from members of Congress from both parties who have wind projects in their states, and a number of prominent Republicans like Chuck Grassley have urged Romney to change his position. There are thousands of jobs at stake; as Phyllis Cuttino of the Pew Clean Energey Program writes, “This uncertainty has put off investors and led to boom-and-bust cycles in the industry: Wind installations have declined by 73 to 93 percent in years without a PTC. Because of the long timelines (wind projects can take nine to 16 months from groundbreaking to power generation), investors seeking new wind projects must look two to three years into the future to decide whether the costs and benefits warrant investment. As we’ve seen in the past, investors are wary of supporting new projects if the availability of the tax credit is uncertain.” That brings up a peculiar footnote to this issue: Some of the biggest beneficiaries of this tax break are banks like Goldman Sachs, which is investing heavily in clean energy and so has a substantial stake in the PTC being renewed.
But when the issue came up, Mitt Romney’s spidey-sense, with which he tunes into every whim and grunt from Republican-base voters, began to tingle. Let’s dispense with the idea that anyone on either side has a principled position on these kind of tax credits that they hold to irrespective of the activity that the tax credit supports. In the case of liberals, there’s no hypocrisy involved: We’ll freely admit that there are some things government should support, and in a case like renewable energy, some of these industries need a boost in their early stages in order to become competitive. Part of government’s job is to create the conditions where the market can operate freely, efficiently, and justly. All of us (well, most of us) would agree that if we got all our energy from renewables and that energy was affordable, that would be better than our current situation, in which most of our energy comes from sources that have substantial environmental costs in both their extraction and their use. The question is what we’re willing to do in order to approach that better world, and liberals believe that some tax credits for renewables are a perfectly reasonable part of the price. We also assume that these tax credits are finite and that as the industry matures they can be phased out.
Conservatives, on the other hand, claim that they believe in the free market and that industries should rise or fall on their own merits without any help from government. But in practice, their opinions on particular cases show no adherence to this principle they allegedly hold. Instead, they favor tax credits for industries they like for one reason or another and oppose them for industries they don’t like. In the past few years, opinions on energy have become one more culture-war marker for conservatives, with people gleefully chanting “Drill baby drill!” at Republican rallies and leaders like Rush Limbaugh waging holy war against electric cars, for no particular reason other than liberals like renewable energy, and they hate liberals. So Mitt Romney is perfectly happy to maintain subsidies for the oil industry but opposes subsidies for the wind-power industry. There isn’t some fundamental principle about the relationship of industry and government at work here. He’s just channeling the opinions of his party, as always.
For a long time, it seemed that whenever there was a direct conflict between the preferences of the GOP’s economic base and its grassroots ideological base, preference went to the economic base. Those conflicts were rare—part of the great trick the economic base pulled was convincing the grassroots base that if Jesus returned tomorrow, he’d favor cutting the capital gains tax. I doubt Romney feels particularly strongly about this. But his default impulse, at least for the moment, is to do whatever he thinks the most extreme Tea Partier would prefer. As I said yesterday, it’s almost as though he doesn’t realize the primaries are over.
By: Paul Waldman, Contributing Editor, The American Prospect, August 3, 2012
A federal judge in Galveston on Thursday partially blocked new Texas registration laws that critics say amount to vote suppression because they prevent large voter registration drives.
U.S. District Judge Gregg Costa blocked the state from enforcing five provisions of the laws that its defenders say are aimed at preventing voter fraud.
“Today’s ruling means that community groups and organizations like Voting for America and Project Vote will be able to run community voter registration drives in Texas,” plaintiff’s attorney Chad Dunn said. “These drives are important to reaching the millions of Texans, including three-quarters of a million African-Americans and 2 million Latinos, who are eligible but still not registered to vote.”
Dunn represents two Galveston County residents and the nonprofit voter registration group Voting for America, an affiliate of the nonpartisan Project Vote based in Washington, D.C.
“They don’t care how you vote as long as you get registered and participate,” Dunn said.
“It was a scholarly opinion, he obviously put a lot of thought into it, but I am very disappointed by the outcome,” Johnson said. State officials could not be reached for comment.
Costa granted a preliminary injunction on five sections of the law until a trial on whether the entire law violates the plaintiffs’ civil rights and the 1993 National Voter Registration Act.
Under the ruling, the state may no longer require that deputy voter registrars live in Texas, a law Voting for America said prevented it from organizing voter registration drives.
It also may not prevent deputy registrars from registering voters who live outside their county; prevent organizations from firing or promoting employees based on the number of voters registered; prevent organizations from making photocopies of completed voter registration forms for their records; or prevent deputy registrars from mailing completed applications.
Johnson said allowing groups to copy registration applications could violate privacy rights.
“I intend to start calling state representatives tomorrow to change the content of voter registration applications,” she said. Johnson wants social security numbers, dates of birth and driver’s license numbers removed.
“Is there going to be a huge increase in voter fraud? I hope not,” she said, adding that her office would redouble its scrutiny of completed registration forms.
The plaintiffs had asked Costa to block eight sections of the law enacted in 2011 so that they could register voters before the national election in November. Costa declined to block enforcement of laws that make it a criminal offense for a deputy registrar to submit a partially completed form, a restrictive training requirement, and a requirement that deputy registrars wear an identification badge. He left the legality of those laws to be decided at trial.
Dunn said the attorney general could appeal the injunction to the 5th U.S. Circuit Court of Appeals.
Dunn, who has represented Democrats in redistricting lawsuits, said the Legislature’s redistricting plan, photo identification bill and registration requirements are evidence of voter suppression.
“This Legislature will do anything to prevent Texans from voting,” Dunn said.
By: Harvey Rice, Chron.com, August 3, 2012
Congress’s job approval rating has slowly ticked up over the past six months—reaching a whopping 16 percent in the first half of July, with 78 percent disapproving. However, even these dismal numbers may be giving Congress too much credit, especially if legislators don’t act soon to avoid the looming fiscal cliff.
The scenario is eerily reminiscent of last spring, when political deadlock over the federal budget threatened a government shutdown before an 11th-hour deal was struck. Such political wrangling risked the loss of 800,000 jobs and the curtailment of crucial public services such as mortgage, passport, and loan processing—not to mention a massive disruption of a fragile economic recovery.
And another similar scenario just a few months later was the battle over the federal debt ceiling, gambling the possibility of another government shutdown. The haphazard deal reached during that policy fight, which failed to produce long-term practical solutions, laid the groundwork for what the country faces today.
The risks of the impending fiscal cliff are similar, if not graver. If current fiscal policy is allowed to take effect, the United States economy will simultaneously experience across-the-board income tax hikes and deep, automatic spending cuts of billions of dollars at the end of this year. According to the nonpartisan Congressional Budget Office, these policies combined will contribute to lower incomes and higher unemployment numbers, slowing economic growth in 2013 to a mere 0.5 percent—and sending America into a double-dip recession.
The general assumption is that lawmakers will not let it get to that point; spending measures will be passed and tax cuts will be extended—though how much and for whom remains undecided. We all need to be asking when this is going to happen.
The 112th Congress has been called the most polarized, inefficient, and unproductive Congress in the 236-year history of the United States; and if they’re trying to fight that image, it sure is hard to tell. Legislators have shown little political will to act before the November presidential elections, dangerously close to the December 31 deadline when the first of a series of tax cuts will expire.
Such political brinkmanship is detrimental to the business environment and to a weak economic recovery. Small businesses are particularly hard hit by the uncertain climate created by Washington, and the threat of substantial tax increases has done nothing to ease fears. According to a Chamber of Commerce poll in July, over half of small business owners cite economic uncertainty as their top concern. Only 20 percent of those surveyed expected to hire in 2013.
This is bad news—with real implications for American prosperity. Small businesses are the key to economic recovery, spurring the majority of job creation. But to hire, business owners need the assurance of a stable investment environment in which they can secure returns. Regardless of whether America falls off the fiscal cliff, Congress’s behavior is already having detrimental effects on business and employment expectations. Amid discouraging jobs and industry reports, this political game is not something we can afford.
Lawmakers must realize that their gridlocked partisanship is hurting a nation already struggling. The 112th Congress has five months left in its term. Is it too naïve to hope things might change?
By: Steve Zelnak, U. S. News and World Report, August 3, 2012
You’d think Mitt Romney’s campaign would be happy about the report this week by the Tax Policy Center—the demands for the former Massachusetts governor to release more of his tax returns have finally been quieted. Of course they’re none too pleased that the obsession with his making public more tax returns has been replaced by calls for him to release more of his tax plans.
Romney’s tax plan contemplates an across the board 20 percent tax cut, among other things. He and his people swear that the plan would be revenue neutral—it would not cause the budget deficit to further balloon—because while he cut rates he would also close loopholes. Which ones? He has pointedly not said, and scoffed whenever any independent groups tried to run the numbers to figure out how his plan would work. “It can’t be scored because those kind of details have to be worked out with Congress and we have a wide array of options,” he told CNBC in March. How could he be sure that his tax plan is revenue neutral if the details haven’t been worked out yet? You’ll just have to trust him on this.
But the new Tax Policy Center blows this argument out of the water—they ran the numbers and figured out that no matter which numbers Romney plugs in (even magical, supply-side, dynamic scoring numbers), there aren’t enough loopholes to close to pay for the tax cuts. The result would be what the New York Times’s Paul Krugman calls Dooh Nibor—reverse Robin Hood economics: Rob from the middle class to pay the wealthy.
Romney’s team has flailed around trying to discredit the Tax Policy Center, calling the group’s credibility into question (though Romney-cons cited it as authoritative earlier in the campaign) and arguing that it doesn’t take into account the special economic growth mojo of tax cuts (it in fact does). Here’s what they haven’t done: release the missing details that make his plan add up. Maybe that’s because they haven’t worked out the details yet (so how do you know the numbers will add up?). Or maybe it’s because the details involve numbers of Romney’s own invention which defy the ordinary laws of arithmetic and exist at a frequency which can only be heard by dogs traveling down the highway at high speeds while strapped to the roofs of cars. That would actually answer a few questions.
Romney’s two front tax-withholding—not giving an inch more on his tax returns or his tax plans—reminds me of the old aphorism attributed to Abraham Lincoln that it’s better to remain silent and be thought a fool than to speak and remove all doubt. It seems like the Romney campaign is updating and adapting the sentiment for modern politics. They’re testing whether it’s better to be silent and thought to be hiding something damaging than to fully disclose and remove all doubt.
By: Robert Schlesinger, U. S. News and World Report, Washington Whispers, August 3, 2012
In May, Mitt Romney responded to a modest jobs report showing the economy had created 115,000 jobs in April by saying that the U.S. should really be creating almost five times more. “We should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery,” Romney told Fox News.
The press immediately jumped on his target of 500,000 jobs per month, noting that it was highly unrealistic. The economy had not created that many jobs in a single month since 1984, and just 10 times since 1950, mostly due to special circumstances like census hiring or strikers returning to work. “Every president makes statements as a candidate that he later comes to regret once he is in the White House. He finds himself held to a standard that sounded good on the campaign trail, but may not be realistic in office … If Mitt Romney is elected this fall, he may look back at his comment Friday as one of those,” New York Times reporter Peter Baker wrote at the time of the jobs target.
Indeed, Romney quickly abandoned the number. Now, responding to today’s jobs report, Romney has set a new target. He slashed the old number in half and is now aiming to create 250,000 a month, or 12 million jobs in his first term. It’s a far more reasonable goal than his previous one in that it’s at least theoretically attainable, but it’s still very ambitious. Bill Clinton presided over one of the biggest economic expansions in history and only saw 11.5 million jobs created during his first term. And Clinton comes closest to Romney’s goal. Ronald Reagan, Romney’s free-market icon, created only 5.3 million jobs in his first term, and 16 million over two terms, when Romney would presumably be shooting for 24 million. Lyndon Johnson, the next biggest job creator going back to Harry Truman in the 1940s, according to the Wall Street Journal, created 11.9 million jobs — about Romney’s goal — but over his six years as president.
Using the Atlanta Fed’s job calculator to get a rough estimate of what Romney’s plan would do to the unemployment rate, we see that consistent job creation at 250,000 per month over the 48 months would drive unemployment down to 3.4 percent, a rate we haven’t seen in over 40 years. (Clinton hit a low of 4.0 percent in 2000.)
Romney economic adviser Glenn Hubbard put out a white paper yesterday explaining the goal, but as the Huffington Post’s Jon Ward notes, “The paper was less actuarial work with raw data and specific numbers, however, and more of an economic philosophy argument based largely on the premise that simply by undoing much of what President Obama has done since taking office, the economy would recover at a faster pace than it has been from the recession that began in late 2008.”
Still, the paper states that “history shows that a recovery rooted in policies contained in the Romney plan will create about 12 million jobs in the first term of a Romney presidency.” Notably, the paper does not provide much historical evidence to support this claim, and where it does look at history, it focuses on unemployment rates, not job creation numbers.
By: Alex Seitz-Wald, Salon, August 3, 2012