GOP Jobs Plan: Old Ideas, Fancy New Clip Art
Academic books pack about 600 words to a page. Normal books clock in around
400. Large-print books, you know, the ones for kids or the visually impaired — fit about 250. The House GOP’s jobs plan, however, gets about 200 words to a page. The typeface is fit for giants, and the document’s 10 pages are mostly taken up by pictures. It looks like the staffer in charge forgot the assignment was due on Thursday rather than Friday and cranked up the font to 24 points and began dumping clip art to pad out the plan.
Which is odd, because there’s nothing in this plan that hasn’t been in a thousand other plans. When I asked David Autor, an economist at the Massachusetts Institute of Technology and a specialist on labor markets, to take a look at the substance, he pronounced it a classic case of “what Larry Summers would call ‘now-more-than-everisms.”
“Here’s how it works,” Autor wrote in an e-mail. “1. You have a set of policies that you favor at all times and under all circumstances, e.g., cut taxes, remove regulations, drill-baby-drill, etc. 2. You see a problem that needs fixing (e.g., the economy stinks). 3. You say, ‘We need to enact my favored policies now more than ever.’ I believe that every item in the GOP list that you sent derives from this three-step procedure.
“That’s not to say that there are no reasonable ideas on this list. But there is certainly no original thinking here directed at addressing the employment problem. Or, to put it differently, is there any set of economic circumstances under which the GOP would not actually want to enact every item on this agenda? If the answer is no, then this is clearly now-more-than-everism.”
If you read Autor’s answer and then guessed at what’s included in the plan, you’d probably get it about right. The GOP wants a separate congressional vote on every significant regulation. It wants to cut taxes for corporations and small businesses led by individuals. It wants a tax break on profit that corporations earn overseas. It wants to pass pending trade agreements, increase domestic production of oil and enact spending cuts. The only two proposals you couldn’t have guessed sight unseen are patent reform and visas for the highly skilled.
But even if you think every item on that agenda is a grand idea, this isn’t exactly fast-acting medicine. “At best, an agenda like this is meant to improve long-term growth by a couple of tenths of a percentage point,” says Larry Mishel, president of the Economic Policy Institute. “It takes a really long time to move the dial. It’s not a response to a cyclical downturn.”
That’s okay, because the document doesn’t believe in cyclical downturns. It only believes in deviations from the Republican agenda. The first page sets out the GOP’s narrative of the unemployment crisis. See if you recognize what’s missing here: “For the past four years, Democrats in Washington have enacted policies that undermine these basic concepts which have historically placed America at the forefront of the global marketplace. As a result, most Americans know someone who has recently lost a job, and small businesses and entrepreneurs lack the confidence needed to invest in our economy. Not since the Great Depression has our nation’s unemployment rate been this high this long.”
Four years ago, of course, George W. Bush was president. And he was, as you might remember, a Republican, not a Democrat. As for Wall Street, well, Wall Street who?
But it’s not just that you could read this jobs plan without knowing the financial crisis ever happened. You could read it without knowing the past decade ever happened. As Mishel says, “If lower taxes and less regulation was such good policy, then George W. Bush’s economy would have been a lot better. But under Bush, Republicans cut taxes on business and on investors and high-income people, and they didn’t add many regulations, and that business cycle was the first one in the postwar period where the income for a typical working-class family was lower at the end than at the beginning.”
That, however, is the agenda the House GOP thinks we need. And now more than
ever.
By: Ezra Klein, Columnist, The Washington Post, May 26, 2011
Beyond Citizens United: A Further Overreach On Political Money
The spree of big-money political campaigning — and the corruption that comes with it — seemed guaranteed to worsen Thursday when a federal judge in Virginia ruled that corporations are now free to make direct donations to federal candidates.
District Court Judge James Cacheris claimed his decision was consistent with the Supreme Court’s ruling in the Citizens United case. But his interpretation of corporate free speech rights goes much further — and strains all credibility. The Supreme Court specifically said that the Citizens United ruling was about allowing corporate expenditures through independent campaign groups.
A separate Supreme Court decision from 2003, Federal Election Commission v. Beaumont, still stands and leaves no doubt that the ban on corporate donations to candidates remains the law. Judge Cacheris would seem to twice overrule Supreme Court decisions — a hierarchical impossibility as any law student should know. (A federal judge in Minnesota previously ruled that the ban on corporate donations to candidates still stands.)
Of course, in politics there is the law of the land and there is the tireless frenzy for money. Whether Judge Cacheris — who issued his opinion, as he said, “for better or worse” — meant to blur the two remains to be seen. His decision deserves to be struck down on appeal for “equating apples and oranges,” as Mark Lytle, the prosecutor in the case, said of the judge’s overreach.
Judge Cacheris’s ruling struck down part of an indictment accusing two businessmen of illegally reimbursing employees for their donations to Hillary Clinton’s campaigns for president and the Senate. They are charged with paying more than $180,000 to 43 fake donors in an effort to evade donation limits. Most of the indictment still stands, with a trial scheduled in July.
Campaign money bundlers will keep pushing the limits wherever and however they can — and the integrity of our electoral system will pay the price. The courts need to do a far better job of pushing back.
By: Editorial, The New York Times Opinion Pages, May 28, 2011
Joplin And Natural Disasters: They’re Called “Emergencies” For A Reason
I’ve been writing a lot this week about congressional Republicans’ new approach to disaster relief funds in large part because I find it rather amazing, even for a contemporary GOP that no longer seems capable of surprising.
For all of our differences over party, ideology, and creed, we know that when disaster strikes and our neighbors face a genuine emergency, America responds. We don’t ask what’s in it for us; we don’t weigh the political considerations; we don’t pause to ponder the larger ideological implications.
We act. It’s who we are; it’s what we do.
The problem isn’t that conservative Republicans necessarily disagree with this principle. Rather, the problem is, they place other principles above this one when prioritizing how and whether to act.
While much of Joplin, Mo., is still under rubble from a devastating tornado, conservatives in Congress are starting to argue for a tougher approach to disaster aid, demanding that any funding be offset by cutting federal money elsewhere.
Disasters will no longer be considered “emergencies” if conservatives win this battle to redefine the way Congress funds aid packages for states and cities stricken by natural and man-made catastrophes. […]
Traditionally, the government has responded to disasters — hurricanes, tornadoes, floods and acts of terrorism — by using its power of the purse to aid the affected areas with “emergency” dollars that add to the debt because they don’t count against annual spending caps.
When hurricanes Katrina and Rita slammed into Louisiana and Mississippi in 2005, a vocal minority in the House called for offsetting tens of billions of dollars of spending with cuts to other programs. At the time, House Republican leaders shut them down. But now, as much of the Southern and Midwestern parts of the country have been hit by a series of catastrophic acts of nature, that vocal minority has become a controlling majority — at least in the House.
It was House Majority Leader Eric Cantor (R-Va.) who presented the new way of looking at disaster relief. He was willing to approve a $1 billion emergency package for Southwest Missouri, but on a condition — he wanted to cut money from a clean-energy program to pay for it. His party agreed.
The callousness becomes even clearer in the larger context. If the oil industry wants taxpayer subsidies, conservative Republicans don’t blink, and certainly don’t wonder how we’ll pay for the incentives. When Wall Street needed a bailout, the entire Republican leadership was on board with writing a very large check, without much thought to fiscal responsibility.
But when working-class communities get slammed by a natural disaster, through no fault of their own, suddenly the GOP grows miserly. Republicans’ first thought isn’t, “How can we help these struggling Americans get back on their feet?” Instead, it’s, “How will we block disaster relief aid unless we get corresponding spending cuts?”
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, May 27, 2011
To Fix The Budget Deficit, Raise Corporate Taxes
Washington is a town currently gripped by deficit hysteria. Various commissions and congressional “gangs” have formed (and broken up) with the goal of crafting a plan to bring the nation’s budget into balance. Even the media has been sucked into this vortex, dedicating far more of its time to covering the deficit than other economic issues, such as unemployment.
At the same time, both parties seem to agree that the nation’s corporate tax code needs to be reformed. President Obama and House Budget Committee Chairman Paul Ryan each dedicated a portion of their respective budget plans to overhauling the federal corporate income tax, which is high on paper, but so riddled with loopholes, deductions, and outright giveaways that few corporations pay the full statutory rate (and several corporations pay no corporate income tax at all).
This, then, should be an excellent opportunity to kill the proverbial two birds with one stone: cleaning up the corporate tax code, lowering the corporate tax rate, and still raising more revenue that can be put towards deficit reduction.
But no.
Despite all the hyperventilating over the deficit, both Republicans and Democrats have said that they want corporate tax reform to be revenue neutral, meaning no more or less revenue will be raised by the new system than was raised by the old. President Obama and Treasury Secretary Tim Geithner have each extolled the virtues of deficit-neutral corporate tax reform. But if this is actually the road that’s taken, it will constitute a colossal missed opportunity.
At the moment, corporate tax revenue has plunged to historic lows. In 1960, the corporate income tax provided more than 23 percent of federal revenue; the Office of Management and Budget estimates that it will provide less than 10 percent this year.
During the 1960s, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. Now, the U.S. raises less than 1.5 percent of GDP from the corporate income tax. As the Congressional Research Service put it, “Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards.”
The United States effective corporate tax rate is also low by international standards (though the 35 percent statutory rate is the second highest in the world). There are plenty of reasons for this drop, but chief among them is the proliferation of loopholes and credits clogging up the corporate tax code (alongside the growing use of offshore tax havens and the ability of corporations to defer taxes on offshore profits indefinitely).
Huge corporations, such as ExxonMobil, have recently had years where they paid literally nothing to the U.S. Treasury, despite making huge profits. The New York Times made waves by finding that General Electric paid no federal income tax last year, instead pocketing hundreds of millions of dollars in tax benefits. Mega-manufacturer Boeing has done the same, paying no federal taxes in 2009 while collecting $132 million in tax benefits. Google last year had a 2.4 percent effective tax rate, while California-based Broadcom’s rate was just 1.4 percent, far below the rate that the average American pays.
The Treasury Department estimated in 2007 that corporate tax preferences cost $1.2 trillion in lost revenue over a decade. So there is ample room to remove credits and deductions (like those that benefit, amongst others, hugely profitable oil companies and agribusinesses), lower the statutory rate, while still bringing in more revenue. Some companies would see their taxes go up, but others would see their tax bills drop, and the corporate tax code would be more fair, efficient, and competitive, while ensuring that all corporations pay their fair share.
As the Center on Budget and Policy Priorities put it, “corporate tax reform is a solid candidate to make a contribution to fiscal improvement … Taking a major revenue source off the table for deficit reduction at the outset would be ill-advised.” Indeed, with corporate profits skyrocketing—up 81 percent over a year ago—and corporations sitting on trillions in cash reserves, there is no reason that corporate tax reform should be done in a way that is deficit neutral, besides the fact that raising more revenue will be politically difficult, as corporations will likely throw their considerable lobbying weight against such a move. But in the end, failing to raise additional corporate tax revenue will simply shift more of the deficit reduction burden onto a middle-class already battered by the Great Recession.
By: Pat Garofalo, U. S. News and World Report, May 25, 2011
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