Why The Republicans Want To Raise Your Taxes
House Majority Leader Eric Cantor’s recent assertion that any disaster relief for Hurricane Irene would have to be offset with spending cuts elsewhere sparked a great deal of outrage, especially in the progressive sectors of the blogosphere.
On one level Cantor’s position is no surprise. Paying for emergency disaster relief used to be standard operating procedure in Washington, because it would be inconceivable that the federal government would force the states and individuals to shoulder the burden alone. But with the new GOP House majority, Washington has new rules. Now when there’s a policy objective that enjoys bipartisan support—avoiding a government shutdown or default, for example, or providing disaster relief—the GOP will use it as a hostage to extract their partisan policy objectives.
More broadly, people look askance at Cantor and the GOP for previously supporting (but not paying for) disaster relief, a pair of foreign wars, an expansion of Medicare, and the Bush tax cuts, and then finding their inner fiscal hawks when a Democrat entered the White House. (Robert’s 10th Rule of Politics: A party’s dedication to fiscal responsibility is inversely proportional to its political power.)
Of course the GOP still wants to make the Bush tax cuts permanent, at a cost of $4 trillion over 10 years. If pushing budget-busting tax cuts while carrying the banner of fiscal austerity on issues like disaster relief seems like cognitive dissonance, it is. But that’s today’s GOP.
Take taxes. Last month’s Iowa GOP presidential debate provided a defining moment for the party. The assembled would-be nominees were asked if they would accept tax increases if there were $10 in spending cuts for every dollar of new revenues. To a person, they refused. This came days after the conclusion of the debt ceiling crisis, which had been deliberately manufactured by House Republicans, and which had turned on their flat refusal to accept any tax increase. And it came after months of pious declarations that one never, ever, ever raises taxes on a soft economy (the experiences of Presidents Reagan in 1982 and Clinton in 1993 apparently notwithstanding).
And yet the GOP now wants to raise taxes, both in the immediate term and as a broader matter of principle.
They oppose, for example, President Obama’s call to prolong the payroll tax cut enacted last year when the (temporary) Bush tax cuts were extended. Ordinarily, American workers pay 6.2 percent of their wages in a tax that funds Social Security, with their employers matching the amount. For 2011, that rate was cut to 4.2 percent. The logic is simple: The poor and working class are most likely to pump extra disposable income back into the economy, making the tax cut a more efficient stimulant than, say, rate cuts for the wealthy. It’s as broad-based a tax cut as can be imagined, as it benefits virtually everyone who works, even those who don’t earn enough to pay income taxes. So of course Republicans oppose its extension, preferring to allow a broad-based tax hike to go into effect in the new year. “Not all tax relief is created equal,” Rep. Jeb Hensarling, the House’s fourth-ranking Republican, told the Associated Press, while others cited fiscal concerns. Extending the tax holiday, which cost $67.2 billion this year and a total of $111.7 billion over 10 years, would be fiscally irresponsible while extending the Bush tax cuts is sound policy? Not all tax cuts are created equal indeed.
And this isn’t an isolated instance of the GOP breaking from its usual anti-tax orthodoxy. The truth is that many leading Republicans yearn to raise taxes on working-class and poor Americans.
“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Texas Gov. Rick Perry intoned last month when announcing for president. What to do? Here’s Minnesota Rep. Michele Bachmann: “We need to broaden the base so that everybody pays something, even if it’s a dollar.” More recently, former Utah Gov. Jon Huntsman approvingly cited Florida Sen. Marco Rubio as saying we don’t have enough people paying taxes in this country. The GOP as stalwart fighters against taxes? No more. That more Americans should pay taxes is, according to the Wall Street Journal, “the new Republican orthodoxy.”
And who is it Republicans would like to raise taxes upon? According to the Tax Policy Center, 46 percent of U.S. households won’t pay income taxes this year. The elderly (who are mostly retired, have a larger deduction, and often don’t have their Social Security benefits taxed) make up a plurality of 44 percent of the nonpayers, while people whose income tax liability is wiped out by the child tax credit, child and dependent care tax credit, and the earned income tax credit—all of which were enacted with Republican support—make up an additional 30 percent of the group. (The rest of the nonpayers get a handful of smaller tax credits, including education credits, itemized deductions, and even capital gains benefits.)
Keep in mind that these people not having any income tax liability does not mean that they don’t pay taxes (as is often implied in GOP talking points). They pay state and local taxes, not to mention federal payroll taxes, which of course the GOP wants to see rise.
So Republicans worry about the wealthy paying too much in taxes while fretting about freeloading lower classes. They talk a big deficit game but are more concerned about cutting government spending, specifically on programs that benefit the nonrich. Perhaps this isn’t cognitive dissonance but the logical evolution of the modern GOP into an Ayn Rand-ian coalition explicitly focused on freeing a wealthy elite from the parasitical depredations of everyone else.
By: Robert Schlesinger, U. S. News and World Report, September 7, 2011
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Eric Cantor Is A Hypocrite On Disaster Relief Spending
Buried in this Saturday’s Washington Post Metro section was a short piece about the request from conservative Virginia Republican Gov. Robert McDonnell for $39 million in federal disaster relief for his state.
This was an initial request for 22 localities in Virginia hard hit by Hurricane Irene. According to the article, other local governments can request more aid and, in addition, McDonnell also asked for Hazard Mitigation Assistance for all Virginia localities.
This comes from a governor who, along with his Republican congressional counterpart Eric Cantor, rails against Washington and “government spending.”
What makes this quite interesting is the position taken by Cantor last week on Federal Emergency Management funding for disasters. We have had a record 66 natural disasters this year and Hurricane Irene was one of the 10 most costly ever.
Cantor, whose district was hit hard by the earthquake and the hurricane, has said that any spending for FEMA should be tied to cuts elsewhere, dollar for dollar, “Just like any family would operate when it’s struck with disaster,” says Cantor. Funny, that is not how he felt back in 2004 when he appealed for money for his district after another hurricane and voted against the amendment by Republican Rep. Jeb Hensarling of Texas to do require offsets.
Did Eric Cantor ask for dollar for dollar cuts to pay for the wars in Iraq and Afghanistan? Did he ask for dollar for dollar cuts to pay for the Bush tax cuts for the millionaires and billionaires? Did he ask for dollar for dollar cuts to pay for increases to homeland security? How about border agents?
Another very conservative congressman from Virginia, Leonard Lance, totally disagrees with Cantor. Help is needed now. Gov. Chris Christie of New Jersey, no friend of government spending, talks as though Eric Cantor has lost his marbles: “Our people are suffering now, and they need support now. And they [Congress] can all go down there and get back to work and figure out budget cuts later.”
It is time for a host of protesters to go to Cantor’s district office and call him on his absurdity. Does he believe we should help the victims of these disasters? Is that what government has done for over 200 years? Does he just want to play politics and delay help? Does he represent the people of Virginia? Does he care about the others who have been the victims of tornadoes and floods across this country?
It reminds me of a Senate debate where a certain Republican from Idaho was complaining about a bill that included funding for rat control in New York City.
“In Idaho, we take care of our own rats,” to which the New York senator replied, “In New York, we take care of our own forest fires.”
That about sums it up.
By: Peter Fenn, U. S. News and World Report, September 6, 2011
Quality Vs Quantity: Yes, We Need Jobs. But What Kind?
On Thursday, President Obama will deliver a major speech on America’s employment crisis. But too often, what is lost in the call for job creation is a clear idea of what jobs we want to create.
I recently led a research team to the Rio Grande Valley in Texas, where Gov. Rick Perry, a contender for the Republican presidential nomination, has advertised his track record of creating jobs. From January 2000 to January 2010, employment in the Valley grew by a remarkable 42 percent, compared with our nation’s anemic 1 percent job growth.
But the median wage for adults in the Valley between 2005 and 2008 was a stunningly low $8.14 an hour (in 2008 dollars). One in four employed adults earned less than $6.19 an hour. The Federal Reserve Bank of Dallas reported that the per capita income in the two metropolitan statistical areas spanning the Valley ranked lowest and second lowest in the nation.
These workers aren’t alone. Last year, one in five American adults worked in jobs that paid poverty-level wages. Worker displacement contributes to the problem. People who are laid off from previously stable employment, if they are lucky enough to find work, take a median wage hit of over 20 percent, which can persist for decades.
To understand the impact of low wages, in the Valley and elsewhere, we interviewed a wide range of people, including two directors of public health clinics, three priests, a school principal and four focus groups of residents. Everyone described a life of constantly trying to scrape by. One month they might pay for the phone, another, for utilities. Everyone knew how long each company would carry unpaid bills before cutting service. People spoke not only of their fear of an unexpected crisis — an illness, a broken car — but also of the challenge of paying for basic needs like school supplies. Many used the phrase “one paycheck away from homelessness.”
Because their parents cannot afford child care, children move among relatives and neighbors. They watch too much TV. They don’t finish their homework. Older children grow up too fast from parenting their younger siblings. As one person observed, “All you think about is which bill is more important.”
Economic stress strains marriages. Parents cannot afford quinceañeras for their daughters. In church youth groups, teenagers ask why they should stay in school if all they can get are low wages.
Many children are latchkey kids. Accidents are frequent; we heard of an elementary school student who badly burned himself in a science experiment, with his older brother watching. Their father couldn’t take time off from work to visit his son in the hospital. Children come to school sick. Parents miss teacher conferences because they can’t afford time off. Type 2 diabetes is a scourge in the Valley. Since Type 2 diabetics can be asymptomatic for years, many don’t buy medicine; as time passes, they become severely ill, often losing sight or a limb.
The director at one clinic, with nearly 70,000 visits a year, estimated that half of its patients had anxiety or depression. Often people can’t get to the clinic because they cannot afford to lose work time or because gas costs too much. When they go, they take their families, because they have no child care.
And yet the Valley is not hopeless. Teachers stay late to help with homework. They make home visits to meet parents. Health clinic employees work overtime. The community organization Valley Interfaith has pushed for training opportunities and living-wage jobs. There is no “culture of poverty,” but the low-wage economy has corrosive and tragic consequences.
Must we choose between job quality and quantity? We have solid evidence that when employees are paid better and given more opportunities within a company, the gains outweigh the costs. For example, after a living wage ordinance took effect for employees at the San Francisco International Airport, in 1999, turnover fell and productivity rose.
Contrary to the antigovernment rhetoric, there is much that the public sector can do to improve the quality of jobs.
A recent analysis by the Economic Policy Institute reported that 20 percent of federal contract employees earned less than the poverty level for a family of four, as opposed to 8 percent of traditional federal workers. Many low-wage jobs in the private sector (notably, the health care industry) are financed by taxpayers. The government can set an example by setting and enforcing wage standards for contractors.
When states and localities use their zoning powers to approve commercial projects, or offer tax incentives to attract new employers, they can require that workers be paid living wages; research shows this will not hurt job growth.
Labor standards have to be upgraded and enforced, particularly for those employers, typically in low-wage industries, who engage in “wage theft,” by failing to pay required overtime wages or misclassifying workers as independent contractors so that they do not receive the benefits to which they are entitled.
Americans have long believed that there should be a floor below which job quality does not fall. Today, polls show widespread support for upgrading employment standards, including raising the minimum wage — which is lower, in inflation-adjusted terms, than it was in 1968. It’s time for the federal government to take the lead in creating not just more jobs, but more good jobs. The job-growth mirage of the Rio Grande Valley cannot be our model.
By: Paul Osterman, Op-Ed Contributor, The New York Times, September 5, 2011
Texas-Style Tort Reform: Rick Perry’s Texas Health Care Hoax
In his quest to win the Republican presidential nomination, Texas Gov. Rick Perry is perpetuating a convincing hoax: that implementing Texas-style tort reformwould go a long way toward curing what ails the U.S. health care system.
Like his fellow GOP contenders, Perry consistently denounces “Obamacare” as “a budget-busting, government takeover of healthcare” and “the greatest intrusion on individual freedom in a generation.” He promises to repeal the law if elected.
Unlike those in the “repeal-and-replace” wing of the Republican Party, however, Perry has emerged as leader of the “repeal-and-let-the-states-figure-it-out” wing that believes the federal government has no legitimate role in fixing America’s health care system.
“To hear federal officials tell it, they’ve got all the answers on health care and it’s up to the rest of us to sit, wait and embrace whatever solution — if any — they may eventually provide,” Perry wrote in a newspaper commentary in 2009. “I find this troubling, since states have shown they know a thing or two about solving problems that affect their citizens.”
Even as he points with pride to the alleged benefits of malpractice and other tort reforms that have been enacted during his tenure as governor of Texas, Perry says he is opposed to tort reform at the federal level. He cites the 10th Amendment to the Constitution, which states-rights advocates say limits the role of the federal government.
But if Perry had his way, all the states would do as Texas did in 2003 when lawmakers enacted legislation, which he championed, limiting the amount of money juries can award patients who win malpractice lawsuits against doctors and hospitals. The legislation capped non-economic (pain and suffering) damages at $250,000 in lawsuits against doctors and $750,000 against hospitals. A few months after he signed the bill into law, the state’s voters narrowly passed a constitutional amendment, also endorsed by Perry, which had the same effect. Proponents of the amendment wanted to be sure the new law would be constitutional.
Texas, he wrote in that 2009 commentary “stands as a good example of how smart, responsible policy can help us take major steps toward fixing a damaged medical system, starting with legal reforms.”
As a result of the 2003 tort reform law, malpractice liability insurers reduced their rates in Texas and, according to Perry, the number of doctors applying to practice medicine in the state “skyrocketed.”
He says that in the first five years after tort reform was enacted, 14,498 doctors either returned to practice in Texas or began practicing there for the first time.
Tort Reform Backfires in Texas
That certainly sounds impressive — so long as you look at that number in isolation. But when you look at how Texas stacks up with the rest of the country in terms of physician growth in direct patient care, tort reform appears to have given Texas no leg up in competition with others states for doctors. In fact, according to statistics compiled by the American Medical Association and other physician organizations, Texas has actually lost ground when it comes to the number of doctors practicing in the state since tort reform was enacted. Big time.
In 2008, the number of physicians in patient care per 10,000 civilian population in the United States was 25.7. At just 20.2 doctors per 10,000 people, Texas ranked near the bottom of the 50 states. In fact, only nine states fared worse. In 2000, three years before tort reform, Texas was still bringing up the rear, but not as badly. Back then, 11 states fared worse than the Lone Star state.
Even more revealing, the number of doctors in patient care increased 13.2 percent nationwide from 2000 to 2008. It increased only 12.8 percent in Texas. The rate of growth was actually greater in 41 other states and in Washington, D.C. than it was in the Lone Star state.
It is true that malpractice insurance rates dropped in Texas after tort reform was enacted, but Texans would be hard pressed to claim any direct benefit from that drop — except, that is, Texans who are doctors.
The Dallas Morning News published a chart earlier this year showing that the average malpractice rate charged ob/gyns in Texas by the state’s largest domestic insurer of physicians fell from $53,752 in 2003 to $33,881 in 2011. The paper reported drops of similar percentages for doctors in family practice and general surgery.
Advocates of tort reform have long claimed that one of the reasons for escalating health care costs is the “defensive medicine” doctors practice, such as over-treating and prescribing more medications and diagnostic tests than necessary, out of fear of being sued. Well, if Texans believed their own health insurance rates would go down once tort reform made defensive medicine less prevalent, they have by now been disabused of that notion. The chances of a Texas family saving a few bucks on premiums would actually be greater if they moved to another state.
In 2010, the average premium for family coverage in Texas was $14,526. That’s $655 higher than the U.S. average. Those numbers seem to indicate that doctors have not passed on their own insurance savings to their patients and that they are not practicing medicine any less defensively than before tort reform was enacted.
Not only are Texans paying more for their own insurance while doctors are paying less for theirs, their chances of getting employer-subsidized coverage is less than it would be if they lived in another state. The Dallas Morning News, citing statistics from the Agency for Healthcare Research and Quality and other sources, reported that a smaller percentage of employers in Texas offered coverage to their workers last year than in the U.S. as a whole (51 percent and 53.8 percent, respectively). And the Texans who do have coverage through the workplace are contributing far more out of their own pockets for that coverage than people who live in most other states. In Texas last year, the average employee contribution toward company-sponsored coverage was $4,500. The U.S. average was much lower: $3,721.
Another statistic Perry is not likely to mention when he talks about the benefits of tort reform is the number of Texans who are uninsured. The U.S. Census Bureau reports that Texas continues to be the state with the highest percentage of its residents without coverage, a whopping 25 percent last year, compared to about 16 percent nationwide. It was dead last in 2003 and it is dead last now.
All this should leave us wondering what “thing or two” states have come up with to solve the problems that affect their citizens. Considering the dismal state of health care in Texas, perhaps Perry had Massachusetts in mind.
By: Wendell Potter, Center for Media and Democracy, September 1, 2011
A “Federal Family” Affair: Coordinated Efforts, Except At Fox News
FEMA chief Craig Fugate and National Weather Service director Jack Hayes recently wrote an op-ed about preparations for hurricane season. They noted the coordinated efforts of “the entire federal family, state, local and tribal governments, the faith-based and non-profit communities, and the private sector.”
This wouldn’t be especially interesting, except as reader J.M. noted via email, Republican media outlets are apparently worked up about the phrase “federal family.”
Here, for example, is a Fox News report that ran on Monday:
[B]efore Irene fizzled, the Obama White House wanted to make sure that Irene was no Katrina and that, in fact, the president and his aides would be seen in compassionate command of the situation.
Hence the introduction of what may be the most condescending euphemism for the national government in its long history of condescending euphemizing: “federal family.”
This new phrase was supposed to, [Fox News’ Power Play] supposes, make anxious East Coasters feel the love of a caring federal government — tender squeeze from the Department of Homeland Security, a gentle embrace from the National Oceanic and Atmospheric Administration. The phrase was a centrally distributed talking point, appearing in op-eds, press releases and statements from across the administration.
No major hurricane had hit the U.S. mainland in the Obama era, and the “federal family” had obviously been saving up a lot of new approaches to differentiate itself from the clan under President George W. Bush.
National Review’s Andrew McCarthy was also troubled by the “federal family” phrase, as was Doug Powers at Michelle Malkin’s site, though both appeared to be working from the assumptions of the Fox News report.
There’s just one problem: Fox News’ report is completely wrong and based on lazy assumptions, which could have been avoided if it had taken 30 seconds to check.
Fox News said the “federal family” phrase was “introduced” by the Obama administration, adding that it’s a “new phrase” intended to draw a distinction between Obama’s team and Bush’s. What Fox News didn’t bother to find out is that the Bush administration also used the “federal family” phrase, many times, as did the Clinton administration, many times. It simply refers to a group of federal agencies that work together on emergency response.
It’s not “new”; it wasn’t “introduced” by the Obama administration; it’s not part of a “condescending” liberal scheme to make Americans love the government; it has nothing to do with embarrassing the Bush administration, since the Bush team used the same rhetoric. Fox News just didn’t bother to get its facts straight before misleading its audience.
There’s a good reason those who rely on Fox News seem so confused, so often — they’re routinely lied to.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, August 31, 2011
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