“Blowing Away The Smoke”: A Democrat-Sponsored Tax Cut Calls The GOP’s Anti-Poverty Bluff
For months now, as congressional Republicans have blocked repeated attempts to extend benefits to the long-term unemployed, as they’ve fought to deny low-income Americans access to health insurance, as they’ve advocated to cut tens of billions from the food stamp program, as they’ve resisted proposals to raise the minimum wage, they have simultaneously professed their commitment to American workers and the poor.
Senator Patty Murray put forth a new test of that commitment on Wednesday, by introducing legislation to expand the Earned Income Tax Credit. The EITC is already one of the largest and most effective anti-poverty programs, rewarding low-wage earners for their work and lightening their tax burden. It’s also one of the very few specific anti-poverty policies Republicans have praised in recent months.
Murray’s bill, the “21st Century Worker Tax Cut Act,” would increase the maximum credit for childless adults and create a new tax deduction for families with two working parents. It’s intended to complement the Democrats’ campaign for a higher minimum wage, and to force Republicans to take a real stand on help for American workers. Given their recent nods towards the EITC, one might reasonably expect Republicans to consider Murray’s proposal seriously. (President Obama also proposed an EITC expansion in his budget for 2015.) Even the tax loopholes Murray proposes closing in order to pay for the expansion have already been singled out for elimination by the Republican chairman of the House Ways and Means Committee, Robert Camp. But these are not reasonable times.
The Republican’s recent expressions of support for expanding the EITC have always seemed more opportunistic than sincere. Rather than actively working to extend the credit to more Americans, the GOP instead uses the EITC as “a protective shield against populist attacks,” as Jonathan Chait put it; specifically, as a counterpoint to calls from the left to raise the minimum wage.
“The minimum wage makes it more expensive for employers to hire low-skilled workers, but the EITC, on the other hand, gives workers a boost—without hurting their prospects,” Representative Paul Ryan said of the EITC in a January speech at the Brookings Institution. “It gives families flexibility—it helps them take ownership of their lives.”
Conservative pundits and academics have taken a similar line. Two economists at the American Enterprise Institute argued last year that “expanding the earned income tax credit is a much more efficient way to fight poverty than increasing the minimum wage.” Steve Moore of the Heritage Foundation argued in favor of a higher EITC in January, as did former Bush advisor Glenn Hubbard. Another former Bush advisor, Harvard economist Gregory Mankiw, wrote recently that the EITC was “distinctly better” than raising the minimum wage because the costs are born by taxpayers rather than employers.
In his own much-hyped poverty speech in January, Senator Marco Rubio advocated for replacing the EITC with a “federal wage enhancement” subsidy. The vague contours of the alternative he proposed suggested that what he had in mind was nearly identical to the EITC, but with more support for people without kids.
Rubio was right to point out that one of the major shortcomings of the current EITC is that it offers minimal assistance to childless workers. As the program operates now, people without children who are under 25 are ineligible, and the maximum credit for those between 25 and 64 is $487. Families with children receive more substantial benefits. In 2011, their average credit was $2,905.
Murray’s bill addresses Rubio’s professed concern for childless workers by lowering the eligibility age to 21 and raising the maximum credit for childless workers to about $1,400. Those changes would benefit thirteen million people, according to a Treasury Department estimate. The legislation also increases support for families with two working parents by allowing a secondary earner to deduct twenty percent of their income from their federal taxes. This could offset childcare, transportation, and other costs associated with entering the workforce, thus encouraging more stay-at-home parents to find jobs. More than seven million families would benefit from this new deduction, according to the Joint Committee on Taxation.
The bill also doubles the penalties for tax payers who fail to comply with the Internal Revenue Service’s “due diligence” requirement, a reform that addresses Republican concerns about the costs of improper claims.
If Republicans really wanted to use the EITC as a vehicle for boosting low wages, this legislation provides an excellent starting point for negotiation. But they’re unlikely to engage with it seriously, because their lauding of the EITC was never serious to begin with. For example, Rubio’s proposal to expand the credit for childless workers would have been accomplished by taking money away from workers with kids, instead of by increasing the size of the program overall.
Republicans will face a tricky situation if Harry Reid brings Murray’s bill up for a vote in the Senate. “If Republicans aren’t interested in supporting this bill, they’ll need to explain why they are rejecting the alternative that they have often pointed to in order to justify opposing raising the minimum wage,” a senior Democratic aide told The Nation.
If recent votes on unemployment insurance are any indication, Republicans are far more likely to risk hypocrisy and find reasons to kill the bill than do any real governing, even on policies they profess to support. If a vote doesn’t accomplish much for low-wage workers, it may at least blow away some of the smoke from the GOP’s show.
By: Zoe Carpenter, The Nation, March 26, 2014
“Will The Press Let Chris Christie Clear Himself?”: The Beltway Press Has A long History Of Showering Christie With Adoring Coverage
The starting point for any allegation of executive office cover-up, like the one surrounding New Jersey Governor Chris Christie, is always the same: What did he know and when did he know it?
Eleven weeks after Christie held a marathon press conference to address questions about the bridge scandal that has enveloped his administration, we still don’t know the answer to the central question in the case: When did Christie find out that the city of Fort Lee had been brought to a four-day stand-still when at least one senior member of his staff teamed up with his appointee at the Port Authority to purposefully clog traffic lanes?
The release today of a self-investigation undertaken by Christie’s handpicked attorneys, and at a cost of at least $1 million to New Jersey taxpayers, does little to exonerate Christie on that question.
In fact, the report confirms that David Wildstein, the Christie appointee at the Port Authority who remains at the center of the scandal, insists he told the governor, in real time, about the lane closures on Sept. 11, 2013, and had detailed that meeting to one of Christie’s aides in December. Christie claims he doesn’t recall that conversation and from that he said/he said stand off, the internal probe generously declares Christie version is be believed and that he didn’t find out until weeks later about the Fort Lee fiasco.
Miraculously, in a scandal that brought weeks of relentlessly bad news for Christie in January and February, as revelation after revelation painted a picture of a deeply corrupt administration, his new paid-for investigation couldn’t find much bad news for the governor. The report, according to Christie’s attorney Randy Mastro was “a search for the truth.” It just so happens the reports is also “a vindication of Gov. Christie,” as Mastro stressed to reporters today.
Fact: Mastro served as a New York City deputy mayor under Mayor Rudy Giuliani, who has been perhaps Christie’s most public defender since the scandal broke in January.
Christie aides are hoping the new report, which reads more like a legal brief on the governor’s behalf and which failed to interview key players, represents a political turning point for Christie who has aspirations to run for president in 2016. But whether that strategy works depends a lot on how the national press treats the new report and the public relations push behind it. (Fact: The Beltway press has a long history of showering Christie with adoring coverage.)
For the first time since the scandal broke in January, Christie sits for a one-on-one interview with a national media figure, Diane Sawyer, which will air on ABC’s World News With Diane Sawyer tonight. The interview will be a good indication of how the Beltway press treats the new report and if it’s willing to allow Christie to clear himself of any wrongdoing before the U.S. Attorney’s office and New Jersey lawmakers in Trenton complete their own investigations.
A key to the ABC interview will be if Sawyer presses Christie on when he knew that roadways were being jammed, which remains the central point. Over time, Christie has given an array of answers to that very simple question.
From NJ.com:
But a review of the governor’s public statements on the controversy shows he has never said precisely when he first heard about the closures, giving slightly different explanations on three separate occasions and at one point describing his knowledge as “an evolving thing.”
What Christie does now when asked about his knowledge of the lane closings is to stress he wasn’t involved in the implementation of the plot.
This has probably been the most important strategic move Christie’s office has made since January: convince the press that the key question of the scandal is whether the governor planned the lane closures, not whether he knew about the wrongdoing in real time. Time and again this winter when asked, Christie has been very careful, and very emphatic, in insisting he was not involved in the plotting of the dirty tricks scheme; he had no advance knowledge.
From a February appearance on a radio call-in show:
“The most important issue is, did I know anything about the plan to close these lanes, did I authorize it, did I know about it, did I approve it, did I have any knowledge of it beforehand. And the answer is still the same: It’s unequivocally no.”
But again, that’s not really the question at hand. Think back to Richard Nixon. The pressing, constitutional question wasn’t whether Nixon himself had drawn up the harebrained scheme to break into Democratic Party offices inside the Watergate apartment complex in 1972. It was whether Nixon knew his underlings were running a criminal enterprise from inside the executive offices.
The same holds true for Christie today. And the fact that his paid legal counsel could not produce a report that erased doubts about the governor’s knowledge of the dirty tricks campaign poses a political problem.
Meanwhile, will the new initiative be enough the rekindle the love affair that had blossomed between the Beltway press and the N.J. governor? During that media romance, Christie was relentlessly and adoringly depicted as a Straight Shooter; an authentic and bipartisan Every Man, a master communicator who was willing to cut through the stagecraft and delivers hard truths.
Following Christie’s reelection last November, the admiration reached a new, sugary high. “Chris Christie is someone who is magical in the way politicians can be magical,” Time’s Mark Halperin announced on Meet The Press that week. Added Time colleague Michael Scherer in a cover story later that month, “He’s a workhorse with a temper and a tongue, the guy who loves his mother and gets it done.”
We’ll soon see if the press uses the new, one-sided report to return to its days of glowing Christie coverage.
By: Eric Boehlert, Media Matters For America, March 27, 2014
“A Nation Of Takers?”: Demanding Cuts In Public Assistance To The Poor, While Ignoring Public Assistance To The Rich
In the debate about poverty, critics argue that government assistance saps initiative and is unaffordable. After exploring the issue, I must concede that the critics have a point. Here are five public welfare programs that are wasteful and turning us into a nation of “takers.”
First, welfare subsidies for private planes. The United States offers three kinds of subsidies to tycoons with private jets: accelerated tax write-offs, avoidance of personal taxes on the benefit by claiming that private aircraft are for security, and use of air traffic control paid for by chumps flying commercial.
As the leftists in the George W. Bush administration put it when they tried unsuccessfully to end this last boondoggle: “The family of four taking a budget vacation is subsidizing the C.E.O.’s flying on a corporate jet.”
I worry about those tycoons sponging off government. Won’t our pampering damage their character? Won’t they become addicted to the entitlement culture, demanding subsidies even for their yachts? Oh, wait …
Second, welfare subsidies for yachts. The mortgage-interest deduction was meant to encourage a home-owning middle class. But it has been extended to provide subsidies for beach homes and even yachts.
In the meantime, money was slashed last year from the public housing program for America’s neediest. Hmm. How about if we house the homeless in these publicly supported yachts?
Third, welfare subsidies for hedge funds and private equity. The single most outrageous tax loophole in America is for “carried interest,” allowing people with the highest earnings to pay paltry taxes. They can magically reclassify their earned income as capital gains, because that carries a lower tax rate (a maximum of 23.8 percent this year, compared with a maximum of 39.6 percent for earned income).
Let’s just tax capital gains at earned income rates, as we did under President Ronald Reagan, that notorious scourge of capitalism.
Fourth, welfare subsidies for America’s biggest banks. The too-big-to-fail banks in the United States borrow money unusually cheaply because of an implicit government promise to rescue them. Bloomberg View calculated last year that this amounts to a taxpayer subsidy of $83 billion to our 10 biggest banks annually.
President Obama has proposed a bank tax to curb this subsidy, and this year a top Republican lawmaker, Dave Camp, endorsed the idea as well. Big banks are lobbying like crazy to keep their subsidy.
Fifth, large welfare subsidies for American corporations from cities, counties and states. A bit more than a year ago, Louise Story of The New York Times tallied more than $80 billion a year in subsidies to companies, mostly as incentives to operate locally. (Conflict alert: The New York Times Company is among those that have received millions of dollars from city and state authorities.)
You see where I’m going. We talk about the unsustainability of government benefit programs and the deleterious effects these can have on human behavior, and these are real issues. Well-meaning programs for supporting single moms can create perverse incentives not to marry, or aid meant for a needy child may be misused to buy drugs. Let’s acknowledge that helping people is a complex, uncertain and imperfect struggle.
But, perhaps because we now have the wealthiest Congress in history, the first in which a majority of members are millionaires, we have a one-sided discussion demanding cuts only in public assistance to the poor, while ignoring public assistance to the rich. And a one-sided discussion leads to a one-sided and myopic policy.
We’re cutting one kind of subsidized food — food stamps — at a time when Gallup finds that almost one-fifth of American families struggled in 2013 to afford food. Meanwhile, we ignore more than $12 billion annually in tax subsidies for corporate meals and entertainment.
Sure, food stamps are occasionally misused, but anyone familiar with business knows that the abuse of food subsidies is far greater in the corporate suite. Every time an executive wines and dines a hot date on the corporate dime, the average taxpayer helps foot the bill.
So let’s get real. To stem abuses, the first target shouldn’t be those avaricious infants in nutrition programs but tycoons in their subsidized Gulfstreams.
However imperfectly, subsidies for the poor do actually reduce hunger, ease suffering and create opportunity, while subsidies for the rich result in more private jets and yachts. Would we rather subsidize opportunity or yachts? Which kind of subsidies deserve more scrutiny?
Some conservatives get this, including Senator Tom Coburn, Republican of Oklahoma. He has urged “scaling back ludicrous handouts to millionaires that expose an entitlement system and tax code that desperately need to be reformed.”
After all, quite apart from the waste, we don’t want to coddle zillionaires and thereby sap their initiative!
By: Nicholas D. Kristof, Op-Ed Columnist, The New York Times, March 26, 2014
“Waiting For Excuses For The Inexcusable”: When Talking About The Third Rail Of American Conscience, Brace For Dumb Excuses
What excuses will they make this time?
Meaning that cadre of letters-to-the-editor writers and conservative pundits who so reliably say such stupid things whenever the subject is race. Indeed, race is the third rail of American conscience; to touch it is to be zapped by rationalizations, justifications and lies that defy reason, but that some must embrace to preserve for themselves the fiction of liberty and justice for all. Otherwise, they’d have to face the fact that advantage and disadvantage, health and sickness, wealth and poverty, life and death, are still parceled out according to melanin content of skin.
So they become creative in their evasions.
They use made-up facts (Trayvon Martin was actually casing the neighborhood) and invented statistics (black men and boys commit 97.2 percent of all the crime in America), they murder messengers (“You’re a racist for pointing out racism!”) they discredit the source (Can you really trust a government study?).
One waits, then, with morbid fascination to see what excuse those folks will make as federal data released last week reveal that African-American children are significantly more likely to be suspended — from preschool. Repeating for emphasis: preschool, that phase of education where the curriculum encompasses colors, shapes, finger painting and counting to 10. Apparently, our capacity for bias extends even there. According to the Department of Education, while black kids make up about 18 percent of those attending preschool, they account for 42 percent of those who are suspended once — and nearly half of those suspended more than once.
Armed with that information, there are many questions we should be asking:
Are black kids being suspended for things that would earn another child a timeout or a talking-to?
If racial bias pervades even the way we treat our youngest citizens, how can anyone still say it has no impact upon the way we treat them when they are older?
What does being identified as “bad” at such an early age do to a child’s sense of himself, his worth and his capabilities?
Does being thus identified so young play out later in life in terms of higher dropout rates and lower test scores?
How can we fix this, build a society in which every one of our children is encouraged to stretch for the outermost limits of his or her potential?
Those are the kinds of smart, compassionate questions we should ask. But again, we’re talking about the third rail of American conscience. So one braces for dumb excuses instead.
Maybe someone will claim African-American preschoolers are 73.9 percent more likely to fail naptime.
Maybe someone will contend that they thuggishly refuse to color inside the lines.
And you may rest assured someone will say that for us even to have the discussion proves hatred of white people.
What a long, strange road we have traveled from the high land of idealism and hope to which the human rights movement brought us 50 years ago, down to the swampy lowland of justification and circumscribed horizons we find ourselves slogging through now. It is noteworthy that this story of institutional bias against children barely out of diapers scarcely skimmed — much less penetrated — an American consciousness presently preoccupied by basketball brackets and the mystery of a doomed jetliner.
Small wonder. Those things ask very little of us, other than a love for sport and a capacity to feel bad for other people’s misfortune. This, on the other hand, cuts to the heart of who we are.
Last week we learned that their schools routinely bend little black boys and girls toward failure. And the people who make excuses should just save their breath.
There are none.
By: Leonard Pitts, Jr., Opinion Writer, The Miami Herald; Published in The National Memo, March 26, 2014
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