Our Narrow And Wrong Headed Economic Debate
There’s a janitor who lives in a studio apartment just outside of Stevens Point, Wis. He cleans the math and science buildings at a state university, a job he’s been doing for about 18 months, after a year of unemployment. He’s 43 and last year made $24,622. He doesn’t have kids, so he doesn’t qualify for a child-care tax credit. He doesn’t own a home or a hybrid car — those credits don’t apply to him, either. He hasn’t been enrolled in school since the 10th grade, so he definitely doesn’t qualify for any education credits or deductions. He just learned that Gov. Scott Walker’s new budget has slashed his benefits and that next year he’ll be bringing in about 16 percent less per month. And when he sits down to do his taxes next week, he’ll find that he paid the federal government around $1,400 in 2010.
“People can think what they think,” said Jeff Immelt, GE’s chief executive, in response to a growing anger to this story, first reported last week by the New York Times. What else is there to think, one wonders, but that with the muscle and money of lobbyists and lawyers, with the access and influence built over generations, GE has done not just the audacious but the outrageous. And it is not alone.
Exxon Mobil, for example, made $19 billion in profits in 2009 but paid no federal income taxes. In fact, it received a $156 million rebate from the IRS. Bank of America received a $1.9 billion tax refund from the IRS last year, even though it made $4.4 billion in profits and was handed a nearly $1 trillion bailout by taxpayers. The list, inconceivably, goes on.
And yet the conversation in Washington hasn’t turned to aggressively closing the loopholes that GE’s lobbyists created for its accountants to exploit. It hasn’t turned toward ending the ridiculous tax breaks on corporate dividends and capital gains that allow hedge fund managers and the very wealthy to pay the government a lower percentage than their middle-class employees. Instead, Congress is debating whether $33 billion in cuts to the social safety net is enough to make the Tea Party happy.
While Republicans in the House have stopped talking nearly altogether about jobs (and have embraced a budget that could cost the economy 700,000 of them, according to Moody’s chief economist Mark Zandi), the head of the President’s Council on Jobs and Competitiveness, someone charged with finding a way to sustained job growth, is none other than Jeff Immelt himself, tax evader in chief. This is a systemic problem that neither belongs to nor can be solved by a single man. But for Immelt to keep his post with the administration now would be bad politics, bad policy and bad messaging. Yet as I write this, it doesn’t look as if he will be asked to step down.
Still, I am hopeful.
I am hopeful because an incredible spirit and energy has been unleashed. It was first shown during the Wisconsin labor battle, and it is being sustained and nurtured, and broadened to communities across the country. People are showing that they will not abide a system that finances corporate greed on the backs of the poor and middle class.
On Monday, the nation commemorated the assassination of Martin Luther King Jr., who was killed in Memphis, where he had gone to fight for the rights of sanitation workers. Thousands gathered across America for a national day of action supporting public employees, other working people and trade unions in a common quest for jobs, justice and decency for all citizens. They participated in teach-ins, protests, demonstrations and vigils, all with a simple and deeply American message: It is time for the richest, most privileged among us to pay their fair share.
They spoke of the widening gulf in American politics, between the powerful and the powerless, between those who most need the government’s assistance and those most likely, instead, to receive it. They are not alone. For all the disappointment that progressives feel about this Congress, there are members who have been leaders and allies on Capitol Hill.
Consider Sen. Bernie Sanders (I-Vt.). Always the people’s champion, Sanders has called for closing corporate tax loopholes, which, if done, would raise more than $400 billion over a 10-year period. He’s also introduced legislation imposing a 5.4 percent surtax on millionaires that would yield up to $50 billion more a year — more than enough to protect Pell Grants and Head Start and other programs facing the chopping block.
He is joined by Rep. Jan Schakowsky (D-Ill.), who has introduced legislation to create a separate tax bracket for millionaires and billionaires — an option that garners the support of 81 percent of the American people, according to an NBC/Wall Street Journal poll.
The common sense, humane response at this moment is to fight to reset the terms of a suffocatingly narrow and wrongheaded debate. This is the heritage of the progressive movement and, indeed, our obligation. The best principles of our country have been trampled by corporate immorality and right-wing extremism. But they can be restored. Martin Luther King Jr. knew as much when he fought for the sanitation workers of Tennessee 43 years ago. Now, we must know it too.
By: Katrina Vanden Heuvel, Opinion Writer, The Washington Post, April 5, 2011
Junior High Theatrics And Our Cowardly Congress
• Democrats excoriated Republicans for threatening to shut down the government, but this mess is a consequence of the Democrats’ own failure to ensure a full year’s funding last year when they controlled both houses of Congress.
That’s when the budget should have been passed, before the fiscal year began on Oct. 1. But the Democrats were terror-stricken at the thought of approving spending bills that Republicans would criticize. So in gross dereliction of duty, the Democrats punted.
• Republicans say they’re trying to curb government spending and rescue the economy — but they threatened to shut down the government, even though that would have been both expensive and damaging to our economy.
The shutdowns in late 1995 and early 1996 cost the federal government more than $1.4 billion, the Office of Management and Budget reported at the time. Much of that sum was for salaries repaid afterward for work that employees never did because they were on furlough. There were also lost fees at national parks and museums: tigers must be fed at the zoo, even if nobody is paying to see them.
It’s particularly reckless and callous to threaten a shutdown when the economy is already anemic. Among the federal workers and contractors potentially losing paychecks, some would miss payments on their homes, their credit cards or their children’s college tuition.
• Republicans are posturing against abortion in a way that would increase the number of abortions.
Conservatives have sought to bar federal funds from going directly to Planned Parenthood and the United Nations Population Fund. The money would not go for abortions, for federal law already blocks that, and the Population Fund doesn’t provide abortions. What the money would pay for is family planning.
In the United States, publicly financed family planning prevented 1.94 million unwanted pregnancies in 2006, according to the Guttmacher Institute, which studies reproductive health. The result of those averted pregnancies was 810,000 fewer abortions, the institute said.
Publicly financed contraception pays for itself, by reducing money spent through Medicaid on childbirth and child care. Guttmacher found that every $1 invested in family planning saved taxpayers $3.74.
As for international family planning, the Guttmacher Institute calculates that a 15 percent decline in spending there would mean 1.9 million more unwanted pregnancies, 800,000 more abortions and 5,000 more maternal deaths.
So when some lawmakers preen their anti-abortion feathers but take steps that would result in more abortions and more women dying in childbirth, that’s not governance, that’s hypocrisy.
• The House Republican budget initiative, prepared by Representative Paul Ryan, would slash spending and end Medicare and Medicaid as we know them — and it justifies all this as essential to confront soaring levels of government debt. Mr. Ryan is courageous to tackle entitlements so boldly, and he has a point: we do have a serious long-term debt problem, and Democrats haven’t had the guts to deal with it seriously.
Unfortunately, the new Republican initiative would worsen government debt problems, according to the Congressional Budget Office. The C.B.O. (whose numbers Republicans regularly use to attack Democrats) estimates that with current trends, debt will reach 67 percent of gross domestic product in 2022. But it finds that under the Republican plan, because of increased tax cuts, debt would reach 70 percent of G.D.P.
In other words, the Republican position is that America faces such a desperate debt crisis that we must throw millions under the bus — yet the result is more debt than if we do nothing.
What does all this mean? That we’re governed by self-absorbed, reckless children. Further evidence comes from a new study showing that American senators devote 27 percent of their press releases to “partisan taunts” rather than substance. “Partisan taunting seems to play a central role in the behavior of many senators,” declared the study, by Justin Grimmer of Stanford and Gary King of Harvard.
A bewildered Chinese friend asked me how the world’s leading democracy could be so mismanaged that it could shut down. I couldn’t explain. This budget war reflects inanity, incompetence and cowardice that are sadly inexplicable.
By: Nicholas Kristof, Op-Ed Columnist, The New York Times, April 9, 2011
Wisconsin Supreme Court Election: Every Vote Must Be Counted
Many voters went to sleep in Wisconsin and thought they woke up in Florida on Friday after a “Republican activist” county clerk announced that she discovered an extra 14,315 votes in a hotly contested Supreme Court race. Not surprisingly, the votes went to the conservative candidate giving incumbent justice David Prosser a 7,500 lead over challenger Joanne Kloppenburg. Oddly, 7500 was the exact number of votes Prosser needed to avoid a statewide recount.
The Supreme Court race has garnered national attention as a proxy vote on Governor Scott Walker’s radical proposal to end collective bargaining in the state and cut a billion dollars from public schools.
Long Time Republican Apparatchik
The county clerk in question is long-time Republican apparatchik Kathy Nickolaus. Nickolaus got her start in GOP politics in 1995 when the Republican Speaker of the Assembly was – that’s right – David Prosser. She worked for Prosser’s Republican Assembly Caucus, one of four GOP and Democratic legislative groups that were shut down following a criminal investigation for illegal campaign activity on state time.
Nickolaus first came to public attention in 2001 when she was granted immunity from criminal prosecution in exchange for testimony against her bosses at the Assembly Caucus. The case resulted in unprecedented convictions of Democratic and Republican legislators on felony counts of misconduct in office and arranging for illegal campaign contributions. Both Democratic and Republican leaders were sentenced to jail time.
In the caucus, Nickolaus was the person who ran the numbers, creating databases for illegal donations, partisan mailings and the like. When she escaped criminal prosecution, she hightailed it to Waukesha where she ran for county clerk in the conservative county in 2002.
She later botched a 2006 vote and stirred controversy by placing the entire voting system on her own personal computer. Prompting the County Corporation Counsel to charge: “If she wants to keep everything secret, she probably can.”
On Thursday of this week, she called a press conference to announce the new vote totals that put Prosser over the top and blamed “human error.” She claimed that the canvass was a “open and transparent” process, yet she found the error at noon on Wednesday and sat on the information for 29 hours, not even telling top election officials at the Government Accountability Board. According to election observers, the issue of 14,315 additional votes from Brookfield was never discussed at the canvass. But, this information somehow made its way to right wing bloggers before her press conference.
Reaction Swift
Wisconsin Citizen Action has demanded that federal prosecutors step in, confiscate her computer and start an investigation. “In the current political climate in Wisconsin, only an investigation by a U.S. Attorney can be seen by all citizens of the state as independent and above politics,” said Robert Kraig.
The Kloppenburg campaign has demanded “a full explanation of how and why these 14,315 votes from an entire city were missed.” As part of the search for that explanation, the campaign plans to file open records requests for relevant documents.
Meanwhile, both Kloppenburg and Prosser have lawyered-up. Kloppenburg is being represented by Marc Elias, the attorney who handled Al Franken’s U.S. Senate recount fight in Minnesota. Prosser is being represented by Ben Ginsberg, who served as national counsel to former President George W. Bush’s campaigns in 2000 and 2004 and was central to the 2000 Florida recount.
Lessons from Bush v. Gore Florida Recount
The Florida 2000 recount is on the mind of many Wisconsin voters. The big lesson from the nightmarish “hanging-chads” recount “is that you need a total statewide recount. If you only recount select counties the perception is you are only selecting counties that favor you,” says Jay Heck, the head of Wisconsin Common Cause.
Heck issued a statement on Friday:
The incredible and almost unbelievable events of the last two days with regard to the reporting of votes in the City of Brookfield in Waukesha County in Tuesday’s election for the State Supreme Court warrant a full investigation by the Wisconsin Government Accountability Board, the U.S. Attorney for the Eastern District of Wisconsin, the Wisconsin Department of Justice and the District Attorney of Waukesha County. Furthermore, the Government Accountability should authorize and supervise a statewide recount of all ballots cast in Tuesday’s elections and such a recount should be funded by the State of Wisconsin.
Why so many parties? Because this is the same constellation of offices that investigated the 2002 caucus scandal, giving voters more confidence that the manner was being handled appropriately and in a bipartisan fashion.
If Wisconsin is not to irreparably harm its reputation as a functional and relatively noncorrupt state, many Cheeseheads believe that a statewide recount is a necessity.
By: Mary Bottari, Center for Media and Democracy, April 9, 2011
With Truants And Teabaggers In Congress, How Do We Stop The Next Shutdown Threat?
I began work as chief of staff to Vice President Al Gore on Nov. 13, 1995, one day before the first of two government shutdowns that year. I arrived to find a stack of furlough forms on my desk; I spent the day introducing myself to new colleagues . . . and laying them off. Throughout the building unease was palpable: People had bills to pay, and junior White House staffers had little cushion in their bank accounts.
Too many in government faced, and narrowly escaped, that same fate last week. The prospect of future shutdowns still looms, and the pain from a shutdown of any duration would be widespread. Effects of the 1995 shutdown included a halt in toxic cleanups at more than 600 sites; delays in deploying hundreds of new border agents and processing more than 200,000 passports; and closure of more than 300 parks, with losses to the tourism economy.
How did we get to the brink? And what lessons can we apply from the past to ensure this scenario doesn’t arise again?
There would be no political winners in a shutdown. Many Democrats recall the 1995 shutdown as a pivotal point in the Clinton presidency — the moment when his political comeback was cinched and the GOP began its slide to defeat in 1996. But the truth is more complicated. President Bill Clinton’s approval ratings fell during the shutdown and rose again only after the government reopened. The GOP’s political debacle stemmed in large part from Newt Gingrich’s comment that the shutdown was “payback” for a bad seat on Air Force One — a remark that former representative Tom DeLay later described as causing “the whole moral tone of the shutdown [to be] lost.” While Democrats emerged from this confrontation with a strong hand, there is no guarantee that a future crisis will end well. Undisciplined mistakes could foil their party as easily as the GOP.
Republicans would approach the next juncture in an even weaker position. Recent events showed that some learned from the severe political fallout from the 1995 shutdown, but others still believe the real mistake was compromising with Clinton to end the standoff. House Speaker John Boehner said last week that “there’s no daylight between the Tea Party and me,” just a day after Tea Party protesters chanted “shut it down, shut it down” near his office. And this deal didn’t make it less likely the speaker will reach one next time.
President Obama won this round, navigating difficult currents to take command of the situation and protecting nascent economic growth.
But this economy will continue to be far more fragile than the one Clinton managed during the confrontation in 1995, so simply putting this crisis behind us isn’t enough.
To lessen the odds of a repeat when the current year’s appropriations inevitably remain unfinished this fall, the president should do four things.
First, he has to continue to drive home — as he has in recent days — what the American people have at stake in a government shutdown. Obama must seize the moment, as Clinton did in 1996, to prepare for future confrontations; highlighting the Tea Party’s lusty cheering for a shutdown underscores both an ideological zeal that is indifferent to a shutdown’s real-world effects, and a contrast that can shape the governing and political dynamic for the final two years of his term.
Second, he should use this reprieve to direct his advisers to reexamine the basic legal framework for any future government shutdown: a January 1981 memo from outgoing Attorney General Ben Civiletti, and a subsequent directive from the Office of Management and Budget, that created the dichotomy that sends most federal workers home in a shutdown, except those whose activities are deemed “essential.” The attorney general could preemptively broaden the list of activities considered essential, substantially lessening the stakes in future standoffs. A 1990 amendment to the relevant federal statute narrowed room for creative interpretation of the law, but in the 1995 shutdown Clinton authorized 50,000 workers to return to their jobs, saying that their processing of Social Security and veterans benefit applications was “essential” to avoid a soaring backlog. A similar expansion of the definition of “essential activities” would minimize the portion of the government that could be held hostage in a future stalemate.
Third, he can explore the path employed to end the U.S. government shutdown in January 1996 — which ended not with a year-long agreement to fund the government (that didn’t come until April) but with a continuing resolution that included language categorizing all activities by federal workers as essential, allowing them to return to work even when funding expired. Putting such a measure in place now, in advance of the next crisis period, would ensure that workers remain on the job even when future battles over policy riders and spending levels rage.
Finally, the president should use the momentum gained in this confrontation to press for enactment of an automatic continuing resolution that would keep the entire federal government functioning at the prior year’s spending level when no other funding plan is in place. Congress has passed the regular appropriations bills on time in fewer than 10 of the past 60 years; the odds of success this year are remote. Tolerating unmanaged uncertainty about government funding is like walking around Washington in April without an umbrella: You will get wet; the only question is when.
President Obama averted disaster this time. But steps must be explored to prevent such near misses in the future.
By: Ron Klain, Opinion Writer, The Washington Post, April 8, 2011
The Efficacy Of A Republican Hostage Strategy
Matt Yglesias offered a helpful reminder this morning about leverage.
Details on the appropriations deal are still hard to come by, but you don’t need the details to know that substantial short-term cuts in domestic discretionary spending will hurt the poor while harming macroeconomic performance. The problem with not agreeing to the deal, of course, is that a government shutdown would also hurt the poor while harming macroeconomic performance.
If you genuinely don’t care about the interests of poor people and stand to benefit electorally from weak economic growth, this gives you a very strong hand to play as a hostage taker. And John Boehner is willing to play that hand.
Right. A hostage strategy works well when the hostage taker makes it clear that killing the hostage is a perfectly viable option.
In this case, President Obama knew he was facing an unpleasant choice: accept spending cuts, which would hurt working families and undermine the economy, or allow Republicans to shut down the government, which would hurt working families and undermine the economy. As much as I really don’t like the agreement reached last night, I’m not unsympathetic to the dilemma.
But it’s worth appreciating the dynamic itself. The moment it was clear that the White House and congressional Democrats were determined to avert a shutdown, and congressional Republicans saw a shutdown as a reasonable, if not attractive, option — one that their base would celebrate — the rules of the game were already written to guarantee a discouraging result.
By some measures, Dems entered the process with the better hand. Democrats not only had the White House and the Senate majority, but polls showed the American mainstream opposed to the GOP agenda. But they also made clear that they were ready to make concessions — because they were determined to save that hostage, and Republicans didn’t much care either way.
Or as Greg Sargent put it this morning, “Republicans knew full well that the White House wouldn’t allow a government shutdown, allowing them to continue to move the spending-cut goalposts in the knowledge that Dems would follow — again ensuring that the debate unfolded on the GOP’s turf.”
The variable here would, ideally, be electoral considerations — Republicans wouldn’t kill the hostage because they’d be afraid of a voter backlash, creating a built-in incentive for the GOP to act responsibly. In theory, this gives Dems at least some leverage, too — “If you shut down the government, we’ll blame you and you’ll lose in 2012.”
So why doesn’t that work more? Probably because Republicans know that news organizations feel obligated to blame “both sides” at all times for everything, enough so that the GOP is willing to take its chances. Besides, even if they are blame, GOP officials can count on the party, the Koch Brothers, and Karl Rove to run a bunch of attack ads that will help them stay in office in anyway.
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About a thousand miles to the east, in Fairfield, Conn., General Electric, one of the world’s largest multinational corporations, posted a $14.2 billion profit for 2010. When its accountants were finished working their magic, the company didn’t owe a single dollar in federal taxes.