“The Government Problem”: The Central Issue Is Whom The Government Is For
Some believe the central political issue of our era is the size of the government. They’re wrong. The central issue is whom the government is for.
Consider the new spending bill Congress and the President agreed to a few weeks ago.
It’s not especially large by historic standards. Under the $1.1 trillion measure, government spending doesn’t rise as a percent of the total economy. In fact, if the economy grows as expected, government spending will actually shrink over the next year.
The problem with the legislation is who gets the goodies and who’s stuck with the tab.
For example, it repeals part of the Dodd-Frank Act designed to stop Wall Street from using other peoples’ money to support its gambling addiction, as the Street did before the near-meltdown of 2008.
Dodd-Frank had barred banks from using commercial deposits that belong to you and me and other people, and which are insured by the government, to make the kind of risky bets that got the Street into trouble and forced taxpayers to bail it out.
But Dodd-Frank put a crimp on Wall Street’s profits. So the Street’s lobbyists have been pushing to roll it back.
The new legislation, incorporating language drafted by lobbyists for Wall Street’s biggest bank, Citigroup, does just this.
It reopens the casino. This increases the likelihood you and I and other taxpayers will once again be left holding the bag.
Wall Street isn’t the only big winner from the new legislation. Health insurance companies get to keep their special tax breaks. Tourist destinations like Las Vegas get their travel promotion subsidies.
In a victory for food companies, the legislation even makes federally subsidized school lunches less healthy by allowing companies that provide them to include fewer whole grains. This boosts their profits because junkier food is less expensive to make.
Major defense contractors also win big. They get tens of billions of dollars for the new warplanes, missiles, and submarines they’ve been lobbying for.
Conservatives like to portray government as a welfare machine doling out benefits to the poor, some of whom are too lazy to work.
In reality, according to the Center for Budget and Policy Priorities, only about 12 percent of federal spending goes to individuals and families, most of whom are in dire need.
An increasing portion goes to corporate welfare.
In addition to the provisions in the recent spending bill that reward Wall Street, health insurers, the travel industry, food companies, and defense contractors, other corporate goodies have been long baked into the federal budget.
Big agribusiness gets price supports. Hedge-fund and private-equity managers get their own special “carried-interest” tax loophole. The oil and gas industry gets its special tax subsidies.
Big Pharma gets a particularly big benefit: a prohibition on government using its vast bargaining power under Medicare and Medicaid to negotiate low drug prices.
Why are politicians doing so much for corporate executives and Wall Street insiders? Follow the money. It’s because they’re flooding Washington with money as never before, financing an increasing portion of politicians’ campaigns.
The Supreme Court’s decision this year in McCutcheon vs. Federal Election Commission, following in the wake of Citizen’s United, already eliminated the $123,200 cap on the amount an individual could contribute to federal candidates.
The new spending legislation, just enacted, makes it easier for wealthy individuals to write big checks to political parties. Before, individuals could donate up to $32,400 to the Democratic or Republican National Committees.
Starting in 2015, they can donate ten times as much. In a two-year election cycle, a couple will be able to give $1,296,000 to a party’s various accounts.
But the only couples capable of giving that much are those that include corporate executives, Wall Street moguls, and other big-moneyed interests.
Which means Washington will be even more attentive to their needs in the next round of legislation.
That’s been the pattern. As wealth continues to concentrate at the top, individuals and entities with lots of money have greater political power to get favors from government – like the rollback of the Dodd-Frank law and the accumulation of additional corporate welfare. These favors, in turn, further entrench and expand the wealth at the top.
The size of government isn’t the problem. That’s a canard used to hide the far larger problem.
The larger problem is that much of government is no longer working for the vast majority it’s intended to serve. It’s working instead for a small minority at the top.
If government were responding to the public’s interest instead of the moneyed interests, it would be smaller and more efficient.
But unless or until we can reverse the vicious cycle of big money getting political favors that makes big money even bigger, we can’t get the government we want and deserve.
By: Robert Reich, The Robert Reich Blog, December 23, 2014
“Sharp Focus”: A Reminder Of Our Collective Unfinished Work
Back in 2001, I got into a long argument with a friend about Jesse Jackson, who had just acknowledged having fathered a child with a mistress. I insisted that Jackson’s retirement from the American political scene was long overdue, and that Jackson probably should have called it a career after the 1984 “Hymietown” controversy. Jackson, I asserted, had long since become an obnoxious, ineffective blowhard.
My friend disagreed. While not defending Jackson’s adultery or anti-Semitic rhetoric, he suggested that the best way for Jackson to leave the political stage was for white racism to decline dramatically, and that the folks who wanted Jackson to go away should work harder to combat the manifestations of discrimination. After all, he stated, “If racism goes away, what does Jesse have to complain about?”
I haven’t spoken to that old friend in some time, but I keep thinking about his remarks whenever I see Al Sharpton speak out about police brutality. I can’t say that I’ve ever been a Sharpton fan; I don’t watch his MSNBC program, and even when he makes points I agree with about police violence against African-Americans, I can’t help wondering if it might be better for American race relations to have those points made by someone with, frankly, a less controversial track record than Sharpton.
Yet the point my old friend made about Jackson also applies to Sharpton, no? If we all work harder to combat racism, discrimination, income inequality and police brutality, would we not, in effect, retire Sharpton? Is Sharpton not a reminder of our collective unfinished work?
When we hear complaints about Sharpton’s rhetoric and image, do we really think about how we should best answer those complaints? Getting rid of Sharpton wouldn’t get rid of racism…but getting rid of racism would get rid of Sharpton, no?
I’ll admit it: when I see Sharpton, I still think of Tawana Brawley and Freddie’s Fashion Mart and the other controversies of his past, not his calls for racial justice in the present. For many years, I regarded Sharpton as a voice of racial discord and resentment, and it’s tough for those memories of Sharpton to fade.
However, I can’t deny the validity of the argument that Sharpton’s grievances have to be addressed before he can depart from the platform of American politics. There are millions of Americans—left, right and center—who secretly want Sharpton to shut up and go away. The best way to achieve that goal, of course, is to actually fix the problems Sharpton is talking about.
By: D. R. Tucker, Political Animal Blog, The Washington Post, December 27, 2014
“There’s A New Twist This Time”: To GOP Congress, As Usual, It’s Welfare On The Chopping Block
Congress loves to be Scroogey when it comes to helping the poor at Christmastime. Last year, it let an unemployment extension for the long-term jobless expire during the holidays. That was right after food-stamps were cut. This year, a bare-bones welfare program will continue into the New Year without being updated. For some, it’s a mixed blessing: This Congress would likely cut the program even more rather than fix its problems.
In late 2010, Tea Party Republicans first stormed into the House of Representatives with their budget-cutting agenda, one of the first items they nominated for the chopping block was a component of the program once known as welfare.
The program was a $25 billion emergency fund that passed in the stimulus act and encouraged employers to hire low-income workers by subsidizing their salaries through welfare-to-work funds. Throughout 2009 and 2010, it had created 250,000 jobs in 37 states, including conservative states like Mississippi, and was widely popular because it helped bolster employment during the economic downturn.
Despite the program’s popularity, Congress let it die in September 2010. So it was ironic a couple of months later when the Tea Partiers were railing against it—it had already expired.
And that’s how fights over virtually all aspects of the program once known as welfare go. Welfare recipients have had to meet work requirements to receive their checks ever since President Bill Clinton signed the welfare reform law in 1996, and those paychecks are meager: in most states, the average family will receive between $200 and $400, clocking in between 20 and 30 hours of work activities and applying for as many as 20 jobs a week. Yet stereotypes of the program as a large handout to moochers who don’t have jobs remain, and the program is always among the first that the public and conservatives would sacrifice to budget cuts.
And so as the year ends, Temporary Assistance for Needy Families, as what we call welfare is officially known, is not being reauthorized again this year. The bill expired way back in 2010. Congress keeps funding it through continuing resolutions, but TANF’s existence has been year-to-year, and supporters of the social safety net have always preferred full reauthorization.
But there’s a new twist: Now, many progressives and policymakers who care about the poor are ironically happy that TANF isn’t being reauthorized again this year. The reason? These folks fear that reauthorizing the bill will hand Republicans who control the house—and as of January, the Senate—the opportunity they’ve been waiting for—to gut it.
The program already operates at a minimum level. In 1997, the first year after the law was passed, state governments spent 70 percent of the funds provided through the program on cash assistance for families. Now they only spend about a quarter of their money by directly helping families, and they send the rest of the money on other welfare-related programs or use it to close holes in their own budgets. Critics noted this led to the program’s lackluster response to the economic crisis. In 2011, only 27 percent of families living in poverty were receiving welfare assistance.
Among the fears are that House Republicans will try to eviscerate funding—which in 2013 totaled about $16.5 billion for the welfare program. The House budget chair, the Wisconsin Republican Paul Ryan, wants to turn all safety-net programs into a giant block grant to the states—he says it would maintain the programs’ current levels of funding but most experts believe funding would ultimately dwindle and serve fewer families.
Republicans showed their gleeful willingness to go after safety-net programs when they tried to slash food stamps by more than half. And when President Barack Obama attempted to provide waivers to states so that they could be more flexible in how they administered welfare-to-work and do less paperwork for the federal government, Republicans accused him of gutting the work requirements. So not only are Republicans likely to cut funding, but they would also resist any changes that might actually make the program run better.
This is why progressives are just as happy to see TANF not be reauthorized. However, there’s a downside to that. Only eight states have raised the amount of money that families get to keep pace with inflation, which is why so many families in so many states get so little money. Reauthorizing the bill could force states to readjust the formulas they use to determine benefits so that families get more.
The stimulus program that helped low-income Americans find employment during the recession—the one the Republicans were so proud to claim credit for cutting—could be reauthorized as well. While the economy has been inching toward recovery, the long-term unemployed and low-income Americans are still struggling to find good jobs that pay well, and increased welfare funds designed to employ them could bolster the economy again.
There are other programs, including those designed to help states serve their clients better, that have expired or gotten lost in the shuffle. Many advocates want those changed, adjusted, or bolstered, and the only way to do that is to open up the bill and reauthorize it.
Instead, conservatives still view the fact that Americans need help from the government as a disaster, and are more likely to cut benefits than to think about helping them. It was a Republican Congress working with a Democratic president that succeeded in passing the welfare reform bill the first time. But this time around, advocates are too worried Republicans will do something unprecedented, like they did with food stamps—which is try to tear the program completely apart.
By: Monica Potts, The Daily Beast, December 26, 2014
“Destructive In The Long Run”: The Red State Economic Miracle That Wasn’t
For years progressives in blue states have had to put up with listening to conservatives in red states bray about their supposed economic “miracles” of low-tax, low-investment paradises of low employment in places like Texas and North Dakota.
The fact that these economies were creating mostly minimum-wage jobs with terrible safety nets and awful infrastructure fell on deaf ears. So did the response that those jobs were temporary and fossil-fuel based, and would not last. Undiversified economies based on a single natural resource tend to fare poorly over time.
And indeed it looks like progressives are getting the last laugh due to low oil prices:
States dependent on oil and gas revenue are bracing for layoffs, slashing agency budgets and growing increasingly anxious about the ripple effect that falling oil prices may have on their local economies. The concerns are cutting across traditional oil states like Texas, Louisiana, Oklahoma and Alaska as well as those like North Dakota that are benefiting from the nation’s latest energy boom.
“The crunch is coming,” said Gunnar Knapp, a professor of economics and the director of the Institute of Social and Economic Research at the University of Alaska Anchorage.
Michael Hiltzik at the L.A. Times had more on the topic earlier this week:
A greater danger to the state’s boom-era reputation is that the receding tide may expose a lot of economic wreckage to public view. One consequence of the state’s low-tax, low-service credo is that infrastructure spending has been starved, just at the moment when it’s most needed. As the Texas Tribune reported last year, local roads have become so damaged by heavy oil-patch traffic that in some districts the only option has been to convert paved roads to gravel — there’s no money for repaving, despite the state’s burgeoning wealth.
That shows how little pressure has been placed on the oil industry to carry its fair share of the public cost of the boom or contribute adequately to public investment. When the boom becomes a bust, there will be even less money, and you can bet that the oil industry will be pleading poverty.
When it isn’t simply padding the bottom lines of the wealthiest Americans, most conservative economic policy tends to be about taking the easiest, most aggressive and short-sighted approach to any problem. Eliminating taxes so you can entice corporate grifters may net some immediate transitory gains, but it’s destructive in the long run. Similarly, putting your eggs into the fossil fuel basket doesn’t just destroy your local environment and add to the climate change already ravaging your state, it also puts you at severe risk of economic seizures if fossil fuel prices decline.
By: David Atkins, Political Animal Blog, The Washington Monthly, December 27, 2014
“Citigroup Becomes Its Own Self-Serving Lawmaker”: 21st Century Civics Lesson; How A Corporate Bill Becomes A Law
Congress, which has long been so tied up in a partisan knot by right-wing extremists that it has been unable to move, suddenly sprang loose at the end of the year and put on a phenomenal show of acrobatic lawmaking.
In one big, bipartisan spending bill, our legislative gymnasts pulled off a breathtaking, flat-footed backflip for Wall Street, and then set a dizzying new height record for the amount of money deep-pocketed donors can give to the two major political parties. It was the best scratch-my-back performance you never saw. You and I didn’t see it — because it happened in secret.
The favor was huge — allowing Wall Street’s most reckless speculators to have their losses on risky derivative deals insured by us taxpayers. Yes, such losses were a central cause of the 2008 financial crash and subsequent unholy bank bailout, which led to passage of the Dodd-Frank reform law, including a provision sparing taxpayers from covering future losses. But with one, compact, 85-line provision inserted deep inside the 1,600-page, trillion-dollar spending bill, Congress did a dazzling flip-flop on that regulation, putting us taxpayers back on the hook for the banksters’ high-risk speculation.
In this same spending bill, Congress also used its legislative athleticism to free rich donors (such as Wall Street bankers) from a limit of under $100,000 on the donation that any one of them can give to political parties. In a spectacular gravity-defying stunt, lawmakers flung the limit on these donations to a record-setting 15 times higher than before. So now bankers who are grateful to either party for being able to make a killing on taxpayer-backed deals can give $1.5 million each to the parties.
Perhaps you recall from your high school civics class that neat, one-page flow chart showing the perfectly logical, beautifully democratic process that Congress must go through to pass our laws.
What a bunch of kidders those chart makers were! To see how the sausage is really made, let’s take a look at that trillion-dollar budget bill that Congress squeezed out just before Christmas. It was crammed with special corporate favors, such as: reinstating a Bush rule allowing mining giants to explode the tops off ancient Appalachian mountains and then bulldoze the rubble down into the valley below, destroying pristine mountain streams; another letting long-haul trucking outfits require their drivers to be on the road more than 11 hours a day and up to 82 hours per week, filling our highways with highballing, sleep-deprived truckers; and cutting $60 billion from the Environmental Protection Agency, freeing up polluters to go unpunished for polluting.
None of these favors had anything to do with that “how a bill becomes law” flow chart in our civics textbook. No bill was filed, no public hearings, no debate, no vote. Just — BAM! — there they were, a thicket of benefits secretly slipped into the 1,600-page budget bill by … well, by whom? Largely by corporate lobbyists, though they get one of their for-hire congresscritters to do the actual dirty deed.
The taxpayer subsidy for Wall Street, for example, was written by Citigroup. The bank’s lobbyists then handed the provision to Kansas Republican Kevin Yoder, who slipped it into the bill. Thus, the Wall Street conglomerate that took a $50 billion bailout from us taxpayers just seven years ago to save itself from its own bad deals essentially was allowed to become an unelected, self-serving, do-it-yourself, backroom “lawmaker” to make sure that your and my tax dollars will be there to cover its next mess-up.
And that, boys and girls, is the real flow chart for making our laws. It’s always an amazing sight when Wall Street and Congress get together — especially when they get together out of sight.
By: Jim Hightower, The National Memo, December 24, 2014
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