“Norquistism”: Republican Zeal Runs Amok
To watch Republicans in action today, in Washington and in legislatures around the country, is to be reminded of Casey Stengel’s amazed query to the 1962 Mets, whom he had the cosmic misfortune to manage: “Can’t anybody here play this game?”
In California, in Minnesota and here on Capitol Hill, Republican legislators in divided governments seem incapable of taking half or even three-fourths of a loaf — of recognizing when they’ve won. By holding out for more when they’ve already attained plenty, they run the risk of coming away with nothing for themselves or inflicting avoidable calamity on everyone else. As Daniel Bell once said of American socialists, they act as if they’re in but not of the world.
In California, for instance, where Republicans hold just over a third of the seats in each legislative house — enough to block any tax increase, which requires two-thirds support — Democratic Gov. Jerry Brown told reporters on June 16 that he was willing to submit to voters proposals to reduce both state pensions and business regulations if Republican lawmakers agreed to let voters also decide whether to extend some tax increases. Brown’s goal was to avoid having to cut more deeply into spending on schools, universities and medical care. California businesses, which have complained of overregulation for decades, were hot for the deal, but the
Republicans refused to budge. In consequence, in the state budget passed last week, without the tax extensions, the state’s public universities will have to raise tuition roughly 10 percent (on top of another 10 percent increase that will take effect in September); and the poor will pay more for medical care. Pensions and regulations will remain unrevised.
What makes the California Republicans’ intransigence so loony — “idiotic” is, I think, not too strong a term — is that they are likely to lose legislative seats as soon as next year as a result of redistricting, and they are sure to lose legislative seats over the next decade because of their ongoing estrangement of the state’s Latino voters. When Republicans drop beneath one-third representation in the statehouse, Democrats will be able to raise taxes without their support. In other words, this may well have been Republicans’ last chance to extract concessions they considered vital. And they blew it off.
What we have here is an extreme world view — let’s call it Norquistism — that ensures impasse, paralysis or perverse outcomes whenever control of government is divided. It’s the doctrine preached by GOP activist and lobbyist Grover Norquist, who trots around the country collecting pledges from GOP candidates and elected officials that commit them to never, ever raise taxes, no matter what they may be offered in return. In Minnesota, a state with a Democratic governor and a Republican legislature, Gov. Mark Dayton sought to raise taxes on only the relative handful of Minnesotans with annual incomes in excess of $1 million. The legislature opposed that, insisting on cuts (including to services for those with disabilities) that Dayton wouldn’t countenance. Absent a budget, most state services in Minnesota closed down on July 1; it’s not clear when, or how, some compromise can be reached to reopen the state.
In the nation’s capital, Republicans also seem to have lost their capacity for compromise — even when that compromise looks to be a GOP victory. Senate Republicans, for instance, have been urging President Obama since before he took office to finalize three trade accords — with South Korea, Colombia and Panama — and bring them before Congress. Obama has now done so, asking in return only that Republicans approve the renewal of Trade Adjustment Assistance, a program that aids workers who lose their jobs as a result of these kinds of trade deals. But Republicans are balking — boycotting last week’s meeting of the Senate Finance Committee at which these treaties were to be taken up — because they don’t like TAA. This is hardly a major program, mind you, but the GOP’s loathing of any program that provides government assistance to workers (who really shouldn’t need any assistance, as free trade is good for us all) has eclipsed its long-term commitment to American corporate priorities.
When zeal runs amok, the sense of proportion suffers. Today’s Republicans remind me of some leaders of the American Communist Party whom I got to know decades ago, after they’d left the fold. “We believed in the party line, in its infallibility, so completely,” one ex-commie told me, “that we’d forget the larger strategy for the momentary tactic.” So it was with Communists of yore; so it is with Republicans today.
By: Harold Meyerson, Opinion Writer, The Washington Post, July 5, 2011
“You Talkin’ To Me?”: Obama Calls The GOP’s Bluff
Here’s how to negotiate, GOP-style: Begin by making outrageous demands. Bully your opponents into giving you almost all of what you want. Rather than accept the deal, add a host of radical new demands. Observe casually that you wouldn’t want anything bad to happen to the hostage you’ve taken — the nation’s well-being. To the extent possible, look and sound like Jack Nicholson in “The Shining.”
This strategy has worked so well for Republicans that it’s no surprise they’re using it again, this time in the unnecessary fight over what should be a routine increase in the debt ceiling. This time, however, something different is happening: President Obama seems to be channeling Robert De Niro in “Taxi Driver.” At a news conference last Wednesday, Obama’s response to the GOP was, essentially, “You talkin’ to me?”
Obama’s in-your-face attitude seems to have thrown Republicans off their stride. They thought all they had to do was convince everyone they were crazy enough to force an unthinkable default on the nation’s financial obligations. Now they have to wonder if Obama is crazy enough to let them.
He probably isn’t. But the White House has kept up the pressure, asserting that the real deadline for action by Congress to avoid a default isn’t Aug. 2, as the Treasury Department said, but July 22; it takes time to write the needed legislation, officials explained. Tick, tick, tick . . .
“Malia and Sasha generally finish their homework a day ahead of time,” Obama said, gratuitously — but effectively — comparing his daughters’ industry with congressional sloth. “It is impressive. They don’t wait until the night before. They’re not pulling all-nighters. They’re 13 and 10. Congress can do the same thing. If you know you’ve got to do something, just do it.”
Obama’s pushing and poking are aimed at Republicans who control the House, and what he wants them to “just do” is abandon the uncompromising position that any debt-ceiling deal has to include big, painful budget cuts but not a single cent of new tax revenue.
The president demands that Congress also eliminate “tax breaks for millionaires and billionaires . . . oil companies and hedge fund managers and corporate jet owners.” Without these modest increases in revenue, he says, the government will have to cut funding for medical research, food inspection and the National Weather Service. Also, presumably, whatever federal support goes to puppies and apple pie.
In truth, some non-millionaires who never fly on corporate jets would also lose tax breaks under the president’s proposal. And it’s hard to believe that the first thing the government would do, if Congress provides no new revenue, is stop testing ground beef for bacteria. But Obama is right that the cuts would be draconian — and he’s right to insist that House Republicans face reality.
My view, for what it’s worth, is that now is the wrong time for spending cuts or tax increases — that it’s ridiculous to do anything that might slow the lumbering economic recovery, even marginally. But if there have to be cuts, then Republicans must be forced to move off the no-new-revenue line they have drawn in the sand.
Even if they move just an inch, the nation’s prospects become much brighter. This fight is that important.
Every independent, bipartisan, blue-ribbon panel that has looked at the deficit problem has reached the same conclusion: The gap between spending and revenue is much too big to be closed by budget cuts alone. With fervent conviction but zero evidence, Tea Party Republicans believe otherwise — and Establishment Republicans, who know better, are afraid to contradict them.
The difficult work of putting the federal government on sound fiscal footing can’t begin as long as a majority in the House rejects simple arithmetic on ideological grounds.
“I’ve met with the leaders multiple times,” Obama said, referring to House Speaker John Boehner and Senate Minority Leader Mitch McConnell. “At a certain point, they need to do their job.” The job he means is welcoming fantasy-loving Republicans to the real world, and it has to be done.
The stakes are perilously high, but Obama does have a doomsday option: If all else fails, he can assert that a section of the 14th Amendment — “The validity of the public debt of the United States, authorized by law . . . shall not be questioned” — makes the debt limit unconstitutional and instructs him to take any measures necessary to avoid default.
Maybe that’s why, in this stare-down, the president doesn’t seem inclined to blink.
By: Eugene Robinson, Opinion Writer, The Washington Post, July 4, 2011
“We Hold These Truths To Be Self Evident”: Real Patriots Pay Taxes
Some of our nation’s biggest corporations are planning a tax holiday and they want you to pick up the tab.
Actually, you already pay for their routine tax avoidance through the use of tax havens in Bermuda, the Cayman Islands and elsewhere. These accounting acrobatics cost the U.S. Treasury $100 billion a year. Now they want Congress to pass a special tax holiday for money they “repatriate” back to the United States.
There’s nothing patriotic about this repatriation being pushed by Google, Cisco, Pfizer and other companies in the Win America campaign. To sell the tax holiday, they claim it will produce a burst of jobs and investment. In fact, Congress passed a “one-time-only” tax holiday in 2004 with similar promises. Instead, it produced a burst of shareholder dividends and stock buybacks, which goosed the pay of CEOs.
Corporations laid off workers and shifted even more income and investment to offshore tax havens in the wake of the 2004 tax holiday.
“Why should we reward firms for successfully gaming the tax system when we in turn are called on to make up the missing tax revenues?” Edward Kleinbard, former chief of staff of Congress’s Joint Committee on Taxation, told Bloomberg. “Much of these earnings overseas are reaped from an enormous shell game: Firms move their taxable income from the U.S. and other major economies — where their customers and key employees are in reality located — to tax havens.”
A favorite accounting trick is transferring a patent from the U.S. parent company to a subsidiary — often a shell company — in a tax haven. Profits from the patent go largely untaxed offshore while the costs of development, marketing and management remain in the U.S., where they are taken as tax deductions.
Pfizer was the largest beneficiary of the last tax holiday, bringing $37 billion back to the United States and paying just $1.7 billion in federal corporate income taxes. It laid off 10,000 American workers in the following months. The U.S. is the world’s most profitable drug market and yet over the last three years, Pfizer — maker of Lipitor, Viagra and much more — has reported $7.9 billion in U.S. losses while claiming $37.8 billion in profits in the rest of the world. Pfizer, like the rest of Big Pharma, is heavily subsidized by taxpayer-funded research at the National Institutes of Health and elsewhere. It should not be rewarded with another tax holiday.
Bloomberg reported that “Google reduced its income taxes by $3.1 billion over three years by shifting income to Ireland, then the Netherlands, and ultimately to Bermuda.” What a corporate ingrate. Google would not exist without the Internet, and the Internet grew out of U.S. government research beginning in the 1960s. In the 1990s, the U.S. National Science Foundation funded the Digital Library Initiative research at Stanford University that Larry Page and Sergey Brin, now billionaires, developed into Google. Brin was also supported by an NSF graduate student fellowship.
Increasingly, U.S. multinational corporations want to benefit from government spending on education, infrastructure, research, health care and so on without paying for it. Today, large corporations pay, on average, 18 percent of their profits in federal income taxes and as a group contribute just 9 percent toward federal government bills, down from 32 percent in 1952. The Congressional Joint Committee on Taxation says a new tax holiday would cost $79 billion.
A dozen national and state business organizations led by Business for Shared Prosperity recently wrote members of Congress urging them to oppose the tax holiday. The letter said, “When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs.”
There is no excuse for repeating a policy that’s a proven failure. It would be even worse this time around, as corporations would redouble their efforts to shift profits overseas in anticipation of the next tax holiday. Congress should close the tax loopholes that reward companies for transferring U.S. profits, jobs and investment abroad — not encourage them.
Real patriots pay their fair share of taxes. They don’t run out on the bill.
By: Holly Sklar and Scott Klinger, CommonDreams.org, July 4, 2011
Democrats Must Be Adults As GOP Redefines ‘Tax Increase’
OK, this isn’t exactly asking what the meaning of “is,” “is,” but it is close.
What is a tax increase? Is it letting a previous, temporary tax cut expire and go back to the earlier tax? Is it the “closing of a loophole” to remove a favorable tax break put in place for a specific industry? Is it the imposition of a fee or the increase in a fee? Is it really anything that results in an increase in revenue?
We can go on and on here, but what we are really talking about is not an esoteric debate. If you listen to Republicans right now, particularly Rep. Eric Cantor, who picked up his marbles and went home from White House negotiations, you would think that everything is a “tax increase.”
The sad aspect of the current debate is that what many Republicans are espousing is that added revenue should be “off the table.” This is clearly a nonstarter for truly solving our problems.
It also is inflexible and holds to the absurd notion that taxes can never go up; they can only go down. That sort of reminds me of: Housing prices can only go up; they don’t go down! Hmmm…
Democrats, to be honest, have to be the responsible party when it comes to providing balance to the cuts/revenue equation. They need not fear the boogeyman crying “tax raiser!”
Americans, by large majorities, understand that the richest 2 percent of their fellow citizens have seen rapid and large increases in their wealth of late, and asking them to pay their fair share is a no brainer. Americans understand that providing huge tax breaks to oil companies already making huge profits makes no sense. Americans understand that rewarding companies for parking their profits overseas or exporting jobs is untenable, and such behavior should not entitle them to special tax “incentives.”
In short, most Americans know that adequate revenue is part of the critical balance that will create and keep jobs as well as attack our debt problem. It is not about eviscerating government and tearing apart our social fabric. Republicans as conservative as Ronald Reagan have known the meaning of a tax increase and have not hesitated to use it.
By: Peter Fenn, U. S. News and World Report, June 27, 2011
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